Long-term trading opportunities available in power sector: Raunak Onkar

economictimes.indiatimes.com:

" So, I want to understand the impact of cost of capital on your portfolio from here on. We have seen very sharp interest rate hikes in US where you have bulk of your overseas portfolio in the last 18-20 months," says Raunak Onkar, PPFAS MFI was looking at your fund breakup. You have 65% in Indian equity, 35% outside of India, so which part is more richly valued and which part is more attractively valued right now — global equities or Indian equities? I just like to make one correction, at the moment we do not have 35% invested, that is the maximum limit for foreign investments.

We are currently at around 17% invested in foreign stocks and around 66% invested in domestic stocks. So, we are finding both markets to be interesting. Some companies we like fortunately are trading at reasonable valuations.

However, there are many pockets in our market as well as global markets, they have become a little expensive and we are trading cautiously because of that. Hence, we have around 16% of cash in the flexicap fund.So, I want to understand the impact of cost of capital on your portfolio from here on. We have seen very sharp interest rate hikes in US where you have bulk of your overseas portfolio in the last 18-20 months. The rise has not been that sharp in India. But if we assume in the next six to eight months, the direction of the rates may actually reverse give or take a quarter. How will that reducing cost of capital impact your blended portfolio?Interestingly, the cost of capital really hurts those businesses who constantly need to depend on outside capital to raise money and to scale their businesses.