At BT Market Today Summit on Tuesday, ace investor Raamdeo Agrawal, chairman and co-founder, Motilal Oswal, had everyone in splits when he explained on why he regrets buying Zomato stock in 2021.
“I wouldn’t have bothered about Zomato but fund managers were on my head. They said “sir use your office to get some allocation”. Lot of people with better degrees than me convinced me and I got sucked in. The environment was such and the demand was high. The management doesn’t even come to Mumbai. They have their own format to declare results. All kinds of nonsense,” Agrawal said. The food delivery platform’s stock fell 66% from its all-time high.
In Mumbai, he was speaking at a session titled “Chasing Alpha in a VUCA world”, moderated by Udayan Mukherjee , Global Business Editor, India Today Group. Shankar Sharma, founder, GQuant Investech and Nikhil Kamath, co-founder, True Beacon & Zerodha also spoke at the session.
Agrawal said he faced Zomato-like situation in 2008 too.
“In 2008, I got sucked into Central Bank of India. At the peak of 2008 boom, I ended up buying big time in Central Bank of India. In two years, the most coveted blue chip stocks will be PSU banks,” he said. He said another mid-cap mistake of his was buying Sterlite Technologies stock when it was at its peak.
Agrawal also spoke about the fads that the market has been witnessing lately.
“12 months back we were talking about Zomato, Nykaa, now we are talking about PSU banks. A fund manager can’t move Rs 1 lakh crore from stocks like DMart, Asian Paints to a PSU bank,” the ace investor said.
While discussing the market volatility, Raamdeo Agrawal said the stock prices in the last 5-7 years have become absolutely absurd. He also added that the most coveted blue-chip stocks of next two years will be PSU banks because the credit cycle is rising and PSU Banks can report up to Rs 1 lakh crore profit in 2025.
