Arora, whose newly launched smallcap fund raised ₹470 crore last week, talking to ET Now, said investor interest is clearly returning—and the shift in flows will soon broaden gains across the market.
Largecaps will stabilise first, then the rally will spread
Arora expects largecaps to look stronger initially as FII outflows ease, especially in financials, IT, and large consumer names.
But once largecaps steady, he says, the rally will “automatically spread” to mid and smallcaps.
“Indian public won’t stay excited only about large IT and consumer names growing 6%. Once largecaps settle, the broader market outperformance kicks in,” he said.
He added that from the February bottom, midcaps have already outperformed, even though YTD numbers still show underperformance due to early-year volatility.
Stock picking in smallcaps won’t start with sectors
Arora clarified that in the smallcap universe, sector-based investing doesn’t work the same way as it does in largecaps.“We like financials and consumer companies, but they barely exist in smallcaps. So, we don’t start with a sector view—we build bottom-up,” he said.
However, final portfolio weights will still reflect exposure to financials, auto ancillaries, consumer plays, and capital goods.
Selective on consumer-tech IPOs: Paytm, PhysicsWallah in; others not
Helios Capital was an anchor investor in PhysicsWallah, but skipped most recent consumer-tech IPOs.
Arora said new-age IPOs need to justify their valuations: “If you’re asking for 2027–28 multiples, you must show 50–100% bottom-line growth—not 15%.”
On Paytm, he remains positive: “With the stock nearly tripled, it’s now a regular compounder.”
He added that criticisms of new-age IPOs are usually about price, not the business model.
Zomato ‘will blow everyone out’
Arora was emphatic about Zomato’s advantage, saying new unlisted competitors are making a strategic mistake by pushing for IPOs when listed peers aren’t buoyant.
“They can’t go public when listed players aren’t performing. When they try, they’ll have to show profit paths—and that will ignite a rally in leaders like Zomato.”
Helios Capital continues to hold Zomato with strong conviction.
IPO strategy: Always price-first, not hype-first
Arora said Helios applies discipline: “We buy four stocks after they fall 30–50% from IPO levels. We rarely buy at issue price unless the business is truly unique.”
They are evaluating select upcoming IPOs like Meesho and Aequs but expect small allocations due to high demand.