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Is it the right time to invest in Fixed Deposits again?

by Tavaga Invest

Markets this week

I hope you all had a great Diwali and a nice festive long weekend! I mean, I’m pretty sure you did, thanks to none other than Virat Kohli. Let’s be honest, how many times have you watched the highlights of the India-Pakistan match so far? In fact, it would be quite interesting to look at Disney+ Hotstar’s viewership figures of the match highlights.

Due to festivities, markets were closed for 2 days this week, but otherwise ended on a positive note thanks to some good earnings announcements. This was despite US markets being spooked by disappointing Big Tech results and Credit Suisse teetering on the brink of collapse.

We have started a new section “Money Matters” where we will take up one pressing personal finance issue that people face in their everyday lives and demystify it for our readers because after all, money matters! Do you have any investment concerns? Write to us at advice@tavaga.com and we shall answer it in our next wrap-up.

Now, let’s now dig deep into some of the important news that made headlines this week.

Dabur the new “Swad Sugandh ka Raja” 👑

What happened: Dabur is acquiring a 51% stake in Badshah Masala valuing the spice company at ₹1,000+ Cr.
Most of us remember Dabur as that cult brand that introduced ayurvedic and natural healthcare products into our everyday lives. Remember when your mom would force-feed you Dabur Chawanprash early in the morning or your grandparents brushing their teeth with Dabur Red Paste?
But why pivot? Dabur is a mature company with a steady revenue growth of 13-15% year on year. It is hard for Dabur to penetrate its existing business faster. And, therefore, the easier route is to acquire new biz and grow. But, Badshah is TOO SMALL for Dabur (less than 2% of Dabur sales) so why even bother, you may ask?

As per Avendus, the spice and condiments or the “masala” business will double to a 50k crore market in 3 years and much of this growth to come from organized players. No wonder we see so much spice in this space – ITC bought Kolkata-based Sunrise and Orkla-MTR Foods bought a majority stake in the largest condiments brand in Kerela, each for ₹2k crores.

Our take

Branded spices market in India is growing in multiple digits because of increasing consumption and upgradation from unbranded spices. Plus, the spice segment is one of the highest-margin business in F&B category.

But Badshah Masala despite a 100 year+ brand has not been growing enough and needs a complete overhaul of its supply chain & market positioning. For e.g. Everest which started 9 years after Badshah is at ₹1,400 Cr revenue, almost 15X of Badshah!
So will this deal be appetizing enough for Dabur? We shall soon see!


To hell with Wall Street! 👊

This seems to be Mr. Zuckerberg’s battle cry for the moment. Meta aka Facebook has seen its shares tank by ~70% this year on the back of 2nd straight quarter of declining revenue. The not so “Big Tech” anymore has been hard hit by higher interest rates, lower advertising budgets, and widespread economic uncertainty. But this did not STILL stop Mark from going all-in on the metaverse.

What went wrong? Gen Z are fleeing FB. Even investors aren’t confident. Meta shareholder Altimeter Capital published an open letter and urged Meta to cut the flab, slash headcount expenses by 20%, and curb meta-investment to $5 billion/year max. The advice has fallen on deaf ears for now.

Meta is not the only company that needs a checkup. Everyone from Google, Youtube, and Apple are struggling. Even Cool-as-a-cucumber Microsoft was not spared.

Our Take

Tech giants ballooned during Covid as businesses and homes splurged on smartphones and computers. Everyone was stuck inside with only the internet to entertain themselves which attracted huge money into digital ads.

This sudden slowdown is exposing a weakness. The big tech companies haven’t really found a new profitable idea in years. Afterall, despite years of investment in new biz, Google and Meta still rely mostly on ads. The iPhone, 15 years since its launch, still drives Apple’s profits.

Now that covid is behind us, we are going to find out which companies will be able to sail without the wind at their back.


Nykaa going the Zomato way

What happened – Share price of Nykaa is falling like a pack of cards and slipped below the 1,000 mark for the first time this week. Among all the new-age IPOs that got listed last year, Nykaa was among the best-performing ones as it had nearly doubled on listing day in November last year. But even that could not provide comfort to the investors. Stock has seen massive selling pressures and has tumbled ~15% this week. 

Call it a promoter’s escape or investors fate, IPO lock-in expiry has hit like a time ticking bomb bursting the fates of several new IPOs, Zomato being another of them. Nykaa’s lock-in period for pre-IPO investors is slated to expire on November 10. soon.

Our Take

12% shareholders in Nykaa is sitting on 100 times returns since their early-stage investments and maybe enough reason to book some gains.

Buy the dip? – Unlike other stocks which have a long road ahead to profitability, several analysts believe that Nykaa is different as it sits on a significant growth opportunity, due to increased aspirational spending, increased women labor force participation and rising social media influence. One should ideally wait for some time for the dreams to start reflecting in financials before taking the beauty bet.


We are introducing a new section in our wrap from this week where we shall take up one personal finance query we get from our readers and give our view on the same. This week we look at Fixed Deposits.

Time to invest in Fixed Deposits again?

Fixed deposits have always been the most popular investment choice among Indian investors. However, rates on FDs had fallen from a high of 9% a few years back to less than 5% early this year. Poor inflation-adjusted returns and high after-taxes returns took the sheen away from it.

Following repo rate hikes by RBI, almost all banks and NBFCs have now increased interest rates offered on FDs. Current rates are around 5.5% – 7.5% with senior citizens getting an additional 0.5-0.75%. With equity markets remaining volatile for the most part of this year, should investors start parking some money back into FDs?

Our Take

FDs are a great investment tool for parking emergency or surplus funds. FDs give assured returns and help reduce portfolio risk as returns on FDs are not dependent on the market movement. We do not advice overdependence on FDs due to low after-tax and inflation-adjusted returns. Investment in equities is always suitable if you have a longer investment horizon of more than 5-7 years and moderate to high risk appetite. The only time you should move out of equities and start parking funds in FDs is when you are nearing your financial objective.

Moreover, even when you are investing in FDs always invest with a good quality bank with strong asset quality and do not simply get lured by high-interest rates offered.

What else made news?

🌵 Crown of thorns – Rishi Sunak stepped into 10 Downing Street as Britain’s Prime Minister, the first of non-British origin following Liz Truss’ resignation. Liz had the shortest stint in Britain’s history of just 45 days of office

🛁Let that sink in –Elon Musk finally took over Twitter this week starting a new era for the platform. But, 4 Twitter executives including CEO Parag Agrawal, CFO, legal affairs and policy chief Vijaya Gadde have been asked to leave.

🟰Landmark decision: BCCI announced pay equity policy for BCCI’s men and women cricketers to tackle discrimination.

👎Floating pink slips – Byju’s is reported to be laying off 12k employees or 25% of its workforce over next year. as the company reduces redundancies, consolidates its subsidiaries and focuses on profitability.

🖐Bye Bye Baby – Famed rapper and designer Kanye West aka Ye lost $2 billion after fashion brands Adidas, Balanciaga, GAP, Vogue and others cut him out following his controversial remarks on social media.

Hope you liked reading this week’s wrap. See you next week. Till then, hope you have a great weekend!


Ruchi Mehta


Disclaimer: This write-up is solely for educational purposes. This in no way should be construed as a buy/sell recommendation. Please consult your investment advisor before investing.

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1 comment

sumitshirke001 November 8, 2022 - 3:17 pm

Such a handy article explaining if it’s the appropriate time to invest in fixed deposits. All the factors including FD interest rates are described thoroughly that would be help many decide easily.


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