Veteran market investor Vijay Kedia is finding the SME space frothy, and has said that he is not ready to invest in such a market for IPOs or pre-IPOs, preferring the comfort of his earlier investments.
"In this kind of market, I will not invest. I am just sticking to my old investments, and I am comfortable. When there is a typhoon, the best thing would be to stay calm," Kedia told CNBC-TV18 during a conversation on September 2, referring to the frenzy in the unlisted or SME space and the pre-IPO placement. "This is clear euphoria, and I would like to stay away," he added, in response to a question regarding the unlisted space and the rush for public issues.
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Kedia said that a market correction has been on the horizon, but the flow of money has not been allowing any meaningful pullback. "A market correction has been coming in the market, but it appears that this liquidity will not allow the market to collapse, on the whole. So, may be sectors in the market will rise on rotation, which could continue as long as the US market is holding the fort," said Vijay Kedia.
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Kedia added that the market is in the midst of significant froth right now. "I would not say that the entire market is either expensive or cheap, but you will find froth in 9 out of 10 spaces. So, I am sitting tight, holding on to my investments. Don't be adventurous in this market."
Back in March 2024, the capital regulator too had noticed stock-price manipulation in the SME segment - in IPOs as well as listed space — and had introduced measures to curb it.
Vijay Kedia echoed the concerns, and said he too sees froth, and that the space is getting trickier for a new investor to navigate. "I feel there is froth in SME space, and it can get a bit tricky for a new investors to identify the space." Referring to instances when SME issues got many-fold bids for shares on offer, Kedia feared some of these may have been 'pre-structured' IPOs, without taking any names. "It did not happen on its own, to an extent it is pre-decided, I am 100% sure."
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