Ace investor Rakesh Jhunjhunwala is not looking to jump on the new-age technology IPO bandwagon but believes there is more opportunity in metal stocks and domestic banks. Speaking at Motilal Oswal AMC’s Global Partner Summit, the big bull said that he is bullish on every aspect of the Indian economy and domestic markets except the new-age internet companies that have begun their journey towards Dalal Street with Zomato’s IPO last week. Apart from Zomato, the financial services behemoth Paytm has also started mapping its stock market journey, filing the draft IPO papers last week.
Favour metals, banks over new-age technology
“I think I will much better returns from metals and other sectors such as banks,” Rakesh Jhunjhunwala said in an interaction with fellow market veteran, Raamdeo Agrawal, Chairman, Motilal Oswal AMC. “It is not my party, I do not go there. This party will get spooked at some stage,” he added. Talking about the recently concluded IPO of food-tech unicorn Zomato, the big bull said that he sees 20% upside but 60% downside potential for the company. “This is driven by discounting next 15 years,” he added.
Last week Zomato’s Rs 9,375 crore public issue received bids 38.25 times the issue size. Overall, bids were made for more than 2,751 crore shares against the 71.92 crore shares on offer. The IPO saw massive interest from investors even though the company is yet to turn profitable.
Rakesh Jhunjhunwala said that his concerns around new-age tech companies stem from valuations and not from their business models. When asked about new-age tech companies across the globe and their dominance on Wall Street, the billionaire investor said that Indian companies are yet to exert such dominance. “These (US technology) companies have built valuations over time. Amazon took 25 years to reach this stage,” he added. After Zomato’s IPO now Paytm plans a massive 16,600 crore IPO, filing papers for the same with the market regulator last week.
Current bull market won’t fade away
Talking about the current bull run, Rakesh Jhunjhunwala said that India is structurally strong, unlike the 1990s which makes him confident that the current market run will last for decades. “India’s fundamental story today is far stronger than it was in 1991. Today, we are starting as a well-established country in the software space. Software exports will touch $400 billion in the next 4-5 years. We are positioned to be the pharma capital of the world. We have had reforms such as GST. Economically, India is in a position that is better than ever,” the big bull said while adding that the current bull run won’t vanish like that of the 1990s.
Big bull said that he does not find anything that could clutch India’s growth over the next 10 years while predicting a return for Prime Minister Narendra Modi in 2024. He, however, said that China’s aggression is a thing to watch out for. “In the next 10 years, one big event that we should look out for is if China attacks Taiwan. That will be a very important geopolitical event worldwide,” he said.