Deal with Digital
The coming weeks will probably see a big deal announcement. This is going to be in a space where investors constantly doubted valuations. If the rumour mills are to be believed, this deal between a potential buyer and Flipkart, India’s leading online retailer will be one of the biggest deals of all time. Importantly, it signals the beginning of a phase where investment flows directly into Indian businesses are going to become bigger and better. Further, digital businesses will see renewed thrust, focus and investment.
The decision by SEBI to let stock exchanges work almost till midnight is another gamechanger. This move will signal the coming of age of digital financial firms. Domestic digital services are clearly going to be never the same again. They are entering a credible phase of extended growth, big-ticket investments and business transformation. The irony is that these firms are hardly represented in most portfolios and remain still very much a private equity pocket borough. That they need even bigger pockets now, is certainly not music to ears of domestic investors who already feel left out.
“ No rule always works, the environment isn’t controllable, and circumstances rarely repeat exactly. Psychology plays a major role in markets, and because it’s highly variable, cause-and-effect relationships aren’t reliable. ” ― Howard Marks