A day after the successful divestment of National Thermal Power Corporation (NTPC), Vikas Khemani, president and head- wholesale capital markets, Edelweiss Securities says he sees success for the future divestment the Government intends on doing.
A day after the successful divestment of National Thermal Power Corporation (NTPC), Vikas Khemani, president and head- wholesale capital markets, Edelweiss Securities says he sees success for the future divestment the Government intends on doing. What is aiding this sentiment is strong investor appetite, he says in an interview to CNBC-TV18.
"Looking at the number of meeting requests and participation from the investors, it looks like investors are looking to revisit what is happening on lines of the reforms announced. They are looking at what is happening at the ground level and what it means for the companies and how far it is getting percolated down to the ground," he says. This is a positive sign for the industry as it hints at interest coming back to the Indian economy.
Below is the edited transcript of Khemani's interview to CNBC-TV18.
Q: What is the appetite looking like now? A day after the National Thermal Power Corporation (NTPC) issue do you see good attendance?
A: This is our flagship event and there is a lot of participation expected. We have about 450 investors expected there and about 88-89 companies expected to participate. I think over two days, there are about 5000 odd meetings scheduled. So, I think it is a fairly large event. Looking at the number of meeting requests and participation from the investors, it looks like investors are looking to revisit what is happening in lines of reforms announced, what is happening at the ground level and what it mean for the companies and how far it is getting percolated down to the ground. So, I think investors are re-evaluating all this and the current number of meetings is an indication that probably the interest in the Indian market is coming back.
Q: What kind of appetite do you see for the government paper where a lot of supply is slated for the next few weeks?
A: We have already seen few successful issues. So, as long as the pricing is right, I think there should be a decent supply coming through. We have seen National Mineral Development Corporation (NMDC), National Thermal Power Corporation (NTPC) and Oil India going through reasonably well. So, I think there will be a good appetite in the investors both locally and internationally. Specifically the recent company has been great. The next few companies that are lined up are also very good companies. I am sensing that the government is not too focused on optimising the price which is a good indication. So, I am reasonably confident that this will sail through.
Q: Yesterday, after the 5 percent GDP estimate from the CSO, expectations on rate cuts have gone up again. What are you expecting to hear from the RBI?
A: I guess market participants and investors are definitely expecting the Deputy Governor of Reserve Bank of India (RBI) to give some direction. Whether he gives the direction or not depends on him. However, I would tend to think that this will put additional pressure on the RBI to expedite the rate cut in the coming policies. So, let’s see how it goes. However, he should outline certain indications given that there are lot of foreign investors who would be sitting to look for guidance from him.
Q: Your inaugural address is from the State Bank of India's (SBI) managing director, but there has been some disappointment on public sector banks, the way they reported this quarter. What do you hear from most of your attending investors on that front and what are you telling them?
A: Most of the investors are looking to get some sense on the asset quality issues. What kind of asset quality issues can come, specifically in the PSU sector is the key issue in the minds of the investors. If they get some comfort on the asset quality issue, I guess interest in the PSU banks can come back in a meaningful manner. So, I guess most of the investors are looking for that direction and interest rate cut obviously expedites and helps to corroborate that interest further. That is the single biggest investor concern at this point in time.