Reliance should be the leader in the next bull market: Mehrab Irani, Tata Investment Corporation Ltd

Mehrab Irani, Investment Manager, Tata Investment Corporation Ltd, in a chat with ET Now talks about Reliance Industries and ONGC.

Talking about Reliance Industries, what should be the strategy? Also, why is ONGC not moving and where are we missing the value here?

If you see about Reliance, it has been a big underperformer over the past few months because of whatever the problem, etc. was there. Now with this court case getting resolved, it should be one of the leaders in the next bull market. The GRMs were around 7.5 and that should increase to around 9. It is in the initial stage of the cycle. Reliance should be a beneficiary of that and it should be a leader in the next market.

Regarding ONGC, it has been a big underperformer because of whatever the government concerns, etc. were there but this time, the fiscal deficit may not be as bad because the GDP would grow at a 7.5-8% comfortable rate plus also we have seen that good collection has come.

Is it that as far as ONGC is concerned, we keep looking at their income but the kind of assets they are sitting with? They really do have assets way beyond Reliance or anybody else but they just do not get valued on those assets?

Yeah, they do not get valued because of whatever the government has been doing. They have a very good dividend yield of 3.3% or so and the government will keep paying dividends. This year we have seen that so much 3G auction, around 60000 has been collected and plus the oil prices remaining low around 71-72 barrel. So the subsidy burden may be less on ONGC this year and it may be a good pick.