As global macro headwinds intensify and mid and smallcap stocks face mounting pressure, Mumbai-based Sohum Asset Managers has made a decisive pivot toward largecap safety — and is finding value in some of India’s biggest names. Sanjay H Parekh, Founder and Chief Investment Officer, laid out the fund’s current positioning in a conversation with ET Now, revealing a portfolio built around domestic strength, reasonable valuations, and disciplined growth investing.
Largecap heavy and domestic overweight
Sohum’s mandate requires a minimum 70% allocation to largecaps. Right now, that number sits at 82% — a deliberate increase from 72–73% in February. The shift happened through March, April, and early May as the fund repositioned in response to a more uncertain global environment.
The overarching theme is clear: domestic overweight, global underweight. Parekh said this stance has directly benefited fund performance, as India-facing businesses have proven more resilient than export-oriented or globally exposed names amid ongoing geopolitical tensions.
Why Reliance is the fund’s biggest conviction bet
Parekh singled out Reliance Industries as one of the fund’s most significant recent additions, with purchases made around the ₹1,350–1,360 level. His sum-of-the-parts valuation puts the stock’s fair value at ₹1,660–1,670 by FY28 — a compelling upside for the country’s largest listed company.
The investment case rests on multiple pillars: a base refining and petrochemical EBITDA of around ₹60,000 crore that Parekh believes can only improve, a strong oil and gas EBITDA of ₹16,000–17,000 crore, a well-performing telecom business, and a retail segment finding its footing. Beyond the existing businesses, he is particularly excited about Reliance’s new energy play, describing it as a fully integrated renewable energy platform spanning solar, battery storage, and specialised chemicals — one that he expects to become a meaningful contributor to earnings by FY28–30.
Private sector banks: A 26% portfolio allocation
The fund holds a basket of India’s four largest banks — SBI, ICICI Bank, Axis Bank, and HDFC Bank — together accounting for 26–27% of the portfolio. Parekh’s conviction here is grounded in valuation and balance sheet quality. All four are trading at significant discounts to their five-year averages, carry excess provisions, and are showing improving asset quality.
Crucially, he believes interest rates have bottomed out. In a rising rate environment with loan growth recovering toward 15–16%, he expects net interest income growth to outpace loan growth — a dynamic that should directly benefit this banking basket over the next one to two years.
Other high-conviction positions
Beyond financials and Reliance, the portfolio reflects a broader domestic consumption and infrastructure thesis. Parekh holds Maruti and Mahindra in the auto space, citing strong April volume numbers, along with auto ancillary firm Samvardhana Motherson. In cement, Ambuja and Grasim — which gives indirect exposure to UltraTech — are the preferred names, with the view that larger players will consolidate market share despite current overcapacity. Bharti Airtel represents the telecom play, while Larsen and Toubro and niche prefab company Interarch round out the capital goods exposure. Adani Ports completes the portfolio’s infrastructure tilt.
One sector the fund is staying away from
Despite positive consumer sentiment data, Parekh remains cautious on FMCG. While acknowledging that companies like Nestle and HUL have delivered ahead of expectations, he believes valuations remain uncomfortable relative to sustainable growth prospects. Instead, the fund is accessing consumption through discretionary, telecom, and real estate exposure.
The fund has compounded returns at 18% annually over nearly four years — a track record Parekh attributes to disciplined GARP investing and a portfolio concentrated in 15–20 high-conviction names.
