People who are under allocated are using the dips to increase their allocations, says Abhay Agarwal, Founder, Piper Serica PMS. The resilience of the market is surprising despite the second Covid wave. How are you analysing it?As long-term investors, we do not really look at short-term events but my guess here is last year same time, a lot of people panicked and exited the markets. Then Nifty went up 70% in the last financial year. People are not exiting the market because they believe that while the number of Covid cases are going up, a way out may be seen in April or May and they are looking beyond that. That is the sense I get because last year, there was a lot of emotional pressure on investors. This time, we are seeing a lot of urgency in putting out money. People who are under allocated are actually using this opportunity to increase their allocations. We are also on the cusp of starting with the Q4 earnings season. Looking at the Q4 operational updates, it seems steel is doing very well. Do you think the earnings momentum will continue this quarter as well?Barring the lockdowns which are still regional in nature and not as wide and pervasive as we had last year, there is a tremendous desire from the corporate sector to maintain things as they are — keep the factories open and meet the customer demand which is pretty strong at this point of time. It is driven by a couple of things. One is that there is a pent up demand. The amount of savings with the HNI category have gone up dramatically because last year, they got an opportunity to spend too much money on discretionary items. We are seeing good demand from real estate, auto. My view is that this last quarter’s earnings will be pretty strong from the low base of last year. But the current quarter earnings will again surprise people on the positive side, especially for the larger companies that are leaders in their space. The weaker companies will continue to lose market share. How do you read the RBI commentary? Even the worry about rising yields in the US seems to have calmed down after a round of commentary from Yellen and Powell that rates will remain lower and there will be ample QE. The infra bill will also kick up a lot of capex. The Indiam government and RBI too have managed to calm down the yields issue. Low yields are going to stay for a very long period of time because in a world that is still working its way through a pandemic and the rehabilitation phase after that, I do not really expect the yields to go up in the next couple of years. There will be volatility. So 10-year Gsec in India may at some time spike to 6.5-6.75%, but it will stay around 6% or slightly lower. There is ample liquidity in the system, RBI has guided that it will provide liquidity, banks are flushed with cash, CASA deposits have gone up for almost all the banks that we track in the last quarter. One of my colleagues who has borrowed from a very large bank, has a 20-year home mortgage at 6.75% which is the lowest ever I have seen. With that kind of abundant supply, yields may become volatile sometime but otherwise for the next couple of years, investors should not worry about any rapid rise in yields including the US yields. If you are a central banker, you do not want to rock the boat at times when the economy and the people may have to struggle again. Policybazaar and Zomato are both IPO bound. What are your thoughts in terms of earnings trajectory? The whole consumer internet space — whether it is selling insurance, food delivery or any business that has leveraging technology, are going to become very valuable in India over the next two to five years. In a market like India, leadership positions have got established pretty quickly. So, if you look at food delivery, it is Zomato and Swiggy. Policybazaar is pretty much the leader in the online insurance space. For us, it is a great convergent play through InfoEdge. We have an indirect ownership in both these companies. You in personal capacity analyse start-ups and invest there. Dollops of liquidity have been coming in Meesho, CRED, Grow and Byju. Do you think Indian technology backed startup ecosystem is coming of age and it is getting recognition on a global scale now?It has been getting recognition for many years. These companies have been raising rounds of capital starting from $10 million and $30-$40 million. Swiggy recently raised $800 million. So frankly India is a hotspot as far as global investors are concerned who think that private companies which are using digital technologies to disrupt a lot of traditional industries are going to create value. I think that momentum is only going to pick up pace. There will be periods of overvaluation and extreme competitiveness between investors. But barring that, the good thing for the country as a whole and for the entrepreneurs is that if they are successful at an early stage, there is no scarcity of capital. Tremendous value will get created from unlisted companies and as they will go and list like we are expecting at least 10 such unicorns to list in the next 12 to 18 months, the retail investors will get a great opportunity to participate in them.