MC Inside Edge: Warp and weft of Nandan Denim, caution is the word for new investors, turning barren land into gold

Here's all the major deals and the inner goings-on from Dalal Street.

Yarn of a different kind

Nandan Denim has been a hot favourite among stock-market gurus for a few months now. They have been taking viewers through the company website and highlighting its financials. They claim that the company is a multi-bagger that is waiting to be discovered. But they have missed out a few points though -- one, the company's statutory auditor resigned on June 17, saying that they are not being paid enough for the volume of work and that their requests to increase the fee has not been “considered favourably” by the management. The social-media influencers also do not mention anything about the SEBI order asking the company why its Risk Management Committee did not meet as frequently as is required by law. Its committee met after a gap of 225 days, when the law clearly states that the committee has to meet once every 180 days. Meanwhile, the stock kept climbing and climbing – the shares are up 138 percent in the last one year -- till June 21, when it crashed around six percent. A day earlier, on June 20, a promoter group entity Chiriipal Exim sold 25 lakh shares.

Brace for possible impact

Right now, everything looks good in the stock market. Yes, there are those intermittent corrections and falls but the long-term prospects look solid on the back of a strong domestic investor base. But a large part of the retail investor base is relatively new and has mostly seen only a strong upswing in markets. Simply put, they have not experienced huge losses and may lack the expertise to handle a downfall. This assumes significance as a large section of experts are advising caution on the possibility of the global “bubble” bursting any time soon. They are comparing it to Japan’s fall – the Nikkei has fallen nearly six percent after touching a record high in March. Experts believe that markets, across the world may be ill-prepared for such an event, especially from the point of view of new investors. While there is a counter theory as well that markets like India and China could actually gain from such a global bubble bursting, they believe that some amount of caution would not really harm anyone.

Betting on barren

Dubai was always a preferred destination for many rich and uber-rich Indians who were looking to invest in real estate. Bollywood celebrities appearing in advertising commercials for Dubai properties is also not a recent trend. But while earlier it was all about buying residential or commercial properties in ultra-premium and marquee projects, the recent past has seen an increased interest from Indian HNIs for buying barren lands in the Middle East. While there may be no development or return visible in the next few years, experts believe that Indians are placing a decade-long bet. The reason - climatic predictions. Experts say these regions will receive more rainfall in the coming years – it is a fact that rainfall has been increasing in Dubai over the past decades -- and hence will turn green and profitable. This, in turn, will push real estate prices higher, they say.