The street is expecting fund flows from multicap funds towards smallcaps and midcaps. We are in 100 percent agreement with SEBI’S guidelines. However, apart from complying with SEBI’s rules and regulations we also have to manage investor’s money with a view to optimising risk-adjusted return. I am not going to buy small and midcap at any prices irrespective of valuations just to comply with the rules and regulations, I have to manage both.
- Nilesh Shah, MD of Kotak Mahindra AMC
I think SEBI has been very quick in responding to the request of the industry AMFI represented and I think they came very quickly before even the markets opened. My sense is the best is to go for a new category altogether which is called flexicap. The regulator should not have any problem in having a flexicap category and all these funds would be accommodated there.
- Raamdeo Agrawal, chairman at Motilal Oswal Financial Services
1.2 percent of corpus of our Multicap fund is in small caps. The large and midcaps have been doing better than the small businesses over last few years. If the economy starts to see a broad-based recovery, then definitely more of midcaps and smallcaps will start to do better.
- Harsha Upadhyaya, CIO equity at Kotak Mutual Fund
Investors don't want to take risk of 25 percent exposure to small caps. They will withdraw from multicap funds if forced to take high smallcap exposure. This will unnecessary improve either capital gains for investors if they book out money from this fund and move to safer funds. There could be entry/exit load impacts there.
- Manoj Nagpal, MD and CEO of Outlook Asia Capital
Over the last decade, we are definitely seeing more companies come into the capital markets. As the economy becomes the large one, you would find a plethora of opportunities. We have seen huge private equity money going into the new businesses and these typically would probably list as midcaps and become largecaps over a period of time. So there is a huge opportunity in terms of listings in the smallcap and midcap space definitely over the next many years.
- S Krishna Kumar, CIO-equity at Sundaram Mutual Fund
What I see is that there are situations in the market that are led by events external to fundamentals and I think these are times that one has to be a little careful in terms of valuations. So as a CIO you will appreciate the fact that we have a fundamental approach to buy in equities. But we also understand that there are moves in the market and this doesn’t have to be necessarily anything to do with the present situation.
- Tushar Pradhan, CIO, HSBC Global AMC
Barring the financial space most of the market is richly valued and therefore there is a need to be cautious and somewhat calibrated. We are not taking major sectoral deviation calls, instead, within the sectors, we are sticking to the leaders in the sectors, companies that have strong balance sheets and who we think will fall less in case of a correction. We are not taking major sectoral bets but there are certain sectors where we are seeing tailwinds and where we see less disruption. For example the technology sector, pharma sector and even the telecom sector. These are the sectors where we have a slight positive bias.
- Manish Kumar Chief Investment officer at ICICI Prudential Life Insurance
The government did a very good move 2-3 weeks back when they reduced the stamp duty. Now, by suddenly increasing the ready reckoner rates, I do not think it serves any purpose. The government should try and take it back. Residential markets across Mumbai and in the state have corrected. It should have actually been brought down instead of taking the ready reckoner rates up. So, not a good step by the government.
- Ramesh Nair, COO- Business, JLL India
I think the bureaucracy is totally in disconnect with the reality of the market. I do not think they even understood what is being talked about. We have statements from the chief minister which says that there should be a reduction in ready reckoner rates. We have had a part of the government machinery talking to us and everybody agrees that the ready reckoner rates are wrong. It is quite ridiculous that the ready reckoner rates are not being rationalized into whatever it is. Yes, there may be one or two areas where it could have been increased, but you can’t peg the entire city and country on the basis of one or two areas where the prices have gone up.
- Niranjan Hiranandani, CMD, Hiranandani Group
In India, historically I have not seen too many consolidations happening. But this time the situation is bit different, the scale of the developers are much larger in the past. So, already some consolidation is happening and will happen, but not as much as it should happen. The reason is that it is so difficult to just take over assets, clean them up. There are so many issues, litigation, funding, etc. So, consolidation in India is a very difficult task.
- Anshuman Magazine, CMD, CBRE South Asia
First Published: IST