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Sensex 57696.46 (-1.31%)
Nifty Bank 36197.15 (-0.85%)
Nifty IT 35848.05 (-0.86%)
Nifty Financial Services 17779.5 (-1.13%)
Adani Ports 737.45 (-0.22%)
Asian Paints 3110.45 (-2.21%)
Axis Bank 673.00 (-0.46%)
B P C L 385.90 (1.86%)
Bajaj Auto 3287.85 (-1.22%)
Bajaj Finance 7069.25 (-1.55%)
Bajaj Finserv 17488.70 (-1.52%)
Bharti Airtel 718.35 (-1.94%)
Britannia Inds. 3553.75 (-0.69%)
Cipla 912.05 (-1.00%)
Coal India 159.75 (0.28%)
Divis Lab. 4757.05 (-0.42%)
Dr Reddys Labs 4596.50 (-1.42%)
Eicher Motors 2455.55 (0.16%)
Grasim Inds 1703.90 (-1.16%)
H D F C 2771.65 (-1.29%)
HCL Technologies 1171.40 (-1.12%)
HDFC Bank 1513.55 (-0.80%)
HDFC Life Insur. 690.95 (-2.03%)
Hero Motocorp 2462.45 (-0.41%)
Hind. Unilever 2343.65 (-1.66%)
Hindalco Inds. 424.65 (-1.72%)
I O C L 122.20 (1.28%)
ICICI Bank 716.30 (-0.84%)
IndusInd Bank 951.15 (0.59%)
Infosys 1735.55 (-0.73%)
ITC 221.65 (-1.69%)
JSW Steel 644.55 (-0.34%)
Kotak Mah. Bank 1914.20 (-2.55%)
Larsen & Toubro 1801.25 (0.67%)
M & M 836.95 (-1.48%)
Maruti Suzuki 7208.70 (-1.59%)
Nestle India 19321.35 (-0.93%)
NTPC 127.00 (-1.32%)
O N G C 145.90 (1.32%)
Power Grid Corpn 206.10 (-3.92%)
Reliance Industr 2408.25 (-3.00%)
SBI Life Insuran 1165.95 (-1.86%)
Shree Cement 25914.05 (-1.43%)
St Bk of India 473.15 (-0.81%)
Sun Pharma.Inds. 751.80 (-1.89%)
Tata Consumer 774.30 (0.14%)
Tata Motors 480.10 (0.21%)
Tata Steel 1118.00 (0.50%)
TCS 3640.45 (-0.07%)
Tech Mahindra 1593.30 (-2.23%)
Titan Company 2369.25 (-0.72%)
UltraTech Cem. 7332.45 (0.13%)
UPL 712.75 (2.08%)
Wipro 640.75 (-0.94%)

Do’s and Don’ts of Stock Market Investing for Beginners

Do's and Don'ts for beginners
17/10/2019

With a trading account and demat account you are ready to trade. But if you are a beginner in the stock markets, then that is not all. You also need to keep a tab on some major do’s and don’ts before you venture into investing in the stock markets. Let us look at 10 such key dos and don’ts for investors.

10 important do’s and don’ts for investment beginners

Do’s are about doing the right things in the market when you are starting off on your investing journey while the don’ts are the ones to avoid. Here are ten such important dos and don’ts for investing beginners.

  1. Do your research before investing? Remember, research of a stock is not a rocket science and it is all about getting your research process right. Get comfortable reading the balance sheets and income statements of a company. Also read the Management Discussion and Analysis (MDA) of the stock you are planning to invest in.

  2. Start with your goals in mind. You must be clear about how much risk you are willing to take and how much risk you can afford to take. Your equity portfolio should be within the limits defined by your allocation. Always start with a plan.

  3. Don’t put all your eggs in one basket. That is age old wisdom and applies to investing as well. In technical parlance it is called diversification where you effectively spread your equity investments across sectors and themes so that your investment performance is not dependent on any one stock or sector.

  4. Take a long term view and cultivate that habit in the very beginning. It is futile to time the market. Not only that it is hard to consistently get the tops and bottoms of the market right but it hardly makes any difference to your eventual returns.

  5. Try to invest consistently and regularly instead of putting a large corpus in a stock of your choice. The advantage of being regular is that it instils discipline in your investment and also gives the added benefit of rupee cost averaging. That means; over time your average cost of investing comes down.

  6. Even through equity is about the long term, try to get bargains. Even if you are convinced about the long term prospects of Infosys, it makes a lot of business sense to buy at Rs.650 than at Rs.750. Quite often, a market correction creates salivating bargains. Use such corrections to add quality stocks at low prices.

  7. Divide your equity portfolio between core holdings and satellite holdings. Your core holdings are your long term investment portfolio and you don’t sell these stocks at every correction. On the other hand, the satellite portfolios are more of a trading portfolio where you look out for short to medium term opportunities in the market. Have a separate approach to both these types of stocks.

  8. Don’t ignore trading costs. Even if you are a long term investor, take at a close look at your costs. Your cost is not just about brokerage costs but there are a number of other costs too. There are statutory costs, exchange charges, demat AMC, DIS charges, demat and remat charges etc. All these need to be added to calculate your effective cost. Nowadays, it makes a lot of sense to opt for low-cost discount brokers who can give the same execution at a much lower cost.

  9. As a beginner, remember that quality always wins in the end. When we talk about quality we are talking about quality at a number of levels. Look at quality of earnings; more of the earnings must be coming from the core business. Look at profitability; the company must be earning more margins than the peer group. Take stock of asset turnover; it tells you how efficiently the business is using assets. At a qualitative level, prefer companies that have high standard of disclosure and transparency. Large caps or mid caps, this quality approach always works in your favour.

  10. Make effective use of technology and if you are a beginner then you better get used to it early. Ideally use the online trading platform; it gives you a lot more control over your trades. Also, if possible you can download the app on your smart phone which allows you to trade on the run. Get used to reading electronic contract notes and ledgers; they are a lot more convenient and environment friendly than printed stuff.

In an effort to chase stocks, investors tend to forget that investment success is a lot more about discipline than about skills or flair. It is in your hands to make your investments work in a systematic manner.

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Hurled by the IPO Rush? Here’s All You Need to Know About ASBA

ASBA IPO
by Nikita Bhoota 27/02/2020

ASBA (applications supported by blocked amounts) was introduced by SEBI to protect the interests of the retail investors. ASBA can used to apply for IPOs, FPOs, rights issues etc. In ASBA, the designated bank account only gets blocked to the extent of the application money. On the date of allotment, the amount gets debited to the extent of allotted shares and the balance gets released. If zero shares are allotted to the applicant, then the entire blocked amount under ASBA is released.

Who can make an ASBA investment?

ASBA is mandatory for all IPOs after January 01st 2016. However, an ASBA investor has to fulfil some basic conditions.

  • He must be a resident individual applying under the Retail Quota
  • Bid must be at cut-off price with a single option of number of shares bid
  • ASBA application has to be made through self certified syndicate bankers (SCSB)
  • Such price intibid made in ASBA cannot be revised later on
  • ASBA cannot be used for other categories like employees / shareholders etc.

What are the advantages of ASBA?

ASBA comes as a major boon to retail investors. Here are some of the major advantages.

  • Since the amount is only blocked, you continue to earn interest
  • You don’t worry about refunds as only the allotment money is debited
  • The application process is very simple and you can apply through your bank
  • The blocked amount is included in average quarterly balance (AQB)
  • Even through bids cannot be revised, they can be cancelled.

How can an ASBA application be cancelled?

While an ASBA application cannot be revised as per the rules, the ASBA application can certainly be cancelled. There are two distinct situations here. If the IPO has not closed, you can cancel the ASBA application through your online trading account or through the bank. Your SCSB will cancel the bid and unblock the amount right away. However, if you withdraw after the issue closes, then you have to write to the registrar to cancel the bid. The SCSB will only remove the block after the allotment is complete and they get intimation from the registrar.

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Here’s All You Need to Know About Getting a Demat Account

Open Demat Account
by 5paisa Research Team 25/03/2020

Demat Account is almost like a bank account. Just like you hold funds in your bank account, you hold shares and other securities in the Demat Account. Having a Demat Account is mandatory for trading in equities as per SEBI regulations. 

How to open Demat Account?

Demat Account can be opened online or offline. It is normally opened along with trading account (TCD) by the broker. Demat Account can be opened with any authorised depository participant (DP); which could be a bank or a broker. Here is how to open a Demat Account.

For offline Demat Account, you need to fill up the demat form and sign the demat agreement and submit to your DP. Basic documents like PAN Card, Proof of identity, Proof of residence and cancelled cheque are required. Copies of self-attested documents must be submitted to the DP along with the signed DP agreement. Carry the originals for verification by the officer. Demat account opening can take up to 4-5 days, if all the documents are in place.

Online Demat Accounts can be opened by filling up the online form on the DP website. You must authenticate your identify and address with your Aadhar Card and verify the same with OTP sent to mobile. An in-person-verification (IPV) has to be done before fully activating the demat account. Only Aadhar address will be considered for online demat.

Check: Procedure to open a Demat account


How to use the Demat Account

With a demat account, your purchase, sale and holding of securities are in electronic mode. You must issue a signed Debit Instruction Slip (DIS) to sell shares or you can give a power of attorney (POA) to the broker. When you sell shares, the demat account gets debited and when you buy shares the demat account gets credited.  All corporate actions like bonuses and splits are automatically credited to your demat account. Dividends are directly credited to the mapped bank account. 

Documents Required for Demat Account

As stated earlier, demat account opening requires proof of identity and proof of address. Proof of identity can be any statutorily issued photo identity like passport, Aadhar, driving license, voter card etc. Proof of address can be any of the above with complete and latest address or electricity or land line bill. In case of online demat account opening, the Aadhar address will be considered. In addition, submission of PAN card and cancelled cheque are mandatory for opening demat account.

Importance of having a Demat account

Here are some of the key uses of having a demat account.

1. It facilitates non-physical holding of securities

2. Demat account can hold equities, bonds, ETFs, gold bonds and other securities

3. Corporate actions are automatically executed in demat account

4. One point intimation of change in address, email, mobile to all companies

5. Eliminates risk of physical holdings like bad delivery, mutilation of certificates, loss in transit, forgery, fake certificates etc.

6. Trading shares, holding in demat and bank transfers become one seamless chain if you opt for online trading

7. Demat is also cost effective compared to dealing in physical certificates

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Stimulus Day-3 Puts the Entire thrust on “Jai Kissan”

Jai Kissan
18/05/2020

Friday the 15th of May marked the third consecutive day when Nirmala Sitharaman addressed the press and announced a slew of measures to prepare the Indian economy for growth post COVID-19. Here is how the Stimulus panned out on the first three days of the stimulus roll out.

Day 1 and 2 focused on the building blocks

The first day of the stimulus announcement saw a sharp focus on the financial sector. The government offered leeway to NBFCs, micro finance institutions and housing finance companies. The first day also focused on the beleaguered MSME sector. These medium and small enterprises account for nearly 35% of GDP and over 50% of all exports. MSMEs also account for a bulk of the jobs created in India. However, Day 2 focused on the more vulnerable sections of the economy like the rural population, street vendors and migrant labour. The migrant labourers are an important link in the supply chain for most industries. Their getting back to work is crucial and that is what Day-2 largely focused on.

Day 3 moves its focus to the Indian farmer

COVID-19 and the lockdown had come when Indian agriculture was in a state of flux. The Kharif crop last year had been disappointing but had been more than compensated by the robust Rabi output. However, efforts had been undermined by the lack of proper post harvest infrastructure. Day 3 of the stimulus has focused on improving the condition of the farmer, enhancing rural demand and arresting supply bottlenecks. Here are the key announcements made on Day-3 by the finance minister.

1. Government proposed strict stock limits under exceptional circumstances like national calamities, famines, floods, epidemics etc to smoothen supply flows. This can avoid sharp spikes in price and the consequent impact on inflation.

2. Risk mitigation is the key to protecting farmers from the vagaries of weather and price. A new legal framework will allow farmers to engage with processors, aggregators, large retailers and exporters to ensure fair pricing and risk mitigation.

3. Announced Rs.13,433 crore fund to ensure 100% vaccination of 53 crore livestock in India. The humongous and aggressive vaccination program will go a long way in ensuring the health of cattle and the quality of output.

4. Free pricing has been a long standing demand of farmers. FM announced that cereals, edible oils, oilseeds, pulses, onions and potatoes will be deregulated. The Essential Commodities Act is to be amended for better price realisation.

5. Beekeeping gets official agriculture status with fund allocation of Rs.500 crore. This will enhance income for 2 lakh beekeepers and ensure quality honey supply. The multiplier effect will be an increase in yield with better quality of crops through pollination.

6. A special Rs.100,000 crore fund made available to entrepreneurs and start-ups to facilitate procuring from farmers and add value to the agri-value chain. This fund will be used to create the requisite agri infrastructure with private entrepreneurship.

7. The long standing gap has been post harvest infrastructure. FM has allocated Rs.1 trillion for FPOs for strengthening farm-gate infrastructure such as cold chains, transport, post harvest etc. This will reduce wastage and spoilage of crops.

8. FM allocated Rs.20,000 crore for fishermen through PMMSY Fund. The scheme will lead to additional fish production of 70 lakh tonnes over 5 years. Fisheries and dairy have been two segments that have been less cyclical.

9. Finance Minister also announced a new scheme to give concessional interest loans to dairy cooperatives. Interest subvention scheme will continue and put additional Rs.5000 crore in hands of 2 crore dairy farmers

India is the world’s largest producer of milk, jute and pulses. It is also the second largest producer of sugarcane, cotton, groundnut, fruits, vegetables and fisheries and the third largest producer of cereals. No economic relief package can be complete or meaningful unless it begins with the farmer and that has been the focus on Day-3!

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Do You Know sectors to Benefit from Joe Biden’s win?

Benefit from Joe Biden's Win
by Nikita Bhoota 11/11/2020

The markets have turned volatile in advance of the United States (U.S) election and continue to remain volatile post-election. The waves were felt not only in India but across the globe in the equity markets. Joe Biden is to be the 46th President of the U.S and it would certainly lift hopes of certain sectors back in India.

Certain industries that might get affected more than others with Biden’s victory.  Biden plans to spend roughly US $3.2 trillion over the next decade. His plan includes a spending budget of US $750 billion to improve healthcare and the US $750 billion to revamp education as per the media reports. The win of Joe Biden might not make any material difference in the long run, but in the near term.

We have gathered a list of sectors that are likely to benefit from Joe Biden victory as the U.S President.

Metal Stocks and Pharma stocks:

We expect metal stocks to benefit from Biden’s infrastructural push. Metal stocks could gain on the expectation of higher steel export to the U.S for additional infrastructure spending of ~$700-800 bn in the next 10 years.

The Indian Pharma sector is expected to benefit from the Biden win on the back of increased push for generic prescriptions and push to affordable health insurance. Biden plans to protect and strengthen The Affordable Care Act, which ensures a reduction in healthcare costs and access to health insurance for the U.S citizens. This implies more reliance on generic drugs and biosimilars, that would be positive news for Indian Pharma companies. As per the media reports, the U.S imports ~$7 billion worth of formulations from India annually. An increased scope for access to affordable health insurance would also boost the demand for generic drugs.

Electric Vehicle companies:

Biden in his campaign had made it clear that his administration’s focus will be on green energy. As per the media reports, Biden has promised $400 billion in public investment to transition to clean energy, including advanced battery technology and electric vehicles. Therefore, Shares of EV companies and the battery and the solar sectors would benefit from Biden’s win. Biden could also ease concerns about the trade war with China leading to a positive impact on global trade.

Real Estate, Financial Institutions:

A Biden win would mean a larger stimulus followed by additional means to improve healthcare access and other social welfare programs. Sectors that are likely to get impacted include real estate, financial institutions, student loans, etc.

Chemicals, Cement and IT sector

The Chemical sector which competes with China might have a positive impact as the U.S can take a tough stand against China. Similarly, the infrastructure push by Biden will benefit the cement industry.

The market experts have an opinion that visa restrictions for software engineers sent by Indian IT companies could ease. Trump has tightened norms for H-1B visas, mostly used by software services providers to send engineers for on-site work. That prompted IT companies to ramp up hiring local talent in the past three years, increasing costs in the market that contributes 50-65% of the revenue for India’s five largest IT firms. A Biden presidency is, however, seen to be less hostile to immigrants.

Conclusion:

U.S elections are likely to lead to short-term market swings that will be insignificant over the longer run.  Therefore, we recommend the investors to stick to their long-term strategy and stay focused on individual stocks.

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Aditya Birla Sun Life AMC IPO Subscription Day 2

Aditya Birla Sun Life AMC IPO subscription Day 2
by 5paisa Research Team 29/01/2021

The Rs.2,768.26 crore IPO of Aditya Birla Sun Life AMC Ltd, consisting entirely of an offer for sale (OFS) of Rs.2,768.26 crore, was just about fully subscribed on Day-2. As per the combined bid details put out by the BSE, Aditya Birla Sun Life AMC Ltd IPO was subscribed 1.07X overall, with bulk of the demand coming from the retail segment. The issue closes on Friday, 01st October.

As of close of 30th September, out of the 277.99 lakh shares on offer in the IPO, Aditya Birla Sun Life AMC Ltd saw bids for 298.73 lakh shares. This implies an overall subscription of 1.07X. The granular break-up of subscriptions were tilted in favour of retail investors but HNI and QIB bids typically come in only on the last day of the IPO.

Aditya Birla Sun Life AMC Ltd IPO Subscription Day-2

 

Category

Subscription Status
Qualified Institutional (QIB) 0.06 Times
Non-Institutional (NII) 0.40 Times
Retail Individual 2.00 Times
Others 0.67 Times
Total 1.07 Times

 

QIB Portion

On 28 September, Aditya Birla Sun Life AMC Ltd did an anchor placement of 110.81 lakh shares at the upper end of the price band of Rs.712, raising Rs.789 crore. The list of QIB investors included a number of FPI names like HSBC, IMF, ADIA, Morgan Stanley, Societe Generale etc. It included domestic institutions like ICICI Pru MF, HDFC MF, SBI MF, Axis MF, SBI Life, HDFC Life, Kotak MF, IIFL Special Opportunities Fund and Abakkus Growth Fund. 

The QIB subscription continued to see negligible subscription at the end of Day-2. The QIB portion (net of anchor allocation of 110.81 lakh shares as above) had a quota of 73.87 lakh shares of which it has got bids for just 4.53 lakh shares, implying a subscription of 0.06X by QIBs at the end of Day-1. QIB bids typically get bunched on the last day, although the anchor response does indicate strong interest in the issue from institutional investors.

HNI Portion

The HNI portion got subscribed 0.40X (getting applications for 22.06 lakh shares against the quota of 55.40 lakh shares). This is an OK response on Day-2 for the HNI segment and could be due to the large size of the IPO. Bulk of the funded applications and corporate applications, come in on the last day, so the actual picture should only get better. 

Retail Individuals

The retail portion was fully subscribed 2.00X at the end of Day-2, showing strong retail appetite. For retail investors; out of the 129.28 lakh shares on offer, valid bids were received for 259.04 lakh shares, which included bids for 201.60 lakh shares at the cut-off price. The IPO is priced in the band of (Rs.695-Rs712) and will close for subscription on 01st October.
 

Also Read:-

Aditya Birla Sun Life AMC IPO : 7 Things to Know About

Upcoming IPOs in 2021

List of Upcoming IPOs in October 2021

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