Nifty May Look Very Different In Two Years: InCred Asset Management’s Mrinal Singh
The National Stock Exchange of India Ltd. (NSE) building stands in the Bandra Kurla Complex in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Nifty May Look Very Different In Two Years: InCred Asset Management’s Mrinal Singh

The disruptions caused by the Covid-19 pandemic might change the composition of Nifty and upheaval could be witnessed in the next two years, according to InCred Asset Management’s Mrinal Singh.

“It’s an era of disruption. We may see potentially at least 20% of the companies getting changed in next two years in the Nifty,” Singh, CIO and chief executive officer at the fund manager, told BloombergQuint’s Niraj Shah in an interview.

Very large businesses are waiting to get listed. The last one year has altered the perception of consumption and consumer behaviour and businesses are trying to adapt to this new way, he said, adding that e-commerce has gotten meaningfully bigger creating a disruption even in industries where it may have been unimaginable. “The world will look very different after five years and we will have a large number of businesses graduate from mid cap to large cap.”

The mid- and small-cap segment has interesting businesses, good prospects and enterprising minds, and is the place where the real action is happening, Singh said, as he listed fintech, rural utilities, healthcare, housing, infrastructure and technology as some of the sectors that look promising.

Inflationary Concerns

According to Singh, demand outstripping supply could be a good scenario as Indian businesses incurring capex to boost supply will be good for the economy.

The recent commodity inflation plaguing the economy, according to him, could be looked at from three angles:

  • If crude remains high, it could be worrisome as it impacts currency, affects government deficits and the consumers' ability to spend.
  • Gradual increase in agri-commodity prices is favourable unless it starts spurring the core inflation, since it benefits rural producers.
  • Price hike in base metal commodities may be beneficial to exporters, while some indigenous infrastructure companies may suffer and could, therefore, be good and bad.

The current outlook on prices of all three, however, seem to be positive, he said.

Watch the full interview here:

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