Get The Daily Rip India

Up, Up and Away

Tale of the Tape 

Good evening, ladies and gentlemen. Welcome to the new trading week. 🎲

Markets continued their winning streak. Nifty and Sensex jumped +1% each as reports downplay Omicron’s economic impact. Midcaps (+0.9%) and Smallcaps (+1.4%) were equally enthusiastic. The advance-decline ratio (2:1) ratio remained firmly in favor of the bulls. 😇

It was a sea of green across the board. State-owned banks (+3%) posted their highest single-day gain in nearly 3 months. Check out their charts below. Real Estate (+1.9%) and Auto (+1.8%) stocks also saw healthy gains. 💪

Paytm tanked another 6% after Macquarie downgraded the stock. Read more below. 👇

TCS (+1%) will consider the proposal of a share buyback on Wednesday. 💸

Earnings update. Avenue Supermarts (-2%) Q3 earnings met estimates. But, a weak outlook and concerns over lower margins dragged the stock lower. GNA Axles slumped 12% on weak results. 📊

South Korea-based electric carmaker Edison Motors will buy SsangYong Motor for $255 million. PS. Mahindra & Mahindra owns a 75% stake in SsangYong. The stock closed up 2%. 🚗

KEC International (+5%) won new orders worth Rs 1,025 cr. 💰

Maruti Suzuki (+3%) rose for a seventh consecutive day, most since June 8th. 📈 

Cryptos rebounded after opening lower. Bitcoin (+1%) traded above $42K after hitting its lowest level since September. Ethereum rose 1.5%. 🤗 

Here are the closing prints:

Nifty 18,003 +1.1%
Sensex 60,395 +1.1%
Bank Nifty 38,347 +1.6%

Hello, NSE??

Reliance Jio may go public in 2022, according to CLSA. 😎

RIL first announced plans of launching Jio’s IPO at its 2020 annual general meeting. But, we never heard of an official date. Valued at roughly $100 billion, CLSA believes this could be a major catalyst for India’s telecom sector. 📈

In just 5.5 years, Jio became India’s #1 telecom operator with +42 cr subscribers. A lot has changed in that period and the industry finally seems to stand on its own. Bharti Airtel, its largest rival and #2 player, may also re-rate when compared to Jio’s massive valuation premium. ✌️ 

Obviously, there will be a lot of interest in the public offer. Even more, since Reliance raised around $20 billion from marquee investors like Facebook and Google in 2020. Next on the block, its massive retail empire? Let’s hope so. 🚀


Chartbusters 

State-owned banks were on fire. Buzz of capital infusion in the upcoming Budget plus easing NPA problems, and (constant) privatization rumors boosted investor sentiment. Bank of Baroda, PNB, and Canara Bank jumped between 4%-5% each. 🤑 Check out their charts below:


No End To Its Troubles

Paytm may drop a further 22% from the current levels, according to Macquarie. FYI – the stock is already down 45% from its IPO price. WTF! 🤯

What’s the deal bro? Paytm gets 70% of its revenue from its payments business. The RBI’s latest proposal to cap digital payments charges may cause a massive dent in its revenue, according to Macquarie. Also, key senior-level exits plus slowing lending business are key negatives. ❌

That’s not all. The insurance regulator, IRDAI, rejected Paytm’s application to enter the general insurance business. This may eventually come in its way of getting a banking licence, said Macquarie’s analysts. Ouch! 😓

Macquarie has been bearish on Paytm since Day 1. They infamously initiated coverage on Paytm on its listing day with a target price of Rs 1,200, 40% below its IPO price. So far, Macquarie has been bang-on with its prediction. But, can Paytm find its feet and rebound from here? Only time will tell. ⌚


Management Masterstroke

Microsoft CEO Satya Nadella will join Groww as an investor and an advisor. Congrats guys!! 👍

Nadella is credited with turning around one of the biggest tech companies since taking over as its CEO in 2014. He made several moves like partnering with competitors, strategic acquisitions like LinkedIn, and changing the work culture at Microsoft. As a result, profits have 2x to $61 billion (FY21) while the stock continues to hit new highs. Having one of the most successful CEOs in silicon valley history on your side is a massive W, IMHO. 🏆

Big Picture: Millions of Indians have entered the equity markets in the last 12-18 months. Rising financial awareness and an explosion of cheap brokers have fuelled the participation. Still, only 5% of India’s population invests in financial markets. This offers a huge runway for growth. PS. Groww recently raised $251 million to fund its expansion plans. 💰