DMart Business Model Cover

DMart Business Model and Success Mantra – How Does DMart Make Money?

DMart Business Model Explained: “One must not open any store within a 1km radius of DMart”. This is a common saying in the retail industry to avoid direct competition with DMart. So what makes DMart so special to customers or so threatening to its competition. What are the strategies that have catapulted the retail chain to where stands today? Keep reading to find out.

DMart Owner RK Damani Success Story cover 

DMart’s Growth Story

The success story of DMart is owed to its investor and trader turned entrepreneur ‘Radhakishan Damani,’ Now you know what the D stands for in DMart.

Founded in 2002, the DMart retail chain is owned by Avenue Supermarts. It started off with only two stores in the state of Maharashtra and today boasts 220 stores and 225 DMart Ready stores across 11 states and 1 union territory. DMart was also one of the few companies whose shares were listed at almost a 114% premium post its IPO.

Although DMart may fall short in terms of the number of stores it makes up for it in profitability. To put things in perspective in the FY 2014-15 Dmart booked profits of Rs. 211 crores beating both Reliance Retail and Future Retail which earned Rs. 159 crores and Rs. 153 crores.

Just a few days back you may have heard of DMart becoming an Rs. 2 trillion company. So …

What is DMart’s Business Model?

1. Product Mix

Have you ever examined the categories of products that are available in DMart? You would notice that they only sell those that fall in the category of Foods, Non-foods and General Merchandise, Apparel and other daily products. One may find this bizarre as retail chains also expand their product offerings to electronics, jewellery etc.

DMart has done this to ensure that the products they sell are in demand throughout the year. Thus maintaining consistency in sales and lower shelf life. This also meets their targeted low and middle-class’s daily household needs.

A little kid while shopping in a DMart Store | DMart Business Model

Being influenced by Walmarts in the late 90s Damani made it clear that they must follow the principles laid down by Sam Walton. Damani along with other promoters even walked other stores at the time to gain an understanding of what customers put in their trolleys and what not.

In addition to this DMart has also realised the importance of recognizing diversity in different states. DMart has identified this factor and tailored its product line to meet these expectations of consumers of the states it operates in. In order to achieve this DMart increased its dependency on local suppliers in each region. This further helps them achieve their targets instead of having a centralized model.

Although DMart sources its products locally they avoid private labels by directly connecting with the manufacturers. Although this gives customers limited options in comparison to other chains, they still are those of known brands which sell. 

2. Brick and Mortar Stores – DMart Business Model

One of the DMart Store in India | DMart Business Model

DMart may be one of the very few retail chains that actually owns the stores that they operate in. Yes, this is also something Damani has identified and adopted from Walmart. 90% of the stores are owned directly by DMart and the remaining are mostly taken on a 30-year lease. DMart so far has spent over Rs. 23 billion to buy their own land and stores.

One may think of this as retail suicide due to the huge cost involved in owning a store instead of renting. This however has helped DMart save a huge amount of money in the long term which otherwise would be paid as rent. It also saves them from the huge rents that other retailers bear in shopping malls.

This also ensures that the retail chain grows organically and only when they have the resources to do so making it stronger financially. This also provides them with a silver lining in the long term as the property value also increases in the long term. 

3. Strategic Locations and Designs

DMart has always tried to avoid malls and their inflated rents like a plague. Hence it chooses its locations in residential areas strategically. These decisions are further taking their targeted low and middle-class’s into consideration. Most of their stores are in the suburbs of metros, tier II & tier III cities. Their store size is set based on the density of the targeted customers around it.

If you enter a DMart store you would notice that DMart has decided to keep their stores simply. This has further saved up on costs that would otherwise be spent on expensive interior designs. This means that every individual who enters the store is a customer unlike those in malls taking an evening stroll. This makes DMart’s main competitors the local Kiranas who receive similar types of customers. 

3. Relationship with Suppliers

At the end of the day, it is DMarts relationship with its suppliers which sets its miles apart from any other retail chain. All retail businesses operate on credit.

DMart clears its credit payments on the 11th day itself and always maintains assured payment in about 15 days. Other players work on a 60 day credit period. This further helps them negotiate their products at a cheaper price from the suppliers. 

4. Discounted Products – DMart Business Model

All the strategies we’ve seen above finally lead to Dmarts ultimate strategy for Indian markets which is discounts. DMart offers its products at a 6-7 % lower price than other retail chains and at times 10% off MRP. This further attracts the low and middle-class’s to their stores.

Costs saved on inflated rent, designs, good relationships with suppliers are ultimately carried onto their customers. This allows them to maintain a loyal customer base as their customers already know that their desired products are available at cheaper rates at DMart. This even gives them an added advantage over local kiranas.

In Closing 

You may have observed that all the money saved through various strategies implemented were carried onto the customers further catapulting them to success. But another proponent that helped DMart was Damani’s investor mindset.

Being a value investor Damani gave importance to the long term view. In hindsight, none of the strategies would have worked if they weren’t diligently applied over the long term.

That’s all for this post. We hope the article was able to explain the DMart business model Let us know if you that Dmart has the potential to be crowned as India’s retail king. Happy Holi!

Biggest Bankruptcies in India Cover

8 Biggest Bankruptcies in India in the Last 10 Years

List of Biggest Bankruptcies in India: Bankruptcies although a regular occurrence in the global business world is considered a taboo topic in India. Promoters would rather hide the fact that a company is going bankrupt and would instead create a facade of success. Understanding this government was forced to introduce the Insolvency & Bankruptcy Code. 

Petition to file for bankruptcy cover | Biggest Bankruptcies in India

This reform undertaken by the Modi government would allow creditors/lenders of a business can approach the National Company Law Tribunal (NCLT) when they have given up on receiving any of the loan amounts from the company. They would then be able to recover some amount through the sale of the company or its assets through bids to others. 

8 Biggest Bankruptcies in India

1. Dewan Housing Finance Ltd. – US$13.93 billion

Dewan Housing Finance Ltd. (DHFL) logo

Dewan Housing Finance Ltd. (DHFL) is a non-banking financial company that was established in the year 1984 by Rajesh Kumar Wadhawan. The company was set up in order to assist the lower and middle-income groups to avail housing finance in India’s tier 2 and tier 3 cities.  DHFL was the 2nd housing finance company to be set up after HDFC. 

The company performed well for over 3 decades maintaining good growth and even acquiring companies like Deutsche Postbank Home Finance. The company also took on slum development and slum rehabilitation projects in Maharashtra.

These projects and several others were financed through debt raised by the company. This orchestrated development of DHFL was however cut short after Cobrapost, a group of journalists published an expose on DHFL on 29 January 2019.

According to the expose DHFL had diverted the Rs. 31,000 crores from the loans they had taken to various shell companies for the personal gains of its promoters which included Kapil Wadhawan, Aruna Wadhawan and Dheeraj Wadhawan.

Cobrapost also alleged that DHFL had made crores worth of donations to political parties possibly to keep them shielded. For eg. Rs. 14,282 crores worth of loans were diverted to these shell companies under slum development rehabilitation.

In addition, the Bharatiya Janta Party too received donations worth Rs. 20 crores. What earlier seemed like a well-orchestrated growth of DHFL now seemed like a well-orchestrated scam. 

DHFL Responds

Initially, the company denied these claims and Indian credit rating agencies reaffirmed their high safety rating for DHFL. However, the actions of the company spoke otherwise. They began selling a number of businesses to pay their debt. Later in 2019, DHFL defaulted in its bond payments and Rs 900 crore worth of interest payments. This forced the credit rating agencies to act. By now the stock price fell by over 97%. 

Due to their defaults, the RBI was forced to supersede the board of DHFL and began processing a resolution for DHFL under the Insolvency and Bankruptcy Code. DHFL would soon also be taken to NCLT. Investigations taking place in the background revealed further disturbing news.

Investigations following the trail of money had tracked it to Sunblink real estate in 2010. This led them to gangster Iqbal Mirchi an accomplice of Dawood Ibrahim. By December 2019 DHFL was stuck in bankruptcy courts for defaulting on Rs 90,000 crores of debt,  and their promoters were jailed on money laundering charges. Meanwhile, the RBI had approved the DHFL takeover by the Piramal Group.

2. Bhushan Power and Steel – US$6.9 billion

Bhushan Power and Steel Logo

Bhushan Power & Steel Ltd. (BPSL) was founded in 1970 and went on to become one of the top steel manufacturing companies in the country. Between 2007 and 2014 the company met most of its expansion needs through loans. These loans were used for meeting working capital requirements, purchase of plant and machinery, and other expansion related activities. This caused the company to raise over Rs. 47,204 crores from 33 banks and other institutions.

Despite this, the company maintained good growth and reasonable profits. This would have meant that at least the loans were being put to good use. BPSL however kept continuously missing payment deadlines. 

In April 2019 the CBI began investigating into the company and it was later revealed that the money was diverted to 200 shell companies. This caused the banks to suffer from huge NPA’s forcing the company into National Company Law Tribunal (NCLT). BPSL was eventually auctioned off to JSW Steel who offered an Rs. 19,700 crore repayment proposal. This meant that banks lost out on 60% of their loan amount. 

3. Essar Steel (US$6.9 billion) – Biggest Bankruptcies in India

Essar Steel Logo

Essar Steel was part of the Essar group which was set up in 1969 and is owned by the Ruia family. The company first fell into the debt trap in 2002 where it underwent Corporate Debt Restructuring for a debt of Rs. 2,800 crore. Luckily for Essar, the company survived and was back on track by 2006.

Essar once again took on its ambitious growth plans. Sadly these plans were hampered due to delay in environmental approvals and the non-availability of natural gas. By 2015 Essar was once again caught in a debt trap, but this time amounting to Rs 42,000 crore. The plans to rescue the company were met with plummeting commodity prices.

In June 2017, Essar was named among the list of 12 stressed accounts submitted by RBI that would have to undergo insolvency action under the IBC. Following this, the company was put under the National Company Law Tribunal (NCLT). Essar Steel was put up for auction and later acquired jointly by ArcelorMittal and Japan’s Nippon Steel. The company was renamed ArcelorMittal Nippon Steel India (AM/NS India).

4. Lanco Infra – US$ 6.3 billion

Lanco Infratech Limited Logo | Biggest Bankruptcies in India

Lanco Infra was founded in 1986 by Lagadapati Amarappa Naidu and his nephew Lagadapati Rajagopal who also was a member of the Lok Sabha. The Company’s growth in its initial year was unmatched as it received several large contracts primarily in construction.

Soon the company also entered other areas like power generation, transportation, solar energy, coal mining etc. By 2010 Lanco was among the fastest growing in the world. It was also India’s first Independent Power Producers and also its largest private power provider. 

Following the several policy reversals put in place in 2012 by the UPA government which were otherwise encouraged by them affected Lanco’s business drastically. According to India Energy Exchange, the monthly average merchant power tariffs in January 2012 were at around ₹ 3 per unit, down from a high of ₹ 10.78 per unit in April 2009.

Lanco’s revenue’s soon reduced which also made it difficult for the company to raise debt from banks. Due to its poor financials by March 2017, 60% of their expenses were interest payments.

In June 2017 Lanco Infra was named among the list of 12 stressed accounts submitted by RBI that would have to undergo insolvency action under the IBC. Once the largest infrastructure companies in India Lanco now faced insolvency proceedings by the NCLT.

5. Bhushan Steel (US$6.2 billion) – Biggest Bankruptcies in India

Bhushan Steel Logo

Bhushan Steel was founded in 1987 when Brij Bhushan Singal and his sons bought a steel factory in Sahibabad. The family quickly grew the business by including sophisticated Japanese machinery in their operations to manufacture steel.

What further accelerated their growth was the budding Indian automobile industry which began to take form in the country. This aided Bhushan Steel’s growth and allowed them to acquire clients like Maruti Suzuki, Mahindra and Mahindra, and Tata Motors. Its Client base further allowed Bhushan Steel to acquire loans which they used for their expansion needs. 

However, the dream run took a turn for the worst post the 2008 financial crisis when Bhushan Steel the commodity prices began to fall. Bhushan Steel already had been burdened by debt exceeding Rs. 11,000 crores. 

By 2012 the prices of steel had fallen to $300 from their heights of $1265 in 2008. This affected the steel industry as a whole but the companies were still able to avail loans as both the banks and Bhushan were optimistic that the prices would soon pick up.

Banks had extended almost Rs. 18,000 crores in fresh loans on this bet. But the good times never came. Although the company kept growing, it could not keep up with the debt as it was ₹31,839 crore, 3.5 times its equity. The company soon fell short of its debt repayment obligations. 

Bhushan Steel too was named among the 12 stressed accounts list submitted by RBI that would have to undergo insolvency action under the IBC. In 2019 the company was merged with Tata Steel and is today known as Tata Steel BSL Limited.

6. Reliance CommunicationsUS$4.6 billion

Anil Ambani | Biggest Bankruptcies in India

Reliance Communications (RCom) is today known to be Anil Ambani’s biggest failure. But Rcom once used to be one of the fiercest competitors. Anil Ambani had received RCom following the split of assets between the Ambani brothers after the death of their father.

One of the first mistakes that the company made was opting for CDMA early on over the other alternative i.e. GSM. This was a bad bet as GSM technology developed leaving CDMA behind. 

Anil Ambani however was quick to realise this and began investing in the 3G and GSM technology. This followed by an aggressive pricing strategy where he offered services often 60% cheaper than other telecom companies. This worked in his favour as RCom was India’s 2nd largest telecom provider in 2008. But by now RCom had already shelled out Rs 8,500 crore to buy 3G spectrum in over 13 circles. Trouble began brewing for RCom as it was caught amidst the 2G scam storm. 

The 2G scam had enabled almost 14 players in the industry which further skimmed profit margins. RCom slowly began losing its market share and stood 4th in the telecom sector by 2014. 

The final nail in Rcom’s coffin was the entry of Jio in Indian markets who also began providing free data services. By 2017 Rcom’s debt had ballooned to Rs 43,000 crore from Rs 25,000 crore in 2010. Estimates have shown that nearly half of the company’s debt was for buying spectrum. RCom stopped its operations in 2017 and began selling its assets to pay off its debt. The company was then sent to NCLT and Anil Ambani still faces trial over its dues. 

7. Alok Industries – US$4.1 billion

Alok Industries Limited Logo

Founded in 1986, Alok Industries was one of India’s leading textile manufacturers for world-class garments. The company maintained good growth and profitability. 

One of the first mistakes by Alok Industries was borrowing Rs. 10,000 crores for their expansion needs in 2004. The worst part was that Alok chose to use this to open new plants instead of enhancing or using their existing plant to full capacity. What Alok didn’t watch out for was the possibility of a fall in demand in the industry. These factors saw Alok’s asset turnover worsen in addition to low demand they also fell prey to cut-throat competition. 

Another one of Alok’s mistakes was entering the real estate market in 2007. It acquired properties in Lower Parel, Mumbai. The real estate market was adversely affected by post the 2008 financial crisis. 

Consistent losses and increasing debt further worsened Alok’s position. In June 2017 Lanco Infra was named among the list of 12 stressed accounts submitted by RBI that would have to undergo insolvency action under the IBC. Alok Industries had Rs.30,000 crores worth dues to be paid to its creditors. Reliance and JM Financial Asset Reconstruction Company won the bid for the company with a plan of Rs. 5000 crores.

8. Jet Airways – US$2 billion

Jet Airways Plane | Biggest Bankruptcies in India

Jet Airways was the country’s largest and longest-serving private airline. Founded in 1992, the airline was the first to fly a fleet of  Boeing 737-400 aircraft. At its peak, it even carried out 650 flights a day. When Jet failed many wondered if it was even possible for any airline to operate profitably in the Indian market. This was because Jet had followed Kingfisher’s failure. Jet too was prey to the airline industry. 

One of the major reasons for the Jets failure was the huge fuel expenses to be borne by the airline. Generally, 40% of the airline’s expenses are fuel. When aviation fuel gets expensive this is not always carried forward to the customers. This is because no player holds enough market share to influence the price. This in turn reduces the airlines’ profit margin due to competition.

In addition to this Jet suffered from depreciating rupee. This affects international airlines as they have to now pay more in dollars to other countries as rent, maintenance fees, and refuelling costs to international airports. The Rupee was also known as Asia’s worst-performing currency. 

These factors eventually led to the Jets failure.

In Closing

It makes it hard to believe at first that such huge bankruptcies have taken place. But looking back they also offer valuable lessons for businesses. A common theme occurring through all of them has been the ‘Debt’. If used correctly it may aid the growth of the business or face the same fate as the companies above.

That’s all for these biggest bankruptcies in India post, let us know in the comments what you think about the IBC and companies going bankrupt. Happy Holi!

What is Portfolio Backtesting How to perform it on Indian Stocks

What is Portfolio Backtesting? How to Perform it on Indian Stocks?

Portfolio Backtesting is a strategy used by investors and traders to backtest how a portfolio would have performed if they have invested in a few specific assets during a defined time frame. The results of the portfolio backtesting help investors to create their own strategy (or expectations) while investing with similar assets in an alike situations.

To perform stock research, Portfolio Backtesting is a powerful tool for stock market investors. However, there are very few quality tools available in the Indian market to backtest Indian stock portfolios. In this post, we’ll discuss how to backtest portfolio using the Portfolio Backtesting tool by Trade Brains.

Portfolio Backtesting Tool by Trade Brains

portfolio backtesting 1

Using Trade Brains’ Portfolio Backtesting tool, you can backtest your strategies to find out the returns that you might have got on any past investments. Here, you can test how portfolios would have performed if you’ve invested in different stocks with varied allocations for 5Yrs/10Yrs back, before Demonetization, amid COVID19, or any other desired time frame.

This advance portfolio backtesting feature allows you to build one or multiple stock portfolios based on different allocations and backtest their performance. Moreover, you can find the detailed result and can look into the absolute returns, CAGR, Portfolio growth, Y-O-Y or M-O-M returns in stocks on these portfolios.

Example: How to perform Portfolio Backtesting on Indian Stocks?

In this example, we’ll discuss how much returns you would have got if you’ve invested Rs One Lakh (1,00,000) in four companies Asian Paints, HDFC Bank, Hindustan Unilever (HUL), and Reliance between Jan 2014 to Jan 2019.

The allocations on all four stocks can vary in different portfolios. For example, an equally distributed portfolio will have Rs 25k invested in each stock. On the other hand, you can also give different weightage to some stocks in an unequally distributed portfolio.

portfolio allocation

Let’s backtest the return on these four stocks between 2014 to 2019. Here are the steps to perform Portfolio Backtesting on Indian stocks using Trade Brains Portal:

1. Got to Trade Brains Portal.

2. In the ‘Tools’ section on Top Menu Bar, select “Portfolio Backtesting”. Else, here is the direct link to the Trade Brains’ Portfolio Backtesting tool.

3. Enter the Start Date, End Date, and Initial Amount. For this example:

  • Start Date: 1st Jan 2014,
  • End Date: 1st Jan 2019 and
  • Initial investment amount: Rs 1,00,000

4. Next, allocate funds in different stocks to build your portfolio.

For Portfolio 1 (which is equally distributed), enter (25, 25, 25,25) which means 25% of Rs 1,00,000 allocated equally in each stock. In the other two portfolios take two different uneven allocations. For instance, (40, 40, 10, 10) and (20, 20, 30,30) allocation in stocks for Portfolio 2 and Portfolio 3.

portfolio backtesting 2 - allocations

5. Finally, Click on “Backtest”

After clicking on Backtest, a tabular result will appear that will show how much returns each portfolio would have made. Here is the result for the above example of portfolio backtesting:

portfolio backtesting result trade brains portal

From the above table, you can see that portfolio 1 has given a CAGR return of 18.81% per year. If you have an evenly distributed portfolio with the stocks of Asian Paints, HDFC Bank, HUL, and Reliance invested between Jan 2014 to Jan 2019, your investment amount of Rs 1,00,000 would have appreciated to Rs, 2,36,819.16 by 2019.

Note: You can look into the ‘Analysis’ segment on Trade Brains’ Portfolio Backtesting tool to get more details about the results of your backtest.

Further, please do notice that the second portfolio has given the best returns out of three with a CAGR of 19.81%. This shows that a better allocation can improve the final returns on the portfolio.

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Trade Brains Portal – How to use for Stock Research?

Closing Thoughts

In this post, we discussed what is portfolio backtesting and the exact steps to perform it on Indian Stocks using Trade Brains Portal. If we summarize, portfolio backtesting is a powerful tool to find the historical performance of a bundle of stocks and evaluate how much returns can be expected if a similar portfolio is made. Another important point that we learned from this post is that the returns on a good portfolio can be improved by an efficient allocation of money on different stocks, rather than investing evenly in all.

That’s all for this post. I hope this post was useful to you. If you’ve got any queries related to Trade Brains’ Portfolio Backtesting tool, do let me know by commenting below. I’ll be happy to answer your doubts. Have a great day and Happy Investing.

10 Best Stock Research Websites in India to Analyze Companies

10 Best Stock Research Websites in India to Analyze Companies!

List of Top Stock Research Websites in India: A good stock research tool will make your stock analysis process a lot easier along with saving tons of time for you. In this post, we are going to look into the best stock research websites in India where you can analyze Indian companies and perform complete fundamental and technical analysis of stocks. All these websites are very powerful and provide quality financial data for the users.

In addition, there’s also a bonus section at the end of this post where we have mentioned a few other stock research websites in India that you should also check out. Therefore, do read this article till the end. Now, discuss the best stock research websites in India to analyze stocks. Here it goes.

10 Best Stock Research Websites in India

Here are the best stock research websites in India that will simplify your stock research process:

1) Moneycontrol

moneycontrol stock research

Moneycontrol is the most popular stock research website in India. It provides all the essential financial data (fundamental & technical) for the stock market traders and investors. You can find information about stocks, mutual funds, IPOs, the latest news, and more on the moneycontrol website. A few of the other key pieces of information on this website are market news, trends, charts, livestock prices, commodities, currencies, personal finance, etc.

2) Screener.in

screener dot in stock website

As the name suggests, this is a screening tool for Indian stocks. Screener.in is a familiar stock research website in India. Along with the stock screening, users can find the financial details of public companies in India for the last ten years on this website.

Most of the features on Screener are absolutely free. Here, you can find key stock informations like financial ratios, charts, analysis, peers/competitors, quarterly results, annual results, profit & loss statements, balance sheet, cash flows, etc.

3) Trade Brains Portal

trade brains portal best stock research website in India equity

 

Website: https://portal.tradebrains.in/

Trade Brains Portal helps stock market investors to make efficient stock research and analysis of Indian stocks by providing quality fundamental data with interactive visuals. Here, you can find the last 5 year financial data of all publically listed companies on NSE and BSE.

Along with financial data, this Trade Brains Portal offers many useful tools for stock research like Stock Screener, Compare stock tool, portfolio analysis, backtesting, and more.

4) Marketsmojo

marketsmojo

Started by the Ex-founding team of Moneycontrol, Marketsmojo is yet another popular stock research website in India. Here, you can Research across 4,000 stocks, analyze fundamentals and technicals, track your portfolio, and more. Marketsmojo provides pre-analyzed information on all stocks, financials, news, price movement, broker recommendations, technicals, and everything that matters in the Indian stock markets.

5) Trendlyne

trendlye stock research

Trendlyne is another powerful stock research website in India for performing fundamental and technical analysis. It offers few exclusive stock research features in India like Trendlyne’s trademark DVM Stock Scores, unlimited alerts, stock recommendations from analysts, SWOT, portfolio and watchlist tools, and a real-time newsfeed, and more.

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6) Tickertape

tickertape stock research

Tickertape is a comprehensive stock research website in India that provides financial details for Stocks, ETFs, Indices, and Mutual Funds. It is powered with smart features like its informative asset pages, screener, watchlist, and more. A popular tool by Tickertape is the “Market Mood Index” which is a sentiment tool that describes the current mood in the market as emotions, ranging from extreme fear to extreme greed.

7) Investing.com

investing.com stock research website

The Indian version of Investing.com websites provides stock data along with financial news for Indian companies. Here, you can get the data of both fundamental and technical analysis of stocks. Some popular features of the Investing.com website are Stock Screener, Economic Calendar, Portfolio/watchlist, etc.

8) Yahoo Finance

yahoo finance

https://in.finance.yahoo.com/

Yahoo Finance is probably one of the oldest stock research websites in India. Along with finance and stock market news, it provides complete financial results and stock quotes on Indian public companies.

9) Finology Ticker

finology ticker

Ticker by Finology is a known stock research website in India. It provides the financial results of Indian publically listed companies for the last five years. Along with financial results, a few other key features of the Finology ticker are its featured stock bundles, indexes data and curated news.

10) StockEdge

stockedge stock research website

Stockedge Web offers financial data of Indian public companies for performing both fundamental and technical analysis of stocks. A few key features of StockEdge are Technical Tools, News & Analysis, FII/DII Activity, Investor portfolio, and Edge Reports. In addition, it also provides mutual fund information.

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Bonus: Other Popular Stock Research Websites in India

Along with the above-mentioned websites, here are a few other popular stock research websites in India to find and analyze companies.

That’s all for this list of Best Stock Research Websites in India to Analyse Companies. Do let us know which is your favorite stock research website in India by commenting below. Have a great day and Happy Investing.

Most Profitable Companies in India cover

Most Profitable Companies in India – Top 10 Largest Companies by Net Profits!

List of Most Profitable Companies in India (FY19-20): How often do you have a look at the profitability of the company before you invest? You’ll often come across rankings of the largest companies in India. But how many of these aren’t overvalued and actually generate sufficient profits for returns.

In this article, we take a look at the most profitable companies in India by comparing the Net Profit for the financial year ending March 2020.

Top 10 Most Profitable Companies in India

Here are the companies which generated the highest net profit for the financial year (FY) ending March 20. Please note that all the net profits are for the Standalone financial statements.

1. Tata Consultancy Services (TCS)

TCS profit over the years | Most Profitable Companies in India

Tata Consultancy Services (TCS) tops the list for the most profitable company in India. The Indian IT giant earned Rs. 33,260 crores for the financial year ending March 20.

TCS is a subsidiary of the Tata Group and specializes in information technology. Thanks to its profitability for several years now TCS also generated more than 70% of its parent company’s dividends for the years 2014-17.

The company also currently holds the record for the world’s largest IT company with a market capitalisation of $169.2 billion. This also makes it the most valuable IT services brand worldwide.

TCS performance in different segment

The company earns most of its revenues from software development and maintenance followed by IT enterprise consulting. Their other revenue streams are generated from banking, financial services, and the insurance sector. This make-up almost half of their revenues.

Although the company is based in India TCS makes most of its revenue from its US-based clients. For the year 2020, the company brought in around Rs. 82,000 crores from the US or 10.8 billion U.S. dollars. As of 2016 TCS held a 3% market share in the North American Market.

2. Reliance

Reliance Profit over the years | Most Profitable Companies in India

Reliance Industries Limited (RIL) bags the spot for the second most profitable company in India for the year 2019-20 after earning Rs. 30,903 crores.

The company enjoyed many years with ‘India’s Most Profitable Company’ title but was finally dethroned by TCS in 2019-20.

Reliance profit in different segment FY2020

The company is a conglomerate with businesses engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. RIL however is the largest publicly traded company in India by market capitalisation.

3. HDFC

HDFC Profit over the years

Housing Development Finance Corporation Limited (HDFC Ltd.) is one of the most profitable companies in India. They earned Rs. 17,769 crores during the 2019-20 financial year. The company was set up in 1977 with the objective of encouraging homeownership by providing long-term finance.

Today, HDFC is a parent company to various companies engaged in the financial services sector. It is also a major housing finance provider in India.

The company has an interest in banking, life and general insurance, asset management, venture capital, realty, education, deposits, and education loans.

Its subsidiaries include HDFC Bank Limited, HDFC Standard Life Insurance Company Ltd., HDFC ERGO General Insurance Company Ltd., HDFC Asset Management Company Ltd., GRUH Finance, HDFC Venture Capital Ltd., HDFC RED, and Credila Financial Services Private Ltd.

4. Infosys

Infosys profit over the years | Most Profitable Companies in India
Infosys Ltd. is one of the most profitable companies in India having generated profits of Rs. 15,543 crores for the year 2019-20. The company is also the second-largest Indian IT company after Tata Consultancy Services (TCS).

Revenue of Infosys by segment

Despite having its core business in the IT industry the company has interests in various other industries. These include Aerospace and Defence, Agriculture, Consumer Packaged Goods, Financial Services, Healthcare, Industrial Manufacturing, Insurance, Life Science, Logistics, Mining, Oil and Gas, Retail, etc.

5. ITC

ITC profit over the years | Most Profitable Companies in India
ITC is an Indian conglomerate and the second company on the list which is part of the Tata Group. The company successfully earned revenues of Rs. 15,136.05 crores.

ITC was set up in 1910 as Imperial Tobacco Company of India Limited and comes with a rich history.


(Revenue of ITC Ltd. by segment for 2020)
Revenue of ITC in different segments

Today the company has its presence across industries like Cigarettes, FMCG, Hotels, Packaging, Paperboards & Specialty Papers, and Agribusiness. The company however still earns most of its revenue from the Cigarette Industry.

Also Read

Top 10 Companies in India by Market Capitalization

6. HDFC Bank

HDFC Bank profit over the years

HDFC Bank is an Indian banking and financial services company. It is also one of the most profitable companies in India. The company earned profits of Rs. 14,114.93 crores for the year 2019-20.

The company is India’s largest private sector bank by assets also the largest banking company by market capitalization.

7. ONGC

ONGC profit after tax over the yearsOil and Natural Gas Corporation (ONGC) is a multinational oil and gas company. It is owned by the Ministry of Petroleum and Natural Gas, Government of India.

The company entered the list after it made Rs. 13,444.54 crores despite suffering a 50% fall in its profits. ONGC produces around 70% of India’s crude oil and around 84% of its natural gas. The company is also India’s largest profit-making PSU and 7th on the list of most profitable companies in India.

ONGC also owns 51.11% shares in Hindustan Petroleum Corporation Limited (HPCL) another Indian state-owned oil and natural gas company.

8. Coal India

Coal India profit over the years | Most Profitable Companies in IndiaCoal India Limited (CIL) is a coal mining and refining entity owned by the Indian government. The company earned a profit of Rs. 11,280.88 crores for the year 2019-20.

Coal India is also the largest coal-producing company in the world. They currently have aimed at achieving an output of 1 billion tonnes by 2023-24. It currently contributes around 82% of the total coal production in India.

Its subsidiaries include Bharat Coking Coal Ltd. (BCCL), Central Coalfields Ltd. (CCL), Eastern Coalfields Ltd. (ECL), Mahanadi Coalfields Ltd. (MCL), Northern Coalfields Ltd. (NCL), South Eastern Coalfields Ltd. (SECL), Western Coalfields Ltd. (WCL), Central Mine Planning and Design Institute (CMPDI), North Eastern Coalfields, Coal, India Africana Limitada, and Dankuni Coal Complex.

Sadly the company not only ranks 8th on the list of most profitable companies but also on the list of top 20 firms responsible for a third of all global carbon emissions.

9. Power Grid Corp.

Power grid profit over the years
Power Grid Corporation of India Limited is engaged in the transmission of power. It is owned by the Government of India. The company earned a profit of Rs. 10,811.18 crores for the year 2019-20.

Income and revenue distribution of Power Grid Corporation

The company is responsible for around 50% of the total power generated in India through its transmission network. The company is also involved in the telecom business through its company POWERTEL.

10. NTPC

NTPC profit over the years | Most Profitable Companies in IndiaNational Thermal Power Corporation Limited (NTPC) is engaged in the business of generation of electricity and its allied activities. The company earned a profit of Rs. 10,112.81 crores for the year 2019-20.

NTPC is yet another government enterprise to make it into this list. The company generates and then sells electricity to state-owned power distribution companies and State Electricity Boards.

Currently, NTPC is the largest power company in India. Over the years they also have ventured into oil and gas exploration and coal mining activities.

#12 Companies with the Highest Share Price in India (Updated)

Closing Thoughts 

The profits from these firms are enough to make any accountant drool. That’s all for this post. Here we listed the most profitable Indian companies and the most profitable businesses in India which are the largest in terms of their net profit.

S.No.Company NameNet Profit in FY19-20 (₹ Crore)
1TCS33,260
2Reliance30,903
3H D F C17,769
4Infosys15,543
5ITC15,136
6HDFC Bank14,114
7ONGC13,444
8Coal India11,280
9Power Grid10,811
10NTPC10,112

Let us know what you think about the profits generated and how important they are when investing. You would also like to know who are the top 10 companies in India by market capitalization. We are almost nearing the end of the Financial year 2020-21. Which company do you think will take the top spot for most profitable this year?

Why Investing in Stocks is NOT Gambling Myth Simplified cover

Why Investing in Stocks is NOT Gambling? Myth Simplified!

Myth Solved – Why Investing in Stocks is NOT Gambling: How many times have you been discouraged from investing by being told that it is just another name for “Gambling”? For some of us if we had a dollar every time we heard that we’d have to classify it as a source of income. In this article, we take a closer look at the century-old myth and debunk why investing in stocks is NOT gambling.

But before jumping into their differences let us understand what the two words investing and gambling mean.

What is Investing?

The basic purpose of investing is directing your liquid capital towards companies that need it. This however is done with the intention of generating income or profit. But along with this while investing one’s money into a company one also boosts the wealth of the economy as it helps them commit that capital to assets to increase productivity, aid growth, hire more people, etc.

This leads to an increase in the value of the company and an increased value of our investment in it. Investing is not devoid of risk which depends on the factors like the level of research, the period of investment, etc.

Also read: How to Invest in Share Market in India? An Ultimate Beginner’s Guide!

What is Gambling?

What is Gambling?

Gambling, also known as betting is wagering money or something of value on an event whose outcome is uncertain. This is done with the aim of winning the prize money. Some examples of gambling are Lotteries, Card games(poker, blackjack), Slot machines, etc. 

Differences between Investing in Stocks and Gambling

Although both of them include a series of decisions, risks and are done with the aim of profitability they have a lot of key differences.

1. Level of Control

Investors and gamblers have varying possibilities of mitigating their losses. After deciding how much they want to invest, investors can choose the asset class they want to invest in which have varying levels of risk. For example assets like bonds have low-risk low returns whereas stocks have a high risk with the possibility of a higher return.

In addition, the size of the companies also offers varying risks, eg. blue-chip stocks have lower risk in comparison to small-cap stocks. In addition, investors also have the option to save their capital. If they find out that their investment has begun making losses they can always decide to sell their investments.

Gambling on the other hand is a sum-zero game. Out of all the money pooled it is only a few or in some cases only one person who wins big at the expense of others. It also diminishes the possibility of you winning your capital back or limiting losses. Take the lottery ticket for eg. if you do not win the lottery you have lost the complete Rs.1000 capital you poured into the ticket.

2. Environment

The environment differs massively between the two. Investing has been made so accessible that one can pursue a career in trading from the luxuries of their homes and investing can simply be done through smartphones. 

Gambling on the other hand is a completely different ball game. Although there are online means and lotteries casinos still occupy the greater share. Casinos bring shows, food, drinks, and a lot more to the table. Most casinos are designed in order to play on the weaknesses of human psychology. These include glittering lights, music, and free drinks, all these set at dulling your senses, weaken your decisions, and most importantly keep you there all night long.

3. Stock Exchange vs. The House

For investors stock exchanges simply serve as a medium or platform for investing to take place. They charge minimal amounts for every trade and strive for increased efficiency.

 The house in gambling refers to casinos, bookmakers, slot machines, etc. It is a common term in gambling that the house always wins. The games generally have different varied edge over the players with benefits going to the house. In card games, the advantage for the casino might only be 0.5%, but certain types of slot machines might have a 35% edge over a player—other games fall somewhere in between.

4. Time Factor

In investing the longer you stay the lower your odds become of making losses. This is the exact opposite of gambling. it does mean that the more you play, the more the math works against you. There are greater chances of you walking out of the casino with less money than when you came in. Take the examples of slot machines, they have odds ranging from one in 5,000 to one in about 34 million chance of winning the top prize when using the maximum coin play.

The period of participation also differs here, when investing your participation can actually span decades. At the same time even if the shares may not increase significantly in value investors are still rewarded for staying invested in the form of dividends. When it comes to gambling once the game or race or hand is over, your opportunity to profit has gone.

5. Information

Knowledge is power! Information is important for both investing and gambling but it is available in varying amounts. Investing is abundant with information that is ready to use. Company earnings, financial ratios, research analyst reports, can be easily found online before investing. When it comes to gambling the information available is extremely limited and worse it is not always quantifiable.

ALSO READ: How To Select A Stock To Invest In Indian Stock Market For Consistent Returns?

Closing Thoughts

In this post, we discussed why investing in stocks is NOT gambling. Despite a number of differences stock market investing can still become a gamble for many. This is because of investing without research, speculation, investing all your money ina single stock, etc.

Investing after doing a thorough study is rewarding in the long term whereas flipping a coin to select a stock makes it a gamble. Although the stock market is hard to understand it sure does make much more sense than a casino.

Bollywood Movies on the Stock Market

6 Must Watch Bollywood Stock Market Movies & Web Series!

List of Top Bollywood Movies on the Stock Market: Finally a middle ground I share with many people i.e. movies. Growing up many of us may have experienced that we, at times learned a lot simply by being glued to a screen. Take me for example, dubbed anime combined with western kid flicks played a very important role in developing my vocabulary over the years. Which I wouldn’t have learned otherwise simply by reading my grammar textbook. 

You can’t deny that these movies have played some role whatsoever in developing our likes and dislikes over the years. Or at least got us interested in something which we otherwise wouldn’t have dreamt reading about or learning in a school. One such niche genre of movies are those related to the stock market. In this article, we list the Bollywood movies on the stock market which got many lured by the razzmatazz of the investing world. 

Top Bollywood Stock Market Movies and Series

Although many of us have gotten used to gaining information and pleasure by reading a book or balance sheet probably. Here is a list of 6 Bollywood movies revolving around the stock market that anyone involved in the field must watch at some point in their lives.

1. Scam 1992

“Are you serious?”. This is how your friends would react if you stated that you still haven’t seen this masterpiece. Many may not even be surprised that this movie tops the list. Released in 2020 and available on Amazon Prime, the series is based on the life of infamous investor and trader Harshad Mehta aka the “Bachchan of BSE”.

What makes the series even more binge-worthy is the struggle portrayed by a middle-class man to make it to the top. And for many, the series also brings along with it a sense of nostalgia from “Bombay” in the early 90s. 10/10 would recommend. The series is available on SonyLiv. If you’re still not convinced, the movie has received an IMDb rating of 9.4!

2. Baazaar

Released in 2018, Bazaar is another must-watch movie that revolves around money, power and the stock market. In addition to the thrilling story, the movie also includes stars like Saif Ali Khan and Radhika Apte.

The story revolves around Rizwan Ahmed a stock trader who finally gets a break to work for his idol, Shakun Kothari. Rizwan’s life however is in for a twist. The movie is available on Amazon Prime and has received an IMDb rating of 6.7. 

3. Gafla

Gafla movie poster | Bollywood Movies on the Stock Market

If there was one movie that was ahead of its time it is Gafla. Released in 2006, Gafla too is based on the life of infamous investor and trader Harshad Mehta. If one is already familiar with the Harshad Mehta story, Gafla allows one to observe the story from a different perspective.

Luckily for us, the movie is available for free on Youtube. The movie has received an IMDb rating of 7.3 and 53% on Rotten Tomatoes.

ALSO READ

Top 10 Stock Market Movies That Every Investor Should Watch!

4. Corporate

Another must-watch movie based on the world of investing is Corporate. Released in 2006, the storyline is based on Nishi, an ambitious woman trying to make it big in the corporate world.

The movie has a star cast that includes the likes of Bipasha Basu and Kay Kay Menon. The film did well in the box office and has an IMDb rating of 6.5 and 60% on Rotten Tomatoes. Lucky for us again this movie is available for free on Youtube.

5. The Big Bull

Yes, a third film based on the life of infamous investor and trader Harshad Mehta. I’m now wondering how crazy his real life must have been to have three entertainment projects based on him. The movie however is yet to be released on 8 April 2021. The trailer however has already got many interested anticipating its release.

The movie includes a star cast of Abhishek Bachchan, Ileana D’Cruz, Saurabh Shukla and Ram Kapoor. For those waiting to see how Abhishek Bachchan will play the “Bachchan of BSE” the movie will release on Disney+hotstar.

6. Share Bazaar

Share Bazaar movie poster | Bollywood Movies on the Stock Market

It would take one a while to get a hold of this movie but it really exists!. Released in 1997, the story revolves around powerful investors the Mehta brothers who try to ruin 2 men Shakar and Raj. The movie includes a star cast of Jackie Shroff, Ravi Kishan, Anupam Kher, and Dimple Kapadia. The movie has received an IMDb rating of 5.4.

Closing Thoughts

This completes the list for Bollywood movies and series revolving around the stock market. These also play an important role in inspiring people and informing them about the stock market. You should also see the list of must-watch stock market movies.

Don’t you think we should have more movies/series in the Bollywood industry about the stock market? Let us know what you think about the list and also let us know how you would rate these movies in the comments below. Have a good time!

Why Do Companies Like MRF Don’t Split the Stock cover

Why Do Companies Like MRF Don’t Split the Stock?

Ever wondered why do companies like MRF don’t split the stock? If you check the current market price of MRF Share, it’s hovering at a whopping price of Rs 84,470 per share. Its all-time high for the last 52 weeks is Rs 98,599. Even though the price of one share is too high for this company, the interesting question here is why the MRF’s management/promoters are not splitting its shares? After all, buying a stock at Rs 84,470 per share is not financially viable for most retail investors.

In this article, we are going to answer the same. Here, we are going to discuss why companies like MRF don’t split the stock. However, before we discuss these expensive stocks, let’s first study why companies split their stocks?

MRF latest Share price - most expensive share in India

Quick Note: If you are do not know what is stock split and bonus shares, then check out this post first- Stock split vs bonus share – Basics of stock market

An Interesting study on companies that Rapidly Split Stocks in Past

You might have heard about the wealth creation story of Infosys. A small investment in the 100 shares of Infosys in 1993 would be worth over Rs 6.04 crores by now. (Also read: How to Earn Rs 13,08,672 From Just One Stock?)

In the last 25 years, Infosys has given multiple bonuses and stock splits to its shareholders. And, that’s why the share price of Infosys is still in the affordable purchase rate for the average investors. In fact, if Infosys has not given so many bonuses and splits, the price of one share of Infosys might have been over multiple lacks by now. Here is the bonus and split history of Infosys from 1993 till 2018:

infosys split

(Source: Moneycontrol)

Besides, Wipro is another common stock with a similar story. Because of its consistent bonuses and splits, the Wipro share is still in the purchase range for the retail investors. Else, if the management had decided not to give any split or bonus, then the share of Wipro might also have been over multiple lakhs and maybe over crores by now. (Also read: Case Study: How 100 shares of WIPRO grew to be over Rs 3.28 crores in 27 years?)

The big question – Why do companies split a share?

Here are four common reasons why companies split their shares-

  1. Stock splits help the companies to make the share price affordable for retail investors. For example,  if a company is trading at a share price of Rs 3000 and it offers a stock split of 10:1, then it means that its price will drop to Rs 300 per share after the split. Now, which price is more affordable to the public- Rs 3,000 or Rs 300? Obviously, Rs 300.
  2. The stock split makes the stock more liquid and hence increases its trading volume. This is because the total number of outstanding shares increases after the stock split.
  3. Splitting a stock does not affect the financials of a company. Although the outstanding shares of the company will increase after the split, however, the face value will decrease in the same proportion. Overall, stock splits don’t affect the financials and hence the companies are willing to go for it.
  4. As small and retail investors are more interested in affordable shares, stock splits help in increasing their participation and overall helps the companies to build a broadly diversified investor base for their stock.

Overall, in terms of value, the stock split doesn’t matters much as the financials of the company remains the same. However, by splitting the shares- the company is able to keep the shares affordable to the public and hence maintains a wide ownership base.

Companies that do not split their shares – List of few Costliest Shares!

The reasons to split shares might be clear by reading the above paragraph. However, the next big question is why few companies do not split their shares? Why the share price of many stocks in the share market is still in the 5 figures if they have an option to split their stocks.

If you check the current market price of the companies listed on the Indian stock exchange, you can find out that there are many companies whose share price is above Rs 5,000. Here are a few of the top ones:

CompanyIndustry Market Cap (Rs Cr)Current Price (Cr)
MRF Ltd.Tyres & Allied35528.2983770.55
Honeywell Automation India Ltd.Consumer Durables - Electronics39314.5844465.85
Rasoi Ltd.Consumer Food303.231387.65
Page Industries Ltd.Textile33131.1929703.75
3M India Ltd.Diversified30843.2527379.55
Shree Cement Ltd.Cement & Construction Materials97260.3526956.3
Nestle India Ltd.Consumer Food159994.6516594.25
Abbott India Ltd.Pharmaceuticals & Drugs31139.5814654.4
Bosch Ltd.Auto Ancillary42343.1314356.7
The Yamuna Syndicate Ltd.Trading433.3514099
Tasty Bite Eatables Ltd.Consumer Food3559.8213873.05
Procter & Gamble Hygiene & Health Care Ltd.Household & Personal Products42288.0613027.45
Bombay Oxygen Investments Ltd.Industrial Gases & Fuels153.7410249
Bharat Rasayan Ltd.Pesticides & Agrochemicals4082.519608.75
Bajaj Finserv Ltd.Finance - Investment149727.659408.7
Polson Ltd.Chemicals106.638885.9
Paushak Ltd.Chemicals2479.928046.15
Indiamart Intermesh Ltd.e-Commerce24265.637991.65
Sanofi India Ltd.Pharmaceuticals & Drugs17683.377678.2
TTK Prestige Ltd.Consumer Durables - Domestic Appliances10043.827231.65
Maruti Suzuki India Ltd.Automobiles - Passenger Cars214573.517103.2
Lakshmi Machine Works Ltd.Textile - Machinery7439.486963.85
Atul Ltd.Chemicals20425.576903.55
Ultratech Cement Ltd.Cement & Construction Materials194197.976728
Procter & Gamble Health Ltd.Pharmaceuticals & Drugs10543.516351.75
Wabco India Ltd.Auto Ancillary11639.556136.55
Kama Holdings Ltd.Plastic Products3556.685512
Hawkins Cookers Ltd.Consumer Durables - Domestic Appliances29125507
Gillette India Ltd.Household & Personal Products17895.315491.85
Bajaj Finance Ltd.Finance - NBFC324743.365389.15
Alkyl Amines Chemicals Ltd.Chemicals10885.795332.85
Schaeffler India Ltd.Bearings16580.545303.95
Affle (India) Ltd.Telecommunication - Equipment13510.525299
SRF Ltd.Diversified31296.585282.55
Blue Dart Express Ltd.Courier Services12436.885241.45
Bayer CropScience Ltd.Pesticides & Agrochemicals22897.555094.9

Quick Note: The above prices and values are updated till March 2021!

All these shares are not easily affordable for the average retail investor. Even the shares of Maruti are trading at a current price of above Rs 7,100. 

Why Do Companies Like MRF Don’t Split the Stock?

Why do companies like MRF don’t split the stock

Here are a few common reasons why few companies do not split their shares:

1. They are already doing good. Why bother to split?

Many of these companies are already good. Then, why should they bother to split the share and make it cheap?

For example- MRF was trading at a share price of Rs 6,358 in March 2010. Currently, as of March 2021, it is trading at Rs 84,470. The people might have argued that the stock was expensive and not affordable even in 2010. However, it has done pretty well in the last 11 years and given a return of over 1,100% to its shareholders.

mrf latest share price march 2021

In short, if a company is doing good, they why it should bother to go through the splitting process. It’s already making money for itself and its investor, even when the share price is expensive.

2. No financial benefits

There are literally no financial benefits while splitting the shares. The value of the stock remains the same after stock splitting (the financial statements and ratios don’t change). That’s why until and unless the promoters have any good enough reason, the share splitting does not appeal much to the management and promoters.

3. Keeps Speculators away

The stock split increases liquidity and makes the stock affordable. This results in an increase in the participation of retail investors and traders. And with an increase in participation, speculation also increases. On the other hand, a high share price helps to keep the traders and speculators away from the stock. Only serious investors are the ones who can find these companies appealing and might want to enter these stocks.

Another benefit of the high share price is that it keeps the newbie investors away from them. As the new investors are mostly attracted to the affordable companies and are not willing to invest a high amount, therefore their participation is quite low in these companies.

4. Limited Public Shareholding

The high share price of a company results in limited public shareholding. Retail investors and traders can’t easily enter such stocks. Sometimes, this also helps in decreasing the volatility in the share price. Moreover, by allowing the high share price, the promoters tend to keep the voting right in their hands. This helps in maintaining a static voting right which allows the owners to make key decisions without much interference.

Besides, fewer public shareholding also helps in avoiding scenarios like creeping acquisition or in worst case hostile takeovers. Expensive stocks discourage acquisition.

5. Symbol of Status and Uniqueness

Do you know that one share of Warren Buffett’s company- Berkshire Hathaway costs around Rs 2.74 crores? Yes, that’s true. The current share price of Berkshire Hathaway Inc. Class A is $3,77,440. Similarly, MRF is known in India for such an extremely high share price.

A high share price can be sometimes regarded as a symbol of status. Splitting that share means losing this exclusiveness.

Closing Thoughts

There are no specific guidelines or rules from SEBI or any stock exchange about a stock split. Therefore, the prices of the shares can go as high as they can and the company is not obliged to offer any split.

As we discussed in this article, there are both pros and cons of a high share price. The biggest advantage of a high share price is that it helps to keep the traders and speculators away from that share. Anyways, a company might choose whether it wants to split a share or not- depending on what suits them best for their interests.

That’s all for this post on Why Do Companies Like MRF Don’t Split the Stock. I hope it was helpful to you. If you still have any doubts/queries on this topic, feel free to comment below. I’ll be happy to help. Take care and Happy Investing!

Sensex 30 Companies - List of 30 Stocks of Sensex by Weight [2021] cover

Sensex 30 Companies – List of 30 Stocks of Sensex by Weightage [2021]

List of Sensex 30 Companies: Sensex, the benchmark index of the Bombay Stock Exchange (BSE), consists of the top 30 companies listed on BSE. That’s why Sensex is also known as BSE 30. In this post, we are going to look into the Sensex 30 companies’ constituents, along with their weightage in the index. Let’s get started.

What is Sensex?

Before we look into the Sensex 30 companies’ weightage, let’s first brush up on the basics and revise what exactly is Sensex.

The BSE Sensex or the Sensex 30 tracks the behavior of the top 30 companies as per the free float market-cap registered on the Bombay Stock Exchange. BSE Sensex stands for S&P Bombay Stock Exchange Sensitive Index. Here are a few top facts about Sensex 30:

  1. The 30 companies are selected on the basis of the free-float market capitalization.
  2. The base year of Sensex is 1978-79 and the base value is 100. Currently, BSE is hovering at 50,000 points.
  3. These are different companies from different sectors representing a sample of large, liquid, and representative companies.

Sensex is an indicator of market movement. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE has gone down. If Sensex goes up, it means that most of the major stocks in BSE went up during the given period.

Constituents of Sensex 30 Companies by Weightage

Here is the list of 30 companies of Sensex along with the company’s Sensex weightage.

 NameIndustry Weight
1.Reliance Industries Ltd.Integrated Oil & Gas11.99%
2.HDFC Bank Ltd.Banks11.84%
3.Infosys Ltd.IT Consulting & Software9.06%
4.Housing Development Finance Corporation Ltd.Housing Finance8.30%
5.ICICI Bank Ltd.Banks7.37%
6.Tata Consultancy Services Ltd.IT Consulting & Software5.76%
7.Kotak Mahindra Bank Ltd.Banks4.88%
8.Hindustan Unilever Ltd.Personal Products3.75%
9.ITC Ltd.Cigarettes,Tobacco Products3.49%
10.AXIS Bank Ltd.Banks3.35%
11.Larsen & Toubro Ltd.Construction & Engineering3.13%
12.Bajaj Finance Ltd.Finance (including NBFCs)2.63%
13.State Bank of India Banks2.59%
14.Bharti Airtel Ltd.Telecom Services2.31%
15.Asian Paints Ltd.Furniture,Furnishing,Paints1.97%
16.HCL Technologies Ltd.IT Consulting & Software1.89%
17.Maruti Suzuki India Ltd.Cars & Utility Vehicles1.72%
18.Mahindra & Mahindra Ltd.Cars & Utility Vehicles1.48%
19.UltraTech Cement Ltd.Cement & Cement Products1.40%
20.Sun Pharmaceutical Industries Ltd.Pharmaceuticals1.16%
21.Tech Mahindra Ltd.IT Consulting & Software1.11%
22.Titan Company Ltd.Other Apparels & Accessories1.11%
23.Nestle India Ltd.Nestle India Ltd.1.07%
24.Bajaj FinservFinance (including NBFCs)1.04%
25.IndusInd Bank Ltd.Banks1.03%
26.POWERGRIDElectric Utilities1.03%
27.Tata Steel Ltd.Iron & Steel/Interm.Products1.01%
28.NTPC Ltd.Electric Utilities0.94%
28.Bajaj Auto Ltd.2/3 Wheelers0.86%
30.Oil & Natural Gas Corporation Ltd.Exploration & Production0.73%

Quick Note: Please note that the BSE 30 companies are updated as of March 2021 and the top 30 listed companies in BSE is subjected to change in the future, which might result in a change in the weightage of 30 companies of Sensex.

ALSO READ

Nifty 50 Companies – List of Nifty50 Stocks by Weight [2021]

Closing Thoughts

In this post, we looked into the Sensex 30 Companies by weightage. All the stocks in the BSE top 30 companies list are old and well-established companies and mostly leaders in their industry. Many of these stocks are able to move the index and the market if there is a significant movement in the share price of these companies.

That’s all for this post on the Sensex 30 companies or the Sensex stocks list. Do let us know which is your favorite stock in the top 30 listed companies in BSE list in the comment section below. Have a great day and Happy Investing.

Moat Companies in India Cover

Top Moat Companies in India – Warren Buffett Style of Stocks!

List of Top Moat Companies in India: Have you ever wondered, if the greatest investor existed in the Indian stock markets, “What stocks would he pick?”. This question got us wondering about Warren Buffet too. Hence we have created a list of Buffets favourite type of stocks existing in the Indian stock market.

In this article, we’ll cover the list of top moat companies in India, which is the Warren Buffett style of stocks for investing. Keep Reading!

Warren Buffett Photo | Moat Companies in India

What are Moats?

The term Moat was popularised by Warren Buffet in the world of investing.

A simple dictionary definition of a moat would be – a deep, wide ditch surrounding a castle or fort, typically filled with water and intended as a defence against attack. These moats were created in medieval times in order to ensure that in the case of an attack it would make it as hard as possible for an enemy to breach the castle.

However, even modern companies have moats too in their businesses.

History of Moat | Moat Companies in India

Now picture the company as a castle and the attackers as new entrants or competitors. Business moats are generally put up by the company as some sort of competitive advantage that would act as a barrier to entry for new entrants. These could be in the form of brand identity, patents, size or market share, low-cost production, etc.

Warren Buffet has time and again expressed his love for these Moats stocks. 

“The most important thing [is] trying to find a business with a wide and long-lasting moat around it … protecting a terrific economic castle with an honest lord in charge of the castle,” – Warren Buffet

Top Moat Companies in India

Here we have compiled a list of Moats existing in the Indian markets. Possibly answering the question, “If Warren Buffet participated in the Indian markets, whats stocks would he invest in?”

1. Asian Paints

Asian Paints Logo

Asian Paints is one of the most obvious stocks on this list. The company was founded in 1942 and is engaged in the manufacturing, selling and distribution of paints, coatings, products related to home decor, bath fittings and providing of related services.

Over the years the company was successful in converting the paint commodity into an Asian Paints brand. They currently are India’s largest with a market share of almost 40%. It is also Asia’s 3rd largest paint company. In addition, the company has also maintained a good track record for consistent growth.

2. Shree Cements

Shree Cements limited logo

The next one on the list of moat companies in India is Shree Cements. The shares of Shree Cements are one of the most expensive cement stocks in the world. The company was formed in 1979 and is currently one of the biggest cement manufacturers in the country.

They recently joined an elite list of companies with Rs. 1 trillion Mcap. One of the biggest moats the company has set for itself has been its low production cost in the cement industry. The company has an EBITDA/tonne of Rs. 933/tonne whereas the industry average stands at only Rs 692/tonne.

3. TCS

TCS logo

Tata Consultancy Services recently surpassed Accenture to become the worlds largest IT firm by Mcap. TCS is a subsidiary of the Tata Group. The company is specialized in information technology (IT) services and consulting. They currently operate in 46 countries.

One of the biggest advantages was being the first software and services company in India in 1968 and also being the first Indian software company to set up operations in the US. They were also the first Indian company to develop an offshore delivery model giving them a cost edge.

Apart from its size being a significant moat they also benefit hugely from switching costs their clients may face. They still benefit from the first-mover advantage in the US as 95% of their new businesses come from their existing clients.

What we’re trying to find is a business that, for one reason or another — it can be because it’s the low-cost producer in some area, it can be because it has a natural franchise because of surface capabilities, it could be because of its position in the consumers’ mind, it can be because of technological advantage, or any kind of reason at all, that it has this moat around it.” – Warren Buffet.

4. Avenue Supermarts

DMart (Avenue Supermarts) Owner RK Damani

Avenue Supermarts Ltd. better known as DMart is an Indian chain of hypermarkets founded by Radhakishan Damani in 2002. They are spread across the country with 196 stores in 72 cities.

Again one of the biggest advantages the hypermarket has is its size. This helped it set up a moat by providing one of the lowest costs to its consumers. Due to their size, they are able to generate huge volumes of sales which allows them to negotiate the price of products at a cheaper rate from suppliers when buying in bulk. This results in products sold at lower costs in their stores in comparison to other competitors.

Also Read

10 Indian Companies with Monopoly in Their Industry!

5. Titan

Titan products | Moat Companies in India

Titan has been one of the greatest wealth creators in modern times. It is also responsible for creating a major chunk of the Big Bull- Rakesh Jhunjhunwala’s wealth. Titan, founded in 1984 is part of the Tata Group.

They are a lifestyle company engaged in the manufacture and sale of fashion accessories such as watches, jewellery and eyewear. They also introduced the Fastrack brand in the Indian markets and own over 60% of the domestic market share in the organized watch market. Titan is also the fifth-largest watch manufacturer in the world.

They sell jewellery through their Tanishq brand which is the largest branded jewellery maker in India. Titans brands like Tanishq enjoy strong customer loyalty giving them added advantages over their competitors.

6. Dr Lal Pathlabs

Dr Lal Path Labs Logo | Moat Companies in India

Dr Lal PathLabs Limited was founded in 1949 by Dr S. K. Lal. They perform diagnosis and testing on blood, urine and other human body viscera. The company operates on a hub and spoke distribution model which allows it to have greater flexibility and further extending its network.

The company has over 200 clinical labs across the country with 2,569 Patient Service Centers (PSC) and 6,426 Pick-up Points (PUP). This model puts it at an advantage in comparison to other standalone chains.

They also have a strong franchisee network furthering their reach and at the same time reducing their capital expenditure. The company has achieved good growth over the years and at the same time maintaining good financials.

“But we are trying to figure out what is keeping — why is that castle still standing? And what’s going to keep it standing or cause it not to be standing five, 10, 20 years from now. What are the key factors? And how permanent are they? How much do they depend on the genius of the lord in the castle?” – Warren Buffet.

7. Bajaj Finance

Bajaj Finance Limited Logo

 

Bajaj Finance has been one of the greatest wealth creators in the Indian markets in the last decade. It also makes it the most expensive NBFC stock. The company is a subsidiary of Bajaj Finserv and is one of the moat companies in India.

The company deals in consumer finance, wealth management and loans to SMEs. It has 294 consumer branches and 497 rural locations with over 33,000+ distribution points. Its attractive car, housing, small business loans and other commercial loan products have helped it achieve a customer base of 34.5 million in 2019.

One of their biggest loans has been cross-selling. Here Bajaj Finance has the ability to offer products to its existing customers. Cross-selling has helped it achieve to acquire 19.7 million customers.

8. Pidilite

Pidilite Products | Moat Companies in India

Founded in 1959, Pidilite Industries Limited is an Indian adhesives manufacturing company. Their brands include FeviKwik, Dr Fixit, M-seal, Acron etc.

Their leading brands have a 70% market share in the Indian adhesive and industrial chemical market. There are very little competitors can do when accompany owns such a large portion of the market.

And then if we feel good about the moat, then we try to figure out whether, you know, the lord is going to try to take it all for himself, whether he’s likely to do something stupid with the proceeds, et cetera.” – Warren Buffet.

9. Maruti Suzuki 

Maruti Suzuki Products | Moat Companies in India

Maruti Suzuki India Limited is the subsidiary of the Japanese auto manufacturer Suzuki Motor Corporation. The company has successfully maintained a market share of 50% for many years now in the Indian markets.

Other companies have been able to do very little over the years to capture a significant portion of the market. The runner up Hyundai only holds a market share of 17%.

10. SBI

State Bank of India (SBI) Logo

The State Bank of India (SBI) is India’s largest bank. The government-owned company holds a market share of 23% in terms of assets and 25% market share for total loans and deposits.

SBI is the biggest bank in India in terms of total assets. One of the biggest moats for the company has been the salary accounts being opened for all government employees. This also further allows them to cross-sell their products to their existing customer base. Another private equivalent to SBI has been HDFC. Recently Kotak Mahindra too signed an MoU with the Indian army to handle salary accounts. 

Closing Thoughts 

Investors like Warren Buffet make it seem too easy to find high-quality companies with wide moats. But identifying these moat stocks before they erupt and buying them at a fair price is challenging. Companies with moats can provide huge returns to their shareholders in the long run but it is very important to thoroughly research the stocks before investing as there are no guarantees.

We hope you have liked the list of best Moat companies in India. You may read about an economic moat and get more insights. Do let us know in which company you have invested or would like to invest in the comment section below. Happy Investing!

5 Top FMCG companies in India in 2021- Best FMCG Shares!

5 Top FMCG companies in India in 2021- Best FMCG Shares!

List of the best FMCG companies in India 2021: All our lives depend on FMCG (Fast Moving Consumer Goods) products that satisfy our basic needs. FMCG products are those that have a short shelf life that is produced in high volumes with low cost and are made for rapid consumption.

This industry includes household items, over-the-counter medicines, food, personal care items, and stationery and consumer electronics, etc. The fast-moving consumer goods (FMCG) sector is India’s fourth-largest sector and has created employment for more than three million people.

Today, we take a look at the top 5 FMCG companies in India that are responsible for keeping over 1.3 billion Indians on their feet every day.

Top 5 FMCG companies in India in 2021

1. Hindustan Unilever Limited (HUL)

Market cap: Rs 5,43,560.03 Cr / PE : 74.16

Hindustan Unilever best FMCG Shares

HUL is one of India’s oldest FMCG companies. It is a subsidiary of Unilever, a British-dutch company. The company was established in 1933 and has headquarters in Mumbai. HUL has served over 2 billion customers for over 87 years.

HUL has over 35 brands across 20 categories such as soaps, detergent, skincare, cosmetics, tea, toothpaste. The brand includes famous names like Surf, Excel, Dove, Lux, Lifebuoy, Clinic Plus, Wheel, Sunsilk, Knorr, Axe, etc.

HUL Popular brands in India

2. ITC Limited

Market Cap: Rs 2,74,588.57 Cr/ PE : 21.07

itc top fmcg share in indiaITC Ltd. has flourished in the Indian markets for over 110 years giving them a deep understanding of the Indian Consumer. The ITC is known to guarantee a certain standard in production and packaging. They have broad distribution channels in India. This has allowed them to penetrate into even the most rural areas through several retail shops.

Their products include Bingo, Sunfeast, Aashirvaad, Fiama Di Wills, Vivel, Savlon soaps and handwash, Papercraft, and Classmate. ITC sells 81% of the tobacco products in Asia including brands like Wills Navy Cut, Gold Flake Kings, Silk Cut, India Kings, Bristol, Gold Flake Super Star, Gold Flake Premium Lights, Classic Menthol, etc.

Most valuable brands of ITC

3. Nestlé India

Market Cap: Rs 1,58,549.38 Cr / PE : 76.14

Nestle India top fmcg companies in India

Nestle is a transnational food and beverage company headquartered in Switzerland. Globally the company has been around for more than 150 years. In India, Nestle dates back to 1912 when it began operating as Nestle Anglo-Swiss Condensed Milk Company. They cater to the nutritional and wellness requirements of Indian consumers. In 2016, they were rated 33 in Forbes list of largest public companies.

Nestle sells a plethora of products including beverages, bottled water, milkshakes, breakfast cereals, instant foods, performance, and health care nutrition, etc. A few of the 2000 brands they currently own are Nescafe, Maggi, Milky Bar, Kit Kat, Bar One, Milkmaid, Nestea, etc.  How Nestle India Makes Money(1)

Quick Note: If you want to look into the financials and fundamentals of these companies, you can find it on our stock research and analysis portal here.

4. Britannia Industries

Market cap: Rs 83,488.56 Cr / PE : 46.7

britannia industries fmcg companies in India

Britannia Industries is one of the oldest food-producing companies in the country. It was established in 1892 in Kolkata with an initial investment of merely Rs. 295. Their products are available in more than 5 million retail outlets. More than 50% of Indian households are proud users of their range of food items. The FMCG is known as the first Zero Trans Fat Business in the country. They have an extensive distribution network in India and 60 other countries. 

how britannia ind makes money

Their products include Good Day, Tiger, Milk Bikis, Bourbon, Marie Gold, Cake, Cheese, Milk, and Yogurt. The company is the largest brand in the organized bread market.

5. Marico

Marketcap: Rs 51,008.02 Cr / PE : 46.88

marico fmcg company

Marico was established in 1990 in Mumbai. It began as a brand for coconut and refined edible oil and later expanded into various kinds of consumer goods. It is currently operating in 25 countries in the emerging markets of Asia and Africa. They maintain their innovation in manufacturing and packaging to preserve the tagline “Make a difference”.  

how marico makes money

Marico’s household brand includes Parachute, Saffola, Nihar, Livon, Set Wet, Mediker. Its global products include Parachute, Haircode, Caivil, Black Chic, Isoplus, Code 10, and X-men.

Financial Comparison – Top 5 FMCG companies in India

ParticularsHINDUNILVRITCNESTLEINDBRITANNIAMARICO
MCAP543560.03274588.57158549.3883488.5651008.02
PE74.1621.0776.1446.746.88
Price / BV11.664.7755.3233.612.5
YIELD1.084.551.221.011.71
ROE86.1125.6670.2735.9428.95
ROCE117.2531.5598.1641.4735.69
CRATIO1.314.021.781.452.32
Price / Sales11.875.6113.357.538.15
Debt To Equity000.030.280.03

(Source: Trade Brains Portal)

Closing Thoughts

With the ever-growing needs and constantly improving standards of living the FMCG’s play an even larger role. In order to fulfill these requirements, there are several other FMCG’s too that compete for a significant spot in this market. They include Colgate Palmolive, Parle Agro, P&G, The Godrej Group, Amul, Patanjali, Dabur, etc.

how dabur india makes money

In this highly competitive environment, the FMCG’s have managed to keep customers satisfied by reaching out to every nook and corner of the country making each and every FMCG an integral part of the economy.

7 Must Know Websites for Indian Stock Market Investors cover

7 Must Know Websites for Indian Stock Market Investors

List of Must know websites for Indian stock market Investors: The Internet is full of stock market websites and resources. You can find thousands of websites based on the stock market and tons of market information out there for free. However, because of this huge number of resources, it’s literally impossible to remember all the sources that you visit even in a single day. Luckily, for the Indian stock investors, there are not many such great stock market websites to remember. Even if you only bookmark a few of the best ones, it will help you to keep yourself updated with all the market news, trends, announcements, happenings, and more.

In this post, we are going to discuss seven such must know websites for Indian stock market investors. Knowing these websites will significantly simplify your stock market journey. Further, do read the post till the end, as there is a bonus in the last section. Let’s get started now.

7 Must-Know Websites for Indian Stock Market Investors

1. NSE India

nse india website

Website: https://www.nseindia.com/

This is the official website of the National stock exchange (NSE). You can get the financial information and stock quotes of all the companies listed on NSE exchange. The information provided on this website is accurate and consistently updated. As the company has an obligation to submit their financial reports to the exchanges, you can always find the financial data like quarterly reports, shareholding patterns, bulk/block deal details, etc of any company on this website, in case you can’t find it elsewhere.

Further, along with charts, there are tons of historical data regarding NSE and nifty available on this website. You can find information about the corporates, domestic and foreign investors, new listings, IPOs, etc. NSE India also provides courses and certifications (known as NCFM).

2. BSE India

bse india website

Website: http://www.bseindia.com/

BSE India is the website of the Bombay stock exchange (BSE). This website is complementary to NSE India in terms of most pieces of information. However, you can find more data on this website because more companies are listed on BSE compared to NSE. A few of the key information available on BSE India are market info, Indexes data, charts, Public offers, OFS, IPOs, Domestic and foreign investors, etc.

Further, similar to NSE India, you can find financial data like quarterly reports, shareholding patterns, bulk/block deal details, stock quotes, etc on the BSE India website.

Also read: How to find complete list of stocks listed in the Indian stock market?

3. Money Control

moneycontrol stock research

Website: http://www.moneycontrol.com/

Moneycontrol is certainly the most popular website among Indian stock investors. You can find all sorts of information on this website like market news, trends, charts, livestock prices, commodities, currencies, mutual funds, personal finance, IPOs, etc.

For equity investors, here you can find the fundamental data of any company along with technical indicators (including candlesticks charts). Moneycontrol website also provides a platform to track your investments and to create your own wish list.

Further, the discussion forum offered by this website is also among one of the unique features of this website. If you are unable to find the latest news regarding the drastic share movement of any company, just go to the forum of the stock, and read the discussions. However, please do not get influenced by the comments in the discussion section as a few may also be spam discussion posts.

In addition, money control also offers an app on all mobile platforms- Android, IOS, and windows. The app is amazing because of its simple user interface and great navigation features. If you do not have this app installed on your phone, I would highly recommend you to install it now.

4. Screener

screener dot in stock website

Website: https://www.screener.in/

The screener is a great website to perform the fundamental analysis of a company like reading its financial statements, ratios, etc. Most of the features on Screener are absolutely free. You can find a number of important information about the companies on this website like financial ratios, charts, analysis, peers/competitors, quarterly results, annual results, profit & loss statements, balance sheet, cash flows, etc.

The best part is the customized financial reports which are created in such a manner that only useful information is shown. No clutters! The financial statements of a company are very long, however, the screener simplifies the financials in small useful chunks. Anyone can easily read the annual reports, balance sheet, etc on this website because of the user-friendly display of the data.

I regularly use this website to check the financials of a company and will also recommend using this website. It saves a lot of time for the readers to navigate through the financials.

Also read: How to use SCREENER.IN like an Expert

BONUS: Here’s a video on how you can use the SCREENER website to find stocks to invest in the Indian stock market.

5. Investing.com

investing.com stock research website

Website: https://in.investing.com/

Investing is a great site if you want to find comprehensive information regarding a public company. You can perform both fundamental and technical analysis of stocks on this website. The different pieces of information available on this website are general info, chart, news and analysis, financials, technicals, forums, etc.

You can also use a number of amazing ‘tools’ available on this website for free. The best one is the ‘Stock screener’. Using this tool, you can screen stocks and shortlist them based on different criteria like market capitalization, PE ratio, ROE, CAGR, etc. I also use investing for technical analysis as there are a number of technical indicators that are available on this website and easy to use. In short, if you haven’t visited this website, then go on and check it out.

6. Economic Times Market

ET Market

Website: http://economictimes.indiatimes.com/markets

This is one of the best websites to stay updated with the latest market news. The economic times market provides instant and reliable financial news. It also posts morning and evening ‘briefs’. In case you missed the news an entire day, you can simply read all the happenings of the day here.

Further, the ET market provides similar information as the money control website in terms of features it provides like stock charts, portfolio, Wishlist, expert views, mutual funds, commodities, etc.

7. Live Mint

live mint website

Website: http://www.livemint.com/

Another amazing website to read a variety of posts regarding the stock market, finance, economy, politics, science, sports, etc. If you’re involved in the share market, you should also keep yourself consistently updated with the latest news in India and abroad. This website will keep you updated with all the happenings so that you do not miss out on any important news that might affect your stock selection in the future.

Bonuses Stock Market Website (As promised)

In addition to the above mentioned websites, here are a few popular websites in India that you should also know:

Popular stock research websites that you should know:

  1. Marketsmojo: https://www.marketsmojo.com/
  2. Trade Brains Portal: https://portal.tradebrains.in/
  3. Tickertape: https://www.tickertape.in/
  4. Yahoo Finance: https://in.finance.yahoo.com
  5. MarketMojo: https://www.marketsmojo.com/
  6. Trendlyne: https://trendlyne.com
  7. Stockedge: https://web.stockedge.com/
  8. Finology Ticker: https://ticker.finology.in/
  9. Equitymaster: https://equitymaster.com/
  10. Tijori Finance: https://www.tijorifinance.com/

Important Links on NSE/BSE:

  1. Bulk/ Bulk Deal (BSE)
  2. Bulk/Block Deal (NSE)
  3. Download the complete list of NSE Stocks
  4. Download the complete list of BSE Stocks

Securities and Exchange Board of India (SEBI)

  1. SEBI: https://www.sebi.gov.in/

Websites to read the financial news:

  1. ET Market (http://economictimes.indiatimes.com/markets)
  2. LiveMint (http://www.livemint.com)
  3. Bloomberg Quint (https://www.bloombergquint.com)
  4. Business Standard: https://www.business-standard.com/
  5. The Hindu Business Line: https://www.thehindubusinessline.com/
  6. Moneycontrol: https://www.moneycontrol.com/
  7. Financial Express: https://www.financialexpress.com/

Stock Screeners that you should know:

  1. Screener: https://www.screener.in/
  2. Trade Brains Screener: https://portal.tradebrains.in/screener/
  3. Tickertape Screener: https://www.tickertape.in/screener
  4. Investing: https://in.investing.com/stock-screener/
  5. Edelweiss: https://www.edelweiss.in/oyo/equity/user/screener
  6. Equity master: https://www.equitymaster.com/research-it/company-info/stock-screener-india.asp
  7. Moneyworks4me: https://www.moneyworks4me.com/stock-market/stock-screener
  8. CapitalCube: https://online.capitalcube.com/#!/screener
  9. Investello: https://www.investello.com/screeners
  10. Trendlyne: https://trendlyne.com/stock-screeners/
  11. Google Finance: https://finance.google.com/finance#stockscreener

Also read: 7 Best Stock Market Apps that Makes Stock Research 10x Easier.

Summary

In this post, we discussed the seven must know websites for Indian stock market investors. Let’s quickly revise those websites:

  1. NSE India (https://www.nseindia.com)
  2. BSE India (http://www.bseindia.com)
  3. Money Control (http://www.moneycontrol.com)
  4. Screener (https://www.screener.in)
  5. Investing (https://in.investing.com)
  6. ET Market (http://economictimes.indiatimes.com/markets)
  7. LiveMint (http://www.livemint.com)

That’s all for this post. I hope this article on ‘7 must know websites for Indian stock market investors’ is useful to the viewers. In case, you haven’t visited the above-mentioned websites, do check them out. Further, if I missed any big website name, please comment below. Happy Investing.

Barbeque Nation IPO Review 2021

Barbeque Nation IPO Review 2021 – IPO Price, Offer Dates & Details!

Barbeque Nation IPO Review 2021: The Barbeque Nation Hospitality IPO opens on 24th March and closes on 26th March 2021. In this article, we cover the Barbeque Nation IPO review and look into important IPO information and find out the possible prospects of the company. Stay with us for the next 5 minutes to get an answer to the question – Should you subscribe?

Barbeque Nation IPO Review – About the Company

Barbeque Nation Logo

Barbeque Nation Hospitality is the owner of the casual dining restaurant Barbeque Nation Restaurants, Toscano Restaurants and UBQ. They opened their first restaurant in the year 2008. Over the years they have grown to open 138 Barbeque Nation Restaurants in 73 cities across the country. 

The company also acquired the brand “Red Apple” which operates 9 Italian restaurants under the name Toscano and 1 restaurant by the name “La Terrace” in Bengaluru and Chennai. Their UBQ brand currently caters to the restaurant’s delivery segment.

They also have expanded globally by opening 7 outlets in the UAE, Oman and Malaysia. Its sheer size has made it one of the leading players in the organised casual dining segment.

ALSO READ

Suryoday Small Finance Bank IPO Review 2021 – IPO Price, Offer Dates & Details!

Key IPO Information of Barbeque Nation

Barbeque Nation Outlet

The promoters of the company include the Dhanani family which consists of Azhar Dhanani, Sadiya Dhanani, Sanya Dhanani, Kayum Dhanani, Raoof Dhanani, and Suchitra Dhanani through their listed flagship Sayaji Hotels. They hold a 45.7% stake in Barbeque Nation through Sayaji Hotels Limited and Sayaji Housekeeping Services Limited.

Barbeque Nation Assets Over the Years | Barbeque Nation IPO Review

The company is also backed by CX Partners which owns 21.72% of the firm. They are also backed by ace investor Rakesh Jhunjhunwala‘s investment firm Alchemy Capital holds 2.07%. 

The issue comprises both an Offer for Sale and a Fresh Issue. The Offer for Sale includes a sale of 54,57,470 equity shares by shareholders Sayaji Housekeeping Services, Azhar Dhanani, Sadiya Dhanani, Sanya Dhanani.

The OFS also includes the sale of investment by other investors like Tamara, Aajv Investment Trust and Menu Private Limited. Despite the OFS forming a major portion ace investor Rakesh Jhunjhunwala has stated that he will remain invested in the company. 

Barbeque Nation Profit Over the Years | Barbeque Nation IPO Review

The promoters have appointed IIFL Securities, Axis Capital, Ambit Capital and SBI Capital Markets as the lead managers to the issue. Link Intime India Private Ltd. has been appointed as the registrar to the issue. 

ParticularDetails
IPO Size₹452.87 Cr
Fresh Issue₹180.00 Cr
Offer For Sale(OFS)₹272.87 Cr
Opening DateMar 24, 2021
Closing DateMar 26, 2021
Face Value₹5 per equity share
Price Band₹498 to ₹500 per equity share
Lot Size30 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateApr 7, 2021

It is also important to note that the company had filed for an IPO in 2017 to raise Rs. 700 crores. The processing of the IPO however was kept in temporary suspension by the SEBI due to pending regulatory action for past violations.

The IPO was approved by the SEBI in 2018 but the company did not go ahead with the IPO due to unfavourable market conditions. In the meantime, the company raised capital from Rs 149.97 crore in its pre-IPO placement.

Barbeque Nation IPO Review – Purpose of the IPO

The proceeds from the IPO will be used for:

  • Repayment/Prepayment of all or a part of the company’s outstanding borrowings.
  • Expansion purposes and other general corporate purposes.
  • For offer for sale.

Closing Thoughts 

The IPO opens on 24th March and closes on 26th March 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Barbeque Nation.

That’s all for this post. Do let us know what you think of the Barbeque Nation IPO review. Are you planning to apply for this IPO or not? Comment below. Cheers!

Nifty 50 Companies - List of Nifty50 Stocks by Weight [2020]

Nifty 50 Companies – List of Nifty50 Stocks by Weight [2021]

List of Nifty 50 Companies to learn Nifty Constituent Stocks by Weightage (Updated March 2021): Nifty 50 is the benchmark index of the National stock exchange (NSE) in India. Basically, an index is the stock exchange creating a portfolio of the top securities held by it based on market capitalization in the respective category (entire market or sector-wise).

These indexes are useful because they provide investors and companies with a reliable benchmark. They have also been used as an investment strategy. In these cases, Investment Managers just set up their fund portfolios to simply track the index. They use the same portfolio as the index in an attempt to gain similar market returns.

Indexes play an important role as they also stand in the representation of a country’s market and economy. Today, we observe NSE’s benchmark index namely Nifty 50. We take a look at the companies they have included along with the weights assigned to each.

Nifty 50 – NSE Benchmark Index

The Nifty 50 index tracks the behavior of the top 50 blue-chip companies as per market capitalization that are traded on the National Stock Exchange. Although the index includes only 50 of the 1600 companies that trade on the NSE it captures 66% of its float-adjusted market capitalization. Therefore, it is considered a true reflection of the Indian stock market.

Here are a few top features of the Nifty 50 Index:

  1. The base year is taken as 1995 and the base value is set to 1000.
  2. Nifty is calculated using 50 large stocks that are actively traded on the NSE.
  3. The 50 companies are selected on the basis of the free-float market capitalization.
  4. Here, the 50 top stocks are selected from different sectors.
  5. Nifty is owned and managed by India Index Services and Products (IISL)

Nifty 50 Companies – Constituents of Nifty 50 by Weights – 2021

 NameIndustryWeight
1.Reliance Industries Ltd.Energy - Oil & Gas10.77%
2.HDFC Bank Ltd.Banking10.66%
3.Infosys Ltd.Information Technology7.42%
4.Housing Development Finance Corporation Ltd.Financial Services7.29%
5.ICICI Bank Ltd.Banking6.59%
6.Tata Consultancy Services Ltd.Information Technology4.86%
7.Kotak Mahindra Bank Ltd.Banking4.16%
8.Hindustan Unilever Ltd.Consumer Goods3.04%
9.AXIS Bank Ltd.Banking2.87%
10ITC Ltd.Consumer Goods2.84%
11.Larsen & Toubro Ltd.Construction2.78%
12.State Bank of India Banking2.39%
13.Bajaj Finance Ltd.Financial Services2.23%
14.Bharti Airtel Ltd.Telecommunication2.13%
15.Asian Paints Ltd.Consumer Goods1.64%
16.HCL Technologies Ltd.Information Technology1.58%
17.Maruti Suzuki India Ltd.Automobile1.46%
18.Mahindra & Mahindra Ltd.Automobile1.23%
19.UltraTech Cement Ltd.Cement1.13%
20.Sun Pharmaceutical Industries Ltd.Pharmaceuticals1.03%
21.Wipro Ltd.Information Technology0.97%
22.IndusInd Bank Ltd.Banking0.96%
23.Titan Company Ltd.Consumer Goods0.94%
24Bajaj Finserv Ltd.Financial Services0.93%
25.Nestle India Ltd.Consumer Goods0.92%
26.Tata Motors Ltd.Automobile0.92%
27.Tech Mahindra Ltd.Information Technology0.91%
28.HDFC Life Insurance Co. Ltd.Insurance0.88%
29.Power Grid Corporation of India Ltd.Energy - Power0.88%
30.Dr. Reddy’s Laboratories Ltd.Pharmaceuticals0.86%
31.Tata Steel Ltd.Metals0.86%
32.NTPC Ltd.Energy - Power0.83%
33.Bajaj Auto Ltd.Automobile0.79%
34.Adani Port and Special Economic ZoneInfrastructure0.79%
35.Hindalco Industries Ltd.Metals0.79%
36.Grasim Industries Ltd.Cement0.74%
37.Divi’s Laboratories Ltd.Pharmaceuticals0.68%
38.Hero MotoCorp Ltd.Automobile0.67%
39.Oil & Natural Gas Corporation Ltd.Energy - Oil & Gas0.65%
40.Cipla Ltd.Pharmaceuticals0.64%
41.Britannia Industries Ltd.Consumer Goods0.63%
42.JSW Steel Ltd.Metals0.61%
43.Bharat Petroleum Corp. Ltd.Energy - Oil & Gas0.58%
44.Eicher Motors Ltd. Automobile0.56%
45.Shree Cement Ltd.Cement0.56%
46.SBI Life Insurance Co.Insurance0.54%
47.Coal India Ltd.Energy & Mining0.51%
48.UPL Ltd. Chemicals0.49%
49.GAIL (India) Ltd.Energy - Oil & Gas0.42%
50.Indian Oil Corporation Ltd.Energy - Oil & Gas0.40%

Quick Note: If you want to research more about the fundamentals of these companies, you can go our Stock research and analysis PORTAL here.

Bonus: BSE Sensex Constituent Stocks

The BSE Sensex or the Sensex 30 tracks the behavior of the top 30 companies as per market-cap registered on the Bombay Stock Exchange. BSE Sensex stands for S&P Bombay Stock Exchange Sensitive Index. Here are a few top facts about Sensex 30:

  1. The 30 companies are selected on the basis of the free-float market capitalization.
  2. These are different companies from different sectors representing a sample of large, liquid, and representative companies.
  3. The base year of Sensex is 1978-79 and the base value is 100.
  4. Sensex is an indicator of market movement. If the Sensex goes down, this tells you that the stock price of most of the major stocks on the BSE has gone down. If Sensex goes up, it means that most of the major stocks in BSE went up during the given period.

Sensex 30 Companies- Constituents of Sensex 30 by Weights – 2021

 NameIndustry Weight
1.Reliance Industries Ltd.Integrated Oil & Gas11.99%
2.HDFC Bank Ltd.Banks11.84%
3.Infosys Ltd.IT Consulting & Software9.06%
4.Housing Development Finance Corporation Ltd.Housing Finance8.30%
5.ICICI Bank Ltd.Banks7.37%
6.Tata Consultancy Services Ltd.IT Consulting & Software5.76%
7.Kotak Mahindra Bank Ltd.Banks4.88%
8.Hindustan Unilever Ltd.Personal Products3.75%
9.ITC Ltd.Cigarettes,Tobacco Products3.49%
10.AXIS Bank Ltd.Banks3.35%
11.Larsen & Toubro Ltd.Construction & Engineering3.13%
12.Bajaj Finance Ltd.Finance (including NBFCs)2.63%
13.State Bank of India Banks2.59%
14.Bharti Airtel Ltd.Telecom Services2.31%
15.Asian Paints Ltd.Furniture,Furnishing,Paints1.97%
16.HCL Technologies Ltd.IT Consulting & Software1.89%
17.Maruti Suzuki India Ltd.Cars & Utility Vehicles1.72%
18.Mahindra & Mahindra Ltd.Cars & Utility Vehicles1.48%
19.UltraTech Cement Ltd.Cement & Cement Products1.40%
20.Sun Pharmaceutical Industries Ltd.Pharmaceuticals1.16%
21.Tech Mahindra Ltd.IT Consulting & Software1.11%
22.Titan Company Ltd.Other Apparels & Accessories1.11%
23.Nestle India Ltd.Nestle India Ltd.1.07%
24.Bajaj FinservFinance (including NBFCs)1.04%
25.IndusInd Bank Ltd.Banks1.03%
26.POWERGRIDElectric Utilities1.03%
27.Tata Steel Ltd.Iron & Steel/Interm.Products1.01%
28.NTPC Ltd.Electric Utilities0.94%
28.Bajaj Auto Ltd.2/3 Wheelers0.86%
30.Oil & Natural Gas Corporation Ltd.Exploration & Production0.73%

Also read: What is Nifty and Sensex? Stock Market Basics (For Beginners)

That’s all for this post. I hope it was useful for you. In case, if you have any queries related to Sense and Nifty 50 Companies or constituent stocks, let me know by commenting below. I’ll be happy to help. Happy Investing.

Ramesh Damani Success Story

Ramesh Damani Success Story – Journey, Mistakes & Advice to Investors!

Ramesh Damani Success Story: “How to make 100 crores by investing 10 lakhs” was the highlight of an interview given by investor Ramesh Damani. But unlike most gurus, we find online these days Ramesh Damani is a man who practices what he speaks. He has done well for himself over the 3 decades in the Indian market to boast a fortune of over Rs. 200 crore.

In this article, we cover the success story of the Investor along with the advice and mistakes he made while building his personal wealṭh. 

Ramesh Damani’s life before becoming an Investor

Ramesh Damani Success Story

Ramesh Damani was born into the world of investing as his father too had earned a living by trading in shares. His fathers’ efforts put their family in a well-to-do spot financially.

Damani graduated from the H.R. College of Commerce & Economics and went onto get an MBA from California State University-Northridge. But what may surprise you is that, unlike some investors to whom the stock market meant everything from a young age, Damani wanted nothing to do with the stock market.

His father on the other hand wanted him to return to India and be involved in the markets along with him. Part of this stemmed from the fact that he couldn’t imagine living far away from his only son. 

Damani however had other plans. After failing to convince his son multiple times his father decided to give one more final try. He got into a deal with his son where he sent him $10,000 to invest the money. If Damani was successful in doubling the money the amount would be his. If the investment went sideways his father would put an end to all questions. 

Sadly, in a span of 6 months, Ramesh Damani somehow managed to lose the huge sum. Although disappointed his father stuck to the deal and no questions were asked.

The story however took a turn for good. Damani could not believe that an MBA graduate was defeated. That too in bullish markets. The loss had hurt his ego and to reclaim himself he decided to dive into the world of investing. 

Ramesh Damani Success Story: Journey to become an Investor

After returning to India, the MBA graduate became a member of the Bombay Stock Exchange. He also went on to make a living as a broker at his own brokerage firm.

Damani was able to make a lot of money for his clients during the Harshad Mehta Bull run in the early 90s but at the end of the day would receive only 1% of the returns. Some of his clients had made returns up to 100%. Once the Harshad Mehta bubble burst, Damani decided to invest for himself. 

Ramesh Damani Portrait Photo

Damani was already following the footsteps of his father who also had been successful enough to earn an income from the market to live well off. His father followed a strategy where he would sell the investment after the stock price went up.

But what excited Damani was identifying potentially successful businesses, and investing in them for the long term. After all, he was part of the generation that started getting influenced by great investors like Warren Buffet and Charlie Munger’s style of investing.

“I learned that just because a stock doubles, it is not a reason to sell it.”

Damani had worked as a coder for the brief period he was in the US. Hence after noticing Infosys go public in 1993 he was quick to identify the potential the company had in the future. He jumped upon the opportunity. He invested 10 lakhs in 2 companies, Infosys and CMC.

By 1999, his investment had grown a hundredfold. This was proof enough for Damani to hold onto stocks instead of selling them immediately after making a decent return.

Following this Damani was quick to identify that the entire Indian liquor industry was available for Rs 500-odd crore. Damani quickly became bullish on the industry and the investment paid off handsomely.

In addition to this, he also identified Bharat Electronic Ltd and Bharat Earth Movers Ltd in the early stages. His only regret with these companies was that he did not invest enough.

ALSO READ

Porinju Veliyath Success Story – How Porinju Became The Smallcap Czar!

Lessons to learn from Ramesh Damani’s mistakes

Damani made a lot of mistakes as an analyst but these have served as lessons for the next 30 years of his life. Let us take a look at some of which he has shared with us:

Damani’s very first investment of $10,000 in the market offered some very valuable lessons. Damani’s strategy involved looking back at the price history of stocks and picking stocks that had fallen but performed exceptionally in the previous bull markets.

This taught him an expensive lesson that it is not necessary that a fallen stock is a good investment. 

“There are no losses, only lessons learned” – Ramesh Damani

Another mistake that Damani recalls is not buying aggressively when the markets crashed in 2008. By the time he had entered the market, the market had already crashed.

Ramesh Damani Success Story: Advice to Investors

Ramesh Damani while interacting with other investors

  • Advice for potential investors

“Market has gone up so much that people keep asking me if they should invest. I would reply by saying that the market would grow further. Use the market as a vehicle to get rich over time. It is not a quick-rich scheme. If you move 18-20 percent of your money over 20-25 years, you will be fine. A small portion of the money will become large in the long-run. My advice to everyone especially India which is a young country is to get it started. The first thing in order to test waters is to get your feet wet.”

He also stated that “Compounding is the surest thing to make you rich. The earlier you start, the better off you are,” he said.

  • Simplicity beats complexity 

We try to find out the obvious. If I expect a business to make Rs 1,000 crore profit over the next five years and currently getting the same business at Rs 500 crore then you do not need to put that into a spreadsheet and figure it out. It is not rocket science. The way to do it is to understand the market capitalisation and external opportunities. For instance, in the logistics industry, if say the Indian economy is supposed to grow from a trillion-dollar to five trillion dollars there would be enormous movement of the goods. Also, with the introduction of the GST, they will create a national marketplace for the first time. And today you are getting these companies at Rs 500-1,000 crore, which is clearly at the lower end of the spectrum.”

  • The other upsides of buying cheap

We want to buy them cheap relative to its external opportunities. That’s the number one rule in the financial markets. If you buy cheap even in the case of a bad purchase decision you will be able to get out of it over a period of time. Besides, understand the market capitalization, understand the discounted cash flow (DCF), price to earnings ratio and look at the external opportunities.

  • When investing in Bull Markets

As the price may already be inflated in the bull market offering a reduced margin of safety. Damani states  “Probably, the margin of safety is not there. But, whenever we have seen leadership in the market like we have seen cement stocks in 1992 or technology stocks in the year 2000, these stocks generally have a long way to go. They are seen as expensive initially but as the earnings catch up they get re-rated and become even more expensive.” 

  • When prices are falling or in relation to the maxim ‘Never catch a falling knife.’

The maxim comes from the principle that a lot of people start buying just because the stock has fallen 10 percent, 20 percent, or 50 percent. This is a fairly dangerous way to make a living. When we go back to the technology boom and see the so-called K-10 stocks in that era, they fell from the peak they made by 50 percent and then by another 50 percent and then another 50 percent. So, any time if you try to bargain hunt or catch the falling knife you essentially put blood on your hands. There is only one way to buy the stock, buy them when they are cheap and you do that by way of including a variety of factors.”

  • Do the rules of investing change over time

The Law of Gravity cannot change. The same thing applies to the rule of investing. These are the universal principles.

  • Getting to 100 crores 

“Suppose you start with Rs 10 lakh and double your money every three years over 30 year period, Rs 10 lakh become Rs 100 crore. So that’s a phenomenal amount of money to have.”

Closing Thoughts 

The Ramesh Damani success story offers advice and motivation for anyone looking to enter into the stock market and most importantly highlights the importance of investing with a long-term view. He is among the most successful stock market investors in India.

For a novice investor looking to enter the markets but afraid of losses, “The first thing in order to test waters is to get your feet wet.” Happy Investing! 

10 Reasons To Start Investing In Stock Market Today cover

10 Reasons To Start Investing In Stock Market in 2021!

Understanding the Reasons to start investing in stock market: Most people at some time have thought to start investing in the stock market. Their reasons to start investing may be different, yet the final goal is always the same “To make money”. However, because of some myth or misconceptions that they heard from their Uncle or close kin, they were afraid to take the next steps.

For a very long time, our family members, friends, and news channels have told us to stay away from the market. The common misconception that ‘Stock investing is like GAMBLING’ has become more of a fact than a myth for many. And maybe this could be the reason why even less than 3% population of India is actively investing in the stock market.

Today, we are going to break the barriers. In this post, we are going to discuss 10 great reasons to start investing in stock market. Therefore, be with us for the next 5-6 minutes to enjoy this roller coaster ride that may open your eyes towards investing in stock market.

Top 10 Reasons to Start Investing in Stock Market.

1. To keep pace with inflation

Inflation is defined as a state where the prices are rising and the value of purchasing power of money is decreasing. Inflation occurs in an economy when there is an expansion in the total amount of money. Overall, Inflation is not desirable for a common person.

Let us understand inflation with an example. Suppose you have Rs 5 lakhs in your account and you want to buy a car, which also costs Rs 5 lakhs currently. However, you changed your mind, deciding to buy the car next year, and kept your money in the savings account.

The bank is giving you a decent interest of 3.5% pa. Now, let us fast forward to next year. You went to the bank and came home happily with your money that has become Rs 5.17 lakhs now. Next, you went to the car showroom. But boom! You get the shock.

The price of that car has now increased to Rs 5.5 lakhs. The car, which you could have easily bought last year, is now not affordable to you. That is inflation. The same thing happens with groceries, or all other products that you buy and their price inflates with time.

The inflation in India for the last few years has been around 4-5%. The return on the savings account (Interest rate) is around 3-4% per annum. Hence, a savings account cannot beat inflation.

inflation in india yearwise tradingeconomics

(Source: Tradingeconomics)

Overall, if you want to beat inflation, you have to invest your money intelligently in high-return investment instruments. And the stock market is the best place for intelligent investors. If you buy stocks of good companies, you can make a decent consistent return of 12-18% per annum depending on how good the stock is and how much time you invested in choosing the stock. Therefore, investing in the stock market is a great option if you want to keep pace with rising inflation.

2. Most Capital Growth Potential

For the past couple of decades, Stocks and real estate are the two investments, which have constantly beat all other forms of investments in India.

Whether it is fixed deposits, insurances, bonds or commodities like gold, silver, petroleum, etc. the stock market has been able to outperform all these investments with the best returns on the investments. Hence, with the tremendous growth potential in the stock market, it is always advisable to invest in stocks for those who want to grow their money.

3. Investing Makes Your Money Work for You

Money is important to buy comforts and in all other aspects of life. Most people say that they do not work for money and lack of money is the root of most problems. However, investing is the solution to this problem.

If you invest your money in good companies, you just have to sit idly and do nothing. Your money will grow as the company prospers. In the meanwhile, when your money is growing by itself, you can use your time to focus on your primary job or in whatever way you want. In this way, you can make your money work for you, unlike your primary job where you have to work for money.

4. Stock Investing Requires As Little Amount as buying a ‘Burger’

There is a common misconception among many people that they need a huge amount to start investing in the stock market. However, that is not true. You can start investing with as little money as required to buy a burger.

There are a number of stocks whose price is less than Rs 100. You can invest very small amount of money and start getting good returns. This option is not available in other for other forms of investments like gold or real estate. In addition, remember a little bit of things every day ads up to a big result.

ALSO READ:

What is The Minimum Money I Need to Start Stock trading in India?

5. You do not need to be a ‘Genius’ to invest in Stock Market

peter lynch quote investing - Reasons To Start Investing In Stock

If you can understand 5th standard math, then you can understand stock market’- Peter Lynch.

Peter Lynch is one of the most renowned fund managers famous for giving around 30% return for a continuous period of 13 years at Fidelity. He always inspires common people to invest in stocks and believes the stock market is for everyone. You do not need to be a mastermind or rocket scientist to invest in stock market.

Unlike starting most business or start-ups, the stock market requires only a little money, knowledge, time and interest. Anyone can get decent returns by investing in the stock market.

Quick Note: If you are new to investing and want to stay away from common myths and mistakes in stock market, I will highly recommend you to read this book: One Up On Wall Street: How To Use What You Already Know To Make Money In the Market. It is one of my favourite books on stock market.

6. Investing in Stocks is lot easier ‘Now’

Investing and trading with the online brokerage account is a lot simpler now. Now with the help of leading online brokers, you can buy and sell stocks within seconds using your smart phone.

Moreover, with the increase in financial websites and apps; finding and selecting stocks is also simpler. You do not need to go through all the boring financial newspapers and magazines now and need not rely on newsletters to get the company’s financial reports now.

Also read: How to Invest in Share Market? A Beginner’s Guide

7. Tax benefits from Government on Stock Investing

taxes - Reasons To Start Investing In Stock Market in 2021

There are a number of tax benefits in investing in stock market. The long-term capital gain tax is 10% for gains exceeding Rs 1 lakh. Still, this is better than the return of 6.5% from FDs, which is again taxable up to 10-30% depending on your tax slab. That’s why it is a popular quote ‘The rich pay less tax’.

8. You do not Always have to Pick Hidden Gems.

hul share price stocks

There are a number of other examples of common stocks as well that has given more than several hundred percent returns over the last few years. For example, Asian Paints, Hindustan Unilever, HDFC Bank, Symphony, Maruti Suzuki, Titan Company, etc. These companies are well-known to the common people. People can easily find such growing companies around them as they are already using their products.

In short, you are not always supposed to find a hidden gem or a very rare/unheard chemical stock. You just have to look around and find leading companies with amazing products and invest in them.

9. To create a Alternate source of income

It has always been taught in our school- ‘Get a high paid safe and secure job’. What is not taught is what will happen if you’re fired or the company is shut down. We should always have multiple source of Income. For the common people, stocks market investment can help to create this additional source of income.

Most people are completely busy with their office their entire life. For those people, Investing in the stock market can be their second source of income. Through value appreciation and dividends, they can steadily grow additional income. That is why people need to start investing in the stock market.

10. The Power of Compounding through Long-term Investments

Stock Investing allows you to take advantage of compound interest, which grows your wealth exponentially. Most of the bank savings account gives you a simple interest. However, with investing in stock, you can get compounded returns. The famous scientist Albert Einstein once said- “Compounding is the eighth wonder of the world”.

The world’s greatest investor, Warren Buffett, is known to have a compounded return of around 22% for the last 5 decades. Moreover, this compounded return for a long time has made him one of the richest men on earth. The power of compounding is one of the major reasons why people should invest in stock market.

Closing Thoughts

In this article, we discussed 10 of the best reasons to start investing in share market. The biggest reasons to invest in share market are to beat inflation, create a secondary source of income and obviously to get a superior returns on your capital.

That’s all for this post on top reasons to invest in stock market. I hope the post is useful to you. If there is an additional reason to invest in the stock market that I missed or you want to add to the list, feel free to comment below. I will be happy to include them also. Have a great day and Happy investing!

A Complete List of Stock Exchanges in India

A Complete List of Stock Exchanges in India!

An overview of list of Stock Exchanges in India (Updated 2021): Most of the Indian investing population have heard of only two stock exchanges in India – the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). However, the list of stock exchanges in India is bigger than just two.

Apart from BSE and NSE, a few of the other popular stock exchanges in India are Calcutta Stock Exchange, Magadh Stock Exchange, Metropolitan Stock Exchange of India, etc.

In this post, we are going to highlight the major stock exchanges in India which are registered with the Securities and exchange board of India (SEBI) and currently active. We’ll also share a list of different commodity derivative exchanges in India.

What is the Stock Exchange?

Before we dive deep into stock and commodity exchange, first of all, let’s understand what is an exchange.

An exchange is an organization or association which hosts a market where stocks, bonds, futures and options, commodities, etc are traded. Here, buyers and sellers come together to trade the financial instruments during the specific hours of business days. (Also read: Stock market timings in India).

A stock exchange is a facility where stocks are traded. Please note that stock exchanges do not own the stocks (similar to the vegetable market where the market doesn’t own the vegetables but connects the buyers and sellers of vegetables at a location).

To trade in a stock exchange, the companies must be listed there. The exchange imposes rules and regulations on the firms & brokers for efficient trading and provides the facility for the issue and redemption of securities. (Also read: How does the stock market work?)

Those companies which are not listed on the stock exchanges are traded Over the Counter (OTC). These are the smaller, riskier, and less liquid companies. Generally, they do not meet the requirements of getting listed on the stock exchanges and hence trade over the counter.

Two Popular Stock Exchanges in India

Now, let us first discuss the two of the largest stock largest exchanges in India – the Bombay Stock Exchange and the National Stock Exchange.

— Bombay Stock Exchange

Bombay Stock Exchange (BSE) is an Indian stock exchange located at Dalal Street, Mumbai, Maharashtra.

  1. It was established in 1875 and is Asia’s oldest stock exchange.
  2. The BSE is the world’s 11th largest stock exchange with an overall market capitalization of $1.43 Trillion as of March 2016.
  3. More than 5500 companies are publicly listed on the BSE.

— National Stock Exchange

The National Stock Exchange (NSE) is the leading stock exchange of India, located in Mumbai, Maharashtra, India. It was started to end the monopoly of the Bombay Stock Exchange in the Indian market.

  1. NSE was established in 1992 as the first demutualized electronic exchange in the country.
  2. It was the first exchange in the country to provide a modern, fully automated screen-based electronic trading system that offered an easy trading facility to the investors spread across the length and breadth of the country.
  3. NSE has a total market capitalization of more than US$1.41 trillion, making it the world’s 12th-largest stock exchange as of March 2016.
  4. NSE’s index, the NIFTY 50, is used extensively by investors in India and around the world as a barometer of the Indian capital markets.

Quick Read

BSE and NSE – Why are there two Stock Exchanges in India?

National Stock Exchange (NSE) | Stock Exchanges in India

Difference between Stock and Commodities Exchanges

The stock exchange is a place where the piece of ownership in businesses (i.e. stocks) are bought and sold among the traders. On the other hand, a commodity exchange is a market where goods that come from the earth like gold, silver, corn, soybeans, oil, cattle, coffee, pork, etc are traded among the buyers and sellers.

An important difference between both these markets is that commodity exchanges are not just for investment purposes, but also for the business purpose to carry out the operations.

The complete list of Stock Exchanges in India

Here is the list of existing stock exchanges in India as of March 2021.

Sr. No.NameAddressValid Upto
1BSE Ltd.Address: P J Tower, Dalal Street, Mumbai 400023 Website: http://www.bseindia.comPERMANENT
2Calcutta Stock Exchange Ltd.Website: http://www.cse-india.com/PERMANENT
3India International Exchange (India INX)India International Exchange IFSC Limited, 101, First Floor, Hiranandani Signature Tower, GIFT City IFSC Ð 382355, Gujarat, India.Website: http://www.indiainx.com/Dec 28, 2018
4Magadh Stock Exchange Ltd.SEBI vide order dated September 3, 2007 refused to renew the recognition granted to Magadh Stock Exchange Ltd.PERMANENT
5Metropolitan Stock Exchange of India Ltd.Website: http://www.msei.in/index.aspxOct 02, 2019
6National Stock Exchange of India Ltd.Address: Bandra Kurla Complex, Bandra (East) Mumbai 400051 Website: https://www.nseindia.comPERMANENT
7NSE IFSC Ltd.NSE IFSC LIMITED, Unit No. 46 Ð 53, 1st Floor, GIFT Aspire One Business Centre, Block 12, Road 1-D Ð Zone 1, GIFT SEZ, Gandhinagar 382355. Website: https://www.nseifsc.com/May 28, 2019

Quick Note: The following exchanges have been granted exit by SEBI vide orders

  • The Hyderabad Securities and Enterprises Ltd (erstwhile Hyderabad Stock Exchange),
  • Coimbatore Stock Exchange Ltd,
  • Saurashtra Kutch Stock Exchange Ltd,
  • Mangalore Stock Exchange,
  • Inter-Connected Stock Exchange of India Ltd,
  • Cochin Stock Exchange Ltd,
  • Bangalore Stock Exchange Ltd,
  • Ludhiana Stock exchange Ltd,
  • Gauhati Stock Exchange Ltd,
  • Bhubaneswar Stock Exchange Ltd,
  • Jaipur Stock Exchange Ltd,
  • OTC Exchange of India,
  • Pune Stock Exchange Ltd,
  • Madras Stock Exchange Ltd,
  • U.P.Stock Exchange Ltd,
  • Madhya Pradesh Stock Exchange Ltd,
  • Vadodara Stock Exchange Ltd,
  • Delhi Stock Exchange Ltd
  • Ahmedabad Stock Exchange Ltd.

The above exchanges have been granted exit by SEBI vide orders dated January 25, 2013, April 3, 2013, April 5, 2013, March 3, 2014, December 08, 2014, December 23, 2014, December 26, 2014, December 30, 2014, January 27, 2015, February 09, 2015, March 23, 2015, March 31, 2015, April 13, 2015, May 14, 2015, June 09, 2015, November 09, 2015, January 23, 2017, and April 02, 2018, respectively.

(Source: Securities and exchange board of India)

Calcutta stock exchange | Stock Exchanges in India

List of Commodity Derivative Exchanges in India

Here is the list of commodity derivative exchanges in India as of March 2021.

Sr. No.NameAddressValid Upto
1Ace Derivatives and Commodity Exchange LimitedAddress: Rawat-ni-wadi, Nr.Central Bank of India, Gandhi Road, Ahmedabad-380001 Website: http://www.aceindia.com/PERMANENT
2Indian Commodity Exchange LimitedAddress: Reliable Tech Park, 403-A, B-Wing, 4th Floor, Thane-Belapur Road, Airoli (E), Navi Mumbai-400708Website: http://www.icexindia.com/PERMANENT
3Multi Commodity Exchange of India Ltd.Address: Exchange Square, CST No.225, Suren Road, Andheri (E), Mumbai-400093 Website: https://www.mcxindia.com/PERMANENT
4National Commodity & Derivatives Exchange Ltd.Address: Akruti Corporate Park,1st Floor, Near G.E.Garden , L.B.S. Marg, Kanjurmarg(West), Mumbai 400 078 Website: http://www.ncdex.com/PERMANENT
5National Multi Commodity Exchange of India Limited.Address: 5,4th Floor,H.K. House, B/h JivabhaiChambers,Ashram Road, Ahmedabad.-380009 Website: http://www.nmce.comPERMANENT

Note:(#) Pursuant to Section 131 of Finance Act, 2015, and Central Government notification F.No. 1/9/SM/2015 dated 28th August 2015 all recognized associations (Commodity derivatives exchanges) under the Forward Contracts (Regulation) Act, 1952 (FCRA) as of September 28, 2015, are deemed to be recognized stock Exchanges under the Securities Contracts (Regulation) Act, 1956 (SCRA).

(Source: Securities and exchange board of India)

What is Nifty and Sensex? Basics of Stock Market Index!

Closing Thoughts

The stock exchange is a place where buyers meet the sellers to trade securities. Two large and popular stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).

To get listed on the stock exchange, the companies must meet the basic requirements and guidelines. Further, Over the Counter (OTC) is a place where unlisted stocks can be bought or sold.

That’s all for this post. Hopefully, you have liked the article. Do let us know which stock and commodity exchange you use for investments. Happy Investing!

top ev stocks in india -Top Electric Vehicle Manufactures in India - EVs in India cover

Top EV Stocks in India 2021 – Leading Electric Vehicle Companies in India!

List of the Top EV Stocks in India 2021 – Electric Vehicle Manufacturers in India: When it comes to travel new technologies just keep popping up around the world. These alternative technologies in transport are mainly based around electronic vehicles with many companies jumping on the bandwagon to get some traction before the industry gets a radical shift away from traditional fossil fuels.

This change can also be seen as catchup that existing companies are trying to play in the electric vehicle (EV) segment with companies like Tesla and the bars set by them before its too late. Today, we take a look at the electric vehicle segment in India and the top EV stocks in India for investors to watch out for in this segment.

Why Electric and What is the plan ahead?

One of the major reasons why countries are forced into adopting an electric alternative is climate change. India according to Environmental Pollution Index (EPI) 2018 is ranked 178 out of 180 in terms of air quality. One of the strategies adopted to combat this has been the push for electric vehicles[EV]. This will not only improve the environment but also India’s overall economic health. India currently imports crude oil and which sets us back in a deficit of approx $60 billion. 

The aim set by the government has been 100% electrification by 2030. This is a humungous target considering the early stages of adoption that we currently are in. The electric vehicle adoption rate in India is less than 1% according to a McKinsey&Company report. According to Bloomberg, in the six years leading up to October 2019, India has barely sold more than 8000 electric cars. If compared to countries like China these sales figured are achieved in less than 2 days.  

top ev stocks in india 2021- electric vehicles

Some state government realizing their role have tried to eradicate one of the major barriers to owning an EV i.e. the high initial cost. This can be seen in the example of Maharashtra where subsidies were announced amounting to 1 lakh for electric vehicles. Consequently, Maharashtra had the highest sales volume in 2017 in the Indian electric car market. The government has also realized that it is best to target their efforts towards the public transport system in the initial stages.

This is because the purchase of EV in the private sector will depend on major other factors like attractiveness etc. The public transport system being one of the most heavily used in a country like India will definitely offer a huge boost to the sector. 

Top EV Stocks in India – Leading Vehicle Manufacturers

The Indian EV industry being in its nascent stages does not have an established market leader in all vehicle types. There are 10+ major players existing in the 2 wheeler segment, 3-4 in Electric buses, and few in car manufacturing. The following are the top  Electric Vehicle[EV] Manufacturers in India.

1. Mahindra Electric

mahindra electrical EV manufacturer in India

Mahindra is the pioneer for EV in the Indian space. Being the first major EV manufacturer it launched Mahindra Reva, its first EV as early as 2001. The Mahindra Reva was India’s first electric car. Over the years Mahindra has gone ahead to set up a dedicated R&D center in Bengaluru.

Some of its other EV variants include the Mahindra E20 and eVerito. Mahindra however has not only focussed on the manufacture of EV’s but also battery packs and has partnered with various institutions in order to boost EV charging.

2. Tata Motors

Tata Motors Electric Vehicles 

Tata is Indias biggest automobile manufacturer  It automobile segment ranges from the manufacture of cars, utility vehicles, buses, trucks, and defense vehicles. Its associate companies include Jaguar Land Rover and Tata Daewoo. But when it comes to the EV segment Tata is a new entrant when compared to Mahindra.  

In India, Tata Motors has an industrial joint venture with Fiat. One of Tata’s major benefits has been its ability to use resources from around the world.  Tata’s innovation efforts are focused on developing auto technologies that are sustainable as well as suited. With design and R&D centers located in India, the UK, Italy, and Korea. Tata Motors in collaboration with its subsidiary, the UK based Tata Motors European Technical Centre (TMETC), are looking to have a major play in the EVs market in India.

When it comes to EV’s, Tata has focussed on the Passenger Vehicles and Electric Buses market in India. When it comes to four-wheelers Tata offers 3 vehicles to pick from. The Tigor EV, Nano EV, and the Tiago electric variant. In the Electric bus segment, Tata expects its demand from State transport Unions. The expected demand is estimated to be around 400,000 buses in the long run.

Apart from EV’s, Tata has also focussed on setting up charging stations in its efforts to improve the industry infrastructure.

3. Hyundai

Hyndai electric vehicles

Hyundai burst into the Indian EV segment with its launch of the Hyundai Kona EV in India. The South Korean global giant in the world of automobiles has stated that Kona was specifically designed to suit Indian operating conditions. One of the USP’s of the vehicle is its 452km range in one charge. This suited perfectly with Indians ‘Kitna Deti hai’ demand when it comes to vehicles.

Just to put things in perspective the range difference of the Kona and other market leaders is in hundreds of kilometers. The Kona, however, has an Ex-showroom cost of Rs.23.8 lakhs making it extremely expensive for Indian markets. Addressing this Hyundai has however said that another EV is in developmental stages keeping affordability in mind in order to serve the mass market. This EV is expected to be ready to enter the market in the next 2-3 years.

4. Ashok Leyland

Ashok leyland electric vehicles

Ashok Leyland,  the Hinduja Group’s flagship company, is the 4th largest bus manufacturer in the world and a market leader for trucks in India. The company has tied up with Sun Mobility in order to enhance its expertise in the vehicle domain.

Ashok Leyland designs electric variants specifically for Indian conditions and has also introduced battery swapping in electric buses to address e-mobility needs in the country. It has launched multiple electric bus variants like the Circuit, HYBUS,  Electric Euro 6 Truck, and announced the iBUS. The immediate focus of the company, however, is currently in giving more thrusts to exports.  

Top EV Stocks in India – Associated Industries & Stocks

The Indian EV market being in its nascent stages is viewed as an opportunity waiting to be exploited. Other players that also have products in the EV market include MG Motors, Maruti Suzuki, Renault, Audi, Volvo, Hero, Ather, etc. An expansion in the EV industry will also see other associated industries catch on too. This includes the battery and EV chargers. Interests have been shown by many companies like Siemens, Schneider, Delta, etc.

But unfortunately, these companies will only move in once a significant demand arises in the public 4 wheeler segment. On the other hand, one of the major factors for the EV industry not expanding has been consumer concerns regarding the lack of Fast Chargers in India. 

Unorganized and small players are dominating due to the limited scale of business. In order to combat this, the NITI Ayog is laying a key role in setting up EV chargers. There are currently 270 units of installed EV chargers in India. NITI Aayog has partnered with NTPC in order to set up 100,000 EV charging stations across India. Other government entities like BHEL have partnered with ISRO in order to develop batteries using Lithium technologies.

Most lithium requirements are currently imported from China, South Korea, Vietnam, Singapore, and Japan. Other players who have shown interest in the Lithium battery production business in India include Reliance, Suzuki, Toshiba, Denso Corp, JSW Group, Adani, Mahindra, Hero Electric, Panasonic, Exide Batteries, Amara Raja. 

List of Top EV Stocks in India for Investors

S NoCOMPANYMarketcap (Rs Cr)INDUSTRY
1Amara Raja Batteries Ltd.14862.4 CrBatteries
2Exide Industries Ltd.15907.75 CrBatteries
3Hero MotoCorp Ltd.62319.44 CrAutomobile Two & Three Wheelers
4Himadri Speciality Chemical Ltd.1782.03 CrChemicals
5Vedanta Ltd.82577.47 CrMetal - Non Ferrous
6Hindalco Industries Ltd.75297.62 CrMetal - Non Ferrous
7Ashok Leyland Ltd.34140.18 CrAutomobiles-Trucks/Lcv
8Mahindra & Mahindra Ltd.105683.8 CrAutomobiles - Passenger Cars
9Tata Motors Ltd.102580.91 CrAutomobiles-Trucks/Lcv
10Tata Chemicals Ltd.19155.12 CrChemicals
11Greaves Cotton Ltd.3038.06 CrDiesel Engines
12Graphite India Ltd.9904.57 CrElectrodes & Welding Equipment
13Hindustan Copper Ltd.11639.24 CrMetal - Non Ferrous
14Maruti Suzuki India Ltd.214837.83 CrAutomobiles - Passenger Cars
15JBM Auto Ltd.2041.18 CrAuto Ancillary

Closing Thoughts

In this article, we discussed the list of the top EV stocks in India along with leading Electric Vehicle Manufacturers, their current work in EV segment, and future prospects. The Indian government had set up the aim of replacing all internal combustion engines with EV’s by 2030. A report from Mckinsey and Company from 2017 indicated that 40% of electrification was a more realistic picture of mobility in 2030. This report, however, was prior to the Pandemic. This, in turn, will further set back electrification in the industry for years to come.

In addition, the steps taken in order to enable acceptance of EV will not suit their main purpose if alternative means of electricity production are not implemented. Currently, up to 60% of the electricity is produced from coal. Although the government has set major aims to bolster the growth of EVs a lot more has to be done in order to ensure they are implemented. 

Debenture Explained What is Debenture Definition, Meaning, Types & more cover

Debenture Explained: What is Debenture? Definition, Types & more!

Understanding what is Debenture: Investors are always on the lookout for financial instruments to enhance their portfolios. One such instrument is Debentures. In this article, we will answer the questions like – what is debenture, what kind of investments they are, and how they work. Let’s get started.

What is Debenture?

Man holding money | What is a debenture

Debentures are debt instruments used by corporations to secure long-term debt. These instruments pay an interest rate (coupon rate) to the investors. At the same time, they exist for a limited period post which the capital is redeemed or repaid to the investors (debenture holders).

Corporations prefer to issue debentures as their features can be adjusted to the requirements of the company. For eg., they generally have a lower interest rate and longer repayment periods in comparison to traditional loans. 

The interest paid to debenture holders is paid out of the profits made by the company. Debenture holders are given priority over the shareholders for the interest payment. The interest due to debenture holders is paid to the debenture holders first from the profits and the remaining may be utilized for dividends etc. Also in the case of liquidation of a company,  debentures have priority over preferential and equity shares.   

These securities do not have any collateral, hence are unsecured. As debentures are unsecured investors buy these securities based on the creditworthiness, financials, reputation, and faith an investor has in the entity issuing it. 

However, it is also important to note that the word Debenture may have different meanings in different parts of the world. What we have seen so far represents debentures in India and countries like the US. In the UK however, debentures are unsecured. They represent documents that grant the lenders a charge over the asset. This gives the lenders a means of collecting their money back in the case of a default.

Components to look before investing in a Debenture

Debentures have 3 basic components and they should be looked into carefully before investing in:

1. Credit Worthiness

Credit rating agencies | Debentures

Since debentures are unsecured instruments it is very important to find out whether the company issuing them will actually be able to repay the debt. One must carefully look into the financials and the track record of the company before investing in them.

Investors can also make use of the credit ratings of the company. These are provided by credit rating agencies like Standard and Poor’s, Moody’s, and Fitch Ratings. Ratings are given to the companies based on a scale set by these agencies based on the creditworthiness of the borrower. Companies receiving the excellent rating are good investment option over companies receiving rating lower on the scale

2. Coupon Rate

Another important factor is what returns will the debenture be providing to investors. The coupon rate represents the yield or payment made by fixed income securities on their face or par value. This rate is either fixed or floating i.e. it can be fixed or constant at one rate or set as floating which changes.   

3. Maturity Date

The date of maturity is very important when it comes to debentures. It represents the date on or before which the company must pay back the debenture holders. The company may pay back the capital amount raised by debentures on this date which is generally the case. Or the company may pay a specific amount each year until the date of maturity.

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Risks Associated with a Debenture

As with every financial instrument, there are also few risks involved with debentures. Since debentures are unsecured they carry the risk of default. Debentures also carry interest rate risks.

Further, as debentures are issued over long periods debenture holders might find themselves receiving lesser returns from debentures over time in comparison to other investment options. It is also possible that the interest rate provided may be overtaken by the inflation rate.  

What are the types of debentures?

Debentures can be classified into 2 categories based on their convertibility

1. Convertible Debentures

Convertible Debentures are those which can convert into equity shares of the issuing corporation after a specific period. Here the debenture holders have the option to either hold the debentures until maturity and receive the interest payments on them. Or they can convert the debentures into equity shares.

2. Non-convertible Debentures

Non-convertible debentures (NCD) or traditional debentures are those which cannot be converted into shares or equities. NCD interest rates depend on the company issuing the NCD.

What is the difference between Debenture and bond?

A debenture is an unsecured type of debt issued by a company. They are issued simply based on the creditworthiness of the company.

A bond similar to a debenture is meant for companies and countries to raise capital providing interest in return. Bonds however are secured and backed by a specific asset of the issuer.  

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What are Bonds? And How to Invest in them in India?

Closing Thoughts

In this article, we explained what is debenture. In a nutshell, debentures are an important source of funds for companies. In addition to this, they also have become exceptional instruments used to balance the portfolios of investors.

One however must invest in debentures only after careful evaluation of the creditworthiness of the company and other aspects like coupon rate, expiry date, etc. Hopefully, we were able to answer – what is Debentures. Happy Investing!

SGX Nifty meaning what is it

SGX Nifty Explained – How it affects Indian Share Market?

Understanding SXG Nifty meaning & its impact on Indian share market: If you are an active stock market trader in India, I’m sure that you would have definitely have heard of the term ‘SGX Nifty’. If you open any business news channel, then before the opening of the Indian equity market, all you will see is an hour-long discussion on the SGX Nifty and its implications on the opening of the Nifty for that day.

The importance of understanding this terminology can be seen from the fact that it is one of the most popular hashtags followed or searched over different social media platforms like Twitter, if one wants to have a better picture of the Indian Equity market. In this post, we are going to discuss what exactly is SGX nifty and how it affects Indian share market.

What is SGX Nifty?

The word SGX is an acronym for the Singapore Stock Exchange. Further, Nifty is the benchmark index of the National Stock Exchange (NSE) of India and it is comprised of the top 50 companies listed on NSE. Overall, if we were to add these two constituents, we can say that SGX Nifty is the Indian Nifty trading on the Singapore Stock Exchange. It is an actively traded futures contract on Singapore Exchange.

sgx nifty price chart

(Source: Sgx.com)

Who is allowed to trade SGX Nifty?

Any investor who is interested in trading Nifty, but is not able to access Indian Markets, finds trading SGX Nifty a very good alternative to trade. Even the big hedge funds who have big exposure in the Indian market find SGX Nifty as a good alternative to hedge their positions.

Further, an Indian citizen is not allowed to trade SGX Nifty contracts. For that matter, Indian citizens are not allowed to trade derivatives in any other country.

Difference between Nifty and SGX Nifty?

1. SGX nifty is Nifty futures contract trading in Singapore Stock Exchange and in India, Nifty contract trades on NSE.

2. The contract size of SGX Nifty is different compared to Nifty. In India, we have 75 shares in every Nifty contract Lot whereas the SGX nifty does not have a contract with shares in it. SGX Nifty is denominated in terms of US dollars. Say, if Nifty is trading at 9500, then the contract size of SGX Nifty will be 9500*(2 USD) i.e., 19000 USD.

For example, if the Nifty moves up by 100 points for the day, then make a profit of 100 rupees per share.  Therefore, total profit in case of Nifty will be 100*75 = Rs 7,500. But in the case of SGX Nifty, we will be making a profit of 100*2 = 200 USD per contract.

3. Now, In India, in the case of Nifty, we see Open Interest as the ‘number of shares’ outstanding. But in the case of SGX Nifty the Open Interest shows the ‘number of contracts’ outstanding. Both Nifty and SGX Nifty are highly liquid and a very high volume of trading happens in that.

Also read: What is India VIX? Meaning, Range, Implications & More!

Trading Hours of SGX Nifty

SGX Nifty Futures

(Source: SGX Nifty)

The above figure is the value of SGX Nifty from the website on the Singapore Stock Exchange. It shows the value of SGX Nifty futures traded on SGX. In Singapore Nifty trades in two tranches. One part during the day time and it is denoted by ‘T’ (as seen in the picture above). The other half during the evening time and it is denoted by ‘T+1’. The trades happening in the evening will be considered in the next day settlement prices.

SGX Nifty Trading Timings

(Source: SGX Nifty)

Now, the above picture gives you details about the trading hours of SGX Nifty. The Trading hours mentioned here are Singapore time and the difference between Indian Standard Time and Singapore time is 2 hr 30 minutes. Therefore, we can see that in the Morning (T) session, it trades from 9 am to 6:10 pm Singapore Standard time.

So, in Indian Standard time, the trading happens at SG Nifty from 6:30 AM to 3:40 PM. And the Evening (T+1) session, it trades from 6:40 pm to 5:15 am Singapore Standard Time, which if converted to Indian Standard time will have timings of 4.10 pm to 2:45 am.

Contract Settlements in SGX Nifty

SGX Nifty has two serial monthly contracts and it has Quarterly contracts. The contract expires on the last Thursday of Every expiring month and if the last Thursday is an Indian holiday, then it expires the preceding business day. The SGX Nifty contracts are cash-settled and the final settlement price is derived from the official closing of S&P CNX Nifty.

How SGX Nifty Impacts Indian Equity Market?

Looking at the current global scenario, with the continuous onslaught of COVID-19 pandemic or the rising tensions between US-China over trade deal, we see a continuous inflow of information and news. And these inflow of information has a direct impact on the Global Financial markets.

SGX Nifty still trading way after the closure of the Indian Nifty market, we see an impact of these global news on the SGX Nifty price movement. This further directly impacts the opening pricing of Nifty, the very next day. And that is one of the reasons we see the Indian Nifty market opening at a premium or discount over the previous day’s close.

Note: Many analysts use SGX Nifty as one of the factors to predict whether the Indian stock market will open higher or lower on a trading session.

Closing Thoughts

In this post, we explained what is SGX Nifty and its impact on Indian share market. The SGX Nifty is a perfect substitute for investors and traders looking to trade in the Indian equity market but are not able to do so. It is a perfect hedging instrument if you are already exposed to the Indian equity market.

One unique advantage that SGX Nifty has longer trading hours compared to the Indian Equity market. And all these points make it a lucrative investment and trading avenue.