“That’s at all times an excellent signal, however you must watch out,” Rao advised ET Now in an unique interplay. “Typically when there are too many IPOs, there’s a concern a couple of bubble brewing and all that stuff. It occurred right here additionally within the late Nineties.”
He added that whereas a number of high-quality companies are hitting the market, not all corporations coming by means of the IPO window have strong fundamentals. “There are at all times some good corporations in there, however some others get in due to the tailwind. Total, folks must watch out simply as within the US — spend money on corporations which have good potential, a strong marketing strategy, and a path to profitability. That’s the primary factor,” he cautioned.
Rao identified that in previous market booms, some corporations went public primarily based purely on lofty expectations relatively than sustainable earnings. “You’ve some corporations, as we had up to now, the place earnings had been anticipated method down the road if all the celebs lined up — that didn’t actually make sense. However there are some good corporations with sturdy fundamentals and good industries which have a transparent path to profitability, and people are those to search for in IPOs — and that applies in every single place,” he stated.
International Headwinds and India’s Resilience
Discussing the worldwide market setup, Rao noticed that whereas the US markets have seen combined alerts, the basic backdrop stays regular. “Each nation has its personal fundamentals. The US market is correct now in a bind — on one hand, the labour market is sort of softening; on the opposite, some information from Citibank is displaying that unemployment claims are literally falling. Though you see bulletins, layoffs usually are not that dangerous,” he defined.In line with him, the US financial system continues to be holding up nicely. “Essentially, the US market continues to be good, and there are a number of cuts coming down — yet another lower by the tip of the yr and two extra after that. So there’s some tailwind going into that, which is constructive sentiment,” he stated, including that such optimism tends to hold over to different main markets, together with India.Rao additionally highlighted the altering dynamics of worldwide capital flows. “One factor I learn and observe is that the relative benefit of investing in India — for retail cash and for corporations to maneuver to India as a substitute of China — due to tariffs, that arbitrage or revenue hole is sort of diminishing,” he famous. “Hopefully, there’s a decision to the tariffs concern, and that can assist India extra at this level by way of international cash coming into the nation.”India Poised to Profit from Cooling Oil PricesOn India’s outlook amid the broader international developments, Rao remained upbeat. “India ought to do nicely on this setup as a result of each time oil costs are down, that’s at all times good — that’s extra money in folks’s pockets, in order that’s at all times an excellent tailwind,” he stated.
He emphasised that the Indian financial system continues to be among the many fastest-growing globally. “Though there’s a slight disturbance right here due to this tariff speak and different stuff, general it’s a superb place to take a position. I’m positive it’ll choose up increasingly more because the mud settles and we get some extra readability,” he stated.
Rao additionally underlined the strengthening partnership between the US and India. “Speaking to some consultants right here, the US believes India is an enormous companion — will likely be an enormous companion going ahead — and equally vice versa. So I feel ultimately that can settle, and India will return to what it was earlier than this noise got here in about all the things happening,” he noticed.
Wrapping up on an optimistic notice, he stated, “Web-net, I count on — and even from a few of the corporations reporting in India — they’re doing very nicely. So, I’ve a constructive opinion concerning the Indian market and its outlook.”
