Over the past year, the stock has had little joy trying to play savior for the market because the market, honestly, had no need for its services just like Spiderman in Marvel’s Avenger series. Investors were occupied with riding the bulls with Adani stocks on one side and metal stocks on the other. Who needed the defensive stocks to drag their portfolios?
And yet, here we are in the 73rd week of this bull market when the US Federal Reserve’s mere hint of tapering its extraordinary liquidity bazooka launched last year has sent investors scurrying for havens to hide in. Among all the sectoral indices on the National Stock Exchange, Nifty FMCG was the only one with gains as investors fled riskier bets in the market.
The flight to safety meant shares of jumped nearly 5 per cent today, their biggest one-day gains since May 2020. Shares of the country’s largest FMCG company, often seen as a defensive bet, closed at a record high. As they say, every dog has his day but HUL has a lifetime (we just made that up).
Activist investors to the fore
While most will remember today for the nosebleed it gave their portfolio, keen observers of India’s stock market will be secretly celebrating for something that happened to
.
In a rare show of activism, shareholders of Eicher Motors decided to vote against a special resolution moved by the company’s board to reappoint Siddhartha Lal as their managing director and raise his pay by 10 per cent.
For a market infamous for its docile institutional investors, the decline of the motion to raise Lal’s compensation in a year when the company’s performance was not much to write home about showed another sign of the maturity of India’s capital market.
The stock of the company eventually ended flat for the day after falling nearly 3 per cent as the news broke out. But the actions of the institutional investors of Eicher Motors should show the way to other investors on how to stand up for something that may not be in theirs and the company’s best interest.
Sign of things to come?
The optimists will say that the listing of shares of CarTrade Tech today at a discount to its issue price is merely a function of the weakness seen in financial markets across the world. The stock listed at a minor discount, defying trends in the grey market that suggested a premium listing.
Yet, those who have been tracking the IPO market pointed out that this was an accident waiting to happen. To an extent, the blame for the poor listing of CarTrade lies on its merchant bankers for failing to leave anything on the table for investors for a company that is a loss-making entity.
However, the poor reception could also be a sign of shrinking risk appetite among retail investors in particular after the bloodbath in broad market stocks over the past two weeks. Analysts suggest that the CarTrade listing could turn out to be a turning point for the IPO market as leveraged retail investors lose their risk appetite after taking heavy losses in recent IPO listings and in the secondary market.
