Rakesh Jhunjhunwala’s next big bet: PSU Banks, commodities, steel

Billionaire investor Rakesh Jhunjhunwala today said that he believes a massive commodity bull run is waiting ahead for domestic markets that could last for several years. Rakesh Jhunjhunwala is now bullish on steel stocks, helped by the commodity cycle, he said while speaking to Madhusudan Kela, founder, MK Ventures at India Economic Conclave 2021. “There is a buffet waiting for Indian markets,” Jhunjhunwala said. “We are going for a good commodity bull run now lasting 5-7 year,” he added. Rakesh Jhunjhunwala, often called the Big Bull of Dalal Street, has been known for his long-term multi-bagger bets in the stock market. Along with Jhunjhunwala his fellow market veteran, Madhusudan Kela said that it is time for investors to take bold calls on cyclicals in India. 

PSU Banks undervalued

Further talking about the pockets where he is most bullish on for the coming years, Jhunjhunwala said that PSU Banks in particular seem attractive to him. “I’m very bullish on the banking sector and the most undervalued banks stocks are in PSU space.,” the ace investor said. “I think the credit cycle has turned and going ahead there will be huge demand for money,” he added. Jhunjhunwala said the state-owned PSU Bank are hopelessly undervalued at this juncture.

Amid the bloodbath on Dalal Street today, banking stocks are faring the worst with the Nifty PSU Bank index tanking 5% while the Nifty Metal index down 1.56%. Jhunjhunwala said that he would not rule out multiplying his wealth 5 times by investing in PSU Banks.

Buy disinvestment candidates but exit with government

Rakesh Jhunjhunwala, lauding the government’s disinvestment efforts, advised investors to buy disinvestment candidates and move out along with the government. “There will be a run-up in disinvestment hopefuls but when the process is complete there will be a maturity period of 3-4 years before the new owners can turn around those companies to more efficient ones,” he said. 

Going on to share his views on India’s growth prospects in the post-pandemic world, the big bull said that India has all the qualities required for growth. “Reforms have taken place in the last 3-4 year in the form Jan Dhan yojana and the way Indian society has been digitalised. Now the government is promoting ease of doing business, privatisation and I believe these things will bring double digital growth to India,” he said.