Market Unplugged Podcast: CarTrade good company, but IPO a case of bull market greed

The market had been giving signs of an impending correction from the beginning of the month when the number of declining stocks steadily started exceeding the number of advancing stocks, says Anuj Singhal, Stocks Editor at CNBC-TV18 in this edition of Markets Unplugged Podcast. The correction has suddenly become brutal over the last few days, and this will lead to a reset of investor expectations, he says.

Singhal feels that CarTrade has a good business model, but the valuation was excessive and coming to the market at this point with issue only to provide an exit to existing shareholders was a case of bull market greed. HNIs have lost money in many of the recent IPOs as the listing price was not enough to cover the interest cost they had to pay on borrowed funds.

Yet, quality issues priced reasonably will still find takers even if the market continues to correct. Right now, investors are flocking to FMCG and IT stocks for safety, not so much to pharma stocks because the sector still continues to grapple with its own set of issues, mainly pricing pressure in the US markets. Commodity shares sold off over the last week, but overall story, particularly in steel, still has some steam left.

To find out the key cues that Anuj is keeping an eye out for next week, listen to the podcast.