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Markets will remain closed on 21st April, 2021 on account of Ram Navami.

Do not copy the MNCs
Wed, 11 Aug Pre-Open

Growth has attracted a huge premium in recent times. Especially with the fastest growth engine in the world, China, showing signs of lethargy. Multinational firms are the best example to cite in such cases. They have come to manifest over enthusiasm in willingness to pay heavy premium. A couple of them buying stakes in Indian companies at expensive valuations are the cases in point.

Growth in developed markets has either stagnated or is showing signs of decline. At such times, getting a pie of emerging markets has become paramount. Especially to MNCs hoping to expose their extensive product lines and established brands to new customers. Some wish to avoid the hassle of conforming to complex regulatory and listing norms. And thus have also bought out listed businesses. Take the example of US drugmaker Abbott's purchase of the domestic formulations business of Piramal Healthcare. The deal came in at a hefty 60% premium! But offered Abbot an extensive presence in one of the fastest growing and very profitable segments of Indian pharma.

The trend nevertheless may not be very safe for retail investors to follow. Benchmarking against the high premiums that foreign investors are willing to pay for growth could be very risky. Legendry investor Jim Rogers has recently aired similar views. He believes that allowing foreign investment in Indian stocks could make the valuations unjustifiable. In an interview to a business daily he said "Indian shares are certainly not cheap and they have gone up a lot, but if they are finally going to make the Indian stock market open and accessible to everybody, that having to go through a bunch of hoops or a bunch of rigmaroles, that is certainly going to attract more and more investors to India. But if India is going to do that, it would have to make me reconsider my views on India"

India's eagerness to attract foreign capital is evident in the government's unwillingness to restrict FIIs. Even if they bring in unnecessary volatility to the stockmarkets. Long term funds in the form of FDIs (foreign direct investment) could certainly make some healthy addition to GDP growth numbers. But the short term high risk investments could be of a disservice. Especially to the retail investors in the country who may be wooed by the expensive valuations.

Coming to the MNCs, retail investors do not have large investible surpluses like them. Nor do the latter have a comparable risk appetite. But what they could share is a long term investment horizon. But the former's willingness to overpay for growth need not be aped by retail investors. For unlike MNCs, retail investors in India have the choice of investing in a variety of businesses offering attractive growth potential. And some are still available at reasonable valuations.

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Stock Market Updates

Sensex Trades On a Volatile Note, Dow Futures Up by 68 Points (Today's Market)

Apr 20, 2021 12:30 pm

BSE Sensex is trading up by 11 points, while the NSE Nifty is trading up by 13 points.

WOCKHARDT Share Price Up by 13%; BSE HEALTHCARE Index Up 1.4% (Today's Market)

Apr 20, 2021 12:42 PM

WOCKHARDT share price is trading up by 13% and its current market price is Rs 527. The BSE HEALTHCARE is up by 1.4%. The top gainers in the BSE HEALTHCARE Index are WOCKHARDT (up 12.6%) and ASTRAZENECA PHARMA (up 5.7%). The top losers are GSK PHARMA and ALKEM LABORATORIES (down 0.1%).

Sensex Opens 440 Points Higher; Nestle India and ACC Among Top Stocks in Focus (Today's Market)

Apr 20, 2021 09:30 am

Indian share markets open in green. The BSE Sensex opened up by 440 points, while the Nifty is trading higher by 133 points.

SOBHA Share Price Up by 8%; BSE REALTY Index Up 1.3% (Today's Market)

Apr 20, 2021 09:50 AM

SOBHA share price is trading up by 8% and its current market price is Rs 536. The BSE REALTY is up by 1.3%. The top gainers in the BSE REALTY Index is SOBHA (up 7.6%). The top losers are PHOENIX MILL (down 0.1%) and OMAXE (down 4.0%).

CIPLA at All Time High; BSE HEALTHCARE Index Up 1.1% (Today's Market)

Apr 20, 2021 09:44 AM

CIPLA share price has hit an all time high at Rs 966 (up 0.6%). The BSE HEALTHCARE Index is up by 1.1%. Among the top gainers in the BSE HEALTHCARE Index today are CIPLA (up 0.6%) and ABBOTT INDIA (up 1.1%). The top losers include PROCTER & GAMBLE HEALTH (down 0.3%) and BIOCON (down 0.3%).

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

Apr 20, 2021 09:26 AM

GLENMARK PHARMA share price has hit a 52-week high. It is presently trading at Rs 589. BSE 500 Index is up by 1.1% at 19,461. Within the BSE 500, GLENMARK PHARMA (up 0.1%) and ICICI PRUDENTIAL LIFE INSURANCE (up 6.7%) are among the top gainers, while top losers are GE POWER INDIA and OMAXE.

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