Market guru Sunil Singhania likes new-age companies as a space but does not have too many companies to choose from given expensive valuations. In an exclusive interview to CNBC-TV18, the Founder of Abakkus Asset Management said he caught the trend of new-age businesses early on but "unfortunately, all the companies getting listed are now far beyond our fair value".
The remarks from the market veteran come at a time when many new-age businesses have tapped the primary market on Dalal Street to raise funds.
On November 8, digital payments startup Paytm is set to roll out an initial public offer (IPO) worth Rs 18,300 crore, which, if successful, will be the biggest the country has seen so far, surpassing the mega share sale of state-run dry fuel behemoth Coal India.
On Wednesday, bidding for Policybazaar shares concluded with the issue attracting a positive response from investors. The IPO received bids for more than 16.5 times shares compared with the issue size.
Prior to that, the public offer of Nykaa also saw a stellar response, seeing a subscription of more than 81 times on the final day of bidding. The Nykaa bidding had concluded on November 1.
Earlier this year, Nazara Technologies and Zomato were the first startups to hit the market in the recent past. The IPO of Zomato, which had market experts divided at the time, has seen a strong response from investors since.
Ace investor Rakesh Jhunjhunwala and veteran fund manager Madhusudan Kela are among the experts sceptical of the primary market entry of these loss-making companies due to their expensive valuations.
Speaking on the space, Kela said there are some businesses that "we evaluate, but I don't understand many of them, which is why I stay away. Kela though said his investment in Nazara Tech has "worked out well". The stock has risen more than 45 percent since its listing in March this year. Nazara is backed by Jhunjhunwala.
(Edited by : Sandeep Singh)
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