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Hush-hush tales from the world of stock markets, banking, corporate world and corridors of power

MC Insider: IPO delay’s side effects, brokerages in a tizzy, the painter who took a bank boss’ advice and more

Last Updated: January 23, 2023 / 09:48 AM IST

Playing Hide and Seek?

Ever since this firm filed its DRHP in mid 2022, investors have been keenly eyeing its IPO. The regulator's approval came later in the year and the management said it would aim for a listing by December. That did not happen. Then, all eyes were on its promoter's Q3 results. Market participants were expecting an announcement on the subsidiary's IPO and listing schedule. That too did not happen. This time, irked investors did not hold back. The promoter company's stock fell almost 6 percent intraday in the next trading session. Now, all eyes will be on the upcoming Union Budget. Any further complication in online regulations could delay the IPO further. If not, it's game on!

Reverse decoupling

Reverse decoupling

Not long back when the Sensex and Nifty were heading for new highs, traders were rejoicing at the decoupling of Indian markets from their global counterparts. But they have suddenly realised that decoupling can work in reverse as well: India has been underperforming major markets for almost a couple of months now. Some traders are tempted to trade in the US market, especially after seeing Dubai-based traders making big gains. RBI currently forbids resident Indians from derivative trading in offshore markets. It could be no more than a passing phase. Once decoupling turns in favour of India, it will be “Mera Bharat Mahaan” all over again.

What if the float dries up?

What if the float dries up?

The Securities and Exchange Board of India (Sebi) has proposed an ASBA-like facility for the secondary market. If it becomes the rule, money will flow directly from the client’s bank account to the clearing corporation’s bank account and not through the broker’s bank account. The broking industry is clearly rattled, because brokers make money on the funds temporarily lying in client accounts--float in market parlance--by investing those in short-term, low-risk investment vehicles such as liquid funds. Some brokers also use the float to cover a part of their own operating expenses, because like in the case of bank deposits, not every customer will come asking for their money at the same time. Chatter is that traditional broking firms are gloating because the move will eat into a big chunk of discount broking firms’ income earned from float. But it seems to be a case of the joke about Joe asking for a mild heart attack when god tells him that his neighbour Peter will get twice of whatever Joe asks for. Because for Peter to suffer twice as much, Joe needs to suffer too. Insiders say us that a big discount broking firm has already asked its tech team to stop all their other projects and rework their software architecture for the new system.

A Painter's Woes

A Painter's Woes

A few years ago, a painter went to this bank chief's palatial residence because the banker wanted to decorate his walls with images of gods and goddesses. When he got the call, the painter readily agreed hoping for a big pay day. But fate had some other plans. As work progressed from one wall to other, the banker started his usual pep talks with the painter and managed to coax him to put around Rs 50 lakhs (his entire life savings) in certain financial instruments offered by his bank that offered better returns. Allegedly , what he didn't tell the painter was this instrument will carry no value in the event of an organisational failure. The man fell for the words and by the time the last wall was done, the money was in the banker's account. A few years later, the bank collapsed and the said instruments were written down. Suffice to say, the painter lost everything. Was it greed? Was it the banker's sweet talk? One can debate.

A Team Rejig?

A Team Rejig?

It's that time of the year when the cabinet reshuffle is the most trending gupshup item within the power corridors. Earlier there was word on the street that a possible rejig could happen between 15-22 Jan. Now, there’s a strong buzz around the scheduled council of ministers meeting before the budget . With the government in poll gear, will there be any changes ? Let's wait and watch.

String theory

String theory

When a foreign company was banned in India a few years back, quite a few Indian rip-offs came up and flourished. The biggest beneficiary of this seems to have been the policy official of a desi startup that trooped in to fill the void. With rumours abound that he was the one who allegedly pulled the strings in Delhi to send the foreign company packing, the policy official is understood to have seen his salary jump at least 4X. That's not including stock options, guesses a disgruntled former executive of the startup. Very much unlike for a startup in India, this policy czar is a part of the unicorn's core team . "He was the former CEO's blue-eyed boy once. He is the current CEO's blue-eyed boy now," says a little birdie.

Exit Conundrum

Exit Conundrum

This private equity firm, which has backed some of the biggest startups in India, had the opportunity to invest in a poster boy startup a few years back at a unicorn valuation. But India had very few unicorns back then and the PE felt that this startup demanding a $1 billion valuation was a stretch. So it ended up not investing in the round. But the startup's valuation ballooned over the next one year and the PE again had an opportunity to invest in the startup and this time it jumped onto the opportunity. Sure, the PE is sitting on handsome on-paper returns, but with the startup getting surrounded with controversies recently, the PE is wondering how it will be able to garner real returns as exit options are becoming very limited with every passing day amid rising troubles for the startup. The PE's managers in India are learnt to be so worried about it that they have stayed away from the sector the startup caters to for a few years now.

Red-faced sharks

Red-faced sharks

This head honcho of a business group known for his quick wit took to social media to praise this popular show calling it "a great platform for our budding entrepreneurs". In the same breath , the gentleman also pointed out the FY 22 PAT numbers of most of the judges on the show which were in the red and said he was reminded of the movie Jaws and bleeding! Ouch!

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