Nilesh Shah | market correction: Market taking a breather for

Market sometimes finds a reason to correct and currently there are plenty of factors — the PayTM IPO debacle, reversal in farm law and Reliance has decided not to go ahead with its proposed demerger — which could be the dominant factor why markets are correcting. Has the market lost its near term inertia? Has the train stopped at the platform now?
The simple reason why markets are correcting is because prices had run up a little bit ahead of fundamentals and yes the train has stopped and in fact taken a slightly reversed direction so that people who are standing on the platform can board the train. There are many factors which have contributed to the correction, but my feeling is the primary reason is that the market was running ahead of its fundamentals. It is taking a breather so that fundamentals can catch up.

India is one of the few countries in the world wherein the interest rates are still positive. Until now, RBI has been very supportive of growth. Inflation is pretty much under control. We can see a change in stance by the central bank because that is something that the market is sure going to react to going forward?
So in a very lighter way, RBI is batting like Rohit Sharma and Virat Kohli together, balling like Jasprit Bumrah and Mohammed Shami together and fielding like Ravindra Jadeja now you really cannot expect more than this from the Reserve Bank of India. They have been managing growth, inflation, interest rate, the government’s borrowing programme, massive inflows from foreign exchange market and the fair value of rupee.

In the last 18 months, they have done an exceptionally brilliant job and today we are in a position where Indian inflation is actually lower than US inflation. Now when people say we are in a high inflation country, I wonder what they are going to say about the US. I never hear them complaining in the US that the US inflation is higher. There they support the Fed. Here they are saying that inflation is out of control. We need to trust the RBI. They have been managing an excellent balance between growth and inflation and I am sure they will change the gear at the right time to ensure that growth also get supported and inflation does not go out of control.

Does a reversal like Paytm remind you of what happened to Reliance Power? I know it is unfair for us to compare Paytm and Reliance Power, but could the sequence of events that happened after Reliance Power debut, happen to PayTM also in terms of market positioning?
We are not allowed to talk stock specific, but I do not think the IPO market is dead. Yesterday, we saw one IPO getting closed. It almost scored a century plus and this is despite the fact that previous IPO’s money have not yet arrived….