- #Zee and #PunitGoenka both keen to close merger: Sources
- Saudi oil price cut: What does it mean for India
Find out what's happening in trade so far with Hersh Sayta and Smriti Chaudhary on 'Market IQ'. #NDTVProfitLive
- Saudi oil price cut: What does it mean for India
Find out what's happening in trade so far with Hersh Sayta and Smriti Chaudhary on 'Market IQ'. #NDTVProfitLive
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TVTranscript
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00:42 Markets continue to inch higher.
00:44 Nifty nears 21,700 marks.
00:46 Sensex jumps over 600 points.
00:49 Broader markets, mirroring gains.
00:53 All sectoral indices in the green, barring media.
00:56 IT and reality emerge as the top gainers,
00:59 while Zee drags Nifty media lower.
01:02 Sources say Zee and Puneet Goenka
01:09 are keen to close the merger, with good faith negotiations
01:12 still going on.
01:13 That's an NDTV Profit Exclusive.
01:15 And a thumbs up coming in from OMCs
01:21 after oil plunges as much as 4%, as Saudi price cuts
01:25 counter Middle East worries.
01:27 Stellar rally in Adani Group stocks.
01:33 Their total market cap hit 15.57 lakh crore rupees market cap.
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01:41 Good afternoon.
01:57 Welcome.
01:57 You're watching Market IQ here on NDTV Profit.
02:01 I am Harsha Hyder with me is Smriti Choudhury.
02:03 Over the next half an hour, we'll
02:04 keep you cued on what markets are up to.
02:07 And at the moment, you're seeing a good bit of gains
02:10 on the benchmark indices after a tough day of trade
02:13 to start the week yesterday.
02:15 Benchmark indices, the Nifty itself
02:17 is up nearly a percent in trade.
02:20 Definitely a positive day.
02:21 And we're going from strength to strength, as you can see.
02:24 It's a fairly steady graph through the day,
02:26 except that initial blip that we saw at the start.
02:29 Let's also have a look at the breadth of the market.
02:33 The advance decline ratio strongly
02:35 in favor of the advances, clearly demonstrating
02:38 that there is a very good breadth with regard
02:41 to buying, which is happening across the board.
02:44 Let's also have a look at the broader markets.
02:48 Broader market indices also gaining largely in tandem
02:51 or slightly lower than where the benchmarks are at.
02:55 That's a bit of a change from what
02:59 we've seen over the last week or so,
03:01 where we've seen largely broader markets outperforming
03:04 the Nifty.
03:05 That's been the trend.
03:06 That trend seems to be continuing,
03:08 but a slight bit of outperformance
03:12 shown by the benchmarks today.
03:14 So that's definitely a positive.
03:16 43 of the Nifty 50 stocks in the green,
03:19 and the breadth looking extremely strong.
03:21 Let's quickly look at also where the sectoral indices are
03:26 doing, except Nifty Media.
03:27 Let's pull up Nifty Media.
03:29 Look at the constituents there.
03:31 So outside of the Nifty Media, you're
03:32 seeing pretty much all sectors in the green.
03:35 Again, the breadth extremely strong, signaling that.
03:38 Let's pull up the Nifty Media with regard to constituents,
03:40 Z being the key drag there.
03:43 But other than Sun as well as NETV,
03:46 you have pretty much all of the other constituents
03:49 there in the red, and sharply in the red.
03:53 Also, if I can quickly flag off some stocks which are buzzing,
03:57 you have the likes of GMDC, which is up roughly 7-odd%.
04:02 Z Entertainment, of course, down roughly 8% or thereabouts.
04:05 IRB Infra up 11% on the back of December numbers.
04:09 Fino Payment up 3%, Gensol Engineering up 3%.
04:12 Those are some of the stocks which are buzzing specifically.
04:16 Smriti.
04:17 You talked about Z Media, and there's
04:20 a lot of weakness in the stock today.
04:22 But we have the latest update on that ZSony deal.
04:26 Sources have told NETV Profit that good faith negotiations
04:30 are still on.
04:31 This comes after a Bloomberg report
04:33 that claimed that Sony is planning to call off
04:35 the $10 billion deal.
04:37 We have Tamannah joining us with more on that.
04:41 So sources close to the deal indicate
04:44 that we've not yet heard the last on the ZSony saga.
04:48 Now, this is an important clarification coming in just
04:51 a day after a Bloomberg story reported
04:54 that Sony is looking to exit that merger deal.
04:58 Just for context, the deadline of those negotiations
05:01 end on the 20th of this month.
05:03 That is after an extension in place.
05:05 And because of that Bloomberg report,
05:07 the stock has been hit quite badly.
05:09 Now, what are we learning?
05:11 Our sources are telling us that good faith negotiations are on,
05:14 that Puneet Goenka and Z are keen to go ahead
05:18 with the merger.
05:20 There is also a clarification that it is not,
05:22 as of Puneet Goenka, vying for any specific chair or position,
05:26 but wants to see what the shareholders have approved
05:29 be implemented in the letter and spirit, which effectively
05:32 is him at the helm.
05:33 That continues to be an issue with Sony.
05:36 There is no doubt about that.
05:37 The push and pull on the leadership question continues,
05:41 but the negotiations and conversations
05:43 are still on as we speak.
05:44 And this becomes crucial because if you
05:47 go by the Bloomberg story that says
05:49 Sony has pretty much decided it's
05:51 going to call off the deal while they're still
05:53 having a conversation.
05:54 So that conversation is very much on.
05:56 Another point to sort of add and keep in mind here,
06:00 that if the deal is called off, it goes back to ground zero.
06:05 So you have to go back to all the regulatory desks
06:08 for approval.
06:08 Once again, a long process which took about two years.
06:11 You have to go back to the shareholders as well
06:13 for an agreement.
06:15 And then you move on from there.
06:17 For Sony, walking away from Z is not the easiest thing
06:20 to do right now.
06:21 With competition really jumping up on this landscape.
06:25 Remember, after Jio has taken over Disney Hotstar,
06:29 it has become a behemoth.
06:30 And to compete and survive in this market,
06:33 Sony will need to shore up resources.
06:35 So Z is a good deal for them.
06:37 Even on the other side, in terms of Puneet going,
06:40 guys, it's not going to be very easy for him
06:42 to walk away from Sony.
06:44 So it's a very tough negotiation on right now.
06:47 We have to see which side blinks.
06:49 But the long and short of it is, we've not heard
06:51 the last word on this yet.
06:53 Absolutely.
06:54 But the last word ought to be heard
06:56 before the 20th of January, Tamanna.
06:59 And of course, we'll wait and watch as to how things play out
07:02 going forward.
07:03 But outside of Z, we had oil prices also slip
07:07 in trade yesterday.
07:08 Saudi Arabia cut its prices.
07:10 What does this mean for India?
07:12 And what does this mean for OMCs?
07:14 Miika's here to tell us exactly that.
07:17 Yes, so Saudi Arabia did cut its selling price
07:19 on the February loaded Arab light crude.
07:22 And this was the lowest in 27 months.
07:24 And the price was cut by $2.
07:26 And this came after Saudi also cut the prices by $1.5
07:32 in December for the January loaded crude.
07:35 Now, this move works well for India, as well as the OMCs,
07:39 as the country is actively trying to diversify
07:42 its crude import mix amid a scenario where
07:44 the Russian crude discounts that we once enjoyed are now fading.
07:48 Now, Russia is the top supplier to India.
07:51 And in the April to October period,
07:52 it accounted for 34% of the crude import bill,
07:55 while Iraq and Saudi Arabia accounted for 20% and 16%,
07:59 respectively.
08:00 Now, India majorly turned to Russian crude
08:02 because we enjoyed a good $20 discount
08:05 in the start of February 2022.
08:07 But the discounts from Jan to October 2023
08:10 have now narrowed by 14%.
08:12 And so the Petroleum Minister has
08:14 stated that India is happy to buy Russian crude,
08:16 but only if it's at a discount.
08:18 So India's crude import strategy is basically
08:21 surrounded by price.
08:23 So the Saudi Arabia cutting prices
08:25 and Iraq being marginally higher than the Russian crude prices
08:29 bode well for us, as India is focusing
08:31 on diversifying its mix and focusing on Middle Eastern
08:35 suppliers more.
08:37 Right.
08:37 Thank you, Mihika, for that.
08:39 And time and again, the Petroleum Minister
08:42 has talked about how they have no issues buying
08:45 from Russia or anywhere else, and price
08:49 being the biggest point.
08:51 Now, moving on to Uber India that posted a 54% year
08:55 on year revenue growth in FY23.
08:57 But the numbers are not driven by rides.
09:00 My colleague Rishabh is joining us
09:02 to explain the key factors that have driven Uber's revenue
09:06 growth.
09:07 Rishabh, talk to us about how the results are
09:10 and what are the main highlights that came out of it.
09:13 That's right, Smriti.
09:18 We have our hands on Uber India's financials for FY23.
09:23 What's very, very interesting is that the revenue
09:25 has increased about 54%.
09:28 It has reported a 2,666 crore revenue.
09:33 The largest revenue head was not its mobility rights.
09:37 The largest revenue heads was, in fact, the IT or support
09:41 services that it provided to its parent company in the US
09:45 and in Netherlands.
09:47 So that made up about 1,977 crores of its entire revenue,
09:54 while rides made up only about 679 crores for the revenue
09:59 it made.
10:01 It continued to be a loss-making entity.
10:03 It posted a loss of about 311 crores.
10:06 That's comparable to its FY22 loss.
10:10 That was about 200 crores as well.
10:12 Its expenses have also ballooned to about 3,145 crores
10:17 from 2,145 crores in FY22.
10:21 What's also interesting is that the listed entity in the US,
10:26 Uber Inc., has turned profitable.
10:30 That has posted about two consecutive quarters of profit.
10:34 But the India entity continues to languish
10:37 in what is turning out to be a very competitive market
10:41 for Uber with Ola, with new challenges like Rapido cabs.
10:45 We have InDrive and now BlueSmart as well.
10:49 Thank you, Rishabh, for that.
10:51 But it's time to slip into a short break.
10:53 But more updates on the other side.
10:55 Stay tuned.
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13:56 - Welcome back, you're watching Market IQ on NDTV Profit.
14:04 Quickly addressing the news that's flashing
14:06 at the bottom of your screen.
14:07 We had Access Bank, which had invoked pledge of shares
14:10 from Carvey Stock Brokers.
14:13 The SAT had, the SEBI had placed an order,
14:18 or rather passed an order in favor of Carvey,
14:22 which was reversed by the SAT.
14:24 It seems that that order is now on hold as both SEBI
14:28 as well as Carvey seem to have gone to the Supreme Court.
14:32 Of course, we await more details on that one.
14:35 It's against Access Bank,
14:36 but doesn't seem to be extremely material.
14:39 But quickly moving on, the Vibrant Gujarat Summit 2024
14:42 is set to be inaugurated by the Prime Minister tomorrow.
14:46 NDTV's Vasudha Venugopal gets us all the details
14:50 of the roadshow prior to the event in Ahmedabad.
14:54 Vasudha, how are preparations looking?
14:57 Talk to us.
15:01 It's going to be two tightly packed days for Gujaratis.
15:05 And also, I think this event is of great significance
15:08 for the people of the country because, you know,
15:10 this is a very different Vibrant Gujarat.
15:11 It comes very close to the Lok Sabha elections of 2024.
15:15 Prime Minister Narendra Modi, you know, it's Vibrant Gujarat
15:18 is seen as his brainchild, you know,
15:19 something that he conceptualized in 2003.
15:22 And he wanted to project his state as the best destination
15:25 for not just investments and business,
15:27 but also policymaking.
15:28 And this is his way of showing the country that,
15:32 you know, 20 years to Vibrant Gujarat,
15:34 you know, the platform has risen to become this unique,
15:38 you know, meeting of stakeholders and policy makers.
15:41 All of that is going to happen today and tomorrow.
15:44 What I understand is that the Prime Minister will inaugurate
15:47 the Vibrant Gujarat trade show in the afternoon.
15:49 Remember that the focus of this is going to be emerging technology.
15:54 So there's a lot of talk about e-mobility, FinTech
15:56 and also high-tech manufacturing.
15:59 And of course, a lot about green hydrogen and green ammonia.
16:02 So that whole sustainable energy is something that remains a focus,
16:06 you know, focus area of Vibrant Gujarat this time.
16:09 What I understand is that after that inauguration,
16:11 he is, of course, moving to the airport to receive the president
16:15 of UAE and that, Mohammad Bin Zayed.
16:18 And, you know, he has already posted on Twitter that,
16:21 you know, it's like welcoming his brother home.
16:23 And remember that in July 2023,
16:25 the Prime Minister did make a visit to UAE and remember that
16:29 the diplomatic relations between the two countries has only risen
16:32 to a historic high in the last few years.
16:34 He was the first Prime Minister in 35 years to visit UAE in 2015.
16:39 After that, he has visited the country almost five times.
16:41 And India-UAE relations have gone from just being,
16:45 you know, India being the state that buys petrol.
16:47 It's gone to talking about energy and food security.
16:50 So there's been a great development on that front.
16:52 And then we also saw the inauguration or not the announcement of the
16:56 India-Middle East-Europe corridor.
16:58 And of course, the grouping of BRICS being expanded to include UAE
17:02 and that also came with India support.
17:04 We saw, you know, in during G20 presidency of India,
17:07 UAE supported India very much.
17:09 So all of this has happened in the last few years.
17:11 And today is going to be a culmination of sorts that roadshow is being,
17:15 you know, organized in the honor of the UAE president.
17:19 And remember that this is also a diplomatic message that India is
17:21 sending out to the world, even as the geopolitical tensions rise
17:26 between Israel and Hamas.
17:28 This is India's way of reaching out to the international audience as well.
17:32 So I did speak to Rahul Gupta,
17:35 who is the managing director of Gujarat Industrial Development Corporation,
17:38 a short while ago, to understand how.
17:43 Right. You know, quick breaking news that's flashing on the bottom of your screen.
17:47 Zee has issued a clarification suggesting that the $10 billion deal with Sony
17:54 is not called off, that some of these, you know,
18:00 the news which has been going around is factually incorrect,
18:04 is what the company has clarified now in an exchange filing.
18:08 This is quite big, Smriti, because we've seen the Zee stock tank nearly 10 plus percent,
18:14 or rather 10 percent, and currently was languishing at around 8.5 percent.
18:19 Now you can see a bit of a recovery on the stock.
18:21 The stock is down just about 6 percent.
18:24 So a 2 odd percent recovery, Smriti, in the stock price as well, on the back of that news.
18:28 Right. And as the Manna just talked about how Zee and Puneet Goenka
18:33 are both keen on closing the merger.
18:36 And if it doesn't close, analysts believe it's a lose-lose situation for both the entities.
18:41 But moving on to governments spending on major subsidies in the upcoming fiscal 2025
18:50 is seen as flattish as commodity prices are expected to remain benign
18:55 through most of the upcoming fiscal.
18:58 This is according to The Economist. My colleague Janani will join us soon
19:03 and will talk to us about it. But before that, how is Zee performing as of now?
19:10 Let's quickly have a look at the Zee graph as to exactly what the stock is doing,
19:14 because it was well beaten in trade early today.
19:18 It was trading in the 250 odd range.
19:21 There you see a small spike seen in the stock.
19:26 But of course, it seems that somewhere there isn't enough conviction,
19:32 despite this Zee clarification.
19:36 So the stock hasn't rebounded fully on the back of this clarification coming out from Zee.
19:42 In fact, what and I quote, we would like to clarify that the above-mentioned article is baseless
19:48 and factually incorrect, which is the termination of the $10 billion deal with Zee.
19:53 Yeah, they also add that they're committed to the merger with Sony
19:58 and is continuing to work towards a successful closure of the proposed merger.
20:03 This is from the exchange filing by Zee. We have Tamannaah joining us on more details on that.
20:09 Tamannaah, now the official word is out.
20:12 Yeah. Yeah. In fact, the story that we broke on NDTV Profit a couple of hours ago
20:16 has been confirmed in every sense by this exchange filing.
20:21 Essentially, what is being communicated is that the conversations are on.
20:25 And just to add a few more layers for it, the communication that Sony is intending to call off the deal
20:32 that Bloomberg reported has not been received in any sense by the other party.
20:37 Good faith negotiations are still on. And that's what we've reported.
20:41 That's what echoes what Zee is coming out and saying.
20:44 What they're essentially saying is that the conversations are still very much on.
20:49 They have till the 20th to come to a finality.
20:53 Nothing is off the table at this point is what we gathered.
20:57 Remember the contention at the end of the day is about who will lead the merged entity.
21:01 And while Zee and Puneet Goenka are still in that negotiation round where their position is very clear.
21:08 This is what the shareholders have agreed to. So let's go ahead with this with Puneet Goenka at the helm.
21:14 It is looking like an obstacle for Sony. Is it a deal breaker where at the end of the day they'll walk away?
21:22 Well, if they had to, that probably may have happened by now.
21:25 But look at what has been done so far. Extension has been given for the negotiations.
21:30 That good faith negotiation period is on. It continues till the 20th.
21:35 There has been no official response from Sony since the Bloomberg story came out yesterday.
21:41 And now you have Zee officially writing to the exchanges and saying that the article that has been cited,
21:48 the context of this is that the exchanges have asked Zee for a clarification and they've quoted an article by the Economic Times dot com
21:55 that reproduced what the Bloomberg story said, saying that Sony is going to walk away from the deal.
22:00 So they've called that article and that story completely factually incorrect.
22:05 You've seen the stock getting hammered, but you've seen some of those losses being paid right now,
22:10 as far as Zee is concerned, because of their clarification to the exchanges.
22:16 And you have to understand the context. It's going to be a tough deal for both of them to walk away from.
22:21 Absolutely, Tamanna. Plenty of flip flops that have happened over the last six to eight months on this one.
22:28 Let's hope that over the next 10 days, there's a bit of a conclusion of sorts on what's happening with regard to the Zee Sony merger.
22:38 But thank you so much for that and for breaking that news a couple of hours back, broken by NDTV Profit and confirmed now by Zee
22:47 that the company is committed to merge with Sony and is continuing to work towards a successful closure of the proposed merger.
22:55 You can see the spike on the stock price now evidently clear, 4 percent down only now Zee in trade versus the almost 10 percent drop that we saw at the bottom for the day.
23:08 But that's where Zee is concerned. Quickly moving on to some of the other ones which are also in focus.
23:15 We had some life insurance numbers which also came out and we had the likes of an SBI life growing at 20 percent for the month of December.
23:24 If we can have the stock price of that one, it's up around 2 odd percent in trade as we speak.
23:32 So that's one counter which is seeing some bit of positivity, Smriti.
23:36 Right. But moving on, we have in the recent light of development projects in Ayodhya,
23:43 our colleague Pallavi Nahata had the chance to speak to the tourism minister of UP, Jaiveer Singh.
23:50 Listen into a slice of that conversation.
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26:43 Right, that's all we have for you on Market IQ for today.
26:47 From Smriti, myself, everyone who puts the show together,
26:50 thanks so much for watching.
26:51 Stay tuned to NDTV Profit for more on market action.
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30:13 Welcome. You're watching the Mutual Fund Show.
30:16 I'm Tamannah Enamdar.
30:17 And today we're talking about a new fund
30:20 which has launched just a few days ago.
30:22 That's the Sundaram Multi-Asset Allocation Fund.
30:25 It's coming at a time when multi-asset allocation funds
30:30 are definitely in vogue.
30:32 They've seen great interest in the year gone by
30:35 and continue to be some of the top performers
30:38 and attractors of funds.
30:40 The idea is fairly simple.
30:42 You hedge your bets in a sense.
30:44 So along with a focus on equity,
30:46 you have gold and fixed income too.
30:48 What makes this one different
30:50 or what is the purpose or focus of this one?
30:53 To speak more on it, I'm joined now by Mr. Sunil Subramaniam.
30:56 He's Managing Director of Sundaram Mutual.
30:59 That's the AMC, of course, that is launching the fund.
31:02 Mr. Subramaniam, thank you so much for joining us
31:05 and welcome to NDTV Profit.
31:06 Great to have you here.
31:08 Hi. Great to be here back on NDTV Profit.
31:14 Let's begin and get straight to it.
31:16 Let's start by talking about this particular multi-asset allocation fund.
31:21 Why a multi-asset allocation fund and why at this point
31:25 when equities have performed phenomenally well,
31:28 do you think they will continue to do so
31:31 or is this you looking at sort of risks increasing in the year to come?
31:41 I think, first of all, this is an all-weather fund.
31:44 It's not that the timing at this particular time makes a difference
31:47 and I'll explain that in the next few minutes.
31:49 It's an all-weather fund.
31:50 Why this launch at this time and you've seen many other AMCs launch
31:55 is because in the finance bill last year,
31:57 the taxation for commodity, ETFs and debts,
32:00 was indexation benefit was effectively removed.
32:03 So any investor looking to hedge his equity risk
32:07 with either debt or commodities
32:09 could not do that in a tax-efficient way.
32:12 So multi-asset allocation funds,
32:14 which can give you either debt-based taxation
32:16 or equity-based taxation depending on the structure,
32:19 started getting popular with investors and with distributors.
32:23 So what Sundaram is planning to do is to launch an equity-oriented fund,
32:26 which means that even within the multi-asset fund,
32:28 we would have 65% in equities at all times.
32:31 So thereby we impart the benefit of equity taxation.
32:34 The second is that though the name is multi-asset allocation,
32:37 we propose to make it as a fixed asset allocation,
32:39 wherein we will keep the fixed income piece at 10% at all times.
32:43 The reason for that is there are enough options available
32:45 through aggressive hybrids, balanced advantage funds,
32:48 where debt as a component to hedge the risk are available.
32:52 But what our fund seeks to do is within the commodity space to maximize it,
32:57 and within commodities, we have chosen to specifically use only gold.
33:02 At no time in this fund, we'll have any other commodity other than gold.
33:05 Now that's a very clear-cut demarcation from all of the multi-asset allocation funds
33:10 because they tend to look at it saying we will choose the commodity
33:13 based on our view, including overseas securities.
33:16 We are not saying anything like that.
33:18 We are saying our focus is clearly on gold.
33:20 Now what is the logic of this gold?
33:21 And we will keep gold at the maximum permitted 25% at all times.
33:25 So these two significant decisions make our fund very different.
33:29 And the logic comes from a very, very simple fact
33:31 that gold is the long-term shock absorber for portfolios
33:37 because not only does it perform well when equity doesn't,
33:41 it tends to actually deliver very good returns when equity is having negative returns.
33:45 Now debt generally varies between 6 to 8.
33:47 So if you have shocks in the market, equity gives you negative,
33:51 debt at least gives you 6 to 8.
33:52 But with gold, it very often gives you double-digit returns
33:55 when equity is correcting. That's one aspect.
33:57 The second aspect, being an Indian and investing in gold,
34:00 you get the benefit of currency depreciation
34:02 because over a long time, 3 to 4% is the average currency depreciation
34:06 and gold inherently carries that.
34:08 So if you look at the rolling returns of gold as a standalone asset class
34:11 through the MCX Gold Price Index, over the last 18 years,
34:15 gold has delivered an average of somewhere between 11 to 12%
34:18 annualized as a return to the investor.
34:21 So clearly compared to debt and arbitrage,
34:23 if you hold for the long term, there is an additional value of returns
34:27 that gold in the past has delivered.
34:29 We know that past performance cannot be predictive of the future,
34:32 but since we use the rolling returns mythology to arrive at this,
34:35 we feel that it's fairly consistent in terms of its approach.
34:38 So I think that's what differentiates this fund
34:40 and it's not that it's being launched because we feel equities are overvalued.
34:43 We believe, given the inherent nature of gold to do well when equity doesn't,
34:48 every equity investor in India should have gold in his portfolio.
34:52 And with it too, that was possible through gold ETFs directly by investors,
34:56 but with the indexation benefit going away,
34:58 multi-assets with gold is the best way for an equity investor
35:02 to participate in the market at all times,
35:05 regardless of whether equity is doing well or not.
35:07 Sure. Just, and I know you can't give any predictive
35:12 absolute return figures or estimates that is not permitted,
35:16 but if you can give us a ballpark sense of how you expect this fund to perform,
35:20 that's part one. And second part is fixed income at 10%.
35:25 Is that a good idea in a year where you're going to definitely see interest rates coming down?
35:31 The only question is when?
35:33 Okay. So let me answer the first one.
35:38 So in terms of, you know, we all do back testing, we launch new fund offers.
35:42 So our benchmark index, right, is 65% Nifty 500 index,
35:47 25% the MCX gold price or the gold ETFs,
35:51 and 10% is the Nifty short duration bond index.
35:54 If you take the performance of this index as a back testing over the last dozen or so years,
36:00 I think the fund has delivered roughly about anywhere between 8, 9, 10% on a post tax basis.
36:08 You will make that as at least better than fixed deposit because you get 10% equity taxation.
36:13 Right. But there are times when the fund outperforms.
36:17 There are times when equity doesn't do well, gold does well.
36:20 And there are times when equity and gold both do well.
36:23 So in that sense, you know, it's a good asset class to mix.
36:26 And if you see point to point returns over the last one year, it's been 17%.
36:31 I know, again, that past performance should not be predicted,
36:33 but last year has been a good year, both for gold and for equity.
36:36 So such events also do happen in the journey.
36:39 And remember that an economy goes through business cycles.
36:42 And when there is recovery and expansion, equities does well, when there's contraction, debt does well.
36:47 But when there is a slowdown, it's gold that does the best.
36:50 And to answer your second question on in a year, is this a good time to keep debt only at 10?
36:54 Like I said, for investors, if they feel debt is a good asset class,
36:57 there are enough products available in the market through which they can pay.
37:00 There are aggressive hybrids, which are 70% equity, 30% debt.
37:03 There are equity savings, which have a little more than 30, 35% in debt.
37:08 But that being said, I'd like to speak about this expected interest rate reduction.
37:13 So I have a slightly contrarian view on this.
37:16 I think during the current year, I do not expect a significant rate cut from the Reserve Bank in domestic terms.
37:22 It is the Fed which is going through a massive rate cut drive.
37:25 But remember, when the Fed hiked rates by 550 basis points, RBI raised it only by 250 basis points.
37:30 So until Fed cuts it down by 300 basis points, there is no pressure on RBI.
37:35 And look at the domestic scenario. Growth is not suffering.
37:37 So you don't need rate cuts to support growth.
37:39 Inflation is unlikely to drop below 4, given how prices are there of food and oil.
37:45 So as long as it remains above 4, RBI really can't cut rates.
37:48 So I don't see a scenario during the current year of a big rate cut in the domestic scenario.
37:53 So from my point of view, for a domestic investor, right, I'm not sure that this is a good year for debt,
37:59 unless you're looking only at an accrual kind of return.
38:01 I think equities is poised to do well and gold also, I believe, given the international slowdown,
38:07 the expectation of a rate cut by the Fed and the fact that countries like Russia,
38:11 Saudi Arabia, China, in addition to India, are shifting their exposure away from the dollar
38:16 and gold is a natural safe haven for them to park their monies.
38:19 So I do think it's a sweet spot for both equities and gold in the coming year and not necessarily that for debt.
38:25 Okay. Now let me just come to the equity part because it's 65% of your portfolio,
38:31 up to 65% of your portfolio is going to be in equities.
38:35 And as I understand it, the focus is going to be more on large caps.
38:39 Now I know that's the theme, that large caps are the ones that are going to fire this year.
38:44 But having said that, the phenomenal increase in mid caps and small caps don't seem to have ended yet.
38:49 Can you explain the rationale behind that?
38:52 Yeah, absolutely. So what's happening is that the last six months or so,
38:59 you've had periods in September, October when FIS pulled out money from India.
39:03 And then from November onwards, they slowly came in and December they came in a big bang way.
39:07 So because FIS participation has not been generally great except for the month of December,
39:12 domestic flows have tended to be diversified and there has been a buying by domestic fund managers
39:18 has dominated the equity markets thanks to the strong growing SIP book and domestic flows.
39:23 And hence allocation by domestic fund managers has been focused on domestic oriented stocks and sectors.
39:29 And hence you've seen small and mid caps rally tremendously.
39:32 From December onwards, with the clarity from the December 3rd state election results,
39:37 that the likelihood of the NDA government coming back to power, offering a policy continuity for five plus years
39:43 for a foreign investor, there's a significant change in outlook and approach towards India.
39:47 This is strengthened by the fact that oil, thanks to the US lifting sanctions on Venezuela
39:52 and Iran pumping more oil to finance the war with Israel through Hamas,
39:57 you are seeing oil in flooded supply. So oil is also expected to be stable.
40:01 One of the biggest factors for FIS to invest in India is a stable or a declining oil regime.
40:06 With those factors positive, I do expect strong increase in FIS flows at least till the election.
40:12 So given that, I expect large caps to actually outperform mid and small caps.
40:16 Now that being said, doesn't mean that small and mid caps are going through a correction
40:20 because as much as 30% of your 17,000 crore SIP book is in small cap and mid cap funds,
40:25 another 30% is in multi cap. So roughly half of the SIP book is actually coming
40:30 from domestic fund managers by small caps and mid caps. So while large caps might be rallying
40:34 because of the FIS, domestic fund managers have enough fuel and ammunition through SIP book
40:39 to support the mid and small caps. So I believe that the tilt is that large caps will do better.
40:44 It doesn't mean small and mid caps are going to cover. So I think a multi cap portfolio
40:48 tilted towards large cap is the best allocation option. And incidentally, our fund is also proposing
40:53 to be sanctified to 80% in large caps within equities, and it will use 20 to 25% of mid caps
40:59 tactically and strategically to allocate to enhance returns to the investor.
41:03 So I think this is a good long term strategy to adopt, given that multi asset allocation funds
41:08 are a part of the hybrid category, targeting moderate investors who want long term
41:13 inflation beating and fixed income beating returns with low risk.
41:17 And I think that's the key part that we've got to bear in mind. I can't afford to load
41:21 mid and small caps in this fund, which is in the hybrid category. I've got to bear in mind
41:26 the kind of customer who's going to invest in this fund and I think playing the middle ground.