Stay clear of SKS Microfinance: JV Capital

What’s your call on counters like SKS Microfinance? Is it a good business at a bad price or a bad business altogether and you would completely avoid such stories?

Sajiv Dhawan: Frankly, I would probably stay clear at the moment. There is too much news flow and it is not on the positive side since the IPO is being clouded in controversy and is constantly in the media, in the limelight for the wrong reasons and when you got a political party, which has clearly made a decision, which is very detrimental to the stock, it is going to take time for the company to get over it.

So the people who are buying it probably feel valuations are cheaper, the company is not bad and the stock has been battered enough but these stocks will now tend to be highly volatile. You might see the swings of 5-10% either side, so if you are a high-risk trader, by all means go out and buy some stock but you have to be prepared to see the stock may be sink another Rs 50-100 before it starts to finally move upwards after there is some clarity and stability on the news front.