Why I'm buying IPOs, Unlisted and SME IPO stocks | Akshat Shrivastava

Summary

In this video, investor Akshat Srivastav discusses the sentiment-driven nature of the Indian stock market, highlighting the disconnect between stock prices and fundamentals, exemplified by Ola Electric. He emphasizes the importance of understanding sentiment investing and suggests exploring unlisted stocks and SME IPOs as potentially lucrative areas. Srivastav also stresses the need for a balanced portfolio and cautions against blind speculation, offering insights into different investment stages and strategies for risk management.

Takeaways

• 🧐 Mr. Ramdev Agrawal, a renowned investor, is puzzled by the rising stock prices of Ola Electric despite its limited fundamentals.
• 📈 The Indian market has become increasingly sentiment-driven, affecting stock performance irrespective of a company's fundamentals.
• 🤔 The speaker aligns with Agrawal's view, questioning the fundamentals of Ola Electric and the market's current investment trends.
• 🌐 Factors contributing to sentiment-driven investing include retail participation, news manipulation, and domestic institutional investment behavior.
• 📚 It's suggested that even fundamental investors should be aware of and learn about sentiment investing as it's becoming a persistent trend.
• 💡 The video aims to explain why the Indian market is sentiment-driven, the associated risks, and how investors can potentially benefit from it.
• 🚀 The speaker discusses his interest in unlisted stock investing and SME-IPOs, areas where significant money is expected to be made in the future.
• 📉 The example of an auto dealership's oversubscribed SME listing illustrates the current market's high sentiment and speculative behavior.
• 🔢 The high price-to-earnings (PE) ratio of Adani Enterprises, compared to typical industry standards, is cited as an example of sentiment-driven valuations.
• 🎰 The speaker warns that investing based solely on sentiment is akin to gambling and lacks a solid foundation, which could lead to losses in the long run.
• 💼 The importance of understanding the difference between seed-stage startups, SMEs, unlisted companies, and recently IPOed companies is highlighted for effective sentiment investing.

Q & A

What is Mr. Ramdev Agrawal's view on Ola Electric stock prices?

Mr. Ramdev Agrawal, a legendary investor in India, expressed that he could not understand why the Ola Electric stock prices are going up, as he believes it has very limited fundamentals.

What does the speaker believe about the current state of the Indian market?

The speaker believes that the Indian market has become very sentiment-oriented in recent years, possibly due to factors such as excessive DII or domestic institutional play, participation of retail investors, and manipulation of news.

What is the term used to describe investing based on the prevailing sentiment rather than fundamentals?

The term used is 'sentiment investing', which the speaker suggests that even fundamental investors need to be aware of and learn about.

Why does the speaker think that unlisted stock investing and SME-IPO investing are areas to focus on?

The speaker thinks that these areas are where a lot of money will be made in the future, regardless of the current sentiment-driven nature of the Indian market.

What example does the speaker provide to illustrate the sentiment in the market?

The speaker provides the example of an auto dealership in NCR that went on to list on the SME exchange, attempting to raise 12 crore but receiving bids of around 450 crores, indicating massive market sentiment.

What is the speaker's opinion on Adani Enterprises' PE ratio?

The speaker believes that Adani Enterprises' PE ratio of around 80 plus is 'absolutely crazy' for a large-cap company involved in infrastructure, which typically should not command more than 35.

What investment did the speaker make last year that resulted in significant profits?

The speaker made investments in small-cap stocks, specifically mentioning small cap 250, which resulted in a 90% profit within a year.

What are the three key reasons the speaker mentions for why a stock runs?

The three key reasons are fundamental reasons (sales, revenues, and profits growth), technical reasons (such as strong technical patterns), and sentiment (people following the trend due to positive or negative sentiment).

What is the speaker's advice on building a portfolio for investors interested in sentiment investing?

The speaker advises to first understand the risk, learn how to create a balanced portfolio, and then explore options such as SME IPOs and unlisted stocks, while ensuring that it fits with one's overall portfolio strategy.

What approach does the speaker suggest for investing in companies that have recently gone public (Stage 4 companies)?

The speaker suggests waiting for the initial sentiment euphoria to die down, allowing for price discovery to occur, which usually takes about one to one and a half years, before considering investment in such companies.

How does the speaker describe the current sentiment towards electric vehicles (EVs) in the market?

The speaker describes the sentiment towards EVs as 'massive bullish sentiment', suggesting that the market cap of companies like Ola Electric does not make sense in comparison to established companies like Hero Motocorp, indicating a sentiment-driven valuation.