Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Not enough sound investment options!
Fri, 16 Jul Pre-Open

One would think that in a vast country like India, one could possibly never run out of investment options. But private equity (PE) firms in India just did. As per a Mint report, at least US$ 17 bn of PE money is 'waiting' to be deployed in India. And why is it waiting? There just aren't enough sound investment options!

Private equity firms are nothing but investment funds who invest in unlisted companies. Among other things, there are a few big factors that differentiate PE firms from investors who invest in listed companies. PE firms are forced to think of themselves as business partners of the promoters. Due to the lack of liquidity of their investment, they are also forced to take a very long term view of their investments. Further, they also do not have any public market which gives them the value of their investment on a daily basis.

That may not look like a very comfortable situation to the average stock investor. But for those that look at stocks as pieces of businesses, it's the perfect environment. It lets you focus your energy looking at business performance. And it would also force you to give a long hard look at the value you are receiving in return for the price you pay. This is in stark contrast to the perspective that most stock investors seem to have. They just look at stocks ticker symbols wanting its price to go up the next day, the next week or the next month.

So what are these 'business perspective investors' saying these days? As mentioned above, many of them are having a lot of difficulty finding good investments at the right valuations these days. And many PE firms seem to be chasing every opportunity, causing valuations to go skyward.

The Mint report cites the example of one of the firms that is looking to exit its investment. It has already received 22 offers from potential investors. The fund's management has been quoted as saying, “We haven't seen something like this in our 10 years of investing in India.” This tells the whole story!

Due to such a scenario, many investment committees have become extra cautious to ensure that their funds are not investing at high prices. This is one of the reasons why the actual investment deals that have been clinched by PE firms have been very few off late. And their kitty of un-invested money is piling up.

Undeniably, India is booming, led by domestic consumption. But the sad part for these PE investors is that the valuations of target firms are increasing along with the rising consumer demand in the country. And good companies bought at high valuations do not always make good investments.

Investors in the stock market would do well to take a leaf out of the book of these PE firms. That's because as valuations head higher, investors investing with a business perspective should find themselves in a similar dilemma. If you don't, it is quite likely that you are focusing on only 'price' and not 'value'.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "Not enough sound investment options!". Click here!

  

Stock Market Updates

Sensex Rises 477 Points; Trading Resumes on NSE (Today's Market)

Feb 24, 2021 Special Update

The BSE Sensex is trading up by 477 points, while the NSE Nifty is trading up by 135 points.

SIEMENS at All Time High; BSE CAPITAL GOODS Index Up 0.5% (Today's Market)

Feb 24, 2021 02:54 PM

SIEMENS share price has hit an all time high at Rs 1,922 (up 1.7%). The BSE CAPITAL GOODS Index is up by 0.5%. Among the top gainers in the BSE CAPITAL GOODS Index today are SIEMENS (up 1.7%) and HONEYWELL AUTOMATION (up 1.9%). The top losers include HAVELLS INDIA (down 0.2%) and GRAPHITE INDIA (down 0.2%).

MUTHOOT FINANCE Share Price Down by 6%; BSE 500 Index Up 0.5% (Today's Market)

Feb 24, 2021 02:36 PM

MUTHOOT FINANCE share price is trading down by 6% and its current market price is Rs 1,315. The BSE 500 is up by 0.5%. The top gainers in the BSE 500 Index are INDIAN OVERSEAS BANK (up 10.0%) and BANK OF MAHARASHTRA (up 10.0%). The top losers are MUTHOOT FINANCE (down 5.8%) and HIMADRI SPECIALITY CHEMICAL (down 5.4%).

ZENSAR TECHNOLOGIES at 52 Week High; BSE 500 Index Up 1.0% (Today's Market)

Feb 24, 2021 01:02 PM

ZENSAR TECHNOLOGIES share price has hit a 52-week high. It is presently trading at Rs 282. BSE 500 Index is up by 0.5% at 19,684. Within the BSE 500, ZENSAR TECHNOLOGIES (up 5.3%) and NAVA BHARAT VENTURES (up 11.2%) are among the top gainers, while top losers are MAGMA FINCORP and RELIANCE POWER.

Sensex Trades Over 200 Points Higher; Dow Futures Down by 103 Points (Today's Market)

Feb 24, 2021 12:30 pm

BSE Sensex is trading up by 226 points, while the NSE Nifty is trading up by 113 points.

OMAXE Share Price Down by 6%; BSE REALTY Index Up 0.5% (Today's Market)

Feb 24, 2021 12:22 PM

OMAXE share price is trading down by 6% and its current market price is Rs 72. The BSE REALTY is up by 0.5%. The top gainers in the BSE REALTY Index are PRESTIGE ESTATES (up 1.9%) and DLF (up 1.9%). The top losers is OMAXE (down 5.8%)..

View More Indian Share Market News

Most Popular

Intraday Trading for a Living(Fast Profits Daily)

Feb 15, 2021

In this video, I'll cover your queries on intraday trading and also share my view on how to decide stop losses and target prices.

Penny Stock Master Series: The Quest for 10X Profits in 10 Years(Profit Hunter)

Feb 12, 2021

This is first of the three part master series. In these editorials, I'll show you how to earn 10X returns from a penny stock portfolio over 10 years.

Top 5 Stocks Mutual Funds Bought and Sold in January 2021(Sector Info)

Feb 16, 2021

A look at what India's top equity mutual funds bought and sold in January 2021.

I Would Recommend this Small-cap Stock Over Tesla(Profit Hunter)

Feb 16, 2021

Do you enjoy reading Tesla and Bitcoin stories? Here's a not so famous small-cap stock to profit from the rise of EVs.

More

India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE SENSEX


Feb 24, 2021 (Close)

MARKET STATS