Jama Wealth CEO Ram Kalyan Meduri has advised investors to stay away from glamorous IPOs like Paytm. He added that the company does not have a clear business model as of now and it will take time for the retail investor to gain clarity and understand it. The stock of Paytm has lost 70 percent from its issue price. Meduri said this in an interview to Moneycontrol.
Fund raising will be difficult for equity companies
Meduri said, “Till then this stock may go below the target of Rs 450 (Estimate of Macquarie). Overall, we stay away from such glamorous IPOs as we don’t know much about the promoters.”
He said, with global central banks starting to raise rates to absorb liquidity, it may become difficult for equity companies to raise funds under fresh rounds, which may force them to do more exits.
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Traders can take advantage of the position
The CEO of Jama Wealth said, the market has already weakened due to the threat of nuclear war and the tough stance of the US Fed. Traders can take advantage of further developments by taking positions as the market remains volatile.
They feel that pressure from the Fed, or China’s support for Russia, or a sharp rate hike could trigger a downward spiral.
Meduri began his 23-year career with Infosys, where he eventually headed the Hyderabad fintech vertical. He worked closely with several Fortune 100 companies on their investment and insurance business technology strategies. Later he was also CIO in ICICI Group and then Group CIO at Poonawalla Fincorp.
Rate hike may be more than expected
Responding to a question on the rate hike by the US Fed in view of geopolitical tensions and sanctions on Russia, Meduri said, “Before the Russia-Ukraine war, the US was already very high and now there is a danger of increasing significantly.” So the rates will increase. Now the Fed said that there could be a higher rate hike than expected in the December meeting.
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