Did you hear the story of Nidhi Razdan, who thought she got recruited by Harvard University, till she wasn't? Nidhi is a former Executive Editor at NDTV - A position she held for 21 years. One day she got an e-mail asking if she was interested in a teaching role at Harvard Univeristy. Who wouldn't be?
She was interviewed by 'eminent' staff, rolled out an authentic looking offer letter and was later adviced that her US visa was almost ready. Almost a full year later, after having left her job at NDTV and being frustrated with the slow pace with which it was all moving, Nidhi contacted some others at Harvard University only to realise that it was all a scam in the first place. The impostors obviously got a lot of personal information out of her.
If there is one thing at all we should take away from this, it is that the thieves, dacoits and the robbers of our age, don't come through the front door. They come through our e-mail inbox. You are warned!
IN THIS NEWSLETTER
News in brief
Quiz, Price is right!
Easy money being made in IPOs?
Quarterly results update
In other news, Thought for the day
Tesla fell just short of selling close to half a million cars worldwide in the last year in 2020. Can you guess what percentage of total new cars sold in the entire world is being sold by Tesla?
NEWS IN BRIEF
India’s largest gas distribution firm, GAIL (India) Ltd., announced a major share buyback scheme on Friday this week. Close to 1.6% of total outstanding shares are due to be bought back at a price of Rs.150 a piece. GAIL’s closing price on Friday was close to Rs.140. The government which owns 51.76% of GAIL is slate to be the biggest beneficiary.
Google announced that it has completed its $2.1 billion acquisition of fitness-gadget maker Fitbit.Google already has a wearable brand called WearOS. However, that brand is more dead than alive. With the acquisition of Fitbit the search giant might just catch up with Apple. Oh, and they have pinky-promised not to use data coming from Fitbit with their search data!
The Trump administration this week blacklisted the Chinese smartphone manufacturer Xiaomicorp., broadening efforts to undercut the expansion of China’s technology sector. The US government alleged that Xiaomi has ties with the Chinese military. Xiaomi responded to this saying that it is not owned or controlled by the military. But who is listening! The stock tanked by -10%.
The RBI played spoilsport this week in the bond markets. The central bank announced that it was going to absorb close to Rs.2 trillion in excess liquidity from the banking system through what is known as reverse-repo auction (essentially saying, ‘hey banks, here are the bonds you sold to me. Give me my Rs.2 trillion back’). Bond yields went up and fixed income bond prices came crashing down.
The Modi government this week announced that it has decided to purchase 83 indigenously made fighters manufactured by Hindustan Aeronautics Ltd. (HAL). The stock price of the majority government owned defence manufacturer was up by 9.5%. Prices of other defence equipment manufacturers like BEL were also up. This follows on from the government’s push to insource defence equipment.
GAME : THE PRICE IS RIGHT
One of the biggest tech events in the world, CES 2021, was held this week digitally. The kind of gadgets in display were so in tune with current times – Facemask with a phone, facemask with oxygen filter (oh, we need that!), smart facemasks! But what caught our eye was this portable AI powered water filter and clean water dispenser for washing hands. The Japanese firm Wota which manufactures it already has 4,000 orders for it since it launched last year in July. It is the size of a barrel, weighs about 80 Kg, requires no connection to water mains and uses the same technology used in spacecrafts to recycle water. Your job now is to guess its price!
Easy money being made in IPOs?
2020 was a year when easy money was made in the stock market. Everybody who invested in the market at any point in time of the year was better off at the end. People who were especially better off were the ones who invested in IPOs that opened last year. All they had to do was subscribe to the IPO, pray for an allocation, and eventually sell the allocated lot in the secondary market on listing day.
How much did they make? An investor who put in Rs.10,000 on each of the IPOs listed in 2020, made a total trading profit of Rs.53,422 – A total return of an astonishing 434% in one year. 11 of the 15 IPOs from 2020 listed with positive gains and all the 15 are trading above their IPO prices as of last week. So, is that it then? Have we figured out where the money tree grows? Inside the IPO forest? Well, not so fast.
We took a look at all the IPOs that listed in India over the last 15 years. And the trend, is fascinating. Here is a chart of listing day returns from all these 400+ IPOs. Take a look.
2020 was a fantastic vintage. 36% average listing day gains were recorded across the 15 IPOs. But we have had rough years in the past. To be honest, we have never seen gains similar to 2020 in the past. Hit the button below to find out more about what we unearthed.
Let there be light, said god. Let there be quarterly results, said January 2021. It is still very early days, but we are quite excited about this results season in particular as we expect more of normalcy to have returned.
The chart above shows industry wise sales and profit growth from last year and from last quarter. It can be a bit hard to read, but the idea is to get a big picture view of what is happening. The line right at the centre of each section is the 0% line. Dots above that line show positive growth while dots below show negative growth.
For now, the only trend we are seeing is that media companies are struggling still. But you already knew that! Here is a quick glimpse at the 27 businesses that have posted results so far. Tata steel is a big winner this time around.But given the increase in iro ore prices and steel prices across the board, it isn't entirely surprising. SAIL (steel authority of India) will also be posting robust numbers on the back of government's push to offload stake in the steel maker.
Our watchlist has close to 900 companies, so stay tuned for more to come.
IN OTHER NEWS...
Brazil sent an aircraft to India this week to pick up 2 Million doses of AstraZeneca’s vaccine from Serum institute.
Apple seems to be in discussions with a number of different companies to get into the electric cars business.Word on the street is that Hyundai is in the lead.
UBS is apparently in discussions to invest $400 Million in PayTM. The payments giant is backed by Softbank and Ant financial. Everybody wants a piece of India!
ANSWER TO QUIZ
That is Tesla’s share of new car sales in the world. Roughly about 65 Million new cars were sold in 2020. Tesla’s share of half a million of that 65 million equates it to having a market share of 0.7%. Its market cap on the other hand has increased so much that the company is now worth as much as the next 10 biggest car makers in the world by market cap.
THOUGHT FOR THE DAY
Hindsight is 20/20 😉
Watch to Pirojsha Godrej, the Chairman of Godrej Properties, make some excellent points about why the real estate cycle has started to turn again. Economic Times
Jack Ma, the English teacher who founded Alibaba, delivered a speech on the 24th of October 2020 at a summit in Shanghai. That speech cost him dearly. How much? $37 Billion! Read the rest of it here. Entrepreneur’s Handbook
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