Next 2-3 years will see 'very high' FII inflows: Abakkus' Sunil Singhania

Sunil Singhania

Long term investors in India don’t have anything to worry about, and those who remain invested for a long time will see good returns, according to renowned investment manager Sunil Singhania. The equities markets may soon find new targets to achieve after the Nifty 50 recently topped the 20,000-mark, Singhania said in an interview with CNBC Aawaaz. India is entering a very good growth phase, and the equity markets will ride along, he added.

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“Every 2- 4 years, the market hits different targets. That is expected. As the economy continues to grow, the market will also grow,” Singhania said. Earlier on September 11, the NSE Nifty 50 hit 20,000 points for the first time ever. The benchmark has rapidly risen around 13% from 17,624 points in the last 6 months, led by both domestic and foreign investors, and shrugging off global concerns.

The Indian economy’s potential can be seen through a renewed focus on growth, through initiatives and announcements made at the recently-concluded G20 summit in New Delhi, Singhania said.

Singhania is also positive about long-term foreign inflows into the Indian markets, regardless of any near term gaps. “We can’t estimate based on 'on and off' increase in FIIs flows. When it comes to FII flows my views are very positive. In the next two to three years, FII flows into India will be very high.” FII flows, at present, will be more pronounced in large stocks because they can invest large sums of money, he said.

Also read: Chemicals sector to enter a challenging phase, says Abakkus' Sunil Singhania

Proceed with caution

The market over the last few quarters has also seen various changes including an upgrade in earnings. The PE multiples for Nifty have also grown 18x for FY25.

However, Singhania sounded a note of caution on broader markets. If one looks at the larger market, there is a certain level of over exuberance, and that is where one needs to be a bit careful, he said.

Further, he cautioned investors about defence and railways stocks at this time, after the recent rally and rise in valuation. “When it comes to sectors like this, it is difficult to say how big the bubble will be or will continue,” Singhania says.

Also Read: Nifty @20k: Markets rejoice but experts say caution is warranted

Additionally, companies in these segments tend to float less - the increase and fall is both large. “So, investors who have been watching these stocks for a long term, will maintain some level of caution when it comes to investing in them,” he adds.

Singhania said his Abakkus Asset Management company continues to be focused on investing. “We are everyday buyers and sellers,” he says. When it comes to the firm’s portfolio, he says there is some comfort as they are valuation focused. Additionally, apart from being cautious about momentum- and theme-based stocks, he adds that there is not much risk in the market right now.

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