Tale of the Tape 

Hiya everyone! 😎

Nifty and Sensex ended flat in another choppy session. Midcaps (+0.5%) and Smallcaps (+1.2%) continued zooming ahead. The advance-decline ratio was in favour of the bulls (3:2). 🐂

Check out the Stocktwits Sentiment Meter:

Most sectors ended in the red. Real Estate (-2.6%) was the biggest loser; FMCG (-0.4%) and Auto (-0.3%) saw minor cuts. PSU Banks (+1.8%) and IT (+0.7%) witnessed the most buying. 💸

India’s F&O craze is set to get bigger. Why aren’t SEBI and GOI stepping in? Read our top story below. 🎯

This smallcap metal sector stock could see a +22% upside over the next year. More details below. 🤑

Shriram Finance (+4%) was the top Nifty gainer after reports said Warburg Pincus would likely acquire its housing finance unit. 🤝

Ultratech Cement was in focus after its two new greenfield facilities in Tamil Nadu and Chattisgarh started production. 🏭

Defence stocks were on fire. Mazagon Dock Shipbuilders, Cochin Shipyards and Garden Reach Shipbuilders rallied between 7%-12% each. 🔥

SRM Contractors had a quiet market debut. The stock closed at Rs 226 p/sh; +8% from its IPO price. 😐

Indiabulls Real Estate (+1%) will consider raising funds at its April 5 board meeting. 💰

Gensol Engineering hit a 5% upper circuit after reporting its highest-ever annual revenue in FY24. 📊

Here are the closing prints: 

Market
Something Doesn’t Feel Right

India’s big gambling craze -- yes, we mean futures and options -- is set to get even BIGGER. Lot sizes for key derivative contracts will be cut in HALF by the NSE. Also, overall transaction charges on derivative segments will be cut by 1%. Both moves come into effect from April 1, opening the floodgates even more. But is this what’s best for India’s retail investors who are losing crazy amounts of money? 🤔

The F&O trading biz is already enormous. Fun fact: India accounted for nearly 80% of option contracts traded GLOBALLY in 2023. The NSE was the world’s LARGEST derivative exchange for the fifth straight year, which is INSANE. However, most people who dabble in options aren’t making money. SEBI says 9 out of 10 traders in equity F&Os made losses (an average of Rs 1.1 lakh) in FY22. 🙈

So who is benefiting? Well, brokers, exchanges and the GOI. FYI - the BSE now earns as much from equity derivatives through transaction charges as it does from the regular cash market. Wtf! 🤯

Derivatives often get a bad rep, but historically, they’ve helped in hedging & risk management. The only problem? In India, investors treat them like a casino. A majority of options are traded short-term. The average retail trader holds their options for less than 30 minutes, according to a study by Axis Mutual Fund. As Siddhartha Bhaiya of Aequitas Investment put it recently: "The biggest form of gambling in India right now is derivatives. It is India's Las Vegas without any of the glamour." 🎰

Big Picture: SEBI has tried to step in, asking brokers to alert investors about F&O risks. That’s why when you open up Zerodha or Groww you’re treated to a warning message. But is that enough? Should we be doing more? 🤷

India has millions of young people wanting to get rich. The stock market is the best way to create long-term wealth. But nothing is worth losing your life savings over. Yes, ‘democratizing’ market access is a worthwhile goal. But that can’t mean GOI and SEBI should sit by and watch newbie investors throw their lives away. 😤

Specials

5 Stocks To Buy In April - By SEBI RAs

Markets are at their all-time highs but is it a good time to invest now? In this video, we cover 5 investment ideas by SEBI RAs which can deliver healthy returns even from current levels.

Stock

What’s Popping?

Tega Industries has been KILLING it! The stock has increased 3x since listing in December 2021. Here's everything you need to know: 💯

About the company: Tega is a leading player in the ‘mill liners’ industry, which makes products for the global mining sector. FYI - ‘mill liners’ are used in the extraction of minerals from rocks. Over 70% of Tega's demand comes from the copper and gold industry. Fun fact: Five companies control over 50% of the global mill liner market, with Tega sitting at Number 5. 👏

What’s popping? Tega’s new liner product, called DynaPrime, has been shaking things up. Experts say this product helped push Tega’s market share to 8.5% in FY24 vs 5% in FY21.

But that’s the tip of the iceberg. Analysts project that the steel liner market (where DynaPrime wants to compete) is around $900 million, out of which 50%-60% could be persuaded to move from a metallic-only liner to a rubber-steel hybrid. Nearly 10% of this market has ALREADY moved to hybrids, in which DynaPrime has a big market share. If the rest is converted, Tega will benefit BIG TIME. ✅

Beyond this, its rubber liner biz has been doing well. Its order book currently stands at Rs 6,700 cr, all of which will be executed in the next 6 months. To keep up with rising demand, the company is setting up a new plant in Chile (revenue potential of Rs 8,000 cr) and has also floated a new subsidiary in Peru, a major mining hub. ⛏️

Big Picture: Tega is a good way to play the mining & mineral theme without worrying about commodity cycles. Growth here is structural and generally isolated from volatile price fluctuations. FYI - Centrum Broking has a target price of Rs 1,625 p/sh;+22% from current levels! 💸

Winner Winner Chicken Dinner

Congratulations Rahul Ayar for winning the Community Star of the Month! ⭐

Here are a few investment & trading ideas shared by him on Stocktwits that you must check out: 😎

• $HERCULES.NSE: https://stocktwits.com/Rahulayar/message/566162178 

• $SUDARSCHEM.NSE: https://stocktwits.com/Rahulayar/message/567051468 

Rahul Ayar is a part-time trader and began his market journey in 2022. His trading style centers on identifying breakout stocks mostly in the cash segment. But, he occasionally dabbles in the Futures & Options segment as well. Follow him for more awesome trading insights like these.

Disclaimer: Rahul Ayar is not a SEBI registered advisor and you should not construe any information discussed herein to constitute investment advice. Consult your financial advisor prior to making any actual investment or trading decisions.

Links That Don’t Suck

💯 5 Stocks to Buy in April 2024 | 2024 Top Picks by SEBI RAs | Top SEBI RAs to Follow

💬 Stocktwits is hosting a free AMA with Sandeep Aggarwal. Click to ask 

💻 How to organise your work life like a monk

👀 Meta (again) denies that Netflix read users’ private Facebook messages

🏏 When Mayank hushed the Chinnaswamy

🙏 Taiwan hit by 7.2 strong quake, multiple buildings collapsed, tsunami warnings issued

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