Indonesia just had its biggest-ever IPO kitv.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from kitv.com Daily Mail and Mail on Sunday newspapers.
NEW DELHI: India s market capitalisation-to-GDP ratio is hovering above 100 per cent level, ringing alarms over expensive valuations. But do not get surprised if the same, called Buffett Indicator because the legendary investor uses it to judge pricey markets, one day touches 200 per cent for Dalal Street.
This may not be a fit-for-all indicator. In the US, the m-cap-to-GDP ratio has hit 200 per cent and in Taiwan, it is screaming at 300 per cent currently.
As per the indicator, stocks are deemed expensive when the value climbs above 100 level. For India, the average 10-year m-cap-to-GDP ratio has stood at 79 per cent, as much of the economy is unlisted and nonformalised.
Just yesterday, Policybazaar which is a IPO-bound company, was talking about good growth coming in and how they saw growth in the last few months of the pandemic. Have you analysed this new window which is opening up in terms of the business models on offer?
A lot of these consumer tech companies would probably be tapping the IPO market. It is not that these are new companies. Quite a few of them probably are more than a decade old. They have been trying to grow with India’s demand and India’s infrastructure. Covid has done two things: One, demand has accelerated for quite a few of these companies over the last 12 months. Another thing is the consumer’s acceptance of going online for a lot of things. We are utilising fintech models or using a B2C side. Many new digital consumer brands have come up and these are going to last and not just because of Covid.
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Moneycontrol Pro Weekender | The reflation trade
Inflation undercurrents remain globally, but in India, the premium is on growth
(Image: Shuttershock)
Dear Reader,
What markets dread most is the return of inflation. It’s easy to see why if inflation rises, central banks may be forced to raise rates and that could be the end of the bull run in equities. No wonder then that the few bears that have survived the bull charge are pinning their thinning hopes on inflation. Societe Generale’s resident perma bear Albert Edwards tweeted, “The Fed should start tapering right now as the FAO reports food prices continue to surge in January.”