It’s Time To Go

Tale of the Tape

Happy Tuesday everyone. Markets continue to trade sideways. 😑

Nifty and Sensex closed flat after opening higher. Weak global cues offset the lower inflation data. August retail inflation moderated to a 3-month low of 5.3% vs an estimate of 5.6%. Midcaps (+1.4%) and Smallcaps (+0.3%) maintain their lead. ✌

Most sectors ended in the green. Autos (+0.9%) bounced back following their recent slump. IT (+0.9%) continues to march higher. 📈 Metals (-0.5%) and FMCG (-0.3%) closed with minor cuts.

Zee Entertainment rallied +40% after large investors sought a complete revamp of its management. ✅ Full story below.

The entire media sector was pumped. TV18 Broadcast, Jagran Prakashan, SunTV rallied between 4%-10%. Check out their charts below. 🤑

HCL Tech (+3%) hit a new all-time high. The company entered into a strategic partnership with South Korea-based HANCOM Inc. 💸

Zomato Co-Founder Gaurav Gupta announced his resignation. The stock dropped 5% from its intraday high. 😓

Godawari Power & Ispat was locked in a 5% upper circuit. The company approved a 1:2 stock split and a 1:1 bonus issue. 👍

New listings Ami Organics and Vijaya Diagnostics kicked things off in style. Ami Organics closed up 52%. Vijaya Diagnostics surged +17% from its issue price. 💪

Crypto rebounded after heavy selling in the last few days. Bitcoin and Ethereum rose +3%. Solana and Polkadot jumped +8%. 🤗

Here are the closing prints:

Nifty	17,380	+0.1%
Sensex	58,247	+0.1%
Bank Nifty	36,613	+0.4%

See Ya Wouldn’t Wanna Be Ya

Zee Entertainment rallied +40% after its largest shareholders called for an Extraordinary General Meeting (EGM) to remove top management. 🚫

What’s happening? Invesco Developing Markets Fund and OFI Global China Fund hold ~18% stake in Zee Entertainment. The two shareholders wrote a letter to the company’s board seeking the removal of Managing Director & CEO, Punit Goenka. Two other directors Manish Chokhani and Ashok Kurien have already resigned. The letter also proposed the appointment of six independent directors.

Why is it a big deal? Let’s go back a few years to understand this better. Zee’s founder Subhash Chandra borrowed thousands of crores for his Infra business. The loan was backed by Zee’s shares as collateral. In 2018, IL&FS went belly up triggering a massive liquidity crisis. Chandra failed to pay the banks which triggered a fire sale in its shares. Corporate governance lapses aside, business too wasn’t doing well. Falling market share and the rise of OTT platforms coincided with the 85% drop in the company’s share price between March 2018 to May 2020. 📉

What next? The Street is hopeful that a new “professional” management may turnaround the company’s fortunes. Regaining lost market share, a new digital/OTT first strategy may trigger a re-rating. Zee’s cheap valuations make it all the more attractive. 😍

Chartbusters

Zee’s biggest single-day jump had a positive rub-off on the rest of the media stocks. TV18 Broadcast, Jagran Prakashan, SunTV rallied between 4%-10%. 📈 Check out their charts below:

While we’re on the topic, Dish TV, one of Vishal Mehta’s top momentum calls from #StockRoomSunday, continues to sizzle. The stock has gained ~19% in the last two days. 🔥 For more awesome ideas like these, subscribe to our Youtube channel here – https://bit.ly/3u8Bzn2

Stock Room Sunday is a weekly show hosted by Saket Mehrotra, a professional portfolio manager, and Vishal Mehta, co-chair of India’s CMT Association. Join each weekend for an entertaining run-through of the markets and see what stocks are moving. You may find a few jokes and fundamental vs technical analysis debates along the way.

Blockbuster Offering

Freshworks is all set to become the 1st Indian unicorn to list overseas!!! 🥇

Freshworks aims to raise $912 million from the markets. The price band is fixed at $28-$32 per share. As per reports, this values the company at a whopping $9 billion.

Freshworks started as a customer support chat tool back in 2010. Over the years, the company has expanded into marketing, HR tools, IT management, among others. Freshworks has more than 50,000 employees and is backed by the likes of Accel, Sequoia Capital, and Tiger Global.

Financial Snapshot: (H1 2021) 📊

Revenue: $169 million; up 53% YoY
Net Loss: $10 million (vs net loss of $57 million)

Freshworks’ IPO comes hot on the heels of several startups charting a course to the capital markets. Let’s go! 💯

For all the positives, it’s a bit of a shame that it won’t be easily accessible for most Indian retail investors.

$LTC’s Back and Forth

Litecoin lovers’ hearts skipped a beat — twice. All because of a fake press release. 🤯

GlobeNewswire’s (fake) announcement stated that the U.S. retail giant Walmart would allow customers to pay using Litecoin. Litecoin was also a little too eager and shared the news from its Twitter account without verifying it — for which later it apologized.

The news spiked $LTC.X over 20% from $174 to a session high of $232 — and then quickly retreated after Walmart confirmed that the press release was fake. Walmart spokesman Randy Hargrove said that the retailer is in touch with the newswire company to investigate how the false press release got posted. 🔎

The hoax (temporarily) added nearly $4 billion to the market cap of $LTC.X. Experts compared the incident to “pump and dump” schemes popular in stock markets. Chief Economist Peter Schiff tweeted that it was an orchestrated incident.

This drama couldn’t have been more ill-timed when the crypto market is going through a tumultuous trend. 😓