Good news and good prices rarely come together.
The last time mid and small caps were this cheap was in mid-2013. Then the Indian economy seemed to be coming apart for a number of reasons. With the US Federal Reserve withdrawing its Quantitative Easing programme, the threat of an increase in the cost of capital had pushed up interest rates and had resulted in foreign investors dumping Indian equities. India’s crude oil basket stood at $108 a barrel.
Unsurprisingly, the rupee tumbled 13 percent to 68 and the markets sold off—the Sensex fell 8 percent to 18,816. As investors rushed for the exits, smaller companies took it on the chin with some quality franchises losing as much as half their value in August 2013 alone. Stocks quoting at an eight percent dividend yield had no takers. No matter how attractive the valuations were, few were willing to put their money to work in these businesses.
Six years on, it’s clear that that was a great buying opportunity. That September, Narendra Modi’s announcement as the prime ministerial candidate started a rally that saw the Nifty Midcap 100 Index compounding at 22.9 percent a year till August 2018. There were several instances of individual stocks rising 10-fold in that period. Sure, there were other aiding factors that couldn’t have been foreseen then— the collapse in oil prices and food inflation and subsequent lowering of interest rates. But those brave enough to buy smaller companies then have had a profitable ride.
Bu hikaye Forbes India dergisinin October 11, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Forbes India dergisinin October 11, 2019 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
Home-Cooked Meal Is Now Greatly Valued
The pandemic has also brought with it an improved focus on hygiene, use of technology in dining, rise of cloud kitchens and resurgence in popularity of Indian ingredients
Paytm 3.0 - Reaching Near Breakeven In Two Years
As of 2020, Vijay Shekhar Sharma’s super app for financial services had run up losses in thousands of crores. Now, as digital payments gets yet another boost courtesy Covid-19, he’s hopeful of reaching near breakeven in two years
THE PANDEMIC HAS CAUSED WOMEN GREATER LABOUR PAIN
Covid-19 has shown that women are more likely to face the brunt of job losses than men, and find fewer opportunities when they want to resume. That apart, several have to deal with increased hours of unpaid work at home and even domestic abuse
LEADERSHIP WILL BE ABOUT SEEING THE BIGGER PICTURE
Leaders must not only guard their teams first during a crisis, but also deal with stakeholders with respect and dignity. And apart from pursuing business goals, they should remain committed to our planet and the environment
PHILANTHROPY SHOULD BE HUMBLE, BUT NOT MODEST
Apart from building a flexible and resilient framework for the future, philanthropists, civil society and the government must work in tandem so that every rupee is absorbed on the ground
INTEGRATED HEALTH CARE, TECH WILL DISRUPT SECTOR
While clinical research will get a boost, having a skilled workforce and public spending on health care will be challenges in the near term
DIGITALISATION WILL HELP IN VALUE CREATION
As the pandemic brings technology and innovation to the core of business and daily life, the next decade will see about 150 million digital-first families in India
Industry 4.0: Climate Revolution?
Augmenting sustainability alongside digital capabilities is an economic, competitive and global opportunity for India’s businesses, but regulations need to reflect intent
EV Dream Still Miles Away
Electric vehicles have remained a buzzword in India for years. But not much has moved on ground due to high upfront costs, range anxiety and charging infrastructure
Living Waters
A virus has caused us to scramble for oxygen but our chokehold on the environment is slowly strangling the very waters that breathe life into us. The virus is a timely reminder: We are merely consumers, not producers of life’s breath on this planet