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00:00You don't like this one. Why. Well you know I think I see because of his stage prevalence market brand. I mean it's an amazing franchise. As far as life insurance business goes in India and that business is growing as more and more people are opting to take life insurance. There are a lot of people who are taking life insurance for the first time. However the problem is that since Laci lost its monopoly its market share has been dropping consistently. You know it's down to be lost. I mean people say no and doit has many stable cash flows. The issue is that this is not a growth story. This is a value. Value stock. So I think it will attract value investors the funds that are value funds. We are growth investors. We don't really see the kind of growth that that's a likely you will be able to give us any indication as you mentioned Rishaad Salamat to you know technical overhangs. One is a very very low float because of budget and not get added to any indicts that has Indian stocks because of its low float. And secondly there is that overhang that Goldman will continuously be a seller elect gets to 25 percent public shareholding. That's why they change guidelines. So I think some of these technical factors and fundamental factors will keep a lid on the valuation in the near-term. Yeah and you know it probably has legacy issues as well. Being a state grown owned company. But. But surely if you look at it in a broader context it must be good news that India is actually floating some of its companies them and of course needing that money for its coffers. Well absolutely. I think I think this gunman to give its due has been very clear that you know it doesn't want to be in businesses and that's the reason we saw the privatization of Air India which was a losing airline owned by Goldman for a very long period of time. And we are in the midst of privatization of some of the large public sector oil and marketing companies. So I think absolutely. Rather than increasing taxes and you know trying to meet its budget deficit developmental expenses it is it is very good news that the government is even Yvonne Man next up market you know realizing that look we need to get this done. Let's not be too picky about the price and valuation and let's keep going through the process of divesting public enterprises. So I think absolutely. I think that is that is the right way to go as far as the country is concerned. I'll bet you're concerned that the market share for NYSE is falling but this is a behemoth. I mean it has five hundred billion dollars in assets. It has. I don't know economies of scale something you can use to to compete effectively. Surely there's a plus side to buying it. No no absolutely. I think for that that's what we keep saying that you know what we did. You told us what she had all those who are long term shareholders. It is. It is absolutely a great add to their portfolio. They should allocate some of their money to it but not not look for it. We don't know. That's the caveat. So as long as you are a patient long term investor. Absolutely. You know you could go ahead and added to your portfolio because this is a company that is only going to get bigger. And you know it has this army of one point thirty five million agents you know ft on street that continues to get it. You get a new business. So. So from that perspective absolutely. And I have no doubt that this company is only going to become bigger and better. Now it's a question of you know how much patience do investors have. What'd You Miss?. IBEX before we let you go I want to take a look at the broader Indian market. We're seeing some deep correction out there. Is the trough in sight. Oh well I think so but domestic investors have been very confident about India's long term prospects will be seeing consistent positive flows from domestic investors retail investors domestic institutions regularly. However the problem has been the consistent selling by foreign investors for the last seven months. They have sold almost 30 billion dollars off next stocks over the last seven months and this is the eighth month. So I think that will be formed only when we see some reversal of flows from foreign investors. So if that happens I would I would not bet on it. Get off the inside immediately.

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Piper Sercia's Agarwal on LIC Offering

Abhay Agarwal, Founder, Managing Director and CIO of Piper Sercia Advisors, discusses the prospect of the Life Insurance Corporation of India, the country's biggest IPO that starts trading on Tuesday. He speaks with Rishaad Salamat and Haslinda Amin on "Bloomberg Markets: Asia". (Source: Bloomberg)

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