Market Movers: Stock rally shows realty boom here to stay; Voda investors unsure of future
Experts in the country’s real estate sector are rubbing their hands with glee as the once-suffering residential property market in India is coming back to life in style and taking real estate stocks up with them.
MUMBAI: If investors are rushing to buy equities, then Indians are scrambling to buy residential property.
Experts in the country’s real estate sector are rubbing their hands with glee as the once-suffering residential property market in India is coming back to life in style and taking real estate stocks up with them.
The initial rally in realty stocks was founded on the perception that homebuying is rising only because people had extra savings during the national lockdown. That narrative is steadily giving way to the view that India could actually be in the genesis years of a new real estate upcycle, and if past is any evidence, these things tend to run anywhere between 7-10 years.
With residential registration in Mumbai, the country’s most premium housing market, hitting decadal highs, the stage is set. No surprises then that investors were rushing into buying real estate stocks even if they didn't wish to buy actual real estate. The Nifty Realty index ended nearly 5 per cent higher, perched at its decade high. Grab it, if you can!
Do we want it or not?
Vodafone Idea’s investors were a confused lot today after the news of the company’s promoter Aditya Birla Group offering its stake to the government hit them in the face. Birla’s offer could be a move by someone backed in the corner with nothing to lose.
If the government agrees, they get to finally rid themselves of an investment gone sour. If the government doesn't, then Birla Group could at least hope to squeeze some more sops and time from the government. Either way, letting Vodafone Idea go to bankruptcy court will be bad economics and bad politics for the government. Birla is counting on that, but Vodafone Idea’s investors aren’t yet sure if either situation is really good for them or the company.
PI Industries carries on
One of the stocks of the century has made yet another right move. PI Industries on Saturday announced that it’s going to buy the bulk drug business of Ind-Swift Lab. The move will allow the company to enter a very lucrative sector whose prospects are as bright as ever.
Analysts believe that the move is an ace given that it will not only boost PI Industries’ margins, but the acquisition cost is fairly reasonable given the opportunity size. Investors could not agree more as they rewarded the stock with an over 12 per cent bump.
