CLSA adds Indiabulls Ventures to its Asia ex-Japan portfolio

Trims stake in HDFC Bank, Indiabulls Housing Finance and Bajaj Finance by 1 percentage point each

Indiabulls Ventures has caught the fancy of CLSA, with the foreign brokerage and research house adding the stock in its Asia ex-Japan long-only portfolio.

"A 3% investment will be initiated in Indian consumer finance play Indiabulls Ventures. This will be paid for by shaving the existing investments in HDFC Bank, Indiabulls Housing Finance and Bajaj Finance by 1 percentage point (ppt) each," wrote Christopher Wood, managing director and equity strategist at CLSA in his weekly note, GREED & fear.

The development saw the stock move up over 1% in trade on Friday. It hit a high of Rs 295 and a low of Rs 275.7 on the National Stock Exchange (NSE) in intra-day trade.

Recently, the market regulator had raised a red flag on the stock price movement. The sharp rise in the share’s price after a preferential allotment to institutional investors between April and June, according to reports, generated red flags at the Securities and Exchange Board of India’s (Sebi’s) surveillance system. The share price surged eightfold in these six months and trebled since April, ahead of the share allotment. CLICK HERE FOR THE STORY

Meanwhile, Wood remains bullish on the road ahead for domestic flows into the Indian equity markets.

"Net inflows into Indian equity mutual funds surged to a record high in August. This was prompted by locals “buying the dip” after a 4.2% decline in the Sensex last month. GREED & fear’s base case is that these inflows continue," he says.