Markets with Bertie: The Kumbh stock basket has a surprise, yet an obvious pick

In Mumbai, the investor conference season is on in full swing but Bertie is now exhausted with what feels like an echo chamber of corporates and investors. To break the monotony, he sought out the equity research head of a bulge-bracket bank. Bertie and this gentleman, Tom, go back over two decades and during that association, he has admired Tom’s discipline of regularly visiting countries he covers; not just the financial centres but even the hinterland.

“Nice tan, Tom,” Bertie started as they met for breakfast. “Kumbh,” Tom said with a smile. Bertie felt embarrassed that he hadn’t been to the place that Tom and half the country had visited. But that feeling quickly gave way to the excitement of knowing a well-travelled outsider’s view of the mega event.

“Don’t know if it will cleanse my sins,” Tom started with a chuckle, “but it’s like nothing that I have seen before. Massive!” He went on to describe the infrastructure developments since his last visit to Uttar Pradesh, the crowds and the chaos; but what stayed with him, he said, was the method in the madness and the infectious energy.

Bertie was feeling worse now for having missed the event. But he was determined to not miss a money-making opportunity. He asked Tom about what it meant for the economy and corporates. “The whole state economy will get lifted, Bert. Not just Prayagraj. Many visitors have made this into a pilgrimage across the state.” Having seen the itineraries of his friends, Bertie knew this to be true. “A lot of money has been spent during the last few weeks, and it will find its way into all parts of the economy.” An excited Tom had let his coffee get cold.

“In fact, I am going to make a ‘Kumbh basket’ for clients,” Tom said, “Of stocks that I think will benefit from Kumbh. Will you have a look?” This is exactly what Bertie wanted and so he nodded enthusiastically. The list that Tom sent the following day consisted of apparel retailers, jewellers and consumer durable retail chains with notable presence in Uttar Pradesh. It had two-wheeler companies, passenger car manufacturers and consumer durables makers, along with online travel aggregators, hotels and airlines. Bertie was impressed by Tom’s understanding of India’s listed universe. However, he was surprised by a couple of low-end footwear manufacturers on the list.

When he called up Tom to ask him about it, he laughed. “The number of people who have lost their footwear there is not funny. So many people on the streets were walking barefoot because they could not make their way back to where they had removed their footwear.” Bertie laughed but Tom was now serious: “650 million people. Even if a small percentage loses their sandals and shoes, think of the new buying.”

Bertie became serious too as he looked up shoe manufacturers on his screen.

Bertie is a Mumbai-based fund manager whose compliance department wishes him to cough twice before speaking and then decide not to say it after all.