Big bull Rakesh Jhunjhunwala has said markets are reading the second coronavirus wave, which has seen India report recording-breaking daily infections, as a blip and once vaccination is through, "the worry is going to be very little".
The ferocious new wave has overwhelmed India's frail healthcare system, with hospital beds, medical oxygen and medicines in short supply. States such as Maharasthra, the worst-hit in the country, have been forced to clamp lockdown-like restrictions, fuelling concerns about India's economic recovery. The market has been volatile as concerns mount.
"Even if we are going the way of Britain, or much worse, in the second wave surge or in France, wherein the second wave surge has a big issue, markets are reading the second COVID-19 surge as a blip in time," Jhunjhunwala said in an interview to CNBC-TV18.
The second wave hit European nations hard but the vaccination drive seems to have helped reduce COVID-19 cases. The UK is opening up after the latest round of strict restrictions. The same seems to be happening in the US too, where vaccination has picked up in the last few months.
In India, "Once the vaccination programme gets through, the worry is going to be very little," Jhunjhunwala said. The country started its vaccination drive in January 2021 and has administered more than 13.23 crore doses. From May 1, the vaccination programme will be expanded to include very Indian citizen above the age of 18,
India on April 22 reported 3.14 lakh cases, the first country to report more than 3 lakh cases a day, and a record 2,104 new deaths.
The Nifty50 has fallen 7.4 percent and BSE Sensex 9.2 percent from their highs in February 2021.
"If the market reads that 2.5 lakh cases a day is a peak, then I am quite confident that markets will not go down," said Jhunjhunwala.
Data shows that in 2020, urban area were affected more than rural parts of the country. This year, four states, including Maharashtra and Karnataka, account for 58 percent of active COVID cases, which was 82 percent two months ago.
"Look at Maharashtra, around 80 percent of cases are in urban areas. The surge in COVID-19 cases is largely an urban phenomenon, I feel rural India will not be affected as much by the second wave of COVID-19. I think with infrastructure setup to give large vaccination in rural areas will take time. By June, a good part of urban India will be vaccinated," he said.
"And also the herd immunity will develop and estimates about 60 percent of people will be vaccinated by June," he added.
The ace investor said March 2020 was the biggest opportunity he had seen in his life. The market corrected around 40 percent in nearly two months from its peak in January 2020.
He said Tata Motors was available at Rs 80 per share, with a market cap of Rs 30,000 crore. It was trading at nearly Rs 600 per share in September 2016 and around Rs 200 in January 2020.
"This reward was so much in favour. I hold a lot of shares of Tata Motors, which is my disclosure," he said. "I bought a good quantity of Tata Motors stock in March and the risk-reward during March lows was in favour of investors," he added.Follow our LIVE Updates on the coronavirus pandemic here
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