MUMBAI: This has been the most-unloved rally of all times as far as domestic investors are concerned,” says Sunil Singhania , who last month took charge as the head of equities at Reliance Mutual Fund, the country’s number one mutual fund by assets under management.

Indian asset management companies (AMCs) have net-sold around Rs 24,000 crore so far this calendar, responding to redemptions by existing investors. And the 42-year-old Mr Singhania is betting on the market extending its rise for a while before pausing for a breather. The 30-share Sensex closed at 20166 on Friday, and is less than 6% away from its record high seen in January 2008.

“There are no signs that the market is poised for a steep correction...of course, if there is some adverse global development out of the blue, you could see a 5-10% fall. Otherwise, valuations are not exorbitant, domestic investors are still pulling out money...these are not conditions usually ideal for the market to peak out,” he says.

Mr Singhania’s strategy to increase cash levels in some of his schemes to as much as 40% in March 2009 drew criticism from many quarters. And while he maintains that was the best possible approach under those market conditions, the chartered accountant-turned-fund manager has not been very aggressive in his cash calls since then. Reliance Mutual manages around Rs 1.07-lakh crore, with around Rs 39,000 crore of it in equities.


“Except for our recently-launched small-cap fund, where we are still in the process of deploying the funds, we don’t hold more than 5% cash in any of the equity schemes,” says Mr Singhania, who has been managing funds for seven years now.

Unlike most of his peers, Mr Singhania doesn’t have any high expectations from corporate earnings for the July-September quarter. Benchmark indices are up 15% since the start of this calendar and are trading around 18 times one-year forward earnings; expensive by historical average. Brokers and fund managers feel that any disappointment in earnings growth could trigger a selloff.