In a candid dialog with ET Now, Sabharwal warned that your complete IPO story is “turning into increasingly more murky,” citing a worrying sample of firms abruptly turning worthwhile simply forward of their public concern. “Many of those firms are reporting earnings solely within the final quarter earlier than they arrive for IPO, or the final 12 months after being in losses for years,” he mentioned. This development, he added, raises severe questions on transparency and earnings high quality.
In line with Sabharwal, regardless of such pink flags, these IPOs are being “lapped up” by giant institutional traders, which in flip triggers a herd response from retail traders. The consequence, he famous, is an overheated main market and a subdued secondary market. “Promoter promoting and an enormous movement of IPOs are holding the broader markets subdued,” he mentioned, despite the fact that earnings for the September quarter have been strong with general development of round 16%.
In a separate dialog final month, he added that regardless of the frenzy, he stays on the sidelines. “I’ve not, as a result of see, when you get into that lure… then ultimately you don’t actually know what you’re doing,” he mentioned, stressing that enticing alternatives could come up later when valuations are right.
On the outlook for the approaching quarters, Sabharwal struck an optimistic word on earnings restoration. He expects the revenue pool to broaden from this quarter onwards, led by a revival in client demand. “Your entire client area ought to see a powerful revival. Auto firms ought to proceed to do effectively,” he mentioned, including that large-cap names like Bharti Airtel, Reliance Industries, and main banks are well-positioned as margins stabilise.
Whereas the home earnings image appears to be like wholesome, Sabharwal cautioned that international elements may nonetheless affect the near-term trajectory. “International markets have carried out very effectively; we now have not carried out as effectively. So, in the event that they go right into a correction, we’ll must see how a lot we right,” he mentioned.Additionally learn: Lenskart, PhysicsWallah, and Groww: GMP tendencies counsel as much as 22% itemizing positive factors for 9 IPOs subsequent week
On public sector banks, Sabharwal stays constructive however selective. “PSU banks general ought to do effectively, however folks ought to concentrate on the bigger ones,” he suggested, highlighting State Financial institution of India as a standout. With the QIP fundraising behind it and curiosity returning to the inventory, he sees a possible 15–20% upside in SBI because it continues its rerating cycle.
(Disclaimer: Suggestions, options, views, and opinions expressed by consultants are their very own and don’t characterize the views of The Financial Instances.)
