Most Dalal Street analysts have a “buy” call on the stock, which has a potential upside of 26-64 percent over the next 12 months.
Indian mutual fund (MF) managers were the biggest buyers of new-age stocks in November, even as investor attraction towards such companies continued to grow as share prices fell last year, Mutual funds were net buyers of emerging technologies to the tune of Rs 2,139 crore in November, Prime Database data said, Mutual funds invested heavily in shares of Nykaa, PB Fintech, Delivery, and PayTM, which meant fund managers processed large block trades on these counters during the month of the lock-in period. Investors in these companies’ IPOs, The transaction saw the largest share of purchases as MFs bought shares worth $839 million from the market on the net in November. Delivery shares fell 11 percent in the month after the November 19 lockout, but most of the losses were offset by buying from local MFs, The buying by MFs was not enough to stem the plunge in Nykaa shares, which fell 25 percent in November after heavy selling by some pre-IPO investors. In November, domestic MFs were net buyers of Nykaa shares worth Rs 788 crore.
Policy market operator PB Fintech also saw $441 million worth of gains from MFs last month as fund managers benefited from a huge exit from the company’s pre-IPO investors following the November 10 shutdown.
Shares of new-age companies, which are seeing depreciation of more than 50-70 percent since listing in 2021, look attractive to long-term investors. Mutual funds like ICICI Prudential AMC have started pushing new-age companies due to improved growth prospects and positive valuations.
Naveen Kulkarni, chief investment officer at Axis Securities, predicted that many of these stocks will be valued by domestic institutional investors.
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Fund managers believe that the outlook for new-age companies should continue to grow, as most of them are well-placed, with valuations being their only concern.
India’s new-age companies have had their moments in history after their spectacular IPOs last year, but many have quickly become markers of disappointment as they have lost a lot in market value.
Also, Read | Investors in new age companies have lost assets worth Rs 2 crore since listing.
Many of these companies have turned their attention to profitability, despite a sharp decline in share prices after investors reacted by deducting a few percentage points from the growth rate.
Companies like PayTM and Policy Bazaar have shown operating profit till 2023 for the first time in their history. Nykaa’s higher estimated gross asset value (GMV) and gross margin calculations in September helped boost sentiment, while Delivri recently told analysts that growth will pick up in 2023. ..
Analyst forecasts for most new-age companies have improved over the past month with potential growth of 26-64% over the next 12 months for Nykaa, PB Fintech, Delhivery, and Paytm.
According to data available to Bloomberg, most analysts at Dalal Street call the stock a “buy,” suggesting that the worst of the collapse may be over.
(Disclaimer: Investment opinions and advice presented by Money Control experts are their own and not those of the website or management. Money Control advises users to consult with certified professionals before making investment decisions.)
The market is quite expensive, but you have pockets to choose from in three categories:
Meanwhile, some companies that used to borrow in the bond market find it cheaper to borrow in the banking system. As a result of bond liquidation, interest rates in bond markets rose faster than interest rates in associated banks. Mihir Vora, MD & CEO, of Max Life Insurance, said:
Where do you want to buy a new item at PSB?
Public sector banks are free trades, traditionally cheaper than private sector banks, and for historical reasons. We have a few large PSU banks, but that doesn’t change the overall long-term thesis that the private sector is better.
Yes, there are captive contracts and they can last for a while, but structurally the private sector is better at managing its balance sheet, better managing risk aversion, and delivering higher growth rates over the long term. I think the whole thesis is successful. Changed. So for PSU banks, except the top two, stick with the bigger banks.
Side pockets are a great approach for millions of MF investors.
As an investor, are you fascinated by the garment warehouse concept and its significance, if you are a mutual fund investor you should be? Simply put, side pockets separate a fund from bad to good when the fund’s investment segment is underperforming.
Specifically, an investment in a mutual fund invests in a company’s debt securities and retains its shares even if the fund’s company defaults.
Most of the funds are partially or fully depreciated at 5% of their value. I have the right to mark 5% of my portfolio.
Investment manager A might believe that the commercial bond will recover 50% of the bond’s value one year after filing under the new bankruptcy regime, while investment manager B believes that you will recover 30% of the bond’s value.
After one year, when the bankruptcy proceedings are completed or other settlements are made, the recoverable amount is 0-100%.
At 40% returns, managers down to 30% are too conservative, and those up to 50% are less careful. But behind all knowledge of God, there is wisdom. All the challenges are obvious for the fund manager (who doesn’t live in the Mountain Trust of Delphi).
So nothing ends.
These calculations are important for understanding the problem. Without implementing side pockets, the share value of the mutual fund is between Rs 95 and Rs 100 and the share price is Rs 100.
However, the price fluctuates depending on the number of fund managers. Hence, if the fund reduces its assets by 50%, the net asset value will be Rs 97.5. After that, people can buy and sell units for Rs 97.5.