Investment in securities market are subject to market risks. Read all the related documents carefully before investing

India's Third Giant Leap
Discover the Best Category of Stocks to Ride
this Mega Opportunity On February 29

mailtimers.com


**Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
**By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.


AD

Not Paytm Karo. The Right Way to Ride India's Tech Revolution...

Feb 6, 2024

Editor's note: Equitymaster invites you to join our exclusive WhatsApp channel. Be in constant touch with our editors and get regular updates on their most profitable ideas and research. Join Equitymaster's WhatsApp channel here.


Not Paytm Karo. The Right Way to Ride Indias Tech Revolution

As I started browsing for my daily dose of morning news, headlines on possible Paytm wallet acquisition were buzzing.

Ever since the regulator RBI imposed a ban on Paytm Payments Bank from offering all kinds of banking services for non-compliance, the stock has plummeted by over 40%, in just three days.

Paytm's role in the fintech economy is commendable, almost synonymous with cashless transactions.

As a user, I can't be thankful enough. It's such a convenience to not have to bother with cash when I'm travelling, and functional ATMs are hard to find.

And yet, despite being a great platform with amazing network effects, Paytm never made the cut for me as an investment bet.

Along with the regulatory minefields, the lack of any entry barrier kept us away from this tech business. And the caution has served us well.

The recent episode only highlights the dilemma, and a real challenge, that Indian tech investors are facing.

The average lifespan of the company has shortened, thanks to tech disruptions.

In the US, eight out of top 10 listed companies are tech companies.

As an investor in India, an economy that's slowly aspiring to be an innovation hub, you can't afford to not bet on tech players.

--- Advertisement ---
Investment in securities market are subject to market risks. Read all the related documents carefully before investing

India's Third Giant Leap

India's first two multi-decade leaps created crores for investors.

And now India is taking its third giant leap.

Our research says that this leap could potentially generate wealth at a scale we've probably never seen before.

We are going to share our entire research on this mega opportunity at our upcoming special event.
mailtimers.com
Get Full Details Here
Details of our SEBI Research Analyst registration are mentioned on our website - www.equitymaster.com
---------------------------------------------------

Until a few years ago, this wasn't much of a possibility. However, in the post Covid years, the tech startups have risen, and how. A lot of companies - Zomato, Policybazaar, Mamaearth and so on... have progressed from being just startups to getting publicly listed.

However, recent happenings in case of Paytm and Byju underscore the need to tread this space with caution.

So can investors find a way to be a part of tech revolution, without it being an all or nothing bet?

I believe there is a way, and it's through betting on companies creating adjacencies.

It's like creating optionalities in the tech space in the existing business, while committing a reasonable capital to it.

Optionality is generated from an investment which has the potential to give huge returns, but the quantum of it cannot be ascertained while making that investment. One can arrive at a fair value only over a period of time. Not to mention that such investments come with their fair share of risks.

The exciting aspect of optionality is that the loss is limited to the extent of investment, but the payoffs could be disproportionate.

It was the successful placement of such optionality bets that let Infoedge make a killing when Zomato got listed.

--- Advertisement ---
Investment in securities market are subject to market risks. Read all the related documents carefully before investing

This Silvery-white Metal is a Potential Fortune Maker

This silvery-white metal goes inside almost all the electronic gadgets that you use: mobile phone, laptop, Bluetooth speakers.

Not only that... this metal also goes inside equipment used by large data centres, telecom towers, railways, planes, EVs.

We're talking about Lithium. Lithium is the new oil.

Our research has found the best way to tap into this rising demand of lithium in India.

You can click here to get full details
Details of our SEBI Research Analyst registration are mentioned on our website - www.equitymaster.com
---------------------------------------------

Amazon grew from just being an online bookseller to taking over practically everything by betting on adjacencies.

While these are some proven, but not standalone examples.

There are many more optionalities in the making as I write this.

Consider a company like Dhanuka Agritech, betting big on drone applications and planning to set up a joint venture in India for the development and commercialization of biological products.

Or a company like Kabra Extrusiontech, a manufacturer of plastic extrusion machinery, accommodating products that could participate in energy storage. Through its division Battrix, Kabra has forayed into EV battery technology and green energy space.

Or a company like Praj Industries that has moved from just being a biofuel player to now betting on renewable chemicals and materials.

--- Advertisement ---
Investment in securities market are subject to market risks. Read all the related documents carefully before investing

Want to Grow Your Wealth With Safe Stocks?

Access Our Premium 'Low Risk, High Return Potential' Stock Research at Rs 2,050 Off

Full Details Here
Details of our SEBI Research Analyst registration are mentioned on our website - www.equitymaster.com
---------------------------------------------------

Note that the discussion here does not imply a recommendation on the stocks mentioned.

If these bets fail, they would not have harmed the companies much, considering the strong positioning in the main businesses in which they are the market leaders. If they work, they could lead to a lot of value creation, over and above the prospects of the main business.

And that's what I believe would be the right way to ride India's tech revolution.

Do you agree with my views? Let me know what you think in the comments box.

And for more such updates on potential optionalities in the listed space, stay tuned.

Warm regards,

Richa Agarwal
Richa Agarwal
Editor and Research Analyst, Hidden Treasure

Recent Articles

Can Competition Kill Asian Paints? February 28, 2024
Should the current rough patch be considered permanent damage for Asian Paints? Find out...
How Smallcaps are Riding India's Tech Boom February 27, 2024
Some Indian smallcaps are facing tech disruption head on.
Can Coal India Crash to Rs 300 Per Share? February 26, 2024
What is the way forward for Coal India after the run up in price?
Lesser Known Smallcaps with Big Potential February 23, 2024
Caution, and not greed should be the sentiment while investing in smallcaps in the ongoing rally.

Equitymaster requests your view! Post a comment on "Not Paytm Karo. The Right Way to Ride India's Tech Revolution...". Click here!

1 Responses to "Not Paytm Karo. The Right Way to Ride India's Tech Revolution..."

Surendra Manna

Feb 7, 2024

Thanks Richa, big fan of your research and commentary, what is interesting on your research is to get investor thinking big on their analytical mind, and to be honest these researches keep me updated on how to connect dots on Indian growth story and its underlying growth molecules. thanks for your deep research. Will love to see many more of these researches....I still see Page industries is in your cover list hoping to get another one like that.

Like 
  
Equitymaster requests your view! Post a comment on "Not Paytm Karo. The Right Way to Ride India's Tech Revolution...". Click here!