Category: Share Market

Reasons behind the rally of Tata Power in share market in recent time

Tata power company which was previously known as tata hydroelectric power supply, changed their business model in last year.  After that not only the company come back in growth track but also their share price went up to 220 rupees from 60 rupees in just one year.

High price of every tata stocks

This is not only the phenomenon of this particular company of Tata. Every other listed Tata company`s share prise at least 70 -80 percent in just one year. Now the question arises, what happened to tata that their share price is showing such high price. At last we will conclude that this boom will continue or only some tata stocks will stand out the market.

New Chairman changes the fate

There is also a master plan going on by the present chairman of tata sons group N. Chandrashekaran. We will discuss this in details in this article.

This story started when after finishing his masters, N. Chandrashekaran joined TCS. In 2009, he became the CEO of TCS. Under his lead, the revenue soars up to 300 percent in few years. Then he finally joined as a CEO of Tata sons. As we all know after resigning of Ratan Tata, many tata companies started to struggle to get market share and profit.

After joining of N. chandrashekaran, things started to change. He planned some master plan for the companies. Only after that the 17 listed companies of tata sons started to doing well.

Ultimate Opportunist

Tata groups have total 17 listed and many other unlisted companies. In his masterplan he thought to vertical integration of every company and make an ecosystem with those companies. Through this ecosystem these various tata companies stay under a roof. 

Today we will discuss one of the eco system of tata groups.

Electric Vehicle ecosystem

If you think the tata motors will get the highest benefit of the EV ecosystem, then you are wrong. It will be the tata powers which will the highest profit from the ecosystem. When tata motors will get profit one time for selling but through the charging point system of tata power, this company will generate revenue for years.

Tata power already started to establish their charging point in various metropolitan cities. Later they will establish same in lower tier cities. It will be around 1 lakh charging station very quickly. The one advantage of this company is that when tesla and other ev companies will enter India, Tata motors will feel pressure but this tata power will generate profit from every electric vehicles selling from any company.

Profit from other sources

Not only EV making companies, govt entities are also very optimistic about the electric vehicles. In an report it can be seen that govt want to increase the electric vehicles up to 70 percent in 10 years. In few years no doubt, you will see a lot of electric vehicles in form of bus, car and other vehicles. To get benefit from this Tata power tied up with Hindustan Petroleum by which in petrol pump of HP, Tata power will install electric charging point.  

So now you can understand why this company generate a huge profit and their stock prices is in bull mood. It is expected that this company will do good in future too.

Interesting facts and detailed analysis of penny stocks of Share market

Today we will talk about penny stocks in which people expect that even 2 rupees stock can go upto 2000 and beyond. Penny stocks term was first used in US market. Any share price which is below one dollar was termed as penny stock. It means in less investment more profit. But if this stocks work in this way we will find it out.

Example of penny stocks

You may hear about successful investor Rakesh Jhunjhunwala. He got a lot of money in investing in a penny stock company name Titan in his early life. He bought 3 rs per share of this company in 2003. At present this is up 1500 percent than that price. You may hear some other stories where some thousands investment in a penny stock turns into lakhs and crore rupees.

What are penny stocks

In Indian context the stock price, which is below 5 rupees are known as penny stocks. Some of the stocks are traded below one rupee in Stock Market. Some people tend to invest in those companies thinking they will get so much share in very few money. 

Popular stocks like TCS, HUL, nestle are almost higher than 10 k rupees which is unaffordable for most of the retail investors. Some investor think they are already trading in high price, how far there price can go? So they choose some unknown penny stocks over popular known stocks thinking they can get huge profit from these.

Actual story of penny stocks

But we will tell something interesting about this penny stocks which may you never hear. In the first example we see that those 3 rs titan stocks become 1500 rs seeing in the google chart. But actually it was not the case. In that time the titan share was trading at about 60 rs.

This confusion occurs as we are not considering the stock split. In stock split company divided their shares some years. First we need to understand why company split their share. Suppose if any stock price rises more than 1 lakh rupees, then this share will be unaffordable for many investors. So they splits their stocks so that retail people can purchase the stocks.

System in US

There is no problem in US market regarding this. People of US can buy fractional shares there. So if you find some us popular stocks like Alphabet, Amazon or Facebook you will find the price of the stocks of these companies are above lakh rupees. By this rule you can invest in google/amazon stocks in just 1 dollar whatever the actual price of full stock. But this facility is not available in India. So company have to split their stocks to be in affordable range.

Live Example

If you notice you will find that every IPO of every company, the stock price are in range of 100 rs to 1000 rs. So now think how can price of some stocks be in such lower prices less than 5 rs. If anything occurs like recession, covid 19 or world war stock market hardly falls 50 -60 percent, not less than that. But the price of penny stocks falls even 90-99 percent.

Final words: 

So now you understand stock price of any company become less than 5 rupees when the company was caught in any scams or their promoter left the company or the business model of company does not work now or the company only has loans to repay in the balance sheet. In short, these company become so risky. 

So most of the newbies in stock market get in this penny stocks trap influenced by some selfish influencers. So don’t think whenever a share is high it can`t go to higher prices. Also start to realize this penny stock companies are not multi bagger.

Quickly know if it is right time to invest in Gold or not

The women of India are so rich combinedly that they can buy 4 Pakistan or 6 New zeland or a entire Australia. You may ask how is this possible? Let me clear the concept.

Gold Economy

Women of India combinedly own about 21733 tonne gold. If we calculate the present gold price, it will be 1.3 trillion dollar which is almost half of the India`s entire GDP. In this article we will discuss in which factors the price of gold depends. We will also discuss if we should invest in gold right now or not.

Price of gold

If you see gold as an investment asset you will find that the price of gold is flattened for some years. This flattened price is confusing the people. In 2001 market crash, the price of gold increases quickly. Same happened in 2011 financial crisis. In the last year pandemic also the price of gold rises.

Relation with stock market

You may think what is common between these years. in every year stock market crashed. Thus people started to buy gold and therefore the price increases. It happen because people always try to find the assets which will give them highest returns. When the bull run happening in the stock market people tend to invest their money in market. 

In last year stock market gives around 50 percent returns. So flock of people attracted here and start investing in stocks and mutual funds. Thus they avoid financial assets like FD or Gold.

But when the stock market enters into bear market, people tend to move their money from stock market to FD and gold. We can see direct relation of gold price with the stock market movement.

Returns from Gold

If we calculate the returns from gold asset we will find it is almost 12 percent CAGR in last 15 years. It easily beat inflation rate. So when market crashed this type of financial instruments need for the investors of the country.

We know market crashed after the pandemic. But market recovered very quickly and presently in the bull run phase. So the price of gold remain flat as people are not interested in investing in Gold. For that the price of gold does not move much. But when this bull run will end, the demand of gold will rise again. Thus price will also increase in supply demand method. 

Final thoughts

But the problem is no one knows when will this bull run end. But it will be an intelligent work if you start to invest in gold slowly as bull run crosses long way. 

Nowadays it is not needed to purchase physical gold as that have some other charges. If you want to buy gold in pure investment way it is better to buy Digital Gold or Sovereign Gold Bond which is issued by RBI. There are no charges and you will get additional benefit from that.

The temples and the women have sufficient gold to eradicate problems like poverty. But the problem is this gold is sitting idle and not contributing much in our economy.

In our opinion you should not have 5 -10 percent gold in the portfolio. When other instruments will not help to create wealth, this financial instrument will help you survive and adapt in bad situations.

Everything you need to know about Policy Bazaar before its Initial Price Offerings

In 2008 Yashish Dahiya went to Infoedge. He did something brilliant that in the first meeting itself VC of Infoedge company agree for the deal he wanted to execute. Ashish Dahiya is also known as Ion Man. So can this iron man show his magic in the stock market, we will try to figure this out in this article. There are also many concerns for the valuation of this company. We will address that too in this article.

History:

For the seed funding of Policy Bazaar Yasish Dahiya went to infoedge founder Sanjeev Bikhchandani. You may know that Sanjeev Bikhchandani was the one who also invested in Zomato. His invested one million dollar in zomato become more than one billion dollar after the IPO of Zomato. 

So in the meeting Yashish state a bold statement that Sanjeev was paying 60 percent more in his car premium. Mr. Sanjeev was little bit surprised to know that and asked Yashish to show the demo. Then Yashish quickly showed the prototype of Policy Bazar where he shows and told “here are some car insurers there who are giving same feature in lower money. It is sometime even 60 percent lower in some case. Mr. Sanjeev was very happy after seeing this. He immediately invested 30 crores in this company which was the highest investment of his at that time. policy Bazar

Truth about the Policy Bazaar

To understand policy bazaar at first we have to understand the insurance market as a whole. Generally insurance industry is considered as a very complex. But we will try to break this in simple words. At present policy bazaar have more than 90 percent market share in the industry. But you should not make conclusion on this single fact.

Firstly, you will shocked to know the number which are sell online. It is only 1 percent which is far far low than any other developed countries. Among the 1 percent half of the policies are sold by the app of the insurance company. Other half are sold by the insurance aggregators like policy bazaar. 

Master Plan of Policy Bazaar

So now you understand maybe policy bazaar have the highest percent of digital insurance but the market itself is not that much big, at least till now. This penetration is very low but there is very great opportunity for this company to expand in future time.

After the pandemic this type of companies get the boom it wanted for years. As people tend to understand the importance of health and life insurance, many people did it online. So by this year and year profit is getting higher for policy bazaar.

Setback of Policy bazaar

But there is a big concern for this company as HDFC ERGO, ICICI lumbard and LIC left the policybazar. The main motive of Policy Bazar was to remove agent while doing an insurance. But as they are not getting that much success they are changing their master plan. 

They started to set up offices offline and selling insurance. They got insurance broking by which they can sell the insurance that is a big chance to grow for this company.

Other aspects:

They have an other business which is known as paisabazar where they connect lender and borrower. After the pandemic that business is not working well.

If you calculate price to sales ratio it was very high in case this company. So the valuation is quite higher than actual price. But this type of start up can play long term game in future. So you should do every research before investing in this company.

Everything About Nykaa IPO – Biggest female focused beauty products seller

Today I am going to discuss about an IPO which was discussed by numerous people. This is about Nykaa a female focused beauty products seller. This is not just a start up but also a profitable one which is a very rare combination in the startup industry. After reading this article you can decide whether you want to invest in this particular company or not.

Nykaa

So let us know the full story of Nykaa which is quite interesting. You may know that big unicorns like Phone pe, Paytm, Oyo are facing huge loss in every quarter of every year but at the same time this company is making profit every year. Last year it make around 60 crore rupees as profit.

The reason behind this profit is the monopoly of the company. They mainly cover beauty and personal care for women which is around 30 percent of whole market. Nykaa has 13 sub brands which is also profitable for the company. 

They have different inventory policy than most other e-commerce platform like amazon, flipkart or Myntra. Other E commerce platform does not buy third party seller products rather than they listed in their platform. When a buyer gave an order, that platform take the product from the third party seller and dispatched that. So they mainly don’t rely on their inventory.

In case of Nykaa they purchase the products from the third seller and listed in their platform. So when an order is placed then it directly deliver from their inventory. For these there is minimal chance of giving fake products. That’s why they can have an loyal customer base.

At present there is very few competition of Nykaa. They even started to open physical stores around the country. When pandemic hit this company started to get more profit than before as people start to buy products from online rather than market. The average order value also increases from 1433 rs to 1963 rs in just two year which is greater than average beauty order in the market.

Thus their sales and profit is growing around 40 percent compound rate. As beauty products have high margin it is very profitable and hot business. So various big companies are trying to enter in this market. So they invested in MyGlamm which is also in similar business. Grofers also invested in Orange something which manage everything from production to selling of beauty products. So it is expected that this company can get tough competition in future.

Nykaa has also their fashion business. In the time of covid they manufactured masks to personal care products, so we can say that this is an opportunistic company. India`s large young age population have higher purchase value which will directly impact in sale of the company. But at present as the female population is just 20 percent of total workforce which may be an alarming for Nykaa. 

There are some social media posts where it is circulating that Nykaa`s management bully their workers, they regularly use racist words. For this toxic culture many people resigned from this company. Though it is not affecting the fundamentals now but can affect in future time. Though Nykaa completely deny that fact.

In the conclusion we can say that Nykaa is mainly a family business where majority stakeholders are from their company. Falguni Nayar, who is Ex Managing Director of Kotak bank founded this company with her 14 crore rupees. Later she raised 2500 crores from Venture Capitalist. 

People have interest in this company seeing the strong fundamentals. It is also expected that it will get a good listing gain in the IPO. But they depend on some other factors too like market buzz, grey market premium etc. What is your opinion about the company do let us know.

Biggest Ever IPO Of India – Paytm IPO Launch Date and everthing

Today we are going to discuss about the upcoming biggest IPO of India which is none other than Paytm Company. Some days ago many media houses reported that SEBI which is the regulatory board of Stock market has been allowed paytm to enter in the stock market listed company.

Paytm IPO

Paytm IPO

Paytm is one of the biggest Fintech start up from India. It has millions of customers using their app daily. After the demonetization this company grew exponentially. But it has lost some of their glory when UPI was created by NPCI. Then PhonePe and Google Pay take the biggest chunk of money transactions. 

But still now in P2M transactions, there are no competition of Paytm. At the same time, founders tried to build this as a super app where everything can be done from shopping, booking, gaming and investing at the same platform. Though they are still a loss making company but there is also a high probability that they will disrupt the fintech and banking systems in India. 

It can be noted that around a months ago Paytm has submitted DRHP (Draft Red Herring Prospectus) to SEBI. After that some controversies also arised that paytm reportedly sold out their share with some unknown people but at last SEBI gives their permission to Paytm parent company to collect around 16,000 crore rupees in their IPO.

We know that Paytm is actually owned by its parent company named One97 Communications. Through this IPO they planned to raise 2.2 billion dollar which will eventually become biggest IPO in India. But it does not mean that the valuation of Paytm will be that 2.2 billion dollar, it will be much bigger than this as they are not liquidating their entire share.

In between this 16 k crore rupees they will arrange fresh stock of 8,500 crore and other stocks will be shared by present stockholders of this company. It means they will utilize 8500 crore rupees to expand their business and rest will be decided by the owner of the stocks.

The entire IPO share will not be available for retail investors rather there will be booking of 75 % for the Qualified Institutional Investors and 15 % will be reserved for Non Institutional Investors  and rest of 10 % will be for retail investors like you and me.

It is expected by the market that after the IPO, the valuation of Paytm will be around 1,65,000 crore rupees which was around 1,20,000 crore rupees two years ago. It was worthy noticing that Chinese Fintech Giant Ant Group which have the highest stock percent in the company are diluting their stakes. At the same time other stakeholders like Softbank, Elevation Capital and offcourse Paytm Founder Vijay Shekar Sharma also diluting some of their stakes.

There is some story behind this why Ant group is diluting their stakes. When the India- China tension arises there have been many backlashed by the customers about the biggest stakeholder of the Chinese Alibaba group. After these tensions, Paytm reportedly replaced all the Chinese officials from the board and included people from USA and India. 

Paytm is planning for new business initiatives, acquisitions and strategic partnerships with other companies with the money it is getting from the market. Rest of money will be used for corporate purposes.

In the conclusion we can say that paytm is now a loss making company and will be for upcoming some years. So if you want to invest in this particular company you have to judge every risky upside down as anything can happen with these type of start ups as the fintech world change very rapidly.

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