With the government planning to raise Rs 40,000 crore by diluting its stake in public sector companies, Mahesh Patil, co-head, equity investments, Birla Sun Life AMC, tells Sarmistha Neogy that his company is looking forward to participating in the upcoming issues. Edited excerpts:
Compared to strong buying by foreign institutional investors (FIIs), mutual funds (MF) participation has been muted. How do you see the trend progressing?
Recently, FIIs were very strong. On the other hand, there was not much action in the domestic market. So, a comparison between the two is not fair. Because of the global outlook, FIIs have been quite aggressive, while domestic participants have been cautious.
Flows from FIIs will continue to be strong, barring any global shocks. If the markets correct, there will be more support from domestic funds.
What is the cash to equity ratio? What changes do you see in this ratio?
By and large, people won’t be maintaining too much cash at this point in time. We are positive on the markets, but are also aware of the near-term concerns. We will not be buying the markets for the short term. We just have moderate levels of cash to manage liquidity and volatility.
Are you participating in the upcoming PSU disinvestment?
We would surely like to participate in good quality issues. The only concern I see is the valuation. If they will be attractive and comparable to the peers, we will participate. It is purely a valuation call that we have to take. But we are open to the whole process.
Which sectors are you bullish/bearish on?
The sectors that we are positive on are commercial vehicles, banking, finance, engineering and capital goods. I am also quite optimistic on power stocks.
We are slightly cautious on metals and telecom. Cement and downstream oil & gas sectors also look weak.
