Vikas Khemani, founder of Carnelian Capital Advisors, in an interview with CNBC-TV18, shared his views of different sectors and the IPO market.
On IPOs, he said because of the euphoria in many good quality companies and crowding out happening - you either don’t get allocation or if you get allocation, your large part of the thing is done during listing. So, one has to be careful from a medium to long-term perspective. In IPO also, we are seeing quite a bit of frenzy building, one has to be company-specific and time-horizon has to be very right.
Most of the quick gains on listing are done. At those levels, stocks become fairly expensive and so one has to be careful because in a frenzied market, IPOs also come at a price and on top of that you have listing gains and so whether one would make money from there, one has to be careful. This is a general comment and not specific to any company, said Khemani.
The midcap and smallcaps have seen big moves and when asked if they are still good for more or it is worrisome, he said, it depends on your time horizon and what kind of risk you are willing to take. If you are going to be perturbed about volatility risk and mark to market risk, there is no answer but if one is in for a medium to long-term perspective, even at current levels they offer reasonable amount of promise. However, the worry is there is froth getting built in many counters that are not fundamentally strong in midcap and smallcap space and so, one has to be very careful.For the entire conversation, watch the video.