'Deploy 30% funds in a 10% correction'

Gaurang Shah, AVP, Geojit BNP Paribas Financial Services spoke to Krishna Merchant on the recent correction and broader markets

What is your outlook on the markets given the recent steep fall?

We saw a 10% retracement when Nifty hit a low on Friday. Whenever there is 5% correction in the markets, investors should allocate some of their investable surplus.

Given the recent 10% correction, one can deploy 30% of their funds in sector and stock specific ideas.

Do you see any value emerging at current levels in LIC Housing Finance and HCC?

Well this is bribery case, and there no question of losing out money. There were collateral against the loans that were given. We feel LIC Housing Finance is financially sound and well managed entity and has a proven track record.

The financial performance in the last two quarters speaks for the company’s fundamentals. It is a very decent long-term investment. However, what will come out of the interrogations of the individuals who have been arrested by the CBI remains to be seen.

For HCC, we need to wait and watch the extent of damage on the performance. Lavasa was planning to come out with an initial public offer (IPO), which is a 100% subsidiary of HCC. With IPO, value unlocking was going to happen in the stock of HCC. But, now with controversy surrounding HCC and environment ministry has also issued a notice. I would advise investors to hold on to HCC and once the air is cleared, one can have a better view on HCC’s growth prospects.

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