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videos | IST

Seeing signs of froth in IPO market; keeping cash at 20% in case of dips: Old Bridge Capital

The surge in the number of initial public offerings (IPO) seems to be a sign of a bubble, while high valuations remain a concern in the market going ahead, says Kenneth Andrade, founder and CEO of Old Bridge Capital Management.

The surge in the number of initial public offerings (IPO) seems to be a sign of a bubble, while high valuations remain a concern in the market going ahead, says Kenneth Andrade, founder and CEO of Old Bridge Capital Management.
Speaking to CNBC-TV18, Andrade said he would be a little cautious going ahead.
“Going by the surge in IPOs, we are seeing signs of froth in the market. I will be a little cautious. I do not think 2022 is going to be as great as it looks today. Corporate earnings have been good and it improved balance sheets significantly. So it’s just a valuation issue and growth which remains a question mark today,” he said.
Andrade advises investors to keep cash at 20 percent, in case there is a dip in the market.
According to him, the real estate sector is coming out of the multi-year consolidation phase and strong demand and low interest rates are good tailwinds for the realty companies.
On new listings, Andrade said he has not invested in companies like Nazara Technologies and Zomato.
“If there is a new way of investing, I still got to learn. But now we are sitting on the sidelines and watching a lot of these companies. We are not participating in any of these,” he added.
Andrade believes the valuations of Speciality Chemicals are high and would wait for a dip to buy these companies.
For the entire interview, watch the video