Moneycontrol India :: News :: Positive on DLF, neutral on Vishal Retail: Bajaj Capital :: Housing Development Finance Corporation :: IPO - Issues Open :: Rajiv Bajaj, MD, Bajaj Capital,ICICI Bank,SBI Infrastructure Fund,HDFC,Vishal Retail IPO,HNI,MF NFO,DLF IPO

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Positive on DLF, neutral on Vishal Retail: Bajaj Capital

2007-06-14 10:44:48 Source : Bazaar/CNBC-TV18
(Interview Transcript)

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Rajiv Bajaj, MD, Bajaj Capital said that the response for the DLF IPO is good, adding that retail investors normally come in the last few days. The Vishal Retail IPO, he revealed was not on their active recommendation list.

Regarding the MF NFOs, he said that all NFOs are seeing a good traction and there was a good response from institutional investors and HNIs.

Excerpts from CNBC-TV18's exclusive interview with Rajiv Bajaj:

Q: This next two days will be crucial for the retail side of the issue, what kind of preliminary interest are you seeing in DLF in specific?

A: The interest in DLF so far, has been moderate. We were expecting a much better response. We have been actively promoting this issue because we believe it is a very good long-term buy. We as a house do not take short-term sell-on- listing view on IPOs; we take a three-five year view and DLF is the best company in its sector and the sector is in limelight even though the valuations are stretched.

We have been recommending it to our investors; we sent out communications to all our clients. But the response has been moderate, at best. But we are expecting that in the next couple of days, people will come in and invest in the issue.

Q: What are the key concerns that you hear from people, retail and HNI when you approach them with a suggestion of subscribing to DLF?

A: Regarding the fundamentals of the company, no questions can be asked because it is one of the best companies in the sector and therefore, the concerns are mainly there only on valuations.

Real estate sector, the market believes and so do we; is on the edge at the moment and on verge of correction and investors are getting a sense of that in the prices of current listed real estate stocks - they are a big guiding force whenever people come in and invest in new IPOs in a particular sector. And therefore, the prices of currently listed real estate companies, is one of the concerns.

The other concern is increasing interest rate and future prospects of the sector and there has been a correction in the real estate market; the residential prices are down 20%. So there are such concerns in short-term but in medium to long-term there are no such concerns and this company will do very well and there is no doubt about it.

Q: Is Vishal more popular with retail what sort of enquiries are you getting about ICICI Bank�s FPO at this point?

Bajaj: As a policy, we are doing only issues above the size of Rs 100 crore and Vishal is just at that point and therefore we are making the forms available to our clients. But it�s not on our active recommendation list. As far as quality of the management of this company is concerned, it�s a first generation company and it has set itself a good track record in the past few years. But a lot of work still has to be done in terms of this company becoming one of the major in the retail sector. So we have a neutral view on this particular stock.

Q: What�s happening with the mutual funds available in the market at this point; is interest still high and are you sensing any sort of shift to FMP plans at this point?

Bajaj: Yes, very much so. Since April this year, I would say the wave of NFOs is on again.

First it was fidelities; international fund and now recently, SBI Infrastructure Fund and HDFC�s Midcap Fund have garnered a fantastic response and amongst ongoing schemes, Templeton�s scheme and Reliance�s forthcoming scheme are also evoking a lot of interest.

So investors are beginning to believe that mutual funds are a better way of taking an entry into the market especially if they cannot give adequate time and attentions themselves and some interesting ideas are been brought to investors and they are looking at that positively.