Financial planning is important for all as it gives you clarity of exactly what you want to do in your life. You can understand its importance from a statement once our client said: Currently I am focusing on the financial plan you have given me. Now I am relaxed and I may have a peaceful night today”. Now, I am sure that you will handle all my retirement plans as well”
Before getting deep down into it: let’s understand the importance of financial planning:
Below, we have explained the importance of financial planning and why it is necessary. It will give you a clear idea, read below.
When you have a financial plan, you will be able to better manage your income. They know how much you earn on salaries, interest, dividends and more. This will help you understand how much you are making and whether it is enough to reach your goals.
Spend money on basic needs, other needs and luxuries. When we plan our finances, we keep an eye on our expenses. Even if you go outboard in a month, you know how much you'll cut in the next month to keep your budget. As lifestyles and lifestyles change, so do the spending. This helps us determine our income needs and can change our income opportunities accordingly.
You record your income and expenses in the plan. Therefore, you know your savings. The plan gives you an idea of how much money you will need to reach your goals. You can create a budget that allows you to assess whether you are within budget or spend a lot of money. This will help you understand your savings rate and how much you need to save to reach your goal.
Planning helps you choose the right investment based on your income capacity, risk profile, and goals. The plan includes investment portfolio and asset allocation details. This allows you to build a balanced portfolio at all times.
It's not a wise idea to think about taxes in the last week of March. You can use financial planning to visualize tax outflows at the beginning of a fiscal year. You can legally plan your finances to pay the lowest possible taxes.
We all want a carefree and relaxed retirement. This is only possible if you plan your finances to take care of your lifestyle. You need to have cash ready for medical expenses and other emergencies. A good plan includes retirement goals and income, spending, and investment details. This will help you decide what steps to take to reach your goals.
Real estate planning refers to the arrangements made for your property and the proper distribution after your death. The size of the asset is not important, but the details of how to handle the asset and the liability are important.
Financial planning provides a high-level overview of what to do so that your treasurer can know the steps involved in managing your real estate.
There are many changes in our lives. You can get married, lose your job, win the lottery, or make your loved one seriously ill. You make some money decisions that affect your standard of living. Such changes can have positive or negative changes in your financial position.
Financial planning helps you quantify your goals. You know how much you need and when you need it. This will help you determine the right asset allocation and choose the right investment for your risk tolerance and target time.
Financial planning helps develop a systematic and disciplined approach to achieving life goals. Therefore, it is important for everyone. A 24-year-old who has just started his career, or two 40-year-old fathers, and even a 60-year-old retired person.
Note here that there is no gender distinction in the financial plan. Therefore, it is just as important for women to plan their financial goals. Life expectancy is long, and unemployment such as sabbatical and retirement is long.
Women also need to plan their finances early in life. Even non-working women need a financial plan in the event of an inheritance to ensure that the inherited property is protected and used properly.
Financial planning is important and essential for anyone who wants to achieve financial success and achieve financial goals. But keep in mind that financial planning is not a journey of days, but a journey of years that requires utmost patience and a lot of financial awareness.
Mergers and acquisitions are common terms you may have heard before. Even if you're surfing the web, you've probably heard the news that many companies are in the process of mergers and acquisitions. This happens when the two companies decide to merge to form a stronger company. But the question is what an M & A is and how it affects stock prices.
One of the most common processes is a merger and acquisition, as there are several ways to merge two companies.
When two companies merge into one large company, there are various reasons such as increasing market share, minimizing competition, and expanding geographical scope. Many companies have embarked on a merger or acquisition process, but they are not yet recognized. This is because these companies aren't big enough to capture the fresh headlines of the news. Today, I'll talk about M & As and their impact on stock prices.
A merger is an act of merging two companies of similar size and structure into a new company. It is important to note that mergers are usually between companies. This is considered equivalent in many respects. There are different types of mergers.
A horizontal merger refers to a business combination between two companies that belong to the same industry and sell similar products. Horizontal mergers can be done to reduce competition, enable more market control, and economically profit from sales.
When two companies perform different supply chain functions including product development/sales cycles for common superior services, this is called a vertical merger. For example, a manufacturing company can merge vertically with a raw material supplier to create a larger company.
When two or more independent businesses merge to create synergies, increase value, improve performance, and save costs. Simply put, conglomerates are made up of companies that have little in common.
The Product Expansion aims to merge two companies that are active in the same industry and have similar target groups to form a new company with a wide range of products.
Two companies operating in the same sector, but in different markets come together to form one big company, aiming for a larger customer base and market.
What is an acquisition? Since the merger is purely a merger of two companies, the acquisition begins with a large company taking over a small company. This is the process by which one company acquires more than 50% of the shares of another company and controls that company.
If you acquire 50% or more of the shares of the target company, the acquirer reserves the full right to determine the newly acquired assets without the consent of the other shareholders of the company.
The main reasons for large companies to acquire SMEs are:
When a large company reaches the limits of its operations, resources, and logistics. Then it may start looking for young and promising companies to earn and include their sources of income.
To benefit from new technology, large companies acquire young, technology-driven companies to benefit from new technology. This is a cheap way to implement new technology in any business.
When a company tries to expand its business, it buys a small business instead of starting a new business. In this way, companies can save a lot of hassle and money associated with starting a new business.
Mergers and acquisitions have a significant impact on the stock prices of the companies involved. Here we will focus on the impact of M & A.
You may find that the stock prices of companies involved in a merger or acquisition are highly volatile. The merger and acquisition process is a fairly long process and there are some things to do before signing the merger agreement.
Many traders and analysts predict the outcome of a company and determine if a new acquisition will be stronger than the previous one. This gives investors a lot of information about stock market volatility.
Therefore, as an investor, if you invest in the stock of a company that is doing M & A, expect the stock price to fluctuate in the process.
The stock price depends on various factors such as macroeconomic factors and market capitalization, so it has a great impact on the companies that merge or acquire. Generally, if the size, profitability, and superiority of the merged company are similar, the stock price will skyrocket.
Stock price volatility tends to increase trading volumes, which further raises stock exchange prices. When the merger process is complete, the stock price of the company is usually higher than the price of the underlying company.
In the case of acquisition, the stock price of the target company will increase. The main reason for this assumption is that at the time of acquisition, the acquiring company pays premiums to acquire the target company. Here, the investor assumed that the acquisition would only take place if both the acquirer and the acquirer benefit from the transaction. The acquirer agrees to close the transaction if there is a potential, and if the offered purchase price is higher than the current market price, the target company will accept the transaction.
In an acquisition, the market tends to choose a favorite. In other words, investors tend to look for winners and losers in the proposed transactions. The profitability of the transaction is not clear to the investor as the acquiring company makes the purchase.
Introduction
Beginners who want to build wealth from the stock market hesitate to take the first step towards stock market trading because the fear of losing money stops them from entering into it.
Stock Trading as the name suggests is a trading method where people are involved in the transaction of shares of different companies in the stock market.
You may feel surprised to know that investing in the stock market with limited funds actually helps you double your wealth.
Trading stocks can seem challenging, especially if you have limited funds. However, with the right strategies and tools, even small investors can maximize their potential returns. One such tool is margin trading. Margin trading allows you to borrow money from your broker to buy more stocks than you could with just your available cash. This blog will guide you on how to trade stocks with limited funds using the margin trading facility, providing you with tips and tricks to get started.
A small investment with a regular amount will give you a wide experience of trading in the stock market. You only need to take care of a few things:
An investment whether it is small or big has a specific reason to invest. Hence, many stock analysts advise you to set a goal before getting into the stock market as, without a clear objective, one can never achieve desired wealth.
Secondly, the goal of achieving outstanding returns, helps you decide the type, tenure and risk appetite. If you are a beginner, it is suggested to invest in the long run. This is because long term investment gives you ample opportunity to earn knowledge of the stock market. Also, setting a goal lowers the chances of investment errors.
Equity trading investment gives you a steady return if you invest in the stocks for the long term.
Excessive emotions can harm your investment amount. Hence it is suggested to control your emotions while doing stock trading. Positive stock trading returns make people happy, however, negative returns like losses make people unhappy and that’s why many people stop investing.
Successful investments can be done only if investors have an in-depth understanding of the stock market. You can invest and earn a potential return from the stock market only if you focus on the fundamentals of the stock market and keep a track of every stock market movement. You can do this by doing proper stock market research. Having adequate knowledge of the stock market can mitigate your stock market risks.
One of the best investment strategies to mitigate the risks is diversification. It allows investors to divide the investment amount into different investment categories along with their risks. Diversification of the money into different stocks will help you balance your portfolio as if one stock underperforms, the other performs well.
Margin trading provides you with a way to purchase stocks that you can’t afford. Here, you need to borrow some amount of money from the stockbroker. In margin trading, the margin is being paid in both cash and in shares.
It is a prominent feature in stock trading as it allows investors to take larger portions and uplift their returns to another level. Here, the stockbroker plays a pivotal role as it funds your margin trading transactions.
In other words:
Margin trading involves borrowing money from your broker to purchase stocks. Here's how it works:
Set a Clear Goal
Before you begin margin trading, set a clear financial goal. Ask yourself why you want to use margin trading. Are you looking to increase your returns over a short period, or are you investing for long-term growth? Having a goal helps you stay focused and make smart decisions.
Educate Yourself
Understanding the basics of margin trading is crucial. Learn about the following:
Start Small
Begin with a small amount that you can afford to lose. Margin trading amplifies both gains and losses, so it's important to start cautiously. This way, you can learn and make mistakes without significant financial impact.
Select a brokerage firm that offers favorable margin trading terms. Look for brokers with:
By choosing Swastika Investmart, you can benefit from low costs and exceptional resources, setting you on the path to successful margin trading.
Control Your Emotions
The stock market can be unpredictable, and prices can fluctuate significantly. Stay calm and avoid letting emotions drive your investment decisions. Stick to your strategy and remain focused on your long-term goals.
Monitor Your Investments
Regularly review your investment portfolio to ensure it aligns with your goals. Keep track of the performance of your stocks and make adjustments if necessary. However, avoid checking your portfolio too frequently, as short-term fluctuations can be misleading.
Be Aware of Risks
Margin trading comes with significant risks. Here are a few to keep in mind:
Best Practices for Margin Trading
The first and foremost step towards margin trading is to place a request to the stockbroker so that it can open a margin trading facility account. After opening the margin trading facility account, the stockbroker maintains a minimum balance which is called minimum margin.
Before getting started into a trade, investors are required to deposit a fixed per cent of the whole traded amount and the rest of the amount will be funded by the stockbroker.
Please note that the interest rate is charged by the stock broker.
The margin can be settled later when all the positions are squared off.
In margin trading, the profit can be counted only if you earn a profit that is higher than the margin, otherwise, you will suffer from a huge loss.
The amount of money cannot act as a limitation for investing in the stock market. A strong goal with the right decision can help you achieve great wealth. You are only required to Open Demat Account with a reputed brokerage firm like Swastika and you are ready to go. With Swastika’s Demat account, you can start an investment journey with a little money.
A new variant of COVID 19 has been identified which was named Omicron by the World Health Organization (WHO). Many share trading analysts suggested that this new variant tends to spread quicker than the Delta variant and is much more infectious than other COVID variants.
Also, they said that the vaccines available now are less effective against this new variant. As we are trying to recover from the second wave, this omicron variant caused precariousness in the market.
If we talk about the current week, then we will get to know that the GDP for the July-Sept quarter of FY 2022 showed a total growth of 8.4%, which is the fourth consecutive quarter of positive growth post the major contraction.
If India wants to remain in the position of the fastest-growing economy in the year 2023, all restrictions are lifted and the growth continues to rise.
As said above, if the new strain emerges again, the government will take the necessary steps to bring back the restrictions.
Recently the government has announced that it will invest Rs 257 Billion into the electric vehicle initiatives by the year 2025.
The pandemic has acted as a catalyst of a positive change to shape the healthcare sector across the world.
Here are some of the potential stocks you need to pay attention to in India as the new variant of concern spreads.
Its product portfolio contains generics and medications in key helpful fragments.
In India, Cipla is one of the biggest pharma organizations and the biggest Indian exporter to developing business sectors.
During the pandemic, Cipla carried out 7 products as a piece of their Covid-19 portfolio. These incorporate medications, sanitisers, and antigen and counter antibody testing kits.
During the sensitive days of the pandemic, it went into various associations to advertise items in oncology, biosimilars, and metabolic illnesses.
Cipla saw a solid 12% year on year (YoY) development in income in the monetary year 2021 predominantly due to respiratory opening in the US and their Covid portfolio.
During a similar period, Cipla's (EBITDA) margin grew by more than 350 basis points to 22.5% from 18.9%. Lower expenses because of cost enhancement drives and lower on-ground activities because of lockdown prompted extension in margins.
The organization's net overall revenue remained at a notable high of 12.6% in FY 2021 against 9% in the monetary year 2020. Operational efficiency and lower finance costs because of prepayment of debt have prompted higher net margins
During the year, the company launched 9 abbreviated new drug applications (ANDA), filed for 8 ANDAs out of which it has received approval for the 7 ANDAs.
Alkem Laboratories is a multinational pharmaceutical company that primarily manufactures and sells pharmaceutical generics, nutraceuticals, in India and globally.
As per the sources, Alkem is considered the fifth largest Indian pharmaceutical company in terms of market share. As of now, the company has manufactured 20 facilities and 6 R&D facilities in India and US.
The company has more than 800 brands out of which 12 brands have annual sales of more than Rs 1 billion.
During the pandemic, the company’s operations were little affected. However, it saw a full recovery during the whole phase.
In 2021, the company’s total revenue grew up to 6.2% in FY 2021, which was 13.4% in the previous year.
Furthermore, the company has also experienced a drop in sales, which might affect the company’s growth. However, the company managed to recover as the sales growth was primarily supported by their international business.
The EBITDA margin for FY 2021 is 21.9%, which has grown from 17.72% from the last year.
Thyrocare Technologies is an Indian multinational chain of diagnostic and preventive care technologies that are known for offering more than 279 tests and 79 profiles of tests to detect several disorders.
The company has a centralized processing laboratory where it fulfills the requirement of the customers. The company also operates regional processing laboratories in metro cities to ensure speedy processing.
Thyrocare has a network across India as it supports a logistic network and IT infrastructure.
The company further declared a revenue growth of 14% in FY 2021 because of an increase in the diagnostic revenue due to COVID 19 testing.
Dr Lal Pathlabs is an international service provider and one of the top diagnostic chains in India. The company is located in Delhi.
It offers more than 5000 diagnostic tests, related healthcare tests and services across 3,705 centres.
During the lockdown, the company extended its reach digitally and physically to improve its covid testing.
The revenue of Dr Lal path labs grew by 18% in FY 2021 against a 10.6% growth in the financial year 2020.
The EBITDA of the year 2021 was marked at 29.3% as compared to the last year which was 27.5% in the last financial year.
The healthcare industry remains resilient even in the pandemic. However, the companies have also gone through losses but due to the demand for healthcare and antibiotics, these companies have managed to perform better than others.
Other sectors such as FMCGs, and eCommerce companies could also do the same.
The pandemic has completely changed business ethics and the way of doing business.
If you want to invest in good companies, pay attention to those companies that can leverage the changes happening in the economy and push their long term growth terms.
It is suggested to not try to time the market. Instead, invest in the companies that give you better stock market trading returns in the long term.
The SME-IPO boom is still on fire. This year many companies have gone public and many are in the queue. As the year comes to an end, the list of companies going public is not in a mood to take a pause.
Even at the year-end, seven companies claimed to conduct the IPOs in the next 10-15 days, intending to raise more than Rs 19 000 Crore.
The IPO of star health has already come in the first week of December, while the IPOs of the tech companies like Rate Gain Technologies, Anand Rathi Wealth and CE Info Systems will begin in the next week.
The IPOs of Adani Wilmer and Go First Airlines are expected to open for the subscription in the third or fourth week of December.
While the subscription of Tega Industries has already begun and as per the sources, the IPO of the same subscribed 14 times on Day 2.
Adani Wilmer, the maker of Fortune Edible Oil, has already filed DRHP to the stock market regulator organization and the issue is expected to open by December 15. Newly issued shares up to Rs 4500 Crores will be sold by the organization.
The company nearly spends Rs 1900 Crore on the capital investment, Rs 50 Crore on the strategic acquisition and general corporate purposes from the proceeds.
Star health and allied insurance is an Indian health insurance company located in Chennai. The company offer services in a different segment of health such as personal accident, overseas travel insurance, either directly or through other methods like agents, brokers and online.
Rate Gain technologies is a software as a service company that mainly provide services to a wide range of verticles in the travel and hospitality industry.
The services include hotels, airlines, online travel agents, vacation rentals, metasearch companies rail, travel management companies and more.
Also, the organization offers inter-connected products that are equipped for taking revenue creation value chain for their customers by utilizing large information capacities and coordination with other innovation stages to acquire more guests, retain them via personalized guest experiences and seek to maximize their margins.
Anand Rathi is considered India’s leading full-service financial services firm that offers several services such as Wealth Management, Investment Banking, Brokerage and Distribution, Corporate Finance and Advisory and more.
As soon as the IPO of the company has launched, it saw an outstanding response from the investors because the issue was fully subscribed on the first day itself.
The issue received approximately 10 times bids as per the date of NSE. investors bid for 8,29,21,509 equity shares and the total offering was 84,75,000 shares. Initially, the company is selling its shares in the range of Rs 530 - 550.
GO First Airlines is Indian’s first ultra-low-cost airline, headquartered in Mumbai. As of October 2017, the company was the fifth-largest airline in India with a market share of 8.4%.
Go Air began its operations using an Airbus A320 and worked its first departure from Mumbai to Ahmedabad on 4 November 2005.
CE Info Systems aka Mapmyindia is the main service provider of cutting edges digital technologies such as digital maps, geospatial software and location-based IOT technologies in India.
It is a data & technology company offering exclusive digital maps as a service (MaaS), PAAS (Platform as a service) and Software as a Service SAAS.
As per sources, investors of Adani Enterprises, the parent organization of Adani Wilmar, will probably get a 10% decrease in the IPO cost.
CE Info Systems, which possesses MapmyIndia, will dispatch a public offering one week from now to produce generally Rs 1,400 crore.
Promoters and other existing investors, including Qualcomm Asia Pacific, are selling the whole 7.55 million shares on sale.
The organization gives SAAS and stage as help for its digital maps. Its map covers cover 750,000 towns, more than 7,500 towns on a road by-road premise, and 6.3 million kilometers of the road network.
सोने की कीमतों में पिछले सप्ताह दबाव रहा लेकिन कई राज्यों में ओमीक्रॉन वायरस के कारण शुरू हुई सख्ती से इसके भाव सपोर्ट लेते दिखे है। जबकि पिछले सप्ताह में चांदी के भाव में हल्की तेज़ी दर्ज की गई है जो इस सप्ताह के लिए सोने और चांदी के भाव के लिए तेज़ी के संकेत है। क्रिसमस छुट्टियों के कारण सोने और चांदी के भाव अभी सीमित दायरे में बने होने के साथ अस्थिर भी है जिसमे स्थिरता के बाद तेज़ी आ सकती है।
ओमीक्रॉन के मामले अब यूरोप के बाद भारत और अन्य एशिया देशो में बढ़ने लगे है जिसके कारण आर्थिक गतिविधियों में रुकावटें शुरू हो सकती है जो सोने और चांदी में निवेश के लिए सेफ हेवन मांग को बढ़ा सकते है। डॉलर जो सोने के विपरीत दिशा में चलता है, पिछले सप्ताह नरमी रही। अध्ययन से यह भी पता चला है कि ओमाइक्रोन संक्रमण से अस्पताल में भर्ती होने की संभावना कम है, लेकिन यह भी कहा गया है कि इसके संक्रामक होने के कारण गंभीर मामले अभी भी महत्वपूर्ण संख्या में उत्पन्न हो सकते हैं।
नवीनतम कोविड-19 के प्रकोप को रोकने के लिए चीन ने गुरुवार को शीआन शहर को बंद कर दिया ताकि पश्चिमी शहरों में वायरस को फैलने से रोका जा सके। शहर के 130 करोड़ निवासियों को अपने घरों में रहने और ज़रूरतों के लिए हर दूसरे दिन एक व्यक्ति को बाहर जाने के लिए कहा गया है। चीन का यह लॉकडाउन 2020 की शुरुआत की महामारी के बाद से सबसे बड़ा है।
पिछले सप्ताह अमेरिका से जारी होने वाले कोर पीसीई प्राइस इंडेक्स, बेरोज़गारी के दावे और घरो की बिक्री के आकड़ो से कीमती धातुओं को सपोर्ट मिला है। कॉमेक्स वायदा सोना पिछले सप्ताह 6 डॉलर तेज़ होकर 1810 डॉलर प्रति औंस के स्तरों पर पहुंच गया है। कॉमेक्स वायदा चांदी भी 50 सेंट मजबूत होकर 22.90 डॉलर के स्तरों पर रही।
इस सप्ताह सोने और चांदी के भाव सकारात्मक दायरे में रह सकते है। सोने में 47800 रुपये पर सपोर्ट और 49000 रुपये पर प्रतिरोध है। चांदी में 61000 रुपये पर सपोर्ट और 63500 रुपये पर प्रतिरोध है।
सोने की कीमतों में मजबूत डॉलर इंडेक्स और बढ़ती हुई बांड यील्ड के कारण पिछले सप्ताह भी ऊपरी स्तरों पर दबाव रहा।
ओमीक्रॉन वायरस के प्रभाव को भी कम माना जा रहा है जिसके कारण कीमती धातुओं में निवेश की मांग नहीं बढ़ी है। वैक्सीन बनाने वाली कंपनी फ़ाइज़र का कहना है की नए वायरस पर वैक्सीन की तीन खुराक,दो खुराक की तुलना में ज्यादा कारगर है। जिसके बाद से कीमती धातुओं में बिकवाली का दबाव बना रहा।
बढ़ती मुद्रास्फीति को नियंत्रित करने के प्रयास में ब्राजील के सेंट्रल बैंक ने अपनी बेंचमार्क ब्याज दर 150 आधार अंकों को दूसरी बार बढ़ाकर 9.25 प्रतिशत कर दिया, जो 2017 के बाद से सबसे अधिक है। लेकिन, कच्चे तेल के भाव पिछले सप्ताह में 400 रुपये प्रति बैरल तक बढ़ गए है जो सोने के भाव को निचले स्तरों पर फिर से सपोर्ट दे सकते है। सऊदी अरब ने जनवरी क्रूड की कीमत में 80 सेंट की बढ़ोतरी की है। अमेरिकी प्रेसिडेंट बाइडन के मुताबिक कच्चे तेल के साथ कुछ और कमोडिटी पर कीमते कम हुई है लेकिन वर्तंमान मुद्रास्फीति के आकड़ो में यह दिखाई नहीं देंगी।
हालांकि, ओमीक्रॉन वायरस की खबरे फिर से दिखाई देने लगी और यूरोप से एशिया तक, सरकारों ने नवीनतम कोरोनावायरस के प्रसार को सीमित करने के लिए प्रतिबंधों को बहाल करना शुरू कर दिया है, ब्रिटेन ने लोगों को फिर से घर से काम करने का आदेश दिया है, डेनमार्क ने स्कूलों को जल्दी बंद कर दिया और रेस्तरां और बार के लिए घंटों को सीमित कर दिया और चीन ने ग्वांगडोंग से पर्यटक यात्राओं को रोक दिया है।
ओमीक्रॉन के नए मामले बढ़ना कच्चे तेल में बढ़त को सीमित करता दिख रहा है। लेकिन हाल ही की खबर से पता चला कि ओमीक्रोन, डेल्टा संस्करण की तुलना में 4.2 गुना अधिक फैलने वाला है, जिसके कारण दुनिया भर में अस्पताल में भर्ती होने और मौतों में बढ़ोतरी हुई है। मृत्यु दर इस नए वायरस में कितनी है यह अभी ज्ञात नहीं है, हालांकि इसकी प्रसार दर भय पैदा करने के लिए पर्याप्त है। जो कीमती धातुओं को सपोर्ट कर सकती है।
लेकिन, कम दरों और उच्च मुद्रास्फीति के बावजूद साल 2021 में सोने और चांदी ने अब तक लाभ नहीं कमाया है, जो कीमती धातु की विकास संभावनाओं के लिए अच्छा नहीं है। हालांकि, सोने के लिए नकारात्मक आर्थिक परिदृश्य तेज हो सकता है क्योंकि दुनिया भर के केंद्रीय बैंकों को मौद्रिक नीतियों को अत्यधिक उदार रखने की आवश्यकता है। दुनिया भर की अर्थव्यवस्था मुद्रास्फीति को कम करने की कोशिश में है लेकिन महामारी से अनिश्चितता बनी हुई है जिससे सोने के भाव सीमित दायरे में है।
इस सप्ताह बुधवार को अमेरिकी फ़ेडरल रिज़र्व की बैठक है, जिसका प्रयास बढ़ती हुई मुद्रास्फीति को कम करना है और यह कीमती धातुओं के लिए महत्वपूर्ण है। सोने और चांदी के भाव में इस सप्ताह दबाव रह सकता है। दिसंबर वायदा सोने में 47000 रुपए पर सपोर्ट और 48800 रुपए पर प्रतिरोध है। चांदी में 58000 रुपए पर सपोर्ट और 62000 रुपए पर प्रतिरोध है।
सोने और चांदी के भाव में पिछले सप्ताह भी गिरावट दर्ज की गई है। कीमती धातुओं के भाव कोरोना वायरस के नए संस्करण ओमीक्रॉन आने के कारण निचले स्तरों पर सपोर्ट लेते दिखे और एक सीमित दायरे में रहे। साउथ अफ्रीका में बदले हुए वायरस के इस रूप के कारण निवेशक जोखिम भरी संपत्ति में निवेश से पीछे हटते दिखे।
वायरस के नए संस्करण का फैलाव कई देशो में हो चुका है और इसके बढ़ते प्रभाव के कारण कीमती धातुओं की मांग मजबूत होने की सम्भावना बढ़ने लगी है। भारत में भी ओमीक्रॉन के मामले मिल चुके है और प्रभावितो की कोई ट्रेवल हिस्ट्री नहीं थी जिससे यह अनुमान है की इसके फैलने की गति तेज़ है। आने वाले दिनों में वायरस का प्रभाव बढ़ता है तो यह सोने के भाव को सपोर्ट कर सकता है। अभी इसके कोई ज्यादा घातक परिणाम सामने नहीं आये है लेकिन यह अर्थव्यवस्था की गति को धीमा करने में सक्षम है जिसके कारण कीमती धातुओं में निवेश की मांग बढ़ सकती है।
जबकि अमेरिकी फेड के इन संकेतो से कि मुद्रास्फीति के दबाव को कम करने के लिए उम्मीद से पहले परिसंपत्ति की कमी और ब्याज दरों में वृद्धि की गति को तेज करेगा, जिससे सोने और चांदी के भाव में दबाव बना हुआ है। इस बीच, गुरुवार को जारी अमेरिकी आंकड़ों से पता चला है कि पूरे सप्ताह में 222,000 प्रारंभिक बेरोजगार दावे दायर किए गए, जो अनुमान से बेहतर रहे।
जबकि अमेरिकी नॉनफार्म एम्प्लॉयमेंट चेंज के आंकड़े अनुमान से कमजोर दर्ज किये गए जिससे सोने और चांदी के भाव को सपोर्ट मिला है। सोने के विपरीत चलने वाला, डॉलर में अभी मजबूती बनी हुई है जबकि अमेरिकी बॉन्ड यील्ड में अस्थिरता है। इस सप्ताह मुद्रास्फीति के आंकड़े कीमती धातुओं के लिए महत्वपूर्ण होंगे।
इस सप्ताह सोने और चांदी के भाव सीमित दायरे में रह सकते है। फ़रवरी वायदा सोने में 47000 रुपए पर सपोर्ट और 48600 रुपए पर प्रतिरोध है। मार्च वायदा चांदी में 59800 रुपए पर सपोर्ट और 62700 रुपए पर प्रतिरोध है।
Mutual fund investment offers you 3 categories to invest in: Equity Funds, Debt Funds and Hybrid Funds. Although each mutual fund has its benefits, the difference between them is mainly based on the risk-return they provide and the tax treatment.
These funds also include some subcategories which we will discuss below.
Equity mutual funds are the investment schemes that mainly put your money into the stocks of different companies which lead them to generate higher returns. The fund’s portfolio invests 65% of its assets in equity and equity-related instruments.
Compared to debt funds and hybrid funds, equity funds are highly risky and that’s the reason they offer higher returns.
Equity funds are classified based on market capitalisation: they are classified into Small-cap equity funds, mid-cap equity funds, large-cap equity funds and multi-cap equity funds.
Debt funds mainly invest in debt and money market instruments. The instruments include treasury bills, commercial bills, certificates of deposits whereas debt market instruments involve government bonds, non-convertible debentures etc.
Many people invest in debt mutual funds because they are receiving income in the form of interest payments. The main difference between equity mutual funds and debt mutual funds is that debt funds are considerably less risky as compared to equity funds.
Mutual funds that are a mix of equity and debt instruments are known as hybrid mutual funds. Hybrid mutual funds are designed in such a way that it balances out the market risks. Here, the fund risk mainly depends on the investment stance and asset allocation into equity and debt.
All mutual funds are subjected to market risks, however, the degree of risks vary for each category depending upon the investment style, portfolio construction and more. Here is the difference between equity mutual funds and hybrid mutual funds:
By placing the assets in small-cap, mid-cap and large-cap companies, equity mutual funds. If we see the historical equity returns, then you will get to know that these funds have given clear records of giving inflation-beating returns.
If you are an investor, who is willing to place the riskier returns and gain higher returns, then equity mutual funds are a great source of investment options.
Hybrid mutual funds, on the other hand, have the potential to beat the stock market trading returns from the debt funds. Unlike equity mutual funds, these funds give no guarantee of steady returns as the NAV of hybrid funds is directed by the performance of the securities in which are invested.
Debt oriented market funds provide the stability of the income because of the presence of the equity component in the portfolio.
Equity funds are considered the riskiest mutual funds because they are directly dependent on the stock market positions. On the off chance, you invest in a diversified equity fund, the risk factor is balanced.
Debt funds are considered less risky than equity mutual funds. This is because debt funds are based on interest payments which help in mitigating portfolio risk.
Hybrid funds are considered low-risk funds but they are not entirely risk-free.
When it comes to taxation, there are only two categories to determine the taxation on dividends and capital gains.
In the case of dividends; it is tax-free in the hands of the investors in the case of equity funds, debt funds and balanced funds.
However, the rate of dividend distribution tax (DDT) differs. While equity fund dividends attract DDT of 10%, the debt fund dividends attract DDT at a much higher 25%. Now let us focus on how capital gains are taxed in each of these cases.
The Income Tax Act only recognizes two categories of funds viz. equity funds and debt funds.
As long as the equity exposure of the fund is more than 65%, it is classified as an equity fund for tax purposes. So equity diversified funds, sectoral funds, index funds, balanced funds with more than 65% in equities, and arbitrage funds will all be categorized as equity funds.
The dividends in all these cases will attract a DDT of 10%. The capital gains shall be STCG if held for less than 1 year and taxed at 15%.
If held for more than 1 year it will be LTCG. Effective Union Budget 2018, LTCG on equity funds will be taxed at 10% above Rs.1 lakh in a year without the benefit of indexation.
Before taking a deep dive into all the bonds and their benefits, let's take a sneak peek into the bonds.
Bonds are a type of debt instrument, issued by organizations for a long term period or let's say a period of more than 1 year in order to raise their money through borrowings.
Companies raise capital to issue bonds to financial investors in terms of the financial agreement, where the organization vows to pay the principal amount along with the interest to the holder of the bond after a specific date. The amount and the interest are paid in the form of coupons.
It may be noted that some bond don't pay interest to the financial investors, but it is mandatory for the issuers to pay the principal amount to the investors.
Revenue bonds are a form of municipal bonds.
They are set up by income obtained from specific projects which might go from highways, local stadiums, toll bridges and more.
These bonds offer securities to the investors by assisting with income generated projects.
Normally, these bonds are issued by any government entity or asset that is governed as a business.
With the help of a revenue bond, it is feasible for government organizations to cut their expenditures on different infrastructure projects. In addition to this, funds collected from the revenue bonds may also be piped towards the development and construction of airports.
Air terminal Revenue Bonds – Airport terminal bonds are a form of municipal bonds that are mainly issued by the municipal corporation and airport authority. The income produced through the air terminal itself is utilized to impel the bond forward.
Toll Revenue Bonds – This is again the type of municipal bond that is utilized to coordinate income towards the development of a public project. For instance, the construction of bridges, tunnels or expressways. Income generated through tolls paid by those that utilize the public project This revenue is utilized to pay the principal and interest payment relevant to the bond.
Utility Revenue Bonds – This type of bond falls under fundamental services bonds owed to the funds paid by financial investors. With the help of these debt securities, varied public utility activities can be financed.
Hospital Revenue Bonds – This type of bond is intended to help the development of new medical hospitals, nursing homes, clinics etc. Funds generated from these bonds may be distributed towards buying new equipment for these medical buildings or can be utilized to fund upgrades within existing medical clinics.
Revenue produced through these medical hospitals is guided towards payments to bondholders.
Municipal bonds are a type of debt instrument that is given on behalf of municipal corporations or bodies associated with them the nation.
Revenue raised through municipal bonds is directed toward financing projects focused on the economic development of the region being referred to.
This can be ranging from creating and upgrading schools and hospitals to giving better conveniences to the public in general.
Municipal bonds can be bought with a maturity period that adds up to three years following which the issuing municipal company is committed to giving returns to the bondholders by means of property and professional tax accumulated or through revenue produced from different projects.
In these types of bonds, funds can be generated for fluctuated projects aimed at developing the current infrastructure. When these bonds are matured, the repayment and interest given to bondholders are handled by means of the revenue made from different projects and the modes of tax collection.
The main focus of income bonds is to generate funds for specific projects that may be impending like financing the development of another structure. When these bonds mature, the repayment and interest given to bondholders are handled by means of income unequivocally produced through the revenue generated in the bonds. The income generated by projects which are funded with the aid of revenue bonds is stored in an escrow account.
A Eurobond can be perceived to be a bond issued in cash that differs from that which prevails across the nation over or market inside which it has been issued.
In spite of the fact that its name may lead one to think that it has connections to Europe or the "euro" cash, there exist no ties between the two. It, instead, serves as an external currency of securities and bonds given with it are also referred to as external bonds.
Government bonds are a type of debt instrument that can be issued by both - central and state governments of the country. Governments issue these bonds only when they face any liquidity crisis or they are in dire need of funds to improve and develop infrastructure.
In India, government bonds can be considered expensive bonds and that’s why these fall under the G-Sec category. These are long term investment securities that can be issued from 5 years to 40 years.
Perpetual bonds are also known as consol bonds or prep, these bonds can be considered fixed-income securities that don't have a maturity date set up. This type of bond is conventionally perceived to be an equity instrument instead of a debt instrument.
Junk Bonds are called high-return bonds. Junk bonds are referred to those bonds that fall below the investment grade clarified by the three huge bond rating agencies i.e., Moody's Standard and Poor's, and Fitch. Junk bonds have a higher degree of default with respect to different bonds. What makes them famous among investors is that these bonds pay high returns compared to other bonds.
A reverse stock split is when a company reduces the total number of outstanding shares by a multiple and increase the share price by the same multiple.
The company will maintain the same market capitalization (share price x outstanding shares) as before. In effect, you start out with 10 shares of stock worth ₹2000 per share and assuming there is a one-for-two reverse split, you will wind up with 5 shares worth ₹4000 per share.
To make this easier to understand, let's assume for a moment you have two ₹500 bills. Someone offers you a ₹100 bill in exchange for them. You now have one bill worth ₹1000 instead of two that equal the same value.
The value of a company does not change when stock splits. If a company has 100,000 outstanding shares that are worth $100 each before a stock split the company value is worth ₹10,000,000. If the company does a one-for-two reverse split, they now have 50,000 outstanding shares worth ₹200 each. The value remains the same; ₹10,000,000.
Reverse stock splits increase the value of a single share of company stock. Companies that trade on the National Exchange (NSE) or the Bombay Stock Exchange (BSE) often do this to show a boost in share value. This is often necessary for them to remain a publicly traded stock.
In some cases, investor may not purchase stock if they feel the price is too low. For example, some people won't buy stock priced at less than ₹2500 per share. If a company stock has decreased to ₹1200 per share, one option would be to do a one-for-three reverse split. Here's what happens:
You own 300 shares of stock at a price of ₹1200 per share
Company announces one-for-three reverse split
After split you own 100 shares of stock at ₹3600 per share
Now the company stock is worth ₹3600 per share and more investors are likely to be interested in buying stock which gives the company more money to work with.
Initially, a reverse stock split does not hurt shareholders. Investors who have ₹1,000 invested in 100 shares of a stock now have ₹1,000 invested in fewer shares. This does not mean the price of the stock will not decline in the future; putting all or part of an investment in jeopardy.
In some cases, a stock split may result in fewer shareholders. For example, if a company does a reverse split of 100 shares to one, any shareholder who has fewer than 100 shares would not get a share. Instead, their shares would be exchanged for cash. For those investors, that means they no longer own a piece of a company.
In some cases, the shareholders may have to vote on a possible reverse stock split. However, in some states, a company's board of directors may vote for the reverse stock split without the approval of shareholders. The SEC does not dictate reverse stock splits; generally, the rules are laid out during initial stock offerings and empowers the board of directors.
Let's make some basic assumptions to show what happens if you or don't do a reverse stock split:
Company is valued at ₹1,000,000
Outstanding shares 500,000
Shares owned by shareholders 500,000
Current Value of Shares ₹2.00
50 shareholders own 1,000 shares each (50,000); 75 shareholders own 5,000 each (375,000), 1,000 shareholders own 75 shares each (75,000)
Now, let's assume the company decides on a reverse split of one-to-four and any shareholder who has fewer than 100 shares is bought out. Here's what the change looks like:
Company is valued at ₹1,000,000 (no change)
Outstanding shares 125,000
Shares owned by shareholders 106,250
Current Value of Shares ₹8.00
50 shareholders own 250 shares each (12,500); 75 shareholders own 1,250 shares each (93,750)
As you can see, the company now has 125 shareholders instead of 1,025 and has an additional 18,750 shares on their books. This means if those shares are sold, they get an additional ₹1,50,000 in capital to work with. If the company does not do a stock split, the original assumptions remain the same.
Please note, these numbers are very small for illustration purposes only. In most cases, companies will have far more issued shares.
Because the value of a company does not change when a reverse stock split is done, there is little downside for the company. However, it is still possible to alienate investors:
Eliminating Investors: If a company has hundreds of investors who own fewer than 100 shares and the stock split eliminates those investors, they may not come back. These shareholders may be upset about the split and losing their shares.
Causing Nervous Reactions: While a reverse stock split does not change the overall value of the company, a reverse stock split may cause some investors worries. This could result in their pulling their investment out of the company. This may cause the stock price to decline in the short-term.
Overpricing After Reverse Split: If a reverse split causes the stock price to increase too much investors may be discouraged. This could mean fewer investors over the short term which can mean the price of the stock could decline.
Do stock splits always result in an even number of shares being reissued?
The simple answer is no.
Sometimes, a reverse stock split means a shareholder has fractional shares. For example, if you have 100 shares before a reverse stock split and the split is one-for-three your shares will be 33.33. In most cases, the company will enter your shares at 33 and you will get the remainder in cash.
Yes. When a company is formed, they generally authorize the number of shares to be issued. Let's assume the company agrees to issue 10,000,000 shares. If the company does a one-for-two reverse stock split the authorized shares are reduced by the split. That means the company now has only 5,000,000 authorized shares.
Issuing stock is a complicated process. If your company is considering issuing shares or considering a stock split or reverse stock split, you need to speak with an experienced securities attorney to guide you through the process.
India’s leading digital payments system company Paytm made history after successfully launching India’s biggest ever IPO in the current month. As per the sources, the total worth of this public offering was Rs 18,300 Crores with the fixed price band at Rs 2080 to Rs 2,150 for each share.
The company hit headlines when the shares of the company made their market debut after much anticipation on Thursday at a 9 per cent discount. Against the expectations, Paytm Stock listed at Rs 1,955 dropped 9% from its issue price on the BSE. After some hours, the stock prices declined further and reached Rs 1,564 a share (a drop of 27.25%) & hit the lower circuit limit at the end of the day trade.
It has been seen that Paytm's market capitalization dropped to about $13.6 billion from its IPO valuation of $20 billion.
Here comes a question: How did India’s greatest IPO fail to give an outstanding performance? Let’s figure it out.
Experts said that the company’s high valuation, loss-making business decisions and muted investor’s response are some of the primary reasons for the downfall, even though the company expects to break even by next year or in early 2023.
HNIs or and other powerful investors usually borrow funds for the IPO offerings at highly competitive rates. Hence, the investors will make a profit only if the IPO lists at a higher premium than the cost of funding.
After June 2021, merely 25% of the IPO were listed at a discount which led to a huge loss for the investors.
In the case of Paytm, the debut price was lower than anticipated as the stock opened at Rs 1,955 against the issue price of Rs 2,1050 at the upper end at BSE. The stock price is falling at 9.1 per cent. According to Money control, only aggressive investors were requested to put their money for future investments.
The weak response is being viewed as a sign that investors had become disillusioned with a recent string of IPOs with high valuations.
There are numerous reports out there that have claimed that Paytm’s business model lacks focus and attention.
Macquarie Stock Market Research firm has further said that achieving scale with profitability is the biggest challenge for the company. Also, the target price of Rs 1200 for the stock against its issue price of Rs 2,150 clearly shows the 40 per cent downside risks.
Also, the research firm points out that competitors of Paytm such as Amazon, Flipkart, Google etc are offering the same services. The competition became tough when new services such as Buy Today Pay Later were launched by the competitors.
This can be clearly seen from the fact that despite Paytm’s offering being much larger than other offerings, the demand was weaker than the recent stock sale. This is because Paytm has lost much of its market share to its competitors like Google and Flipkart.
Paytm holds its major competition with significant giants in the eCommerce industry like Amazon, GooglePay and Flipkart's Phone Pe. It faces intense competition from these adversaries in specific business areas like purchase currently pay later or buy today and pay later (BTPL)
Although Paytm's Rs. 18,300 crores IPO was listed at the top of the indicator range, it neglected to earn a lot of interest rather than other ongoing IPO events.
The biggest reason behind the market loss to Google Pay and Phone Pe was mainly responsible for this. It is also believed that the company’s FCF (Free cash flow) will not regain its pace till FY 2030.
In addition, the huge development in UPI-based payment structure hampered Paytm's business model.
UPI was presented by GOI in 2019 to build and promote a unified platform for payment in the whole country.
At this point, UPI represents almost 65% of Paytm's GMV, with a strong possibility to reach 85% by FY26
In any case, Paytm actually procures around 70% of its income from the payment business. It is a key part of the mobile wallet section. Nonetheless, this section has lost pertinence because of the advent of UPI payments.
According to a report by Macquarie Research, Paytm needs concentration, innovation and development in its business model. The firm accepts Paytm doesn't have the ability to accomplish scale with productivity.
The digital payment platform is associated with various business verticals, including consumer lending, payment gateway, monetary services etc. It has been consuming a lot of its money while attempting to maintain a few business fragments along with no emphasis on accomplishing benefits. In addition, Paytm procures lower revenue for every dollar it spends through advertising.
As such, the organization has been forced to move into other business segments as it is continuously looking for profitability. In any case, Paytm enjoys a huge client base with 50 million active customers and 22 million merchant banking clients.
Paytm Mall, Paytm's internet business arm, contributes around 55% of its income in this income. During FY2019-21, the segment saw a sharp fall in income. This was predominantly because of rising competition from other significant adversaries.
Paytm neglected to stay aware of the internet business giants like Amazon and Walmart-possessed Flipkart. These players accompany a huge client merchant ecosystem and huge buyer offers.
Paytm stock crash tells us a lot. Only a good company is not the one that can offer you amazing benefits. There are certain things you need to ponder before subscribing to an IPO.
Therefore investors, keen to subscribe to SME IPOs must check the company’s financial and fundamentals. Carefully read the financial statements of a company, analyze its strength and weakness and valuations of a company before subscribing to the IPOs.
Investment bankers and many investors tracking SME IPOs say that 2021 will be a record-breaking year for fundraising.
India is ready to make a record of the biggest IPO launching in the year 2021. In this blog, we will uncover all the reasons that why so many companies are going public this year:
Numerous companies including Policybazaar, Zomato, Paytm have gone public this year. Following the path of these giants, many more firms are expected to launch their IPO later this year.
This year, the companies are planning to raise the highest amount through IPO launching. Despite the impact of COVID 19, the companies are in a rush to go public.
Let’s try to figure out what is the top reason behind the IPO launching:
Initial public offering or IPO is a process under which a privately owned company offers its shares to people so that it can generate funds from investors. The process denotes the progress of a privately owned company to a public firm.
If an organization wants to become public, it has to follow two basic processes. Enter in the primary market to launch its IPO. Second, get listed on the stock exchange to become a publicly-traded company.
A few IPOs also include an Offer For Sale (OFS), which permits existing investors or promoters to minimize their shareholding in the listed companies.
Nevertheless, the amount raised through the OFS generally goes to private investors making their value available for sale.
Initial public offerings are a huge achievement for any company. They are raised when the company concludes it requires capital for a specific reason, like development, growth debt clearance, and funding corporate costs.
Any organization or startup doesn't grow immediately since its inception; they in the long run develop over a period to become more profitable and organized.
Different rounds of funding at the beginning stage and the further mixture of capital through private and private supporters lead to a company’s development.
There comes a turning point in any organization where its growth is soaked, and however the development rate may be positive, there is a flattened growth by a reduction in the rate.
At such a period, many companies are planning to go public via IPO to raise capital from the public.
There are times when a company is making a good profit, however, it needs more capital for development, growth and expansion as all the profits generated by it goes into debt clearance.
In such cases, going public not only helps the company to clear its debt but also utilizes its raised capital for the company’s further growth.
Before going public, the privately held company seeks approval from the market regulator i.e. SEBI. Once it’s done, it starts revealing key insights regarding the IPO.
The key details include the price band for the IPO, lot size, launching date and distribution of share sales for various types of financial investors — non-institutional financial investors, institutional financial investors, existing employees and angel investors.
When the IPO process has begun, the company’s shares first start trading in the grey market — the informal market for unlisted shares. The process continues to take place till they are listed on the bourses.
It may be noticed that the grey market stocks are exchanged over-the-counter (OTC) and are not presented by the stock exchange; only traders are permitted to deal with them.
Investors normally get a small period i.e. typically 2-3 days to subscribe to a company’s public offering post IPO launching date.
During this period, investors (mostly retail investors) can bid for the offers through different stock trading platforms.
As the time period of IPO gets over, investors are required to check their IPO allotment status at their designation status on accessible channels - either the registrar or at the BSE site.
After the completion of allotment, the shares of the company get listed on the stock exchanges on a predetermined date.
It has been seen that Several organizations have gone public regarding fundraising a year ago. Data suggest that organizations raised funds as much as $4.6 billion from IPOs last year. Analysts and investment bankers feel that this sum will be effectively outperformed in 2021 as more organizations are going for public offerings.
A head of investment banking at UBS India told Bloomberg that companies will generate twice the revenue as expected in the last year.
Many organizations have decided on IPOs at the end of 2020, because of the effect of the Covid-19 pandemic on business and the several securities exchange movements.
Experts further suggested that organizations are going public because of the highest performance found in the stock market and higher support of HNIs or high net worth individuals.
A State Bank of India (SBI) report recommended that over 14.2 million new individual investors have taken an interest in the stock market in 2020-21.
Indeed, even as the pandemic hits hard on India's economy, the domestic stock market has not been affected at all.
In fact, stock market indices such as Nifty 50 and BSE 30 have performed better than before.
If we talk about the market performance, a higher percentage of IPOs have done outstandingly well and more investors are hoping to capitalize on this period.
Organizations that are going public either bring capital because of the losses experienced during the Covid-19 pandemic or finance business expansion because of high demand.
Many techs and online delivery companies like Paytm, Nykaa, Zomato have gone public and the key reason is to raise capital and extend the business as the demand grows rapidly.
In the next few years, analysts expect over 50 digital tech companies will get listed on the bourses.
A Gurugram based fintech startup Mobikwik, which was planning to go public this year, may defer its plan by two or three months or even more.
The official news of the delayed IPO comes just after Paytm’s gloomy market debut that saw its shares have gone down by 28% or more.
Seeing the current situation in the primary market, the fintech company has been advised to not go ahead with its IPO as it may face difficulties to find right investors both foreign and domestic.
Mobikwik, a small fintech startup compared to Paytm, had submitted its DRHP to SEBI for the SME-IPO in July. This includes a fresh issue of equity of Rs 1500 Crores and an OFfer for Sale (OFS) for another 400 crores.
The company had plans to hit the markets around Diwali and to raise Rs 1900 Crores approx by issuing its shares to the public. However, the financial advisors had advised the company to wait for the response to Paytm. Also, they suggested not to proceed with the SME-IPO launching, because of the shortening of demand from overseas investors.
After Paytm's debacle, the company is not in a mood to go ahead before January - February 2022.
The firm might have the option to go to the markets in December in case the investors’ reaction is good, if not, the plans might get delayed again.
Paytm's oxymoron listing and proceeding with underperformance, played a vital role in the decision to postpone the IPO plans.
MobiKwik's unlisted stock was trading at around Rs 1,350 before the launch of Paytm's IPO. From that point, the unlisted share price has decreased to about Rs 900, right around 33% lower, according to reports.
MobiKwik has an extraordinary DNA - it was bootstrapped for the initial 4 years and has accomplished its present size of 101 million clients (as of March 2021) having spent just $100 million since its inception.
The fintech startup mainly focuses on Buy Now Pay Later (BNPL) for day to day payments and has the biggest number of pre-supported BNPL users in India at 22.3 million (as of March 2021).
It has consistently adopted a sustainable growth strategy. The organization is seeing solid business development, has a way to productivity and will list at the right time - MobiKwik said according to a report.
As Paytm IPO was released with negative reviews, FinTechs have endured the shot and valuations of Mobikwik shares went further downhill by around 30-40 percent.
Indeed, even the retail financial investors are somewhat terrified since the Paytm IPO has drawn down their capital by approx 30%.
In June, the Abu Dhabi Investment Authority put $20 million in MobiKwik, which provided it with a valuation of about $700-750 million. Since the IPO launching, they had been planning to raise a valuation of more than $1 billion. However the reports say that the current financial investors are not in the mood for a public offering.
The interest for anchor books was repressed both from FIIS and domestic financial investors. This could bring about the delaying of the Mobikwik IPO shares. The more demand among anchor financial investors shows the willingness for financial investors to apply for a specific IPO.
Mobikwik is one of the biggest portable wallets (MobiKwik Wallet) and Buy Now Pay Later (BNPL) players in India dependent on mobile wallet wallet GMV and BNPL GMV, separately, in Fiscal 2021, its DRHP said.
In March, reports recommended that information of almost 110 million clients of MobiKwik was leaked on the dark web available to be purchased by programmers. The dataset included details of KYC documents, Aadhaar cards, Mastercard subtleties, cell phone numbers connected to MobiKwik wallet, and so forth.
The organization, in any case, had denied such information. Resulting reports in October also recommended that this supposed information breach of 3.5 million users at MobiKwik is presently under RBI's scanner.
Online wallet firm MobiKwik allows its users to make and get payments across different financial services like loans and insurance protection. It additionally has tie-ups with different monetary firms.
Also, it has been seen that, during the hour of filing DRHP with the SEBI, MobiKwik had a record of conducting nearly 10 Lakh every day transactions on its platform.
Till now, the fintech startup has not published its quarterly monetary outcomes for the Q2 of FY 2021-22. This shows the willingness of the organization to give Mobikwik IPO shares because the evaluated FS of the new quarter should be distributed before somewhere around 135 days after the end of the quarter.
The organization has saved a hole or pre IPO placements for its shares worth up to Rs 400 crore. MobiKwik’s promoters like Upasana Taku, and Bipin Preet Singh, have intended to sell part of their shares in the organization's secondary market according to the papers documented with SEBI.
Like Zomato and Nykaa, numerous different organizations are grappling to produce enough revenue just to legitimize their existence.
अमेरिका के उपभोक्ता मूल्य सूचकांक में साल-दर-साल वृद्धि सितंबर में 5.4 प्रतिशत की वृद्धि को पार कर गई है। सितंबर से लेकर अक्टूबर तक अमेरिका में, कीमतों में 0.9 प्रतिशत की वृद्धि हुई, जो जून के बाद से महीने-दर-महीने की उच्चतम वृद्धि है। कच्चे तेल, गैस और खाद्य सामग्री की बढ़ती लागत के कारण अमेरिकी उपभोक्ता मूल्य सूचकांक पिछले वर्ष की तुलना में अक्टूबर में 6.2 प्रतिशत पर पहुंच गया है। यूएस सीपीआई डेटा के अनुसार, जो यह मापता है कि उपभोक्ता वस्तुओं और सेवाओं के लिए कितना भुगतान करता है, बढ़कर 4.6 प्रतिशत हो गया है, जो कि संयुक्त राज्य अमेरिका (यूएस) में 1990 में देखी गई मुद्रास्फीति का उच्चतम स्तर है। जिसके कारण पिछले सप्ताह घरेलु वायदा सोना 1400 रुपये प्रति दस ग्राम और चांदी 3000 रुपये प्रति किलो तक तेज़ हुई है।
मुद्रास्फीति हाल के महीनों में श्रमिकों को मिलने वाले वेतन में मजबूत लाभ को कम कर रही है और राजनितिक मुश्किलें बढ़ा रही है। लगभग एक दशक पहले की बड़ी मंदी के बाद की तुलना में महामारी से उबरने के दौरान नौकरी और वेतन वृद्धि अधिक अच्छी रही है। लेकिन उस मंदी के बाद के वर्षों के विपरीत, मुद्रास्फीति अब तेजी से बढ़ रही है और अर्थव्यवस्था में विश्वास को कम कर रही है।
जिसके कारण निवेश के लिए सुरक्षित मांग बढ़ती जा रही है। खाद्यान्न, खाद्य तेल, धातु और बिजली आपूर्ति समेत आवश्यक वस्तुओं के दाम बढ़ने से और दुनिया भर में आपूर्ति बाधित होने से महंगाई बढ़ रही है। हालांकि, अमेरिकी फेड का मुद्रास्फीति लक्ष्य 2 प्रतिशत है जो पहले से ही इस स्तर से काफी ऊपर है लेकिन अर्थव्यवस्था की वर्तमान स्थिति के अनुसार और अधिक आर्थिक सुधारों की आवश्यकता है। अमेरिकी फेड और यूरोपीय सेंट्रल बैंक ने कहा है कि वे बांड खरीद को कम कर रहे हैं, लेकिन निकट अवधि में ब्याज दर में वृद्धि नहीं करने जा रहे हैं क्योंकि अर्थव्यवस्था को महामारी के कारण बिगड़ी हुई आर्थिक स्थिति से बाहर आने के लिए अधिक नौकरियों और प्रोत्साहन की आवश्यकता है।
इस सप्ताह सोने और चांदी के भाव तेज़ रह सकते है। दिसंबर वायदा सोने में 49700 रुपये पर प्रतिरोध और 48000 रुपये पर सपोर्ट है। चांदी में 69000 रुपये पर प्रतिरोध और 63500 रुपये पर सपोर्ट है।
On Thursday, the shares of IRCTC was revitalized 16% after the stock turned into an ex-split. The organization had fixed October 29 as the record day for the stock split in the proportion of 1:5. Earlier, the board of IRCTC had endorsed a stock split on August 12.
Essentially, this implies that each stock will be split into 5 shares This builds the liquidity of the stock by reducing its stock value, subsequently making it more reasonable for investors and traders.
On October 19, 2021, the stock made a record high of Rs1,279 (acclimated to stock split) and has increased the investor’s wealth to a greater extent, which is more than 100% in the recent months.
A stock split builds the number of portions of a firm. In this case, the total number of shares will uplift 5 times however the offer cost will decrease.
This doesn't influence the market cap of the firm. Existing shares might slip yet the worth remains the same as before.
If we take the case of IRCTC, if investors possess 5 shares of the organization, the number of shares will increment to 25. The price of the stock of each share will get reduced. However, their fundamental value will remain the same as before.
The primary reason behind the stock split is to make shares more reasonable for the investors. It happens after a significant run-up of a stock's price.
Before declaring a stock split, the share price of IRCTC was around Rs 4000, even after a major decline from its all-time high of Rs 6,369.
Earlier, the stocks of IRCTC was quite expensive for small investors but after the stock split, the share prices had reduced to Rs 900, making it more appealing for investors.
It does not just advantage the current investors but also for the future investors. This is because IRCTC expanding the number of shares they hold.
It may be noted that there are no extra costs incurred during a stock split. The organization’s finances like revenue, income, operational expenses etc are not much affected after the stock split, nor is the market cap of the firm.
Maximize the ROI by increasing areas of core competencies.
Increase business opportunities through effective partnership between public and private agencies.
Adopt ethical and strong work culture by teamwork as well as the reposition of Railways in the emerging economy.
Concern for heritage and environment.
To be totally friendly to customers and driven by the innovation, and development of human resources.
The fundamentals of IRCTC are very strong even before the stock split. Hence, the analysts recommended their investors hold their stocks instead of buying because of higher valuations. The split just makes the stock more appealing to the investors.
Aside from the stock split declaration, the sudden increase in railway bookings because the economy gets railed again and a decline in COVID cases are the positive news for the IRCTC stocks.
IRCTC has started an online rail ticketing system where any user can book a ticket via SMS or GPRS. It likewise gives an SMS office to check the current PNR status and live train status also.
IRCTC additionally offers catering administrations to its travelers by serving freshly cooked food. IRCTC has also taken the rights for onboard catering of food on all trains operated by Indian railways.
It also has cafeterias such as a food plaza, Jan Aahar at numerous railway stations.
IRCTC accepted its approval for the stock split solely after it declared its quarterly income in August.
IRCTC took this choice simply because it will assist the organization with improving its liquidity in the securities exchange, which thus makes shares accessible for the small financial backers and investors.
The organization further said that the approved offer capital will remain the same at Rs 250 Crore while post-split, the share price will increment up to 1,25,00,00,000 from 25,00,00,000.
IRCTC launched its IPO in October 2019 and thus it entered the primary market. Since launching, the company has also enjoyed its monopoly in the capital market because it's the only company that provides and manages catering services to Indian Railways and at major units at railway stations.
It has been seen that after launching its IPO, the company has managed to give steady returns to its shareholders. The share price of IRCTC has increased more than 10 times from Rs 320 per share to Rs 3,790 within 2 years.
In the June quarter, the net profit of IRCTC has marked at Rs 82.5 crore, whereas its revenue rose up to Rs 257 Crore. Also, the company has increased its revenue to Rs 149 Crore and from the tourism category, the expected revenue was more than doubled to Rs 7 Crore.
The future plans of IRCTC are moving its business to transport, air tickets, tour and travel planners that could bring a new opportunity for the organization to reinforce its position.
IRCTC is the only approved organization that provide online tickets and catering services to the Indian Railways. Hence, we can say that it holds a pure monopoly in business.
Ex split of IRCTC has various advantages as it improves the liquidity in the capital market to build the investor base and makes the share affordable to small investors.
If you are a newbie who wants to start investing in stocks, then IRCTC would be a safe game to play. IRCTC is a government-owned organization and hence investing in it will give you significant gain in the future.
The government of India seeks a gigantic valuation of Rs 10 Lakh Trillion or more from the biggest insurance company of India. The government took a reference from the Zomato IPO, which accumulated a valuation of Rs 1 trillion and suggested its advisors discover if LIC has the potential to be valued at Rs 10 trillion or more.
The government intends to sell a 5-10% stake in the LIC by means of IPO. Through this, the government raise to 1 Lakh Crore according to the people with the knowledge of the matter who have requested to not be recognized, as the matter is confidential.
This, in turn, will help the government to meet Rs 1.75 trillion disinvestments in the current fiscal.
Although the valuation is much lower than Jefferies’ estimate of Rs 19 crore, it can come under the category of RBSA Advisors’ whose estimated valuation is considered as Rs 10 Lakh Crore to Rs 11.6 Lakh Crore.
The central government is pushing ahead with LIC’s IPO to help plug a widening budget gap as it aims to raise Rs 1.75 Lakh Crore via disinvestment. The LIC deal is vital to the government accomplishing this objective.
As said above, the government is looking forward to its LIC IPO as with the help of it, the government aims to meet its disinvestment target. The secondary reason behind the popularity of LIC IPO is that the government is planning to privatize two banks and one insurance company.
From Rs 1.75 Lakh Crore disinvestment, Rs 1 Lakh Crore will be made from the sale of stakes in the financial institution and PSU banks. The leftover of Rs 75,000 Crores will come as a CPSE disinvestment receipt.
Above all, while LIC will have autonomous directors and operate in a corporate structure, it will carry on with the sovereign guarantee. This could end up being of great comfort to the investors and foreign portfolio investment.
Investors met government and LIC authorities last week to officially start the deal process. A listing is expected between January and March in the FY22 said a news official.
The government has selected 10 banks, including Kotak Mahindra Bank, Gold Sachs Group, JP Morgan Chase and Co, ICICI Securities etc to arrange the IPO.
This means that the central government could fuel LIC with more capital if the need emerges.
The offer for sale in LIC IPO could be the mother of all IPOs so far in India - said, research analysts. In spite of the fact that there will be hunger, the sale begins at the end of the financial year which implies that it could deplete the liquidity and impact the secondary market to some extent, analysts said.
The LIC IPO is the biggest plan of the Indian government to raise 1.75 trillion rupees by selling its assets. The money earned after the launching of LIC IPO would be used to minimize the country’s budget deficit which is calculated as 6.8% the current year.
Also, the government aims to offer the majority of its stakes in four major state-run firms including Air India, Bharat Petroleum Corporation of India, Container Corporation of India and Shipping Corporation of India.
The government plans to list LIC shares in the first three months of the year 2022. Earlier, the IPO was planned to be launched at the beginning of the fiscal year April 1, 2020. However, it got delayed due to the Covid 19 and the pandemic issues which interrupted the IPO process to a greater extent.
Calculating the valuation of the biggest insurance company in India is without a doubt a challenging job. LIC, which cover the total size of India’s mutual fund industry, holds $ 511 billion of assets. The firms, that has been appointed to work on the valuation process, will look through million trillion of policies to represent the parameters such as morbidities, mortalities, lapses and surrenders. Additionally, they need to compute the worth of LIC’s fixed property across its 2000 branches.
Few people know that LIC release its balance sheet only once a year and there is no exact number to arrive at its embedded value that incorporates the current worth of future benefit with the net value of assets.
Japan Post, whose privatization began in 2015, was Japan's greatest holder of bank stores and its biggest backup plan while it ran the public postal service.
Like LIC, it was exceptionally apparent, with the greatest chain of retail facades in Japan and a fleet of 86,000 motorbikes for mail conveyance.
Saudi Aramco, which organized the world's greatest IPO in 2019, was in like manner an image of Saudi Arabia's economy might be creating almost 90% of the Saudi government's income.
The huge measure of liquidity presently kicking around in worldwide monetary business sectors could help the IPO sail through. Organizations have raised about $10.2 billion through IPOs in India so far this year, putting 2021 on target to beat the unsurpassed record of $11.8 billion.
Market observers now see great potential in LIC IPO as it may heavily improve future growth as well. Insiders predict that if 22 lakh agents sell one policy per year, it will result in huge volume.
Apart from that, the LIC of India comes with a huge investment portfolio that can create a massive investment return in the future.
Many companies have started IPO filing since the end of 2020. This is because many businesses had suffered due to the impact of the COVID 19 pandemic and exuberant stock market activity.That’s why many SMEs and big organizations have participated in the IPO. Here is the list of the companies that are ready to get launched in November 2021:
Company Name IPO Size Tentative Date CMS Info Systems Rs 2000 Crore November 2021 Emcure Pharmaceuticals Rs 4500 Crore November 2021Star Health And Allied Insurance Co. Limited Rs 3000 Crore November 2021 Jana Small Finance Bank Rs 2000 Crores November 2021 MobiKwik Rs 1900 Crores November 2021Arohan Financials Rs 1800 Crores November 2021 Northern Arc Capital Rs 1800 Crores November 2021 Ixigo Rs 1600 Crores November 2021 Penna Cement Rs 1500 Crores November 2021 Utkarsh Small Finance Bank Rs 1350 Crores November 2021 Fincare Small Finance Bank Rs 1330 Crores November 2021 Sterlite Power Transmission Rs 1250 Crores November 2021RateGain Travel Technologies Rs 1200 Crores November 2021ESAF Small Finance Bank Limited Rs 998 Crores November 2021Shriram Properties Rs 800 Crores November 2021 Shri Bajrang Power and Isp at Rs 700 Crore November 2021Studds Accessories Limited Rs 450 Crore November 2021
Emcure Pharmaceuticals is considered one of the leading pharmaceutical companies in India. Headquartered in Pune, Emcure pharmaceuticals, is planning to make its debut with an IPO of Rs 4500 crore. The company offers numerous products including tablets, capsules including soft gel and hard gel and injectables. The IPO will offer new issue equity shares of Rs 1,100 crore and OFS of about 18 million shares for its current shareholders and company promoters. The primary objective of Emcure pharmaceuticals is to pay its existing debts.
Star Health and Allied Insurance are considered one of the leading health insurance companies in India. Headquartered in Chennai, the company is known for providing health, overseas travel and personal accident insurance. Recently, the company has submitted its DRHP to the Security and Exchange Board of India for filing IPO of Rs 3000 Crore. The offer for sale includes 6 crore equity shares and fresh issue equity shares of Rs 2000 Crore. By launching its IPO, Star health wants to expand its current capital. Currently, the company has a market share of 15.8%.
Jana small finance bank is a leading small finance bank of India in terms of asset under management and deposit size. Founded in 2008, the bank mainly works in the rural and semi-urban parts of the country. The OFS of Jana Finance Bank will be Rs 1,300 Crore and Rs 700 Crore will be through fresh issue equity shares, hence the total IPO worth of Jana Finance bank would around Rs 2000 Crore. The primary objective of the bank is to improve its tier-1 capital.
CMS info systems is a well-known cash management company that has recently filed its DRHP with SEBI. The net worth of the IPO would around Rs 2000 Crore. Here, the IPO will only consist of sales and no fresh issues.
MobiKwik is an Indian digital payment company that has filed a DRHP with SEBI of launching its IPO of Rs 1900 Crore. Founded in 2009 by Bipin Preet Singh and Upasana Taku, the company believes in offering peer to peer payment facilities through UPIs. MobiKwik allows you to make your bill payments and different recharge through its app. By launching its IPO, the company plans to raise a $1 billion valuations.
Northern Arc Capital is an NBFC with 10+ years of experience in the financial sector. Recently, the company has filed DRHP with the SEBI.The IPO consists of an OFS of 36, 520,585 shares and the issuance of fresh equity shares worth Rs 300 Crore.
Arohan Financial Services is an NBFC that provides income-generating loans and other services to people who have zero access to financial services.By launching its IPO, the finance company is planning to make a public issue of around Rs 1800 Crores. The IPO consists of an OFS of 27,055,893 shares and new issue equity shares of Rs 850 Crores.
iXigo is an AI-based online travel portal that has recently filed its DRHP with SEBI. The company has planned to raise Rs 750 Crore through fundraising and an OFS of Rs 850 Crore. In a pre IPO funding round, the company raised around Rs 395 Crore.
The bank filed its DRHP with SEBI in the 1st quarter of this year and got the approval from the same in June 2021 to begin its IPO proceedings. The main motive of this organization behind launching its IPO is business expansion. The total issue size of the IPO will be around Rs 1350 Crore - which can be divided into OFS and fresh issue. Here, the fresh issue of equity will be around Rs 750 Crore and OFS will be Rs 600 Crore.
The initial public offering of Penna Cement will likely have a total valuation of Rs. 1,550 crores. It will comprise an offer for sale of Rs. 250 crores and freshly issued equity shares of Rs. 1,300 crores. ICICI Securities, Axis Capital Limited, JM Financial, Yes Securities (India) Limited, and Edelweiss Financial Services are the lead managers of this IPO. KF in Technologies Private Limited is the registrar of this IPO. Penna Cement is one of the leaders in its segment in India. It has an annual production capacity of 10 million tonnes and has a strong presence in the Southern and Eastern parts of India.
Sterlite Power is a leading integrated power transmission developer and solution provider company. The company is all set to release its IPO of about Rs 1250 Crore. According to the DRHP, the lead manager of this IPO is JM Financial Capital, ICICI securities limited, Axis Capital Limited. However, the registrar of this IPO is KFin Technologies.
RateGain Technologies is all set to release its IPO, which would be worth Rs 1200 Crores. The face value of RateGain’s share is Rs 1 per share. The company is planning to invest its proceedings to pay off debts first and then invest the money in technological innovations and acquiring capital equipment.
Fincare small finance bank is preparing to go public in the current financial year. However, the company has already filed for DRHP to start IPO. The total valuation of around Rs 1,330 Crore, which consists of an OFS of Rs 1000 Crore through the company’s promoters and freshly issued equity shares of Rs 300 Crores.
ESAF Small Finance Bank is ready to go public by the end of 2021. The total size of the IPO is Rs 800 Crores and the remaining is through OFS.
Shriram Properties have filed its DRHP with SEBI. The total valuation of Shriram properties is around Rs 800 Crore. It consists of fresh equity shares of Rs 250 Crores and Rs 550 Crores for OFS.The face value of Shriram properties is Rs 10 per share.
Shri Bajrang Power & Ispat Limited IPO will list 41,18,000 freshly issued equity shares with a face value of Rs. 10 per share.
Studds Accessories Limited, IPO is expected to have a valuation of around Rs 98 Crore. Also, current investors are likely to divest around Rs 3,939,000 crore equity shares.
A stop-loss order is used to mitigate the losses happening in the stock market. The order can be placed on both - the buy and sell orders. As you know the stock market is full of ups and downs and hence there is also a chance of falling stock.
If things happen exactly the opposite of what you think, then you need to do something to stop it right. Here, the term is known as a stop-loss order.
Let’s understand it with a suitable example: Suppose you have purchased a stock of Rs 100 and wish to go that stock high. If this is not happening, then you need to take some action to mitigate the losses. Here, the stop-loss order comes into play.
In the stock market, you can limit your losses by putting a stock loss order at 95. By doing this, you are placing it to stop a loss more than what you are ready to risk.
Stop-loss orders are of two types:
Case 1 > If you have a buy position, then you will place a sell SL.
Case 2 > If you have a sell position, then you will place a buy SL.
In Case 1 if you have a buy position at 100 and you wish to place an SL at 95.
SLM order type: With this order type, you must place a Sell SLM order with a trigger price of 95.
Then, when the price of 95 is triggered, a sell market order will be sent to the stock exchange and your position will be will settle at the market price.
SL order type: With this type of order, you must place a sell order with price and trigger price. Here your order must be triggered first, the trigger price is always greater than or equal to the price.
This order offers you a series of stop-loss limits.
Assume a range of Rs 0.10 (10 Paise). Here you can enter the trigger price = 95 and the price = 94.90.
When the price of 95 is triggered, the sell limit order is submitted to the exchange and your order is squared with the next available offer above 94.90. So your SL order can run at 95 (or higher) or 94.95, but not below 94.90.
The downside of this order is that if the market falls sharply, your Stop-Loss order is placed after the trigger of 95 and before the sell limit order of 94.90, if the share price is already below After 94, 90, your Stop-Loss order is still open and your losses could be much higher.
In Case 2, If you have a sell position at 100 and you wish to place an SL at 105.
SL-M Order Type: You place an SLM buy order with the trigger price = 105.
When the price of 105 triggers, a buy market order is sent to the stock exchange and your position is squared with the price market.
SL Order Type: Make a Buy SL order with price and trigger price.
Since your order must be activated first (the triggered price ≤ price). Here this type of order gives you a stop loss range.
Let’s assume a range of Rs 0.10 paise. Here you can keep the trigger price = 105 and the price = 105.10.
When the price of 105 is triggered, the buy limit order will be submitted to the stock exchange and your order will be squared below 105.10 on the next available offer.
Therefore, your SL order can be executed at 105.05 or 105, but not above 105.10.
Since SL sell orders are used above their buy price and SL buy orders below their sell price, you can use these types of orders to buy via LTP (last traded price) and sell below LTP.
What are the Methods of Calculating the Stop-Loss in Intraday Trading?
Percentage Method
This method is mostly used by intraday traders to calculate the stop loss. In the percentage method, traders are required to set the percentage price of the stock price they are prepared to lose before exiting the trade.
For Example: if you think that you would be losing 10% of the stock price before you exit your trade. Let’s say your stock is trading at ₹50 per share. Hence, your stop loss would be set at ₹45. This is because 10% of ₹ 50 is Rs 5. ₹50 - ₹45 = ₹5
₹5 under the current market value of the stock (₹50 x 10% = ₹5).
This method is comparatively easier than the support method to figure out where to set their stop loss. A moving average can be applied to the stock chart.
The moving average for the long term is better as it helps you keep your stop loss too close to the stock price. Once the moving average has been inserted, kindly set your stop loss just below the moving average level.
In a support area, the stock price often stops falling, and in a resistance area, the stock price often stops rising. Once your support level is determined, all you need to do is set your stop-loss price point below the support level. For example, let's say you own a stock that is currently trading at ₹ 500 per share, and ₹ 440 is the last support level you can identify. It is recommended that you set your stop loss a little less than ₹ 440.
Don’t let a single bad day ruin your whole month. When you do intraday trading, there are so many things that go wrong. Successful traders know how to handle the situation and hence they know when to quit - they set and abide by a daily loss. According to stock market research analysts, the 3% rule is your maximum loss for the day; reduce this amount if you wish, but try never to lose more than 3% in a day.
India is planning a proposal to let foreign investors buy up to 20 percent stakes in the upcoming LIC IPO. The whole information was provided by a person with knowledge of the matter, that would allow them to participate in the nation’s biggest IPO i.e LIC.
The listing of LIC as an IPO is the government’s biggest move towards public offering as the government is expecting to raise 900 billion rupees from its stakes sale.
Also, the government is planning to amend its FDI rules so that the investors will purchase shares without the government’s approval. According to the act of parliament of India, LIC is a special Indian entity, and hence not all have an opportunity to buy its stakes.
Besides, GOI, the RBI, and IRDAI also regulate foreign investment in the Indian insurance sector.
As of now, the FII’s are allowed to hold up to 74% of private insurance companies and 20% up to state-owned banks, however, they have no right to buy shares in LIC.
The amendment in FDI rules would allow foreign pension funds, mutual funds, insurance companies to participate in LIC IPO i.e India’s biggest life insurer.
Before the year ends, the government is all set to complete its listing procedures and hence selected 10 merchant banks out of 16 that had bid to manage LIC IPO.
The government has selected the top 10 global and Indian merchant bankers to manage the mega-IPO of the country’s largest insurer LIC.
According to the department of investment and public asset management, GOI has appointed Goldman Sachs, Nomura Financial Advisory and Securities, Citigroup, JP Morgan Chase, Bank of America Securities, JM Financial, SBI Capital Market, Axis Capital, ICICI Securities and Kotak Mahindra Capital to manage the mega initial public offering of LIC.
Furthermore, the Government of India also selected Kfintech as the registrar, share transfer agent and concept communications as the advertising agency before launching the LIC IPO.
According to DIPAM (Department of Investment and Public Asset Management) secretary Tuhin Kanta Pandey, the government has finalized the book-running led managers and other advisors for LIC IPO.
Also, on July 15, 2021, the disinvestment department received several applications for the appointment of merchant bankers. As a result, 10 out of 16 bankers have been selected. After this, 16 merchant bankers had prepared presentations for managing the listing and disinvestment of LIC.
Looking actively at the whole matter, DIPAM had already appointed a legal advisor for the stake sale and the last date for placing bids for the same was 16 September.
The government also allows foreign investors to buy stakes in LIC IPO. However, as per the LIC Act, there was no provision for foreign investment earlier, the GOI along with SEBI has come with proposed norms regarding FII’s participation as a result of which they are allowed to purchase up to 20 per cent in this IPO.
If you look at the size of the IPO, then it is expected to be far larger than any other IPOs that have launched in the primary market.
The public listing of LIC will give bountiful benefits to the Indian government as its disinvestment target will be Rs 1.75 Lakh Crore in FY 2021-22.
This financial year, Rs 8,368 Crore has been mopped up through minority stake sale in PSU and sale of specified undertaking of the unit trust of India stake in Axis Bank.
After selecting the best merchant bankers for managing the LIC IPO, the fresh move that will be taken by LIC is to draft DRHP next month. As per the finance ministry official, the plan is to bring the IPO within this fiscal, and we have set fixed timelines in regards to the IPO.
The DRHP would be filed in November 2021, i.e next month. Once the Draft Red Herring Prospectus is filed, the merchant bankers will open domestic and global roadshows for investors all over the world.
The government has appointed Cyril Amarchand Mangaldas as a legal advisor for the IPO.
The government’s objective then is to list the insurance behemoth within the current financial year ending in March 2022. The ministry is in the process of getting the embedded value of the LIC and once that is done, the ministerial panel will decide the government stake that will be divested in the IPO.
The listing of LIC is important as through it, the government will get a benefit of Rs 1.75 Lakh Crore.
As per the economic time’s report, three companies including national fertilizers limited, Mishra Dhatu Nigam and Rashtriya Chemicals and Fertilisers Limited are likely to get divested through an offer for sale before LIC IPO launching.
It is estimated that 10% of stake sale of LIC would give a big amount of Rs 1 Crore to 1.5 Crore.
The price band of LIC IPO is estimated at Rs 400-600 shares taking into account total capital and valuation. The paid-up capital is reported is Rs 25000 Crore while the total valuation of the IPO would be between 10-15 Lakh Crore.
The renowned company offers numerous life insurance plans, money back plans, term life insurance plans and more.
LIC covered a market share of 69% in the life insurance space.
LIC also offers other businesses such as LIC Housing Finance, LIC Pension Fund, LIC Mutual Fund, LIC Card Services.
As per the new norms, foreign investors’ participation is allowed in the LIC IPO.
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