The corporate fundamentals are strong, but high valuations remain the only concern in the market, said Harsha Upadhyaya, Chief Investment Officer at Kotak Mahindra AMC, regarding the recent correction that has put investors on the edge.
India's growth story, economic growth, and corporate fundamentals continue to be strong, Upadhyaya said in an interaction with CNBC TV18. However, the only issue is the high valuations, especially in stocks where there was not sufficient liquidity or where the fundamentals were not supportive, he said.
As of now, Upadhyaya does not feel like the market has corrected enough for Kotak to deploy its cash. The investor sentiment around small- and mid-cap stocks has taken a hit over the last few days, with the respective indices falling 12 percent and 6 percent since 7 February.
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However, despite the correction seen in the midcap and smallcap space on March 13, Upadhyaya said that Kotak Mahindra AMC has not deployed all the cash at their disposal. "Clearly, we are still not deploying all the money that we have at our disposal. However, we do have some limited cash in our smallcap strategy."
Upadhyaya said that at this point, pockets with excesses building up are withnessing the most correction. He said that some of the stocks that Kotak AMC likes on a fundamental basis are yet to fall to the levels where the firm would be comfortable to buy those. "Anyway, we do not do that in one go but after analysing the markets and valuations."
He also advised investors to make their portfolio diversified and to make a staggered and disciplined investment rather than putting all their eggs in one basket.
On March 14, benchmark Nifty was trading mildly in green above 22,000 points, whereas the midcap and smallcap indices rose about 2 percent each.
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