“Luckily no. We are a little more sensible than that. But it does not matter because at the end of the day, the country’s mutual funds did exactly the same,” Srivastava said. He expressed concern over mutual funds facilitating exits for private equity investors at valuations unlikely to generate long-term gains.
Short-term IPO price swings, he said, are not inherently concerning, but valuations that stretch into the tens of thousands of crores for companies with no proven profitability are “ridiculous.” Srivastava recounted a recent encounter with a company CFO who claimed, “profit is not an objective,” adding, “Okay, that is fine. Please run your company. My money is not for you.”
Highlighting that the IPO frenzy is easing, Srivastava noted, “Hypervaluation IPOs are a thing of the past gradually, you will see two-three subscriptions already have kind of fallen, share price can still go up after listing, but at least the exuberance of application has gone down in the last 48 hours.”
On broader market themes, he emphasized the strength of India’s automotive and healthcare sectors. “Auto, we are world’s best, there is no question about it. We control the world in terms of two wheelers, and we are exporting cars now heavily. Domestically more than banks… banks are rubbish in India. I have not wasted money on bank for last three years. I will not waste next five years.”
Srivastava also recommended focusing on NBFCs with strong pedigrees and stressed the importance of integrity over flashy financial engineering. “Across India, pedigree has won the day, whether you look at auto, Eicher… you saw gold loan company today coming out, strong pedigree of 50-70 years. I think this next 10 years is going to be the year of pedigree at the end of the day.”He highlighted healthcare, auto, and defence as key structural investment themes while noting that new-age companies with sound business models continue to offer opportunities. “There is one good quality company which just focuses on profit, does not talk of cash burn. I think expensive valuation, but still it is a good company. And we have got over 200 IPOs which are good quality IPOs in the last two years where prices have corrected. Nothing wrong in the companies. It was a pricing valuation. So, you have enough entry points. Lots of new-age companies have come. So choice is abundant.”On gold, Srivastava stressed allocation rather than speculation. “It is not about betting on gold, it is about allocation. You cannot sit out of the gold and say one day it will come down and I will buy it… supply is smaller than the demand of gold, that is a given. Number two, it is the best form of security for any… Indians store gold and take it out when they need it and they borrow money against it, most secured collateral.”
