IRCTC – An Ace Card Played By The Government
By the time you would be reading this editorial, the festive spirit would have gripped the entire nation, with people uniting to celebrate the mega Hindufestival,Deepavali.
A year has gone by since the last Diwali but the situation in the markets appears far from healed. A lot was hoped in terms of market returns but, alas! the aftereffects of demonetization, GST rollout, Trade war, and various other events have had a painful toll on the country’s growth rate. The slowdown from January 2018 is still evident though some positive shootouts are being noticed. There are several factors that are indicating towards country’s economic recovery, emerging around the corner. Apart from the fundamental reasons, the simple theory of probability and law of averages easily demonstrates that the next Diwali would be much brighter and profitable for our readers and investors. If you have lasted till this Diwali, hang on! The next Diwali will bear fruits.
The recent debut of IRCTC at more than twice its issue price has been an appreciated step taken by the government. While many critics of the government will highlight that the merchant bankers of the issue did not perform a good job of ascertaining a better premium for IRCTC, I feel that premiums should not be fully squeezed out in a public issue so that there is some room left for investors, subscribing to make wealth. Now, think about it. If IRCTC comes out with a follow-on issue or the rights issue, it is very natural for that issue to get over-subscribed multiple times again. This is because IRCTC has gained investors’ trust with its returns over time, unlike some of the earlier big IPOs, which squeezed the entire premium and left investors penniless. Some famous examples for this are Reliance Power, DLF, and Career launcher. If any of these plans to come out again, they are bound to remain undersubscribed. Hence, by having shared wealth with the investors with the IRCTC issue, the government has created a fantastic ground for its other disinvestment plans, such as Air India. Investors will eye each of these issues with interest and hopes. A lucrative opportunity for the government to complete its disinvestment plans now.
Diwali festival and wealth creation go hand in hand. This is exactly the reason why we have shared our ‘Diwali Top Picks’ in the cover story. Our research team has put together 7 highly potential stocks, which we believe, should give you a good return in the near future. You should look at incorporating these in your portfolio, or better if you build a fresh portfolio with these stocks. Hear out our market outlook and how the markets have fared in the previous year. Also, understand what is trending in the markets, this season.
In our special story, we have highlighted the merits of investing in low liquid scrips. Do a scan for opportunities in the space discussed as the rewards could be better than you know. A lot is happening in the commodity markets in India. In our special story on these markets, we have emphasized on new developments in the commodity markets that may excite you. Do share your feedback on the special story and let us know how you plan to profit from it. May this New Year be the turnaround that the investor community has been waiting for the past 20 months! On behalf of the entire DSIJ team, I take this opportunity to wish you all, a Very Happy and Prosperous Diwali.