Ace investor Rakesh Jhunjhunwala wants Indians to invest into equities and not care about sector allocation as he expects a tsunami of foreign fund inflows.
Ace investor Rakesh Jhunjhunwala wants Indians to invest into equities and not care about sector allocation as he expects a tsunami of foreign fund inflows. The big bull said that India is likely to witness 8-9% GDP growth in the next four to five years, roping in more funds across various sectors. In an interview to CNBC TV18, the billionaire investor said that Indians need to reach the hotel first and then look at the menu as he stressed on the need for Indian households to start investing in equities and then care about sectoral allocation.
Talking about where he feels like the next big winners in the stock markets will come from he said that it could be the most beaten down sectors. Public sectors enterprises, metals sector are some of the themes that he suggested. Rakesh Jhunjhunwala added that divestment and asset monetisation are some of the catalysts that could enhance shareholder value in the public sector. Hindustan Petroleum Corporation Limited’s (HPCL) buyback offer, according to him, is an indicator that the government wants to enhance valuation of its assets. The big bulls however, did bat for a change in the government’s attitude to treat their assets better.
Continuing his bullish views on the pharmaceutical industry, he said that India has the potential to be the pharma king of the world. India’s API manufacturing firms have seen a sharp uptick in demand and stock price have mirrored that upward trend. Until last year China had been the sole benefactor of the world’s API demand. However, now Indian firms aided by the government have been working to capitalise on the shift of corporations from China. However, Rakesh Jhunjhunwala added that for India everything will be the theme of the decade now.
Global markets are at this juncture witnessing low interest rates and abundant liquidity. Rakesh Jhunjhunwala believes that this will result in a “Tsunami of fund inflows” into the Indian stock markets. India has been a major recipient of Foreign Portfolio Investment and that trend, according to the big bull is likely to continue as Indian markets have the potential to see a substantial growth. This owing to the fact that India is a point where if things go in the right direction, he said, India can reach double digital growth figures in the next five years.
On the reforms front, Rakesh Jhunjhunwala, who had earlier this year expressed his displeasure at the pace of reforms in India, said that the government seems hell bent on reforms despite political opposition which he saw as a positive. The Billionaire investor highlighted that corporate profits to GDP in India are at all time lows. Percentage of profit to GDP will go up and the size of the GDP will go up, he added. This
For India’s growth, he added that he will continue to keep an eye on global inflation and interest rates. As long as these two indicators are well placed capital is likely to make its way towards India, he said.