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Crash Landing

Tale of the Tape

Good evening and happy long weekend y’all. 😇

Markets dashed lower for a third straight day. Nifty closed below the 50-day moving average for the first time in 6+ months. Midcaps (-1.2%) and Smallcaps (-1.4%) saw deep cuts. Four stocks declined for every one gainer. 💔

Except for PSU Banks (+0.3%), all the other sectors closed in the red. Metals and Auto stocks dropped over 2% each. 👎

Paytm’s start to life as a publicly-traded company didn’t quite go as planned. The stock fell 27% from its issue price on its Dalal Street debut. 😓 As expected Sapphire Foods saw a decent 8% listing gain. Read more below.  

Shareholders gave a big thumbs down to Vedanta’s (-8%) demerger plans. More details below. 🚫

Escorts (+10%) hit a new all-time high. Japanese agri equipment maker, Kubota Corp, will increase its stake in the company. Here’s more information. 💸

Sigachi Industries was locked in a 5% lower circuit for a second straight day. Investors also booked profits in Policybazaar (-8%). 📉

The Supreme Court of India allowed the Government to sell its stake in Hindustan Zinc (-3%). ✅ 

Zomato will invest $500 million in Grofers to scale its hyperlocal delivery business. The stock closed down 1%. 🍞

NCC (-2%) won new orders worth Rs 2167 cr. 💰

Go Fashion IPO got oversubscribed 5.5x on Day 2. Latent View Analytics IPO allotment details are out. Check out if you’re one of the lucky few here. 👍

Cryptos mostly traded higher. Bitcoin rose 0.5% but remains below $60K mark. Ethereum advanced 2%. Avalanche (+9%) hit a new all-time high after its deal with Deloitte. 😎

Here are the closing prints:

Nifty 17,765 -0.8%
Sensex 59,636 -0.6%
Bank Nifty 37,976 -0.2% 

Pay-Tum Karo

Paytm’s big date with Dalal Street ended with heartbreak for investors. The stock tanked 27% from its issue price to close at Rs 1,561 per share. 🤯

Adding salt to the wounds was Macquarie’s report today morning. The global research firm sees a 40% downside in the stock. They cited expensive valuations and concerns over profitability as key negative triggers. 🔻

Despite a weak listing, Paytm is still valued at +1 lakh cr. That makes the loss-making startup more valuable than the likes of Britannia, IndusInd Bank, Dr. Reddy’s, and Hero MotoCorp. 💪

At its core, Paytm is a digital payment firm. This has attracted their first 300M+ users. But, the company’s future growth depends on upselling its existing customer base with other financial services such as insurance, lending, and investing. Honestly, we are proud of Paytm and its journey. Let’s see how this one goes. 🔥

While we’re on the topic, Pizza Hut chain operator Sapphire Foods also got listed today. No jaw-dropping listing but an 8% gain in this market is fairly respectable. ✌


Not Buying

Vedanta is planning to revamp its corporate structure. The company says it is undertaking this exercise to unlock shareholder value. But what does it even mean? 🤔

Corporate restructuring simply means the reorganization of the legal, ownership, and operational aspects of a company. This includes mergers, demergers, stake sales, and more. Companies undergo restructuring to streamline business operations, improve profitability and reduce risks. 🤓

Vedanta has kept all the options open which includes the demerger and listing of its aluminum, steel, and oil and gas businesses. Anil Agarwal, chairman at Vedanta said:

This step, which we announced today, whilst pending a detailed evaluation, is designed to create independent, industry-leading, global public companies, where each can benefit from greater focus, tailored capital allocation, and strategic flexibility to drive long-term growth and value for customers, investors, and employees.

This is completely opposite of what the company did a few years back. In 2012, Vedanta underwent a major consolidation exercise bringing several of its units under one umbrella. Clearly, the markets did not like this and the stock closed down 9%. 👎

Notably, Agarwal attempted to take Vedanta private in October 2020. However, the move did not receive the approval of the shareholders. For now, the company has created a special panel to evaluate its options. Investors will wait and watch for the saga to unfold further. 👀


Feed Me More

Zomato is set to pump in $500 million more into Grofers. The latest financing will push Grofers valuations to around $1.5 billion. 💰

Why is it a big deal? Quick commerce, delivery of products in less than 30 minutes, is one of the fastest-growing verticals in India. According to Redseer, the quick commerce market is estimated to grow to a whopping $5 billion by 2025, up from the current $300 million. Besides Grofers, the existing players include Dunzo, Swiggy, Flipkart, and Zepto. 🛒

Meanwhile, Zomato’s latest investment will enable Grofers to further expand its presence in the segment. Zomato has been in an intense battle with Swiggy. Notably, Zomato shut down its own pilot service program in September, following a $100 million investment into Grofers. In the last 3 months, Grofers opened 200 stores and plans to open 150 more by December. 📊

Zomato has been on a shopping spree. It acquired stakes in CureFit, Magicpin, and Shiprocket. It’s planning to invest $1 billion over the next two years with an aim to build a $10 billion revenue business. Watch out for this space. 😍


Win Some Lose Some

Indian crypto fanboys and girls are in for some good news. Media reports indicate that the government may allow people to buy, sell and “hodl” cryptocurrencies just like any other asset class. ✌

A meeting with crypto industry representatives was held earlier this week to discuss the steps needed to be taken in the coming days. There is even a possibility that the Securities and Exchange Board of India (SEBI) may be appointed as the regulator. 💯

Details are scarce at the moment but one thing is for sure, there won’t be any blanket ban on cryptos. Although, its use for payments and transactions will be prohibited. Not soo much of a currency after all. 🤷‍♂️

India’s stand on crypto has always been confusing. For instance, the Reserve Bank of India (RBI) is currently experimenting with central bank digital currencies (CBDCs), but RBI’s Governor Shaktikanta Das also believes blockchain technology can grow without cryptocurrencies. 🤔

Despite all the hurdles, India’s digital currency market reached $6.6 billion in May 2021, compared to $923 million in April 2020. Experts believe that the new bill will settle the dust, and favorable regulations will help the country grow in the crypto sector. 💸


Movers and Shakers

Here’s a look at this week’s top movers from the Nifty 500. Tata Teleservices took the pole position after rallying +21%. 🥇 Apollo Hospital (+19%) hit a new all-time high on strong results. Manappuram Finance (-16%) snapped its 8-week gaining streak. Triveni Turbine (-14%) fell the most since March 2020. 📉 Check out their charts below: