Investors Shankar Sharma, Safir Anand hot on sunrise sectors after budget's low-carbon push

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The Budget 2022-23 aiming to reduce carbon footprint of fossil fuels has ramped up interest in sunrise sectors seen benefiting from policies mitigating climate change such as electric vehicles and renewable energy.

“The low carbon development strategy as enunciated in the ‘panchamrit’ is an important reflection of our government’s strong commitment towards sustainable development,” the finance minister said in her budget speech.

Budget 2022 | Equities have their day in the sun as dark clouds circle

Renowned investors Shankar Sharma and Safir Anand see the Budget as creating great opportunities for investors in sunrise sectors given the focus on creating room for research and development and light-touch regulation.

Let’s see where both the veteran investors will be putting their money after the Budget:

Shankar Sharma

The veteran investor said that he will prefer to ditch large-cap companies for small-cap stocks given the potential for large returns. Sharma added that any company deriving benefits from climate transition “is a great place to be in”.

“I am amazed by the kind of activism being shown by the judiciary in terms of penalising companies that are threatening the environment. I am out there looking for companies that are helping preserve the environment. That's a huge space and a secular trend,” Sharma told Moneycontrol in post-Budget panel discussions.

He also believes that if investors pick their bets wisely in the electric vehicle space then there is money to be made.

Safir Anand

Anand, too, declared his bullishness for companies that benefit from the climate transition currently underway across the globe.

The maverick investor pointed to his investments in sugar companies because of the government’s focus on ethanol blending in transportation fuel, which aims to reduce the carbon footprint of fossil fuels.

However, unlike Sharma who is averse to large-cap financials, Anand continues to see opportunities in some large-cap lenders such as ICICI Bank and State Bank of India.

“It's banks like ICICI Bank and State Bank of India (SBI) where I have put my money in because they have cleaned up the NPA (non-performing asset) mess and there is a decent amount of credit growth,” he said.

“Budget has exceeded my expectations as it has India outperforming the world,” Anand told Moneycontrol in post-Budget panel discussions on February 1.

N Jayakumar

For the Dalal Street veteran and managing director of Prime Securities, the unlisted space is more enticing.

"Over the last 6-8 months we have been moving into the startups space. In the listed space you need to be really smart or lucky to find value," Jayakumar, who was also a part of the panel discussions, said pointing to early-stage investments by his firm in consumer packaged foods, gaming, steel, and last-mile rural distribution segments.

"Gaming is where we have invested in a company whose month-on-month revenues are growing 30x over a nine-month period," he added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.