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Sunday, January 23, 2022

Daily Voice: Budget should focus on strengthening the balance sheet instead of increasing FPI in PSU banks- Naveen Chandramohan

Budget 2022:Navin Chandramohan, Founder and Fund Manager, ITUS Capital had a long conversation with Moneycontrol on the upcoming budget expectations, economy and market related issues. In this conversation, he said that we may see the GST rates rationalizing in the future, but it may take some more time.

There are reports that the government may increase the limit of FPI investment in government banks. Responding to a question related to this, Naveen Chandramohan said that the focus of the government should be on how to improve the efficiency of public sector banks and how to strengthen their balance sheets. There is enough capital in the country to support PSU banks but the condition for this is that the return capital of the banks should improve. The focus of the government should be on increasing the efficiency and financial strength of banks and not on increasing the FPI limit in them.

Responding to a query on the performance of IT companies in the December quarter, Navin Chandramohan said, “We have a huge exposure to IT and tech companies over the past two years. The December quarter figures of IT companies are a reflection of border trends across the world. All the industries around the world are focusing on digitization. This trend will continue in future also. Because in the present circumstances technology has become a very important part of any business. The December quarter figures confirm our view.

Despite Omicron’s rising cases and weak data, the market ran up 2% last week, the rupee also strengthened

Talking on the upcoming Union Budget, he further said that it is clear that as always, the focus of the government will be on increasing investment for the public sector, improving infrastructure, expanding roads and making India a manufacturing hub. Apart from this, if any provision is made to increase the demand of real estate, standardization of GST and increase the ruler growth, then it will be icing on the gold.

Talking on the market, he said that now the eyes of the market will be on the results of the companies. We are currently in the early stages of the growth recovery cycle of all sectors. Going forward, we will see the reaction of the market on the performance of the companies. We believe that in FY22, companies with good balance sheets and sound fundamentals will be able to generate good returns.

Significantly, in the month of December, there has been tremendous investment in the mutual fund industry. During this period, Rs 24990 crore has been seen in equity schemes of mutual funds while Rs 11,305 crore has been invested through SIP. Replying to a question related to this, Naveen Chandramohan said that it is expected that this type of flow in domestic funds will continue in future also. Though there may be volatility on a month to month basis, the broader trend will remain positive.


Shehnaz is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing about Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.
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