When asked about his outlook on the sector, Shenoy said, “We cannot talk stock specific, but we own stake in the auto industry in general. We have players here, but in general it has been good 25-30% in two of the larger names and we are seeing that increase coming on the back of two things, the GST rate cut and also the changes in some of the downstream activity that has happened.”
He added that the passenger vehicle space remains the strongest growth pocket. “It has been a year, in fact it has been four or five years since we have seen meaningful pickup in PV and the last year has been quite some of cheer, this GST rate cut the bigger cars at least the prices come down quite substantially, so a lot of the sales of September would have gotten pushed into October,” he explained.
Shenoy expects the real demand picture to emerge by November once the festive and GST-related distortions fade. “As we see November data when there is not the festive push and also the GST rate cut, the September month backlog piece would have gone away, the November data will be more revealing. But to a large extent the PV market is the bigger play here, it seems to be and the two-wheeler market benefits but relatively speaking it is not as big, so we will have to see how those numbers also pan out in November. The CVs will still take some time,” he said.
On the commercial vehicle front, Shenoy highlighted that recovery would be linked to broader capital expenditure activity, which remains subdued. “There is some part of it related to more capex and that is not really meaningfully happening right now. It probably will take four or five months more,” he added.
IPO Market Buzz and Investor CautionSwitching focus to the primary market, Shenoy weighed in on the recent IPO frenzy, citing examples such as Lenskart’s strong subscription and the volatility seen in Oyo’s grey market premium.“Yes, I mean, there is a lot of conversation around IPOs and who should buy and whether we should buy and not buy and all that but to a large extent these companies are new so we do not know much about them other than what they have revealed in the prospectors,” he remarked.
He cautioned that investors should wait for financial clarity before jumping into newly listed companies. “We will find out about the financials only one or two quarters after they list, how they behave after they have listed, are the profits sustainable, are they creating value, all of that stuff will be visible only a little bit later,” Shenoy said.
Pointing out a common trend among funded startups, he noted, “One of the problems with some of the funded companies is that their biggest investors tend to want to exit after that first six months when they are locked-in of sorts. Then, you find that many of these stock prices seem to dip in that 6-month to 12-month period or first one year kind of period.”
He advised retail investors to take their time instead of rushing into IPOs on listing day hype. “You have enough time, so you do not have to rush and buy them right now and to that extent we will have to see how this performance kind of pans out,” he said.
On the subject of grey market premiums (GMPs), Shenoy was dismissive of their predictive power. “Grey market premiums unfortunately they are functions of sentiment and they change quite rapidly and they do not really indicate what will happen say a month or two months after the stocks list. They are pretty much geared on listing day premiums. It is kind of a black market of sorts for the IPO listing pop,” he said.
Despite the speculative chatter, Shenoy sees value in the growing investor engagement around IPOs. “It is nice to see that people are interested, there are diverse opinions, lot of discussion, lot of anger and unhappiness by a lot of players all that is good discussion because such stuff should come out, but the real thing will only come over time so we will have to wait for two quarters at least before we see some value being created,” he concluded.
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