Why Helios’ Dinshaw Irani is avoiding the IPOs, FMCG, IT and paint stocks
Dinshaw Irani, CIO, Helios MF, says “the RBI circular on raising risk weightages for various lending, made banks go back to the pre-Covid levels. The only thing was they came down heavily on the NBFCs rather than anything else. So that is the good part about the RBI move. I think they have done a wonderful job in controlling the asset quality within the system as such. That is one thing one should look out for. ”
Have you picked anything up or looked at any interesting companies? There have been a lot of debuts this week?
I would not like to comment on this, since now we are running a mutual fund, but I do not think we are too excited in the IPO market as of now. I would stay away from that.
What else are you avoiding completely, where you say valuations are higher even though business is good?
Basically, FMCG is one area which one needs to avoid. I do not think sustenance of 60-70 PEs for most of these stocks – I am talking about one-year forward PEs – is possible, given that even the rural markets are not firing and the growth rates are in low teens or even high single digits as such. So, that is one area that you need to avoid.
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The second one is outsourcing and mainly IT within that space. Because I think there is a lot of hope trade being played out here that probably there will be a rate cut happening very soon in the US, and that is why discretionary spins will come into the IT budgets as such. Not happening. I mean, I think December will be again, the quarter
