Gaurav Garg, Head of Research, CapitalVia Global Research is expecting further selling in the market led by FIIs due to rising dollar, and globally new variant of COVID-19 along with more European countries entering into new COVID-19 restrictions.
Star Health, which is backed by Rakesh Jhunjhunwala and Westbrigade Capital, will to open its IPO on November 30. "We are expecting the stock to list at around Rs 980-1,000 per share on listing, but not expecting massive listing gains as we have seen in recent listed IPOs," says Garg who has more than 10 years of experience across industries and is actively involved in valuation of companies through various models and developing market research reports.
Q: Do you expect more selling pressure in the market given the consistent FII selling?
I am expecting further selling by FIIs due to rising dollar (which might reduce their returns in Dollar terms), globally new variant of COVID-19 along with more European countries entering into new COVID-19 restrictions and expecting market participants might shift their investments from equities owing to higher valuations. In our opinion investors should wait for next few weeks and let trend change for FIIs till then I am expecting selling might persist.
Q: What are the top wall of worries that the market is going to face in coming months?
Rise in inflation globally with strong dollar, expecting some depreciation in rupee which might be major headwind for the market. Rising bond indicating US Fed is in pressure to bond tapering, fear of new Novel Covid-19 variant is the threat to market which can accelerate selling further.
Q: What are your broad expectations for November auto sales that will be released next week? Is it the time bet on auto stocks especially after strong management commentaries?
Last few months have been impressive for automakers in the festive season. However, we might see consolidation in next month of December and for the last quarter of year for both passenger and commercial vehicle space.
Q: What is your view on Star Health IPO that is opening on November 30? Is it overpriced at issue price of Rs 870-900 per share?
Star Health which is backed by Rakesh Jhunjhunwala and Westbrigade Capital is a leading health insurance company. The issue is expected to open its IPO on November 30 in price band of Rs 870-900 per share which will value firm at $7 billion. We are expecting the stock to list at around Rs 980-1,000 per share on listing, but not expecting massive listing gains as we have seen in recent listed IPOs.
Q: How do you sum up the primary market that made records on several fronts? What are the most likely IPOs to hit Dalal Street in December 2021?
In this bull Run we have seen a flurry of IPOs and many IPOs have done exceptionally well which include Latent View Analytics, Sigachi Industries, Nykaa and many more have surprised street with listing gains. In my opinion, primary markets are rewarding fintech stock and monopoly/unique kind of business like Latent View, Nykaa, PB Fintech which are of good business to hold for long term.
Q: Realty and Consumption sectors outperform every other sector and benchmark as well as broader markets in November series. Do you expect the outperformance to continue in December series as well?
Nifty realty index was up 5 percent & Nifty Consumer gained 2.67 percent in November expiry versus Nifty down 1.78 percent which was clear out-performance in these pockets. Main reason behind this stellar performance is consumer sentiment are improving after unlocking, New registration for property are gaining traction which is indicating upbeat sentiment in market supported by ease in government policies. However, investors should wait for correction in these sectors and try to pick companies with strong fundamentals and strong among its peers (industry leader).
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