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Insiders who went dieting during Zomato IPO; consistent compounders vs startups

As both institutional and retail investors went overboard with the Zomato IPO, there were enough insiders who were reluctant to loosen their purse strings. Several market experts are left wondering why the employee quota was left undersubscribed at only 62 per cent, while qualified institutional buyers (QIB) portion was oversubscribed 51.79 times and retail quota 7.45 times in the IPO. One reason could be because of the large number of 65 lakh shares that were reserved for employees, some of whom might already be sitting with huge ESOPs.

In this edition of Tweet Buster, we bring you more such insights on what’s happening in the stock market, along with investing gyaan from the gurus.

Investing is a game

Maverick value investor Vijay Kedia compared investing with playing cricket. He said that your mentality and risk appetite determines if you are fit to play T20 (future trading) or 50-over ODI (short and medium term) or a five-day Test match (long-term).

Edelweiss AMC CEO Radhika Gupta shared some valuable insights on startups that are going to get listed in India soon. “For the public market investor, the consistent compounder is the good kid who always studied and became a CA or engineer — predictable and easy to decipher. The new listings are the child who drops out of college and may become a once in a generation icon.”

Heads I win, tails you lose

Dalal Street veteran fund manager Basant Maheshwari said the market seems to be in a sweet spot now. “If there is no Covid it goes up, if there is a new Covid wave, it gets more stimulus.
Esko bolte hai dono haath mei laddoo!

Herd mentality

Independent market expert Sandip Sabharwal came out with a very good example of how underperformers are left out of conversations in the market. “Cryptocurrency buzz on social media has died out completely. It just goes to show that views follow the price action and not inversely. To make money you need to have the ability to do the opposite and then be patient,” he said.

Investing ideas

Sabharwal said a rally in the largest stock of a sector normally leads to follow-up moves in second and third line stocks. “Look for opportunities in capital goods and infrastructure stocks as rallies.”

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