No matter what news you have heard, Maha Kumbh is the grandest event of humanity. With more than 40 crore people expected to gather at the venue, it is not just a festival, but an experience of a lifetime. While the whole world is immersed in the colossal resplendence of this festival, the Stock market is not untouched by its effect. But how does it impact our stock market or Economic impact of Maha Kumbh? Do investors need to take care of any trend coming till the Kumbh Mela Schedule? Let us unwrap our gifts of curiosity and try to answer these questions in the text that follows.
What is Maha Kumbh Mela?
Kumbh Mela or Maha Kumbh is one of the rarest occurring Hindu pilgrimages, thought to occur once every 144 years. It is an event where planets like Jupiter align themselves astrologically in a way that the time becomes pretty pure and there is a chance that you can get your sins washed away. As per Hindu culture, bathing in the confluence of Triveni i.e. the three rivers Ganga, Yamuna, and Saraswati can wash away your sins of a lifetime on this particular event. This is the reason that many people are considering going to Prayagraj, a city in Uttar Pradesh, hosting Maha Kumbh this year.
How did Maha Kumbh Economy Affect Stock Market?
Will the stock market be impacted by the Kumbh Mela? The big economic impact of Maha Kumbh can affect market patterns even though there isn’t a clear link between it and the stock market. The
With an estimated 40 crore devotees taking part in this massive religious celebration, the Confederation of All India Traders (CAIT) predicts that the Mahakumbh will bring in an incredible 72 lakh crore in revenue from trade, with each person spending an average of 75,000.
Economic Impact of Maha Kumbh on SENSEX
Source- SAMCO Securities, FortuneIndia.com
Six times, the Kumbh Mela was hosted, and each time, from the beginning to the end, the Sensex produced negative returns. These Economic impact of Maha Kumbh were quite evident, according to statistics provided by SAMCO Securities.
The Kumbh Mela lasted 52 days on average, and the Sensex lost -3.42% on average during that time.
However, in five of the six cases, the returns six months after the Kumbh Mela concludes have been positive. In the six months after the event, the average increases were 8%.
Thankfully, the Kumbh Mela economy that offers bulls a glimmer of hope by washing away the karmas that have collected in a bull market. When the market is rising quickly and individuals are only interested in flipping stocks in the hopes of making quick profits, there is a greater likelihood that they may make mistakes.
Regretfully, until there is a crash or a rectification, participants are unaware of their errors. Similar to a plunge in the holy waters, this correction serves as a reset to begin anew, according to Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities.
Santosh Meena, Head of Research at Swastika Investment Ltd., agrees, saying, “The Sensex has displayed an interesting trend during Kumbh Mela occurrences over the previous 20 years. During the Mela, the Kumbh Mela Economy typically declines by -3.4%. The real story, however, starts after Mela, with an astounding average rise of +8% over the next six months.
Now, the question is – Could this be the market’s way of cleansing itself, much like the spiritual rejuvenation of Kumbh?
How Kumbh Mela is good for the economics of India?
A recent update states that the economic impact of Maha Kumbh may generate 2 Lakh Crore in its 45-day period. Now that’s impressive!
Source- https://www.statista.com/chart/16531/millions-expected-at-kumbh-mela-in-india/
This time, it may be time to recognize the Kumbh Mela for what it is: a massive boost to local economies in the most economically and employment-strapped regions of India (the north and central). Since many people travel long distances to reach the Kumbh, it also gives the travel industry a significant advantage.
How much does each visitor to the Kumbh Mela spend on average and contribute in Kumbh Mela Economy? We’re not sure. However, we are aware that the leading trade organization, the Confederation of Indian Industry (CII), anticipates that the 2019 Kumbh Mela will bring in 71,20,000 crores in revenue. On the other hand, the celebration costs the government 74,200 crore.
By any measure, this is an incredible return on investment, even if we take into account that these figures could not be exact.
It’s safe to state that very few companies have offered these kinds of margins.
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Additionally, the festival is expected to generate 600,000 jobs, according to the CII.
Through the festival, 250,000 people will be employed in the hospitality industry alone, and hundreds of thousands more will work in local transportation and logistics, tour and airline operations, emergency and auxiliary support systems, and as formal and informal guides. The festival-related ecotourism and medical tourism alone will generate about 85,000 jobs.
Brands benefiting from branding in Kumbh Mela
The Mahakumbh Mela, which started on January 13, is accessible by all means. With clever activations and creative engagements, brands have also rushed onto the Mela highway. Companies vying for the attention of the millions of devotees anticipated at the holy fair include Dabur, Parle, Coca-Cola, Reliance Consumer Products, ITC Mangaldeep, and Aditya Birla Sun Life AMC.
The News
According to Rajesh Radhakrishnan, co-founder, and chief marketing officer of Vritti Mindwave Media, which owns the rights to the LED display ad spaces at the mela, “We are seeing three to four times more brands than in the regular Kumbh.” He claims that more than 250 brands have already reserved space. He claims that the attention from fintech and BFSI brands has been unexpected.
Aditya Birla
According to Aditya Birla Sun Life Asset Management Company Managing Director A. Balasubramanian, the fund house has started a special advertising campaign in Uttar Pradesh because of the high volume of people that will be there during the Kumbh Mela. Although there aren’t many state investments in the mutual fund sector at present, he continued, there are hopes that it will pick up steam as the government works harder to create jobs in the state.
Dabur India
“The majority of our major power brands, including Dabur Chyawanprash, Dabur Honey, Dabur Red Paste, Dabur Amla Hair Oil, Vatika, Hajmola, and Honitus, will be conducting consumer activations at the Mohit Malhotra, the CEO of Dabur India, mentions “Kumbh Mela.”
Zones for Pampering
The company will be everywhere during the event, from Dabur Red’s Dant Snan Zones (oral hygiene zones) to Dabur Amla and Vatika’s Changing Rooms for female enthusiasts. In addition to giving them immunity shots to ward against diseases, we will also install special hair dryers and relaxation areas within these changing rooms. “”Dabur Lal Tail is creating dedicated baby care rooms,” says Malhotra.
Dabur has also partnered with restaurants and dhabas on the highways and in the city. In addition to doing thorough product sampling, Dabur is branding these dhabas with its main digestion brands, such as Hajmola and Lavanbhaskar Churna.
ITC Mangaldeep
ITC Mangaldeep is erecting distinctive five-foot-tall agarbatti structures in busy areas, such as Sangam Ghat. Distributing alum battis to devotees and hosting a maha hawan with enormous sambrani cups are just two of the brand’s many activations.
Coca-Cola
Immersion experiences are also promised by Coca-Cola India. “We’re dedicated to making a positive social impact through various initiatives at the event. Our goal is to highlight the possibilities of repurposed packaging while spreading awareness about recycling, encouraging everyone to take action together.
Reliance
In the meantime, Reliance Consumer Products is establishing Campa Ashram, a location that provides pilgrims with a calm and secure place to stay. In order to help pilgrims, RCPL is putting up navigational signs and signage and will also run Aaram Sthals (Resting Areas).
Parle
Parle Products Vice-President Mayank Shah said the company is strengthening its supply chain and increasing production to guarantee a sufficient supply of its goods at the world’s largest trade show. He concludes, “Kumbh Mela is more than just a spiritual event; it’s a unique chance to interact with millions of customers in a meaningful and culturally significant way.”
Can Maha Kumbh be lucky for the Stock Market this time?
To be all honest, It doesn’t appear likely, as market analysts anticipate that the stock market will continue to be volatile in the near future. Trump’s plans, the 2025 Union Budget, Q3 profits, and RBI policy will all define the trend in the brief.
Although the event has corrected more than 5% in the last six months, the BSE benchmark Sensex has produced a positive return of 4% over the last year. The 30-share index has down more than 2% year-to-date (YTD) as a result of market sentiment being significantly impacted by recent GDP downgrades, a strong dollar relative to the rupee, rising bond rates, and mixed profits amid higher valuations.
According to Sheth of SAMCO Securities, there may be a number of causes for the unusual market activity that occurred during and following the Kumbha.
During the Kumbha Mela, when millions of Indians travel, cultural focus and economic changes may cause a brief change in purchasing habits and a decline in business activity in some industries. These kinds of events are also firmly anchored in detachment and renewal, which may unintentionally influence investor behavior and foster a more risk-averse attitude.
Bottom Line
The 12-year cycle of Jupiter and its correlation with the Mela serve as a reminder that, like human behavior, markets are frequently impacted by variables outside the realm of logical economics. Investors may learn from this association and use the past underperformance as a warning to take a more cautious approach during the Kumbha Mela.
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