Vehicle scrappage policy, Robinhoods, Nazara IPO: Three things Teji Mandi investors should know on March 19, 2021
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The scrappage policy:

Union Minister of Road Transport and Highways Nitin Gadkari hailed scrappage policy as a win-win for all stakeholders.

With this policy, he expects India's automobile industry's turnover to rise to Rs 10 lakh crore from the current Rs 4.5 lakh crore.

India has 51 lakh light motor vehicles older than 20 years, 34 lakh light motor vehicles older than 15 years, and 17 lakh medium and heavy commercial vehicles which are older than 15 years and without valid fitness certificates. These vehicles could come for replacement under the new policy. Replacing old vehicles with new ones will help improve fuel efficiency and reduce pollution. The GST income is also expected to rise by Rs 30,000 crore – Rs 40,000 crore.

The scrappage policy aims to take old and non-pollution compliant vehicles off the road. It is important to meet the goals set under the Paris climate accord.

As old vehicles will be replaced, sales of new vehicles will increase, benefiting the economy. It in turn will also help the automobile industry to get out of the downcycle that they are stuck with.

New age Robinhoods:

Indian markets after crashing down to the level of 7,500 in 2020 have seen the rise of a new class of investors. These new investors are termed Robinhood investors who have entered the market seeing the short-term boom.

In 11 months of FY21, ~1.22 crore new Demat accounts have been opened. It is a staggering figure considering that ~47 lakh accounts were opened in FY20.

This multifold rise in new accounts has mainly come from Tier 2 and Tier 3 cities. However, this is not just an Indian thing. A similar trend has been observed across the globe.

While many reasons could be attributed, work from home is the major reason behind this trend. WFH has left enough time in the hands of people to explore the nitty-gritty of the stock market.

Also, job-related uncertainty has left people searching for an additional source of income, leading them to explore the stock market.

Bumper demand for Nazara's IPO:

The public offer of Nazara Technologies is subscribed 16.83 times by the noon of March 19. On the final day of bidding, the company has received bids for 4.91 crore equity shares against the issue size of 29.20 lakh.

The retail portion is subscribed 62.54 times and that of employees by 5.98 times. Non-institutional investors' portion is subscribed 15.57 times. And, qualified institutional buyers had bid for 2.36 times.

Nazara Technologies is a leading diversified gaming and sports media platform. It enjoys leadership in eSports with an 80% market share and cricket simulation games. The company is planning to raise Rs 583 crore through the issue.

Motilal Oswal in a recent note said that Nazara is a leader in the highly under-penetrated mobile gaming market. It has a wide product portfolio and a strong relationship and network. The company is expected to witness strong growth for the next two-three years.

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