SEBI Chief Madhabi Puri Buch Is in the Hot Seat

Good evening everyone 😊

Nifty and Sensex ended in the red for a second straight session, down -0.2% each. Midcaps +0.3% and small-caps +1% traded mixes. The advance-decline ratio was in favor of the bulls 3:2. 💥

Nifty 50 Chart

Sensex chart

It was a mixed-bag day for sectors. IT +0.5%, PSU banks +0.3% and Metals +0.3% saw decent gains. Real Estate -1% and Energy -0.8% witnessed profit booking.

SEBI chairperson Madhuri Buch is in the news for all the wrong reasons.

Zomato rallied +8% intraday after JP Morgan saw a 33% upside from current levels. Meanwhile, Chola Investment also gained on Goldman Sachs initiating stock coverage. 💪

Titan Company +3% was the top Nifty gainer after gold prices hit a two-week low today. 💯

Linde India +3% hit a record high after agreeing to acquire Tata Steel's industrial gas supply assets in Odisha. 📈

Ola Electric was up +4% after reports said it was testing a new three-wheeler model. 😝

Max Financial Services -1% was focused after 1.5 cr shares 4.3 equity changed hands in a block deal. The buyer and seller were not immediately known.

Easy trip planners jumped +10% after announcing a foray into EV manufacturing.

Interarch Building products gained +5% after opening a new manufacturing plant in Andhra Pradesh.📈

SEBI chief Madhuri Puri Buch is firmly in the hot seat. It feels like every day, there's a new allegation of impropriety or hint of a scandal. There are two sides to every story and nothing has been proven.

SEBI chief Madhuri Puri Buch

However, the stability of markets is crucial and can only be achieved if a regulator's integrity is intact. Let's take a look at what's keeping the pot boiling.

Congress allegations on Sebi chairperson Madhuri Puri Buch

The opposition claims Buch violated 'the office for profits rules' by receiving Rs 16.8 cr in benefits from her former employer ICICI between 2017-2024. These benefits were higher than the salary she drew from the private lender.

It goes without saying that a SEBI chief can not earn income while being a regulator. ICICI and Buch say this is just ESOPs, but Congress has responded by saying it would violate the bank's rules.

A new allegation comes from Mint today which says Buch was moonlighting by working for a PE firm while she worked at ICICI Bank in 2013!

Zee Saga Subash Chandra Accused Madhuri Buch

Chairmen emeritus Subash Chandra has accused Buch of corruption, that she allegedly accepted bribes to settle the case, and that she scuttled the Sony merger for unknown reasons. No evidence has been provided for this claim.

Zee Saga Subash Chandra

SEBI has been investigating Zee on fund diversion charges. A final probe verdict is awaited as the regulator finishes its investigation.

Employee mutiny: A section of SEBI staff have accused Buch and the management of a toxic work culture, demanding higher pay and a fairer employee review system. while this would normally be an organizational issue, SEBI has strangely accused the employees of being "misguided by external elements" to ruin the regulator's credibility. The employees staged a protest today, demanding Buch's resignation!

Momentum Stocks of Today

Oil India was the biggest causality after dropping -4%. Motilal Oswal closed up for a 4th straight day to hit a new all-time high. Last week's top mover Godfrey Philips also ended higher. On the other hand, new entrants NBCC -1% and Indus Tower +2% are very close to dropping out.

Bullets From the Day

ZOMATO rallied today +8% intraday after JP Morgan hiked its target price to rs 340 p/sh vs 280 p/sh earlier. That's a 33% upside from the current level. The brokerage's bullishness is based on two factors, the first being the insane success of Blinkit.

Multiple analysts believe the quick commerce vertical has the potential to outshine Zomato's core food delivery. JP Morgan believes the company can replicate Blinkit's success in NCR to most metro cities and help "disrupt" modern trade and e-commerce.

This should supercharge Zomato's EBITDA as well. The second factor is in assigning a higher valuation to Zomato's going out vertical after its recent acquisition of Paytm ticketing biz.

CHOLAMANDLAM INVESTMENT AND FINANCE gained 3% after Goldman Sachs initiated coverage on the stocks. The NBFC has branched out into multiple 'new business' verticals over the last two years including consumer loans, secured personal loans, and SME loans. Goldman is betting that these verticals, currently accounting for 10% aum, will diversify its loan book and put in place new operating leverage.