In late March, CNBC reported that Manappuram Finance would be issuing new shares worth ₹4,300 crores at ₹236 on a preferential basis to private equity players. Interestingly, while the broader market was declining from October through March, this stock rose 60%—well before the news became public.
Who Really Knows Before the News Is Out?
The market didn’t officially know this information during the uptrend. But people inside the company surely did—Manappuram insiders, Bain Capital, merchant bankers, investment bankers, even the admin staff preparing documents for the deal.
While they are restricted by laws and regulations, the reality is that news leaks. Not always intentionally, but through conversations, networks, or even casual remarks at a gathering, such sensitive developments often reach market participants in indirect ways.
Why the Rally Happens Before the Announcement
By the time you, as a retail investor, read or hear the news—it’s too late. The move has already happened. That’s exactly what happened here: after a 60% rally, retail investors were told the stock is being issued at ₹236. Had the news been unknown until the announcement, the stock might have rallied after the news. Instead, it rallied into the news.
The “Bhaav Bhagwan Che” Principle
This perfectly illustrates the BBC (Bhaav Bhagwan Che) principle: Price is God. Price knows everything before you do. Prices reflect collective wisdom, access, leaks, anticipation, and everything in between. If something truly new hits the market, you’ll see it first in the price.
Takeaway for Investors
Don’t chase news. By the time it reaches you, the market has moved on. Watch price action—it’s your best indicator of something bigger brewing.
On The Momentum Podcast this week
In Episode 2 of The Momentum Podcast, Rajnish, a seasoned investor from Pune, shares his shift from traditional investing to momentum strategies. He talks about avoiding costly mistakes, the real estate vs equity debate, and his approach to gold investing. A must-listen for young investors! Now streaming.
