Investors Jiten Parmar and Niteen Dharmawat’s equity research firm stops taking new subscriptions. Here’s why

Pune-based Aurum Capital, which is managed by well-known equity investors Jiten Parmar and Niteen S Dharmawat, has stopped taking new subscriptions for their value investing research service, citing valuations concern in the domestic equity market.

In its fifth anniversary newsletter, the equity research firm said that, primarily, they noticed a rise in impact cost. “This could also be a result of the current market state and valuations discomfort in sectors. Also, it is becoming increasingly difficult to find new value ideas due to the euphoria in the markets.”

The newsletter came at a time when the benchmark BSE Sensex closed 676 points down at 65,782 on August 2. Earlier, the 30-share index had gained nearly 10 per cent on a year-to-date basis till August 1.

“The risks for incremental investments are higher. And hence we are restricting taking on new subscribers till further notice. It could be a very hard decision for any service provider especially when you are getting a flood of new subscribers,” said Aurum Capital.

While sharing its view on the domestic equity market, Aurum Capital said the markets have gone up quite a bit. And valuations in most pockets are not favourable.

“There is tremendous greed on the streets. A few indicators we track are showing euphoria. The likes of IPO valuations, listing gains, the valuations in SME stocks and valuations of the ‘current hot’ sectors are among them. We believe investors should avoid FOMO (Fear of missing out) and this is a great time to calibrate and remove the mistakes,” the equity research firm said, adding that investors should avoid stories, extreme overvaluation, priced-to-perfection sectors or stocks and most importantly avoid crap.

Aurum Capital further added that we are sure this bubble will be pricked. “The key is to stay invested in sectors or stocks where one has a longer-term view. We are not negative on the markets from a long-term perspective. It’s important to own good stocks where there is still valuation comfort and which have better prospects over the next few years too,” it said.

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