8 min read
Hello, hope you are doing well!
To sum up Week 4 of September 2021, we will be reading about…
Markets scale a fresh high
Merger of ZEE and Sony Pictures
Freshworks’ IPO creates 500 crorepatis
Snippets of other things that happened
Wrap-up
‘Kya lagta hai at 60k for Sensex?’
The securities market in India is walking ahead, consistently, the feelings on Dalal Street are up and calculating every one of those good perspectives, the market is breaking records, revealing record-breaking highs and giving maximum returns to financial backers. It just required 8 months for the equity market here in India to cross that 60,000 imprint. The 30-share BSE Sensex was exchanging somewhere near 50,000 in January this year and inside in 8 months, the benchmark rose to an unsurpassed high of 60,000. This is occurring at a time, when the COVID-19 diseases bend has practically straightened, immunization is picking up, the economy is tearing back to business as usual, the monetary basics are improving-these elements together are prompting a bull run on the lookout. According to numerous examiners and sharp market watchers, this period of supported bull run is like the 2003-2007 stage where the bulls ran for just about 2-3 years. So the supported bull run for next 2-3 years is something can't be invalidated.
BSE Sensex vanquishing the 60,000 pinnacle is a groundbreaking day to all market members. The excursion has been radiant since the dispatch in Jan 1986. The level mirrors the solid hidden economy, which is reflected in the solid tax collection as of late announced by the public authority. With inoculation additionally establishing new standards, we are in clear skies and have a lot more highs to vanquish in the months ahead. The main road obstruction ahead has all the earmarks of being the probable tightening declaration by the US Fed. The US 10-year bond has begun raising its head, and one necessity to watch out for that. For India, notwithstanding, we are in probably the most astonishing occasions of all time.
The Sensex closed at 60,048.47 on Friday (24.09.21) as it rose by 163.11 points. On the other hand, Nifty 50 scaled 17,853.20 on the same day giving a rise of 30.25 points. The indices continue to scale new peaks as the tearing question among investors remains is ‘Kya lagta hai?’ (What’s going to happen?). Well, we do not know the commander-in-chief of the operation but it seems all upcoming festivals could be celebrated in the coming weeks itself. Brace yourselves as the best is yet to come!
Merger of entertainment powerhouses!
It is rare for competing firms to merge but Zee Entertainment Enterprises (ZEEL) has tracked down a white knight in rival Sony with the last consenting to combine its Indian entertainment business with the ambushed firm, accordingly making India's largest entertainment network with about $2 billion in incomes and 26 percent viewership share. The ZEEL board reported on Wednesday that it had endorsed a non-binding term sheet with Sony Pictures Networks India to combine their operations and that the advertisers of Sony would put $1.57 billion in the merged entity for development purposes.
ZEEL investors will possess around 47% in the combined substance, while the promoters of Sony India will hold 53% after the implantation of growth capital, it said in an assertion. Based on the current assessed value upsides of ZEEL and Sony India, the indicative merger ratio would have been 61.25 percent for ZEEL. However, with the proposed mixture of growth capital, Zee's stake is fixed at 47%, it added.
The promoters of Sony India will transfer around 2% stake so that the Subhash Chandra family will hold an aggregate of 4% in the combined element. Thus, Sony India will hold a 51 percent stake in the combined element, while Zee investors will in total hold the excess 49%. As indicated by the term sheet, Chandra, who set up India's first private sector entertainment organization, has the alternative to raise the stake up to 20 percent. The family offered their stake in ZEEL to repay loans worth Rs 13,000 crore, taken from Indian banks for diversification purposes.
In a late twist, it has emerged that Invesco, the largest shareholder in the Subhash Chandra-backed firm, has insisted that Punit Goenka be removed as MD & CEO of the new firm. Fireworks are all around for this merger as Indians never fall short of - Entertainment, Entertainment and Entertainment!
Freshworks IPO creates 500 crorepatis
A firm started out in Chennai as Freshdesk by Girish Mathrubootham in 2010 has made a heavenly introduction on Nasdaq on Wednesday at a valuation of $13 billion under the name of Freshworks. The first Indian Software as a Service (SAAS) organization to list on Nasdaq, Freshworks raised $1.03 billion, selling 28.5 million million shares at $36 per share. The offers began exchanging at a 21% premium to the IPO cost and shut the day 32% higher at $47.55. The effective IPO of the San Mateo-settled organization, which has 52,000 customers across the world, brought about a monstrous payday for the organization's co-founders and its employees. Mathrubootham, 46, merits an expected $700 million.
Freshworks announced $250 million in income for 2020 and an overall deficit of $57 million. For the main portion of this current year, it checked in the income of $169 million and an overall deficit of $10 million. Freshworks offers a set-up of cloud-based business programming items in the $120 billion worldwide cloud application administrations market. It has highlighted in the Forbes Cloud 100 rundown, the positioning of the main 100 private cloud organizations on the planet, for a long time, working on its positioning from No. 95 of every 2017 to No.10 this year.
Before he took Freshworks public, Mathrubootham, who's called 'G' by his buddies and business partners, had raised $327 million from investment firms, for example, Sequoia, Tiger, Accel and CapitalG, Google's investment store CapitalG. More than 76% of the employees hold shares in the firm making 500 of them crorepatis within a short time from the listing. It’s not easy when you serve a market opportunity worth USD 120 billion but the company’s Freshwork has been lauded for the last decade and we hope it continues to happen so.
What else happened?
Solar Strike: As many as 19 firms, including Reliance Industries Ltd (RIL), Adani Group and Tata have displayed interest for setting up solar manufacturing units under a PLI scheme of the government. In April this year, the Union Cabinet endorsed a Rs 4,500 crore production linked incentive (PLI) plan to support homegrown assembling capacity of solar PV modules. The plan is pointed toward adding 10,000 MW manufacturing capacity of incorporated solar PV modules involving a direct investment of Rs 17,200 crore.
"RIL, Adani Group, First Solar, Shirdi Sai and Jindal Poly have applied under the plan for assembling polysilicon (stage-I), wafer (stage-II) and cells and modules (stage-III and IV). L&T, Coal India Ltd (CIL), ReNew and Cubic have offered for Stage II, III and IV," the source told PTI. The source likewise said nine different firms specifically Acme, Avaada, Megha Engineering, Vikram Solar, Tata, Waaree, Premier, Emmvee and Jupiter have revealed interest for stage III and IV (cell, modules).
Freshly brewed fine: Competition Commission of India (CCI) on Friday forced punishments totalling over Rs 873 crore on United Breweries Ltd, Carlsberg India, All India Brewers' Association (AIBA) and 11 people for cartelisation in the sale and supply of beer. The CCI has additionally coordinated the organizations, affiliation and people to cease and desist from anti-competitive practices in the future.
The period of cartelization was from 2009 to October 2018 where CIPL joined from 2012 and AIBA helped in anti-competitive practices. They were in violation of price norms as they coordinated the same. Let’s hope the lager served at a bar near you does not come in pricey!
Masterstroke Defence: It is a major accomplishment as the Initial Public Offering (IPO) of Paras Defense and Space Technologies has turned into the most oversubscribed IPO in capital business markets history! The issue was subscribed 304.26 times making it the most subscribed IPO in history, trailed by Salasar Technologies with 273.05 times and Apollo Micro Systems was bought in 248.5 occasions.
Paras IPO got bids of 2,17,26,31,875 shares against the offered 71,40,793 equity shares. The part held for the Non-Institutional Investor classification was subscribed 927.70 times and the retail financial backers was subscribed 112.81 times. The Qualified Institutional Buyer class was subscribed 169.65 times.
To wrap it up…
Most worldwide business sectors regularly walk in lockstep, yet what has played out this year—particularly since August—has staggered numerous on the Street. That is on the grounds that the Indian market has gained a sudden advantage over its emerging market (EM). For a second consecutive month, the Nifty has outflanked the MSCI World index by more than 6 percentage points (ppts), and the MSCI EM for a fifth consecutive month.
China's equity market remedy as a consequence of its administrative crackdown has burdened the exhibition of MSCI EM record — where it has more than a third of weighting. In August, the Nifty rose 8.7%, while the MSCI World and MSCI EM rose simply 2.4 percent each. Furthermore, that outperformance has proceeded into September too, with the Nifty acquiring more than 4%, even as the MSCI World and MSCI EM files are down 2.1 percent and 3.5 percent, separately.
The call for remaining cautious has not been more evident than before but it is the continuous learning and growth that will bind the foundation of a sound wealth creation program.
Week 4 | LESSON #4: Review, Rebalance and Reward!
We are sure that readers have learnt that it is important to set goals and keep learning towards accumulating wealth. Furthermore, the power of compounding and having patience also adds a soft and precarious layer to investing. However, the targets will remain unachieved if one does not review, rebalance and reward oneself!
Review your portfolio occassionally as it will help you identify investment mistakes that could be avoided. They need to be rectified as soon as possible before market corrections take place. It will also help you weed out funds that hold the same stocks and those you have bought just by reading the name. A sustainable portfolio is one where overlap is minimal or nil and savvy investors usually try to avoid such mistake.
Not simply market developments can influence whether your portfolio actually suits you. As you ought to contribute with a long haul time span, you might discover your objectives and desires change. Therefore, you might have to refresh your danger profile, and mirror this in your portfolio. To put it plainly, rebalancing guarantees your portfolio stays in accordance with your putting objectives regardless of market developments. It's significant for ensuring your portfolio keeps on supporting your objectives over the long haul.
Last but not the least, reward yourself with an outing that you had put on hold for a long time. Reward with activities that you love and try to unwind from all the market noise at times. It’s best if you hit the refresh button at times as it will help you align your wider lifestyle plans with your investment strategy.
We hope that this Anniversary special month has been informational and fruitful for all readers. Finweek has completed a year and we hope to continue our bull run in the future with zero corrections. We still are in search of our grey market premium but before that, we would just like to thank our readers who spare their precious time and read our blog.
Here’s to more weekly blogs and keeping you updated with fresh financial content!
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That brings us to the end of this weekly wrap-up.
See you next weekend. Stay safe!
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Sources: Moneycontrol, The Signal, The Boring News Co., Business standard, Upstox Daily, and Motilal Oswal.
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