Taking the example of how an IPL cricket team is built with opening batsmen, middle order and bowlers, how would you construct your playing XI on Dalal Street.
Opener- Welspun Enterprises, Orient Cement
Pitch Hitters- Elin Electricals, Frog Cellsat, Virtuoso Optoelectronics
Defensive/Keeper– Bharat Forge, Hindware Home Innovation
Middle Order- Piramal Pharma, Valiant Organics
Bowlers- Coastal Corporation, Aarti Pharmalabs, Time Technoplast
Impact Player- Rain IndustriesSince the beginning of this IPL, we have been seeing real fireworks with some high scoring games on the field. In the markets also, we have seen good returns in April.
We are making a team which has players from the broader market, the ones which have corrected over the past year while they are showing significant fundamental strength and resilience.
These will be the players which will outperform as the interest rate cycle starts reversing and we see FPI money flowing back to equities.
These companies have a cushion of valuation comfort and will stay resilient even if we see some volatility in the markets. They will be very high scorers when the markets are good.
Which event in the history of the Indian stock market would you relate to the victory 83 cricket World Cup?
I think we are living up that moment right now and the best moments of that victory are just ahead of us. If you look at all the tick-boxes, Indian markets are differentiating from the rest of the markets. The world is looking at India from leading growth going forward. We are seeing change in leadership from the growth contributor, China (aka West Indies) to India.
Do you think, just like will winning toss at the start of the match can be one the deciding factor for the outcome of match; subscription numbers should also be the one of the factor for selecting an IPO?
Subscription numbers are important but if you look at the trend, they are highly correlated to the markets. Also, most of the allottees would sell the stocks in a few days post listing as the long term perspective is not there.
I think investors are important and the cap-table should be looked at after 1 year post listing as that would give a more sustainable sense.
What is your selection criteria for building a portfolio; do you believe in past performance or pedigree of a player? Who is your cricket idol and which quality of his, you would like to replicate in your portfolio/strategy?
Selection criteria should have aspects of past performance or pedigree. But that usually is factored in by the markets and you have to also look at the qualitative aspects for the future growth potential of the stock. This is where you create conviction and you hold the stock through the thick and thin for a larger compounding and wealth creation.
We love the long term compounding from our investments and hence would go with Sachin Tendulkar as he has shown his mettle in all formats of the game, delivered consistently and has created records which are very difficult to break.
Do you select a specialist or an all-rounder for your portfolio/strategy and why?
We absolutely like specialists. They are niche players, and we know exactly their role in the team. All rounders are good for a cricket team and sometimes a good diversification but in markets you would make more money and get more valuations with the specialists over time. We are specialists in mid and small-cap stocks and like selecting high potential niche stocks to generate a high compounding over long term.
Narrate a market turnaround event that you can relate to India’s GABBA test victory in 2021?
I think something very recent which everybody could relate to could be a perfect example. Covid post the lockdown was full of uncertainties and markets were bleeding. Nobody was sure of how much damage the pandemic would do and when the vaccination would come. Then we saw a turnaround that took markets to all time highs within a year.
We have also seen such massive turnarounds in the market if you zoom out a little. Subprime crisis is another such example. These crises create opportunities and those who capitalize them come out as winners.
Who would you like to nominate as Dipti Sharma of your portfolio (a well-run company by a women business leader)?
We currently have a portfolio company called Piramal Pharma. The Piramal group has been led by Mrs. Swati Piramal and Ms Nandini Piramal along with the leadership of Mr. Ajay Piramal.
We would love to see more women-led companies getting listed in the coming years.
How do you decide your investment strategy for the investors whether they should opt for a Test match or One day or T20?
The strategy should reflect your character, investment goals and horizon. This also depends on the markets which sometimes gives you opportunities where you can hit more sixes and then there are times when you have to just stay in the pitch (invested) and not lose your wicket. Last few months have been times when you just have to stick it out. We believe that now the time is approaching for investors to start getting greedy as the valuations have turned mouth-watering.