Do it yourself

The recent discussion triggered by a viral video featuring Sanjeev Prasad , Co-Head – Institutional Equities at Kotak Institutional Equities, has reignited scrutiny of India’s IPO markets. Prasad highlighted that over the past five years, roughly 40% of IPO proceeds have gone to promoters and early investors, while only around 15% has been deployed toward capital expenditure—suggesting limited contribution to real economic asset creation. His statement resonated widely, reflecting growing investor unease over whether public equity markets are increasingly serving as exit avenues rather than engines of new growth. While the concern is valid and deserves examination, the broader picture is more nuanced than a headline statistic reveals. The Concern: Is the IPO market becoming exit driven? The disproportionate share of Offer for Sale (OFS) raises legitimate questions: ·          Are IPOs being priced and marketed primarily to facilitate stake...

The life of equity investors appears to be becoming more tense with each passing day, regardless of the indices scaling new highs. This applies more to the professional investors (fund managers etc.) as compared to the individual investors. I gather from my conversations with the professional investors that they are finding it increasingly difficult to sustain their performance of the past three years. The assets under their management (AUM) have increased multifold in these three years, but the stock of quality investable equity shares has not grown at a matching pace. Some of them have been reluctantly deploying the incremental flows in the limited number of available stocks, resulting in unsustainable rise in prices; whereas the others have chosen to go down the quality ladder and invested in the poor quality or apparently absurdly valued stocks. Obviously, they lack conviction in their portfolios, but continue to hold it and even grow it due to professional compulsions. Arguably, t...

We are currently in a market phase where most asset prices are rising. Equity indices (Nifty over 22200) are close to an all-time high. Gold prices (over US$2125/oz) are at an all-time high. Bond prices (benchmark 10-year yields 7.05% from 7.50% a year ago) have recovered from their recent lows. Bitcoins (US$66000) are trading at an all-time high. Real Estate prices in India are also close to their highest levels in most metros. Prima facie, all investors should be celebrating FY24 as one of the best years in their investment journey. However, a recent interaction with many small (retail) and high-networth investors indicates that for a significant proportion of investors, it may be a “glass half empty” kind of situation. The common regrets of over 100 investors I spoke to at three different gatherings could be listed as follows: ·          They stayed invested with the top-performing fund managers of 2018-2020. However, these fund managers ...