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Investors Paying Heavy Premiums For Visibility, Not Growth: Tata Mutual Fund

Markets are rewarding companies growing at 10-12% instead of looking at those that can grow at 15-20%, says Tata Mutual Fund CIO.

The Bombay Stock Exchange (BSE) building stands in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)
The Bombay Stock Exchange (BSE) building stands in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

As the NSE Nifty 50 remains skewed with the market heavily invested in a handful of stocks, Tata Mutual Fund’s Rahul Singh said investors are paying hefty premiums on growth visibility, not high growth.

“In a general market—in India as well as the world—where growth is slowing down, there’s a premium for visibility of growth even if that growth is a little bit on the lower side,” Tata Mutual Fund’s chief investment officer of equities told BloombergQuint. Companies with higher growth visibility will command a significant premium over those that are “a little dicey”, he said.

Singh said the markets are currently rewarding companies and businesses that can grow sustainably at 10-12 percent instead of looking at those which can grow 15-20 percent.

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