Memo 33 – Heads, I win; Tails, I don’t lose much!

Memo 33 – Heads, I win; Tails, I don’t lose much! The above title pretty much summarises the investor experience in stock markets over past 18 months. Markets continue to celebrate even the smallest of positive developments like revenge travel, re-opening of cinemas or the rise in valuation of start-up unicorns. Business media, Twitter & Instagram are full of positive interpretation even around the not-so-positive developments like: • Rising inflation (is good because far...
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Memo 32 – Investing through interesting times!

Memo 32 - Investing through interesting times! A complete victory over Covid seems at least a few months away, but that has not stopped the stock markets from making new highs yet again. The 2 nd wave made little dent on the markets even though it had much deeper impact on lives & livelihood of large number of Indians. The divergence seems even stronger when we see that unemployment rate in India is stubbornly high but most start-ups are facing unprecedented attrition as well as wage infl...
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Gold loans: The “Titan” moment for Muthoot Finance

Gold loans: The “Titan” moment for Muthoot Finance Q1FY22 represented a perfect storm for the gold loan sector. Gold prices had crashed 15% towards the end of Q4FY21, lock-downs had impacted demand as well as ability of customers of earn & repay, and banks had to deal with additional problem of lowering LTVs from 83% to 68%. It was no surprise that most players witnessed de-growth in loan book, rise in NPAs and subdued profitability for the quarter. Tough times generally separate the men ...
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Microfinance (MFI) – Blame it all on COVID?

Just when the MFIs were trying to write-off the Covid losses and re-start their growth journey, the 2 nd wave came and hit them. Given that this wave has penetrated the depth of India’s hinterland, the MFI sector has been very vocal is demanding an emergency credit line of Rs.15,000crs, government relief through Partial Guarantee scheme and enhancement the lending rate. As investors, we may be tempted to think that last few quarters should be treated as “exceptional” due to cyclones, special ...
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Memo 31 – Market View: Pessimism, Scepticism, Optimism and Euphoria!

Memo 31 – Market View: Pessimism, Scepticism, Optimism and Euphoria! The roller coaster of 2020 is resolutely behind us – Covid concerns are fading, life is bouncing back towards normalcy, our favourite restaurants & our household help are back in action, government &central banks are providing unconditional support to the economy and, stock markets are at least 20% higher than pre-Covid levels! One may be seduced to think that it’s surely a party time for investors. Well, life is n...
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Memo 24 – Market View – Separating Men from the Boys!

After almost four years of steady rise, the past few months have been rather challenging for Indian stock markets. The thousands of whatsapp groups which were buzzing with new recommendations every day have become unusually silent; the newspapers and TV anchors are no longer talking about multi-baggers and public personalities are no longer boasting about their winning bets. Let’s take a moment to understand why the euphoria suddenly turned into fear. The damage at the index level looks small (...
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Bandhan HAL & Bharat IPOs

Bandhan Bank, Bharat Dynamics & HAL IPOs – Invest After a long break, it’s again a month of good IPOs. Before you get excited, let us put a disclaimer – these companies are great companies in their respective sectors, but will not give you returns on day 1 of listing. Unlike in the past, you will have to stay invested for a slightly longer period. Since the euphoria in the IPO market has subsided, there is a good probability of allotment in all these IPOs. Bandhan Bank Apart from being ...
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Memo 23 – 11,000 is Just A Number!

11,000 is just a number! We will take the liberty to borrow a few lines from our June 2017 article titled “10,000 is just a number”, where we discussed at length that the Indian stock markets are headed much higher in the coming days. It’s almost a déjà vu as Indian stock markets made fresh highs and NIFTY crossed 11,000 for the first time. As in the past, only a few are celebrating this feat. Through this article, we want to specifically address the three reasons why folks like us are not ce...
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Amber Enterprises IPO

Amber Enterprises IPO – Add this Cool Quotient We may be blissfully unaware that we could be using this little known company’s products to seek respite from the sweltering heat.Amber Enterprises India Ltd is a Punjab based contract manufacturer of room air-conditioners and its components for most of the Indian AC brands. Below are the investment arguments. Investment Arguments Leadership position in Room AC (RAC) to further strengthen Amber commands a lion’s share of ~55% in the ou...
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Memo 22 – Bitcoins – Better or Bitter?

While we claim no expert insights or inclination on this topic, the record number of queries that we have received over past two months have pushed us to write on it. The interesting commonality to all these queries is the “left out” feeling. People have almost stopped short of asking"I don't understand anything about bitcoins but is it okay to buy them?  Am I missing something big if I don't buy them?" Again, we are no expert on bitcoins or block chain, so allow us to borrow some insights fr...
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