Anand Mahindra's Success Story cover

Anand Mahindra’s Success Story: An Inspiring Journey of Mahindra’s Boss!

The Success Story of Anand Mahindra: We currently have fallen in love with his tweets on Twitter. Anand Mahindra keeps sharing advice, extending help, and also dog posts. Apart from making Twitter India fall in love with him, what are his business achievements? In this article, we cover Anand Mahindra’s success story. Keep Reading!

The Mahindra History

Anand Gopal Mahindra was born into the third generation of the industrialist family to Harish and Indira Mahindra. He is the grandson of the co-founder of Mahindra & Mahindra (M&M), Jagdish Chandra Mahindra.

Initially known as Muhammad & Mahindra, the company was founded for steel trading in 1945. Unfortunately due to the partition their partner M. G. Muhammad decided to emigrate to Pakistan and later even went on to become its first finance minister.

This prompted the brothers Harikrishnan and Jayakrishnan to change the name of the company to Mahindra & Mahindra. The brothers saw an opportunity in manufacturing Jeep and partnered with Willys Overland who had also produced the vehicle for WW2. The company came to be well known as a jeep and truck producer. 

But how did M&M go from producing jeeps to operating in aerospace, finance, insurance, agribusiness, components, defense, energy, construction equipment, farm equipment, leisure, hospitality, industrial equipment, information technology, logistics, real estate, and retail? Phew! That was a long list! 

The answer to this question is Anand Mahindra.

Anand Mahindra joins Mahindra & Mahindra

Anand Mahindra and Bill Gates during a meeting

After receiving a degree in architecture and an MBA from the Harvard Business School, Anand Mahindra decided to return to India to work for M&M. A fun fact not known to many he and Bill Gates were classmates at Harvard. The company was then run by his uncle Keshub Mahindra.

As a Harvard graduate and part of the Mahindra family, Anand found an easy way into the company but everything was uphill from here. He joined Mahindra Ugine Steel Company (MUSCO) in 1981 as an Executive Assistant.

Here Anand played an important role in the MUSCO’s expansion into the real estate and hospitality sector. Anand Mahindra worked his way up the ladder and was appointed as the President and Deputy Managing Director in 1989. 

Challenges Faced By Anand Mahindra 

Bharat Doshi recalls that his boss probably faced one of his biggest challenges when the 36-year-old Anand Mahindra was sent to work at M&Ms Kandivali factory in 1991. Mahindra met with striking workers who had surrounded his office and wouldn’t stop at anything. His response may surprise you as he made it clear to the mob which could turn violent that unless the workers got back to work and increased productivity there would be no Diwali bonus.

This was necessary for the company as 1991 stood for liberalization or in other words increased opportunity and competition. Doshi the Group Chief Financial Officer noticed that post this the productivity gains of the company rose from 50 to 150%.

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Anand Mahindra Facing Setbacks   

Building a car from scratch in India was a challenge as the Mahindra Group lacked the technology and the management expertise. To achieve this they decided to enter into a joint venture with Ford but sadly the Escort car failed once it hit the market. 

Although the car flopped what came next would define M&M’s legacy in the Indian markets. Anand Mahindra, now the Managing Director, decided to lead the company into once again producing a vehicle but this time without a joint venture. This would seem like a suicide mission for a company whose product had just failed even after working with Ford.

Using the same team of 300 that had worked on the Escort and hiring talents like Pawan Goenka, Mahindra decided to build the vehicle from scratch.

Scorpio by Mahindra & Mahindra

The result of this gamble is what we today know as the Scorpio. The SUV took the markets by storm and what is even more surprising is that it was created with a project cost of Rs. 550 crore. This was a tenth of the cost it would take any other large manufacturer to create it.

Scorpio was a hit and was even exported to western Europe and Africa in the years to come. The SUV was so successful that it even captured a 36% Market share in the utility vehicle segment. In comparison, Tata only had a 4.9% market share. The SUV also set the stage for other MUVs and SUVs launched by the company like the Xylo and XUV5OO.

Anand Mahindra’s Success Story – Rebranding Mahindra

By 2009 M&M was part of the top business names in India. It was during this period that Anand Mahindra met with Scott Goodson. Goodson’s observation found that even though the managers at Mahindra felt that they were working for a higher purpose this aim was still not crystal clear among them. 

Mahindra Rise - Anand Mahindra's Success Story

Mahindra’s core purpose at the time was to prove that Indians are second to none. But after several acquisitions in Germany, Korea, and China this purpose would not relate to everyone within the company. Instead of sitting on their laurels, Mahindra understood that it was time to adapt. After months of research, the slogan “Rise” was adopted.

Acquisitions

If one takes a look at the history of M&M it would be easy to point out that the company has relied to some extent upon growing inorganically. These include successful acquisitions like Swaraj Tractors, Reva Electric Car Company, Satyam Computer Services, Peugeot Motorcycles, Ssangyong Motors, and Pininfarina S.P.A.

Anand Mahindra Philanthropy 

Anand Mahindra Portrait Photograph

What could be possibly Anand Mahindra’s biggest achievement is the Nanhi Kali project which he started in 2009. The NGO supports education for underprivileged girls in India.

Over the last 2 decades, the project has happily reached out to over 3,30,000 underprivileged girls.

Closing Thoughts 

Anand Mahindra stepped down as the executive chairman and became non-executive chairman of Mahindra & Mahindra in April 2020. His legacy with Mahindra still grows as the company is now one of the biggest names in India. Under his leadership, the revenues of the company grew over 60 times from Rs. 1,520 crores in 1991 to Rs. 96,241 crores in 2020. What more proof does one need? 

That’s it for this article! Let us know what you think of Anand Mahindra’s Success story in the comments below.

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Tata-Mistry Case Explained: What was the Feud all About?

Tata-Mistry Case Explained: The Supreme Court last month ruled in favor of the Tata Sons board and upheld their decision to remove then chairman, Cyrus Mistry from 2016. The Tata vs Mistry feud has been one of the most high-profile cases in the country. But what was it all about? Despite having a decades-long relationship that spanned two generations of the billionaire families, they are ending it in a messy divorce. Keep Reading to find out!

The Tata, Mistry, and Wadia History

Ratan Tata and Cyrus Mistry together during an event

The three remarkable families belong to the Parsi Zoroastrian community. Their ancestors are said to have fled persecution from Persia over a century ago finally making their way and finding refuge in western India. 

All 3 of them over the years have contributed massively to the country and currently hold billionaire status, making them one of the richest in the world. 

Deepening Ties between the Families 

The business ties between the families deepened during the 1970s. Charitable institutions like the Sir Dorab Tata and the Sir Ratan Tata currently own up to 66% of Tata Sons. Tata Sons were the holding company that managed the underlying Tata companies like Tata Motors, Tata Chemicals, Tata Steel, etc. But in 1969 these underlying companies were managed by a managing agency which was controlled by Tata Sons.

Wadia helps Tata retain control

Unfortunately for the Tata family the Monopolies and Restrictive Trade Practices (MRTP) Act was introduced in 1969. This made sure that the management agency system was abolished in India. According to this act, the charitable trusts could no longer cast a direct vote in corporate matters. They were to be represented by a neutral nominee who was appointed by the government.

This was an added blow in addition to Section 153A of the Companies Act, 1963, which allowed the government to add a public trustee on behalf of private trusts. This meant that the Tata companies were now independent of the parent board which in turn put the conglomerate at risk of hostile takeovers and coups.

Ratan Tata with JRD Tata

For a while, the Tata companies stood firm together thanks to their visionary leader JRD Tata. But it still seemed that the group companies would fall apart and become independent in the long run or once JRD Tata retired. It was during this difficult period that Wadia a descendant of Muhammed Ali Jinnah and two other elite Parsi families, Petit’s and the Tata’s came to the rescue of the group. Nusli Wadia was also the godson of JRD Tata.

Wadia used his close relationship with BJP leaders PM Atal Bihari Vajpayee and L K Advani to lobby on behalf of Tata. Finally, in 2002 the Companies Act was amended. Several sections like Section 153A were even specifically amended. This allowed the Tata trusts to vote directly on the Tata Sons board which controlled all the group companies. 

Other Favors among the Tata and Wadia Families

These favors were common between the families as JRD had first helped Wadia to keep his inheritance. Young Wadia has just returned after completing his education only to find that his father was ready to sell Bombay Dyeing & Manufacturing Co. Ltd to R.P. Goenka with the support of Shapoorji Pallonji Mistry.

Thanks to the support given by JRD Tata their ties deepened. For a period of time, it was also rumored that Wadia was the possible heir to Tata and Sons.

Ratan Tata with Ness Wadia during a conference

Wadia also further deepened his ties with Ratan Tata. To everyone’s surprise, Ratan Tata was appointed as the chairman of Tata and Sons. Wadia stood by Ratan Tata and deal with the uprising within the group companies. 

How did the Mistry family enter the picture?

The Mistry family started holding a significant stake in Tata and Sons in the 1960s. This was made possible as several members of the Tata family decided to sell their stake. The first purchase for a 5.9% stake was made in 1965 when JRD Tata’s widowed sister sold her stake.

Mistry further increased his stake in Tata Sons when Naval Tata chairman to the Sir Ratan Tata Trust tried to raise funds. This was done by selling off a 4.81% stake. They sold their stakes on the approval of JRD Tata. The third sale however was done without JRD Tata’s consent in 1974 when his younger brother Darab Tata sold his stake to Mistry. This further created a rift between Mistry and JRD Tata

JRD and Wadia vs. Mistry and Naval

Ratan Tata, Pallonji Mistry and Ness Wadia from left to right

Rifts within the 3 families were common as family members would often take opposing sides. Thanks to their good relations JRD Tata even went on to invite Wadia to join the Tata board. This move however was opposed by Ratan Tata’s father and Pallonji Mistry. The two even sought help from Indira Gandhi who already was wary of Wadia because of his connections with the opposing parties.

Wadia however backed out as it was evident that he would be met with hostility on the board. The relationship between Naval and Pallonji further was further carried on when Ratan entered the picture. When Ratan Tata was appointed as the chairman in 1991 in addition to Wadia’s support Pallonji Mistry also helped strengthen Ratan Tata’s position within the group.

Just a few days after becoming chairman Ratan Tata wrote to Pallonji Mistry. The letter stated “Our common agreement and mutual faith will foster a true and lasting relationship. Our standing together will be a matter of strength”. This was followed by “Let me reiterate that I will never do anything to hurt you or your family.” Sadly for the Mistry’s this line no longer holds true in the current circumstances.

Tata-Mistry Case: Cyrus becomes CEO of Tata

When Ratan Tata finally decided it was time for him to step down as the chairman his possible heirs included the likes of John Thain (who was an American investment banker and the former CEO of Merill Lynch) and Cyrus Mistry.

Cyrus Mistry who was already a member of the board since 2006 was selected on the basis of a letter he had circulated among the board which outlined how Tata Sons must be managed. It was after he was appointed as Chairman that the cracks began to develop between the Tata and Mistry relationship.

When Cyrus was appointed as the chairman to Tata Sons he was the only one to holds that position and not be appointed as the chairperson for  Sir Dorab Tata Trust. This position was retained by Ratan Tata. Nusli Wadia is reported to have stated in response,” All you have done is move the power center from the board to the trusts.’’. This meant that Cyrus now had lesser power in comparison to other chairmen before him. You can already see the friction forming among the families. 

Mistry’s Identity Crisis

The main reason why Ratan Tata had not considered John Thain as his replacement despite having a stellar resume was because Ratan felt that Tata should be managed by an Indian to retain its Indian identity. This moved the post in favor of Cyrus Mistry. There however was one problem, Cyrus held Irish citizenship. Despite receiving repeated requests from Tata, Mistry never renounced his Irish citizenship.

Several Conflict of Interests

During Mistry’s time as Chairman of Tata, there arose several conflicts of interest between his personal life and the company. The most consequential of these was when Tata paid Rs 2,926.35 crore to Shapoorji Paloonji & Co. Although the payment was made for several constructions made by the company for Tata, Cyrus benefited from the contracts as he was part of the Mistry family which owned Shapoorji Paloonji. 

Another conflict of interest arose when a multi-million dollar endowment fund created for Yale. The conflict of interest once again arose here as Cyrus Mistry’s son joined Yale the same year. 

Cyrus Questions Tata Trusts

As we have seen earlier Tata has always battled questions of their Trusts playing a role in the running of the companies. The trusts had received special treatment where even laws had favored them in addition to the tax exemption. This time the questions came from within the company. Mistry questioned why an entity set up for philanthropic causes was being used to ruin and control the conglomerate.  

Mistry already did not have the same powers the chairmen had before him. So he did the next best thing to attain this. He set up the Group Executive Council (GEC) which was meant to supervise the CEOs of the group companies. In addition to this, the individual underlying companies of Tata Sons were now being also asked to set up their own philanthropic foundation. Despite institutions like Sir Dorab Tata and the Sir Ratan Tata Trust already existing.

Another instance that further dented Mistry’s relationship with Tata was during the acquisition of Welspun Renewables Energy. Although the talks had begun back in November 2015 this was only disclosed to the board in May 2016. Although it was Tata Power that was acquiring Welspun there was no mention of the acquisition during their March 2016 meeting for talks on energy issues. Finally, when they were informed in May the email was only meant to inform and not seek approval from the directors.

Another factor that played a major role in Mistry’s removal was his motivation to sell several loss-making entities of Tata instead of helping them turn their fortunes. These included the Nano project and Tata Steel Europe among others. This ultimately would have undone Ratan Tata’s legacy within the conglomerate.

Removal of Cyrus Mistry 

On 24th October 2016, Ratan Tata along with Nitin Nohria met with Cyrus asking him to step down as the chairman of Tata. They also made it clear that they were otherwise going to move a resolution for this matter before the board if he refused. They also made it clear that his term would anyways run out in March 2017.

Mistry however refused to step down. A board meeting was held 15 minutes later which eventually resulted in Mistry being sacked. Tata then went onto appoint N Chandrashekaran as Chairman. N Chandrashekaran was also Tata’s first non-Parsi chairman. 

Mistry’s removal also saw Wadia who was once known as Ratan’s corporate samurai turn against Tata. Following this even Wadia was voted out of the boards of Tata Steel, Tata Chemicals, and Tata Motors. 

Mistry Sues Tata

Mistry went on to file a suit against Tata Sons alleging oppression and mismanagement. The NCLT ruled in favor of Tata dismissing Mistry’s allegations. The NCLAT however ruled in favor of Mistry in December 2019 citing the removal as illegal.

Ratan Tata and Tata Sons challenged the NCLAT before the supreme court. The Supreme Court bench which included Chief Justice SA Bobde and Justices AS Bopanna and V Ramasubramanian on March 26, 2021, set aside the ruling given by the NCLAT hence ruling in favor of Tata.

Ratan Tata's tweet after Supreme Court judgement on Tata-Mistry case

 Ratan Tata stated in a Twitter post.

In Closing

The ruling by the Supreme Court saw shares of Tata Motors and Tata Steel Rally. On the other hand, the shares of SP Group companies saw a sharp single-day decline. The ruling however did not mean an end to the drama. The court has left it to the two parties to discuss the terms of their separation. The SP Group has valued its stake in Tata at $24 billion.

Tata on the other hand responded by valuing their stake only at $11 billion. What is certain now is all three families have fought hard to arrive at their wealthy position. Wadia fought for his company only when he was 26, Ratan Tata managed to retain control when he was just appointed chairman and the Mistry family has always been strategic in their options. 

What do you think about the future of the three parties and the Tata-Mistry case judgment? This could finally be the part where Tata finally begins to focus on their growth prospects or this could also take a turn for the worse. Let us know what you think in the comments. Happy reading!

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ITC Diversification: Why is ITC diversifying into the FMCG Industry?

ITC Diversification’s Reasons Explained: The Ambani’s, Tata’s, Wadia’s all seem to have taken a keen interest in the Indian FMCG sector. In this article, we take a look at why India’s most famous tobacco company entered the FMCG sector. Keep Reading to find out the reasons for ITC diversification into the FMCG industry.

What is the History of ITC?

ITC Logo | Trade Brains

The ITC we know today was founded by the British-owned company Imperial Tobacco Company (ITC) in 1910. As the name suggested the company was set up to expand its tobacco business in India. It was set up in Calcutta. For many years ITC was known to be a white company employing British-Cambridge graduates into their management roles. 

It was only after 1969 when Ajit Narain Haksar became its first chairman that its name was changed to an Indian Tobacco Company. It was finally changed to ITC in 1974. But Indian shareholding within the company began increasing way back in 1954 and it was the government and its related entities investing in the company over the years which made it Indian in nature. 

Today, various state-owned insurance companies coupled with other government banks hold a 28.5% stake. The British company Imperial Tobacco Company whose name was later changed to British-American Tobacco Company still holds a 29.4% stake in the company.

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Why did ITC diversify into the FMCG Industry?

It may come as a surprise to some today when they find out that ITC is primarily in the cigarette business. This is because ITC has diversified into products like noodles, atta, juice, biscuits, chips, books, hotels, etc. This diversification however is not an attempt for a  sudden escape from the cigarette industry but began way back in 1970.

Today ITC is an umbrella group that offers services and products in multiple industries. The major being cigarettes and FMCG. 

Key Players in Indian Cigarette Industry | ITC Diversification

But one may ask when one out of four Indians uses tobacco products then what was the need for ITC to diversify?

Among the various industries present in India where survival has become the toughest, the tobacco industry definitely tops the list. All with good intentions too. When ITC was first set up in India tobacco could be seen as a ‘need’ available for everyone. 

But research over the years has brought to light the harmful effects of smoking. This in turn prompted the government to take action. The restrictions that have been put in place to minimize the harmful effects of smoking have been ever increasing since the revelation was made. 

These started out as increasing awareness among Indians to increasing taxes. Then to banning advertisements and currently using the product itself to advertise its harmful effects.

Countries like the US, China, Japan, and those in the Middle East and Europe still do not have the stringent laws that are in place in India against the sale of tobacco products.

Speaking about companies diversifying Mr. Sunil Alagh, former Managing Director of Britannia Industries says that “Companies think of diversifying into new categories and products typically because growth in the core business is slowing down or with the intention of leveraging their existing brand equity. Diversification into new products and categories could be one of the ways to generate growth.”

Added troubled for ITC

Similarly for ITC, seeing the government place roadblocks on the growth of its product would force the company to finds a way out. This way out was FMCG. In addition to this, the roadblocks placed by the government have evolved to become competition for the company.

According to Sanjiv Puri, the Chairman and MD of ITC the impact of excise duties on the product had gone up 118% since 2012-13. Despite the efforts being successful in discouraging local cigarettes. It unfortunately has boosted illegal foreign cigarettes coming into the country through the border. This is done in order to avoid taxes. These activities further affect the legal cigarette industry.

However, ITC is not the only player in the tobacco industry diversifying into FMCG. Even the DS Group has recently entered into a joint venture with Lotte Company Ltd. of Japan. The Joint venture will now be manufacturing confectionery, gum, candy, and ice creams. 

Sanjiv Puri however states that the government introducing stringent laws is not the main reason for ITC diversifying into FMCG. “ Diversification reasons are beyond that. ITC’s core proposition is to invest in areas that contribute to nation-building. We are able to make a meaningful contribution to society in all sectors that we are present.”

ITC Diversification – How successful has ITC been?

For the first quarter ending June 30th of 2020 ITC still owed 74% of its profits to the sale of cigarettes. The year before that ITC owed 80% of its profits to the sale of cigarettes. This is despite FMCG still making over 50% of ITC’s revenue. This shows that despite ITC effectively reducing the revenue dependence on its tobacco arm it still has a long long way to go increase its profit share. 

Closing Thoughts 

In this article, we discussed ITC diversification into the FMCG industry. Although it may not seem so the company has had an internal tussle for power which almost destroyed the company in the 90s. The government entities have stopped BAT from turning the company into a purely tobacco-based company.

BAT has in the past tried to increase its holdings within the company. These however were countered by the state-owned entities. Their efforts however were foiled forever since 2010, when the government banned all FDI’s into Indian tobacco companies. 

This move by the government was seen as going out of its way to back ITC and keep the company in Indian hands. The government also faced added criticism in 2019 when it banned the safer alternative to smoking. All the while holding a stake in ITC. 

This however raises the question of whether these moves by the ITC management of diversification and nationalism are in the best interest of the shareholders. Will the company perform better if the two arms are split to focus on their separate markets. ITC into tobacco and the demerged company focussing only on FMCG.

Let us know what you think of ITC as shareholders in the comments section. Happy Investing!

Greatest investor cover

The World’s Greatest Fund – Jim Simons’ Medallion fund!

Who do you think runs the World’s Greatest Fund? Hold onto this answer. If you ask anyone in the world of investing about Renaissance’s Medallion fund you’ll find answers filled with awe due to the results they have managed to achieve – 60 to 70 percent returns for over 3 decades!!!! 

To put things in perspective at this rate you’d be a multi-billionaire over three decades just by having invested $1,000 (But it doesn’t work on a growth model). You might have to rethink your answer. Even Warren Buffet has managed an annual average of 23% in the long run. Because obviously a fund being given the title of the greatest of all time obviously will be headed by one of the greatest minds on Wall Street.

In this article, we cover the greatest fund in the world run by Rennaisance, its inception, how it works, the men behind it, and its performance amidst Covid-19. Keep Reading to find out.

How did the Rennaisance start?

The founder of Rennaisance technologies, Jim Simons is a legendary figure in the mathematics and investing community. After graduating from MIT and receiving a Ph.D. in mathematics at the age of 23, Jim Simons went on to work as a professor at MIT and Harward.

Over the years his research earned him the Geometry equivalent of the Nobel prize- the Oswald Veblen Prize in Geometry. He along with his partner professor Shiing-Shen Chern produced the breakthrough mathematical theory known as the Chern-Simons theory.

Jim Simmons - greatest investor - World's Greatest Fund

What many people do not know about Simons is that he also worked for the Pentagon’s Institute for Defense Analyses as a code breaker. The cold war had pushed both the US and Russia to try and outsmart each other. This also required some of the greatest minds to crack each other’s secret codes. Sadly Simons was fired from the IDA for voicing his opposition to the Vietnam War.  

Simons finally decided to focus on the big bucks. His initial days in trading commodities weren’t as successful. Simons had based his bets on the fundamentals of demand and supply which did not get him far.

Simons used this for much of the Renaissance’s early years when it was called Monemetrics. It however never occurred to him in his early years to apply maths to investing

The Working behind the World’s Greatest fund?

— Headhunting the Rennaisance team

Simons then tried applying statistics and maths to make trades. His experience at the IDA had helped acquaint him with several great cryptographers and other mathematicians. He began hiring them at Renaissance and they began their quest to decode the financial markets.

Among them were Elwyn Berlekamp and Leonard Baum who were his colleagues at IDA along with professor Henry Laufer and James Ax. They began looking for patterns in the market which they could exploit.

One such example of a loophole they recognized was that S&P’s options and futures closing times were 15 minutes apart which they exploited to make profits for a while. The markets were filled with many similar loopholes which they took advantage of. 

Greatest investor Jim Simmons during a lecture

They began building models which used both trend following and mean reversion while focussing exclusively on trading. Their results weren’t anything great, making 8.8% and 4.1% in 1988-89 respectively. Renaissance finally received a break in 1990 when its Medallion fund gave a 56% return. 

The Medallion was now going through heaps of data and using advanced maths and building systems that were ahead of their time into investing. On the other hand, his other counterparts were using the same old techniques which relied on the fund manager’s instinct to predict which direction the market would move in. 

— Ahead of its time – World’s Greatest Investor

The team in Renaissance included super nerds from their respective fields using some of the world’s most powerful computers to find signals to make predictions.

The scientists would keep looking for signals which they could exploit in the markets. They also teamed up with linguists and focussed on speech recognition and machine translation. Much of their work also set the scene for the creation of Google Translate and Siri. 

— Signals and Systems

The signals they identified worked on slim margins. One such signal was identified by analyzing cloud cover data. The team had found a correlation between sunny days and the market trending upwards on those days. This was observed from New York to Tokyo. The team of scientists worked day and night to identify such signals.

The Medallion fund maintains a library of over 8,000 signals. The fund then uses these signals thousands of times daily. The difference between the win and loss percentage is only 2% i.e. 51% win vs 49% loss probability. But as this edge is applied thousands of times per day their odds increase. The funds’ team keeps looking for such signals on a regular basis. 

Another example of how far ahead of their systems were was found out when Rennaisance tried to file for a Patent in 2016 for executing synchronized trades in multiple exchanges. In order to achieve this, they had to use one of the most precise time instruments on earth i.e. atomic clocks. These clocks are accurate down to a billionth of a second.

Medallion funds’ Results and Comparison

The unique strategies have helped the Medallion fund achieve 60 to 70% annual returns for over 30 years. According to Bloomberg, the fund has produced more than $US74.5 billion over a period of 28 years. This meant that the Medallion fund generated $10 billion more in profit than those run by legendary investors Ray Dalio and George Soros.

$1 invested in the fund would have earned you $20,000 after fees. Despite assessing the fund on the basis of net returns it still beats the S&P index where your investment for the same period would only result in $20. Let’s make the comparison harder and pit the returns against Warren Buffett’s Berkshire Hathaway. A dollar invested for the same period would have resulted in $100.

What Simons and his team have achieved at Medallion is nothing short of a miracle. The fund beats one of the greatest wealth creators the S&P500 index by 1,000 times and the greatest investor of all time by 200 times.

The fund has been soo profitable and consistent that Renaissance started charging its investors 5% in management fees and 44% in performance fees. This meant that in 10 years the fund itself would make more money than its investors.

Despite this, the fund received loads of interest once the word got out. However prospective investors were met by the unhelpful customer service which included the company’s legal department. 

Why is the Medallion fund only worth $10 billion?

Even the Medallion funds size is intentionally limited to only $10 billion. Simons has always believed that the funds’ size could hamper its performance. Due to this, the assets of Medallion are currently capped at $10 billion.

As the profits from Medallion are reliable the firm is able to leverage up to ten times its capital. This means that even though the fund asset is worth only $10 billion dollars they have a trading footprint of $100 billion. 

Having a fund that is too big also limits the investment alternatives. This also limits their ability to use the same Ghost Signals. The Signals used by Medallion also cannot handle a huge size. In order to maintain this size, the fund ensures that the profits are distributed every 6 months.

Employees of the Fund – ( no to wall street and riches and Simons as a manager)

Medallion fund in the midst of a crisis?

The ultimate test however comes in the face of crisis. The Medallion fund suffered a $1 billion loss in a few days during the 2008 financial crisis. But still made up for the losses and posted an 85.9% gain as the market began rebounding. In the midst of Covid when most funds were struggling to service Medallion flourished by posting a 116% gain before fund fees. 

Closing Thoughts

Most of you will be looking for the means to invest in this fund ASAP. Possibly some apps may assist you to invest in the US markets. Sadly for all of us, the Medallion fund stopped accepting money from external investors in 1993. By 2005 the firm had bought out all of the external investors.

Today access to the fund is only limited to the 300 employees working in Renaissance. Thanks to Medallion at least 100 of them are worth more than $5 million. The remaining at least worth $1 million. Despite being employees they aren’t free from the exorbitant fund charges.

From what we’ve seen so far it is clear that competing with Medallion is next to impossible. Primarily because it is a herculean task to assemble a team of the world’s greatest minds and get them to work in the stock markets and ensuring they have the best systems in place. 

Book on Jim Simons - greatest investor

That’s all for this post on the World’s Greatest Fund by Jim Simons. Find out here! If you found this interesting be sure to check out the book “The Man Who Solved the Market” by Greg Zuckerman. We think now you can answer who is the greatest investor of all time. Let us know what you think about Medallion. Are quant funds the future of trading? Let us know if you think such a fund will work in the Indian markets. Happy Investing!

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Lodha Developers IPO Review 2021 – IPO Price, Offer Dates & Details!

Macrotech Developers (Lodha Developers) IPO Review 2021: The Macrotech Developers IPO opens on 7th April and closes on 9th April 2021. In this article, we cover the Macrotech Developers (Lodha Developers) IPO review and look into important IPO information and find out the possible prospects of the company.

 

Lodha Developers logo

 

Lodha Developers IPO Review – About the Company

The Lodha Group was founded in 1980 and incorporated in 1995 by Mangal Prabhat Lodha as a real estate developer based in Mumbai. The company mainly focused on developing residential projects for affordable and mid-income. Its projects however were mainly concentrated in the Mumbai Metropolitan Area (MMA).

As the company kept growing they also took up projects in Pune and Hyderabad. The company also ventured into luxury housing and was well known for providing world-class standards. Their luxury projects include the Trump Towers in Mumbai.

In 2010, they set a record for India’s biggest land deal when they bought a plot from the  Mumbai Metropolitan Region Development Authority for Rs. 4,053 crores. The area is currently being developed as New Cuffe Parade.

They also went global when they entered the UK market in 2013 with an investment of 400 million pounds. They have developed the Lincoln Square project and the Grosvenor Square located in Mayfair.

Lodha – India’s largest Real Estate Developer

Lodha Developers Total Assets over the years

By 2014 they were already India’s largest real estate developer by residential sales value. They continue to be at the top to date. The flats offered by them are priced in the range of 35 Lacs to 59 Cr.

Their properties are sold under various brands. These include CASA, Crown – Lodha Quality Homes for affordable and mid-income housing projects. Lodha Luxury for luxury housing projects. However, it is the affordable and mid-income housing projects which accounted for 57.77% of their revenue in 2020. 

Much of their success is owed to their strong sales network. They are spread out across India and also in GCC countries, UK, Singapore, and the US. This is done to gain access to the NRI customers. 

Profit over the years | Lodha Developers IPO review

The company is currently implementing its plans to enter the development of logistics, industrial parks, and commercial real estate. Its logistics and industrial parks are currently being developed in Pallava over 800 acres of land.

Its commercial real estate projects include corporate offices, IT campuses, and boutique office spaces. These are sold under their brand names ‘iThink’, ‘Lodha Excelus’ and ‘Lodha Supremus’.

Lodha Developers IPO Review – Key IPO Information

The promoters of the company are Mangal Prabhat Lodha, Abhishek Mangal Prabhat Lodha, Rajendra Narpatmal Lodha, Sambhavnath Infrabuild, and the Sambhavnath Trust. Its founder Mr. Mangal Prabhat Lodha has played an important role in Lodha’s success so far. He has also served as the Member of the Legislative Assembly in Mumbai for five consecutive terms.

They have appointed Axis Capital, JP Morgan India, Kotak Mahindra Capital Company, ICICI Securities, Edelweiss Financial Services, IIFL Securities, JM Financial, YES Securities (India), SBI Capital Markets, and BOB Capital Markets as the book running lead managers to the issue. 

Link Intime India Pvt. Ltd. has been appointed as the registrar to the issue. 

ParticularDetails
IPO Size₹2,500.00 Cr
Fresh Issue₹2,500.00 Cr
Offer For Sale(OFS)---
Opening DateApr 7, 2021
Closing DateApr 9, 2021
Face Value ₹10 per equity share
Price Band₹483 to ₹486
Lot Size30 Shares
Minimum Lot1
Maximum Lots13
Listing DateApr 22, 2021

It is also important to note that this is the third time Macrotech has attempted to float its IPO. Lodha Group earlier tried to list in 2009 and 2018 but backed out citing unfavorable market conditions for the realty sector. 

Purpose of the Lodha Developers IPO

The real estate firm plans to raise money for the following purposes;

  1. Reduce outstanding borrowings of the company on a consolidated basis. Rs 1500 cr.
  2. Acquire land or land development rights. Rs 375 cr.
  3. Meet general corporate purposes

Lodha Developers IPO Review – Grey Market Information 

The shares of Macrotech Developers traded at Rs 506-511 as of 4th April 2021. This shows a premium of Rs 20-25 i.e. 4-5% over their IPO price band. 

Macrotech Developers (Lodha Developers) IPO Review – Competitors 

Their competitors include real estate developers such as:

  • Godrej Properties Limited
  • Oberoi Realty Private Limited
  • DLF Limited
  • Prestige Estates Projects Limited
  • Wadhwa Group Holdings Private Limited
  • Dosti Realty Limited
  • K Raheja Corp Private Limited
  • Hiranandani Developers Private Limited
  • Indiabulls Real Estate Limited
  • L&T Realty Limited
  • Rustomjee Builders Private Limited
  • Kalpatru Limited
  • Tata Housing Development Company Limited.

In Closing

The IPO opens on 7th April and closes on 9th April 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Macrotech Developers.

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

DMart Business Model Cover

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

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

DMart Owner RK Damani Success Story cover 

DMart’s Growth Story

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

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

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

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

What is DMart’s Business Model?

1. Product Mix

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

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

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

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

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

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

2. Brick and Mortar Stores – DMart Business Model

One of the DMart Store in India | DMart Business Model

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

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

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

3. Strategic Locations and Designs

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

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

3. Relationship with Suppliers

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

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

4. Discounted Products – DMart Business Model

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

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

In Closing 

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

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

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

Biggest Bankruptcies in India Cover

8 Biggest Bankruptcies in India in the Last 10 Years

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

Petition to file for bankruptcy cover | Biggest Bankruptcies in India

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

8 Biggest Bankruptcies in India

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

Dewan Housing Finance Ltd. (DHFL) logo

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

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

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

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

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

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

DHFL Responds

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

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

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

2. Bhushan Power and Steel – US$6.9 billion

Bhushan Power and Steel Logo

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

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

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

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

Essar Steel Logo

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

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

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

4. Lanco Infra – US$ 6.3 billion

Lanco Infratech Limited Logo | Biggest Bankruptcies in India

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

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

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

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

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

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

Bhushan Steel Logo

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

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

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

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

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

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

6. Reliance CommunicationsUS$4.6 billion

Anil Ambani | Biggest Bankruptcies in India

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

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

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

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

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

7. Alok Industries – US$4.1 billion

Alok Industries Limited Logo

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

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

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

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

8. Jet Airways – US$2 billion

Jet Airways Plane | Biggest Bankruptcies in India

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

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

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

These factors eventually led to the Jets failure.

In Closing

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

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

Most Profitable Companies in India cover

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

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

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

Top 10 Most Profitable Companies in India

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

1. Tata Consultancy Services (TCS)

TCS profit over the years | Most Profitable Companies in India

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

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

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

TCS performance in different segment

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

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

2. Reliance

Reliance Profit over the years | Most Profitable Companies in India

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

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

Reliance profit in different segment FY2020

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

3. HDFC

HDFC Profit over the years

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

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

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

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

4. Infosys

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

Revenue of Infosys by segment

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

5. ITC

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

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


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

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

Also Read

Top 10 Companies in India by Market Capitalization

6. HDFC Bank

HDFC Bank profit over the years

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

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

7. ONGC

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

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

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

8. Coal India

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

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

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

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

9. Power Grid Corp.

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

Income and revenue distribution of Power Grid Corporation

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

10. NTPC

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

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

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

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

Closing Thoughts 

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

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

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

Bollywood Movies on the Stock Market

6 Must Watch Bollywood Stock Market Movies & Web Series!

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

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

Top Bollywood Stock Market Movies and Series

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

1. Scam 1992

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

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

2. Baazaar

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

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

3. Gafla

Gafla movie poster | Bollywood Movies on the Stock Market

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

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

ALSO READ

Top 10 Stock Market Movies That Every Investor Should Watch!

4. Corporate

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

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

5. The Big Bull

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

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

6. Share Bazaar

Share Bazaar movie poster | Bollywood Movies on the Stock Market

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

Closing Thoughts

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

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

Moat Companies in India Cover

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

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

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

Warren Buffett Photo | Moat Companies in India

What are Moats?

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

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

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

History of Moat | Moat Companies in India

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

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

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

Top Moat Companies in India

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

1. Asian Paints

Asian Paints Logo

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

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

2. Shree Cements

Shree Cements limited logo

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

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

3. TCS

TCS logo

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

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

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

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

4. Avenue Supermarts

DMart (Avenue Supermarts) Owner RK Damani

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

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

Also Read

10 Indian Companies with Monopoly in Their Industry!

5. Titan

Titan products | Moat Companies in India

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

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

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

6. Dr Lal Pathlabs

Dr Lal Path Labs Logo | Moat Companies in India

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

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

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

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

7. Bajaj Finance

Bajaj Finance Limited Logo

 

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

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

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

8. Pidilite

Pidilite Products | Moat Companies in India

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

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

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

9. Maruti Suzuki 

Maruti Suzuki Products | Moat Companies in India

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

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

10. SBI

State Bank of India (SBI) Logo

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

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

Closing Thoughts 

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

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

Barbeque Nation IPO Review 2021

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

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

Barbeque Nation IPO Review – About the Company

Barbeque Nation Logo

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

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

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

ALSO READ

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

Key IPO Information of Barbeque Nation

Barbeque Nation Outlet

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

Barbeque Nation Assets Over the Years | Barbeque Nation IPO Review

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

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

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

Barbeque Nation Profit Over the Years | Barbeque Nation IPO Review

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

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

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

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

Barbeque Nation IPO Review – Purpose of the IPO

The proceeds from the IPO will be used for:

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

Closing Thoughts 

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

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

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

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

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

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

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

Nifty 50 – NSE Benchmark Index

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

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

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

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

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

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

Bonus: BSE Sensex Constituent Stocks

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

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

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

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

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

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

Suryoday Small Finance Bank IPO Review

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

Suryoday Small Finance Bank IPO Review 2021: The Suryoday Small Finance Bank IPO opens on 17th March and closes on 19th March 2021. In this article, we cover the Suryoday SFB IPO review and look into important IPO information and find out the possible prospects of the company. Let’s get started.

Suryoday Small Finance Bank IPO Review – About the Company

Suryoday Small Finance Bank Logo

Incorporated in 2008, Suryoday Small Finance Bank is among the leading Small Finance Bank (SFBs)  in India.

Before becoming an SFB the Non-Banking Finance Corporation catered to the unbanked and underbanked sections of the population. They only started offering SFB services in 2017.

As of December 2020, the bank had 554 banking outlets which include 153 unbanked rural centers (URCs). Their customer base for the same period stood at 1.44 million.

They also have set up 661 customer service points (CSPs) as additional service from April 2020 and January 2021 and intend to continue expanding their reach

Suryoday SFB total assets over the years

Suryoday SFB beats its other SFB peers in terms of net interest margins, return on assets, yields, and deposit growth. They also have the lowest cost-to-income ratio among Small Finance Banks within India for FY20.

The bank predominantly operates in urban and semi-urban locations due to the greater income earning capabilities and employment opportunities in such areas in comparison to other rural regions. 

Profit over the years | Suryoday Small Finance Bank IPO review

Suryoday is a commercial bank that considers customers to be the most significant stakeholders. They have set up a strong credit process and a robust risk management framework.

Even though they are relatively new to the sector they have already introduced digital banking aspects and services like ATMs, phone banking, mobile banking, tablet banking, CSPs, and internet banking services.

The Bank loan portfolio stood at Rs 3,900 crore as of December 2020. Microloans formed 70% of these loans. The loans of the banks are concentrated in regions like Maharashtra, Tamil Nadu, and Odisha. These states make up  77% of the bank’s lending businesses.

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Suryoday Small Finance Bank – Key IPO Information

Pomotors ownership pre and post IPO in Suryoday SFB

The promoters of the bank are Baskar Babu Ramachandran, P Surendra Pai, P S Jagdish, and G V Alankara. Together they represent 30.35% of the paid-up equity share capital of the bank.

Other investors in the bank include Axis Mutual Fund, ICICI Prudential Life, Two Aditya Birla group companies, SBI Life Insurance Company, Goldman Sachs, IDFC Mutual Fund, HDFC Holdings, Gaja Capital, and Kotak Mahindra Life Insurance.

The offer includes a fresh issue of 81.50 lakh equity shares and an offer for sale of 1.09 crore equity shares by existing investors.

ParticularDetails
IPO Size₹582.34 Cr
Fresh Issue₹248.58 Cr
Offer For Sale(OFS)₹333.76 Cr
Opening DateMar 17, 2021
Closing DateMar 19, 2021
Face Value ₹10 per equity share
Price Band₹303 to ₹305 per equity share
Lot Size49 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateMar 30, 2021

The promoters have appointed Axis Capital, ICICI Securities, IIFL Securities, and SBI Capital Markets as the book running lead managers to the issue. Kfin Technologies has been appointed as the registrar to the issue.

Suryoday Small Finance Bank IPO – Purpose of the IPO

Suryoday has opted for a public issue for the following reasons:

  • To raise funds for augmenting the Bank’s Tier-1 capital base to meet the Bank’s future capital requirements.
  • To meet the requirements set by the RBI where SFBs are required to list within 3 years of reaching a net worth of Rs. 500 crore.

In Closing 

The IPO opens on 17th March and closes on 19th March 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Suryoday Small Finance Bank.

That’s all for this post. Do let us know what you think of Suryoday Small Finance Bank IPO Review. Are you planning to apply for this IPO or not? Comment below. Happy investing!

Nazara Technologies IPO Review 2021

Nazara Technologies IPO Review 2021 – IPO Price, Offer Dates & Details!

Nazara Technologies IPO Review 2021: The Nazara Technologies Ltd IPO opens on 17th March and closes on 19th March 2021. In this article, we cover the Nazara Technologies Ltd IPO Review and look into important IPO information and find out the possible prospects of the company. Read the complete article which will take 5 minutes to answer the question, Should you subscribe?  

Nazara Technologies IPO Review – About the Company

Nazara Technologies Ltd logo

Founded in 1999 by Nitish Mittersain, Nazara Technologies Ltd is the leading India based gaming company. The company has offers products across interactive gaming, esports and gamified early learning ecosystems. Some of its famous games include CarromClash, World Cricket Championships and Motu Patlu series.

They have also gamified early learning in the game Kiddopia, Nodwin and Sportskeeda in eSports and eSports media, and Halaplay and Qunami in skill-based, fantasy and trivia games. Although a market leader in India the company also enjoys a good presence in Africa, South East Asia, Middle East, and Latin America.

The company is also backed by investors like Utpal Sheth and Rakesh Jhunjhunwala aka the big bull. He is known to invest in quality companies that offer multifold returns in the long run.

Earlier this month Nodwin gaming a subsidiary of Nazara where they own a 55% stake, raised Rs 164 crore from the makers of the popular game ‘PlayerUnknown’s Battlegrounds’ (PUBG)- Krafton a South Korean company.

Nazara Technologies total assets over the years | Nazara Technologies IPO Review

NazaraTechnologies have focussed on sustaining the majority of their growth through the funds they generate from their operations. This has helped them maintain positive EBITDA. They have raised Rs 12.63 crore (in two tranches – 2005 and 2007) and Rs 76.53 crore in 2018.

The company has maintained good financials with over Rs 400 crore in cash. They have invested over Rs 300 crore into other Indian gaming companies over the last 5 years.

Nazara Technologies' profit over the years

Unlike most businesses that were severely affected by the COVID-19 restriction, Nazara’s customer base boomed. They received an average of 40.17 million Monthly Active Users (“MAUs”) for Financial Year 2020. For the 9 month period ending in December, the company received an average MAU of 57.54 million.  

Nazara Technologies IPO Review- Key IPO Information

Vikash Mittersain, Nitish Mittersain, and Mitter Infotech LLP are promoters of the company. They will be taking part in the offer for sale by selling  52,94,392 equity shares or a 16.7% stake. They will rake in Rs 582.91 crore at the upper band of the IPO.

Other investors like Mitter Infotech LLP, IIFL Special Opportunities Fund, Good Game Investment Trust, IndexArb Securities and Azimuth Investments will also be selling shares in the IPO. 

Nazara Technologies IPO Review | Promotor Ownership

IIFL will be partially exiting the company. They currently hold over 21% stake and will be selling off a  14% stake in the company. Others will be selling a 2.25% stake out of their total 22.5% holdings. Rakesh Jhunjhunwala, who owns a 10.8% stake, has decided to stay invested in the company.

The promoters have appointed ICICI Securities, Nomura Financial Advisory and Securities (India) Private Limited, Jefferies India Private Limited and IIFL Securities as the lead managers to the issue. Link Intime India Private Ltd has been appointed as the registrar to the IPO.

ParticularDetails
IPO Size₹582.91 Cr
Fresh Issue---
Offer For Sale(OFS)₹582.91 Cr
Opening DateMar 17, 2021
Closing DateMar 19, 2021
Face Value ₹4 per equity share
Price Band₹1100 to ₹1101 per equity share
Lot Size13 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateMar 30, 2021

It is also important to note that this the second time that Nazara Technologies has attempted an IPO. They had earlier filed a draft red herring prospectus in 2018 but backed out citing market conditions. 

Purpose of the Nazara Technologies IPO

The company has opted for the IPO for the following two reasons:

  • To achieve the benefits of listing Equity Shares on the Stock Exchanges. 
  • To carry out Offer for Sale.

Closing Thoughts

The Nazara Technologies Ltd IPO opens on 17th March and closes on 19th Mar 2021. Before investing prospective investors must carefully consider both the future prospects and the risks associated with the company.

That’s all for this post. Do let us know what you think of Nazara Technologies Ltd IPO Review. Are you planning to apply for this IPO or not? Comment below. Cheers!

Kalyan Jewellers IPO review 2021

Kalyan Jewellers IPO Review 2021 – IPO Price, Offer Dates & Details!

Kalyan Jewellers IPO Review 2021: The Kalyan Jewellers India Limited (KJIL) IPO opens on 16th March and closes on 18th March 2021. In this article, we cover the Kalyan Jewellers IPO Review and look into important IPO information and find out the possible prospects of the company. Let’s get started.

Kalyan Jewellers IPO Review – About the Company

Kalyan Jewellers Logo | Kalyan Jewellers IPO review

Founded in 1993 by Mr T.S. Kalyanaraman, Kalyan Jewellers India Limited began its operations with one showroom in Thrissur, Kerala. The company designs, manufactures, and sells a variety of gold, studded and other jewellery products for various occasions like weddings, festivals, etc.

The company has come a long way in the last 28 years. Today the Jewellery company has 107 showrooms located across 21 states and union territories in India making it one of the largest gold companies in India.

Kalyan  Jewellers also boasts a strong international presence. The company has over 30 showrooms in the gulf region. They also sell jewellery through their online platform at Candere.

Growth of Kalyan Jewellers

Total Assets over the year | Kalyan Jewellers IPO review

One of the major reasons for their success has been their focus on creating a brand image that represents trust and reliability. These are paramount in the gold jewellery industry and the company focussed on this aspect ever since its inception. Once this was achieved the company focussed on its expansion needs.

Kalyan Jewellers was also the first Indian jewellery company to voluntarily opt to have all their products BIS hallmarked. In addition to this, they also ensured that all their products came with a price tag that detailed the price of various components used.

These moves enhanced customer education and transparency which was missing in the Indian markets especially in the gold jewellery industry.

Kalyan Jewellers Profit Over the Years

Keeping customers at the forefront they also have set up  750 customer support stores in India, which function as feeders to the showrooms. This has made them one of the most trustworthy brands giving them a loyal customer base. This has further enhanced their ability to operate as a hyperlocal jewellery company in the southern states. They also have out in place strong.

Kalyan Jewellers has also given emphasis to their information technology and operational management systems. These have ensured operational efficiency and best-in-class standards of controls. In addition, the company’s introduction of policies concerning inventory management and the mitigation of gold price fluctuations have been critical to their success. 

The company received investments from the Warburg Pincus Group in 2014. According to the ICRA Warburg Pincus has a 30% stake in Kalyan Jewellers. Gold Jewellery makes up 74.77% of their revenue followed by studded (diamond and precious stone) and other jewellery segments in the year 2020.

Key IPO Information of Kalyan Jewellers

The Promoters of this company are MR. T.S. KALYANARAMAN, MR. T.K. SEETHARAM AND MR. T.K. RAMESH. Mr T.S. Kalyanaraman, who has over 45 years of retail experience, of which over 28 years is in the jewellery industry.

They have appointed Axis Capital Limited, Citigroup Global Markets India Private Limited, ICICI Securities Limited, SBI Capital Markets Limited, BOB Capital Markets Limited as the lead managers to the issue. Link Intime India Private Limited has been appointed as the registrar to this issue. 

Promotors Ownership | Kalyan Jewellers IPO Review

 

Kalyan Jewellers IPO Review – Important IPO Details

ParticularDetails
IPO Size₹1,175.00 Cr
Fresh Issue₹800.00 Cr
Offer For Sale(OFS)₹375.00 Cr
Opening DateMar 16, 2021
Closing DateMar 18, 2021
Face Value ₹10 per equity share
Price Band₹86 to ₹87 per equity share
Lot Size172 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing Date:Mar 26, 2021

Purpose of the Kalyan Jewellers IPO

The net proceeds from the IPO will be used for the following purposes:

  • To finance business working capital requirements.
  • To meet general corporate purposes.

In Closing 

The IPO opens on 16th March and closes on 18th March 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Kalyan Jewellers India Limited.

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

Craftsman Automation IPO Review 2021

Craftsman Automation IPO Review 2021 – IPO Price, Offer Dates & Details!

Craftsman Automation IPO Review 2021: The Craftsman Automation Limited IPO opens on 15th March and closes on 17th March 2021. In this article, we cover the Craftsman Automation Limited IPO review and look into important IPO information and find out the possible prospects of the company. Let’s get started. 

Craftsman Automation IPO Review – About the Company 

Craftsman Automation Limited was founded in 1986 by Srinivasan Ravi in Coimbatore in the State of Tamil Nadu. They create products for the powertrain, industrial and engineering products segment, and automotive segment. This also includes aluminium products for the automotive segment.

The company product portfolio includes material handling equipment such as hoists, crane kits, industrial gears, gearboxes, locomotive components, railway products, storage solutions, marine engines and accessories, tool room, mould base products and Special Purpose Machines (“SPM”). The SPMs also includes metal cutting and non-metal applications such as washing and leak testing solutions.

Craftsman Automation Office | Craftsman Automation IPO Review

The company has come a long way over the 32 years. They have developed strong in-house engineering and design capabilities allowing them to offer comprehensive solutions and products. Their facilities also include imported state-of-the-art computer numerical control (“CNC”) machine tools and die casting machines.

They have set up 12 manufacturing facilities across 7 cities in India, with a total built-up area of over 1.5 million square feet. These facilities have been set up in strategic locations closer to the clients in order to facilitate the clients just-in-time delivery schedules and for other logistical advantages.

The manufacturing facilities of the company include aluminium foundries, pressure die casting facilities, machining and allied facilities, heat treatment, fabrication, and assembly facilities. 

Craftsman Automation Assets over the years | IPO Review

They are currently the largest component manufacturer engaged in the machining of cylinder heads and cylinder blocks in the construction equipment industry as well as in the IMHCV segment of the commercial vehicle Industry. The company is also part of the top 4 manufacturers in cylinder block machining for the tractor industry.

Craftsman Automation Profit Over the Years

They have a long-standing list of domestic and international clients which includes:

Craftsman Automation Limited IPO Review – Key IPO Information

Srinivasan Ravi, the promoter of the company is a mechanical engineer and a first-generation entrepreneur with over 32 years of relevant industry experience. He owns a 52.83% stake in the auto component maker. Other investors in the company include IFC, Marina III (Singapore) and K Gomatheswaran hold 14.06%, 15.50% and 7.04% stake, respectively.

The IPO comprises a fresh issue of equity shares worth Rs 150 crore and offer-for-sale (OFS) of up to 45.21 lakh equity shares by promoters and existing shareholders.

Craftsman Automation Promotors ownership | IPO Review

They have appointed Axis Capital Ltd and IIFL Securities Ltd as the book running lead managers to the issue. Link Intime India Private Ltd has been appointed as the registrar to the issue.

Important Craftsman Automation IPO details

ParticularDetails
IPO Size₹823.70 Cr
Fresh Issue₹150.00 Cr
Offer For Sale(OFS)₹673.70 Cr
Opening DateMar 15, 2021
Closing DateMar 17, 2021
Face Value ₹5 per equity share
Price Band₹1488 to ₹1490 per equity share
Lot Size10 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateMar 25, 2021

Craftsman Automation’s Competitors

Craftsman Automation listed competitors include:

Craftsman Automation IPO Review – Purpose of the IPO

The proceeds from the issue will be used for the following purposes:

  • Repayment or pre-payment of the company’s borrowings.
  • Other general corporate purposes.

Closing Thoughts

The IPO opens on 15th March and closes on 17th March 2021. For retail investors, it can be a good opportunity to look into the company’s future prospects and apply for the IPO if they believe in the products and growth prospects of Craftsman Automation Limited.

That’s all for this post. Do let us know what you think of Craftsman Automation Limited IPO Review. Are you planning to apply for this IPO or not? Comment below. Cheers!

Anupam Rasayan IPO Review 2021 cover

Anupam Rasayan IPO Review 2021 – IPO Price, Offer Dates & Details!

Anupam Rasayan IPO Review 2021: Anupam Rasayan IPO opens on March 12 to March 16, 2021. In this article, we cover the Anupam Rasayan IPO Review and look into important IPO information and find out the possible prospects of the company. Let’s get started.

Anupam Rasayan IPO Review – About the Company

Anupam Rasayan IPO Review - About the Company

Anupam Rasayan began operations in 1984. Since then it has gone on to become one of the leading speciality chemicals manufacturers in India. The company is engaged in the production of custom synthesis and manufacturing of speciality chemicals. Its chemical products are used in agrochemicals, personal care and pharmaceuticals.

The company is also involved in the manufacture of speciality pigment and dyes, and polymer additives. It is important to note that 95.37% of its revenue comes from the agrochemical, personal care and pharmaceutical sectors. Revenue from other speciality chemicals accounted for 4.63%. 

Anupam Rasayan IPO Review - Company total assets

They currently have 6 manufacturing facilities based in Gujarat –  four facilities located at Sachin and two located at Jhagadia. The company also exports its products globally to countries like the United States, Japan and in Europe. They have maintained a strong long term relationship with MNC’s like Syngenta Asia Pacific Pte. Ltd., Sumitomo Chemical Co. Ltd. and UPL Ltd. This has further helped them expand their product offerings. 

Anupam Rasayan IPO Review - Company Net Profit - Profit After Tax

Anupam Rasayan IPO Review – Key IPO Information

Mr Anand S Desai, Dr Kiran C Patel, Ms Mona A Desai, Kiran Pallavi Investments LLC, and Rehash Industrial and Resins Chemicals Private Limited are the company promoters. They have appointed Axis Capital Ltd, Ambit Private Ltd, IIFL Securities Ltd and JM Financial Ltd. as the book running lead managers to the issue.  KFin Technologies Private Ltd. has been appointed as the registrar to the issue.

Important Anupam Rasayan IPO details

ParticularDetails
IPO Size₹760.00 Cr
Fresh Issue₹760.00 Cr
Offer For Sale(OFS)---
Opening DateMar 12, 2021
Closing DateMar 16, 2021
Face Value ₹10 per equity share
Price Band₹553 to ₹555
Market Lot27 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateMar 24, 2021

Grey Market Premium

As of 8th March, the shares of  Anupam Rasayan India Ltd surged by Rs. 320 and were trading at Rs 875 in the Grey Market. This implied a premium of 58%.

Anupam Rasayan IPO Review – Purpose of the IPO

The net proceeds from the issue will be used for

  • Repayment of ₹556.20 crores in debt. As of 30 September, the company had a total debt of ₹814.48 crores.
  • Other general corporate purposes

Competitors

Anupam Rasayans listed competitors include:

Closing Thoughts

Anupam Rasayan has come a long way since its inception. The current global market trend where companies are also looking for a suitable alternative to Chinese firms could play an important role in Anupam Rasayan growth and open many doors for the company. Happy Investing! 

Rana Kapoor's Story | Trade Brains

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

Rana Kapoor Press Conference | Rana Kapoor's Story

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

Rana Kapoor with Prime Minister Narendra Modi

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! 

EaseMyTrip (Easy Trip Planners) IPO Review 2021

EaseMyTrip (Easy Trip Planners) IPO Review 2021 – IPO Price, Offer Dates & Details!

EaseMyTrip IPO Review 2021: The Easy Trip Planners IPO which opens on March 8th and closes on March 10, is one of the first digital company IPOs this year. In this article, we cover the EaseMyTrip (Easy Trip Planners) IPO Review and look into important IPO information and find out the possible prospects of the company. Let’s get started.  

EaseMyTrip (Easy Trip Planners) IPO – About Company

EaseMyTrip IPO Review 2021 March

Founded in 2008, Easy Trip Planners Ltd is an online travel agency which offers a range of travel-related products and services which includes flight tickets, train tickets, holiday packages, hotel booking, bus tickets, cab booking services, and other value-added services which include travel insurance, visa processing, etc.

The company has offices throughout the country including major cities like Noida, Bengaluru, Mumbai, and Hyderabad. The company has also expanded its presence globally and has offices located in Singapore, the UAE, and the UK.

History of EaseMyTrip

 Easy Trip Planners offer their services through their website (EaseMyTrip) and their android and iOS mobile app. In its early years, the company started off with a B2B2C (business-to-business-to-customer) distribution channel. Here they provided travel agents access to their website in order to book domestic travel airline tickets to cater to the offline travel market in India.

By 2011 the company entered the B2C segment where they would directly assist clients in booking flight tickets through their website. By doing so they addressed the needs of the middle-class population of India by providing an easy-to-use alternative instead of travel agents.

Easy Trip Planners Net Assets

In 2013 the company entered the B2E (business to enterprise) segment where they would provide their services to corporates. They also introduced hotel bookings and holiday packages to their customers. The following year Easy Trip Planners launched their Android application.

The company also has developed an in-house technology team that focuses on providing a secure, advanced, and scalable technological infrastructure.

EaseMyTrip IPO Review – Achievements

EaseMyTrip Achievement - Profit after tax

Over the years the company has grown in leaps and bounds. One of their biggest USPs has been the end-to-end service that they provide for all travel needs making their platform a one-stop destination for all travel needs. This has made Easy Trip Planners the second largest online travel agency in India in terms of gross revenue. In order to achieve this, they have entered into various agreements with third parties, including airlines, GDS and API service providers, channel managers, IRCTC, corporate customers, and IATA.

The company provides its clients access to 400 international and domestic flights along with 1.1 million hotels in India or abroad. As of March 2019, it had 49,494 registered travel agents across major cities of India.

The company has also achieved the feat of being the only profitable online travel agency among the key online travel agencies in fiscal years 2018, 2019, and 2020 in terms of net profit margin. The expansion of the internet and smartphones across the country will only increase the company’s growth potential.

EaseMyTrip in the midst of COVID-19

What is even more impressive is the company’s performance in the midst of the pandemic. They reported a revenue of Rs 50 crore in the nine months period ended in December 2020. They also managed to recover 70% booking volumes in the third quarter of Fiscal 2021, in terms of segments in comparison to the third quarter of Fiscal 2020. 

EaseMyTrip IPO Review – Risks in the Company

One of the major weaknesses of the company is the industry it operates in. The operations of the Travel-related products and services get severely impacted in the case of pandemics which we already saw this year. The effects of COVID-19 are said to have a lasting impact on the industry. 

Easy Trip Planners IPO Review - Revenue segments

The table above shows the breakup of the sources of the online ticketing segment. Here you can see that the industry is majorly dependent on Airline ticketing. Similarly, Easy Trip Planners too generates more than 90% of its revenue through air tickets booked on its website and mobile application. Any impact on the airline industry will be carried on to  Easy Trip Planners. 

The company is also dependent on its website and mobile application for operations. Failure to adapt to technological advances or glitches in the systems could disrupt their operations.

Key IPO Information for EaseMyTrip

ParticularDetails
IPO Size₹510 Cr
Fresh Issue---
Offer For Sale(OFS)₹510.00 Cr
Opening DateMar 8, 2021
Closing DateMar 10, 2021
Face Value₹2 per equity share
Price Band₹186 to ₹187 per equity share
Lot Size80 Shares
Minimum Lot Size1
Maximum Lot Size13
Listing DateMar 19, 2021

Mr. Nishant Pitti, Mr. Rikant Pittie, and Mr. Prashant Pitti are the company promoters. They have appointed Axis Capital and JM Financial as the leading book managers. KFin technologies Private Ltd. has been appointed as the registrar to the issue.

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EaseMyTrip IPO Review – Grey Market Premium

The IPO has received a positive response in the Grey Market. As of March 4, the shares of the company traded at a 96% premium over the issue price. This shows that the investors are bullish on the IPO.

Shareholding pattern -EaseMyTrip IPO Review 2021

EaseMyTrip IPO Review – Purpose of the Issue

The net proceeds from the issue will be used for

  • The company will not receive any proceeds from the issue. The IPO is entirely an offer for sale for founders Nishant Pitti and Rikant Pitti, who hold 49.81% and 49.68% stake, respectively. They will each sell holdings of ₹255 crores in the issue. 
  • They also aim to achieve the benefits of listing the equity shares of the company on stock exchanges.

EaseMyTrip Competitors in the Industry

Their competitors in the industry include:

  • ClearTrip
  • MakeMyTrip
  • Yatra Online
  • OYO
  • Paytm

Closing Thoughts 

Easy Trip Planners is one of the first digital company IPO this year which has shown to have great potential thanks to the reach of the internet. The company also has maintained a consistent financial track record.

Dinesh Gupta, Co-founder of UnlistedZone stated “ The IPO market is in high spirits. Every company is trying to tap the primary market with an initial public offering. The liquidity rush is allowing every issue to demand whimsical valuations,” It is important that investors do not jump along on the bullish trend but invest only after careful evaluation of the offer. Happy Investing!