In an interview with CNBC-TV18, Deepak Shenoy of capitalmind.in shared his views on the fundamentals of the market and specific sectors.
Speaking about rumors of State Bank of India (SBI) taking over Yes Bank, he said, “I do not know if there was even a chance that SBI would take over Yes Bank. I do not think it is going to happen. Yes Bank needs capital and if there isn’t any capital to be had, we would see a merger, but I do not see that SBI would get into the fray right away.”
“SBI has got a pretty good story. There is Cards IPO that is also going to come out and there is potentially a lot of activity because it is far up in the merger process. It has already processed mergers. Among the public sector banks, it is one of the most aggressive. I think it is a reasonable bet to look at, but it is going to get a big hit in terms of DHFL because at the end of this quarter DHFL will be officially an NPA and therefore NPAs will shoot up,” he added.
According to Shenoy, one of the fundamental changes that have happened in the last two or three weeks is that Indiabulls Housing will fund an ESOP trust which will buy shares in the market at 4 percent. It will be around Rs 300-400 crore which will be used to purchase shares in the market, and it would give a temporary fillip to the stock.
On BEML, he said though it is a very good company on paper, it does not get the valuation because the government owns it. "To a certain extent they make a lot of revenue partly from railways because they make some of the metros scavengers and so on. One of the problems here is the government ownership and the fact that it could see a mix in revenue or receivables work to their disadvantage going forward. However, if this was a divestment candidate in any serious form of the word, then I think it is a very valuable stock probably. As a privately owned company, this would trade 2-3 times of what it is right now and I would look at that as a trigger,” he pointed out.
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