Kela said that the government needs to elaborate the details of the divestment targets that the FM sets for FY22, as there are good chances that the government would miss the disinvestment number for FY21 as well.
He felt that the divestments in FY21 may total Rs 40,000-50,000 crore against the initial target of Rs 2.10 lakh crore. Divestments of Rs 2 lakh crore cannot be achieved without aggressive share sale in PSUs, he said.
“You can give Covid as a main reason, but what I would watch as a market participant is whether there is an intent to strategically divest companies. These big divestment numbers are not possible to be achieved by selling minority stakes in already existing public sector companies. Keep a watch on what the government says, what is the intent and how it will get achieved,” he said.
Ahead of the Budget, Kela said one way to play the likely higher commitment towards healthcare is to invest in insurance, hospitals and pharma stocks. Kela said he likes all the three segments.
“Even though the stocks have appreciated a lot, they don’t look in any euphoric zone; they look reasonably valued,” he said.
Kela advised investors to consider IT stocks. “Infrastructure, real estate are forgotten heroes that have a lot of value,” he said.
Kela said he will be a selective buyer in the current market. “Corporate performance is too good”, he said, adding that the valuations are not very challenging. “We have to utilise corrections to buy into the bull market.