After most exit polls predicted a thumping majority for the Bharatiya Janata Party-led National Democratic Alliance (NDA) in the Lok Sabha elections, Rakesh Jhunjhunwala is of the view that exit polls do give us a direction. The NDA would get around 300 seats plus or minus 10 seats, he said in an exclusive interview to CNBC.
He said that the market has already priced-in some kind of dispute between US and China and another uncertainty is the friction between US and Iran, which could go nowhere. “I think the market has made a bottom around 11,000. How high will it go, how long it will take that we can only know in posterity; we can know the direction, we can know the approximate higher bottom but we cannot predict how much it will go, when it will go,” he said, adding that he does not think market would give returns of 30 percent this year but they will be good.
When asked about support levels for the market, he said, “I think if NDA gets clear majority then 10,750-11,000 is the bottom.”
Talking about his expectations from the second-term of the NDA government if it were to come to power he said, “I think expectations in the second term are moderated and the results are going to be far better than the first term.”
It is very difficult to change anything in India because India is an elephant, he said. “The second term will be far better than the first because expectations are moderated and performance will be better,” said Jhunjhunwala.
When asked about the areas India needs to focus on, he said the biggest thing that limits India’s growth is democracy but it is needed, we cannot overrule it. Second thing is the bureaucratic system that we have created without blaming any individual but that can only be undone with technology and time.
With regards to Indian growth, he said India’s growth is not necessarily linked to global growth because India’s exports are far lower as compared to GDP.
“India has had sub-par capital expenditure for the last five years, we had banking crisis, we had to pay the price of demonetisation and GST introduction and we have paid for all that now,” he said, adding that the credit culture in India is now improving because of IBC and integrity is coming to the fore. “People with integrity are creating the most wealth,” he said.