Zomato V/s. Reliance – interesting study

 28^th July 2021

Zomato V/s. Reliance – interesting study

Dear Fellow Travelers,

Namaste! Looking at the success of Zomato – some people are calling it Infosys moment or some are comparing it with the Retail investors' revolutions started when Reliance Issues came way back in 1977. Some people are saying they will never invest in companies like Tesla or Zomato. So, we have lot many expert views in the market after Zomato's success. But I want to deal with the most normal complaint of normal people.  

Normal Complaint of 99% of the Normal people: -

It is very common to hear normal people comparing themselves with successful people saying that we are working honestly and they are working dishonestly. They are prospering and we are not coming up in our lives in spite of our good deeds.

Now, let us take an extreme example – say there is a Gunda and he has come up with all kinds of cheating. Now, that GUNDA knows that someday he will be in JAIL / He may be killed by other Gunda or Police. He has no respect in society. He has no peace of mind and he has to remain alert all the time when police are after him.

See the above, a guy is taking a risk with life / losing his peace of mind / earning a bad name when caught/losing the support of his family and friends. He is risking too much to make tons of money on his way.

The problem with normal people is that they want the money like GUNDA but are not ready to take all the above risks and pains. So, they are criticizing these guys.

How does this relate to ZOMATO?

When UBER came with an IPO – the CEO of the company had said – we don’t know whether we will be able to earn profit or not in a lifetime. From day one they are NAKED.

Zomato came without any strong business moat and loss-making track record. Lot many value investors (normal honest guys) have criticized. Many have asked how come SEBI can allow this kind of company to come out with IPOs? Can you see the BAD name ZOMATO earned while doing IPO? How many promoters will be ready to have BAD NAME and come out with IPO like ZOMATO? Not many. So, the company who showed the guts took all the money.

The factor which favoured ZOMATO: -

Collective destiny is the major factor for the major success of anybody in life. However smart, hardworking, honest, and gutsy you may be – if you don’t get the support of the collective destiny (read Market for stock related matters) – you become like ITC.

On 26^th January 2020 - we had written our bold call – What Shani Sankranti Horoscope indicates about the coming 30 months for Market/Economy / World & Normal Persons at large?

In the above post this was the bold prediction –

House: - Saturn is in the 10^th house as per the CHART. It will become violent in the area of business. It means – All old ways of working / old ways of doing business will have to find new ways of working and new ways of business models. Some new businesses/technologies will come up. Established players will have a tough time in maintaining their leadership – if they are not ready to embrace the change.

This is the collective destiny. Zomato got this support. This is not only the case in India. World over this kind of company is getting a huge subscription. Eg. South Korean digital bank Kakao Bank Corp will raise $2.2 billion in its initial public offering (IPO), the company said in a filing on Thursday. The shares were priced at 39,000 won each, the top of the range announced in a regulatory filing this month, to raise about 2.6 trillion won ($2.22 billion).

This is just a bank like Paytm. Paytm is also coming out with Rs.16000 Crs or some big amount of IPO.

All those people/companies or business models which are not connected with the NEW NORMAL will have a tough time without any doubt.

What NEXT?

This post is awakening for all the people who have a complaining attitude for other people’s success. Look at the risk they are taking and waiting for the support of the collective destiny. Reliance is making a New Trend in Technology oriented business models as its Friend and it is also taking a huge risk. Today they are also facing a bad name for earning 7-8% return on capital employed. But when collective destiny supports it – you will see the magic.

Wish you all a happy investing.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

 

Live With Passion…Invest With Passion. 

 

Hitesh Parikh.