India to get foreign inflows on preferred basis; startup economy big draw: Prime Securities

FM Nirmala Sitharaman says economy will grow 7.5-8.5% from 2022

Tata Motors will invest over $2 billion in its electric vehicle (EV) business over the next five years, a company executive said on Tuesday after the Indian automaker announced it had raised funds from private equity firm TPG.

According to Jayakumar, the move in Tata Motors has been beyond what anyone could have expected.

“Tata Motors DVR stock has performed brilliantly and therefore any thought that we had, we had made it look much better than we intended to be in the shorter-run. I thought the discounts would narrow, and from 60 percent they would come down to 25-30 percent over a period of time,” he said.

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The entire electric vehicle (EV) conversion theme requires a lot of capex. In the short run, this entire conversion will put a huge demand on a whole bunch of the ecosystem, supply chain, etc, it is expected to be built over a period of the next one-two decades, this isn’t one of those things that are going to play out but it is indicative of something else, he noted.

Jayakumar further stated that this market is indicative that the investors at the end of the day carry a simple message - good and clean businesses, good and clean management, directionally right and futuristic, our money is with you, never mind what P/E multiples are.

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He believes, shareholder activism is on the rise and shareholders will be able to say and do things which will be heard.

"The advisory business suffers from two-three basic issues – one is that the outcomes can be binary in the advisory business. Two is that it can be people dependent and three is scalability becomes the function of how many offices one opens," he said.

“What the digital shift does is it allows us to create market places, move more to retail and focus on one big sector which is where these old economy and new economy investors come in, which is digitally enabled businesses and the start-up economy. Start-up economy is the space that we cannot ignore,” he shared.

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In terms of market investment strategy, he said, “The direction seems to be that India is a preferred destination. In that there will be bubbles that will get created but more importantly rather than getting scared, we at least are telling people to allocate 20-30 percent to the start-up economy which is where you can capture some of these in terms of much younger and energetic companies and continue to hold on to your winners.”