Last time I send my letter to you no! That Zomatoone, Saar!
After sending you letter no, I am thinking very much deeply. Somehow, I think I will end up investing in Zomato IPO Saar.
I met a romba powerful man. Bablu Chaurasiya. He has a paan shop near BSE. He is telling me names of big big stock market traders, journalists and so many other peoples who are his regular customers ah.
Last year only no, he purchased Audi A3 and some 15 Activas for doing paan deliveries. I woke him up as he was sleeping in his new car near his 5X5 shop this afternoon. I somehow managed to speak with him about this Zomato IPO. Here are the notes of our discussion.
Aye Bablu bhaai... Sleeping aah? You look very busy these days huh?
Nai bhaai... Business after lockdown is down. Waise, it was super good in lockdown. Every customer would buy cigarettes worth 2,000 rupees every week. During lockdown, thanks to the blessings of Maa Shakti, I booked 25 Activas and purchased a new Audi also. I can have my afternoon nap inside my beautiful car. Iski dikki main pure dukaan kaa saaman aa jaata hai (Audi A3 boot has space to fix a day's merchandise)
You are talking as if it is Paan-demic huh... Anyways, bro, how is the market these days?
Professor Saab, haso mat (don't laugh). Do you know cost of cigarettes is doubled, tobacco products have trebled, petrol price is crossed 100 rupees. Sab kuch mehenga ho gaya hai. (everything is become costly). Waise, you know our business naa? Market upar yaa neeche, sabko apna maal maangta hai! Irrespective of whether markets trade up or down, everybody wants their maal.
What is maal?
Cigarettes, Chaini, Zarda, Kalkatta Paan, and the stuff you would normally find in a Paan shop?
But why are people buying now? Demand is low no! Inflation has increased so much! Third covid wave is also coming...
Aisa thodi hota hai? (laughs) (It doesn't happen like that!) People are actually stocking up. Lockdown is good business for us. Don't know why government allowed everything to open. In our paan business no, there is no supply-demand problem. Whatever we supply, everything gets consumed up. And by chance if people stop consuming tobacco products for health reasons, we people can always create artificial scarcity, increase price for profits.
That is bad Bablu bhaai. Anyways, what is your opinion about Zomato?
Zomato? Usse zyaada riders toh mereko Swiggy ke dikhte hain raste pe! (I can see more riders of Swiggy on the streets).
No, no, not about Food Bhaai. But the IPO?
Daalega naa. Poora paisa daal dega! (I am putting all my money in it)
But Bhaai, its a loss making company brother!
Toh kyaa hua? (So, what?) Value is important not the cost. For example take a look at this bottle of water. It is an important product but costs just Rs 20. Take a look at this packet of cigarette. It is not a useful product but still costs Rs 500.
During lockdown, you saw how many people were fighting outside my shop for cigarettes and Shetty Anna's bar for beer bottles. That is Value.
Interesting, but bablu bhaai have you analyzed anything about the stock?
Nai bhaai. Itna time nai rehta hai. (No brother, don't find that much time). I have 700 regular customers who eat Paan everyday. Some prefer five times paan a day. All of them are busy trading on the BSE. They cant come to my shop no. So, maximum time goes in the shop doing the Paan, applying Chuna, cutting the supari etc. But, I have reminded something about these types of stocks which my stock-analyst customer taught me. I call him Guruji.
What things? And these kind?
5 things which are very important for investing in companies that are loss-making!
What 5 things?
First, don't bother about profits. Everything is value oriented (The water bottle example) in the world of Startups. For them profits is like moh-maaya.
Second, never worry about loss. Money is after all haath kaa mail (startups). If you can't hold this stock, somebody else can buy it at a later date at a better price.
Third, never ever dare question the management. It is their company. How they spend and where they spend, we are nobody to question them?
Fourth, don't be jealous when new competition for Zomato arises even if the new business is more profitable.
Fifth, Bura Mat Socho, Burat Mat Bolo, Bura Mat Kaho. Remember the three monkeys of Gandhiji? So, whenever news is depressing, just chomp on a Paan and forget it.
There is also a sixth one. Chaahiye?
Sixth one aah? What is it?
Corona Kaal main Mask Ban gaya jaise Zaroori; waise hi dhongi patrakaaron aur analysts se rakho sau gajj doori.
I don't understand that sixth advice saar. Can you explain please. By the way he is telling me the name of that Guruji also. Someday when we meet for our Breakfast no, I will tell you about that.
Disclaimer: Prof Bluffington Iyer is a day-dreamer, invests time in over-thinking and sharing silly parodies and satire with Sify Finance. If you like his writings, do share them on social media. You can always reach out to us for any complaints or feedback. Readers are also advised that this article is not an investment advice. You are requested to consult a SEBI registered financial analyst for personalized financial or stock-market advice.