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How accurately do you define small-cap stocks in the context of India? There are various definitions, but large-capitalization is a term used to classify companies with relatively small market capitalization.
For your safety, you can easily consider stocks with a market capitalization of Rs 2000 to Rs 5000.
Of course, you need to do your homework before investing in these stocks online, but here are 10 things to check when buying small-cap stocks in the stock market.
Before buying any stock, you exactly need the time horizon as it will help you decide up to what time you should hold the stock.
Time horizon can be divided into three types:
An investment that you need to hold for 1 year comes in the short term. If you want to buy stocks that come under the short term horizon, then it would be best to invest in stable blue-chip stocks which give you good investments. These stocks hold a good balance sheet and also possess minimum risks.
People who want to invest in the middle term should invest in emerging market stocks and have a moderate level of risk.
Long term investment stocks have the ability to generate long term stock market trading returns and have to recover if their prices go down due to volatility.
Small-Cap stocks are the ones that have a small market capitalization. Hence it is important to check the past record of any small-cap companies. Since the company stocks carry high risks, you need to carefully examine the stock’s fundamental analysis and technical analysis before selecting any stock.
Therefore it is suggested to invest in the small case stocks that have a good track record i.e. at least of 5 years.
Before selecting any small case stock, you need to focus on the strategies which are used by most investors:
Value investing is mainly used by giant investors like Warren Buffet. This type of investing refers to the company stocks that are undervalued compared to peers in a hope of gaining good stock trading returns.
In growth investing, people invest in stocks that show huge growth in terms of revenue and earnings. Investors firmly believe that any upward trend in these stocks will generate huge profits.
Income investing in the stocks that pay you high dividends. These are quality stocks and are investors’ favorites because the income generated by these stocks can be reinvested for higher earnings.
Sometimes consistency matters more than absolute performance, especially in the case of small-cap stock.
Hence it is suggested to invest in the companies that have shown growth and have a good past track record and neglect the companies which have shown poor performance. It has been seen that the consistent small-cap achieves better valuations than the other small-cap stocks.
It is good to check the fundamentals before buying any stock:
The ratio refers to the stock price with respect to the company’s earnings on an annual basis. For instance, if a company is trading at Rs 20 per share that generates EPS of Rs 1 on annual basis; that means the share price is 20X times the company's earnings calculated annually.
Debt to equity ratio tells how much the company is in debt. It is to be noted that high debt is bad as it leads to bankruptcy.
The ratio compares the stock price to the net value of assets that are owned by the company which is then divided by the number of outstanding shares.
Small-cap companies are those that have a single product or single service as they don't have much capital to expand their business. In this case, the size of the market matters a lot. Also, the company’s position in the stock market highly matters as it makes a countable difference to company valuations.
A dividend refers to a portion of profits companies share with their shareholders. They distribute profits in the form of dividends. Investors who are interested in dividend stocks should check the dividend history of the companies before going for any stock.
Contingent liabilities mean pending legal cases, open derivative exposures etc. Small-cap companies generally have contingent liabilities. Hence it is important to check whether a company is involved in any legal cases or not.
In addition to this, you need to check whether the auditor is not qualified or the auditor resigns from their position.
Volatility badly affects small-cap stocks. The small-cap stocks with high volatility will rise on bullish days and fall drastically when the market gets into a bearish mode.
It is important to check the cash flow statements, especially in the case of small-cap stocks. As the small-cap stocks generally lie under liquidity constraints which means that the small-cap stocks are unable to manage their working capital effectively.
Small-cap stocks are highly volatile which makes them full of risks. It makes it difficult for investors to trade in small-cap stocks. However, you can select good small-cap stocks if you use these factors for stock trading.
Savings vs Investing: Which one is an ideal choice for a beginner? This question has been asked by thousand of people. The term saving and investing look similar to each other and hence most of the time they are used interchangeably. But if you get deep down into it, you will know that there is a thin line between the two terms.
People who are new to savings and investing should know the fundamentals of the two essential processes. Here, a simple question arises: should you start saving or investing or do both together?
In this blog, we will unlock the concepts of both savings and investing.
Savings means the leftover money one deducts after the expenditure from their income.
Savings= Income - Expenditure
Saving money provides a sort of financial security as it will help people use them in case of emergencies and needs. Also, they can use this money for investments.
Savings are usually done by putting money in monthly and yearly plans.
You can use any type of government-backed saving plan because of sudden huge expenses that go unrecorded. Hence, you are required to make a proper plan to save regularly and effectively.
The best possible way to start saving is by budgeting.
A budget is a plan of action that helps one to cut down several expenses and help him limit his spending on unnecessary expenditures.
If one is unsure about the limits of spending, you can use the following thumb rule 50-30-20 to start budgeting.
You can alter this rule as per your requirements and goals.
Savings remains unaffected by any events in the economy. Since it's not an invested amount, you can achieve your objectives as per the fixed schedule and a fixed amount.
Saving is the initial step toward investment. Also, it helps you to save money for your goals too in the most disciplined manner.
Because of the inflammation, the purchasing power of money can get reduced. Hence it can be suitable for short term tasks only.
Most savings plan offers low to moderate interest rates which can't be enough to beat the inflation rate.
One should use savings only if -
Although saving is necessary for financial security, there is another fundamental process for building wealth. I,e Investing.
Investing is the process of -
As savings are usually done with government schemes, investing is mainly done through the stock market and mutual funds.
Investing is quite complex compared to savings, however with the right kind of knowledge, one can easily invest in the stock market through stock trading.
Investment should be classified as short term, medium and long term goals. Also, it depends on one’s risk appetite.
Risk is the amount you can afford to lose. It’s also known as an investor’s risk appetite.
Before investing in any stocks, you need to do a complete analysis of a company: fundamental analysis and technical analysis.
Fundamental Analysis: It is the process of analyzing the financial status of a company and the industry in which it is operating to make any investment or trading decisions.
Technical Analysis: Through technical analysis, you can analyze the charts with the help of patterns and indicators which are in turn used to find out the possible price trends in the future.
Pros and Cons of Investing
Investing helps you to combat inflationary pressure. Investing in the equity segment can make your money grow at a faster rate so that it can beat inflation in the future.
Investing beats inflation with a unique feature which is known as compounding of wealth. Hence, the earlier you invest, the more of your earnings will multiply with the passage of time.
Due to the growth of wealth, you don’t require to set as much money for a goal as compared to simply saving money.
Cons
Investing needs adequate knowledge, strong analytical skills and emotional intelligence. It requires a lot of practice to become a skillful investor.
Investments can be affected by a variety of factors such as company results, and economical events.
Hence, before investing your money in any financial instrument, one needs to study all the necessary factors for wealth building.
Well, if you want to make your financial future secure, then investing is something that comes second to none.
The advantage that comes into play, you need to invest money for a long term of at least 10 years.
Therefore, one should choose to invest when -
Here is an important point to note savings come before investing and never together. This is because, how will you invest if you don't save money for it.
If you are a beginner, who wants to save or invest money will be someone who has just started earning money.
If you are stuck in a situation, then you need to clear financial objectives and goals first. Once the habit of discipline is built, a beginner will find it to maintain that discipline for the investment as well.
Saving and investing are two terms that are interrelated with each other. Beginners who want to build their wealth, need to save their money first, build a successful financial plan and move on.
If you are one of those who have little or less idea about investing, then it's the right time to go for wealth managers as they will assist you in finding your goals and achieving them. There are many stockbroking firms that help people find their paths in investing.
अपेक्षा से अधिक मुद्रास्फीति के आंकड़ों से सोने की कीमते कॉमेक्स वायदा में 1980 डॉलर प्रति औंस के स्तर तक पहुंच गई है। प्रमुख अर्थव्यवस्थाओं के मुद्रास्फीति आकड़ो में बढ़ोतरी दर्ज की गई है जबकि अमेरिकी मुद्रास्फीति मार्च माह में कम होने के बाद भी साल -दर साल बढ़ी है जिससे यह 40 साल की उचाई पर बरक़रार है।
बढ़ती हुई मुद्रास्फीति के बीच तेज़ी से ब्याज दर बढ़ोतरी और बैलेंस शीट में कटौती, चिंता का विषय है। जिसके कारण अमेरिका के साथ वैश्विक अर्थव्यवस्था क्षतिग्रस्त हो सकती है इसलिए कीमती धातुओं के साथ अमेरिकी बांड यील्ड और डॉलर इंडेक्स में बढ़ोतरी देखी जा रही है। कच्चे तेल के भाव में तेज़ी फिर से दिखाई देने लगी है और ब्रेंट तेल के भाव पिछले सप्ताह में 8 प्रतिशत तेज़ हो कर 111 डॉलर प्रति बैरल पर पहुंच गए है जो मुद्रास्फीति में सपोर्ट करेंगे।
भू -राजनीतिक जोखिम, कोविड वापसी की दस्तक और महामारी के कारण छोटे देशो की चरमराती हुई अर्थव्यवस्था सोने और चांदी के भाव को सपोर्ट कर रही है। घरेलु वायदा बाजार में सोने के भाव पिछले सप्ताह 1.8 प्रतिशत तेज़ हो कर 53000 रुपये प्रति दस ग्राम के स्तरों पर पहुंच गए है और चांदी के भाव 3 प्रतिशत तेज़ हो कर 69000 रुपये प्रति किलो के स्तरों पर पहुंच चुके है। इस सप्ताह के लिए चीन से जारी होने वाले आर्थिक आंकड़े, फेड प्रमुख जेरोम पॉवेल का बयान, अंतर्राष्ट्रीय मुद्रा कोष की बैठक और फ्रांस राष्ट्रपति के चुनाव सोने और चांदी की कीमतों के लिए महत्वपूर्ण रहेंगे।
इस सप्ताह सोने और चांदी के भाव तेज़ रह सकते है। जून वायदा सोने में 52500 रुपये पर सपोर्ट और 53300 रुपये पर प्रतिरोध है। मई वायदा चांदी में 68000 रुपये पर सपोर्ट और 70000 रुपये पर प्रतिरोध है।
The year 2021 was a remarkable year for India as the country raised more growth post-pandemic. Many companies went public in 2021 which was considered the major breakthrough of IPOs and SME IPO in the Indian stock market history. This year, many upcoming IPOs in 2022 are ready to hit the primary market.
However, there were some cases where IPOs such as Paytm experienced the biggest stock crash. If we talk about the year 2022, many companies are expected to go public as a result many of them have already submitted DRHP to SEBI.
It has been seen that SEBI has shown a lot of flexibility in approving DRHP, however, the companies make delays in launching their IPOs.
Here, we will mention some of the IPOs that will come in April 2022:
LIC IPO was all set to launch in the first month of this year, but somehow it got postponed. The primary reason behind the sudden delay of the LIC IPO is the Russia-Ukraine war.
Now, many sources have confirmed that the LIC IPO will come out on 12 May 2022.
Although a large number of companies are ready to go public, LIC IPO is the one that everyone has an eye on.
Company NameIPO Size (Approx)Expected IPO DateLIC IPO Rs 66000 CroreApril/May 2022National Stock ExchangeRs 10000 CroreApril 2022Oyo RoomsRs 8,430 CroreApril 2022DelhiveryRs 7,460 CroreApril 2022Ola CabsRs 7,300 CroreApril 2022PharmeasyRs 6,250 CroreApril 2022Bajaj EnergyRs 5,450 CroreApril 2022Emcure PharmaceuticalsRs 4,500 CroreApril 2022Go AirlinesRs 3,600 CroreApril 2022BoAt ElectronicsRs 3,500 CroreApril 2022Droom TechnologiesRs 3000 CroreApril 2022Jana Small Finance BankRs 2000 CroreApril/May 2022MobiKwikRs 1900 Crore April/ May 2022Arohan Financial BankRs 1800 CroreApril/ May 2022Northern Arc CapitalRs 1800 CroreApril/ May 2022IxigoRs 1600 CroreApril/ May 2022Utkarsh BankRs 1350 CroreApril/ May 2022Penna CementRs 1,550 CroreApril/ May 2022Fincare Small Finance BankRs 1,330 CroreApril/ May 2022Paradeep PhosphatesRs 1,225 CroreApril/ May 2022Sterlite PowerRs 1,250 CroreApril/ May 2022ESAF Small Finance BankRs 998 CroreApril/ May 2022Hexagon NutritionRs 600 CroreApril/ May 2022Skanray technologiesRs 400 Crore + OFSApril/ May 2022ESDS SoftwareRs 322 Crore + OFSApril/ May 2022
Here, we present a quick snapshot of the upcoming IPOs in India 2022 that will hit the primary market in April 2022
NSE is expecting to hit the primary market in April. This is because the top stock exchange company has received approval from SEBI to launch its IPO. According to SEBI guidelines, NSE cannot launch its IPO on the platform itself, hence NSE is seeking multiple listings on BSE and on other international platforms.
OYO Rooms is considered India’s one of the largest hospitality startups in the area of digital room business. The company submitted its DRHP to SEBI last year. Hence, it is looking forward to launching its IPO in the current month.
With the IPO, the company is planning to raise a capital of Rs 8,430 Crore. Of which, Rs 7000 Crore will be counted at freshly issued shares and the rest is through OFS.
India’s new-age logistics company is planning to launch its IPO of Rs 7,460 Crore. The IPO will come with a fresh issue of Rs 5000 Crore and OFS of Rs 2460 Crore.
India’s largest local cab booking service is planning to go public with an Rs of Rs 7,300 Crore. Since Ola filed for DRHP months ago, the company has decided to hold its pre-planned IPO for the next few months. Ola has selected City bank group, and Kotak Mahindra bank to manage its IPO.
It is an online portal that connects the pharma store and customers together and is considered the largest retailer in the pharma industry. PharmEasy also provides doctor consultations and online prescriptions.
Bajaj energy is a renowned thermal power generating company as it helps manage, develop, manage, and finance many thermal power plants in India. As per the DRHP filed with Bajaj Energy, the company is planning to raise Rs 5,450 Crore through its IPO.
Emcure Pharmaceuticals is a well-known name in the pharmaceutical industry. The company is planning to raise its IPO of Rs 4500 Crore of which Rs 1,100 Crore by way of fresh issue and Rs 3,400 Crore for OFS.
Go Airlines or Go Air is an ultra-low-cost airline based in Mumbai. The company hit the headlines just after it decided to launch its IPO of Rs 3,600 Crores. The public offer will include only a fresh issue of equity shares with a face value of Rs 10 per equity share.
boAt electronics has marked its name in the audio equipment and wearable industry. Its products include headphones, earphones, wireless speakers, wearables etc. The company now has decided to go public with an IPO of Rs 2000 Crore.
The lead managers of boAt IPO are Axis Capital, BofA Securities, Credit Suisse Securities and ICICI Securities.
Droom Technologies is a data science company that facilitates the transaction of automobiles through an online platform. The company has filed its DRHP regarding its IPO of Rs 3000 Crore. Of the total amount, the fresh issue comprises Rs 2000 Crore and Rs 1 Crore is for OFS.
The IPO boom is still on as many companies are seeking expansion and growth. After the 1st pandemic, many of them had gone through heavy losses and hence they are planning to launch an IPO to clear their debt and increase profitability for the organization.
The primary market acts as a boon for investors as they gain huge profits from the IPO release. Beginners also book profit from these IPOs by purchasing a “LOT” but most of them feel nervous as they are new in the stock trading arena.
The lot size plays a significant role in Futures and Options trading. If you need to get a clear understanding of Futures and Options, lot size is the primary concept you need to go through.
In this blog, we will figure out what a lot size is and how different derivative contracts have different lot sizes.
A lot size refers to a fixed quantity of shares one can buy or sell as per the contracts.
If you have been into trading for more than 6 months or more, you may have heard that a company has x number of lot sizes. This simply means that the company has fixed its shares a lot.
The Security and Exchange Board of India decides the lot size of stocks and indices that are traded on NSE and BSE. For instance, Nifty Future has a lot size of 50 which means if someone wants to buy Nifty Futures, he wants to trade in the multiple of 50 as the lot size of Nifty is 50.
Like Nifty Futures, equity futures also have a lot of sizes. For example, Reliance Futures has a lot size of 250. If someone buys a lot of Reliance Futures which are currently trading at Rs 5500, that means the value of Reliance Futures is 250*5500=1,375,000
SEBI is the apex body that decides the lot size of each company that is involved in stock trading. When Futures and Options trading came into existence, it was the regulatory body that had decided the notional value of Rs 2,000,00.
After deciding the notional value, SEBI fixes lot size to a certain number that would value more than 2 Lakh when multiplied by the market value. It was done to save the losses of small investors who try Futures and Options.
When SEBI noticed that more lots were purchased by the retail investors, it revised the lot value to Rs 5 Lakh. New additions were introduced after F&O, which kept the lot value to Rs 7.5 Lakh.
Also, the proposal came in front of SEBI to change the value of lot size to Rs 10 Lakh so that only risk-bearing investors can trade in the F&O.
When SEBI notices any major changes in the value of shares that would make significant divergence with the lot values, the regulator revises the lot sizes.
Let’s understand with an example: XYZ company has a lot size of 1500. The F&O trading price is Rs 555, hence the lot value is Rs 8,32,500.
Suppose the trading price of a share rises up to Rs 1000. As per the fixed lot size, the total value of the lot will become Rs 15 lakh which will be a big divergence from the decided lot value.
By seeing the case, the stock market regulator may take action to revise the lot size to a downward price which would be a better reflection of the lot value.
The reverse case also happens. In these types of cases, the lot size has been revised upward so that it is more compatible with the indicative value.
The primary reason to trade in lots in F&O is standardization. The standardization can be done in several ways. Futures and Options across indices come with 1 month, 2 months, and 3 months tenure.
Many of you have heard the saying “ Don't put all the eggs in one basket”.
This means if a farmer gets stumbled while carrying the egg basket, he could end up in a messy situation as all the eggs present inside the basket become messy which makes the whole basket dirty.
The meaning of the words perfectly said that don't risk all of your money on a single investment.
Diversification protects your investment as it allows you to invest in multiple asset classes which in turn saves you from losses that could happen in one particular sector.
Let’s understand with an example: Everyone knows about the equity crash that happened in 2008-09.
As per the reports, during the 2008-09 period, equities crashed by 39%. Had you invested all the money into equities, you would have probably been into major losses.
In any case, if you had spread all of your investment into different asset classes, such as equity trading, debt, commodity trading etc, you would have been saved from huge losses.
In 2008-09, gold gave outstanding stock trading returns of 24%. The same went for debt. In the next two years, post-2008-09, the equities were seeing a rising mode as it would go up by 24% while other asset classes stopped giving good returns.
Portfolio diversification refers to investing your money across multiple asset classes which not only helps your money grow but helps you mitigate your losses to a greater extent.
In diversification, you owe different stocks from multiple industries, countries, commodities and other investments such as gold, silver, bonds, government instruments, and real estate.
Investing money in various sectors minimizes the permanent loss of capital and the volatility of the overall portfolio.
The primary motive of diversification is to minimize risks. But no one can achieve that by investing in highly safe instruments such as government investment schemes like PPF, Treasury bills, RBI bonds, NSCs etc.
This is because investing all of your money into government schemes will significantly reduce your overall returns. For instance, investing all of your money in NSCs, and PPF debt options won't help you get outstanding returns.
The portfolio should be filled with equity-related instruments, only then you would be able to achieve handsome returns in less time.
For those who believe in government investment schemes, you should remember that most of these schemes have a high tax. Hence, your post-tax return would come out as very low.
Many of you would love to gain good returns over less period of time, that too without taking a risk. This cannot happen in real life. To get ample results from your investments, you need to take a reasonable level of risk.
An ideal portfolio should be one that has more than 5 asset classes.
Here are the tips for getting an ideal portfolio:
Investing in multiple sectors is the best way to build your portfolio. Stocks of multiple carry their own weightage which will increase your portfolio’s value. Also, stocks of different sectors will minify your risks at a certain level.
Suppose, if the stocks of IT keep on falling and other sectors of stocks of crude oil and pharmaceutical companies grow, will eventually balance your portfolio in a much better way.
Don't fill your stocks with one particular sector. It does look tempting to buy many stocks of the well-known giants, but it’s not a complete diversification.
For instance, if a sector gets affected by the economic slowdown, the company's shares would fall.
Many investors suggest putting a small portion of fixed income assets in their portfolios. Fixed income instruments like government bonds, may give fewer returns compared to equities but they will also reduce a portfolio’s risk profile and volatility.
The stock market is full of volatility. In many cases, we have seen where the investors lose a great amount of money by investing heavily in equities. In such cases, people find fixed income instruments a great way of investment as they provide them with easy and secured returns.
ETFs are the best example of fixed income securities.
Investors who want to make a strong portfolio should invest in real estate. It is seen that putting money into real estate not only increases your return but also minimizes your portfolio’s volatility.
Age is an important factor in asset allocation. Investment experts say that young investors need to invest a lot in the equity segment. Investors aged 25 to 35 should have equity allocations of 75% to 80% while people of age more than 35 years should have lower equity allocations.
Investors, especially the young ones, should have a willingness to take a certain risk during their investment journey. This is the time when you can learn a lot of things even from your failures.
Many people are often afraid of the term failure, but the term itself teaches you many lessons in real life.
If you are a beginner but want to earn a lot of wealth from the stock market, there are many things you need to learn. Stock picking is not the easy thing as it seems to be. It requires a lot of stock market research, analysis and most importantly knowing the market volatility.
For generating better returns, you need to put money into the stock market, then only you will get to know how the stock market exactly functions well.
New investors need to understand long term investing. Beginners think that 6 months or 1 year is the best holding period, however, it is not correct. One year of equity holdings will not give you satisfactory returns as there are taxes included in it.
For generating better wealth, you need to hold your equities for at least 5 years.
Many investors think that the more they add stocks to their portfolio, the more will be their wealth. Hence, they keep adding more stocks to their portfolio. Modern portfolio theory says that investors should keep 10-15 stocks of one sector in their portfolio.
Portfolio diversification doesn't mean that you will never incur any losses. The role of diversification is to mitigate risks against stock market volatility. Diversification can reduce the risk up to a certain level.
If you want to achieve huge stock trading returns, make the investment a long term journey. Maintain a good balance between risk and return, only then you will become an ace investor.
A loan against securities or loan against shares is a loan facility given to customers in which the loan bearer needs to pledge its security as collateral to avail of a loan. It has multiple types such as loans against insurance, loans against MFs, loans against National Savings Certificates or more.
A loan against securities is popular among investors as it is an easy way to get a loan without compromising your security. Also, it allows you to receive a loan of up to 80% on multiple financial instruments.
This is a unique kind of service that enables the bearer to take advantage of dual service viz perpetuating ownership on your investment along with receiving their benefits.
A loan against security is generally offered as an overdraft facility in which you need to pay interest only on the loan amount you use and the period you use for it. This can be done immediately after the securities you offer for the collateral.
A loan against shares is considered one of the secured forms of loans that can be given against the securities present in your account. The following are the features of loans against shares:
Following are the eligibility criteria for Loan Against Securities
Banks and NBFCs have the authority to sanction loans against securities. Here, we will help you to identify your preferred creditor:
Area Bank NBFC Margin Requirement50% against equity/equity-oriented mutual funds and lenders’ discretion on debt/ debt-based mutual funds.50% against equity/equity-oriented mutual funds and lenders’ discretion on debt/ debt based mutual funds. Capitalization on Loan Amount 10 Lakh against physical shares, 20 Lakh against Demat shares No Cap on the amount of Loan Loan Processing Time consuming process Easy and Fast Process.
It is preferred to take a loan from NBFC as compared to a bank as it is the safe, fast yet most effective way to avail of a loan without much hassle.
There are different purposes for taking a loan against shares which can be mentioned below:
1) Working capital requirement for business:
Many SMEs take loans against securities just to expand their business. With this new loan amount, businesses usually fulfill their daily working capital requirement which in turn enhances their profits and growth.
2) Business Expansion:
This is the most valid reason SMEs take loans against their securities to increase scalability. This will help businesses to work on new products or open new branches in different cities.
3) Investment in Capital Market:
If you want to increase your investment capital and have confidence in your stock picks, then taking out a loan can be a good option for you as getting a loan on your present investment will help you raise future investments as well.
4) Other Personal Usage:
Loans against shares can also be used for personal purposes such as buying a home, a child’s education and marriage, etc.
Parameters for Credit Underwriting
The Bank or NBFC reviews your loan application to check your creditworthiness before giving you a loan. Here are the following parameters:
1) Checking Client’s Profile, Security Provider and more:
Lenders shall check for market reputation and decide the credibility based on the number of years you have been in a business that is known for vintage.
2) Security Analysis:
In security analysis, the creditors take a detailed insight into your financial securities. He determines the proper value of the security, keeping in mind the several fluctuations happening in the market.
3) Financial Statement:
You need to submit all the necessary financial documents such as the cash flow statement, balance sheet, income statement of your business.
Can I Get a Loan Against My Securities?
Yes, you can. A loan against shares is offered against the securities you want to pledge your holdings as collateral. This will help you to meet new investment and liquidity requirements.
What is the Concept of Loan Against Securities?
Loan against shares enables borrowers to get loans against financial securities such as bonds, stocks, mutual funds, insurance to meet your requirements. You can apply for a loan against shares for your business purposes or in case of urgent financial aid.
How many loans Can I Get Against Securities?
You can get a loan of Rs 20 Lakh against your securities.
Can I Get a Loan on Equity Shares?
Yes. you can get a loan on equity shares where you can pledge shares in the form of equity to avail the benefit of the loan.
Gold is considered a very precious commodity and that’s why investors always prefer Gold as a commodity trading instrument because it acts as a safe investment.
In India, gold holds a strong place in people’s hearts as Indian citizens believe it's an auspicious metal that is being worn on every occasion. Also, Indian citizens feel gold is a symbol of richness and power.
It has been seen that the importance of gold has significantly increased over the years as investors keep this metal as a hedging tool during market volatility and inflation.
The price of gold keeps on fluctuating due to several factors. It is interesting to know that the US dollar affects the gold price to a greater extent.
Gold puts strong value not only on a state's strong economy, but even on personal investments.
1) Demand and Supply
Gold prices heavily depend on demand and supply. When there is a huge demand, the price of gold rises or vice versa.
Since Gold is a commodity that is continuously in demand; factors such as demand and supply play an important role in the gold price.
2) Inflation
Whenever inflation is on the rise, the value of currency starts to decrease. As most financial instruments fail to generate better commodity trading returns, gold acts as a strong hedging tool.
3) Government Reserves
The Government of India holds reserves of gold. Here, the price of gold gets affected when RBI purchases more or sells more gold. If you wonder about the gold prices, government reserves could be one of the reasons.
4) Import Duty
Few of us know that India produces less than 1 per cent of global gold production. However, due to the high demand for gold in the country, the government imports a lot of gold from overseas to meet the demand. Hence, import duty plays an important role in increasing gold prices.
In 1944, 44 countries signed the significant Bretton Woods Agreement. The agreement is about international trading, import and export via the US dollar.
A country will sum up its total US dollar reserve at the end of a year. Then, the country goes to the International Monetary Fund (IMF) with that amount of US dollars.
That means the currencies are convertible to gold. Because of this agreement, the USA eventually took profit from all other countries obliged to trade against the US dollar.
During the pandemic time, Gold prices were increased. Why does this happen?
Because gold is a safe investment, people started investing in gold during the times of COVID to use it as a currency if they were in financial trouble.
Investors hold the gold as compared to currency. As a result, when Inflation in India is high, the gold price also increases and vice versa.
Due to high demand and less supply, gold prices get high, and the people who hold gold during inflation make a lot of profit.
If an RBI imports gold, it does affect the demand and supply of the currency in the country.
To import gold from another country, the RBI needs to print a larger number of notes to pay for it, and due to an excessive amount of currency notes, inflation is caused in the country, and hence the gold price will also be increased.
In India, many people buy gold in the form of jewellery, and they give gold as a valuable gift to their loved ones.
India depends on the import of gold as our production of gold is less than 1 per cent of the total world production. Because of the high demand in the festival season, we need to import gold from foreign countries.
During festivals like Diwali and Dhanteras, gold prices increase because of high demand and less supply.
India is increasing the production of gold mines to control the gold imports and fulfill our gold requirements.
The rupee-dollar equation plays a role in Indian gold rates, although it does not impact global gold prices.
India imports gold, and hence if the rupee is getting weaker against the dollar, it directly affects the gold prices.
So, a depreciating rupee may affect the demand for gold in the country. However, the change in rupee-dollar rates has no impact on gold rates denominated in dollars.
As we discussed factors that affect the gold price in India, Gold prices are volatile and considered a safe investment.
Gold is also a portfolio diversifier for stock market trading investors.
When the market falls, people start investing in gold to diversify their portfolios.
Commodity Trading is considered "sensitive" because stock market experts have seen frequent instances of price manipulation in the past 5 years.
Therefore it is suggested to take advice before starting trading in any commodity. Taking help from a reliable stock broking firm will always be helpful as they have strong stock market research reports and an experienced analyst team.
अमेरिका से जारी होने वाले आर्थिक आकड़ो से पिछले सप्ताह बाज़ारो में मिले जुले संकेत रहे, जिससे सोने और चांदी में साप्ताहिक गिरावट दर्ज की गई है। नॉन फॉर्म एम्प्लॉयमेंट चेंज के आंकड़े अप्रैल माह में घट कर 431 हजार रह गए जिससे सोने और चांदी के भाव को सपोर्ट मिला।
जबकि बेरोज़गारी दर में मजबूती देखि गई है। रूस और यूक्रेन के बीच शांति वार्ता में हुई थोड़ी प्रगति से अमेरिकी डॉलर इंडेक्स और बांड यील्ड में निचले स्तरों से सुधार दर्ज किया गया जिसके सोने और चांदी के भाव में दबाव दिखाई दिया।
हालांकि, कीमती धातुओं में कीमते अभी गिरावट के साथ एक सीमित दायरे में चल रही जिससे आगे इनमे उछाल भी देखने को मिल सकता है। जून वायदा सोने के भाव पिछले सप्ताह में 1500 रुपये प्रति दस ग्राम और मई वायदा चांदी के भाव 3200 रुपये प्रति किलो तक टूटने के बाद हिन्दू नव वर्ष की शुरुवात के पहले ही निचले स्तरों से सुधार रहा और सोना पिछले सप्ताह में 1 प्रतिशत और चांदी 2.5 प्रतिशत टूट कर क्रमश 51900 और 67000 के स्तरों पर रहे।
भारतीय सराफा बाज़ारो में शादियों का सीजन शुरू होने के पहले ज्वेलर की मांग बढ़ने की सम्भावना है। निचले स्तरों पर सोने और चांदी की हाजिर मांग आने की सम्भावना से कीमती धातुओं के भाव में उछाल देखने को मिल सकता है।
उधर, ऊर्जा की कीमतों में मजबूती भी सोने और चांदी के भाव को सपोर्ट करती दिख रही है क्योकि पिछले सप्ताह में ओपेक और नॉन ओपेक देशो के समूह की बैठक में पूर्व आधारित योजना के अनुसार ही कच्चे तेल का उत्पादन बढ़ाया जायेगा जबकि बढ़ी हुई तेल की मांग और रूस पर प्रतिबंध के कारण, तेल और गैस के भाव मजबूत है जिसके कारण मुद्रास्फीति के नियंत्रण में ज्यादा वक्त लगेगा।
इस सप्ताह सोने और चांदी के भाव सीमित दायरे में रह सकते है। जून वायदा सोने में 51200 रुपये पर सपोर्ट और 52500 रुपये पर प्रतिरोध है। मई वायदा चांदी में 65000 रुपये पर सपोर्ट और 69000 रुपये पर प्रतिरोध है।
When Indian companies generate profits, they face the decision of how to share that success with their shareholders. Two popular methods are share buybacks and dividends. Let’s explore these concepts and see how they play out with examples from Indian stocks.
Share buybacks occur when a company repurchases its own shares from the market. This reduces the number of shares available, which can lead to an increase in the stock’s price. Buybacks offer flexibility and can signal confidence in a company's future. However, they can also be controversial, as critics argue they might be used to artificially boost share prices.
In 2023, TCS announced a buyback program worth ₹18,000 crore. This move aimed to return excess cash to shareholders while demonstrating the company’s confidence in its future growth. By reducing the total number of shares, TCS increased its earnings per share (EPS), which positively impacted its stock price.
Dividends are regular cash payments made to shareholders from a company's profits. They provide a steady income stream, which is particularly attractive to long-term investors seeking consistent returns. Regular dividends often reflect a company’s financial health and stability.
Infosys has a strong history of paying regular dividends. In 2023, the company declared a dividend of ₹17.50 per share, continuing its tradition of rewarding shareholders with reliable payouts. For many investors, Infosys' consistent dividend payments are a key reason for holding onto the stock, as they offer dependable income over time.
The choice between buybacks and dividends depends on individual investor goals. Buybacks might be more appealing if you’re looking for capital gains, as they can drive up share prices. On the other hand, dividends are favored by those seeking a steady income, such as retirees or conservative investors.
Reliance Industries employs both strategies. The company has conducted share buybacks to signal confidence in its stock value while also maintaining a robust dividend policy to reward its shareholders. This balanced approach allows Reliance to cater to a wide range of investor preferences.
Market reactions can vary depending on the economic environment. For example, in a low-interest-rate environment, buybacks might be more favored due to their tax advantages, whereas in a more stable economic climate, dividends might be preferred for their reliability.
Both buybacks and dividends have their advantages and can play an important role in a company’s strategy to return value to shareholders. In India, companies like TCS, Infosys, and Reliance Industries illustrate how these methods can benefit investors. Whether you prefer the potential for capital appreciation through buybacks or the steady income from dividends, understanding these strategies can help you make more informed investment decisions.
Ultimately, the best approach depends on the specific circumstances of the company and its shareholder base. Many companies use a combination of both strategies to balance short-term returns with long-term growth.
We can see that price-to-sales is the most popular valuation ratio used on YCharts.
That is because the P/S ratio is easy to calculate by a stock trading and can be used for companies with a wide range of earnings and cash flow profiles.
P/S is also a very useful valuation ratio for high growth companies. Many high growth companies do not have positive earnings or cash flow in their early years.
P/S does not require earnings, so it can be applied to young companies as well as more established businesses.
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Price-to-sales ratio (P/S) is the ratio of a company's stock price to its sales per share. It is calculated as market capitalization divided by the revenue per share.
The price-sales ratio is similar to the price-earnings ratio in that it helps investors determine whether a stock is undervalued or overvalued.
The P/S ratio can be used with any type of company, but it is most commonly applied to those companies that are not profitable or whose profits are not consistent.
The P/S metric does not consider whether a company is earning a profit, only how much revenue it generates for each share outstanding.
Because profit margins vary widely across industries, the price-sales ratio does not always provide a meaningful comparison between companies in different sectors.
Also Read - Is It Good To Buy Low P/E Ratio Stocks?
There are Several Determinants of the P/S Ratio and they are:
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Price-Sales Ratio is a ratio of Price per share / Sales per share. For ex: Price per share = ₹100, Sales per share = ₹200 then the price-sales ratio = 100/200 = ₹0.5 which means that for every rupee in sales, the company's market value is 50 Paisa.
This ratio gives us the value of a company per share in terms of sales.
When comparing companies from different industries, it is important to compare their price sales ratios within their respective industry group.
Because different industries have different profitability and capital structures.
P/S ratio for typical technology companies tends to be higher than for other types of companies because investors are willing to pay more for growth.
The P/S ratio is also useful in comparing two companies that are growing at different rates because the P/S ratio will adjust accordingly and make them easy to compare.
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The PSR Ratio has Some Drawbacks:
A price-to-sales ratio is a company’s share price divided by the company’s revenue per share. It compares a company’s stock price to the total revenue of the business.
If a company's P/S ratio is between 1 and 2, it is considered to be a good investment. However, a P/S ratio of less than 1 is considered excellent.
For example, imagine that Company A has a P/S ratio of five, while Company B has a P/S ratio of 10.
You can conclude that investors expect Company B to grow faster than Company A. This makes sense, because investors expect to pay more for future earnings growth.
Also Read about intraday trading
The P/S ratio is the Price to Sales Ratio. The price/Sales ratio (PS ratio) for a sector is calculated by taking the sum of the market capitalization of all the stocks in the sector and then dividing it by their aggregate sales.
Higher the ratio, the more expensive the sector. Lower the ratio, the cheaper the sector.
The Price/Earnings (PE) Ratio for a sector is calculated by dividing the total market capitalization of all the stocks in that sector by its total earnings.
If a company has a PE ratio of 25, it means investors are willing to pay ₹25 for every rupee of its earnings.
The higher the ratio, the higher is the risk associated with that company’s stock. The lower the PE ratio, the lower is the risk associated with that stock.
It can be concluded that there are many advantages and disadvantages to valuing companies, it depends on the companies.
In stock market trading, if the stock pays regular dividends with a record of steady dividend growth is called an income stock.
Companies usually issue income stocks with stable cash flows and well-established financial infrastructure.
It's also quite common for companies that issue income stocks to have long histories of success, a large market capitalization, and to operate at a mature stage in their growth curve.
Income stocks are often compared with value stocks. While income stocks pay out dividends at a high rate, value stocks are often trading at a price lower than the company's fundamental value or the stock's book value.
Investors generally invest in income stocks to get a stable cash flow from their investment without putting too much risk on their money.
Income stocks are generally considered less risky than other types of investments.
If you face any difficulty in understanding income stocks then feel free to mail us and talk to our experts.
Income stocks are considered to be less risky as compared to growth stocks.
Suppose a company is well established and has a consistent track record of paying dividends. In that case, it can be considered an income stock.
Income stocks are considered good for investors who want stability and regular stock trading returns in dividends.
High yielding dividend stocks refer to companies with a long history of paying high dividend yields.
These companies have a steady cash flow stream and can afford to pay higher dividend yields.
Low yielding dividend stocks refer to those companies that payout low or moderate dividend yields.
Such companies generally have a stable financial position. They reinvest their cash flows into their business to expand and grow.
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Dividend-paying stocks are those whose payments are made by a company to its stockholders. Most income stocks pay dividends regularly, whether monthly, quarterly or annually.
The amount of each dividend payment can vary depending on the company's profitability.
The total amount of dividends paid by a company over a given period is its dividend yield or dividend payout ratio.
Also, Read - 5 Smart Rules to Follow While Investing in Dividend Paying Stock
Income stocks offer lower risk than many other investments - they are usually large, well-established companies with long track records of paying stable or rising dividends.
Income stocks have the potential for steady growth through reinvesting their dividends into the business or using them for acquisitions.
The price of income stocks tends to be less volatile than those of speculative growth stocks but more volatile than defensive shares (which pay lower yields and have less scope for capital gains).
It has been found that income stocks are highly defensive in nature. They don't fluctuate with the frequent changes in the market.
Income stocks don't reinvest their profits. Instead, they distribute most of their profits to the shareholders in the form of dividends. As a result, they lack a surplus fund for further investments.
These stocks provide stable dividends to shareholders as compared to other stocks.
Income stocks are less risky as they are less volatile than other stocks.
These are apt for those who have a low-risk appetite investment mindset viz students, non-income people, older people and more.
Companies that issue income stocks have a strong financial background and hence they provide stable dividends to their shareholders.
Companies that issue income stocks mostly come under the large-cap market.
Yes, it is good to invest in income stocks.
We would say that you should make sure you do not put all your eggs in one basket.
If you are investing for the long term, it makes sense to have a lot of different investments.
Income stocks are a great place to start when you begin investing as they are not too risky but offer a decent amount of risk.
One of the main reasons for stock traders to invest in defensive stocks is as a defensive measure against economic uncertainty.
These companies are so-called because they tend to be less volatile and more stable than the wider market, even in times of economic turmoil.
In this blog, we'll outline what makes a stock defensive, how to recognize which shares are defensive, and why you might want to include them in your portfolio.
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A defensive stock is expected to maintain a stable share price during an economic downturn or when the broader market falls.
Typically these are companies with products or services that people will continue to buy regardless of how much they spend.
Typically, defensive stocks have the following characteristics:
As a result, investors typically turn to defensive stocks to reduce risk in their portfolios, especially during uncertain times in the market cycle.
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Stable Revenue and Earnings Growth: Defensive stocks have steady revenue and earnings growth which means they don't make large profits or losses in any particular year.
Low Debt: Most defensive stocks have very little debt. Debt is not something these companies would want to carry on their books as it affects their valuation.
High-Profit Margin: Defensive Stocks also tend to have high-profit margins, compared to other sectors, because of the stability in their businesses. This high-profit margin keeps them profitable during economic downturns.
Stable Dividends: The dividend payment for most defensive stocks is stable and growing steadily over some time.
These dividend payments are also less volatile than consumer discretionary or technology stocks.
Defensive stocks are companies that sell products and services that are considered essential and non-cyclical.
These products are not affected by economic downturns and always remain in demand.
For example, a company that sells FMCG products like soap, toothpaste, shampoo etc., or a pharmaceutical company can be considered as a defensive stock.
The recession affects the demand for these products because people still need to buy food, medicines, and other items for daily use.
Defensive stocks generally have competitive advantages like low-interest rate loans, government contracts etc.
These stocks tend to be less volatile than cyclical stocks and provide a greater level of security to investors. Defensive stocks also offer higher dividend yields.
Defensive stocks are those which can weather economic downturns and market volatility.
These stocks can provide stability to your portfolio, and hence they are known as defensive stocks.
The characteristics of defensive stocks include stable or consistent earnings, regular dividend payouts, low beta, lower risk profile and low volatility.
Defensive stocks belong to sectors with essential products or services and are used in all phases of the economic cycle.
So, when the economy is weak or during periods of uncertainty, these stocks perform relatively well compared to the overall market.
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Utilities
Electric utilities, water, and gas are examples of defensive stocks. Similarly, communications service companies such as telephone and cable television companies are also defensive.
Since utility companies primarily deal in essential services and communication, these businesses remain fairly stable during recessions.
Pharmaceuticals
Pharmaceutical companies are another example of defensive stocks. These companies generate revenue by selling drugs that treat chronic conditions like high blood pressure, diabetes, and arthritis.
Although some prescription drug sales may decrease during a downturn due to patients' inability to afford them, new customers will enter the market.
Also Read - Everything about Intraday trading.
Consumer Staples
Consumer staples are non-discretionary products that people buy regardless of income levels or economic cycles.
For example, consumers still need food and personal care items even during economic downturns.
Consumer staple stocks are also considered defensive because they offer stable earnings with modest growth prospects;
These qualities make them appealing to conservative investors seeking low-risk equities.
Food Stocks
Food stocks are a great example of defensive stocks. Food items like rice and wheat are in high demand regardless of the economic conditions.
When the economy is booming, people buy more food products, but even when the economy is struggling, they still buy basic food items like wheat and rice.
Defensive stocks are a must-have in every investor's Portfolio. They help to create a balanced portfolio and reduce overall risk.
Defensive stocks are not affected by economic downturns and hence, their value does not decrease much in bearish market conditions. These stocks are ideal for investors who want to create a diversified portfolio.
Corporate actions are key events that companies undertake, which can directly impact their stock prices, financial health, and how investors perceive them. Whether it's issuing dividends, conducting stock splits, or merging with another company, these actions play a significant role in the stock market. Let’s break down the most common corporate actions and their effects on stock prices, with examples from Indian stocks to illustrate.
Corporate actions are decisions made by a company that affect its shareholders. These actions can lead to changes in stock prices, which investors need to understand to make informed decisions. Here are some of the most common corporate actions:
Dividends are payments made to shareholders from a company’s earnings. They can be in the form of cash or additional shares.
Impact on Stock Price: When a dividend is declared, the stock price usually drops by the dividend amount on the ex-dividend date. For instance, if a company announces a ₹5 dividend, the stock price might decrease by ₹5 on the ex-dividend date.
Example: Consider a company like HDFC Bank. When it declares a cash dividend, the stock price adjusts to reflect the dividend payout. If HDFC Bank declares a ₹10 dividend, its stock price might drop by ₹10 on the ex-dividend date.
A stock split increases the number of shares outstanding by issuing more shares to existing shareholders. For example, in a 2-for-1 split, shareholders receive two shares for every one they own, but the share price is halved.
Impact on Stock Price: The total value of shares held by an investor remains the same, but the price per share changes according to the split ratio. If a stock priced at ₹200 undergoes a 2-for-1 split, the new price would be ₹100, and shareholders would own twice as many shares.
Example: Reliance Industries has conducted stock splits in the past. For instance, if Reliance's stock was trading at ₹2,000 and underwent a 5-for-1 split, the price would adjust to ₹400, but shareholders would now have five times more shares.
Bonus shares are additional shares given to existing shareholders at no extra cost, usually based on the number of shares they already own.
Impact on Stock Price: The stock price typically drops to reflect the increase in the number of shares. For example, if a company issues a 1:1 bonus, the share price might halve, but shareholders will own double the number of shares.
Example: Tata Motors has issued bonus shares before. If Tata Motors issues a 1:1 bonus, the stock price might decrease, but shareholders will have twice as many shares as before.
Mergers involve two companies combining to form a new entity, while acquisitions occur when one company takes over another.
Impact on Stock Price: The stock price reaction depends on the deal. Generally, the acquiring company's stock price might drop due to the costs involved, while the target company's stock price usually rises. The long-term effect depends on how well the deal is executed.
Example: When Hindustan Aeronautics Limited (HAL) acquired smaller defense firms, HAL’s stock price reacted to the perceived benefits of the acquisition. Conversely, the stock of the acquired firms often saw a spike.
A rights issue allows existing shareholders to buy additional shares at a discount to the current market price.
Impact on Stock Price: The stock price might fall to account for the dilution due to the new shares being issued. For example, if a company issues new shares at ₹50 while the current price is ₹83, the market price might adjust downward to reflect the dilution.
Example: If Infosys announces a rights issue at ₹1,000 when the market price is ₹1,200, the stock price might fall to around ₹1,050 to reflect the new shares being issued.
Impact on Stock Prices
Immediate Reaction: Corporate actions often cause immediate fluctuations in stock prices. For instance, a dividend announcement can lead to a temporary drop in stock price on the ex-dividend date.
Long-Term Effects: The long-term impact depends on how the corporate action affects the company's overall financial health and future prospects. Successful mergers or strategic stock splits can lead to increased stock prices if they create value and growth opportunities.
Corporate actions are significant events that can influence stock prices in various ways. By understanding these actions—such as dividends, stock splits, bonus shares, mergers, and rights issues—investors can better navigate the stock market. Monitoring these events helps investors make informed decisions and anticipate market reactions, allowing them to align their strategies accordingly.
पिछले सप्ताह में सोने और चांदी के भाव तेज़ रहे क्योंकि रूस और यूक्रेन के बीच चल रही शांति वार्ता में कोई खास प्रगति नहीं हुई। जिसके कारण लगातार अनिश्चिता और मुद्रास्फीति दोनों बढ़ने के कारण निवेशकों की सुरक्षित निवेश की मांग से कीमती धातुओं के भाव तेज़ हो रहे है।
गुरुवार को नाटो प्रमुख और यूरोपियन यूनियन देशो के साथ प्रेसिडेंट जो बाइडेन की बैठक हुई जिसमे रूस पर कुछ अतिरीक्त प्रतिबंद लगाए गए। इसमें रूस द्वारा पश्चिमी प्रतिबंधों को कम करने के लिए किये जा रहे सोने में लेनदेन और कच्चे तेल की आपूर्ति पर निशाना साधा गया है।
कजाकिस्तान की कच्चे तेल पाइप लाइन से इसकी आपूर्ति रुकने के कारण पिछले सप्ताह कीमते तेज़ रही और बढ़ती हुई कच्चे तेल की कीमतों से कीमती धातुओं के भाव को समर्थन मिला है।
हालांकि, अमेरिकी बांड यील्ड 2019 के उच्च स्तरों के पास पहुंच चुकी है और इसमें लगातार चल रही बढ़ोतरी के कारण कीमती धातुओं के भाव में ऊपरी स्तरों पर दबाव भी रहा है। रूस - यूक्रेन युद्ध और एनर्जी कीमतों में बढ़ोतरी आवश्यक वस्तुओ की आपूर्ति को चिंता में डाल रहा है।
यूरोपियन देश रूस से कच्चे तेल का बड़ा हिस्सा आयात करते है प्रतिबंधों के कारण कीमतों में अप्रत्याशित बढ़त को रोकने के लिए अमेरिका, यूरोपियन देश को कच्चे तेल और प्राकृतिक गैस की आपूर्ति बढ़ाएगा।
इस सप्ताह बाजार की नज़र अमेरिकी एडीपी नॉन फार्म एम्प्लॉयमेंट चेंज और पैरोल के आकड़ो पर रहेगी जिससे कीमती धातुओं के भाव को नई दिशा मिल सकती है।
इस सप्ताह भी सोने और चांदी के भाव में तेज़ी जारी रहने की सम्भावना है। जून वायदा सोने में 51500 रुपये पर सपोर्ट और 53000 रुपये पर प्रतिरोध है। मई वायदा चांदी में 67000 रुपये पर सपोर्ट और 71000 रुपये पर प्रतिरोध है।
बढ़ती हुई मुद्रास्फीति को नियंत्रित करने के लिए पिछले सप्ताह अमेरिकी फ़ेडरल बैंक की मौद्रिक नीति की बैठक के दौरान कीमती धातुओं के भाव में बिकवाली का दबाव बना रहा और सप्ताह भर में सोने के भाव 2.7 प्रतिशत और चांदी के भाव 3.5 प्रतिशत टूट गए। फेड द्वारा ब्याज दरों को 0.25 प्रतिशत से बढ़ा दिया गया है जिससे अब ब्याज दरे 0.50 प्रतिशत पर पहुंच गई है।
मार्च 2020 में कोविड -19 संकट के फैलने के बाद से यह पहली वृद्धि है। केंद्रीय बैंक ने यह भी आगाह किया कि इस साल छह बार और दरों में बढ़ोतरी हो सकती है, जो कि नीति-निर्माण फेडरल ओपन मार्केट की कैलेंडर बैठकों की संख्या के आधार पर हो सकती है। बैंक ऑफ़ इंग्लैंड ने भी पिछले सप्ताह हुई अपनी मौद्रिक नीति में ब्याज दरों को 0.25 प्रतिशत से बढ़ा दिया है जबकि बैंक ऑफ़ जापान ने ब्याज दरों में कोई बदलाव नहीं किया है।
अनिश्चितता ने सोने को लगातार दूसरे सप्ताह दबाव में रखा है, जो नवंबर के बाद से प्रतिशत के लिहाज से सबसे बड़ी साप्ताहिक गिरावट है। फिर भी, ब्याज दरों में बढ़ोतरी और रूस-यूक्रेन युद्ध के नतीजों के बारे में चिंताओं ने सोने के दोहरे आर्थिक-राजनीतिक बचाव को प्रभावित किया लेकिन कॉमेक्स वायदा सोने का सपोर्ट 1900 डॉलर, जो इस सप्ताह के शुरू में संक्षिप्त रूप से टूट गया था, बनाये रखने में कामयाब रहा है।
रूस और यूक्रेन के बीच चल रही शांति वार्ता के दौरान भी असल शांति की खबरों का आभाव रहा है, जो कीमती धातुओं के के भाव को निचले स्तरों पर सपोर्ट कर रही है। चीन में चल रही मंदी भी कीमती धातुओं के भाव को सपोर्ट कर रही है।
इस सप्ताह सोने और चांदी के भाव में निचले स्तरों से उछाल आने की सम्भावना है। अप्रैल वायदा सोने में 51000 रुपये पर सपोर्ट और 52000 रुपये पर प्रतिरोध है।मई वायदा चांदी में 67000 रुपये पर सपोर्ट और 69500 रुपये पर प्रतिरोध है।
LIC, India's biggest insurer and investment company, come with the most significant updates of LIC IPO. The company has filed DRHP with SEBI to increase its funds through an initial public offering.
The IPO consists of an offer by the Government of India to sell up to 316.25 million shares; LIC's IPO is expected to be the largest IPO in India to date.
After listing, LIC will become the largest company by market capitalization. It will surpass the largest issue by digital payments company One97 communications or Paytm, which raised Rs 18,300 Crore in November 2021.
LIC - India's largest investment and insurance corporation will launch its IPO on March 11, 2022.
The company is a big name in the insurance sector as it currently operates through 8 zonal and 113 divisional offices. Through its IPO, LIC first aims to address working capital requirements.
Secondly, it is required to meet its corporate purposes as well.
In March, more than 31.6 billion shares (5% of government shares) were opened on D Street, giving insurance giant employees and policyholders a discount from the lowest rates.
According to recent updates of LIC IPO, It is expected to launch its IPO on March 11, 2022.
According to the prospectus, employees and policyholders of the largest insurance company in the country will receive the lowest discount.
Shares to be booked for policyholders can reach up to 10 percent. "The total bookings for qualified policyholders must not exceed 10 percent of the offered size," DRHP explained.
Employee quotas are limited to 5%.
To invest in the long-awaited LIC IPO, policyholders need to have two things. The policyholder's PAN is updated on the LIC portal, and the policyholder must have a Demat account.
Potential discounts will be announced at least two business days in advance as the offer's start date approaches.
The policyholder assignment at the IPO (the first of its kind) requires the central government to designate LIC as one of the reserved categories under last year's amendment to the LIC Act of 1956.
Policyholders can use the online process to link their policy to the PAN. However, policyholders who are new to technology can ask agents for technology.
LIC holds a majority stake in the Indian life insurance market. The government wants to raise $ 12 billion by selling its shares in the IPO and hopes the proceeds will help close the deficit gap this year.
LIC is the world's largest domestic market share, accounting for more than 64.1% of total premiums as of 2020 and providing the highest return on equity of 82% in terms of life premiums. Crisil's report states.
LIC reports that after-tax profit for the first half of the fiscal year 2021-22 is Rs 1,437 compared to Rs 6,14 in the year-ago quarter.
The growth rate of new business insurance premiums in the first half of 2010 was 554.1%, 394.76% in the same period of the previous year.
According to DRHP, the embedded value of LIC is set at 5.39 trillion rupees. Companies usually trade at about 34 times the EV.
The government has announced that it will sell 5% of its total capital in shares.
LIC was founded on September 1, 1956, by the merger and nationalization of 245 life insurance companies in India. The initial capital is 5 Crore rupees.
Although many private life insurers have entered the market, LIC is still the leading life insurer.
If you've been waiting for a LIC IPO and want to invest in it, Swastika offers investors several benefits such as security features, key conveniences, and more.
Below is how investors apply for LIC IPO using the Swastika
Enable the terms of use. After submitting the request, the client receives the mandate request in the UPI mobile application and chooses to accept or send it.
After successful registration, the investor will be required to enter the lot size and suggested price. You can click the submit button to place your order when you're done.
शेयर बाजार और स्थाई आय वाली प्रतिभूतियों के परंपरागत निवेश से अलग सोने और चांदी में लम्बी अवधि का निवेश बढ़ने लगा है। प्राकृतिक आपदा, महामारी, युद्ध, रजनीतिक और आर्थिक अनिश्चितता को टाला नहीं जा सकता, इन्ही परिस्थितियों के बीच अपने निवेश को सुरक्षित रखने के लिए सोने और चांदी में निवेश आवश्यक हो जाता है।
वर्तमान में देश की वार्षिक खपत सोना 800-1000 टन, और चांदी 6500-7000 टन है। पिछले 3 साल में सोना 56 प्रतिशत और चांदी 72 प्रतिशत का रिटर्न दिया है। ई - सोना और चांदी में निवेश सीधे तौर पर अब संभव हो चुका है।
कुछ साल पहले तक, सोने और चांदी के वायदा अनुबंध व्यापार करने के लिए एक्सचेंज में थे जिसके कारण लम्बी अवधि में निवेश के लिए भौतिक तौर पर सोने और चांदी को खरीदना होता था जिनको घरो में रखना जोखिम भरा हो सकता है।
वर्तमान में भारत की सभी एक्सचेंज (एमसीएक्स, एनएसई और बीएसई ) सोने और चांदी के वायदा की डिलीवरी देती है जिसको नेशनल स्टॉक एक्सचेंज (एनएसई) में इन्वेंटरी मैनेजमेंट सिस्टम या मल्टी कमोडिटी एक्सचेंज (एमसीएक्स) में कॉमरिस है, जो डीमैट खाते की तरह होते है। सभी एक्सचेंज लंदन बुलियन मार्किट एसोसिएशन से स्वीकृत सोने-चांदी की डिलीवरी उपलब्ध करवा रही है। बात जब लम्बी अवधि की है तो छोटा लाभ भी महत्वपूर्ण होता है।
सोने और चांदी के एटीएफ की तुलना में सीधे तौर पर एक्सचेंज में ली गई डिलीवरी का लाभ अधिक होता है क्योकि इसमें मैनेजमेंट फीस नहीं होती है और ईटीएफ का रिटर्न मैनेजमेंट की योग्यता पर निर्भर करता है। मल्टी कमोडिटी एक्सचेंज (एमसीएक्स) में सोने और चांदी की डिलीवरी 1 ग्राम सोना और 1 किलो चांदी से लेकर एक किलो सोना और 30 किलो चांदी के बड़ी इकाई में भी संभव है। सोने और चांदी में लंबी अवधि के रिटर्न की तुलना में डीमैट के रूप में डिलीवरी के खर्चे बहुत छोटे है।
एमसीएक्स में सोने की सबसे छोटी इकाई की डिलीवरी, गोल्ड पेटल (1 ग्राम ) और गोल्ड गुन्नी (8 ग्राम ) पर स्टोरेज चार्जेस लगभग 36 रुपये सालाना ,ट्रांसेक्शन चार्जेस 300 रुपये तक और 100 रुपये प्रति ग्राम मेकिंग चार्जेस के साथ जीएसटी 3 प्रतिशत होता है। * चार्जेस में लगभग
Commodity Trading is the act of buying and selling commodities futures contracts on commodities such as crude oil, gold, silver, platinum, palladium, copper, corn, soybean and more.
A futures contract is a contractual agreement where one party agrees to buy a specified quantity of an asset at a specified price (the futures price) on a specified date (the expiration date).
The opposite side of the contract is sold by another party, who agrees to sell that same quantity at the same price and date.
To know more about Commodities talk to our expert - 0120 4400777
1) Moving Average for Trading Commodities
Moving average in commodity trading is one of the trendiest strategies for trading. Investors generally use moving averages to find, analyze the market trend along with the support and resistance level.
Supply and Demand Rule
Supply and demand play an important role in commodity trading. If the demand for any commodity increase, the value of that commodity will definitely increase which in turn increase its price in the commodity market.
But commodity businesses work completely differently. In any individual commodity industry, the product is largely the same. Wheat is wheat, cattle are cattle.
Because of this, producers are all price-takers and in normal times aren't able to dictate prices.
Many commodity trading industries are prime examples of what's called perfectly competitive industries, with many buyers demanding an undifferentiated product and suppliers unable to offer differentiated products.
So what causes prices to fluctuate are imbalances in supply and demand, which may occur for many reasons.
Prices may spike if demand rises or supply becomes constrained.
2) Lowest Cost Wins in Commodities
In commodities, companies are price-takers and compete on price alone. In general, the companies that win here produce at the lowest cost—they generate the most profit per unit and can maintain that profit even if commodity trading prices drop.
The most precarious companies are those that produce at high costs. If prices fall, they won’t be able to produce at a profit and will go out of business if the market doesn’t turn around soon enough.
Of course, if you’re trading the price of the commodity itself, you may be uncertain about any individual producer. However, if supply goes offline, it could help push prices higher.
3) Price spikes are often short-lived
Commodity prices are very volatile. This can be bad news for the companies that produce these commodities: they will sometimes see short-term price spikes or declines that make it impossible to remain profitable.
But this volatility is not permanent, and it is part of the way commodity markets work.
The over-corrections that occur as a result of price volatility are what keep commodity supply and demand in line with one another.
If producers don't respond rapidly to changes in prices, then supply will not increase enough to meet demand, and prices will rise too high for consumers.
Similarly, if producers react too quickly by flooding the market with products, then there will be far more supply than consumers need, which pushes prices down so low that production cannot be cost-effective.
So the swings in commodity prices are often short-lived and represent a "shaking out" of marginal suppliers, those without the capacity or willingness to produce at an efficient rate.
Contact our expert analysts to know more about commodity trading, or email us at hello@swastika.co.in
4) Ways to Invest in Commodities
There are many ways you can invest in commodities. Here are five of the most common:
So far we have learned about commodities and strategies, and now we will discuss how to invest in commodities.
The foreign exchange market, also known as currency trading, is the largest financial market globally.
It's more significant than the stock and bond markets combined, making it a very attractive market for investors.
Currency trading has a lot of appeal to beginning investors who are open to learning about the inner workings of various financial markets.
Forex (short for "foreign exchange") is a market where traders from all over the world buy and sell currencies, like dollars, euros, yen and Swiss francs.
Because currency prices fluctuate so much every day, there are many opportunities for traders to make a profit by buying and selling currencies on the foreign exchange market.
Whether you're a beginner at currency trading or have had an account for a long time, it can be difficult to know what you need to do to make the most of your account.
While there are many different strategies for currency traders, not all are good for beginners.
If you're new to forex trading, you may find that there are several things about the market that you may not be familiar with.
In this blog, we are going to discuss the risk factors and strategies that will help you to invest in Foreign exchange market trading.
However, it requires certain skills and expertise to be able to do it well. Contact our Experts for more information about currency/forex trading - 0120 4400700
Foreign Exchange Risk is a risk involved in foreign exchange due to unexpected changes in the exchange rate. There are three types of Risk engaged in Forex trading, which is as follows:
Transaction Risk in Currency Trading:
Transaction risk arises due to unexpected exchange rates between two currencies. This type of Risk affects both importers and exporters doing international business.
For example, a company in the United States exporting goods to another country may quote prices for its product based on the current exchange rate between that country's currency and the U.S. dollar.
Suppose the U.S. dollar depreciates against that other country's currency before settlement. In that case, the company will receive less money than it had hoped for when it set its price.
As a result, its profit margin may suffer or become a loss if it has not planned accordingly.
Similarly, an importer who has agreed to pay in U.S. dollars for goods coming from another country will find itself paying more than expected if there is an appreciation of the other country's currency about the U.S. dollar before payment and settlement.
Learn More About: 6 Things to Keep in Mind About Currency Trading
Economic/Operating Risk in Currency Trading:
Economic/Operating risks arise due to the uncertainty in foreign economies that can affect all MNCs doing business in those countries. Thus, all MNCs operating globally face this kind of operational Risk.
Unemployment: a high unemployment rate generally means fewer people have jobs to spend money on goods and services. People with jobs will also be less likely to take risks, like starting a new business or buying a house.
Inflation: this is the general increase in prices and a fall in the purchasing value of money.
High inflation can deter investment because it reduces the likelihood of future profits, so businesses may be less willing to hire new employees or invest in new machinery.
Interest Rates: Higher interest rates make it more expensive for individuals and businesses to borrow money, so consumer spending and business investment decline.
Exchange Rate Fluctuations are changes in the value of one currency against another.
If the euro strengthens against the U.S. dollar, for example, then imported European goods will become more expensive for U.S. consumers than domestically produced ones, meaning domestic producers may lose sales.
Translation risk arises due to unexpected exchange rates between two currencies.
This type of risk is faced by all MNCs with subsidiaries located in different countries and denominated their accounts in a different currency than their home country's currency.
For example, a U.S.-based company has subsidiaries in China and Hong Kong. The subsidiaries' accounts are denominated in Chinese Yuan (CNY) and Hong Kong Dollar (HKD).
When this company prepares financial statements, it will need to convert the subsidiaries' books into American Dollars (USD), the home currency.
The translation process involves taking the subsidiaries' books' assets, liabilities, revenues, and expenses into another currency.
These converted values are then used to prepare financial statements for reporting purposes.
Translation risk is similar to transaction risk as both arise due to exposure to foreign currencies.
However, translation risk is also known as accounting risk because it relates to how financial statements are prepared and reported for internal and external users.
Translation exposure is an important consideration for businesses seeking new opportunities in emerging markets where currency movements can be volatile or unpredictable.
If you have any confusion regarding translation Risk or Forex trading, feel free to mail us - hello@swastika.co.in
Some of the most popular Forex trading strategies include:
Scalping is a popular trading technique in forex trading. It involves trading currencies in real time, which means that positions are held for very short periods.
In scalping trading, a trader usually opens and liquidates a position within minutes or seconds of each other. The traders aim to make small profits by taking advantage of the bid-ask spread.
Scalping is one of the more popular trading styles because it allows for potentially high risk-reward payouts, and because trades happen very quickly, it can be an exciting way to trade.
Day Trading Strategy for Currency Trading:
Day trading is a way to play the markets to make a profit. For example, if you're buying U.S. treasury bonds (T-bonds), you can buy them at a lower price and then sell them at a higher one.
Many people who trade forex day-to-day are doing it for fun. Others do it to take advantage of price movements in the market. Either way, it's an exciting way to make money.
The type of forex trading strategy you choose depends on how much time you have.
There are very few suitable strategies for beginners because they require extensive research and experience to evaluate market movements accurately.
Trend Trading Strategy in Currency Trading:
Trend trading is one of the most popular and common forex trading strategies.
It involves identifying an upward or downward trend in a currency price movement and choosing trade entry and exit points to position the currency's price within the trend and the trend's relative strength.
Uptrends consist of higher highs and higher lows, while downtrends have lower highs and lower lows.
Identifying a trend depends on the time frame you are looking at. Short-term traders may look at shorter time frames, such as five minutes, while long-term traders may look at four-hour or daily charts with candlesticks.
The strongest trends have both price and momentum moving in the same direction.
Momentum is created when a trader decides to place an order to buy or sell, which adds to market activity and generates more momentum.
Swing Trading Strategy in Currency Trading:
Swing trading is a concept in financial markets that tries to take advantage of short-term waves (or swings) in asset prices.
The trader attempts to benefit from small moves in the market rather than larger gains seen in trend trading or day trading.
Swing trading attempts to capture gains in an asset over a few days to several weeks.
Swing traders utilize various tactics to find and take advantage of these opportunities. By the nature of the strategy, swing traders often hold an asset through many days, weeks, and even months before closing it out for a profit.
Swing traders try to see the big picture without constantly monitoring their computer screens.
The position trading strategy is one of the most widely used strategies in the foreign exchange market.
It involves holding a currency pair over a long time, often weeks or months, instead of just minutes or hours.
The idea is to focus on the underlying trend in the market rather than short-term fluctuations.
Position traders are usually most interested in fundamental factors that may affect currency values.
They look for large moves that can last for weeks or months, and they tend to be less concerned about small day-to-day price fluctuations.
Position traders may also use technical analysis techniques such as trend lines and moving averages to help them determine when to take positions in currencies. Still, their main focus is on fundamental factors.
Our overall conclusion is Forex trading is the best way to go if you are looking for a Good Return on Your Investments. Once you get the hang of it, it can be simple, profitable, and fun.
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