Thriving On Contradictions
“Love it or hate it, the contradictions will eventually make you weep.” An article in HBR, about the inherent contradictions of India,once concluded with this sentence. How true.
India has learnt to thrive on her contradictions. The contradictions have been as old has modern India herself. Contradictions are everywhere. Religious, social, cultural, economic. Obscene level of wealth in the middle of abject poverty, extremely high rate of savings cohabitating with poor infrastructure of health and education, etc.
The contradictions emerging in recent times would be even more enthralling to students of Sociology and Economics. While India prides to present herself as among the world’s fastest growing economies, her farmer finds his suffering ever increasing. The political disposition that rules the Union Government besides 22 out of 27 States, finds that the bypolls on seats vacated by Chief Minister and Dy. Chief Minister of its marquee State are lost to Opposition. We have just witnessed a biggest scam in Indian banking in an era when the corrupt were expected to find it really difficult. As India gets closer to General Elections, the narrative is expected to be more contradictory.
The story in Indian stock market is no different. It seems less worried of FIIs pulling the money out when compared to the political news-breaks. By the rush of IPOs noticed this month, it seems that the later half of 2018 would be much quieter. Looking at the number of disinvestment offers in March 2018, even the Government seems to be in hurry. With over 20 SME IPOs scheduled, March 2018 is witnessing hectic activity in this zone too. The contradiction is in the sentiment within primary market when compared to that in secondary market.
Guess an Indian investor has also learnt to thrive on such contradictions. Cherry picking has largely been adopted as a strategy. Barring a very few sectors, investment decisions have largely been stock-specific. Similarly, each IPO is being considered on its own merit. Last three months have seen a few IPOs just about scraping through while some others have seen subscriptions over 100 and even above 200 times. The investor seems less bothered about the three-month performance after listing when compared to the grey market premium of the next IPO. A small town in Gujarat is often giving more IPO applications when compared to much bigger cities. Another contradiction expected in next financial year is the deluge of SME IPOs amidst limited number of bigger mandates.
India’s contradictions indeed make you cry. Some cry out of joy while some really get hurt.