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Short Selling Explained – What is Short Selling in Stock Market?

Understand What is Short Selling & Its Implications: The terminology ‘Short Selling’ is frequently used in the capital market. It has also been a lot more talked-about on news in recent days because of the SEBI vs Mukesh Ambani Case. SEBI has imposed a penalty of Rs 25 Cr on Reliance Industries and Rs 15 Cr on Mukesh Ambani for manipulating the settlement price of Reliance Petroleum Ltd on 29th November 2007, by shorting nearly 2.7 crore shares, 10 minutes before the closing of the day. This led to a sharp decline in the share price of RPL and investors losing money in the market.

In this article, we are going to discuss exactly what is Short Selling, how market participants make money by short selling, its pros, cons, and more. Let’s get started.

What is Short Selling?

As the name might suggest, Short Selling must have got to do something with the selling of underlying security. In the stock market parlance, short selling would simply mean the selling of shares of the company before buying them i.e. selling shares of the company without having their ownership. Retail and Institutional investors are permitted to short sell.

In other words, the investors or traders are selling equity shares that are not owned by them (i.e. not available in demat account) lent by their brokers with a promise that they will be delivered back to the broker at the time of settlement.

As traders are selling before buying, the short selling concept is entirely opposite of regular investing (where we first buy and sell). And hence, Short sellers make money when they buy back the stock at a lower price. The difference in the selling price and the buying price is the profit for the short-sellers.

Short Selling Explained

Let us try and understand the concept of short selling with the help of a case-based scenario. Say, Mr. X is a regular trader in the market and he has got a bearish (pessimistic) stance on the share price of State Bank of India (SBI), and his view is supported by the following factors:

There is a bearish candle formation in the market (say, Bearish Marubuzo).
The high of the previous day is intact and the market is trading below it.
There is a significant increase in the selling activity in the market as compared to previous days.
And there are other news-driven factors that could have a negative impact on the share price of SBI.

Owing to the reasons mentioned above, Mr. X believes that the price of SBI may fall. He is expecting the immediate support levels to be tested in the market (4% below the current price levels). Therefore, to take advantage of this expected bearishness in the market, Mr. X decides to short the shares of SBI. Let us understand this trade:

Share or Stock	State Bank of India
Type of trade	Shorting or Short Selling
Duration	Intraday
Shorting price	Rs. 300
Quantity of Shares	500
Profit Target (4%)	Rs. 288
Stop Loss	Rs. 305
Total Risk in the trade (500*5)	Rs. 2500
Total Reward in the Trade (500*12)	Rs. 6000
Risk – Reward Ratio (2500:6000)	5:12

If the share price of SBI falls in accordance with the views of Mr. X, then he stands to make a gain of Rs. 6,000 on his trade. On the other hand, if the market goes against his views, he loses Rs. 2500 on his trade.

Why do Traders Short Sell in the Market?

Here are a few of the key reasons for traders to Short sell stocks in the market:

— To Speculate: This is one of the primary reasons why does one takes a short position in the market. If one is of the view that the strength in the market is about the fizzle out and we could see some correction or weakness in the market, they will short sell.

— To Hedge: Hedging as a strategy is of prominence in the capital market. If one is having a bullish view on the market over the long term but is expecting a small correction in the market on its way up, they might short sell. Here, traders short sell to play that short-term weakness in the market, one takes a short position in the market.

— To improve the entry point: This is one interesting rationale behind short selling used by experienced traders. Say, if Mr. A is willing to buy 1,000 shares of ICICI bank at Rs. 250. The current share price of ICICI Bank is Rs. 270. Now, he ends up buying the shares of ICICI Bank at Rs. 270 each. Now to improve the entry point for shares of ICICI Bank, Mr. A shorts (sells) the shares of ICICI bank whenever he sees weakness in the market and books a small amount of profit and improves the entry point of the initial purchase of ICIC bank shares.

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How to do Intraday Trading for Beginners In India?

Rules Regarding Short-Selling in Stocks

Shorting in the cash market comes with its own set of rules and regulations. It has to be strictly done on an intraday basis i.e. the position cannot be carried over to the next day. Therefore, whenever we sell before buying in the spot market, the position has to be bought back before the end of the day.

The short position cannot be carried over to the next day. Nevertheless, position carrying is permitted in the F&O market and to facilitate this, the exchange already keep margins in the Demat or trading account to account for Mark to Market (M2M) losses.

Advantages of Short Selling

Despite being a subject of controversy, short selling is a very important phenomenon to maintain balance in the capital market. The following are some of the advantages of short selling:

Short selling helps in correcting the irrational overpricing of the stocks
It provides liquidity in the capital market.
Short selling prevents the sudden rise in the price of the stocks which are fundamentally weak/

Drawbacks of short selling

Here are a few major drawbacks of short selling in the stock market

Short sellers might be exposed to higher risks compared to regular buying and selling.
Manipulators often use Short selling as a method to hurt the price of certain stocks which has a direct bearing on the market sentiment.
It can sometimes also be used to benefit the counter position taken in the F&O market.

Closing Thoughts

In this article, we discussed what is Short selling along with its advantages and disadvantages. Short selling simply means selling shares of the company that one does not own. By doing so one is exposed to higher risks in the market but it has the potential of earning high returns. In recent COVID-19 pandemic times, the ability and the understanding of the concept of short selling went a long way in earning handsome returns for the traders and investors.

That’s all for today’s Market Forensics. We hope it was useful for you. We’ll be back tomorrow with another interesting market news and analysis. Till then, Take care and Happy investing!

Hitesh Singhi

Hitesh Singhi is an active derivative trader with over +10 years of experience of trading in Futures and Options in Indian Equity market and International energy products like Brent Crude, WTI Crude, RBOB, Gasoline etc. He has traded on BSE, NSE, ICE Exchange & NYMEX Exchange. By qualification, Hitesh has a graduate degree in Business Management and an MBA in Finance. Connect with Hitesh over Twitter here!

www.linkedin.com/in/hitesh-singhi-46564a11/

April 7, 2021 Hitesh Singhi Market No comments yet

What is Free Float Market Capitalization? MCap Methodology Explained!

FREE Float Market Capitalization: As a novice investor have you ever come across terms like Market Cap (MCpap) or the free float factor. In this article, we cover what is Market cap, how the MCap is computed, What is free-float market capitalization, and why it is necessary. Keep reading to find out.

What is Market Cap or MCap?

Market Capitalisation (Mcap) gives investors the public perception of what a company is worth and is also used to further classify companies. It is calculated by multiplying all the company’s shares by the price of each stock in the market. Doing this gives us the total value of all the shares being traded in the market.

This figure gives investors an idea as to what the company is worth including its future prospects and what other investors are willing to pay for it in the present. Based on the MCap companies are further classified into –

Large-cap companies – Rs 28,500 crore or more.
Mid-cap companies – above Rs 8,500 crore but less than Rs 28,500 crore.
Small-cap companies – less than Rs 8,500 crore

There are multiple ways to measure the market capitalization of a company. The two of the most commonly used methods are the total market capitalization method and free-float market capitalization. You can use TradeBrains’ portal to see the market capitalization of all the major Indian companies.

Let us have a look at how MCap is calculated in each of these methods along with examples.

Free Float Market Capitalization Method

The shares can be further classified based on their ownership. Say shares may be held by retail investors or institutional investors, promoters, government, etc. What Free-float MCap does is it only includes shares that are readily available for trading in the secondary market.

Certain shares like those held by promoters are not freely traded in the market. The aim of this method is to distinguish between shares held for strategic control and others who invest based on the stock price.

According to the BSE, the following shares are to be excluded when computing MCap under free float:

Shares held by founders/directors/acquirers which have a control element
Shares held by persons/ bodies with “Controlling Interest”
The Shares held by the Government(s) as promoters/acquirers
Holdings through the FDI route
Strategic stakes by private corporate bodies/ individuals
Equity held by associate/group companies (cross-holdings)
Equity held by Employee Welfare Trusts
Locked-in shares and shares which would not be sold in the open market in the normal course

Therefore Free Float Mcap = (OUTSTANDING SHARES – Restricted Shares) * Price of shares in the market

For eg. ABC Ltd. has a total of 100,000 outstanding shares. Out of these 30,000 are held by the promoters. Apart from this, no other shares are restricted i.e. 70,000 shares are available to be freely traded in the market. If the shares are traded in the market at Rs. 50 it would mean that the MCap for the company under Free Float is Rs. 35,00,000. ( Rs. 50 * 70,000 shares)

Full Market Capitalization Method

Now let us understand the full market capitalization method which will help us better understand the difference between the two.

Under this method, the capitalization is computed using the total number of shares which include both the publicly available and the shares that are privately available. So under this method, the MCap of ABC Ltd. will be Rs. 50,00,000 ( Rs. 50 *100,000 shares).

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What is the Free Float Factor and How is calculated?

The free float factor gives us an idea of how many shares are freely available for trading in comparison to those total which also includes the privately held shares in the company. This gives traders and investors an idea of the number of shares that are available for trading.

Take once again the example of ABC ltd. the free float factor for the company will be 0.70. We arrive at this by dividing the shares available for trading to the public by the total shares outstanding i.e. 70,000 shares/ 100,000 shares.

Why is Free Float MCap preferred over Total MCap?

The Free Float Market Capitalization is preferred mainly because it presents a valuation that shows the total number of shares that actually affect traders and investors who are participating in the market. Rather than include shares that are privately owned and cannot be accessed by anyone.

In addition, these restricted shares don’t play a role among the demand and supply factors for setting the price in the market. This allows the free float MCap to represent the sentiments of the market more accurately. This would not be possible in the case of Total MCap where a promoter or government holding a majority can have any influence.

Free Float is considered the best method globally in all stock exchanges. In India, both the NSE and the BSE use free float for their indexes i.e. Nifty and Sensex.

Does the Free Float Market Capitalization Matter?

The Free Float Market Capitalization allows investors to differentiate companies with the smaller free-float size and those with medium and large. It is important to note that the free float MCap is inversely proportional to the volatility of the shares in the market.

Companies with a lower free float factor would mean that it is easier for traders to influence the price. Companies having a higher free float factor would show a more stable stock as it is harder for a few large trades to influence the price.

The free float factor helps investors weed out the stocks to include only those that help meet their goals. Some investors may only prefer stocks with a large free float factor as they represent less volatile stocks.

Closing Thoughts

The MCap and the free float factor are important criteria to look at while investing. In addition to this, they also have become exceptional instruments to ensure balance in investors’ portfolios and to weed out stocks. One must however carefully evaluate these factors before investing in a company.

Let us know your views about the post in the comments section below. If you are looking for a beginner’s guide on how to invest in the share market in India, you should check the article on our website. Happy Investing!

Aron Almeida

Aron, Bachelors in Commerce from Mangalore University, entered the world of Equity research to explore his interests in financial markets. Outside of work, you can catch him binging on a show, supporting RCB, and dreaming of visiting Kasol soon. He also believes that eating kid’s ice-cream is the best way to teach them taxes.

April 6, 2021 Aron Almeida Beginner's guide, Investment Basics, Market No comments yet

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’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.

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

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!

Aron Almeida

March 31, 2021 Aron Almeida Case Study, Market, News No comments yet

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.

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) 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 & 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 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 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 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 Communications – US$4.6 billion

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

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 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!

Aron Almeida

March 30, 2021 Aron Almeida Case Study, Market, News No comments yet

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?

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:

(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-

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.
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.
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.
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:

Company	Industry	Market Cap (Rs Cr)	Current Price (Cr)
MRF Ltd.	Tyres & Allied	35528.29	83770.55
Honeywell Automation India Ltd.	Consumer Durables - Electronics	39314.58	44465.85
Rasoi Ltd.	Consumer Food	303.2	31387.65
Page Industries Ltd.	Textile	33131.19	29703.75
3M India Ltd.	Diversified	30843.25	27379.55
Shree Cement Ltd.	Cement & Construction Materials	97260.35	26956.3
Nestle India Ltd.	Consumer Food	159994.65	16594.25
Abbott India Ltd.	Pharmaceuticals & Drugs	31139.58	14654.4
Bosch Ltd.	Auto Ancillary	42343.13	14356.7
The Yamuna Syndicate Ltd.	Trading	433.35	14099
Tasty Bite Eatables Ltd.	Consumer Food	3559.82	13873.05
Procter & Gamble Hygiene & Health Care Ltd.	Household & Personal Products	42288.06	13027.45
Bombay Oxygen Investments Ltd.	Industrial Gases & Fuels	153.74	10249
Bharat Rasayan Ltd.	Pesticides & Agrochemicals	4082.51	9608.75
Bajaj Finserv Ltd.	Finance - Investment	149727.65	9408.7
Polson Ltd.	Chemicals	106.63	8885.9
Paushak Ltd.	Chemicals	2479.92	8046.15
Indiamart Intermesh Ltd.	e-Commerce	24265.63	7991.65
Sanofi India Ltd.	Pharmaceuticals & Drugs	17683.37	7678.2
TTK Prestige Ltd.	Consumer Durables - Domestic Appliances	10043.82	7231.65
Maruti Suzuki India Ltd.	Automobiles - Passenger Cars	214573.51	7103.2
Lakshmi Machine Works Ltd.	Textile - Machinery	7439.48	6963.85
Atul Ltd.	Chemicals	20425.57	6903.55
Ultratech Cement Ltd.	Cement & Construction Materials	194197.97	6728
Procter & Gamble Health Ltd.	Pharmaceuticals & Drugs	10543.51	6351.75
Wabco India Ltd.	Auto Ancillary	11639.55	6136.55
Kama Holdings Ltd.	Plastic Products	3556.68	5512
Hawkins Cookers Ltd.	Consumer Durables - Domestic Appliances	2912	5507
Gillette India Ltd.	Household & Personal Products	17895.31	5491.85
Bajaj Finance Ltd.	Finance - NBFC	324743.36	5389.15
Alkyl Amines Chemicals Ltd.	Chemicals	10885.79	5332.85
Schaeffler India Ltd.	Bearings	16580.54	5303.95
Affle (India) Ltd.	Telecommunication - Equipment	13510.52	5299
SRF Ltd.	Diversified	31296.58	5282.55
Blue Dart Express Ltd.	Courier Services	12436.88	5241.45
Bayer CropScience Ltd.	Pesticides & Agrochemicals	22897.55	5094.9

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?

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.

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!

Kritesh Abhishek

Hi, I am Kritesh (Tweet me here), an NSE Certified Equity Fundamental Analyst and an electrical engineer (NIT Warangal) by qualification. I have a passion for stocks and have spent my last 4+ years learning, investing and educating people about stock market investing. And so, I am delighted to share my learnings with you. #HappyInvesting

www.linkedin.com/in/kriteshrules/

March 23, 2021 Kritesh Abhishek Market, Stocks 3 comments

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:

The 30 companies are selected on the basis of the free-float market capitalization.
The base year of Sensex is 1978-79 and the base value is 100. Currently, BSE is hovering at 50,000 points.
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.

	Name	Industry	Weight
1.	Reliance Industries Ltd.	Integrated Oil & Gas	11.99%
2.	HDFC Bank Ltd.	Banks	11.84%
3.	Infosys Ltd.	IT Consulting & Software	9.06%
4.	Housing Development Finance Corporation Ltd.	Housing Finance	8.30%
5.	ICICI Bank Ltd.	Banks	7.37%
6.	Tata Consultancy Services Ltd.	IT Consulting & Software	5.76%
7.	Kotak Mahindra Bank Ltd.	Banks	4.88%
8.	Hindustan Unilever Ltd.	Personal Products	3.75%
9.	ITC Ltd.	Cigarettes,Tobacco Products	3.49%
10.	AXIS Bank Ltd.	Banks	3.35%
11.	Larsen & Toubro Ltd.	Construction & Engineering	3.13%
12.	Bajaj Finance Ltd.	Finance (including NBFCs)	2.63%
13.	State Bank of India	Banks	2.59%
14.	Bharti Airtel Ltd.	Telecom Services	2.31%
15.	Asian Paints Ltd.	Furniture,Furnishing,Paints	1.97%
16.	HCL Technologies Ltd.	IT Consulting & Software	1.89%
17.	Maruti Suzuki India Ltd.	Cars & Utility Vehicles	1.72%
18.	Mahindra & Mahindra Ltd.	Cars & Utility Vehicles	1.48%
19.	UltraTech Cement Ltd.	Cement & Cement Products	1.40%
20.	Sun Pharmaceutical Industries Ltd.	Pharmaceuticals	1.16%
21.	Tech Mahindra Ltd.	IT Consulting & Software	1.11%
22.	Titan Company Ltd.	Other Apparels & Accessories	1.11%
23.	Nestle India Ltd.	Nestle India Ltd.	1.07%
24.	Bajaj Finserv	Finance (including NBFCs)	1.04%
25.	IndusInd Bank Ltd.	Banks	1.03%
26.	POWERGRID	Electric Utilities	1.03%
27.	Tata Steel Ltd.	Iron & Steel/Interm.Products	1.01%
28.	NTPC Ltd.	Electric Utilities	0.94%
28.	Bajaj Auto Ltd.	2/3 Wheelers	0.86%
30.	Oil & Natural Gas Corporation Ltd.	Exploration & Production	0.73%

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.

Kritesh Abhishek

www.linkedin.com/in/kriteshrules/

March 23, 2021 Kritesh Abhishek Market, Stocks No comments yet

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!

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.

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 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

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

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

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 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 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 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

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 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

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!

Aron Almeida

March 23, 2021 Aron Almeida Beginner's guide, Investment Basics, Market, News, Stocks No comments yet

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:

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

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

	Name	Industry	Weight
1.	Reliance Industries Ltd.	Energy - Oil & Gas	10.77%
2.	HDFC Bank Ltd.	Banking	10.66%
3.	Infosys Ltd.	Information Technology	7.42%
4.	Housing Development Finance Corporation Ltd.	Financial Services	7.29%
5.	ICICI Bank Ltd.	Banking	6.59%
6.	Tata Consultancy Services Ltd.	Information Technology	4.86%
7.	Kotak Mahindra Bank Ltd.	Banking	4.16%
8.	Hindustan Unilever Ltd.	Consumer Goods	3.04%
9.	AXIS Bank Ltd.	Banking	2.87%
10	ITC Ltd.	Consumer Goods	2.84%
11.	Larsen & Toubro Ltd.	Construction	2.78%
12.	State Bank of India	Banking	2.39%
13.	Bajaj Finance Ltd.	Financial Services	2.23%
14.	Bharti Airtel Ltd.	Telecommunication	2.13%
15.	Asian Paints Ltd.	Consumer Goods	1.64%
16.	HCL Technologies Ltd.	Information Technology	1.58%
17.	Maruti Suzuki India Ltd.	Automobile	1.46%
18.	Mahindra & Mahindra Ltd.	Automobile	1.23%
19.	UltraTech Cement Ltd.	Cement	1.13%
20.	Sun Pharmaceutical Industries Ltd.	Pharmaceuticals	1.03%
21.	Wipro Ltd.	Information Technology	0.97%
22.	IndusInd Bank Ltd.	Banking	0.96%
23.	Titan Company Ltd.	Consumer Goods	0.94%
24	Bajaj Finserv Ltd.	Financial Services	0.93%
25.	Nestle India Ltd.	Consumer Goods	0.92%
26.	Tata Motors Ltd.	Automobile	0.92%
27.	Tech Mahindra Ltd.	Information Technology	0.91%
28.	HDFC Life Insurance Co. Ltd.	Insurance	0.88%
29.	Power Grid Corporation of India Ltd.	Energy - Power	0.88%
30.	Dr. Reddy’s Laboratories Ltd.	Pharmaceuticals	0.86%
31.	Tata Steel Ltd.	Metals	0.86%
32.	NTPC Ltd.	Energy - Power	0.83%
33.	Bajaj Auto Ltd.	Automobile	0.79%
34.	Adani Port and Special Economic Zone	Infrastructure	0.79%
35.	Hindalco Industries Ltd.	Metals	0.79%
36.	Grasim Industries Ltd.	Cement	0.74%
37.	Divi’s Laboratories Ltd.	Pharmaceuticals	0.68%
38.	Hero MotoCorp Ltd.	Automobile	0.67%
39.	Oil & Natural Gas Corporation Ltd.	Energy - Oil & Gas	0.65%
40.	Cipla Ltd.	Pharmaceuticals	0.64%
41.	Britannia Industries Ltd.	Consumer Goods	0.63%
42.	JSW Steel Ltd.	Metals	0.61%
43.	Bharat Petroleum Corp. Ltd.	Energy - Oil & Gas	0.58%
44.	Eicher Motors Ltd.	Automobile	0.56%
45.	Shree Cement Ltd.	Cement	0.56%
46.	SBI Life Insurance Co.	Insurance	0.54%
47.	Coal India Ltd.	Energy & Mining	0.51%
48.	UPL Ltd.	Chemicals	0.49%
49.	GAIL (India) Ltd.	Energy - Oil & Gas	0.42%
50.	Indian Oil Corporation Ltd.	Energy - Oil & Gas	0.40%

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:

The 30 companies are selected on the basis of the free-float market capitalization.
These are different companies from different sectors representing a sample of large, liquid, and representative companies.
The base year of Sensex is 1978-79 and the base value is 100.
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

	Name	Industry	Weight
1.	Reliance Industries Ltd.	Integrated Oil & Gas	11.99%
2.	HDFC Bank Ltd.	Banks	11.84%
3.	Infosys Ltd.	IT Consulting & Software	9.06%
4.	Housing Development Finance Corporation Ltd.	Housing Finance	8.30%
5.	ICICI Bank Ltd.	Banks	7.37%
6.	Tata Consultancy Services Ltd.	IT Consulting & Software	5.76%
7.	Kotak Mahindra Bank Ltd.	Banks	4.88%
8.	Hindustan Unilever Ltd.	Personal Products	3.75%
9.	ITC Ltd.	Cigarettes,Tobacco Products	3.49%
10.	AXIS Bank Ltd.	Banks	3.35%
11.	Larsen & Toubro Ltd.	Construction & Engineering	3.13%
12.	Bajaj Finance Ltd.	Finance (including NBFCs)	2.63%
13.	State Bank of India	Banks	2.59%
14.	Bharti Airtel Ltd.	Telecom Services	2.31%
15.	Asian Paints Ltd.	Furniture,Furnishing,Paints	1.97%
16.	HCL Technologies Ltd.	IT Consulting & Software	1.89%
17.	Maruti Suzuki India Ltd.	Cars & Utility Vehicles	1.72%
18.	Mahindra & Mahindra Ltd.	Cars & Utility Vehicles	1.48%
19.	UltraTech Cement Ltd.	Cement & Cement Products	1.40%
20.	Sun Pharmaceutical Industries Ltd.	Pharmaceuticals	1.16%
21.	Tech Mahindra Ltd.	IT Consulting & Software	1.11%
22.	Titan Company Ltd.	Other Apparels & Accessories	1.11%
23.	Nestle India Ltd.	Nestle India Ltd.	1.07%
24.	Bajaj Finserv	Finance (including NBFCs)	1.04%
25.	IndusInd Bank Ltd.	Banks	1.03%
26.	POWERGRID	Electric Utilities	1.03%
27.	Tata Steel Ltd.	Iron & Steel/Interm.Products	1.01%
28.	NTPC Ltd.	Electric Utilities	0.94%
28.	Bajaj Auto Ltd.	2/3 Wheelers	0.86%
30.	Oil & Natural Gas Corporation Ltd.	Exploration & Production	0.73%

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.

Aron Almeida

March 21, 2021 Aron Almeida Market, News 10 comments

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.

It was established in 1875 and is Asia’s oldest stock exchange.
The BSE is the world’s 11th largest stock exchange with an overall market capitalization of $1.43 Trillion as of March 2016.
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.

NSE was established in 1992 as the first demutualized electronic exchange in the country.
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.
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.
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?

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.	Name	Address	Valid Upto
1	BSE Ltd.	Address: P J Tower, Dalal Street, Mumbai 400023 Website: http://www.bseindia.com	PERMANENT
2	Calcutta Stock Exchange Ltd.	Website: http://www.cse-india.com/	PERMANENT
3	India 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
4	Magadh Stock Exchange Ltd.	SEBI vide order dated September 3, 2007 refused to renew the recognition granted to Magadh Stock Exchange Ltd.	PERMANENT
5	Metropolitan Stock Exchange of India Ltd.	Website: http://www.msei.in/index.aspx	Oct 02, 2019
6	National Stock Exchange of India Ltd.	Address: Bandra Kurla Complex, Bandra (East) Mumbai 400051 Website: https://www.nseindia.com	PERMANENT
7	NSE 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)

List of Commodity Derivative Exchanges in India

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

Sr. No.	Name	Address	Valid Upto
1	Ace Derivatives and Commodity Exchange Limited	Address: Rawat-ni-wadi, Nr.Central Bank of India, Gandhi Road, Ahmedabad-380001 Website: http://www.aceindia.com/	PERMANENT
2	Indian Commodity Exchange Limited	Address: Reliable Tech Park, 403-A, B-Wing, 4th Floor, Thane-Belapur Road, Airoli (E), Navi Mumbai-400708Website: http://www.icexindia.com/	PERMANENT
3	Multi Commodity Exchange of India Ltd.	Address: Exchange Square, CST No.225, Suren Road, Andheri (E), Mumbai-400093 Website: https://www.mcxindia.com/	PERMANENT
4	National 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
5	National Multi Commodity Exchange of India Limited.	Address: 5,4th Floor,H.K. House, B/h JivabhaiChambers,Ashram Road, Ahmedabad.-380009 Website: http://www.nmce.com	PERMANENT

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!

March 19, 2021 Team Trade Brains Market 3 comments

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.

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 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 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

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, 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 No	COMPANY	Marketcap (Rs Cr)	INDUSTRY
1	Amara Raja Batteries Ltd.	14862.4 Cr	Batteries
2	Exide Industries Ltd.	15907.75 Cr	Batteries
3	Hero MotoCorp Ltd.	62319.44 Cr	Automobile Two & Three Wheelers
4	Himadri Speciality Chemical Ltd.	1782.03 Cr	Chemicals
5	Vedanta Ltd.	82577.47 Cr	Metal - Non Ferrous
6	Hindalco Industries Ltd.	75297.62 Cr	Metal - Non Ferrous
7	Ashok Leyland Ltd.	34140.18 Cr	Automobiles-Trucks/Lcv
8	Mahindra & Mahindra Ltd.	105683.8 Cr	Automobiles - Passenger Cars
9	Tata Motors Ltd.	102580.91 Cr	Automobiles-Trucks/Lcv
10	Tata Chemicals Ltd.	19155.12 Cr	Chemicals
11	Greaves Cotton Ltd.	3038.06 Cr	Diesel Engines
12	Graphite India Ltd.	9904.57 Cr	Electrodes & Welding Equipment
13	Hindustan Copper Ltd.	11639.24 Cr	Metal - Non Ferrous
14	Maruti Suzuki India Ltd.	214837.83 Cr	Automobiles - Passenger Cars
15	JBM Auto Ltd.	2041.18 Cr	Auto 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.

Aron Almeida

March 19, 2021 Aron Almeida Market, Stocks 4 comments

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.

(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

(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.

(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.

Hitesh Singhi

www.linkedin.com/in/hitesh-singhi-46564a11/

March 19, 2021 Hitesh Singhi Market, Options Trading, Trading 20 comments

list of 10 largest stock exchange's image

10 Largest Stock Exchanges in the World By Market Cap!

List of Largest Stock Exchanges in the World (Updated 2021): People who invest in stock must be familiar with the New York Stock Exchange (NYSE), NASDAQ, Shanghai stock exchange as a few biggest exchanges in the list of largest stock exchanges in the world. But there are a few large stock exchanges with which they might not be familiar.

In this post, we are going to discuss the biggest and largest stock exchanges in the world by total market cap of all listed companies. Before we start this post, let us brief a bit about what the stock exchange is.

A Stock Exchange is an organization that anchor formulated market for dealing in securities, derivatives, commodities, and other financial equipment. It is one of the powerful ingredients of the financial market. Here, buyers and sellers club together to carry out transactions. And, securities are bought and sold out according to clear-cut rules and regulations.

Stock exchange furnishes the required edifice and framework to the brokers and members who deal with asset classes. It also governs the transaction activities to certify free and fair trade.

The most engaging aspect is that the Stock exchanges are also deemed as the financial measures of an economy where industrial development and firmness are mirrored in the index. Here is the list of the largest Stock Exchange in the world –

10 Largest Stock Exchanges in the World (By Market Cap)

1) New York Stock Exchange (NYSE), US

The New York Stock Exchange(NYSE) is the 1st on the list of the largest stock exchange in the world and is a highly esteemed stock exchange in the USA which is situated at 11, Wall Street, New York City.

It was established on May 17, 1792, and consists of 2,400 listed companies. It is the world’s largest stock exchange and has a market capitalization of US$ 24.49 trillion as of January 2021.

Back to the back of mergers has aided the New York Stock Exchange to gain its colossal size and global footprint. The blue-chip companies which are listed under NYSE are Berkshire Hathaway Inc, Coca-Cola, Walt Disney Company, McDonald’s Corporation, etc.

2) NASDAQ, United States

2nd on the list of the largest stock exchange in the world is NASDAQ which was primarily an abbreviation and stage for the National Association of Securities Dealers Automated Quotations. It is an American stock exchange and is headquartered at 151 W, 42nd Street, New York City.

The NASDAQ commenced its business on February 8, 1971, and is sighted as the world’s first electronically traded stock market. NASDAQ has a combined market capitalization of US$ 19.34 trillion as of Jan 2021 and is ranked 2nd in the list of largest stock exchanges.

It consists of more than 3,000 stocks listed under it and comprises of the world’s humongous tech giants such as Apple, Microsoft, Google, Facebook, Amazon, Tesla, and Intel.

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31 Hand-Picked Best Quotes on Investing: Buffett, Munger, Graham & More

3) Shanghai Stock Exchange (SSE), China

The Shanghai Stock Exchange (SSE) is located in the city of Shanghai, China, and is one of the two stock exchanges plying autonomously in the People’s Republic of China. Although its foundation traces back to 1866, it was adjourned after the Chinese Revolution in 1949. However, The Shanghai Exchange in its contemporary outlook was laid down in 1990.

Currently, Shanghai SSE is the world’s 3rd largest stock exchange with a combined market capitalization of US$ 6.5 trillion as of Jan 2021. The most interesting fact is that the absolute market cap of the SSE is constructed out of formerly state-run insurance companies & commercial banks.

4) Honk Kong Stock Exchange (SEHK)

The Honk Kong Stock Exchange (SEHK) is located in Hong Kong and is the world’s 4th largest stock exchange on the basis of market capitalization. It consists of 2,538 listed companies with a wholesome market capitalization of US$ 6.48 trillion as of Jan 2021.

Its origin can be traced back to the mid-1800s and since then it has gone through a series of mergers and agglomeration with other exchanges. Some of the gigantic and eminent companies listed under the Hong Kong Stock Exchange are China Mobile, and HSBC Holdings & Petro China.

5) Japan Stock Exchange (JPX)

The Japan Stock Exchange (JPX) is a Japanese financial services corporation that operates multiple securities exchanges including Tokyo Stock Exchange and Osaka Securities Exchange. It was formed by the merger of the two companies on January 1, 2013.

JPX has close to 3,500 listed companies with a syndicated market capitalization surpassing the US$ 6.35 trillion as of Jan 2021. The TSE’s metric indicator is Nikkei 225 and it is home to some of the voluminous Japanese giants with international exposure, including Toyota, Suzuki, Honda, and Mitsubishi, and Sony.

Also Read: Top 10 Stock Market Movies to Watch for Finance Geeks

6) Shenzhen Stock Exchange (SZSE), China

The Shenzhen Stock Exchange (SZSE) is a stock exchange based in the city of Shenzhen, in the People’s Republic of China. It is one of two stock exchanges operating independently in Mainland China, the other being the larger Shanghai Stock Exchange.

As of January 2021, SZSE has 2,375 listed companies and has a market capitalization of US$ 4.9 trillion as of Jan 2021. Many of the companies within this market are subsidiaries of companies in which the Chinese government maintains controlling interest.

7) EURONEXT, Europe

The Word EURONEXT is an acronym for European New Exchange Technology and has its corporate address at La Défense in Greater Paris. EURONEXT was established in 2000 by the consolidation of the exchanges in Amsterdam, Paris, and Brussels.

Over the years, it amalgamated with multiple exchanges, most particularly the New York Stock Exchange. It steers financial markets in Amsterdam, London, Brussels, Lisbon, Oslo, Dublin, and Paris.

It has around 1,500 listed companies leading to a market capitalization worth US$ 4.88 trillion as of Jan 2021. EURONEXT provided the segments which are equities, warrants, exchange-traded, bonds, commodities, funds and certificates, derivatives, indices, and foreign exchange trading platforms.

8) LSE Group, UK and Italy

The London Stock Exchange (LSE) is based in London and is the sixth-largest stock exchange in the world. It was established in 1801 and is the oldest stock exchange in the world. It has more than 3,000 listed companies with a combined market capitalization of $3.67 trillion as of Jan 2021.

LSE is also the maiden source of benchmark prices, equity-market liquidity, and market data in Europe. Some of the massive companies listed under the LSE are Barclays, British Petroleum, and GlaxoSmithKline.

9) National Stock Exchange (NSE), India

National Stock Exchange of India Limited (NSE) is the leading government-owned stock exchange of India, located in Mumbai, Maharashtra. NSE was established in 1992 as the first dematerialized electronic exchange in the country.

The NSE has approximately 1952 listed companies and has a market capitalization of US$2.57 trillion as of Jan 2021. NSE’s flagship index, the NIFTY 50, a 50 stock index is used extensively by investors in India and around the world as a barometer of the Indian capital market.

10) Toronto Stock Exchange, Canada

The Toronto Stock Exchange (TSX) is situated in Toronto, Canada. It was introduced in 1852 and is held and wielded as a subsidiary of the TMX Group. It is the ninth-largest exchange in the world and has 2,231 listed companies with a combined market capitalization of US$2.5 trillion as of Jan 2021.

The financial instruments include equities, investment trusts, exchange-traded funds, bonds, commodities, futures, options, and other products. It is also to be noted that mining and oil and gas companies are listed in more numbers under the Toronto Stock Exchange compared to other stock exchanges around the world.

Also read: A Complete List of Stock Exchanges in India

That’s all for this article on the ten largest stock exchanges in the world. We hope you liked the article. Comment below which one is your favorite stock exchange in the world to trade. Happy trading!

March 18, 2021 Oindrila Chowdhury Market, Stocks 3 comments

#12 Companies with Highest Share Price in India (Updated 2021)

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

List of Companies with the highest share price in India (Updated – March 2021): The majority of shares in India trade at a share price below Rs 1,000 per share on Indian stock exchanges. However, there are a few stocks that trade at a price in the multiples of thousands of rupees.

Although, the share price of a company has nothing to do with the companies valuation, and even a company with a share price of Rs 2,000 can be undervalued compared to its peers. Anyways, for the small retail investors, it might be a little difficult to enter those stocks which trade at a very high share price.

In this article, we are going to discuss the most expensive shares in India i.e. the companies with the highest share price in India. Here, we’ll look at 12 of the costliest shares in India based on the current share price at which they are trading in the market.

Note: Please study the companies carefully if you want to invest in any of the stocks mentioned in the list here. A high stock price doesn’t guarantee a fundamentally strong company or a good investment. And vice versa. Let’s get started.

#12 Companies with Highest Share Price in India

1. MRF (Rs. 85,541)

Market Capitalisation = Rs. 36,279 Cr

Madras Rubber Factory (MRF) is a Tyre manufacturer that produces a wide range of tyres. It specializes in Car & bike tyres, trucks/bus tyres, etc.

Currently, MRF has the highest share price in India among all the listed companies on BSE/NSE. The all-time high share price of MRF is Rs. 96,973. The stock is currently trading at a standalone PE of 22.66.

MRF has never split its share and has a face value of Rs. 10. Noticeably, this company was trading at a price of Rs. 10,000 in November 2012.

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

2. Honeywell Automation (Rs. 46,985)

Market Capitalisation = Rs. 41,542 Cr

Honeywell Automation India Ltd, a part of Honeywell group, USA and is a leader in providing integrated automation and software solutions. It has a wide product portfolio in environmental and combustion controls, and sensing and control, etc.

This stock has given a return of over +235% in the last 5 years. It is currently trading at a PE of 88.92.

3. Page Industries (Rs. 28,675)

Market Capitalisation = Rs. 31,984 Cr

Page Industries is an Indian manufacturer and retailer of innerwear, loungewear, and socks. One of the popular brands under Page Industries is Jockey (Underwear and inner wears company). This stock has turned out to be a multi-bagger stock in the last couple of years and has given a return of over +2,000% in the last ten years.

Page Industries is currently trading at a PE of 124.92.

4. 3M India (Rs. 27,953)

Market Capitalisation = Rs. 31,489 Cr

3M India Ltd is the subsidiary listed company of 3M Company USA in India. 3M Company USA holds a 75% equity stake in the company. It has a diversified portfolio of products in dental cement, health care, cleaning, etc.

This stock is currently trading at a PE of 544.93.

5. Shree Cements (Rs. 26,817)

Market Capitalisation = Rs. 96,759 Cr

Shree Cement is an Indian cement manufacturer headquartered in Kolkata. This Indian cement manufacturer company was founded in Beawar, Ajmer district, Rajasthan, in 1979. Shree Cement is the biggest cement maker in northern India and also produces and sells power under the name Shree Power and Shree Mega Power.

Shree cements is currently trading at a PE of 45.38.

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

6. Dixon Technologies (Rs. 20,074)

Market Capitalisation = Rs. 23,515 Cr

Dixon Technologies (India) Ltd is an Indian multinational electronics manufacturing services company, based in Noida, Uttar Pradesh, India. It is a contract manufacturer of televisions, washing machines, smartphones, LED bulbs, battens, downlighters, and CCTV security systems for companies such as Samsung, Xiaomi, Panasonic, and Philips.

It is currently trading at a PE of 170.61.

7. Nestle India (Rs. 16,458)

Market Capitalisation = Rs. 1,58,681 Cr

Nestle India is in the food processing industry with a wide variety of products like Maggi, Kit-Kat, Nescafe, Every day, etc.   It is the Indian subsidiary of Nestlé which is a Swiss multinational company.

This stock is currently trading at a PE of 76.20.

8. The Yamuna Syndicate Ltd. (Rs. 14,980)

Market Capitalisation = Rs. 460 Cr

The Yamuna Syndicate Limited engages in trading & marketing tractors, industrial lubes, automotive, batteries, electrical, pesticides & fertilizers, sugar, and also runs petrol pumps. The company was incorporated in 1954 and is based in Yamuna Nagar, India.

This stock is currently trading at a PE of 52.52.

9. Abbott India (Rs. 14,730)

Market Capitalisation = Rs. 31,302 Cr

Headquartered in Mumbai, Abbott India Limited, a publicly listed company and a subsidiary of Abbott Laboratories, takes pride in offering high-quality trusted medicines in multiple therapeutic categories such as women’s health, gastroenterology, cardiology, metabolic disorders, and primary care.

It is currently trading at a PE of 48.22. This stock has given a return of over 179% in the last 5 years.

10. Bosch (Rs. 14,660)

Market Capitalisation = Rs. 43,238 Cr

Bosch ranks 10th in the list of companies with the highest share price in India. It is a part of the German multinational company Robert Bosch (or just Bosch), headquartered in Germany. Bosch belongs to the automobile ancillaries industry.

It is currently trading at a PE of 529.62 (52-week high – Rs. 16,679).

11. Tasty Bite Eatables (Rs. 13,977)

Market Capitalisation = Rs. 3,586 Cr

This company operates in the food processing industry with products like tasty bite rice, noodles, entrees, etc. The Company offers a range of ready-to-serve (RTS) ethnic food products under the brand name Tasty Bite and Frozen Formed Products (FFP).

This stock is currently trading at a PE of 105.48.

Also read: How To Invest Rs 10,000 In India for High Returns?

12. Procter & Gamble (Rs. 12,855)

Market Capitalisation = Rs. 41,731 Cr

P & G is in the personal care industry with products in hygiene and health care. The Company is involved in the manufacturing, trading, and marketing of health and hygiene products. The Company’s brands include Ambi Pur, Ariel, Duracell, Gillette, Head & Shoulders, Olay, Oral-B, Pampers, Pantene, Tide, Vicks, Wella, and Whisper.

This stock is currently trading at a PE of 62.77.

Summary

Here is the list of Companies with the Highest Share Price in India along with a few other popular stocks added:

S.No.	Company Name	Share Price (Rs)	MarketCap (Rs Cr)	Current PE
1	MRF	85,541.60	36,279.42	22.66
2	Honeywell Auto	46,985.25	41,542.12	88.92
3	Page Industries	28,675.25	31,984.01	124.92
4	3M India	27,953.65	31,489.98	544.93
5	Shree Cement	26,817.35	96,759	45.38
6	Dixon Technologies	20,074.75	23,515.30	170.61
7	Nestle India	16,458.10	1,58,681.95	76.20
8	The Yamuna Syndicate	14,980	460.43	52.52
9	Abbott India	14,730.95	31,302.24	48.22
10	Bosch	14,660.30	43,238.56	529.62
11	Tasty Bite Eatables	13,977.85	3,586.72	105.48
12	Procter & Gamble	12,855.95	41,731.36	62.77
13	Bombay Oxygen	10,306.05	154.59	6.56
14	Bharat Rasayan	9,657.65	4,103.28	26.74
15	Bajaj Finserv	9,544.85	1,51,894.30	462.77
16	Polson	9,104.95	109.26	14.86
17	Paushak	8,556.25	2,637.13	80.75

Disclaimer: The list of 12 Companies with Highest Share Price in India is till date March 2021. The stock market is dynamic and the stock prices will change in the future, which may change the list or the order of the companies listed here.

That’s all for this post on ‘#12 companies with the highest share price in India’. Most of the companies on this list are trading at a high PE. If you want to buy any one of them, then please study the company carefully.

Just being the costliest shares in India doesn’t make them a good pick for investment. Moreover, past performance does not guarantee future returns.

Further, do comment below which other stocks can find a place in this list of companies with the highest share price in India by next year (March 2022)? And which ones will be thrown out of the list, according to you? Happy Investing!

Kritesh Abhishek

www.linkedin.com/in/kriteshrules/

March 18, 2021 Kritesh Abhishek Market, Stocks 20 comments

Top 10 Companies in India by Market Capitalization

List of the Top 10 Companies in India by Market Capitalization (Updated March ’21): As per the International Monetary Fund (IMF), India is the sixth-largest economy in the world in terms of nominal Gross Domestic Product (GDP), which is valued to be worth US$ 2.87 trillion. This is mainly due to the business various Indian companies have been doing in India and overseas.

Every company operating in India works extremely hard to get better in terms of the quality and customer satisfaction that they provide through its products or services. An organization is generally evaluated on different parameters such as assets, profits, sales, market value, share price, etc. and is ranked accordingly.

However, when we talk about the size of a company, one of the biggest factors to look at is its market capitalization.

In this post, we are going to discuss the ten biggest public companies in India based on their latest market capitalization.

What is Market Capitalization?

Market capitalization is the aggregate valuation of the company based on its current share price and the total number of outstanding stocks. It is calculated by

Market capitalization = (Current market price of 1 share)*(total number of outstanding shares)

It helps to classify the companies into different types like large-cap, mid-cap, and small-cap companies. The companies with a market cap of Rs 28,500 crore or more are large-cap stocks.

Company stocks with a market cap between Rs 8,500 crore and 28,500 crores are mid-cap stocks and those less than Rs 8,500 crore market cap are small-cap stocks. (Related post: Basics of Market Capitalization in Indian Stock Market.)

Let’s understand with an example

Just by looking at the share price, you cannot judge the size of a company. For example, here are the share price of two companies from the automobile sector.

Maruti Suzuki – Rs 7,063
MRF – Rs 85,541

Which company is bigger?

If you just look at the share prices, you might think that MRF’s share price is quite large compared to Maruti Suzuki, and hence, it may be bigger. However, the total number of outstanding shares of Maruti Suzuki is much large compared to MRF. Maruti Suzuki has around 30.6 Crore shares while MRF has 0.43 crores shares.

Therefore, the market capitalization of Maruti Suzuki is Rs 216,141 Crores while the market capitalization of MRF is Rs 36,825 Crores. Therefore, Maruti Suzuki is a bigger company compared to MRF.

Top 10 Companies in India by Market Capitalization

Here is the list of the top 10 companies in India by market capitalization:

1. Reliance Industries

Reliance Industries Limited (RIL) is an Indian multinational company headquartered in Mumbai, currently headed by Mukesh Ambani. The company was co-founded by Dhirubhai Ambani and Champaklal Damani in the 1960s as Reliance Commercial Corporation.

Reliance owns businesses across India engaged in energy, petrochemicals, textiles, natural resources, retail, and telecommunications. Reliance is one of the most profitable companies in India. The market capitalization value of RIL is Rs. 14,20,338 Crores with a current price of Rs. 2,100.45.

2. Tata Consultancy Services (TCS)

Tata Consultancy Services Limited (TCS) is an Indian multinational information technology (IT) service and consulting company headquartered in Mumbai, Maharashtra, India. It is a subsidiary of Tata Group and operates in 149 locations across 46 countries.

TCS is the second-largest Indian company by market capitalization. TCS is now placed among the most valuable IT services brands worldwide. The market capitalization value of TCS is Rs. 11,66,503 Crores with a current price of Rs. 3,108.70.

3. HDFC Bank

HDFC Bank is an Indian banking and financial services company that was incorporated in 1994, with its registered office in Mumbai, India. Its first corporate office at Sandoz House, Worli was inaugurated by the then Union Finance Minister, Manmohan Singh.

As of March 2020, it had a base of 1,16,971 permanent employees with 5,130 branches across 2,764 cities. It is India’s largest private sector lender by assets and market capitalization. It has a market capitalization value of Rs. 8,33,676 Crores with a current price of Rs. 1,512.80.

4. Infosys

Infosys Limited is an Indian multinational corporation that provides business consulting, information technology and outsourcing services.

It is the second-largest Indian IT company after Tata Consultancy Services with its headquarters in Bangalore, Karnataka, India. The market capitalization value of Infosys is Rs. 5,89,781 Crores with a current price of Rs. 1,384.25.

5. Hindustan Unilever (HUL)

Hindustan Unilever Limited (HUL) was established in 1933. It is a British-Dutch manufacturing company headquartered in Mumbai, India. Its products include foods, beverages, cleaning agents, personal care products, water purifiers, and consumer goods.

As of 2020 Hindustan Unilever portfolio had 35 product brands in 20 categories with 18,000 employees and sales of Rs. 39,783 crores in 2019-20. The market capitalization value of Hindustan Unilever is Rs. 5,27,195 Crores with a current price of Rs. 2,243.80.

6. Housing Development Finance Corporation Limited (HDFC)

Housing Development Finance Corporation Limited (HDFC) is an Indian financial services company founded in 1977 as the first specialized mortgage company in India based in Mumbai. It is a major provider of finance for housing in India.

HDFC also has a presence in banking, life and general insurance, asset management, venture capital, realty, education, deposits, and education loans. The market capitalization value of HDFC is Rs. 4,52,818 Crores with a current price of Rs. 2,510.75.

7. ICICI Bank

It is an Indian multinational banking and financial services company headquartered in Mumbai and its registered office in Vadodara, Gujarat. It offers a wide range of banking products and financial services in the areas of investment banking, life, non-life insurance, venture capital, and asset management.

ICICI Bank has 5,275 branches and 15,589 ATMs across India and has a presence in 17 countries including India as of February 2020. The market capitalization value of ICICI bank is Rs. 4,11,369 crores with a current price of Rs. 594.90.

8. Kotak Mahindra Bank

Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai, India. Established in 1985 by Uday Kotak.

In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the group’s flagship company, received a banking license from the RBI. It offers banking products and financial services in the areas of personal finance, investment banking, general insurance, life insurance, and wealth management. It is the third-largest Indian private sector bank by market capitalization value of Rs. 3,77,261 crores with a current price of Rs. 1,903.80.

9. State Bank of India (SBI)

State Bank of India (SBI) is an Indian multinational, public sector banking and financial services statutory body headquartered in Mumbai, Maharashtra. SBI has a 23% market share by assets and a 25% share of the total loan and deposits market.

SBI has 22,141 branches and 58,555 ATMs as of 2020. The current market capitalization value of the State Bank of India is Rs. 3,37,751 crores with the latest share price of Rs. 378.45.

10. Bajaj Finance

Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian non-banking financial company (NBFC). The company deals in consumer finance, SME (small and medium-sized enterprises) and commercial lending, and wealth management.

Headquartered in Pune, Maharashtra, the company has 294 consumer branches and 497 rural locations with over 33,000+ distribution points. Market capitalization value of Bajaj Finance is Rs. 3,29,434 crores with a current price of Rs. 5,467.00.

Summary: Top 10 Companies in India by Market-cap

Here is the list of companies with the largest market cap in India with a few other popular companies:

S.No.	Company Name	Current Price	MarketCap (Rs.Cr)
1	Reliance Industries	2,100.45	14,20,338
2	TCS	3,108.70	11,66,503
3	HDFC Bank	1,512.80	8,33,676
4	Infosys	1,384.25	5,89,781
5	HUL	2,243.80	5,27,195
6	H D F C	2,510.75	4,52,818
7	ICICI Bank	594.90	4,11,369
8	Kotak Mah. Bank	1,903.80	3,77,261
9	SBI	378.45	3,37,751
10	Bajaj Finance	5,467	3,29,434
11	Bharti Airtel	529.30	2,88,762
12	HCL	1,006.35	2,73,089
13	ITC	208.05	2,56,065
14	Asian Paints	2,470.80	2,36,998
15	Wipro	429.25	2,35,190

Disclaimer: This data is updated in March 2021. As the stock price changes in the future, market capitalization will also change. Hence, the list of top 10 companies in India by market capitalization can also change in the future.

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

That’s all for this post on the top 10 companies in India by Market Capitalization. I hope it was useful for you. Take care and Happy Investing.

March 17, 2021 Dharmendra Singh Market, Stocks 12 comments

Indian Energy Stocks – Top Electricity & Power Sector Companies (2021)!

List of Top Indian Energy Stocks / Companies in Indian Electricity & Power Sector: The first electric street light in Asia was lit in Bangalore on 5th August 1905. Despite what seems like a headstart the electrification of India seemed like an uphill battle in the last for almost a century. However, in the last decade, India has begun to make strides not only in extending electrification throughout the country but also introducing greener alternatives.

Today, we take a look at the possible future prospect of the Indian electricity & power sector and top players that are present in the current environment.

Indian Electricity & Power Sector

India is the third-largest producer and second-largest consumer of electricity in the world. India had an installed power capacity of 371.97 gigawatts (GW) as of July 2020. When we take a look at the growth opportunities in this sector their prospects can be viewed in the two plans already put forward by the government. The first being the governments’ vision of ensuring 24×7 affordable and quality power for all.

According to the Ministry of Power, the Saubhagya mission which had begun in 2017 where 100% of households in 25 states would be electrified has already been achieved. The only states left out were Assam, Rajasthan, Meghalaya, and Chhattisgarh.

100% electrification, however, does not mean that going forward there will be limited opportunities isolated only to the remaining four states. India’s energy demand is expected to double by 2040 and also has the potential to triple. This is mainly because of the rising Indian temperatures and increased appliance ownership among consumers. This would require India to add massive amounts of power generation capacity in order to meet the demand from the 1 billion airconditioning units the country is expected to have by 2050.

Another government initiative that offers growth potential in the sector is its plan to double the electricity generation capacity of renewable energy. As of 2018, India ranked fourth in wind power, fifth in solar power, and fifth in renewable power installed capacity. If government plans are successful the shared electricity generated through renewable would increase to 40% by 2030. Currently, the electricity sector is dominated by fossil fuels like coal. In the 2018-19 fiscal these fossil fuels produced about three-quarters of the country’s electricity.

Quick Fact: Did you know that Bhadla Solar Park is located in Bhadla village, in Rajasthan’s Jodhpur district is claimed to be the largest solar power plant in the world. Spanning 14,000 acres, the fully operational power plant has been installed with a capacity of nearly 2,250 megawatts (MW).

Top companies in Indian Electricity & Power Sector

1. Power Grid Corporation Of India Ltd.

Power Grid Corporation of India Limited (POWERGRID) was incorporated on 23 October 1989 as a public limited company, wholly owned by the Government of India. The company is engaged in the power transmission business with responsibility for planning, implementation, operation, and maintenance of inter-state transmission system and operation of national and regional load dispatch centers.

Its transmission network consists of roughly 164,511 ckm Transmission Lines and 243 EHVAC and HVDC substations, which provides a total transformation capacity of 3,67,097 MVA. POWERGRID transmits about 50% of the total power generated in India on its transmission network. The government of India currently holds a 51.34% stake in the company and the balance 48.66% is held by the public.

2. NTPC Ltd.

NTPC Limited is an Indian Public Sector Undertaking company, which is engaged in the generation and sale of electricity. The company generates electric power using coal-based thermal power plants and is headquartered in New Delhi. The company has also ventured into oil and gas exploration and coal mining activities. It is the largest power company in India with an electric power generating capacity of 62,086 MW. It contributes over 25% of the total power generation of the country.

The company has approximately nine joint venture stations, which are coal-based. It also holds approximately nine renewable energy projects. The company’s subsidiaries include NTPC Electric Supply Company Limited, NTPC Vidyut Vyapar Nigam Limited, Kanti Bijlee Utpadan Nigam Limited, Bhartiya Rail Bijlee Company Limited, and Patratu Vidyut Utpadan Nigam Limited.

3. Adani Transmission Ltd.

Adani Transmission Limited is a holding company. The Company operates as a power transmission company. It is engaged in the transmission of electric energy. Despite only being incorporated in just 2013 it is already one of the top companies in the sector. The company owns, operates, and maintains approximately 5,050 ckm of transmission lines.

4. NHPC Ltd.

NHPC Limited ( National Hydroelectric Power Corporation) is a Public Limited Company and was incorporated in the year 1975. It was created with the objective to generate hydroelectric power. The government of India and State Governments holds a 74.51% stake within the Company while the remaining 25.49% is public.

Over the years the company has diversified into other sources of energy like Solar, Geothermal, Tidal, Wind, etc.

5. Tata Power Company Ltd.

Tata Power Company Ltd is India`s largest private sector power utility with an installed generation capacity of over 10,577 MW. The core business of the company is to generate, transmit, and distribute electricity. Tata is one of the few companies that are present in all segments of the power sector viz Generation (thermal, hydro, solar, wind, and liquid fuel), transmission, and distribution.

6. Adani Green Energy Ltd.

Adani Green Energy Limited (AGEL) is one of the largest renewable companies in India. The company was incorporated in 2015 and is part of the Adani Group. In 2017, the company took complete control of the overall solar energy portfolio of Adani Enterprises.

The Company operates and maintains utility-scale grid-connected solar and wind farm projects. AGEL broke into the news in September 2020 when the stock price of the company grew 1300% in one year and they posted a profit in the year 2019-20.

Top Energy Stocks in India – Key Financial Comparision

Particulars	POWERGRID	NTPC	ADANITRANS	NHPC	TATAPOWER	ADANIGREEN
Marketcap (Rs Cr)	120509.67	105208.83	84421.42	24761.01	33295.44	186352.3
PE (TTM)	12.22	15.9	0	8.1	42.51	631.95
Price / BV	2.32	0.94	20.51	1.02	1.9	79.56
Dividend Yield	4.34	2.9	0	6.09	1.49	0
ROE	22.47	9.32	0.34	13.44	1.07	9.43
ROCE	12.37	9.91	6.19	10.31	4.41	6.58
Current Ratio	0.56	1	3.28	1.23	0.51	1.87
Price / Sales	3.12	1.02	98.42	2.46	1.75	43.86
Debt To Equity	3.02	1.5	7.27	1.03	1.29	1.95

(Source: Trade Brains Portal)

Closing Thoughts

The power sector has immense opportunities in a country like India. But before investing it is also important that the investors inspect other aspects of the industry. For a long, time the power sector has found itself debt-ridden. This was primarily because of the lack of trickle-down of payments from the DISCOMS( Power Distribution companies) to the GENCOMS( Power Generation Companies). Another aspect that the investors must take caution is the viability of renewable energy companies.

Although they are marketed as a safer future, it is important to note that they too come at environmental costs and significantly higher economic costs all the while producing only a fraction of the energy in comparison to other fossils fuels. This affects both the motive i.e greener earth and the profitability prospect of the company.

Aron Almeida

March 15, 2021 Aron Almeida Market, Stocks 2 comments

10 Indian Companies with Monopoly in Their Industry!

List of Indian Companies with Monopoly in their Industry: How many Indian companies can you name that are monopolies? Today we identify one of Warren Buffets’ favorite categories i.e. monopolies, but in the Indian markets. Monopoly refers to the category of companies who due to their major competitive advantage are market leaders in their industry. These companies are very difficult to compete with and maintain the highest market share for their products and services.

In investing however the stocks of these companies are known as MOAT stocks. A Moat is a hole that used to surround Medieval castles. This was done as a defense measure in order to make it harder for invaders to attack the castle. The wider and deeper is the moat, the more protected is the castle is. In the business world, these Moats are either barriers to entry like huge capital, government restrictions, or business advantage that a company has made it hard to compete with them.

Today, we take a look at the public Indian companies with monopoly in their industry. There are market leaders in their industry with zero or very less competition. Let’s get started.

Top 10 Indian Companies with Monopoly

Following are the list of monopolies in the Indian markets i.e. the companies that enjoy the status of being a monopoly: (Company – Market Share)

1. IRCTC – 100%

IRCTC is a state-owned entity and the only player in the Indian markets that operate in the Industry. This makes it a monopoly as consumers have no other alternative. The company was founded in the year 1845. It is one of the largest railways in the world and is one of the world’s largest employers. Rail networks are generally considered as ‘ Natural Monopolies’. This is because only one train can use the rack at a given time.

However, countries like the UK have bought in private players by allowing them to bid for rail lines. Earlier this year India too announced that it will be opening the sector for players.

2. HAL – 100%

The Hindustan Aeronautics India Limited represents the Indian aviation industry and plays a very important role in the Indian defense sector. The company a set up in 1940 by Walchand Hirachand and the Government of Mysore, with the aim of manufacturing aircraft in India. Today the company is state-owned and is associated with designing, fabricating, and assembling aircraft, jet engines, helicopters, and their spare parts.

3. Nestle – Cerelac – 96.5%

Cerelac is the brand of instant cereal made by Nestle for infants 6 months and older as a supplement for breast milk. Nestle is one of the worlds leading nutrition, health, and wellness company which was set up in 1866 in Switzerland. It has spent more than a century in the Indian markets over the years has become an undisputed market leader in the baby food segment. It has an undisputed market share of 96.5% despite functioning in an open to all industry.

4. Coal India – 82%

Coal India Limited is a coal mining and refining company. It is also the world’s largest coal-producing company in the world. It is owned by the Union government of India and is managed by the Ministry of Coal. The company contributes up to 82% of the total coal production in India. It was only this year that the government announced that the coal sector would now be opening up for commercial mining possibly ending its monopoly in the future.

5. Hindustan zinc – 78%

Hindustan Zinc Ltd. is the world’s second-largest zinc-lead miner and holds a 78% market share in India’s primary zinc industry. The company was incorporated as Metal Corporation of India in 1966 as a Public sector undertaking. Today the company is a subsidiary of Vedanta Limited which owns a 64.9% stake in the Company while the Government of India holds a 29.5% minority stake.

ALSO READ

What is an Economic MOAT? And Why it’s Worth Investigating?

6. ITC- 77%

Although the company has diversified into a conglomerate in the last century. Despite this, its cigarette business still holds 77% a strong position in the Indian markets. This can be attributed to the expertise the company has developed in the field and a willingness to develop products to match the evolving taste of different types of consumers.

ITC’s wide range of brands includes Insignia, India Kings, Classic, Gold Flake, American Club, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal. Apart from a market experience, another advantage that the brand has is its supply chain and distribution network which spans across the country.

7. Marico – Oil Products – 73%

Marico is one of the well-known FMCG companies in India but the majority of its success lies in its two brands ‘Saffola’ and ‘Parachute’. The company has come a long way in the segment despite being around for only 3 decades. Safola which competes in the premium refined edible oil segment has maintained its market leadership with a share of 73%. ‘Parachute’ on the other hand holds a market share of 59%. These also form up to 90% of their income.

8. Pidilite – 70%

Pidilite’s product range includes adhesives and sealants (Fevicol and M-seal), construction and paint chemicals (Dr. Fixit), automotive chemicals, industrial adhesives, and industrial & textile resins. It is the leader in the adhesive and industrial chemical market with a market share of 70%.

9. CONCOR – 68.52%

Container Corporation of India Limited (CONCOR) is a Public Sector Undertaking managed by the Indian Ministry of Railways. The company was set up in 1966 with the aim of containerizing cargo transport in the country. Concor’s core businesses include that of cargo carrier; terminal operator, warehouse operator & MMLP operation. They hold a market share in domestic business of 68.52% in 2019-20.

10. BHEL

BHEL is India’s largest engineering and manufacturing enterprise in the energy and infrastructure sectors and also a leading power equipment manufacturer globally. Its services and products range from power-thermal, hydro, gas. Nuclear and solar PV, transmission, transportation, defense & aerospace, oil & gas, and water. It also holds the single largest market share in the emission control equipment business in India

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Pat Dorsey’s Four Moats for Picking Quality Companies

Closing Thoughts

In this post, we discussed the list of Indian Companies with Monopoly in their Industry. For a value investor, a monopoly or big Moat stock is similar to a gold mine. This is because if one can find a suitable Moat stock to invest in they provide significant returns in the long turn. But investors must watch out as these stocks just like other Blue Chip companies are generally overvalued and can lead to lower returns or losses.

That’s all for today. Let us know which other Indian companies enjoy a big monopoly in their industry in the comment section. Have a great day and Happy investing.

Aron Almeida

March 14, 2021 Aron Almeida Market, Stocks 4 comments

list of richest and most successfull stock market investors in India

3 Insanely Successful Stock Market Investors in India!

List of Most Successful Stock Market Investors in India: If you want to become a successful stock market investor one day, a key step is to learn from the journey of the super successful stock market investors in India, who’ve already done it before you. Indeed, it’s good lore to know about the journey of these iconic investors, what principles they followed, how long it took for them to become successful, etc. Therefore, today we’ll be discussing the ones who are insanely successful in the Indian stock market.

Anyways, before we start this post, let me take a quick quiz. How many such super successful stock market investors do you know.

Well, let me guess. Everyone who enters the stock market world might know about at least “Warren Buffet”. He is the greatest investor of all time and the fifth richest person in this world who made his fortune by consistently investing his money. Further, you might also have heard about few other prominent names if you’ve read some investing books. Those names can be Benjamin Graham, Charlie Munger, Peter Lynch, Mohnish Pabrai, etc.

But do you know any of the super successful investors who made tons of money by investing in the Indian stock market?

Yes, I can hear the name in your mind. Rakesh Jhunjhunwala. This name comes instantly in the mind of every Indian when we hear the term ‘RICH INDIAN STOCK MARKET INVESTOR’. But how much do you know about him? And what about the other super successful stock market investors in India?

In this post, we’re going to cover three of the insanely successful stock market investors in India. In addition, we’ll also introduce you to few other ace investors in India (as a bonus) whom you should know and take inspiration from. Let’s get started.

3 Insanely Successful Stock Market Investors in India

1. Rakesh Jhunjhunwala

Net worth: $4.3 Billion USD (Feb 2021)
Born: 5 July 1960, Mumbai India
Education: Chartered Accountant (CA)
College: The University of Mumbai, The Institute of Chartered Accountants of India (ICAI)
Occupation: Owner of RARE Enterprises, Investor, Trader & Film Producer

Rakesh Jhunjhunwala, also known as “The Big Bull’, is one of the most renowned and successful stock market investors in India. He has made a great fortune by trading and investing in stocks, which is an inspiration for all those who want to succeed in the Indian Stock Market.

The son of an income tax officer, Rakesh Jhunjhunwala joined the stock market after completing his degree as a Chartered Accountant. Starting with the initial investment of just Rs 5,000, currently, he is sitting on a huge net worth of around Rs 30,300 crores as of 2021.

Jhunjhunwala today manages his privately owned asset management firm “RARE Enterprises”. Interestingly, the name RARE is derived from the initials of his and his wife’s name. Here, ‘Ra’ from his name (Rakesh) and ‘Re’ from his wife’s name (Rekha). Rakesh Jhunjhunwala is also the chairman of Aptech Limited and Hungama Digital Media Entertainment Pvt. Ltd.

Looking back into Rakesh Jhunjhunwala’s journey, Mr. Junjhunwala’s ‘Risk and Reward’ taking ability was impressive from the very start. Along with it, his imagination & wisdom later earned him great profits in the stock market.

Quick Note: If you want to track the latest portfolio of Rakesh Jhunjhunwala or any other super successful stock market investor in India, you can find it at Trade Brains Portal. Here’s a quick link to Superstar Portfolio.

His first-ever large profit in the stock market was from selling 5,000 shares of Tata Tea which he had previously bought for Rs. 43 per share and selling them at Rs. 143. His later career was marked by his buying of six crore shares of Titan in 2003 at an average price of around Rs 3. The stock is still in his portfolio and currently trading at Rs 1200.

Rakesh Jhunjhunwala considers himself as both a stock market investor and a trader. He strongly believes and advocates the idea to invest in India, seeing the consistent growth of India and its rising economy. Mr. Jhunjhunwala is also confident in learning from mistakes. He often says- ‘Mistakes are your learning friends. The idea is to keep these mistakes small.’

According to Forbes 2020 Rich List, Rakesh Jhunjhunwala is India’s 54th richest person.

(Video Credits: FinnovationZ.com)

2. Radhakishan Damani (RK Damani)

Net worth: 15.4 Billion USD (Feb 2021)
Born: January 1954
Occupation: Investor, Stockbroker, Trader, and the Founder & Promoter of Dmart

According to Forbes 2020 Rich List, RK Damani is the 4th Richest Person in India.

Radhakishan Damani, also known as ‘Mr. White and White’, because of his simple dressing of White shirt and white trousers, is the richest stock market Investor in India and owner of D-mart. Coincidently, he is also the mentor of billionaire investor Rakesh Jhunjhunwala. RK Damani is known for his low profile and he rarely makes an appearance in public events or press conferences.

Quick Fact, On 21^st March 2017 i.e. the listing day of Avenue supermart (parent company of D-mart), the stock price rose more than double, from the offer price of Rs 299 and ended up 116% upwards to Rs 648. In the IPO of Avenue Supermart, RK Damani made around Rs 6100 crores in just two days. RK Damani owns around 52% stake in Avenue Supermarts, and Bright Star Investments – his investment company, holds another 16% stake.

RK’s journey in the Indian stock market is truly inspiring. He was not always actively involved in the stock market. He started his career as a trader in ball bearing, with no intentions to enter the stock market. However, his future has something else planned for him. RK Damani entered the stock market only at an age of 32.

At an age of 32, post his father’s death, RK was forced to close down his ball-bearing business and had to join his brother in the family stockbroking business, which was inherited from their father.

RK Damani had no idea of what to do in the stock market at that time. His knowledge of the stock market was very limited. He made many mistakes initially by speculating the stock prices. However, he soon understood that the market is heaven for those who are serious about it and want to make a great fortune in life.

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D-Mart Founder- RK Damani Success Story [Bio, Facts, Net worth & More]

When he got involved in stockbroking, he understood that he can’t make lots of money just by watching other people trade and invest. Finally, he started trading and investing in the stock market, rather than just stockbroking. Gradually, his judgment began getting right, and within the next couple of years, he was standing as one of the most successful investors in the market.

RK Damani’s strategy is quite simple- Invest in good companies for the long term. RK Damani always sees the future prospects of the company before investing and invests only if the product has potential far ahead in the future.

(Video Credits: Vivek Bindra Channel)

3. Ramesh Damani

Net worth: Around Rs 1,100 Crores
Education: HR College, Mumbai (Bachelor’s degree in Commerce)
California State University (Master’s Degree in Business Administration)
Occupation – Founder of Ramesh s Damani Finance Pvt Ltd

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

Ramesh Damani, the investment guru and one of the most successful stock market investors in India, started his journey to riches in 1990s when Sensex was 600 points. He holds a bachelor’s degree in commerce from HR College, Mumbai, and a master’s degree in Business Administration from California State University.

Ramesh Damani works at privately owned Ramesh s Damani Finance Pvt Ltd.

The son of a successful stock investor, Ramesh Damani became a member of the Bombay Stock Exchange(BSE) in 1989. Initially, Ramesh planned his career as a stockbroker. However, later he started enjoying picking winning stocks and switched to become a long-term investor.

Ramesh Damani’s first famous investment was ‘Infosys’. Coming from a techie background in the US, he knew that Infosys has great future potentials. Therefore, when Infosys became public in 1993, he invested Rs 10 lakhs in it. By 1999, this investment has given him more than 100 times return.

The investment philosophy of Ramesh Damani is easy and simple to understand. He is a long-term investor and suggests not to invest for short-term gain. Further, he advises everyone to make an exit strategy clear before making an investment in any stock. He further adds that the economy of a market is hard to predict; however if you have researched the stock carefully, and had made a good strategy, then you can easily make fortunes in the stock market.

Bonus: Few Other Popular Stock Market Investors in India

4. Raamdeo Agrawal

Networth – Around Rs 1,200 Cr
Age — 63
Occupation: Co-Founder- Motilal Oswal Financial Services Ltd

Raamdeo Agrawal, the co-founder of Motilal Oswal Group, is another most respectable stock market investor in India. During the last 30 year career, Raamdeo Aggrawal investing strategy is based on QGLB: Quality, growth, longevity, and bargain value of a company.

He is famous for investing in the legendary stock of HERO Motocorp (Hero honda back then) in 1995 when HERO was a small-cap with a market capitalization of only 1,000 crores. Raamdeo Aggrawal invested around Rs 10 lakh in the shares of the two-wheeler manufacturer at Rs 30 apiece, and held on to them for the next 20 years, till the share price rose to Rs 2,600 apiece. Today, the market cap of HERO Motocorp is above 73,000 crores.

Like most great investors, Raamdeo Aggarwal too follows the principles of long-term investment. Among his favorite books to read are ‘The Intelligent Investor‘ by Benjamin Graham and ‘One Up on Wall Street‘ by Peter Lynch. Further, he is also excited by Michael Porter’s ideas on the competitive structure.

“After 30 years, I understood economic moat is the mantra of investing” -Raamdeo Agrawal

Raamdeo Agrawal suggests the investors not be driven solely by market trends and advice to research the stock intelligently before investing.

(Source: Motilal Oswal Securities)

5. Other Popular Indian Stock Investors

As promised, here is the bonus section. List of a few other best stock market investors whom you should know. Further, I have added a link to each of the investors so that you can read further.

Porinju Veliyath – Investor, Founder- Equity Intelligence India Pvt Ltd
Nemish Shah – Co-founder of ENAM
Chandresh Nigam – Managing Director-CEO, Axis Mutual Fund
Chaitanya Dalmia– CIO, Renaissance Group
Chandrakant Sampat– Individual investor
Parag Parikh – Chairman & CEO, PPFAS
Dolly Khanna – Investor, Homemaker
Sanjay Bakshi – Managing Partner, ValueQuest Capital LLP
Samir Arora – Founder, Helios Capital
Saurabh Mukherjea – CEO (Institutional Equities), Ambit Capital
Anoop Bhaskar – Head – Equity, UTI Mutual Fund
R Srinivasan – Head (EquitIES), SBI Mutual Fund

Also Read: Forbes India: Wealth Wizards: Top 20 Investors Share Their Philosophy

That’s all. I hope this post on “3 Insanely Successful Stock Market Investors in India that you need to Know” is helpful to the readers. Please share the post if you liked it. Further, do comment below who is your favorite Indian stock market Investor? Happy Investing.

Kritesh Abhishek

www.linkedin.com/in/kriteshrules/

March 11, 2021 Kritesh Abhishek INDIAN BULLS, Market 30 comments

Rana Kapoor’s Story: The Man behind the Rise and Fall of Yes Bank!

Rana Kapoor’s Story: What was one of the biggest private banks in India today has left behind a dent in the banking sector. But unlike most businesses failing due to competition or simply being outdated the blame for Yes Banks failure is directed towards one-man – ‘Rana Kapoor’.

Rana Kapoor’s story is similar to that of Icarus. A man who was ready to take great risks to win at all costs. Today, we are going to cover Rana Kapoor, the bad boy of the Indian banking industry. Keep reading to know more.

Rana Kapoor’s Life Story Before Yes Bank

Born in 1957, Kapoor was brought up in New Delhi. He completed his schooling at Frank Anthony Public School and went on to earn a Bachelor of Arts degree from Shri Ram College of Commerce in 1977. Following this, he went on to obtain an MBA degree from Rutgers University in the USA in 1980.

Kapoor began his career in 1980 as a management trainee for the Bank of America. He worked at the bank for 16 years rising up the ranks to become the head of their wholesale banking business. Following this Kapoor joined ANZ Grindlays Investment Bank as a general manager & country head where he worked for 2 years.

During this period Kapoor developed a great friendship with Ashok Kapur. Ashok Kapur had held Rana Kapoor’s business acumen and skill in high regard. So much so that Ashok is said to have played a role in the marriage of his wife Madhu Kapur’s sister Bindu to Rana Kapoor. The two were no longer just friends but relatives now and soon to be business partners.

Rana Kapoor’s Story During the creation of Yes Bank

Kapoor along with his brother-in-law and Harkirat Singh entered into a partnership with Rabobank which was looking to enter the Indian market. They entered into a partnership by contributing a capital of Rs. 9 crores each and set up the NBFC.

The trio sold their stake for $10 million each and began their journey to start their own bank in 2003. The dream was initially of Harkirat Singh who wanted to create a bank that catered to the rural population. It was Ashok who convinced him to also include Rana in their journey of creating Yes Bank.

Singh put together a group of investors which included the trio and Rabobank. Sadly Harkirat Singh was forced to leave Yes Bank the same year citing differences with the other two partners who dreamt of catering to the private sector in order to become one of the biggest banks in India.

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Struggle for Power of Rana Kapoor

Yes Bank made steady progress in its initial stages and IPO. In 2008 tragedy struck as Ashok Kapur lost his life during the 26/11 terror attacks in Mumbai. This however now meant that Rana Kapoor was the sole promoter left. He now began running Yes Bank as his personal fiefdom.

One of the first moves after his brother in laws death was to ensure that his widow and daughter didn’t receive any power within the company. Ashok’s wife, Madhu Kapur’s name was removed as one of the major promoters of Yes Bank.

This led to a litigation battle between the two families where the two women fought to secure their rights for a seat as the board of directors. The fight spilled outside the court too as Rana Kapoor went on to insult Madhu Kapur at a party and use a family patch-up meeting only to hurl expletives at her.

Finally, the two women received justice as the courts ruled in their favour which resulted in them receiving seats among the board of directors in 2015.

Rana Kapoor’s Story – Leadership at Yes Bank

In the midst of the battle for power within the company Yes Bank flourished. Rana Kapoor had created a name for himself in the industry due to his unmatched ability to recover every penny lent to the most shrewd and dubious clients. This earned him the title of ‘lender of the last resort’.

It was because of him that only Yes Bank was able to recover dues from clients like Vijay Mallya and Deccan Chronicles. By 2017 the rising share price of Yes Bank had made Rana Kapoor a billionaire.

Rana Kapoor’s Story – The Scam of Yes Bank

In 2015, UBS published a negative report about the asset quality of YES Bank’s books. Following which Rana Kapoor used his influence to discredit the report. Over the years, however, the truth eventually came out.

Rana Kapoor would lend loans to companies that were turned away from every other bank in the industry. These included companies like Jet, Cox & Kings, and C G Power. He did this in exchange for several kickbacks from the company. However, his skills in recovering the money would fall short over time.

He was able to maintain a positive image for Yes Bank by using other banks to move NPAs among themselves. When the bad debts would increase Yes Bank would sell a bad loan to some other bank by assuring that it will buy the loan asset at the same price later.

This practice allowed Yes Bank to fly under RBI’s radar and present good financials. This however began changing after 2017 when Yes Bank could no longer hide their NPAs. Investigations conducted later showed that Kapoor had sanctioned loans worth ₹30,000 crores out of which ₹20,000 crores were turned into NPA’s.

Rana was eventually forced out as the CEO of Yes Bank by the RBI. Investigations that followed the collapse of Yes Bank showed that Rana Kapoor and his family members had received benefits worth Rs 4,300 crore in exchange for sanctioning huge loans. He is also accused of receiving bribes and fraud and embezzlement of over $3 Billion.

The list of those involved in the scam includes his wife Bindu, and all three daughters – Radha Kapoor Khana, Rakhee Kapoor Tandon, and Roshini Kapoor for money laundering.

ALSO READ

The Unravelling of Yes Bank – Fiasco Explained

Closing Thoughts

Rana Kapoor’s story is that of personal greed and ambition. Despite being one of the great businessmen the country has produced, the once upon a time billionaire was lodged at Taloja Jail, Maharashtra.

The complete story of Yes Banks rise and fall is very well covered by Pavan C. Lall in his book ‘ Yes Man: The untold story of Rana Kapoor’. A must-read for anyone who enjoys business flicks as Kapoor’s story includes all the components for Bollywood to consider. Happy Reading!

Aron Almeida

March 9, 2021 Aron Almeida Market, News No comments yet

Top 10 Stock Market Movies That Every Investor Should Watch!

List of Best Stock Market Movies (Must-Watch): Do you want to learn how to make money from the stock market? However, you find college textbooks or investing novels too boring to read? No need to worry. There’s another fun, entertaining, yet educational approach to learn the financial world without going through 800 pages of financial books. Enter stock market movies.

If you are not an enthusiastic book reader, just try to watch a few amazing movies or documentaries based on the stock market and it will help you understand all about the financial markets. You can learn and explore a lot about stocks just by sitting on your couch and watching these movies on your laptop.

In this post, we are going to discuss ten must-watch stock market movies that you can watch this weekend to learn finance.

Top 10 Stock Market Movies to Watch

Here is a snippet from ten best stock market movies that every investor should watch.

1. The Big Short (2015)

The big short ranks first in this list of top stock market movies to watch. This movie is based on a non-fiction book written by Micheal Lewis directed by Adam Mckay. It’s an Oscar-winning film in 2015 and 37 other wins. It depicts a dramatic tale of events that led to the financial crisis. This movie combines goofy comedy with a financial crisis where eight million people lose their jobs and become homeless.

2. Wall street (1987)

In 1987, Oliver Stone directed this American dramatic film with stars Micheal Doughler, Charlie Sheen and Daryl Hannah. The movie revolves around a young stockbroker involved with the wealthy corporate raider. This film allowed all the financial wheeling and dealing to seem convincing. It gives us an alternative reality about stocks, which may crash down on all of us. The director made this film as a tribute to his father.

3. Trading Places (1983)

John Landis directed “Trading Places” with a lead role played by Eddie Murphy.

The movie tells about the ups and downs of Trading in a Comedy genre giving the basics of socio-economics and class structure in America. The movie also depicts many stereotypical views of money.

4. Boiler Room (2000)

This movie centers Seth Davis who finds a job as a stockbroker for a suburban investment firm to keep up to his father’s high standards. But the job might not be as legitimate at first appears. He is a college drop out with a serious desire to achieve success and wealth. This movie is directed by Ben Younger, released on 18th February 2000.

5. Equity (2016)

A financial thriller movie directed by Meera Menon. The movie depicts Naomi Bishop, an investment banker, struggling to get on top. She is being watched by a prosecutor who suspects her of being corrupt. So she must untangle a web of corruption in this story while it becomes, even more, worse with a betrayal by a trusted colleague to ruin everything. She faces professional setbacks including client losing confidence.

6. The Wolf of Wall Street (2013)

This is my favorite stock market movie of all time. It’s based on a true story of Jordan Belfort who spent 22 months in prison for defrauding investors in massive security scams. It discusses the nature of wall street brokers with a smooth-talking and easy-going Boss. He devises new ways to cover his tracks and watch his fortune grow.

7. Too Big to Fail (2011)

This movie is written by Andrew Ross Sorkin, directed by Curtis Hanson and released in 2011. It’s about how certain corporations particularly financial institutions are so large and so interconnected that if they fail it would be disastrous to the greater economic system. This film also describes a few clips about the mortgage industry crisis.

8. Margin Call (2011)

A thought-provoking dramatic movie directed by J.C.Chandor. It’s a fictional firm and not a real wall street firm. This movie follows people about investment banks over a 24 hour period of time before the 2008 financial crisis. It reveals how large financial institutions operate and the motivations of people who work within them. This was a thirty-five million budget movie nationwide.

9. The Ascent of Money (2008)

A Documentary on the financial history of the world. It shows why our modern societies are structured and behave as they do. The history of money, credit, and banking can be depicted in this documentary. It is a six-part TV documentary written by the author Niall Ferguson in 2008 showing why stock markets produce bubbles, bursts, and Globalization of the western economy.

10. Chasing Madoff (2011)

This is a true story based on “No one would listen “ by Harry Markopolos. It’s a nonfiction narrative documentary film written and directed by Jeff Prosserman. He spent 10 years trying to get US Securities and exchange commission on their investigative proof of Bernie Madoff’s Ponzi Scheme which scammed an estimated 18billion including fake returns.

Other Popular Stock Market/Finance Movies to Watch

Apart from the above mentioned top 10 Stock Market Movies that every investor should watch, here are a few other popular finance/ stock market movies worth checking out:

Bonus: Stock Market Movies ‘Infographic’

Note: Feel free to share/embed the above infographic. Just give the credits to Trade Brains.

That’s all for this post. In case, we missed any amazing stock market movie, please comment below. Further, also mention which one is your favorite stock market movie!

March 7, 2021 Varna Madhukar Market 3 comments

Future Group Dispute Explained: Reliance vs Amazon fight for Future!

Reliance vs Amazon fight for the Future Group: Two of the richest men ever have locked heads. Jeff Bezos led Amazon and Mukesh Ambani led Reliance has been in a dispute since October last year over the Future Group.

In this article, we cover what caused this Reliance vs Amazon feud and where it has escalated to currently.

Reliance vs Amazon: Future Groups’ Position

The Future Group was founded by Kishore Biyani in 2013. He is credited with setting up the first hypermarket-retail store in India which soon made him the country’s retail king.

The Group owns prominent brand chains like Big Bazaar, Food Bazaar, FBB, Brand Factory, Central, Nilgiris 1905, etc. But the group has been struggling in the last few years.

Its debt stood at Rs. 12,778 crore in 2019. The same year Future Retail suffered a 15% fall in profit for the quarter ending December 2019.

The lockdowns imposed due to COVID were the final nail in its coffin. Two months of its malls and retail outlets added immense pressure to the business.

Future Retails sales declined by 75% from normal levels. Rating agencies like CARE and Fitch reduced their ratings to ‘negative’ and ‘Substantial Risk’ respectively.

The period also saw the Biyani Family fortunes reduce from $1.8 billion to $400 million. Due to the poor cash flow Future began defaulting on its bank dues pushing it closer to a financial crisis.

In August last year, Biyani finally found a way out for the group. The group announced that Reliance Retail would be buying the Future Group in an all-cash deal worth Rs. 24,713 crore. This was the largest retail acquisition in India.

The deal included the sale of its retail, wholesale, logistics, and warehousing to Reliance Retail. This move perfectly fit Ambani’s plans to dominate India’s offline retail segment.

Then why are two of the richest men in the world feuding over a company which is facing a severe financial crisis?

Amazon and Future Deal

The Amazon group succeeded in acquiring a 49% stake in Future Coupons, an unlisted promoter entity of Future Retail. Future Coupons holds a 7.3% stake in Future Retail.

The acquisition meant that Amazon now owned a minority stake of 3.58% in Future Retail. This also gave Amazon a ‘call option which allowed it to buy into Future Retail within 3-10 years of the agreement.

The agreement also barred Future Coupons from selling its assets to 15 companies that could turn into Amazon’s potential competitors. The list included Walmart, Google, SoftBank, Alibaba, Naspers, eBay, Target, Paytm, Zomato, Swiggy among others, and also Reliance.

As a result, Amazon accused its partner of breaching the terms of the agreement by selling its assets to Reliance.

Reliance vs Amazon Dispute: Amazon’s Plan for Future

The Jeff Bezos led e-commerce giant has claimed that it has been putting in efforts to rescue its debt-laden partner.

Amazon claims they did this by helping Future repay mounting bank dues, avoid defaults and improve cash flows by selling its products on Amazon. This included a plan where they would work together to deliver products in select cities within 2 hours of customers ordering them.

Amazon along with other partners had devised plans to invest a total of Rs. 6,000 crores into Future Retail. These plans engineered by Amazon are reflected in a presentation titled ‘Putting Future Retail Ltd (FRL) Back on Track’.

The presentation also stated that “FRL and Amazon have envisioned working together to make the most of this opportunity (the fast growth in the retail industry) ahead. While Covid has its adverse impact in the near term, it could be turned into a great opportunity. The potential for home delivery will be multifold through an integrated omnichannel play.”

Amazon also assembled a team of investors including PremjiInvest, TPG capital, SSG Capital, and Verlinvest. All of whom along with Amazon would have invested Rs. 750 crores. The remaining being raised from private equity investors and banks. These investments were to be made in tranches starting from May 2020.

Amazon had also reportedly created another revival plan. This included Future selling its retail business to cut debt and instead focus on other key businesses. It included the sale of small stores, its grocery and personal care business.

Future breaking the non-compete clause

Amazon alleges that despite these plans being made to rescue Future, they still went ahead and sold its assets to Ambani-led Reliance. This broke the non-compete clause in the agreement they had entered into.

The agreement also required Future Group to inform Amazon before entering into any sale agreement with third parties.

Amazon and the Future Group also had entered into an agreement wherein the case of a dispute they would approach SIAC (Singapore International Arbitration Centre), which Amazon did. It is common for companies to appoint a foreign-seated arbitrator when disputes involve multiple parties.

The SIAC enjoys a good reputation in India for being an efficient and convenient forum in international commercial arbitrations.

Reliance vs Amazon: The trial at the SIAC

Amazon approached the SIAC in October last year asking it to bar the Future Group from selling to ‘restricted’ persons which otherwise would be in violation of the contract entered into by them.

The SIAC which resolves arbitrations swiftly in 14 days ruled in favour of Amazon. SIAC stated in its ruling that the Amazon-FRL pact had the right of first refusal. This gave Amazon an advantage in the early days of the dispute.

Futures version of the ‘Reliance vs Amazon’ Story

Future promoter Kishore Biyani has denied the accusation placed by Amazon.

He stated that “As part of the agreement, they could have provided us funds through affiliates or financial institutions by taking over loans from existing lenders but they never did despite the agreement clause and our request. We also connected them with four-five investors but they never showed any interest in salvaging us and were only doing lip-service… What is their intention?”.

He also accused Amazon of being the “dog in a manager” implying that the e-commerce giant had no serious interest in Future but was still preventing others from owning it.

The Indian retailer also told the SIAC that Amazon had sought $40 million from Future Retail in order to allow them to move ahead with the “disputed transaction”. This also meant that Amazon was well aware of the RIL-Future deal.

Kishore Biyani also stated at SIAC that “This event also received widespread media coverage (in reference to the RIL-Future merger) So, leaving aside the messages, calls, and emails, the claimant was aware of the disputed transaction for more than a month before it initiated the present arbitration proceedings,” it said.

He also stated that Future had reached out to Amazon for financial assistance at least 8 times before approaching Reliance. Despite all these attempts, the group received no support from the giant.

A group’s spokesperson also denied any proposals coming from Amazon.

“Future Group has never received any proposal from any such consortium—in fact, you have named existing investors in various Future Group companies, who we understand, are committed to, and strongly support the ongoing Transaction. The entire storyline in your mail is a figment of the imagination and a mala fide attempt at misleading the public and stakeholders.” the spokesperson said.

The future group has also made it clear that Future would collapse if the RIL-Future deal falls apart.

Amazon Responds

Amazon has released an official statement in response to these claims, “ Amazon denies the false and misleading claims being made by the Future Group on a purported request for compensation to forego the right of first refusal. This is a questionable and ill-timed attempt to mislead the public at large more particularly when Amazon has filed a special leave petition in the Supreme Court. Amazon has consistently offered to assist FRL during the economic downturn caused by COVID and reiterated our openness for a dialogue even during the Delhi High Court hearings, which was declined by Future Group,” said the e-commerce giant spokesperson.

Reliance vs Amazon vs Future in Delhi

Following its victory at SIAC, Amazon was quick to notify institutions like SEBI, CCI(Competition Commission of India), and stock exchanges against the Future Reliance deal. This was done in order to put a hold on the deal. It was waiting for a No Objection Certificate(NOC) from the exchanges in order for the transaction to be completed.

By the end of October Amazon also filed a case in the Delhi High Court seeking enforcement of the SIAC ruling.

Things took a turn when the Delhi court ruled in favour of the RIL-Future deal. The court directed the Future Group to maintain the status quo in its deal with reliance as the SIAC ruling did not nullify their deal.

Following this, the Future group appealed to which the bench ruled in Future’s favour stating that Future Retail was not a party to the arbitration agreement (the deal was entered into by Future Coupons.). After that, the deal also received approval from Sebi and stock exchanges

In the meantime, Amazon has now moved to the Supreme court stating that the Division bench order is ‘illegal, and arbitrary, apart from being without jurisdiction’.

It also learned that Amazon stated that if the Indian authorities did allow the deal to go ahead then it would set an example of how orders by reputed tribunals such as the SIAC are not respected in India. Such a ruling could set a bad precedent for foreign investors looking to invest in India.

Reliance vs Amazon Dispute: Distributors write letters to Amazon

Meanwhile, local distributors in business connection to Future Retail have written to Jeff Bezos and Amit Agarwal (Amazon’s India head) urging him not to block the Future-RIL deal.

The Future Group currently owes Rs. 6,000 crores to small vendors and suppliers. These dues have been pending since March 2020.

The All India Consumer Products Distributors Federation (AICPDF) stated in the mail,” While you continue with your great game of world domination, we have become what is called ‘collateral damage’ … Payments of our members are blocked. Our families are in great financial stress and suffering from mental and emotional distress.”

Closing Thoughts

It is clear that the battle is simply not for a debt-laden business. But instead for domination of India’s $1 trillion consumer retail market. Mukesh Ambani has already stated that their goal in the next 5 years is to be among the top 20 retailers in the world.

Reliance Retail currently has over 11,300 stores in India and the disputed deal would put him on the fast track to become India’s Retail King. This however would be a huge blow to e-commerce firms like Amazon and Walmart’s Flipkart. Ecommerce currently only forms 3% of all retail sales. Sadly it is the stakeholders of Future Group like their employees and debtors who are caught up in the middle.

What are your thoughts on how the Reliance vs Amazon case has unfolded so far? What do you think would be the most optimal outcome? Let us know in the comments below. Cheers!

Aron Almeida

March 6, 2021 Aron Almeida Market, News No comments yet