DAILY VOICE | Recent IPO activity points to ample liquidity, investor sentiment: Prasanna Pathak of Taurus MF
The type of responses that we have seen in recent IPOs point towards not only ample liquidity in the system but more importantly towards investor sentiment, Prasanna Pathak, Head of Equity, Taurus Mutual Fund, said in an interview with Moneycontrol’s Kshitij Anand.
Q) US Fed plans to keep interest rates low for a long time. What is the kind of impact it will have on emerging markets like India as well as the currency?
A) The plan to keep the interest rates low for a long time, indicates that the US Fed is skeptical of demand revival in the economy and hence the revival of inflation in the short to medium term.
Though this does point to a weak economic recovery. The low-interest rates coupled with the central bank’s balance-sheet expansion augurs well for the global liquidity.
Also, the weakening of the dollar index, as seen recently, is generally good for commodities and emerging economies like India in terms of flows.
However, one must be mindful that the extravaganza of lower interest rates coupled with monetary and fiscal expansion cannot continue for long. It has to reverse at some point. The question is when!
Q) It looks like it is raining IPOs — we saw bumper responses for both Route Mobile as well as Happiest Minds. There are many more IPOs lined up such as Angel Broking, CAMS etc. Does it look like the lull of IPOs is ending? What are your views? Any IPO which you are particularly excited about?
A) There was already a long list of IPO’s lined up prior to the March 2020 crash. It has taken, 5-6 months for investor sentiments to revive.