"Indian entrepreneurship is booming again. Led not by old-money entrepreneurs, but new money," wrote R Jagannathan. "This optimism -- that India's decade of private investment drought is finally ending -- is what is reflected in the stock markets, which are hitting new highs. Initial public offerings (IPOs) are being snapped up. Zomato, a loss-making food delivery company, managed a market valuation of around Rs 1,00,000 crore (Rs 1 trillion) on listing last month." Following its listing Zomato said "its consolidated net loss widened to Rs 356 crore (Rs 3.56 billion) for the quarter ending June 30, 2021. Zomato, which is backed by China's Ant Group, reported net loss of Rs 99.8 crore (Rs 998 million) in the year-ago period," Business Standard. "The food delivery tussle has reached the Competition Commission of India (CCI) after the National Restaurant Association of India (NRAI) said that they have filed a complaint against food delivery aggregators Zomato and Swiggy," timesnownews.com. "The association added that their filing includes details of 'anti-competitive practices' adopted by Swiggy and Zomato that are negatively impacting and threatening their survival," because they are "forcing restaurants to give discounts to maintain appropriate listing". Zomato is making huge losses despite forcing restaurants to make losses, not an inspiring business model, is it? The dot-com bubble reached its peak in 2000 when the Nasdaq Composite index rose 400%, only for the bubble to burst in October 2002, when it fell 78%, giving up all its gains, wikipedia. Economist Robert J Shiller coined the expression "Irrational Exuberance" and "The current market conditions, marked by a sharp increase in the asset prices in the equity markets without being impacted by stringent lockdowns, are challenging the notions of irrational exuberance once again," wrote Naveen Kukarni. Using Shiller's suggestion of Cyclically Adjusted Price Earnings (CAPE) ratio, markets in India are trading at 1x standard deviation above the mean because "Earnings growth has improved significantly as product prices have moved up on account of supply-side constraints and the resulting inflation." If earnings growth is because of rising prices and not higher productivity then the CAPE ratio for India must also be abnormal. "Companies that go public not only reward their founders with a pot of gold, but also give other investors a chance to participate in their growth story," wrote Ajit Ranade. "Still, there are only 25 million unique investors in equity, as against more than 700 million bank account holders. The potential for wealth creation through stock ownership, either directly or indirectly through mutual funds or pension products, is immense. Yet, it seems that many startups would rather list overseas and not in India. About two dozen founders and private equity investors approached the Prime Minister, no less, to allow them to list abroad, even though these are home-grown and domiciled companies." Maybe, because dividends are clubbed with income and taxed at the highest tax rates in India, Economic Times (ET), while in Singapore there is no tax on dividends from a Singapore company, Hawksford tax services. But, why does a company need government permission to list abroad? US company Walmart bought Flipkart for $11 billion in 2016 on which it paid a tax of Rs 74.39 billion, ET, following which the government has been repeatedly changing rules of e-commerce for foreign companies, Hindustan Times (HT). A few days back, "The Enforcement Directorate (ED) has issued a show cause notice of about Rs 10,600 crore (Rs 106 billion) to e-commerce major Flipkart and its promoters for alleged violation of the foreign exchange law," Indian Express. In these stories of gains and losses, the BJP's income jumped 50% in 2019-20 to Rs 36.23 billion, Rs 25.55 billion coming by way of shadowy Electoral Bonds, TOI. Does that count as "Animal Spirits"?
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