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Indian Indices Trade Marginally Lower; Auto Stocks Witness Losses
Fri, 10 Nov 11:30 am

After opening the day on a negative note, share markets in India witnessed some buying interest and are presently trading marginally lower. Sectoral indices are trading on a mixed note with stocks in the energy sector and auto sector witnessing maximum selling pressure. Capital goods sector is trading in the green.

The BSE Sensex is trading down 8 points (down 0.02%) and the NSE Nifty is trading down by 7 points (down 0.1%). The BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.4%. The rupee is trading at 65.01 to the US$.

Just Dial share price is witnessing buying interest today. The stock of the company is trading nearly 18% up presently. Most of these gains are seen as reports showed that the US internet giant Google is in talks with the local search engine provider to acquire its business.

In the news from IPO space, Mahindra Logistics, the 3rd party logistics (3PL) solutions provider, has made a tepid stock market debut today after having concluded its initial public offer (IPO) last week.

The stock of the company got listed at a marginal discount to its issue price of Rs 429 per share.

Mahindra Logistics is one of India's largest 3PL (third-party logistics) solutions providers in the Indian logistics industry which was estimated at Rs 6.4 trillion in Fiscal 2017, according to the CRISIL Report.

The company follows an asset-light business model in which assets necessary for its operations such as vehicles and warehouses are owned or provided by a large network of business partners. The technology enabled asset-light business model allows for scalability of services as well as the flexibility to develop and offer customized logistics solutions across a diverse set of industries.

To know more about the company, you can read our IPO note on Mahindra Logistics Ltd (requires subscription).

Speaking of IPOs, 2017 is set to be a record year for initial public offerings. However, is it worth investing in IPOs?

If past record is anything to go by, barring a few names that have quality, most IPO companies fail to live up to the hype. Also, the BSE IPO index has underperformed the Sensex over the past decade, as can be seen from the chart below:

BSE IPO Index vis-a-vis Sensex


So, an investor blindly following the IPO hype might have done better following the Sensex.

But does that mean that we should completely ignore IPOs? Here's a snip from a recent issue of The 5 Minute WrapUp answering the same...

  • While it's necessary to be cautious on IPOs, you don't need to completely ignore them either.

    For every Reliance Power - like issue, there have been issues like MarutiTCS, and Jubilant Foodworks Ltd (with returns over 4,000%, 1,000% and 500% respectively) that have made investors rich.

    The percentage of such issues, unfortunately, is very low (Check this IPO performance snapshot). The odds are stacked against a retail investor.

    careful evaluation of each IPO on its merits - its fundamentals, and most importantly, valuations - is the only way to spot future multi-baggers.

To learn how to navigate the treacherous world of IPOs, do read our special report on finding money-spinning IPOs.

In the news from the GST space, The 23rd meeting of the goods and services tax (GST) council will be held in Guwahati. As per the news, finance ministers of 24 states have confirmed their participation.

Tax rates on 100 items are likely to be cut from 28%, with the GST council set to approve sweeping changes including simpler procedures and a single return filing form for small firms.

In today's meeting, the GST Council will also discuss the inclusion of real estate in the new indirect tax regime. It would also discuss ways of reducing the compliance burden on taxpayers.

Notably, the GST Council in the last three or four meetings has reduced rates on over 100 items, bringing them down either from 28% to 18% or from 18% to 12%.

Notably, a wider tax base will also allow the government to lower its tax rates in future.

After studying these and other finer aspects of GST, our colleague Vivek Kaul, has penned his views on what could go right and wrong. Get a balanced perspective on the entire GST saga from Vivek. The report is titled The Good, the Sad and the Terrible (GST). Claim your own copy of his special report now.

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


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