Dimensions Corporate Finance Services expects huge demand in initial public offerings (IPOs) for niche businesses, Ajay Srivastava, CEO, told CNBC-TV18. Srivastava also said that investors can allocate some part of their portfolio for new-age businesses.
“Zomato announced USD 1.25 billion; Swiggy came at USD 1.27 billion, which means the competitive intensity of these businesses is going to be very high, which means the margins are going to be limited. Therefore, if 5-10 percent of your portfolio is in economy stocks, you can live with it and you need to balance some of these with overseas holdings provided government allows you to have larger holding of such global stocks. So that you have a balance of India and global-focused stocks rather than just being India-focused which is very expensive,” he said.
Srivastava recommends 25 percent of portfolio towards US market. “If you can, try and put 25 percent of your portfolio allocation in the US stocks because that’s where bigger and best companies are available. 25-30 percent has to go to the sector of pharma and IT, 25 percent toward home building and last 25 percent in commodities and ferrous stocks,” he said.
According to him, pharma and IT sectors will be the best performing in Indian market. “I don’t think banking will give returns; it’s going to be pharma and IT and the new players keep coming up. It has done well and it will keep paying you well,” said Srivastava.
For the entire interview, watch the video.