Akash Prakash: “A related issue is that public investors are now starting to realise that they are dealing with a slightly different animal when it comes to new listings. Most of them have no promoters and the shareholding of the founding group tends to be sub 15 per cent. This means 80-90 per cent of the equity is owned by investment groups who will sell, driven by their own liquidity needs, with no coordination. We have to be prepared for a constant drip of stock from this capital base. It almost reminds one of the public sector undertaking (PSU) stocks and the government’s initial attempts to monetise its holdings many years ago. Every six months, there would be a 5 per cent block deal. The selling pressure seemed interminable. It ultimately drove all the PSU companies to a steep valuation discount. Given this liquidity/market dynamic, should public investors demand a liquidity discount also on the new VC/PE-backed listings? Should they list at such high multiples if 80 per cent of the float will come to the secondary market in the next 12-24 months. Either that or there has to be much better coordination and visibility on the selling side. Have no doubt, float and technicals do impact valuation multiples, at least till such time as the float stabilises and the shareholding pattern matures.”
Donald Boudreaux: “An issue on which economists’ thinking differs most distinctly from that of non-economists is jobs. The economist understands that jobs are always available. In fact, each of us has so many potential jobs that we can’t possibly do all of them. Paint the house, clean the garage, bathe the dog, mow the lawn, mow the neighbor’s lawn. The list is endless. Trouble is, few of these jobs pay very much. The economist also understands that jobs are not a benefit, but a cost. That is, what each of us wants is not the job itself. We don’t work because doing so affords us the obligation to toil, sweat, and agonize. Rather, we’re willing to toil, sweat, and agonize only because we value sufficiently highly the income we get paid to do so. In short, what we want are not jobs per se but opportunities to earn income.”
Andy Kessler: “Equitable outcomes are collectivist, with capital diverted unproductively to buy votes. Without individual empowerment, meritocracy vanishes and capitalism stops working. With unaesthetic kickback capitalism maybe that’s the intent.”
CNBC: “India’s dream of becoming the new factory of the world will have to overcome longstanding hurdles. A formidable bureaucracy, lagging infrastructure and labyrinthine red rape have forced many foreign businesses to either shun India or shutter their local operations. A lack of skilled labor and innovation, poor production quality, and a reluctance to adopt rapidly evolving technology are also seen as hindrances.”
