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Buffett 💔 Paytm

Tale of the Tape 

Hiya everyone. Welcome back to the market of stocks! 🥳

A last-hour surge saw the markets end higher, with the Sensex up 0.3% and Nifty up 0.5%. Midcaps (+0.3%) and Smallcaps (+0.5%) also moved in lockstep. The advance decline ratio was evenly split. ✌️

Most sectors ended in the green. Oil & Gas (+2%) and Metals (+2%) boosted the rally today, PSU Banks (+1.4%) and Autos (+1%) also witnessed healthy gains. On the flipside, Pharma (-0.3%) and FMCG (-0.1%) stocks saw minor cuts. ✂️

What should investors take away from Warren Buffet’s big Paytm mistake? Read our top story below. 💯

The 2023 IPO party isn’t stopping anytime soon. More details below on how well it has done so far. 🤑

Adani Group stocks were up 3%-15%. Reports say the SEBI probe into the conglomerate is coming to an end. 🚀

BSE jumped 9% after Jefferies initiated coverage and slapped a buy rating on the stock. The brokerage firm sees a 20% upside potential. 💰

TCS faces a whopping $210 million penalty in a new trade secrets lawsuit. 🧑‍⚖️

Netweb Technologies (+8%) gained after it announced an AI development partnership with NVIDIA. 🧑‍💻

HPCL, BPCL and Indian Oil all hit a 52-week high after brokerage firm HSBC upgraded the stocks to a ‘buy’. 📈

Spicejet (+3%) promoter Ajay Singh is reportedly in talks to raise up to $100 million to refinance debt. ✈️

Marut Suzuki will hike the price of all its models from January 2024 due to higher commodity costs. 🚗

Spencer’s Retail jumped 7% after the company said it had made plans to reduce its debt by Rs 100 cr. 👍

KPI Green Energy hit a 52-week-high. Its subsidiary has bagged several solar power project orders. ⚡

Here are the closing prints:

Nifty 19,889 +0.5%
Sensex 66,174 +0.3%
Bank Nifty 43,880 +0.3%

Buffett Sells Paytm!

Even the Oracle of Omaha can make mistakes, folks! Warren Buffett’s Berkshire Hathaway sold its full 2.5% equity in Paytm worth Rs 1,370 cr at Rs 877 p/sh. FYI – this works out to an over 20% LOSS. Berkshire had picked up a 2.6% stake in 2018 for nearly Rs 2,200 cr. That’s rough by any measure. 🧐

For all the Buffet fans: Yes, technically this investment was led by Todd Combs, Buffett’s top lieutenant. Yes, Berkshire only invested $260 million, a tiny portion of its $700 billion-odd assets at the time. And yes, it did sell a small chunk of its holdings (0.1%) during the IPO for a handsome return. 💸

None of this takes away from the fact that it was a bad deal though. There are two key takeaways here. For retail investors, there’s no doubt Paytm’s IPO was greedy and hardly left any money on the table. Two years after the IPO, the stock is STILL 59% lower than its issue price of Rs 2,150 p/sh. 📉 

Secondly, half the battle is knowing when to get in. After all, Paytm is up a whopping 93% from its November 2022 lows. Most experts are bullish, mostly due to its now-clear emphasis on profitability. ✅

Of course, Buffett understands all of this. But it’s good to know even the very best can mess up sometimes. Here’s a quote from the master himself that sums up this situation: “For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favorable business developments.” 💯

Stocktwits Specials

We all miss the legendary investor – Rakesh Jhunjhunwala! In this video, we cover his top holdings and latest portfolio updates along with fundamental and technical views on the same.

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IPO Leaderboard

2023 will go down as the year of IPOs. Investors have gobbled them up like there’s no tomorrow. But how well have most public issues done? Both at the time of listing and in the months afterwards? Let’s do the math. 🤓

There are 45 companies that went public this year. Out of these, 36 companies saw some listing gains.The lowest was Mamaearth (+1.8% debut), while the highest was Ideaforge (+93% listing gains). Three companies had a flat debut. 👍

Only 5 companies closed below their IPO price on listing: IRM Energy (-5.5%), Updater Services (-5%), Yatra Online (-10%), Avalon Technologies (-1%) and Uday Shivakumar Infra (-14%). ❌

Finally, only 4 out of 45 companies are still in the red after their IPOs. These include Yatra Online, Radiant Cash Management, IRM Energy and Updater Services. Not bad at all. 😣

Here are the top 3 IPOs that have created the most investor wealth since their listing:

1) Cyient DLM: For the unaware, the company is the electric equipment manufacturer arm of Cyient. The stock has KILLED it in the last few months. It saw listing gains of 52% and is currently up 144% over its IPO price of Rs 265 p/sh. 💰

2) Senco Gold: A pan-India jewellery retailer with the LARGEST organised presence in Eastern India. The stock saw listing gains of 36%. Since then, its been on the choo-choo train, up 128% over its issue price of Rs 317 p/sh. 🥇

3) Vishnu Prakash R Punglia: The company is a Rajasthan-based infra firm that primarily executes GOI projects in sectors like water supply, irrigation, roads & railways. The stock saw listing gains of a crazy 65% and is up 116% from its issue price of Rs 99 p/sh. 😎

Big Picture: The IPO process is only getting smoother. A few months ago, SEBI even halved the listing time from T+6 days to T+3. This means issuers get access to their capital faster and investors have quicker liquidity. FYI – The rest of FY24 will see some key public issues including Muthoot Microfin, Juniper Hotels and Go Digit Insurance. Watch out for this space. 🔥

Stocktwits Spotlight

Target hit! Here’s an interesting techno-funda take on General Insurance Corp of India by debandkur_das. Follow him for more amazing trade ideas and add $GICRE.NSE to your watchlist to track its performance. Here’s the link:

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