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As Indian youths jump into the ever-growing stock market, risks increase | Business and Economic Affairs

Nithin Kamath, chief executive officer of India’s largest Internet corporation, estimates that its platform spans 10 to 12 million orders a day. More and more of them from first-time moneylenders under the age of 30, doing a lot of business on their mobile phones.

Young sellers like the ones at Kamath’s Zerodha Broking Ltd. – known as India’s Robinhood Markets Inc. – helped drive its stock market to sign up this year, but many are now buying at a time when risks are growing.

India’s Benchmark S&P BSE Sensex Index rose 20% in the first 10 months of this year, thanks to a major banking effort. But it is down about 8% from the October strike, among other things, in anticipation of a sharp rise in the economy between inflation and inflation. Globally, stocks have been tarnished amid concerns over the global spread of omicron species.

In recent weeks, businesses including Goldman Sachs Group Inc. Meanwhile, the first public appearance of the worst public offering in the country, from the pioneer of digital Paytm, has already left many retailers losing.

Market uncertainty means that small investors can face huge losses when they fall. But repayments on traditional businesses such as deposit deposits remain low, encouraging a thousand-year-old in India to continue investing in stocks.

In the eastern city of Udaipur, 35-year-old Dushyant Rathore, who runs a number of luxury hotels with his family, is said to have increased his financial resources during the epidemic after a major international shutdown halted hospitality.

Rathore shares are now worth 11.5 million rupees ($ 150,000) double the price since March 2020. They are not backing down now, and are pushing younger relatives and other relatives to put some of their money into their groups. small, big money.

“This is probably one of the best ways to make a living,” Rathore said. “Even though the business is starting to slow down once the tour resumes, I plan to continue to manage the money well.”

Since March 2020, when stocks plummeted around the world on indications that coronavirus is spreading worldwide, India’s Sensex has risen by about 119%, the highest among countries with $ 1 trillion stock markets or more.

Some researchers look for reasons to be cautious. Despite a recent decline, Sensex’s one-year average price is close to 21, compared to 12.3 of MSCI’s Emerging Markets Index, which makes Indian stocks more expensive.

“When people come to tell me that I manage my monthly finances in the supermarkets, it ‘s worrying,” said Sameer Kaul, chief executive of TrustPlutus Wealth India Pvt., Which oversees nearly 110 billion items. “The market is not in line with real wealth and if people think they can make money as easily as a casino, it is a sign of concern.”

Great IPO

Earlier this year, Devashish Pahwa, a 31-year-old businessman in New Delhi, deposited nearly $ 200,000 from his accounts with his family at One 97 Communications Ltd., a Paytm operator. But shares have dropped by 39% since they wrote last month due to doubts about the initial profit margin. It reported the largest loss in the recent quarter.

Paytm is a household name in India and Pahwa says he did not look as financially as he did before borrowing money. “I did not count the numbers,” said Pahwa. “That was my mistake. But I am exploring more about future IPOs. “

Pahwa believes there will be a market reform. Although he was very clever, he did not sell any Paytm shares or deposit profits on his other businesses, which cost between 350,000 to 400,000 rupees. He has also bought into any company that he hopes to succeed in the years to come, especially when stocks go down as this could make them cheaper.

From Vietnam to South Korea, more and more families are investing in stock markets, but the speed with which India is adding new investors has never materialized. Advertisers have invested $ 860 billion in the stock market on the India National Stock Exchange this year, compared to 512 billion rupees by 2020.

By early 2020, India was adding 400,000 business accounts each month, according to market regulators. By 2021, that number has grown to 2.6 million, about half the population of New Zealand.

Despite Sensex returns, November was one of the best months for business. Zerodha opened nearly 400,000 new accounts last month, while competitors like Angel One and said they also added the same numbers.

Young advertisers do not have much to lose, Kamath said. “They have a long way to go in terms of future income. You make mistakes, you learn and you come back.”

Even with the recent downturn, there may still be opportunities for new investors to enter. Market share in India is relatively low compared to other countries.

Indian families are investing 7% in the economy compared to 30% in other major coming markets, according to Gaurav Patankar, a Bloomberg Intelligence expert. Families in Latin America have more than 40%, while in the US it is at 50%.

“Sometimes, economic recovery stops, but it will not lead to a return to other things,” said Ashutosh Tikekar, head of global markets, India at BNP Paribas SA. “The rate at which investors enter the market may decrease but it does not cause people to leave.”

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