The stock market is witnessing a time-wise correction, as the valuation of the indices is much ahead of the earnings, according to Deepak Ramaraju, Senior Fund Manager, Shriram Asset Management Company Ltd.

However, small-cap valuations are lesser than mid-cap and large-caps. Adding to this, the country is closer to the rate hike cycle and can expect the rates to be kept steady for a few more months, he said.

Though the market will be volatile in the short-term, it is expected to rise once the rate hike is behind and the earnings growth catches up in the medium term, he told businessline.

Ramaraju was in Kochi for a meeting prior to the launch of the Shriram Multi Asset Allocation Fund, which is open from August 18 to September 1. The fund invests in equity (65 to 80 per cent, debt (10 to 25 per cent), gold/silver (10 to 25 per cent).

Potential in MF

On the competition with the entry of new players, he said there is a lot of potential in the MF industry, with AUMs at 16 per cent of GDP vs 75 per cent, which is the global average. Hence more market entrants will only help expand the market. The SIP market is steadily growing to reach ₹15,000 crore from less than ₹1,000 crore 10 years back.

“At Shriram AMC, we continue to focus on performance, products and placement. Our fund performance aims to deliver alpha with our proprietary Enhanced Quantamental Investment (EQI) model, which has shown results both in back test and forward tests. We are launching differentiated products that meet customer needs in a relevant way, as evidenced by our upcoming NFO of Shriram Multi Asset Allocation Fund which is designed to meet many goals with one fund”, he said.

“We are working closely with our channel partners as well as the extensive Shriram Group network of 4,150 branches to ensure placement of our solutions across the country”, he added.

Mission 1 Investments had picked up 23 per cent stake in Shriram Asset Management Company. However, there are no immediate plans to dilute any stake by the promoters, he said.