IPO Update: LIC IPO is quite cheap at current valuation, we may apply: Samir Arora of Helios Capital

The market hasn’t discounted the macros yet, according to Samir Arora, Founder & Fund Manager, Helios Capital, and inflation, coronavirus, and the Russia-Ukraine war are still issues.

Arora also discussed the banking industry, the LIC IPO, and new-age technology enterprises in an interview with CNBC-TV18 on April 26. Excerpts that have been edited:

Do you believe the majority of the unpleasant news has been processed? Is this turning into a buy-on-dips market?

Because the market hasn’t fallen dramatically, I don’t believe the macros have been totally discounted yet. Year to date, the market is down less than 2%. Inflation, COVID-19, and the Ukraine war are still major challenges. The Indian public seems a little too enthusiastic.

What is the banking sector’s outlook?

Banking could outperform in the next few years as asset quality improves. We are heavily invested in banks, with the banking sector accounting for the majority of our holdings.

Who should you bet on among ICICI, SBI, and HDFC Bank?

We have all three banks in our portfolio, and they each have a market capitalization of approximately 7%. HDFC Bank was consistently at the top of our list. HDFC Bank is the one of these three banks that will be purchased. Even if HDFC Bank performs somewhat worse than ICICI Bank, it is not a sell. Some of the quarterly earnings have been over-analyzed.

Do you work for any new-age technology startups such as Nykaa or Zomato?

There are two types of corporations with high valuations: consumer companies and new-age technology enterprises. Both of these things irritate us. There is no incentive to invest in new-age technology firms from around the world or from India.

Do you hold any shares in the Adani group?

We don’t have any Adani Group stock, unfortunately. We can’t analyse these stocks since they’ve risen too quickly.

What are your thoughts on the LIC IPO?

LIC now appears to have reached a point where the government is willing to make a deal. The main problem is that there isn’t enough float. At its current price, the LIC IPO is a bargain. As a result, we may submit an application for the LIC IPO.

Source: CNBC-TV18