A fall in promoter ownerships is good for the markets in the long run, as it makes it more efficient, said Ambit AMC Chief Executive Officer Sushant Bhansali. In India, usually, promoters control 50–60% stake, he noted.
In developed markets, public ownership is higher than promoters' ownership, he told NDTV Profit.
Domestic institutional investors are investing in the market. They have been sensible in the last two and three years to not put liquid float directly into the market and make the valuations more expensive. They have been conservative, and judicious to buy stocks in QIPs, promoter's stock sales and primary markets, Bhansali said.
The primary goal of the capital market is that money should be used and it should be used for capital expenditure. This is how its been going with primary offerings. Hence, it is not a bubble, rather there are opportunities, he said.
Indian markets are not as cheap as they were two months back. Between September and February, 90% of stock saw correction. Then, between March and June, stocks rose as well. However, 70% stock are still below September levels. The froth has gone from numerous segments, he said.
Broader markets declined 4–5% from life-time highs, he said.
Markets are rewarding those companies which are delivering performance. Money is moving from weaker to stronger companies. Smart money is going to insurance side from private banks now, he said.
Ambit Asset Management is investing in chemicals this month. There are tailwinds in the sector from both global and domestic sides. The inventory level is stabilising. Hence, there will be demand, which will help pricing. Prices have bottomed out in many categories. Capex cycle is completed, hence there will be more free cash flows, he said.
Agrochemical segment has a lot of global tailwinds. In India, as well as around the globe, rainfall looks decent so far. Inventories are at historical lows. Hence, chemicals will deliver growth, according to Bhansali.
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