Give a Missed Call
+91 80629 16290
  1. Home
  2. /
  3. Investing
  4. /
  5. Page 28

Investing

Saving for your child’s higher education is a significant financial goal for many parents. You have an investment in your child’s future and path to success. However, considering education abroad, the financial side will be more challenging to deal with the rupee depreciation.

In this article, we will explore ten practical ways to budget to ensure that your child’s educational dreams are not hindered by the challenges posed by a devalued rupee.

1. Start early:

When saving for your child’s education abroad, time can be your best friend. Starting early allows you to benefit from accumulated interest. Your money can grow substantially the longer it lasts. Start a dedicated education fund as soon as or shortly after your child is born.

2. Set clear goals:

Set specific goals for your child’s education. Know which universities or colleges you are targeting and the likely cost. Having a clear financial goal will help you plan effectively.

3. Diversify your investments:

Diversification is key in a volatile economic environment with a depreciating rupee. Don’t put all your money into one type of investment. To reduce risk, spread your investments across asset classes such as stocks, bonds, mutual funds, and real estate.

4. Investigate education loans:

Many banks and financial institutions offer education loans with reasonable interest rates. Consider using such a loan to reduce the financial burden. While this can increase your child’s expenses, it can also provide a structured payment method.

5. Regularly review and adjust your portfolio:

Be careful with your investments. Market conditions change, and rupee depreciation may affect your international investments. With regular monitoring, you can adjust as needed to stay productive.

6. Select the rupee-cost average:

You can use the rupee-cost-average formula to reduce the impact of rupee depreciation. Periodically insert a fixed amount. This strategy allows you to buy more units when the price is high and fewer units when the price is high, thus averaging the cost.

7. Consider investments with cash:

Investing can be a valuable tool when saving for education abroad. They protect your investments from adverse currency movements and ensure that your returns are not severely affected by a decline in the dollar’s value.

8. Use tax benefits:

Find out about the tax benefits offered for educational programs in your state. Governments often provide incentives for people to save money in education, such as tax breaks or reduced interest rates on specific financial products

9. Select structured investment plans (SIPs):

SIPs allow you to regularly invest small amounts in mutual funds. These can be a great way to accumulate capital over time. They also offer the opportunity to increase your savings as your income increases. You can also try using our SIP calculator for more details.

10. Provide professional guidance:

Managing money for your child’s education abroad can be difficult. Consider consulting with a financial advisor who specializes in educational programming. They can help you create the right plan based on your budget and goals.

Things To Consider While Saving for Child’s Education Abroad

AspectDetails
1. Education CostExplore different savings options: traditional accounts, fixed deposits, mutual funds, or education-specific investment plans.
2. Currency Exchange Rate TrendsResearch the cost of higher education abroad for your child. Consider tuition, accommodation, living expenses, and other associated costs.
3. Savings OptionsRegularly review your savings plan and adjust based on changing circumstances, including exchange rate fluctuations.
4. Rupee Exchange RateMonitor the value of the Indian Rupee (INR) against the foreign currency.
5. Start EarlyThe sooner you start saving, the more time your investments have to grow. Compound interest can significantly boost your savings.
6. Monthly Savings GoalCalculate how much you must save monthly to reach your education savings goal. Adjust this amount based on changing exchange rates.
7. Emergency FundMaintain an emergency fund for unexpected expenses to avoid dipping into your child’s education savings.
8. Diversify InvestmentsDiversify your investments to manage risk. A mix of equity, fixed income, and other assets can provide a more balanced approach.
9. Consult Financial AdvisorSeek advice from a financial advisor to make informed decisions about your investment strategy.
10. Monitor and AdjustRegularly review your savings plan and make adjustments based on changing circumstances, including exchange rate fluctuations.
11. Tax BenefitsCheck for any tax benefits or deductions available for education savings under Indian tax laws.
12. Stay InformedStay updated on global economic news and geopolitical events that can impact currency exchange rates.

Also Read: Paid Up Capital Explained

Conclusion:

In your quest to provide the best education to your child abroad, rupee depreciation can pose challenges. However, with proper budgeting and the right strategy, these challenges can be successfully addressed. It’s essential to start early, diversify your investments, and stay abreast of market conditions. Don’t forget to explore the benefits of a rupee-cost-average currency-hedged investment. Remember, every penny you save today is an investment in your child’s future. So, plan wisely and safeguard your child’s educational dreams no matter where he chooses to study.

FAQs

  1. Is it better to save for my child’s education in a foreign currency account?

    While saving in a foreign currency account can protect your investments from rupee depreciation, it may not be the best choice for everyone. It’s essential to assess your financial goals, risk tolerance, and investment horizon before making this decision.

  2. Are there any specific government schemes that support education savings in India?

    Yes, the Indian government offers various schemes and tax benefits to support education savings. The most popular is the Section 80C deduction, which allows you to claim a deduction for tuition fees paid for your children’s education.

  3. What should I consider when choosing an education loan for my child’s studies abroad?

    When selecting an education loan, consider the interest rate, repayment terms, collateral requirements, and any additional benefits offered by the lending institution. It’s advisable to compare multiple loan options to make an informed decision.

Mufin Green Finance Ltd., the New Delhi-based financing solutions provider for the EV ecosystem, will debut on the National Stock Exchange (NSE), as per a BSE exchange filing by the company on Thursday, 2nd November.

In the filing, the company said, “Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), we are pleased to inform you that the Company has received approval for the Listing of its Equity Shares on National Stock Exchange of India Limited with effect from November 6, 2023.”

About Mufin Green Finance

Mufin Green Finance is a subsidiary of Hindon Mercantile Ltd. Classified as a non-government company, Hindon is a technology organisation that provides income-generation loans to its customers.

Hindon is registered at ROC, Delhi. As of 31st March 2022, its total assets under management was Rs. 425 crores.

Mufin offers loans for income generation through swappable batteries, electric charging infrastructure and electric vehicles. According to its website, it has distributed more than Rs. 340 crores towards electric vehicles, affecting carbon footprint, financial inclusivity, income generation and women empowerment.

Stellar Performance On The BSE

On Friday 3rd November, shares of the small-cap organisation listed on the Bombay Stock Exchange (BSE) were locked in an upper circuit limit of 5% at Rs.129.30.

The 5% increase pushed the company’s market capitalisation to almost Rs. 1,950 crores.

Later, a profit booking was seen in the stock, and it dropped to Rs.118.65. The share traded at Rs.128 around 2:15 pm.

Following the approval of the NSE listing of equity shares, Mufin Green rallied during the last trading session of the week.

For the last five trading sessions, the stock has been hitting the upper circuit, rising around 27%. In the last one month, it gained 50%. In the previous six months, it gained 220%.

From its 52-week lows, it delivered a return of 300%.

NSE Listing

The NSE issued a statement, saying, “We are pleased to inform you that the equity shares of the company (Mufin Green Finance) shall be listed and admitted to dealings on the Exchange with effect from November 06, 2023 (Monday).”

The benchmark index has given the company the symbol “MUFIN.” A total of 1,50,99,5172 securities will be listed on the NSE.

The board of directors of Mufin Green Finance is set to meet on Thursday, 9th November, to assess and approve the financial results for the quarter ending 30th September.

The Reserve Bank of India recently gave the green signal to the company to operate as a pre-paid instruments (PPI) issuer. This will facilitate the launch of a “super app” by the company that will offer comprehensive financial services.

Why List On NSE Now?

According to globenewswire.com, the electric vehicle market in India is projected to reach $113.99 billion by 2029 at a compound annual growth rate (CAGR) of 66.52%.

With the NSE listing, the company hopes to attract more investors and leverage the growth potential of the industry in the immediate future.

FAQ

What does Mufin Green Finance do?

Mufin Green Finance is a subsidiary of Hindon Mercantile Ltd. It offers financing solutions to the EV ecosystem.

Why is the company in the news?

Mufin Green Finance will debut on the NSE today, 6th November 2023.

What is the company’s NSE symbol, and how many securities will be listed on the NSE?

The company’s NSE symbol is “MUFIN”. A total of 1,50,99,5172 securities will be listed.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Introduction

Are you tired of the daily grind and looking for ways to secure your financial future? If so, you’ve come to the right place. In this article, we’ll explore the world of income deficit, focusing on how to make it a reality in your life. Whether you want to grow your savings, pay off debt, or achieve financial independence, these strategies will help you unlock the door to free income and put you on the path to a more secure financial future on

Passive income is money earned with minimal effort or continuous work, making it a dream for many. Imagine earning money through sex, travel, or time with loved ones. The good news is that there are ways to make passive income. Let’s dive into 10 smart ways to make passive income a reality.

StrategyDescriptionExamples
1. InvestmentsInvest your money in assets that generate returns over time.Real Estate, Stocks, Bonds, Mutual Funds
2. Dividend StocksPurchase stocks of companies that pay regular dividends to investors.Blue-chip stocks, Dividend ETFs
3. Real EstateInvest in rental properties, earning rental income.Residential properties, Commercial real estate
4. Create an AppDevelop a mobile app or software that provides value to users and generates revenue.Mobile apps, SaaS products
5. Blogging/VloggingStart a blog or YouTube channel, monetizing through ads and sponsorships.Ad revenue, affiliate, marketing, sponsored, content
6. Online CoursesCreate and sell educational courses on platforms or your site.Udemy, Coursera,
7. Automated E-commerceDesign a system that automatically sells products online without constant supervision.E-commerce stores, Dropshipping, Print-on-Demand
8. Dividend ETFs/REITsInvest in dividend-paying Exchange-Traded Funds (ETFs) or Real Estate Investment TrustsREITs (Real Estate Investment Trusts), Dividend ETFs
9. LicensingLicense your intellectual property (e.g., art, software, patents) to others for a fee.Artwork, software, patents, photography

1. Invest in dividend funds

One of the most popular ways to generate passive income is by investing in dividend funds. Many companies pay out a portion of their earnings to shareholders in equity. As a shareholder, you may receive regular dividends, and over time, these amounts can serve as an essential source of passive income.

2. Create a blog or website

If you have an interest or expertise in a particular niche, consider creating a blog or website. By creating high-quality content and attracting regular visitors, you can monetize your site through various channels, such as affiliate marketing, sponsored posts, and ad revenue.

3. Real estate investment

Investing in real estate, whether through rental properties or real estate investment trusts (REITs), is a reliable way to generate passive income. Rental income and potential property appreciation can provide a steady income stream, while REITs can invest in real estate without owning real property.

4. Create an online course

If you have valuable skills or knowledge, consider creating and selling online courses. Platforms like Udemy and Teachable offer the opportunity to share your knowledge and earn money when people enroll in your courses.

5. Invest in high-yield savings

While not the most lucrative way to earn, a high-yield savings account can provide a safe way to continue making passive income with minimal effort. The accumulated interest in these accounts may not be enough, but they are a great place to keep your savings or emergency savings.

6. Write an e-book

If you’re an author or have a story, self-publishing e-books on platforms like Amazon Kindle can be a lucrative venture. Once your e-book is published, you can earn a royalty on sales, and the best part is that your book can continue to sell for years to come.

7. Create a YouTube channel

YouTube is a powerful platform to showcase your creativity and skills. By creating engaging video content and engaging customers, you can monetize your channel by earning ad revenue, sponsorships, and merchandise.

8. Start an e-commerce store

Setting up an online store through platforms like Shopify or Etsy can be an excellent way to generate passive income. You can sell physical products or digital downloads, and with effective marketing, your store can become a consistent source of revenue.

9. Invest in a business or franchise

Investing in an existing business or franchise can be a great source of passive income. While this may require a significant upfront investment, it can provide a cash flow that does not require day-to-day management.

10. Automated online businesses

Automated online businesses, like dropshipping or affiliate marketing, allow you to generate income with minimal day-to-day involvement. By setting up efficient systems and marketing strategies, you can create a source of passive income that runs itself.

Sustainable passive income is an achievable goal for everyone. The key is to find the right option that fits your interests, resources, and purposes. Whether you want to invest in stocks, start a blog, or build an e-commerce store, the potential to make money effortlessly every day is real.

Remember that building passive income takes time and dedication. It’s essential to invest effort upfront to set the foundation for long-term financial success. By diversifying your income streams and continuously working to improve them, you can achieve the financial freedom and security you desire.

So, what are you waiting for? Start exploring these strategies, and you’ll be on your way to enjoying the benefits of passive income sooner than you think.

FAQ

Is it possible to make passive income without a significant initial investment?

Yes, there are many ways to make passive income with minimal to no initial investment. Creating a blog, writing an e-book, or starting a YouTube channel are all examples of low-cost or no-cost methods to generate passive income.

How long does it take to see significant returns from passive income investments?

The timeline for seeing significant returns from passive income investments varies depending on the method you choose and your level of effort. Some methods, like high-yield savings accounts, offer relatively quick returns, while others, such as real estate, may take several years to build substantial income.

Are there risks associated with passive income strategies?

Yes, there are risks associated with passive income strategies. Investments can go up or down in value, and businesses or ventures may not always generate the expected income. It’s important to research and understand the risks associated with each method and diversify your income streams to mitigate potential losses.

What is the best passive income strategy for beginners?

For beginners, dividend stocks, high-yield savings accounts, and peer-to-peer lending are relatively straightforward and low-risk options. They offer a good introduction to passive income generation. As you gain experience and confidence, you can explore more complex strategies.

From a KitKat break to a 2-minute Maggi, Nestle has built an indomitable range of products that are liked and enjoyed by people of all ages. Nestle is the world’s largest food and beverage company. It houses more than 2000 brands under its stable, ranging from global icons like KitKat, Nescafe, and Nestea to local favorites such as Maggi, Polo, Milkmaid, etc.

In this article, we will understand Nestle and its share price performance. Let’s get started.

Brief Overview of Nestle

Nestle is a Swiss multinational food and beverage corporation whose history dates back to 1866 when the Anglo-Swiss Condensed Milk Company was founded.

In 1867, Henry Nestle, who was not connected with Anglo-Swiss, made a breakthrough in the development of baby food. In 1905. Henry Nestle merged his company with Anglo-Swiss to form Nestle Group. By 1905, the company had more than 20 manufacturing facilities and selling products in Africa, Asia, Australia, and Latin America.

Between all the crises, the company continued launching new products. In 1938, Nestle launched its most iconic coffee brand, Nescafe, and in 1947, it added Maggi soups and seasonings.

The group’s Indian unit started operations on 28th March 1959 in New Delhi. Today, Nestle is one of the largest food & beverage companies in the country, with nine manufacturing facilities across India.

Business Overview of Nestle

Nestle has divided its food & beverages business into the following four categories:

  1. Prepared Dishes and Cooking Aids: It includes the products sold under Maggi, such as instant noodles, ready-to-mix soup, and ketchup.
  2. Milk Products and Nutrition: It includes all the dairy products and health drinks like Milo, Crelac, etc.
  3. Confectionary: This category includes KitKat, Munch, and Milkybar.
  4. Beverages: It includes ready-to-consume drinks and Nescafe coffee.

The following is the contribution to revenue of all four categories from January to December 2022.

image 11

Nestle has recently made a foray into the pet food business by acquiring Purina Petcare India Pvt. Ltd. Under Accounting Standard 108 on “Operating Segments,” the company reports all its revenue from operations within a single segment, namely “Food.”

Key Management Personnel

  • Mr. Suresh Narayan has been the Chairman and Managing Director of Nestle India since 1 August 2015. Before joining Nestle India, he was Chairman and Managing Director of Nestle Philippines. Mr. Narayan joined the Nestle Group in 1999 as Executive Vice President for Sales in India. He is an Economics graduate from Delhi School of Economics and has participated in the leadership programs of the London Business School.
  • Ms. Svetlana Boldina is the Executive Director- Finance & Control and CFO. She was appointed CFO on 1st March 2023 for five years. Ms. Boldina is a Russian national with an Engineering degree from Moscow Telecommunication University and an MBA in Accounting and Finance Technology from the Russian Academics of Economics. She has been with Nestle for more than 25 years and served in many geographies.
  • Mr. Satish Srinivasan is the Executive Director of Technical and has substantial experience around different markets and zones. He is responsible for technical areas of the company, including all existing and future locations of factories. Mr. Satish joined Nestle in 1993 and has worked worldwide on various assignments.
  • Mr. Anurag Patnaik is the Head of Human Resources at Nestle India. He joined the company as a Management Trainee in June 2005. Mr Patnaik has a B.Tech from Biju Patnaik University of Technology, Orissa, and a PM & IR, Human Resource from XLRI Jamshedpur.

Shareholding Pattern

image 12

Nestle India Financials

Nestle India has a fiscal year that runs from January to December.

Revenue

In 2022, Nestle’s total revenue from operations grew by 14.6% to 16,897 in 2022 from 14,740 in 2021. For the six months ending on 30th June 2023, the company’s revenue from operations grew by 18% to ₹9,489 crore compared to ₹8,038.3 crores during the same period the previous year.

image 16

Profit from Operations

In 2022, the company’s operating profit rose by 4.1% year-on-year to ₹3370 crores from ₹3230 crores in 2021. However, the profit percentage from operations to sales fell to 20% in 2022 from 22% in 2021.

Net Profit

In 2022, Nestle reported a 12.8% growth in net profit to ₹2,390 crores from ₹2,118.4 crores in 2021. For a six-month period that ended on 30th June 2023, the net profit of the company rose by 30% to ₹1,435 crores compared to ₹1,109 crores during the same period the previous year.

image 15

Key Financial Ratios

Current Ratio: At the end of 2022, the current ratio of the company increased to 1.1 times from 1 time at the end of 2021.

Inventory Turnover Ratio: The inventory turnover ratio 2022 declined marginally to 9.5 times from 9.7 times at the end of 2021.

Trade Receivables Turnover Ratio: The company’s trade payable turnover ratio improved by 6% to 93.8 times in 2022 from 88.6 times in 2021.

Trade Payables Turnover Ratio: In 2022, the company’s trade payables turnover ratio increased 6.4 times from 6 times at the end of 2021.

Net Profit Ratio: The net profit margin of the company in 2022 was 14.2%, declining marginally from 14.4% in 2021.

Return on Capital Employed (ROCE): The ROCE of the company in 2022 fell by 16% to 122.4% from 145.2% in 2021.

The debt-to-equity ratio and interest service coverage ratio are irrelevant as the company has negligible debt.

Nestle Share Price Analysis

The shares of Nestle were listed long back in India in around the 1980s and have been a consistent performer in the market. Nestle has done five bonus issues since its listing and recently announced a split in the ratio of 1:10. 100 shares issued at listing has now become 3600 shares.

AnnouncementFace ValueRatioNumber of Shares
Pre-bonus and split share₹10100
Bonus Issue- 18 July 1983₹103:5160
Bonus Issue- 18 July 1986₹101:1320
Bonus Issue- 18 July 1989₹103:5192
Bonus Issue- 30 September 1993₹101:4240
Bonus Issue- 23 April 1996₹101:2360
Share Split- 19th October 2023₹11:103600

The company has a consistent track record of paying dividends to its shareholders. It paid ₹200 in 2021, ₹210 in 2022, and ₹242 in 2023 as dividends.

Screenshot 2
Source: TradingView

As of 28 October 2023, Nestle share price has given a CAGR return of 12% and 20% in the last three and five years, respectively. Nestle share price at an all-time high level is ₹23,600, which it made on 16th October 2023. The market cap of Nestle India as of 28th October 2023 is ₹2,31,947 crores.

Peer Comparison

Company NameNestle IndiaHind UnileverBritannia
Face Value₹10₹1₹1
Share Price (as of 28th October 2023)₹24,057₹2482₹4,514
P/E Ratio  (as of 28th October 2023)80.256.451
Market Capitalization₹2,31,947 crores₹5,83,180 crores₹1,08,735 crores
Revenue₹16,897 crores₹58,154 crores₹16,301 crores
Operating Profit Margin (FY23)20%21.7%16.3%
Net Profit Margin (FY23)14.2%17.1%13.5%
ROCE (FY23)122.4%101.9%47.33%
Distribution Network (FY23)9 million retail stores2.68 million retail stores

Key Highlights

  • Nestle India has consistently recorded double-digit sales growth in the range of 10-14% over the last five years, except in 2020, when growth was impacted by COVID-19. Between 2016 and 2022, sales have grown at a CAGR of 10.7% and sales volume at 8.2%. And net profits have grown at a CAGR of 15.6% during the same period.
  • The company is opening up its 10th manufacturing in Orissa with an investment of around ₹900 crores.
  • Nestle is strengthening its distribution network and following a RURBAN approach by going deeper into smaller cities and towns. In 2022, it added 55,000 villages, totaling 1,65,376 villages. Rural India contributes ~20% to the total sales volume and value.
  • Nestle is rapidly expanding its footprint in e-commerce, with the contribution of e-commerce to domestic sales increasing from 0.6% in 2016 to 6.5% in 2022.
  • Since 2015, the company has launched 110 new products, accounting for more than 5% of total sales value. Currently, 30 new products are in the pipeline with millet-based products under the Maggi, Nestle a+, and Caregrow brands.
  • The out-of-home professionals’ category is witnessing strong growth due to a revamp in strategy, resetting geography, channel, and sales priority. In 2022, the category recorded 39% year-on-year growth. The total number of Maggi and Nescafe branded kiosks at the end of 2022 reached 620
  • The company board has approved a change in the financial year to April to March instead of currently following the January to December period. Hence, the company will be reporting 15 months of financial results for the current fiscal.

Brief Industry Overview

  • The FMCG sector is the fourth-largest sector of the Indian economy and has a distinctive Indian advantage.
  • The Gross Value Added (GVA) in the food processing sector was ₹2.24 lakh crores in 2019-20, contributing 1.69% of the total GVA in the country.
  • According to the data shared by the Ministry of Food Processing Industry, the Indian food processing market is estimated to reach $535 billion by 2025, growing at a CAGR of 15.2%. Tier-2 and Tier-2 cities could mirror the similar consumption trend visible in metropolitan areas by consuming more processed foods in the coming years.
  • Because of its enormous impact on the Indian economy, the food processing industry is supported by several government initiatives. For food products, the government has proposed a production-linked incentive scheme. It is expected to allow for an increase in food processing capacity of nearly ₹30,000 crore.
  • The government has permitted 100% FDI into the food processing sector under the automatic route, further brightening the prospects of the Indian FMCG market. The Food Processing Sector received $709.72 million in FDI equity inflows from April 2021 to March 2022. From April 2000 to December 2022, the total FDI equity inflow into the sector was $ 11.79 billion.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

FAQ

When did Nestle India start operations in India?

Nestle is one of the oldest food & beverage companies in the world, whose history dates back to 1806. The group’s Indian unit started operations on 28th March 1959 in New Delhi.

How has Nestle share price performed in the last five years?

As of 17 October 2023, Nestle share price has given a CAGR return of 19% in the last five years. It reached an all-time high level of ₹23,600 on 16th October 2023.

What brands are under Nestle?

Nestle houses iconic brands like Maggi, Nescafe, Cerelac, KitKat, Munch, Milkybar, Milkmaid, etc.

The game-changer for the personal care segment, Mamaearth, has witnessed a slow start to its IPO today. The parent company of Mamaearth, Honasa Consumer, came up with its Rs. 1701 crore IPO on the last day of October, which has been subscribed to only 12%.

Honasa divided the distribution of shares in the IPO as follows

  1. Retail Investors – 10%
  2. QIB – 75%
  3. Non-institutional Investors – 15%

Honasa Consumer Ltd. IPO Subscription Status

Out of the 10% allocated to the retail investors, 30% has been subscribed on day one. However, non-institutional investors didn’t turn up for the IPO, subscribing only 3% of the allocated portfolio on the first day of the Honasa Consumer IPO.

Qualified Institutional Buyers (QIBs) usually don’t turn up on the first day of an IPO, so their limited participation is nothing unusual. This segment received bids for around 1543254 shares out of the 75% of the issue allocated to them.

image 2

Honasa Consumer Ltd. IPO Allotment & Listing Date

People who are willing to subscribe to Honasa IPO must take note of these dates.

Basis for AllotmentNovember 7
RefundsNovember 8
Credit of Shares in Demat a/cNovember 9
Listing DateNovember 10

Here are the details of the Honasa Consumer IPO you need to know

Total issue sizeRs 1701 Crores
Face ValueRs 10 per share
Price BandRs. 308-324
Lot size46 shares

How do you check Honasa Consumer Ltd. IPO allotment status?

Option 1: On the BSE Website

  • Firstly, you have to visit the BSE IPO Allotment page
  • In the menu, go to ‘issue type’ and click on ‘equity’.
  • Then go to ‘Issue Name’ and click on ‘Honsasa Consumer Ltd.’.
  • Now, enter your application number or PAN number.
  • Enter the Captcha to verify
  • Finally, click on the search button.

Option 2: On Link Intime India Private Limited’s Website (IPO Registrar):

  • You can also open Link Intime IPO Status to check the allotment status
  • First, you have to select “Honasa Consumer Ltd.” in the dropdown menu section
  • Use one of these four to check the allotment status – PAN, Application Number, DPID/Client ID, or Bank Account/IFSC.
  • Enter the details of the option selected above
  • Click the “Search” button.

When will the basis of allotment for Honasa Consumer Ltd. IPO be finalized?

As intimated by Honasa Consumer, the basis of allotment will be on 7 November 2023, and you can expect your shares to be credited by 9 November. If you are supposed to get a refund, you can expect it by 8 November. As of now, the listing date has been confirmed as 10 November, and the stock will be listed on both NSE and BSE, which is a thing to consider.

FAQ

1. How can I check the Honasa Consumer IPO allotment status?

You can easily check the allotment status of the Honasa Consumer IPO on the BSE website or Link Intime India Private Limited by following the steps mentioned in the above section.

2. When will the basis of allotment for Honasa Consumer IPO be finalized?

The basis of allotment for Honasa Consumer IPO will be on 7 November.

3.  What are the key dates for Honasa Consumer IPO?

The date for credit of shares of Honasa IPO is 9 November, and the listing date is 10 November, you can get the refunds initiated on 8 November.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Every parent shares the same goal: to save money for their child’s future. A corpus of one crore can give your child a lot of financial security and flexibility, whether for their child’s education, marriage, or any other purpose.

However, saving this massive corpus of one crore will be a challenge. Particularly when the effects of inflation and increased costs are weakening the roots of your ambitious tree. Regardless of the obstacles, you must save money for your child’s future. You cannot give up.

Now that we’ve set our sights on our goal, an important question arises:  How to save 1 crore in 20 years? Well, don’t get bogged down. We will cover every possible question in this article to keep you from the arduous process of calculating yourself.  For example, what are the investment options and methods to use? What amount should you save each month, and how can you improve your savings over time? We will also share examples and calculations to assist you better grasp the process.

So, if you want to save money and put up a 1 crore corpus, pay close attention to this article.

Why saving 1 crore for your child’s future is important?

Saving 1 crore for your child’s future is not just a number; it is a vision. A vision of providing your child with the best possible opportunities and experiences in life. A vision of securing your child’s financial well-being and happiness. A vision to save money to fulfill your parental responsibilities and aspirations.

But why 1 crore? Why not save money more or less? Well, 1 crore is not a random figure; it is a realistic estimate of the amount you will need to cover your child’s significant expenses in the future, such as education, marriage, health, and any other contingencies. Let us see how. Let me share with you a chart on the annual cost of education in India has changed from 2007 to 2018, which will make this discussion all the more relevant-

image
Source: Statista

Considering the inflation rate in education of 4.46% (in 2021) to prevail over the next 20 years. Let us assume the average cost of higher education in India today as Rs. 10 Lacs. Then, in the next 20 years, you will need Rs. 24.17 Lacs for the same course. According to GOI, If you want to send your child to a reputed college or university in India, you must save Rs.24.17 lakh by 2043.

We have used the future value formula in the above calculation-

Future value = Present value x (1 + Interest rate) ^ Number of periods

Future value = 10 x (1 + 0.0446) ^ 20 Future value = 10 x (1.0446) ^ 20

Future value = 10 x 2.417 Future value = 24.17

Similarly, applying the same formula to calculate the average cost of marriage in India in the next 20 years. We have considered a CPI (Consumer Price Index) of 5% (as of September 2023) to remain constant over these years. And the average cost of an Indian marriage today is 15 Lacs. According to the government, you must save money to the tune of Rs.39.80 lakh for your child’s marriage by 2043.

Future value = 15 x (1 + 0.05) ^ 20 Future value = 15 x (1.05) ^ 20

 Future value = 15 x 2.653 Future value = 39.80

Explore: Financial Calculators

Apart from these two major expenses, there are other costs that you will have to bear for your child’s future, such as health care, travel, hobbies, emergencies, etc. These costs may vary depending on your lifestyle and preferences, but they can quickly add up to another Rs.20-30 lakh over the next 15 years.

So, if you add up all these expenses, you will get a rough estimate of Rs.80-90 lakh that you will need for your child’s future by 2035. However, this is not the final amount, as you also have to factor in the impact of inflation and taxes on your savings and investments.

Depending on your income bracket and investment type, you may have to pay different rates of taxes on your earnings and returns. If we assume that the tax rates remain constant for the next 15 years, then you will have to pay a certain percentage of your savings and investments as taxes to the government every year.

Therefore, considering the effect of inflation and taxes on your money, you will realize that you will need more than Rs.80-90 lakh for your child’s future by 2035. You will need around Rs.1 crore or more to meet your child’s future needs comfortably.

Hence, saving 1 crore for your child’s future is essential because it is a realistic and achievable goal that can help you provide your child with a bright and secure future.

How to Save 1 Crore: 5 Best investment options

Here, we will go through some of the best investment options to save money to build Rs. 1 Crore-

Stock Investment: To save money over a long term of 20 years, you can invest in stocks or shares of consistent or stable companies. If you are a beginner, the safest bet is to pick companies that you see on a day-to-day basis, like some biscuit brands like Parle G, Britannia, Sunfeast, Cadbury, etc. If the products have reached your home, these companies have deeply impacted a regular household and are considerably more reliable than choosing new companies we know less about. This way, you can benefit from the growth potential and dividends of the businesses.

However, stock investing also involves high risks, as the prices of stocks can fluctuate due to various factors such as market conditions, company performance, news, etc. Therefore, study the fundamentals and technicals of the companies before risking your money.  You must also have a long-term horizon and patience to withstand the market’s ups and downs.

Mutual Funds

To save money, mutual funds also are a good option. Mutual funds expose you to various asset classes, such as equity, debt, gold, etc., without managing them yourself.

Mutual funds are managed by professional fund managers who invest your money in a basket of securities according to the objective and strategy of the fund. You can choose from different types of mutual funds, such as large-cap, mid-cap, small-cap, multi-cap, sectoral, thematic, index, balanced, hybrid, etc., depending on your risk-return profile and goals. You can either make one-time payments or make regular investments through systematic investment plans (SIPs). SIPs allow you to invest a fixed amount every month and benefit from the power of compounding and rupee cost averaging.

EXPLORE OUR SIP CALCULATOR

Commercial Real Estate

Investing in commercial real estate, such as office spaces, shops, warehouses, etc., can give you high returns in rental income and capital appreciation. Commercial real estate is a booming industry these days, drawing the interest and attention of investors worldwide. The returns are generally more stable and profitable than residential real estate, as it has higher occupancy rates, longer lease terms, lower maintenance costs, and better tax benefits.

However, commercial real estate also requires a significant initial investment, which may not be affordable for everyone. Therefore, you can also invest in commercial real estate indirectly through real estate investment trusts (REITs), which are listed entities that own and operate income-generating properties. You can buy and sell REIT units on the stock exchange like shares and earn regular dividends and capital gains.

Bank Fixed Deposits

Traditional bank deposits can help you save money if you are a conservative investor with a limited risk appetite. Bank FDs provide set or guaranteed returns ranging from 6-8% based on the period and the bank/institution you invest in.

Some small finance institutions offer greater interest rates of up to 8-8.5%, but as the phrase goes in the finance sector, more rewards imply higher risk, so choose prudently. FDs, on the other hand, are safe and guaranteed by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to Rs. 5 lakh per depositor per bank, so you can save money by using these financial instruments as well.

Public Provident Fund (PPF)

PPF is a government-backed scheme that offers guaranteed returns. PPF has a fixed maturity of 15 years that can be further extended for 5 years. The ROI is decided by the Government of India and revised every quarter. As an icing on the cake, you also get a tax rebate of up to Rs. 1.5 Lacs on PPFs, which makes it a palatable investment option to save money for the long term.

EXPLORE OUR CAGR CALCULATOR

How to Save 1 Core With These Investment Options?

Formula Used: Future value = Present value x (1 + Interest rate) ^ Number of periods

 Investment in SharesMutual FundsCommercial Real EstateFixed DepositsPPF
ROI15%12%10%6%7.1%
Min. investment amount (per month) to save Rs. 1 crore in 20 yearsRs. 13,492/-Rs. 16,760/-Rs. 20,462/-Rs. 33,214/-Rs. 30,544/-
Investment AmountRs. 32.38 LacsRs. 40.22 LacsRs. 49.11 LacsRs. 79.71 LacsRs. 73.31` Lacs
Interest amountRs. 67.62 LacsRs. 59.78 LacsRs. 50.89 LacsRs. 20.29 LacsRs. 26.69 Lacs

Key Takeaways

To save money for your child’s future is a noble and achievable goal that can give you peace of mind and your child a bright and secure future. However, it demands meticulous planning, consistent saving, and intelligent investing.

 You must consider your income, expenses, inflation, taxes, and returns and choose the best investment options and strategies that suit your risk-return profile and time horizon.

You must also monitor and review your progress regularly and make necessary adjustments to stay on track. If you go through these options given in this article, your question “How to Save 1 crore?” will be aptly answered.

Investments are also like your plants that bear beautiful fruits and flowers if water regularly. So, tips to save money would be to save regularly and be patient. Regular investment gives you the magical power of compounding, and patience helps you stride through rough market situations. Don’t underrate the importance of starting early, it always gets rewarded.

ALSO READ:

How to invest money like a pro?

Benefits of long-term investing

How to make passive income?

FAQs

Why is monitoring and reviewing my portfolio important to save money?

When you regularly monitor and assess the performance of your portfolio, you can see how well it is performing compared to its competitors in the market and take appropriate corrective adjustments. It assists you in aligning your investments with your investment goals and rebalancing as needed. You can use numerous internet calculators to see whether your portfolio return is adequate to save enough money to develop Rs. 1 crore in 20 years.

How can I increase my savings over time to reach 1 crore in 20 years?

You can increase your savings over time by cutting down unnecessary expenses, increasing your income, reviewing your budget regularly, and investing in compounding instruments.

How much must I save monthly to reach 1 crore in 20 years?

Check the rate of return you can earn on your investments first to save money to Rs. 1 crore in 20 years. For example, if you can earn 10% per annum, you need to save Rs. 20,462 per month. If you can earn 15% per annum, you need to save Rs. 13,492 per month.

Introduction

It’s November, which is time for Upcoming IPOs in November 2023. In the financial world, Initial Public Offerings (IPOs) are like grand openings for companies, inviting the public to invest in their future. It’s when a private company takes its first steps into the public market by offering shares to the general populace. But what’s the nitty-gritty of this process? Let’s break it down.

What’s an IPO?

An IPO essentially marks the transition of a private company into a publicly traded entity. This means that the company’s ownership shifts from a select group of private investors to the wider public. It’s a significant financial event for both the company and potential investors.

Fresh Capital or Existing Shares?

When a company goes public, it can either issue new shares to raise capital or let existing shareholders sell their shares, a process known as an Offer for Sale (OFS), without generating fresh capital.

We have three Upcoming IPOs in November 2023. Let’s sneak peek into the IPOs set to make waves in November 2023.

Upcoming IPOs in November 2023

Company NameIssue Size (in ₹ Cr)IPO Date
Cello World Limited IPO1,900.00October 30 to November 1, 2023
Honasa Consumer Limited1,701.00October 31 to November 2, 2023
ESAF Small Finance Bank463November 3 to November 7, 2023

1. Cello World Limited

Another upcoming IPO in November 2023 is Cello World. Cello World Limited is a prominent name in India’s consumer ware industry, with a footprint extending to consumer houseware, writing instruments, stationery, moulded furniture, and related products.

As of March 31, 2023, it operates 13 manufacturing facilities across 5 locations in India. The company is even in the process of setting up a glassware manufacturing facility in Rajasthan. To learn more, check the DRHP.

Details of Cello World Limited’s IPO:

  • Type: 100% Offer for Sale (OFS)
  • Number of Shares: 2,93,20,987
  • Share Price Range: ₹617 to ₹648
  • Aggregated Amount: ₹1,900.00 Cr
  • Minimum Investment (Retail): ₹14,904
  • Listing Date: November 09, 2023
  • Exchanges: BSE and NSE

2. Honasa Consumer Limited(Mamaearth)

Honasa Consumer Limited wears the crown as India’s largest digital-first Beauty and Personal Care (BPC) company by revenue for FY 2023. What sets it apart is its unwavering commitment to providing toxin-free beauty products, all crafted from natural ingredients. Its marquee brand, Mamaearth, has become synonymous with natural, safe-to-use products. To get a better idea, check the DRHP and read our in-depth article on Mamaearth IPO.

Details of Honasa Consumer Limited’s IPO:

  • Type: Fresh Issue and Offer for Sale (OFS)
  • Fresh Capital Raised: ₹365.00 Cr
  • OFS Shares: 4,12,48,162
  • Share Price Range: ₹308 to ₹324
  • Aggregated Amount: ₹1,701.00 Cr
  • Minimum Investment (Retail): ₹14,904
  • Listing Date: November 10, 2023
  • Exchanges: BSE and NSE

3. ESAF Small Finance Bank

ESAF Small Finance Bank Limited is all set to launch its Initial Public Offering (IPO) with utmost confidence. Founded in 1992, ESAF is a renowned Small Finance Bank that primarily focuses on providing loans to customers residing in rural and semi-urban areas.

The Bank offers a wide range of products such as Micro Loans, Retail Loans, MSME Loans, Loans to Financial Institutions, and Agricultural Loans. As of March 2023, the Bank has a widespread network of 700 outlets, 743 customer service centers, 20 business correspondents, and 481 business facilitators. The Bank also has 581 ATMs located across 21 states in India. Read the DRHP to learn more.

Details of ESAF Small Finance Bank

  • Issue Size: Rs 463.00 crores
  • Issue: Fresh Issue: Rs 390.70 crores and Offer for Sale: Rs 72.30 crores,
  • Subscription Period: November 3 to November 7, 2023
  • Allotment Date: Friday, November 10, 2023
  • Listing Date: Thursday, November 16, 2023
  • Stock Exchanges: BSE, NSE
  • Price Band: Yet to be announced

IPOs are akin to a mutually beneficial dance. Companies gain capital by offering shares, free from interest obligations. Investors, in turn, can buy in at a potentially lower price, reaping returns in the long run. Additionally, IPOs can lead to listing gains if the company debuts on a high note. However, you must always do your due diligence before investing in any IPO.

FAQs

  1. How does an IPO benefit a company?

    An IPO allows a company to raise capital by issuing shares to the public, enabling growth and expansion.

  2. Can individual investors participate in an IPO?

    Yes, individual investors can participate in an IPO by purchasing shares through the designated process.

  3. What is an Offer for Sale (OFS) in an IPO?

    An OFS allows existing shareholders to sell their shares to the public without generating fresh capital for the company.

The skincare and wellness industry has evolved in the past few years, and Mamaearth has been a forerunner. Honasa Consumer Ltd., the parent company of this direct-to-consumer (DTC) brand, is launching its IPO on the last day of October.  This IPO will have a fresh issue and an Offer for sale (OFS).

Apart from Mamaearth, Honasa Consumer Ltd. has other brands under its umbrella. Such as The Derma, BBlunt, Dr. Sheth’s, Ayuga, Momspresso, and Aqualogica. So, if you are interested in investing in this FMCG brand, here are the details you must know.

Honasa Consumer Limited IPO Date, Lot Size & More

The IPO will have a Fresh issue of equity shares summing up to Rs. 4000 million and OFS of up to 46819635 equity shares. The price band for the total issue has been fixed with a price band of Rs. 308 to Rs. 324.

The entrepreneur-couple running the company, Varun and Ghazal Alagh, are the promoters selling shareholders selling up to 3186300 and 100000 equity shares, respectively. However, the investors selling shareholders Sofina, offering up to 19133948 equity shares, are offloading the highest number.

IPO StatusApproved
IPO Date31 October 2023 – 2 November 2023
Issue Price BandRs. 308 – Rs. 324
Lot Size46 shares
Fresh issueRs. 365 cr
OFS1336 cr
Issue TypeBook Built Issue
IPO listing atNSE & BSE
Face ValueRs. 10
QIB75%
Retail10%
Non-Institutional15%
Source: DRHP

Honasa Consumer Limited IPO SWOT Analysis

Strengths

  • Natural and eco-friendly products: One of the company’s primary strengths is its commitment to eco-friendliness. Most products are made from natural ingredients such as vegetables, herbs, fruits, and other natural resources.
  • Digital First Approach: The famous brand Mamaearth of Honasa Consumers Ltd. has started selling its products online. It is still a digital-first Company, with most of its sales coming from online portals. Likewise, the other companies under the parent company primarily offer their products and services online.
  • Consumer-centric Innovative products: The products Honasa Consumers offers are all made keeping in mind the needs and preferences of the clients.
  • Brand Building: As consumers are more awakened these days, brand building requires quality products and wise choices, and Honasa Consumer Ltd. knows that well. Its flagship brand, Mamaearth, has become the fastest-growing brand in the BPC sector in the country, with over Rs. 10 billion in annual turnover.

Weaknesses

  • Limited offline reach: While the company has a digital-first approach and has reached millions of customers in India, the growth can be stagnant without an offline presence.
  • Higher price bands: The price range of the products is slightly higher, which doesn’t appeal to many segments of the population in the country.

Risks

  • Excessive dependency on online marketing: The Company depends on online marketing, influencers, and celebrities. This extreme dependency can be a risk to its reputation and brand value.
  • Highly competitive segment: The flagship brands like Mamaearth of Honasa must have garnered immense popularity. However, the competition in the personal care and wellness segment is fierce, which is why the other company brands are yet to grow.

Opportunities

Rising income: As the income levels are increasing, especially for middle-class and upper-middle-class households, they are spending on quality wellness and healthcare products.

Digitalization: With the rise of digitization, the company’s products are becoming readily available to every corner of the country. Moreover, the increasing influence of social media is another factor driving the demand.

What will Honasa Consumer Limited do with IPO Money?

As the IPO is a mix of OFS and fresh issues, the company will not receive the proceeds from OFS. It is entitled to the selling shareholders after deducting expenses and taxes related to the offer.
The proceeds from the fresh issue shall be mainly used for –
• Building brand presence through advertisement
• Setting up new EBOs – this will be a capital expenditure
• Setting up new salons for BBlunt or Bhabani Blunt Hairdressing Pvt. Ltd., the subsidiary of Honasa Consumer Ltd.


Honasa Consumer Limited: Overview of the Company

In 2016, Mamaearth was first launched, which is the primary business of Honasa Consumer Ltd. Post that, all the other six subsidiaries were established, with a primary focus on personal care products.
The company offers products in all these segments – Face care, Body care, Hair care, Baby care, Colour cosmetics, and Fragrances. The use of all-natural products and the direct-to-consumer approach of the company has made it stand out from the rest. To understand the business better, check the video below.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

If you follow the stock market regularly or business-related news, you will often find companies offering bonus shares. For instance, Sonata Software recommended a 1:1 bonus yesterday after its growth in Q2FY24. So why does a company offer bonus shares to its shareholders?

What is a Bonus Issue?

As the name suggests, Bonus shares are shares that a company offers its shareholders at no cost. Often, the bonus issue of shares is used as an alternative to dividends to distribute company profits amongst its shareholders.

If you take the example of Sonata Software, a 1:1 bonus issue means that for every 1 share held by the shareholders, they will get an additional share of the company.

Suppose you hold 500 shares of Sonata Software; you will get an additional 500, and your total holding will become 1000 shares in the company. However, there is a catch.

Even though the number of shares will increase in the shareholder’s portfolio, the investment value will remain the same. It is because the price of each share drops when the number of shares outstanding increases. Taking a cue from the above example of Sonata Software,

The price of each share before the bonus issue, let’s say Rs. 1000.

Therefore, the total investment value before getting bonus shares is Rs. 500*1000 = Rs.500000.

Now, once the bonus shares are issued, the price of each share will = Rs. (500000/1000) = Rs. 500

However, the value will remain the same as your investments = 1000 * Rs. 500 = Rs. 500000

image 145

This is why when a company issues bonus stocks, the price of its shares dips. The inverse relationship between share price and bonus issue of shares helps investors buy the stock at a lower price.

Seven Things to Know about Bonus Issue

  1. Bonus shares are issued to the existing shareholders of a company. Here comes the ‘Ex-Bonus date,’ which is the date on which the shares of the company trade without the rights of receiving bonus stocks. For instance, Company A has declared a bonus issue, and the Ex-Bonus Date is 1 November 2023. So, anyone who has purchased and holds Company A’s stock until 31 October 2023 will be considered existing shareholders for the bonus issue. If you buy the stock on 1 November 2023, which is the Ex-Bonus Date itself, then you will not be entitled to receive any bonus shares.
  2. The Bonus ratio determines how many bonus shares you will receive. The ratio depends on the bonus shares the companies give. For instance, if the bonus ratio is 5:1, then for every share you hold of the particular company, you will receive five additional shares.
  3. Often, a company issues bonus shares instead of cash dividends as it serves the purpose of distributing its profits.
  4. As the investment value remains the same after the bonus issue, the proportionate ownership of the shareholder also remains the same. For instance, if you held a 1% stake in a company, after a bonus issue of shares, though the number of shares you hold increases, the 1% stake will remain the same, as the market value or investment value will remain the same.
  5. As an investor/ shareholder, your voting power increases with bonus issues. However, the best part is that dividend income can increase significantly as dividends are usually paid per share. For example, before the bonus issue of shares, a Rs.10 dividend per share for your 500 shares would have fetched you Rs. 5000, while now, as you have 1000 shares, you can earn Rs. 10000 from it.
  6. The liquidity increases as the number of shares trading in the market increases of the bonus issuing company.
  7. There are two other dates that you need to know when waiting for the bonus issue are –
    1. Record Date, which is the date on which the company determines the eligible shareholders to receive the bonus shares.
    1. Effective Date is when the bonus shares are credited to the shareholders’ account.

The recent five companies that have declared bonus issues, apart from Sonata Software, are –

CompanyBonus RatioRecord dateEx-Bonus Date
Venkatesh Ref1:128-10-202327-10-2023
Maruti Interior1:127-10-202327-10-2023
Krishana Phosch1:125-10-202325-10-2023
Madhya Bharat A1:120-10-202320-10-2023
Rudra Global1:118-10-202318-10-2023
Source: Moneycontrol

Thus, the Bonus issue not only helps the company to distribute its profit without paying any cash dividends but also helps in so many other ways. From increasing the liquidity quotient to lowering the share price, which can bring in new investors, increasing the voting rights of the investors and dividend earnings. All these purposes are served without disturbing the investment value or market capitalization.

FAQs

  1. What is a bonus share?

    These are extra shares offered to the existing shareholders without any cost to distribute the company’s profits.

  2. Are bonus shares good or bad?

    Bonus shares are good for investors as they increase the chance of earning more dividends, increasing the voting power without affecting the investment value.

The healthcare sector is one of the largest sectors of the Indian economy. According to NITI Aayog’s 2021 report, this industry has witnessed a remarkable CAGR of 22% since 2016 and is expected to reach a market valuation of $372 billion by 2022. This impressive growth is also mirrored in the stock performances of pharmaceutical companies.

As of September 29, 2023, the Nifty Healthcare Index has given a return of 18.35% over the past year. Sanofi India, one of India’s oldest pharmaceutical companies, has given an impressive return of 24% in the same period.

In this article, we understand Sanofi India and check the historical performance of the Sanofi share price.

Brief Overview of Sanofi India

Sanofi is a French multinational healthcare and pharmaceutical company headquartered in Paris. Sanofi India is the group’s Indian subsidiary, founded in May 1956 as Hoechst Fedco Pharma Private Limited.

Over the years, the company has changed its name multiple times, and in 1994 it was renamed Aventis Pharma Limited. The name change resulted from a global merger between Hoechst AG, Rhone-Poulenc, and Marion Merrell Dow.

In 2004, Aventis Pharma Limited merged with Sanofi to form Sanofi-Aventis. Consequently, it adopted the name Sanofi-Aventis India Limited. Lastly 2011, the company underwent a name change and became Sanofi India Limited. The company is counted among India’s top 4 multinational pharma companies and has over 3,000 employees across India.

Business Overview of Sanofi Limited

Sanofi operates in various segments in India, including pharmaceutical products, vaccines, and consumer healthcare. It has a large-scale manufacturing presence in Goa, and 12 contract manufacturing organizations spread across different parts of India.

The company has a wide range of medicines for treating diabetes, pain care, cardiology, allergy, epilepsy, and thrombosis, and also present in the nutritional health segment. Some popular medicines from the stable of Sanofi include Combiflam for pain care, Cardace for hypertension, Allerga and Avil for controlling allergies, Tragocid in antibiotics, and DePura for Nutritional Health.

Leadership Team

Mr. Rodolfo Horsz is the Managing Director and joined Sanofi in 2017 as General Manager of Consumer Healthcare in Brazil. In a change in leadership, Mr Horsz was appointed the Managing Director of India business in June 2022. Before joining Sanofi, he had stings with multinational companies Procter & Gamble, Pfizer, Louis Vuitton, and Heineken, serving in commercial, marketing, and general manager roles.

Mr. Ramprasad Bhat is the Head of the Foundation, India and Sri Lanka for General Medicines. He has over 25 years of experience and has held several key roles as Director of Strategic Initiatives (South Asia), Senior Director of Business Excellence, Head of Diabetes Business in India, and many more. Before joining Sanofi, Mr. Ram worked with Wockhardt for 11 years heading their specialty business unit. He is a pharmacy graduate and did his MBA from ITM, Mumbai.

Mr. Vaibhav Karandikar was appointed Chief Financial Officer in Sanofi, India, in October 2020. He joined Sanofi in 2007. Mr. Vaibhav is a qualified Chartered Accountant and Company Secretary and has held multiple responsibilities at Sanofi in business controlling, mergers & acquisitions, and accounting. Before joining Sanofi, he was with Sandoz India, Tata Power, and Hindustan Ciba Geigy.

Mr. Gaurav Bhadur joined the company in April 2013 as Senior Director- Human Resources in India and South Asia. He has over 20 years of experience in human resources and has worked for multinational corporations such as Vodafone India, Yahoo India, and Philips. Before joining Sanofi, he was Executive Vice President of Human Resources at First Source Solutions Limited.

Shareholding Pattern

Sanofi, through its 100%  subsidiary Hoechst GmbH holds a stake in Sanofi India.

image 136
Source: Shareholding_Pattern_for_QE_June_2023.pdf

Financial Overview

Sanofi India operates on a calendar year basis, from January to December.

Revenue

In FY2022, Sanofi India experienced a degrowth of 6.3% in revenue from operations to ₹2,770 crores from ₹2,956.6 crores in FY22. And, for the six months ending on June 30, 2023, the company reported 2.5% growth in revenue to ₹1442.6 crores, up from ₹1406.3 crores in 6MFY23.

In FY22, the company generated 85% of its revenue from the domestic market and the remaining 15% through exports. The country exports its product to more than 60 countries, mainly to the regulated markets.

image 137
Source: Sanofi India

EBITDA

image 138
Source: Sanofi India

Over the last five years, the company’s EBITDA has increased at a CAGR of 2%, rising from ₹713.2 crores in FY13 to ₹775.9 crores in FY22. However, in the last year, the company’s EBITDA fell by 7.28%, from ₹836.9 crores in FY21 to ₹775.9 crores in FY22.

Profit After Tax

In FY22, the company’s profit dipped by 34.28% to ₹775.9 crores from ₹836.9 crores in FY21. And, in Q2FY22, the company’s profit increased marginally by 2% to ₹122.9 crores from ₹120.4 crores in Q2FY23.

image 139
Source: Sanofi India

The financial results of FY21 and FY22 are not comparable. During FY22, Sanofi India completed its divestment in Soframycin and Sofradex business, and the financial reports also include exceptional items.

 Key Financial Ratios

Current Ratio: At the end of 31st December 2022, the company’s current ratio declined to 2.17 times from 2.85 times on 31st December 2021.

Inventory Turnover Ratio: At the end of FY22, the company’s inventory turnover ratio declined by 13.5% to 2.97 times from 3.44 times in FY21.

Operating Profit Margin: The operating profit margin on 31st December 2022 was 24.37%, compared to 23.92% at the end of 31st December 2021.

Net Profit Margin: The net profit margin on 31st December 2022 was 21.84%, compared to 31.16% at the end of 31st December 2021.

Return on Capital Employed (ROCE): At the end of FY22, the ROCE of the company increased to 67.8%, compared to 56.59% at the end of FY21.

Return on Equity (ROE): The ROE of the company at the end of 31st December 2022 declined to 35.45% from 43.47% at the end of 31st December 2021.

Because the company has no debt, the debt-equity ratio and interest service coverage ratio do not apply.

Sanofi Share Price Analysis

The shares of Sanofi India were listed long back in the Indian stock market, initially under the name Hoechst India Limited in around the 1970s. Over the years, the company’s shares have traded under multiple names and are currently traded as Sanofi India in both BSE and NSE. In the last five and ten years, the company’s shares have failed to outperform and have generated 4% and 12% CAGR returns, respectively.

Sanofi
Source: TradingView

Sanofi India share price hit an all-time high level of ₹9,285 in August 2021. The company has a consistent track record of paying dividends to shareholders. It paid ₹377 in 2023, ₹683 in 2022, and ₹365 in 2021 as dividends to shareholders. As of 10th October 2023, the market cap of Sanofi India is ₹17,041 crores.

Peer Comparison

Company NameSanofi IndiaPfizerGSK Pharma
Face Value₹10₹10₹10
Share Price (as of 10th October)₹7399.50₹3958.60₹1547.50
1-yr Performance  (as of 10th October)26%-11%12%
P/E Ratio  (as of 10th October)30.8232.5442.83
Market Capitalization₹17,041.05 crores₹18,109.70 crores₹26,215.58 crores
Revenue₹2770 crores (2022)₹2,338 crores₹3,216 crores
Operating Profit Margin (FY23)24.37% (2022)29%[8] 23.04%
Net Profit Margin (FY23)21.84% (2022)26%[10] 18.79%
ROCE (FY23)67.8% (2022)31.74%[12] 47.77%
Source: Sanofi Annual Report FY23

Key Highlights

  • Sanofi India is present in the therapeutic drug segment, diabetes, cardiology, central nervous system, allergy, multi-vitamins, and supplements
  • The company maintains a leadership position in the market for its diabetes portfolio. In the oral anti-diabetes drugs segment, it maintained 5th position.
  • Its Allerga and Avil brands are the leaders in the allergy category, accounting for 8% market share.
  • Combiflam, its heritage product in the pain care segment, reached sales of ₹200 crores in 2022.
  • Some of Sanofi’s products come under the NLEM- National List Essential Medicine category related to drug pricing. It directly impacts its earnings growth.
  • Sanofi India depends on the R&D conducted by the Sanofi Group for new product commercialization. The Indian unit doesn’t have direct control over new product launches or have R&D capabilities.

  • The company is demerging its consumer healthcare business, for which it has got approval from the Board. It will create a new entity, Sanofi Consumer Healthcare India Limited (SCHIL), and Sanofi India shareholders will receive 1:1 equity shares of ₹10 each for each equity shares owned. The demerger process is expected to be completed by the second half of 2024.

    In June 2023, Sanofi India sold its leading muscle relaxant brand, Myoril, for ₹234 crores to Ahmedabad-based Corona Remedies. Myoril had annual sales of ₹38 crores and was growing at a rate of 13% year-on-year.

Brief Industry Overview

  • The Indian pharmaceutical industry is growing at an average rate of ~10%. IQVIA Prognosis Report (2022) projects that the market is expected to grow at a CAGR of ~9.2% between 2021-26 and reach a market size of ₹2,95,100 crores by 2026.
  • The Government of India’s flagship program- Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana health insurance scheme is likely to drive access to quality healthcare, affordability, and improve health outcomes.
  • Indian generic medicine supplies accounted for ~20% of the worldwide supply by volume. It supplied ~40% of generic demand in the US, and ~25% of all medicine demand in the UK, according to the Indian Brand Equity Foundation’s Pharmaceutical Industry Report 2022.
  • India has become the diabetes capital of the world. According to a study by ICMR- the country now has 100 million diabetics and 136 million pre-diabetic individuals needing prevention.
  • Hypertension-related ailments are also on the rise. According to a study by WHO, one in four adults in India has hypertension, and only 12% of them have hypertension under control.

FAQ

When was Sanofi India incorporated?

Sanofi India was founded in May 1956 under Hoechst Fedco Pharma Private Limited. The company’s name has changed several times over the years, and it was renamed Aventis Pharma Limited in 1994. Aventis Pharma was later merged with Sanofi Group, a French multinational healthcare and pharmaceutical company, in 2004. As a result, the company was renamed Sanofi India Limited in 2011.

How Sanofi share price performed in the last 5 years?

As of 10th October, 2023. Sanofi share price in the last five years has given a CAGR return of 4%.

What are the products of Sanofi India?

Sanofi India is a leader in the diabetes care, allergy, cardiology, and pain care segments. Combiflam in the pain care segment and Avil in the allergy segment are some of its popular products.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

In the world of investments, you may come across many opportunities to create wealth. Amid all the investment options available, one particular option has managed to captivate investors. This option allows you to earn unique returns and associate yourself with the company’s growth. Yes, it is the option to invest in unlisted shares!

As exciting and promising as it sounds, it is essential to understand what an unlisted share is, how it benefits you, and the risks involved with this type of investment. This blog will help you explore the world of unlisted equity shares and understand how to diversify your portfolio with this instrument. 

Understanding Unlisted Shares

Behind the formal stock exchange runs the market of unlisted equity shares. Unlisted shares refer to shares not listed and traded on the stock exchange. These are equities or financial instruments traded over the counter and called over-the-counter (OTC) securities. The shares belong to start-ups or small companies that have not yet complied with the stock exchange listing norms.

These shares are held by a limited number of people or entities, like founders,  promoters, strategic investors, or venture capitalists.

Difference Between Unlisted Shares and Listed Shares 

Shares not listed differ from listed shares on various parameters. Let us look at the crucial differences between the two.

ParametersUnlistedListed
OwnershipA few private investors, such as founders and promoters, own the shares.The ownership of listed shares lies in the hands of the public, promoters, and other entities. 
LiquidityThese shares have low liquidity in contrast to listed shares. They might not always have immediate buyers, which makes it challenging for investors to exit their investments.Listed shares have the advantage of high liquidity. You can purchase or sell these shares easily during trading hours. So you can get access to funds whenever you need it.
Regulatory RequirementUnlisted companies have less rigid regulatory requirements. This gives them a flexible operating environment. However, this raises concerns regarding their transparency and governance.The Securities and Exchange Board of India (SEBI) regulates listed companies. This ensures the market’s integrity and protects investors.
Investment ProcessThe investment process is straightforward. However, unlike listed shares, unlisted equity shares settle immediately.While the investment process in a listed company is simple, it typically takes around trading +2 (T+2) days for the shares to settle.
Tax ImplicationAfter indexation, the applicable tax slab rates are – Short-Term Capital Gains (STCG) – max 30%. Long-Term Capital Gains (LTCG) – 20%Long-Term Capital Gains (LTCG) – 10% (without indexation) when they exceed ₹1 lakh in the financial year. Short-Term Capital Gains (STCG) – 15%
Prediction on ReturnsThe return predictability on unlisted shares is relatively low.The return predictability on listed shares is relatively high.
Market VolatilityStock market price fluctuations do not impact these shares. Investors seeking long-term growth find these shares appealing due to their lower short-term volatility.Price fluctuations in the stock market, economic conditions, geopolitical events, and company-specific news actively influence the stock prices of listed companies.
TransparencyIn contrast to listed companies, unlisted companies offer very limited information. You may have to rely on private sources or conduct research to evaluate the company’s true potential.Strict regulatory requirements govern listed companies. This transparency ensures you obtain all the information regarding the companies’ performance, financial health, and governance practices.

After understanding the differences between listed and unlisted equity shares, the next step is looking at how investing in these shares can benefit you.

Benefits of Investing in Unlisted Shares

As an investor, you can benefit from investing in unlisted equity shares in the following ways:

  1. Potential high returns: Investing in unlisted equity shares of promising start-ups can give you higher returns in the future.
  2. Low valuations: You can purchase these shares early at lower valuations.
  3. Diversification: By including these shares in your portfolio, you can diversify your investments and minimize the risk.
  4. Access to companies with potential: Buying these shares allows you to invest in and benefit from some promising start-ups and businesses.
  5. Pre-IPO opportunities: You can participate in Initial Public Offerings (IPOs) by purchasing these shares. Companies planning to go public usually offer pre-IPO shares to certain investors. This includes investors who have bought unlisted shares. If the IPO succeeds, you might be able to exit at a potentially higher valuation.

Risks of Investing in Unlisted Shares

Unlisted equity shares, though attractive and appealing, come with a few risks. Before investing, knowing the benefits and risks associated with these shares is crucial.

Listed below are a few of the risks:

  1. No transparency: In an unlisted public company, you can access most of the information only at the end of the fiscal year. This limited information makes evaluating the company and the share price tough.
  2. Not regulated: SEBI does not govern unlisted companies. Lack of regulations could increase the chances of fraudulent activities. This leads to a faulty valuation of the company as well.
  3. Restricted liquidity: These shares cannot be easily sold; generally, they require completion of the holding period. The sale takes place when there are buyers or when there is an IPO.

Factors to Consider While Investing in Unlisted Stocks

When you purchase unlisted or pre-IPO shares, you can earn potentially higher returns than you can make from buying and selling listed shares. However, as discussed, this investment involves a considerable amount of risk in terms of transparency and regulations. There are a few factors that you must bear in mind when you decide to invest in such shares.

  1. Performance: Before investing in any company, you must research and analyze the company’s financial statements. This provides an accurate picture of the revenue stream, the revenue generated, the profits, and the cash inflows. Since most of these firms are start-ups, research the management’s track record of success. This helps you understand the company’s current situation and its potential for future growth.
  2. Valuation: You must research the company’s valuation. Valuation is the price you will pay for a particular company’s share. Conducting research helps you determine if you are dealing with an undervalued or overvalued company. Investing in an undervalued company is a fantastic opportunity because the share price may be lower than the company’s actual value.
  3. Investment timeframe: These shares lack liquidity, i.e., you cannot buy or sell these shares quickly. This means, as an investor, you have to hold these shares for a long duration. Before investing in the shares of an unlisted public company, analyze your financial situation and be sure that you do not need liquid funds immediately.
  4. Risk appetite: Investing in unlisted or pre-IPO shares involves risk. As an investor, assess your risk appetite and ensure you are ready to take the risk.
  5. Lock-in period: If you choose to invest in pre-IPO shares, remember they come with a lock-in period. You cannot sell these shares for a set period following the IPO. If you invest in these shares, ensure you do not need funds shortly, as the lock-in period prevents you from withdrawing your funds.

Different Ways to Invest in Unlisted Stocks

You can invest in unlisted or pre-IPO shares in either of the following ways:

  1. Purchase them directly from the promoters of the company
  2. Purchase them from the employees of the company
  3. Purchase them via trustworthy intermediaries
  4. Participate in angel investing
  5. Invest in venture capital funds that invest in unlisted or pre-IPO shares

Conclusion

Unlisted shares are an unchartered territory and a hidden gem in the world of investments. They not only give you access to some promising start-ups but allow you to earn potentially high returns on your investment. Though an attractive investment option that also helps in portfolio diversification, it is important to weigh the pros and cons before investing.

Additionally, you must assess your risk appetite and financial requirements before you take the leap of faith. So, whether you are an experienced investor or a beginner, remember that calculated risk and informed decision-making are essential to a profitable investment.

FAQ

Is an unlisted share similar to a delisted share?

No, they are completely different. An unlisted share is not yet listed on the stock exchange. A delisted share has already been listed on the stock exchange but has been removed for various reasons. 

Should you declare unlisted shares while filing income tax returns (ITR)?

Yes. If you hold the shares of companies registered under the Companies Act 2013, you must report the same in your ITRs. If you do not have income from any other business/profession, you can file ITR-2 or ITR-3.  You must disclose the ITR details under the ‘Part A – General Information’ tab.

Is it legal to invest in unlisted shares?

Yes. You can purchase these shares in different ways. However, you must research the company’s financials and growth prospects before deciding. 

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Introduction

In the ancient epic of Ramayana, timeless lessons about wisdom and prudence extend beyond battles and kingdoms, resonating in our modern financial lives. This article delves into prevalent financial ill habits and draws parallels from the epic to guide us toward a more secure and prosperous financial future.

1. Copying the Investment Portfolio of Others

One of the most ubiquitous financial missteps is unquestioningly emulating the investment choices of acquaintances. This practice disregards the fundamental principle that every individual’s financial journey is uniquely shaped by goals, circumstances, and risk appetites. Crafting an investment approach tailored to your specific needs, aspirations, and capabilities is imperative.

2. Investing Without A Goal

Much like embarking on a journey without a clear destination, investing without predefined objectives is akin to navigating a ship without a compass. Financial goals must be S.M.A.R.T. – Specific, Measurable, Adjustable, Realistic, and Time-bound. These benchmarks are the foundation of a solid investment plan and guide your financial journey.

3. Spending Thoughtlessly

In today’s fast-paced world, giving in to materialism and the desire for instant gratification is easy. It often results in impulsive spending and little to no savings or investments. The consequence? A precarious financial foundation. To effectively manage your finances, it is essential to prioritize saving. This ensures a healthy surplus for future financial goals and unforeseen contingencies.

4. Ignoring Asset Allocation

Just as Lord Rama and his allies meticulously strategized to secure victory, investors must devise a well-thought-out investment strategy. Asset allocation, like distributing one’s resources across various fronts, forms the cornerstone of this strategy. By diversifying investments across different asset classes – such as stocks, bonds, and commodities – you can reduce risk and increase potential returns, protecting your portfolio from market volatility.

5. Losing Focus On Goals

Goddess Durga, Lord Rama, and Arjuna, each unwaveringly focused on a singular goal, exemplify the power of unwavering determination. As investors, maintaining focus on your goal-based investment plan is critical. Giving in to greed, fear, or following the herd leads to bad decisions. A bright financial future requires defined objectives.

6. Not Discussing Finances with Family

In matters of home and health, an honest financial discussion with family members is paramount. It is a collective endeavor, safeguarding the economic well-being of the family. Avoiding financial conversations can prevent loved ones from gaining valuable insights and perspectives, hindering their ability to navigate financial difficulties in your absence.

7. Not Holding an Optimal Insurance Cover

In an era where health uncertainties loom, being adequately insured for life and health is non-negotiable. Insurance provides financial security against unexpected events. It’s important to distinguish between insurance and investments and select policies that suit your needs.

8. Not Creating An Emergency Fund

By its very nature, life is replete with unexpected twists and turns. To weather these storms, maintaining an emergency fund is imperative. Creating a financial lifeline equivalent to approximately 12 months of regular expenses through strategic investments or savings accounts is crucial. It will provide a much-needed buffer against economic and emotional turmoil.

9. Not Reviewing Your Investment Portfolio

The legend of Kumbhakaran, known for his prolonged slumber, serves as a poignant reminder for investors. Reviewing and adjusting your investment portfolio periodically is essential to achieve financial success. This ensures that your investments align with your goals and adapt to market conditions.

10. Not Paying Heed to Sound Advice

Devi Sita’s negligent disregard of Lakshmana’s counsel led to dire consequences in the Ramayana. Similarly, being an astute investor entails being an attentive listener. It is crucial to seek advice from reputable and experienced financial advisors who base their recommendations on thorough research. By collaborating with them and considering your circumstances, you can make informed investment decisions aligning with your financial goals.

Conclusion

As in the grand tapestry of the Ramayana, where intelligence and wisdom guided the heroes toward triumph, financial knowledge can lead us to a future of abundance and security. Take control of your financial future by recognizing and resolving the common financial pitfalls that hinder your progress toward prosperity.

FAQs

  1. How do I begin crafting a personalized investment approach?

    Embark on this journey by introspecting your goals, risk tolerance, and financial circumstances. Seek guidance from a qualified financial advisor who can assist in formulating a tailored plan.

  2. Why is asset allocation important in investing?

    Asset allocation is the cornerstone of risk management. It involves diversifying investments across different asset classes to spread risk and optimize returns, ensuring a balanced and resilient portfolio.

  3. How often should I review my investment portfolio?

    Regular reviews, at least annually, are crucial to ensure your investments remain aligned with your financial goals and adapt to changing market conditions.

  4. Can I rely solely on insurance provided by my employer?

    While employer-provided insurance is valuable, it’s advisable to complement it with additional coverage tailored to your specific needs, especially for life and health insurance.

  5. What steps can I take to build an emergency fund?

    Initiate this process by setting aside a portion of your monthly income in a separate savings account. Gradually increase this fund to cover at least 12 months of regular expenses, providing a safety net during unforeseen circumstances.

One of the seventh highest-priced Indian stocks, Nestle India, recently made headlines by announcing its first-ever stock split at a 1:10 ratio. This news comes as the company reported a whopping 37% increase in net profit for the quarter ending on September 30, 2023, as opposed to the trend set by other frontline companies that have reported weaker second-quarter results. 

But what does the Nestle India stock split mean for you? Let’s find out. 

Splitting the stock into a 1:10 ratio

The Nestle board’s approval for the stock split means that each share worth Rs 10 will be divided into ten equity shares, each having a face value of Re 1.  It means that the number of outstanding shares will increase, but the value of each share will be one-tenth of its previous value. 

As of the announcement, the share price (Rs. 24,389 today) and after the split could be Rs. 2412.2. However, note that this change will not affect the company’s market capitalization solely due to the stock split. 

Changes to Nestle India’s issued post-stock split

Changes to Nestle India’s issued post-stock split
No. of shares pre-stock splitNo. of shares post-stock splitFace value pre-stock splitFace value post-stock split
9.64 crores96.42 croresRs 10Re. 1
Source: BQ Prime

Nestle India declares dividends for shareholders

Nestle India has also shared good news for its shareholders by declaring a second interim dividend of Rs 140 per share. This dividend, amounting to Rs 1,349.82 crore, will be paid starting November 16. This second interim dividend follows the company’s announcement of its first interim dividend of Rs 27 per share earlier in the year.

Solid financial performance is one of the top reasons for the Nestle India stock split.

Nestle India – Total Average revenue in the past 7 years
No. of yearsAvg Revenue in (Rs)
116,997.96 Cr
315,107.79 Cr
513,898.07 Cr
712,721.43 Cr
Source: Trendlyne

For the September 30, 2023 quarter, Nestle India reported a notable 37.28% increase in net profit, reaching Rs 908.08 crore compared to Rs 661.46 crore during the same period the previous year. Sales during this quarter surpassed the Rs 5,000 crore mark, reaching Rs 5,009.52 crore, marking a 9.43% rise from the same period in the previous year. 

Nestle India’s Chairman and Managing Director, Suresh Narayanan, attributed the company’s growth to critical investments in brand equity and strong market penetration in small towns and villages. Key brands such as KitKat, Nescafe Classic, Nescafe Sunrise, Munch, and Milkmaid continued to ace the performance trend.

The company’s focus on rural penetration, innovation, premiumization, and entry into new categories like Purina Pet Care and Gerber’s for toddlers has contributed to its resilient performance.

Nestle India’s Stock Performance

L0vFbzD2S Vc77iP37eZCNH BNvyp MoSz22r
Source: moneycontrol

What do analysts have to say about the Nestle India stock?

Analysts at Axis Securities talk positively about Nestle India’s consistent performance, citing various factors contributing to the company’s success. These include efforts toward rural penetration, market share gains, innovation, premiumization, and entry into new product categories.

Frequently asked questions

What does a stock split mean?

A stock split is when a company increases the number of its outstanding shares by offering more shares to shareholders. For example, if a company announces a 2-for-1 stock split, each shareholder will receive two new shares for every share they own.

Why is Nestle India splitting its stock?

Nestle India is splitting its stock to make it more affordable to a broader range of investors. The company’s stock price has risen significantly in recent years, making it less accessible to smaller investors.


What is the stock split ratio?

The Nestle India stock split ratio is 10:1. Each shareholder will receive ten new shares for every share they currently own.

When will the stock split take effect?

The Nestle India stock split is expected to take effect on November 16, 2023.

How will the stock split affect my investments?

On the day of the stock split, the number of shares you own will increase tenfold, and the price of each share will decrease by one-tenth. For example, if you currently own 100 shares of Nestle India stock at Rs. 2,438.90 per share, after the stock split, you will own 1,000 shares at Rs. 243.89 per share.

The recently popular renewable power company Suzlon Energy, based in Pune, India, has seen an exponential increase in its share price, crossing the INR 30 mark for the first time since April 2015.

In the last year, the stock has grown by 315%, resulting in a market capitalization of over ₹42,000 crore. Impressive, right? The question is, what led the stock to climb the ladder? And what does the future have in store for this stock?

Here’s a glimpse of how Suzlon Energy has been performing

Suzlon Energy’s share price was just ₹7.45 a year ago. Today, it has skyrocketed to ₹30, marking its highest level in nearly seven years. 

DVPhA32MJAoiQLUhtLQ3ByZOnvdV5iA0MvpEvCmbBahi881l0G9YVIbRgtliLHaei4MlgGW69zmKZOT4w1zsa9u2RMRaYio575I5578xCRLsFUdHEpGTm9b8oRUke83oFWECIeSPdQTZo18Gb f0hHc
Source: Yahoo Finance

The stock has been on an upward trajectory since April, consistently delivering positive returns, with May and June standing out with impressive gains of 41.6% and 30%, respectively.

RWFyAab9g58JFrjTn2 Yx0ugNQqgN9g6bwyHU r9emfH6nfnrmHsz4MQuhABUiOtrrEzEsMpuMNlxEYHgV2GzsDt3NSYus1 hBikRkwub r8TIsB
Source: Yahoo Finance

Let’s explore the factors driving Suzlon Energy’s recent success.

#1. The growing renewable energy sector

Of late, renewable energy stocks, including Suzlon Energy, have gained popularity among investors due to strong order wins and growing demand driven by government initiatives promoting clean energy.

India is committed to achieving ambitious renewable energy targets, including 500 GW of non-fossil fuel capacity by 2030 and 100 GW of wind energy installations. These goals provide a conducive environment for companies like Suzlon Energy, a growing player in the renewable energy sector.

#2. Business acquisition

Another factor contributing to Suzlon Energy’s stock price growth is the successful acquisition of multiple wind power projects and improved financial performance. This includes a 29.4 MW wind project for BrightNight and a 201.6 MW order from O2 Power Private Limited.

The company’s order book has grown substantially, providing revenue visibility for the next two years. Additionally, the company has also garnered support from brokerage firms, thanks to its strong order book and financial turnaround.

#3. When the debt is low, profits are higher

Suzlon Energy adopted a debt reduction strategy, replacing multiple lenders with two new ones and converting debt instruments. This move, combined with a recent qualified institutional placement (QIP), has led the company to become debt-free, further boosting investor confidence.

#4. Market outlook

Financial and business analysts expect substantial revenue growth and improved margins in the coming years, projecting a soar profit after tax for FY24 and FY25. JM Financial also highlights the company’s favorable positioning in the wind sector, benefiting from debt reduction and enhanced financial stability.

As the company works toward becoming debt-free and continues to secure new projects, its growth prospects appear favorable. Investors are taking notice of Suzlon Energy’s growth in the renewable energy market, making it a stock worth watching in the coming years.

Frequently asked questions

Why is Suzlon Energy’s share price rising?

Suzlon Energy’s share price surge is driven by a combination of factors, including:
Strong financial performance
Debt reduction
Substantial order wins
India’s renewable energy goals


Mention the products of Suzlon Energy. 

Suzlon Energy is a wind turbine manufacturer and renewable energy that caters to:

Wind turbines
Solar panels
Energy storage solutions
Wind farm development and operation
Renewable energy consulting

What are Suzlon Energy’s growth prospects?

Suzlon Energy’s growth prospects are promising, given its strong order book, debt reduction, and India’s ambitious renewable energy targets.

In what markets does Suzlon Energy operate?

Suzlon Energy’s major markets include India, the United States, Europe, and South America. The company has a presence in over 30 countries and has installed over 19 GW of wind energy capacity worldwide.

It wasn’t long before the Adani Group was in the spotlight earlier this year. A report by Hindenburg resulted in a massive dip in Adani Group’s stock prices, wiping out billions in market value. But what followed was an incredibly amazing comeback that saw several Adani Group companies recover and grow.

In this piece, we’ll explore the stock growth of the Adani Group and the factors contributing to their growth journey. Since early 2023, Adani Group companies have experienced an impressive revival.

Stock% Growth from January low 2023 to July 2023
Adani Enterprises146%
Adani Ports & SEZ90%
Adani Green Energy132%
Adani Transmission28%
Adani Wilmar26%
Adani Total Gas6.40%
Adani Power155%
Source: mint
  • Adani Enterprises: Shares have surged by approximately 146% from their 52-week lows.
  • Adani Ports & SEZ: Shares rallied 90% from their respective 52-week lows.
  • Adani Green Energy: An astounding 132% increase in stock price.
  • Adani Transmission: A notable 28% rise from their lows.
  • Adani Wilmar: Gained 26% from their lowest point post the Hindenburg report.
  • Adani Power: An impressive 155% gain, delivering solid returns.
  • Adani Total Gas: Though slower in recovery, it still registered a 6.4% increase from its lows.

Four Reasons Behind Adani’s Growth

#1. Strong business performance: Adani Group’s diverse portfolio of businesses, spanning ports, power, and green energy, has performed exceptionally well in recent months. This has resulted in a sharp increase in profitability by up to 83%, which has attracted investors and boosted stock prices. The group firm has also raised its stake in two listed companies.

#2. Technical factors: Technical analysts have noted that Adani Group stocks are back with strong momentum and support levels. This indicates continuous growth.

#3. Market sentiment: Positive market sentiment has also affected Adani’s stock growth. Investors are constantly looking for investment opportunities in high-growth sectors. Adani Group’s strong business fundamentals and attractive valuation make it a compelling choice for investors.

#4. Improved financials: Adani Group companies have reported impressive financial results with healthy revenue growth and profitability margins in recent quarters. This has further strengthened investor confidence and boosted stock prices. For example, Adani Power reported an 83.25% rise in net profit in the last quarter.

Vaishali Parekh, AVP, Prabhudas Lilladher: “Adani Power has also rallied decently, finding resistance near the Rs 409 level and has slipped to some extent with near-term support at Rs 360 levels. The trend is strong and expects further rise after a short consolidation.”

Adani Group’s stock growth seems to have defied negative publicity. It is driven by solid business performance, technical factors, improved financials, and positive market sentiment.

Analysts’ insights provide valuable guidance for investors, who should conduct their research and consult with financial experts before making informed decisions.

*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Frequently asked questions

What is Adani Group?

Adani Group is a multinational conglomerate headquartered in Ahmedabad, India. It is one of the largest conglomerates in India, with interests in ports, logistics, energy, infrastructure, and mining.

Why did Adani Group’s stock prices fall in early 2023?

In January 2023, Hindenburg Research, a US-based short seller, published a report leading to a significant Adani Group shares sell-off, wiping out billions in market value.

How has Adani Group’s stock recovered since January 2023?

Through strong business performance, technical factors, improved financials, and positive market sentiment.

 Introduction

In today’s world, pursuing economic freedom is a universal goal. Like men, women are looking for ways to take control of their financial future and have a stable and successful life. This article will delve into the essential steps women can take to achieve financial independence.

Whether you’re an entrepreneur, a stay-at-home mom, or someone, these strategies can empower you to make better financial decisions and work toward your goals.

Below are the various steps to achieve complete financial independence

MethodDescriptionSteps to Achieve
EmploymentSecure a job or career in a chosen field1. Identify career goals
2. Build relevant skills
3. Network and apply for jobs
EntrepreneurshipStart and run a business1. Identify a business idea
2. Create a business plan
3. Secure funding if needed
InvestmentsInvest in stocks, real estate, or other assets1. Learn about investment options
2. Set up an investment account
3. Diversify investments
Passive IncomeGenerate income streams from investments or assets1. Acquire income-generating assets
2. Create passive income strategies
SavingsRegularly save a portion of income1. Set a savings goal
2. Create a budget
3. Automate savings
EducationInvest in education and skill development1. Identify desired skills
2. Enroll in courses or programs
3. Continuously upgrade skills
Financial LiteracyDevelop knowledge about personal finance1. Read financial books/articles
2. Attend financial workshops
3. Create a financial plan
FreelancingOffer freelance services in a specific niche1. Identify freelance skills
2. Create an online portfolio
3. Market services

1. Set clear financial goals

Before embarking on the journey to financial independence, women need to set clear and specific financial goals. These goals vary widely, from saving for retirement, buying a home, earning an education, or starting a business. A clear strategy for your financial future will give you direction and motivation.

2. Make a budget

A well-planned monetary policy is the foundation for economic freedom. Women need to take care of their money, spending, and savings. This budget allows you to see areas where you can cut back on unnecessary expenses and allocate more money toward your financial goals.

3. Invest wisely

Investments are one of the most effective ways to build wealth over the long term. Women must educate themselves on investment strategies, including stocks, bonds, mutual funds, real estate, and retirement accounts. Diversifying your investments can help reduce risks and increase long-term returns.

4. Create an emergency fund

Economic freedom requires a safety net. Women should aim to build an emergency fund equivalent to at least six months of living expenses. This fund provides financial protection during unexpected medical emergencies or job loss.

5. Increase revenue

Women can seek opportunities to increase their income to accelerate their journey to financial independence. This may include pursuing higher-paying job opportunities, initiating side leave, or investing in skills that can lead to career advancement.

6. Educate yourself about finances

 Financial literacy is key to achieving financial independence. Women should take the time to educate themselves on personal finances, including things like budgeting, investing, taxes, retirement planning, and more. There are many online resources, courses, and books to improve women’s financial literacy.

7. To pay the debt

High-interest debt can be a major barrier to financial freedom. Women should prioritize paying off credit card debt and other high-interest debts as soon as possible. Once these debts are eliminated, the money saved on interest payments can be redirected towards investments and savings.

8. Planning for retirement

Retirement planning is essential for women at every stage of life. Whether you’re just starting your career or approaching retirement age, making regular contributions to retirement accounts like NPS is important. Take advantage of employer-sponsored retirement plans and consider consulting a financial advisor for a personalized retirement plan.

9. Network and seek guidance

Networking and mentoring can be powerful tools for women seeking financial independence. Connect with individuals who have achieved financial success and ask for their guidance. Joining professional organizations or online communities can provide valuable insights and opportunities.

10. Protect your property

 Insurance plays a pivotal role in protecting your financial independence. Make sure you have the right health, life, and disability insurance. In addition, consider creating a will and estate plan to protect your assets and help your loved ones. The above details highlight the ways in which women should control their finances and plan for the future.

Conclusion:

Financial independence is within reach for women willing to take proactive steps to secure their financial future. By prioritizing financial education, setting clear goals, building emergency savings, investing wisely, establishing multiple income streams, managing debt effectively, and planning for retirement, women can achieve economic empowerment and control over their financial destiny. Don’t let gender stereotypes or societal norms hold you back—take charge of your financial journey today.

FAQ

What is economic independence for women?

For women, financial independence means having the financial strength and knowledge to make choices that align with their goals and values ​​without relying on others This includes managing money wisely, saving, money closure, and future planning.

How do I start investing if I have little or no experience?

If you’re new to investing, consider starting with a low-cost, diversified index fund or seeking guidance from a financial advisor. Some online resources and courses can help you learn the basics of investing.

Why is retirement planning important for women?

Planning for retirement is important for women because they tend to live longer on average than men and may experience unique financial challenges such as wage gaps and career interruptions. By planning for early retirement, women can achieve financial security later.

 
Is it too late to start planning for retirement if I’m in my 40s or 50s?

It’s never too late to start planning for retirement. While starting early is advantageous, you can still make significant progress by saving consistently, making wise investment choices, and seeking professional advice to catch up on your retirement savings.

Who says that women and investing don’t pair well? Meet our new-age top female investors in India who are breaking all myths and shattering stereotypes. The Covid-19 pandemic has dynamically changed the rules of the investing game.

With the financial agony that Covid-19 brought into our lives, women needed to generate alternative income sources. Factors like growing economic instability, rising prices,  layoffs, and sinking deposit interest rates stimulated a new breed of female investors in India. Even working from home acted in their favor.

The stock market, which male investors have traditionally dominated, has begun to attract more female investors in India.  Women started investing their savings towards financial assets rather than physical assets such as cash and gold. This is supported by numbers from one of the largest brokerage firms, Zerodha.

Data suggests that in 2021, the number of female investors registered on their platform increased from 3.5 Lacs in 2020 to 7.5 Lacs in 2021, accounting for nearly 16% of its total members. Source: Forbes India

In this article, we will look at some of the top female investors in India. These financial masterminds are changing the investment game and inspiring others to follow in their footsteps. Apart from making money, these smart women investors are making a mark in the investing world with their skills, knowledge, and intuition.

Let’s start our tour to explore the top female investors in India.

The Top Women Investors in India

Women investors Ankita Vashistha

Ankita Vasishtha

She is the founder and CEO of Saha Fund, India’s first-of-its-kind venture capital fund for promoting women’s talent.  This 37-year-old shepreneur is also the founder and managing director of StrongHer.

StrongHer Ventures is a platform that aims to create a global billion-dollar venture fund for women. She has also co-invested in multiple startups across Singapore, the U.K., and the U.S. apart from India. [ Source: Economic Times ]

Women investors Vani Kola

Vani Kola

She is the founder and managing director of Kalaari Capital, one of India’s leading early-stage venture capital firms. Thanks to the “Queen of Indian VC,” Kalari Capital ranks in the top quartile in the world, generating steady returns of 3x to 5x to its investors. Vani Kola has been a trendsetter in equity investing, backing companies such as Flipkart, Myntra, Dream11, and Curefit.

Her rise from a conservative middle-class family to a celebrated entrepreneur demonstrates her dedication, inventiveness, and endurance. Her remarkable story should inspire more female investors in India to embrace the complex yet rewarding investment realm. [Source: Forbes India]

Women investors Padmaja Ruparel

Padmaja Ruparel

Padmaja Ruparel is one of the top female investors in India that we look up to. She is the co-founder and president of Indian Angel Network (IAN), India’s largest and oldest network of angel investors. She is also the founding partner of IAN Fund, a seed and early-stage venture fund that invests in sectors like health care, education, fintech, and agritech.

She has transitioned from being a housewife to handling corporate responsibilities to being an eminent angel investor. IAN boasts of establishing a thriving startup ecosystem in India by assisting over 135 firms in 17 countries, with an internal rate of return of about 32%. Moreover, the incredibly low failure rate of roughly 15% is impressive. [Source: Forbes India Magazine ]

Women investors Renuka Ramnath

Renuka Ramnath

Renuka Ramnath has many accomplishments, including being a Harvard graduate, founding Multiples Alternate Asset Management, and becoming the first female chairwoman of the Indian Private Equity and Venture Capital Association (IVCA).

Multiples Alternate Asset Management, which she formed, is a private equity firm that has successfully navigated market turmoil caused by the epidemic to generate steady returns for its clients. She has also served as MD and CEO of ICICI Ventures, a specialty alternative asset manager that has risen to the ranks of India’s leading venture capital funds.

With over 30 years of experience in the Indian capital markets, she has invested in companies like PVR Cinemas and Arvind Fashions. She is on the list of top female investors in India. [Source: Fortune India]

Women investors lakshmi iyer

Lakshmi Iyer

Lakshmi Iyer, chief investment officer (CIO) at Kotak Mahindra Asset Management Co. Ltd, has been awarded one of Asia’s top 25 most significant women in asset management. Lakshmi has had a strange obsession with numbers from childhood, which she attributes to her rise to the list of top female investors in India.

When fintech was a new term to many, Lakshmi Iyer started tracking bonds and found her love in decoding the mystic relationship between finance and technology. Lakshmi Iyer has over 30 years of experience in venture investing, marketing, and financial services.

She is known for her depth and width of knowledge of the equity markets and her DIY approach to investing. She has a unique approach to investing, which focuses on the issuer’s quality, the instrument’s liquidity, and the security’s yield. She is one of the role models for aspiring female investors in India. Source: CIO Journeys, Bloomberg ]

Though we have several well-known female investors in India, the participation of women investors remains low.

Reasons for Low Participation Of Female Investors in India

Let us first figure out what prevents women from engaging in the investing scene-

Fear of being judged: Investing has long been a male niche, particularly in equity. Female stock investors in India face a lack of support from peers and family. Women are afraid of being judged for every financial decision they make. Mistakes are inevitable in this game, but women are often demotivated by every bad choice they make. They are not rewarded or motivated for the victories they achieve.

    Gender Gap in Financial Inclusion: In India, women’s financial literacy is at an all-time low, though the numbers have improved. According to a Humanity Welfare Council poll, about 62% of women in India lack access to basic financial services. Furthermore, about 80% of Indian women lack financial awareness. So, a lack of financial and tech literacy widens the gender gap between male and female investors in India.

      Pressure to Manage Multiple Roles: Female investors in India struggle to juggle their domestic and professional responsibilities. Women have to manage multiple roles in their personal lives, such as being a mother, a wife, a daughter, and a caregiver. On their professional front, challenges are no less. This adds to stress and exhaustion for women at times. Especially if they do not get enough support from their families.

        Female Investors in India vs Male Investors: Difference in Investing Approach

        ApproachFemale InvestorsMale Investors
        Risk appetiteWomen are behaviorally more risk-averse and conservative than male investors. Female investors in India prefer investing in safer and less volatile asset classes.Male investors tend to be more risk-seeking and aggressive, opting for higher-risk and higher-return investment options.
        Investment goalsFemale investors in India tend to have more long-term and specific investment goals, such as retirement, children’s education, or home purchase.  Male investors tend to have more short-term investment goals, such as wealth creation or beating the market rather than generating stable returns.
        Investment behaviourFemale investors in India tend to be more patient and disciplined in their investment decisions, sticking to their plans and avoiding frequent trading.Male investors tend to be more impulsive and overconfident in their investment decisions, chasing trends and trading more often.  
        Source: The Motley Fool

        Top Female Investors in India Share These Three Qualities

        1. Discipline and Patience – These women investors are more patient and rigorous in their approach than men. They take less risky steps and calmly hold on to their investment for the long term, unaffected by short-term gains or losses.
        2. Cautious Investors– In India, women investors prioritize capital preservation above capital appreciation. To do this, they invest in less risky or short-term gains but more stable investments that provide consistent returns over longer periods.
        3. Willing to Learn from Mistakes – These acclaimed women investors in India are unwavering and willing to learn from their failures and accomplishments. No investor can claim to have never lost money. Women investors prefer seeking advice from their peers or experts rather than blindly following market trends.

        Key Takeaways

        In this article, we learned how female investors in India are playing a vital role in shaping the future of the investing and startup ecosystem. They are making smart and profitable investments and positively impacting society by supporting women-led startups and inspiring other female stock market investors in India.

        According to a recent survey, women between 18 and 25 are three times more likely than males to invest in a high-risk, high-return asset class such as equities rather than traditional options such as fixed deposits.

        Padmaja Ruparel, Ankita Vasishta, Nita Mirchandani, and Vaani Kola are among the top female investors in India, having sponsored some of the country’s most successful entrepreneurs and demonstrating their decision-making acumen over time. There is a need to create a more inclusive and diverse environment for female investors in India to boost economic growth and achieve financial gender equality. [Source: Inc42]

        FAQs

        1. What are some of the sectors and industries that female investors are most interested
          in and why?

          Some of the sectors and industries that female investors are most interested in are consumer internet, fintech, health tech, tech, e-commerce, beauty, fashion, and social impact. These areas pique the interest of female investors in India because they have great growth potential, a large market size, and social relevance, and are linked to the overall development of the country.

        2. Who are some of the top female investors in India who have made a significant mark
          through their wise investments?

          Some of the top female investors in India are Ankita Vasishta, Vani Kola, Padmaja Ruparel, Bharati Jacob, Nita Mirchandani, Sakshi Chopra, and Bala Deshpande. They have invested in various startups across different sectors and industries, such as Uniphore, Zomato, Ola, Nykaa, Licious, Fitternity, and many more.

        Have you ever wondered how to buy stock in a company based in another country? A brand’s innovation is wonderful; you want a piece of it. Can an Indian company, such as Tata Motors, Infosys, or Dr Reddy’s, be listed on an international exchange? 

        Are these questions intriguing? No, not that much.

        Well, there is a way to trade in your local stock exchanges without dealing with the difficulties of cross-border transactions. It’s called depository receipts, issued by banks that hold the real shares of foreign companies and let you trade them on your local stock exchange.

        But before you jump into this exciting world of global investing, there are some things you should know. In this article, we will tell you five things you must know about depository receipts: how they work, their advantages and disadvantages, and how they differ from regular shares.

        What are Depository Receipts?

        Depository Receipts are negotiable securities issued by Banks or Financial institutions in the form of share certificates of a foreign public company. They allow you to buy equity in those companies without trading directly on their stock exchanges.

        You can buy and sell depository receipts on your local stock exchange, like any other local stock. You can also receive dividends, bonuses, and capital gains in your currency.  Depository receipts are issued by the country where the foreign company wants to reach investors.

        For example, American depositary receipts (ADRs) are issued for foreign stocks that trade on U.S. exchanges. European depositary receipts (EDRs) are issued for foreign stocks that trade on European exchanges. Global depositary receipts (GDRs) are issued for foreign stocks that trade on any exchange. Indian Depository Receipts (IDRs) that trade on Indian Stock Exchanges like BSE/NSE are issued in India for foreign companies having their offshoots/subsidiaries in India.

        Depository Receipts – Illustration

        Let us take a depository receipts example to understand this concept clearly. Say you want to invest in a company called ABC based in France. You live in India and don’t have access to the French stock exchange.

        You don’t even want to deal with the issues of currency conversion, taxes, and regulations involved in buying foreign shares. So, what’s the solution to this problem?

        You can approach any Bank/Financial institution in India that issues depository receipts of ABC. The bank holds the shares of ABC in a custodian bank in France and issues certificates representing one share each.

        These depository receipts (DRs) or certificates are traded on the Indian stock exchange under the ABCD symbol. You can buy and sell ABCD just like any other stock on the Indian market. You can also receive dividends and other benefits from ABC in Indian Rupees after deducting any taxes or fees.

        5 Things You Must Know About Depository Receipts

        • Emerging market investors generally use Depository Receipts (DRs) to invest in developed markets.
        • The price movements of Depository Receipts depend on the movement of the underlying stock.
        • Depository Receipts are traded and settled independently in the local currency.
        • DR holders are entitled to receive bonuses, dividends, or other benefits on their equity. However, their voting rights are limited by the “terms of issue” defined in the agreement between the issuer and holder of these instruments. 
        • The purpose of depository receipts is to raise capital from foreign markets and gain access to diverse economies.

        How do Depository Receipts Work?

        To understand how depository receipts work, let us first analyze the parties involved while issuing these receipts.  

        Say you own an Indian IT company, XYZ, and wish to raise funds from the U.S. markets and get listed on the New York Stock Exchange (NYSE). Your company fulfills the basic requirements for the issue of ADRs.

        So, the intermediary parties involved in the process, in this case, will be

        1. Depository Bank-   the one that issues ADRs on NYSE
        2. Custodian Bank- the Bank in the originating country i.e., India
        3. Broker – Generally situated in the country that issues ADRs, i.e U. S
        4. Stock Exchange- Where the stocks of XYZ get listed, i.e, NYSE
        image 69
        Source: Depository Receipt, Process of Issue & Parties Involved, Characteristics (efinancemanagement.com)

        Advantages of Depository Receipts

        1. Depository Receipts open before the investor an alternative opportunity to trade through an international market.

        2. Depository Receipts allow the investor to hold equity shares of foreign companies without being involved in direct trading with the overseas market.

        3. Depository Receipts allow an investor to diversify their portfolios by purchasing shares of companies in the global markets and economies.

        4. Depository Receipts are less expensive and more convenient than buying stocks directly from the international market. 

        Therefore, issuing depository receipts allows companies to broaden their investor base and obtain cash without having to list on their local stock exchange. They must, however, follow the rules and regulations of the issuing country, as well as comply with their home country’s securities market laws.

        Disadvantages of Depository Receipts

        1. Depository Receipts have poor liquidity i.e., buyers and sellers in this market are limited therefore, you may face some delay in realizing your money.
        2. Depository Receipts are sensitive to exchange rate changes, political instabilities, and upheaval in the foreign country’s economic environment.
        3. Higher processing and transaction costs gobble up much of your profits.
        4. Changes in rules in home and foreign countries impact Depository Receipts, contributing to their volatility.

        Key Takeaways

        Global investment in Depository Receipts climbed by 35% between 2012 and the first quarter of 2022, indicating that more investors are migrating into this market.

        Depository Receipts provide immense opportunities to invest in International Stocks and mint profits. Some of the most reputed Indian companies, like Infosys, Reliance Industries, and ICICI Bank, have invested in Depository Receipts to access the international markets to raise capital.

        But investors must also be aware of a fair amount of risks. Depository Receipts are susceptible to market fluctuations in the respective country’s market. Hence investors must carefully study the market fluctuation graph, economic and political conditions, and tax implications before investing.

        FAQs

        1. What are the types of depository receipts?

          Depository receipts are divided according to where they are issued and traded. Like American depositary receipts (ADRs), issued by US banks trade on US exchanges. European depositary receipts (EDRs), issued by European Banks, trade on European exchanges. Global depositary receipts (GDRs), issued for countries other than the US, trade on any market.

        2. How are depository receipts taxed?

          The taxation of depository receipts depends on the laws and regulations of both the issuer’s and the investor’s countries and the type and terms of the depository receipt. Investors generally must pay taxes on their capital gains and dividend income, either in their home country, the issuer country, or both, depending on the tax agreements between both countries.

        3. How do Depository Receipts differ from traditional shares?

          Depository receipts differ from ordinary shares in several ways, such as:
          ●  Ownership: Depository receipts represent an indirect ownership of the foreign company’s shares, while ordinary shares represent direct ownership.
          ●  Voting rights: Depository receipts may or may not have voting rights, depending on the type and terms of the depository receipt. Generally, American Depositary Receipts (ADRs) have voting rights. In contrast, Global Depositary Receipts (GDRs) do not (even if depository receipts have voting rights, they may be limited or restricted by the depository bank).

          Ordinary shares usually have full voting rights unless they are non-voting or preference shares.

        With the joyous rhythms of Navratri 2023 echoing in the air, investors are not just gearing up for nine nights of festivities; they’re also preparing for a financial journey like no other. It’s a time when tradition intertwines with market trends, and the stock market dance becomes as captivating as the Navratri Garba.

        In this blog, we’ll delve into the historical performance of the Nifty index during Navratri and share valuable insights that investors should keep in mind. We’ll explore the nine common trading pitfalls and how to overcome them successfully during this Navratri season.

        Navratri 2023: Historical Stock Market Trends

        Navratri festival, which typically falls in October, has historically been a promising period for investors. To provide a more comprehensive understanding of the stock market’s behavior during Navratri, let’s look at the recent three-year performance of the Nifty50 index. This analysis will show how the Nifty50 index has fared not only on Navratri but also 30 days before and after this auspicious occasion.

        NIFTY – 50
        YearNavratri festival date30 days before Navratri30 days after Navratri1-year return
        2020Oct-1711,60412,874   (6%) 
        2021Oct-0717,37718,068  (1%)21.26%
        202226-Sep17,52217,736 (5%)2.68%
        Source: Yahoo Finance

        From the above table:

        • Nifty50 index has shown varied performance around the Navratri festival in these three years.
        • In 2020 and 2021, there were positive 30-day returns after Navratri, with significant 1-year returns.
        • In 2022, while there was a substantial 5% increase after Navratri, the 1-year return was comparatively lower, indicating potential market volatility.

        Navratri 2023 and It’s October Connection

        A report by JM Financial reveals that in the last decade, October has proven to be one of the best months for Nifty bulls. Out of the ten years analyzed, the Nifty index posted positive monthly returns in nine, with an average return of 2.9%.

        image 84
        Source: niftyindices.com

        Furthermore, the Nifty Mid-cap index has consistently performed well during Navratri, closing in the green on all ten occasions with an average return of 3.3%.

        While it outperformed the Nifty on five occasions, with an average outperformance of 0.4%, the Nifty Bank and Nifty Financial indices have also scored a perfect 10 out of 10, with average returns of 6.2% and 5.4%, respectively. Nifty Metal, Auto, and Energy indices have closed positively eight times during this period.

        According to the report, the stocks that consistently closed in the green were ICICI Bank, SAIL, Manappuram Finance, NMDC, SBIN, GMR Airports, PFC, Tata Steel, Ashok Leyland, Petronet LNG, and JK Cement.

        Besides the onset of the festive season, October also marks the release of Q2 earnings reports. This combination of favorable market conditions and corporate performance may usher in lucrative opportunities.

        Conquering Investing Pitfalls with the Power of Navratri’s Divine Avatars

        Just like how the nine forms of Devi during Navratri help us overcome evil, let’s embark on a journey to conquer the nine trading challenges with heart and soul.

        1. Start Fresh with Shailaputri Devi: Think of each investing day as a new beginning, just like Shailaputri Devi. Don’t judge the market too soon; stay flexible, and learn to adapt to different phases of life.
        2. Discipline like Brahmacharini Devi: Be as disciplined as Brahmacharini Devi. Avoid over-investing; it’s like avoiding impulsive decisions, especially after losses. Don’t rush into aggressive trading or investing when things get rough.
        3. Radiance of Chandraghanta Devi: Keep the radiant spirit of Chandraghanta Devi alive. Always have control over your investments. Plan for risks, be ready with Plan B and brace yourself for market ups and downs.
        4. Creativity of Kushmanda Devi: Let your creative side shine like Kushmanda Devi. Control your emotions; don’t let greed and fear dictate your actions. Think calmly before making decisions.
        5. Protection of Skandamata Devi: Be a guardian of your portfolio, like Skandamata Devi guards her devotees. Plan and prepare well for your investments. Stick to your strategies and investment plans.
        6. Courage like Katyayani Devi: Embrace courage akin to Katyayani Devi. Accept small losses to protect your capital; don’t let emotions push you into bigger losses.
        7. Resilience of Kaalratri Devi: Be as resilient as Kaalratri Devi. To protect yourself from market surprises, manage your risk wisely, like setting stop losses.
        8. Clarity like Maha Gauri Devi: Keep things clear and organized, just like Maha Gauri Devi. Maintain proper records of your trades; it helps you understand your trading better.
        9. Blessings from Siddhidatri Devi: Seek blessings like Siddhidatri Devi bestows. Diversify your investments across different assets to reduce risks and increase the chances of success.

        As Navratri 2023 approaches, let the wisdom of these nine Devi avatars light up your trading path. By committing to discipline, flexibility, and sound risk management, investors can confidently navigate the stock market and potentially reap the rewards of this festive period. May the Goddess guide you on a successful investing journey.

        *Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

        FAQs

        1. Is the Navratri festival a historically favorable time for stock market investors?

          Historical data shows that Navratri, which usually falls in October, has been a promising period for investors, especially for the Nifty index.

        2. What are the key findings regarding the Nifty index’s performance during Navratri festival?

          Over the past decade, the Nifty index has posted positive monthly returns in nine out of ten years during Navratri, with an average return of 2.9%.

        3. Which sectors and indices tend to perform well during Navratri 2023?

          Banking, Financials, Metals, Auto, and Energy sectors have performed well during Navratri. Indices like Nifty Bank and Nifty Financial have scored a perfect 10 out of 10, with significant average returns.

        4. How can investors make the most of Navratri 2023 regarding trading and investments?

          Investors can benefit from favorable market conditions and corporate earnings reports released during this time. It’s essential to stay disciplined and flexible and manage risk effectively.

        5. What common trading pitfalls should investors be aware of during Navratri?

          The blog lists nine common investing pitfalls to avoid: over-investments, emotional decision-making, and not being in control of your trades. It provides valuable tips on overcoming these challenges for a successful trading journey.

        In a remarkable turnaround, Paytm, India’s leading fintech giant, made a successful comeback in its stock value, hitting a 52-week high with an astonishing 82% surge in 2023. This dramatic recovery comes after a tumultuous period in 2022 when Paytm’s shares plummeted by almost 70%. 

        The global slump in tech stocks, a complex regulatory environment for fintech companies in India, increased competition, and the company’s mounting expenses posed a challenge. The expiry of the lock-in period for Paytm’s investors triggered substantial selling. Notably, Softbank, one of the major early backers, reduced its stake, leading to a domino effect of other investors offloading Paytm shares, adding to its woes.

        A New Chapter

        The turning point came when Paytm reported a decrease in year-on-year losses, starting in Q3 FY23. Furthermore, the growth in Paytm’s lending business played a significant role in boosting its stock price.

        Zomato’s announcement of its maiden profitable quarter in Q1 FY24 bolstered the broader sentiment toward new-age tech stocks. This, in turn, contributed to Paytm’s recovery. As a testament to its resurgence, Paytm’s shares hit a new 52-week high in three consecutive days in 2023.

        Paytm Stock Performance 2022-23

        d4XhWeki jiWMsLNRBtnD EwiaEbxsh8WQh0BZJzEvxUKZBv3fKtOM1aiQmfnbGKk7pSURA5iMo Lr1DJYP2Mi5zQOvVadjyj3vQlR5F5thO2 E7sChrqVyDCQ7rn9hSu rQOqt62JcUzrC84JFRMg
        Source: Yahoo Finance

        6 Reasons for the Rise in Paytm Share Price

        Paytm’s Founder and CEO, Vijay Shekhar Sharma, highlighted the company’s significant achievements and commitment to sustainable growth.

        1. Capitalizing on Digital & Credit Payments Opportunity

        India’s massive potential for newer payment and credit disbursement solutions allowed Paytm to capitalize on this opportunity, generating revenue and tapping into attractive profit pools. As outlined in its earnings presentation, the company focused on innovation and growth, which helped significantly.

        1. The Surge in Digital Payments in India

        India is experiencing a digital payment revolution, and Paytm believes significant untapped growth potential exists. This includes the growth of the Unified Payments Interface (UPI), card payments, and EMI-led transactions, which are yet to reach the masses. The National Payments Corporation of India (NPCI) has driven UPI adoption, focusing on superior user experience, interoperability, and security.

        Paytm established itself as a leading provider of UPI solutions. Moreover, they launched a new feature called UPI LITE. This feature enables users to make instant, small-value UPI payments of ₹200 or less, enhancing the user experience and simplifying bank statements.

        1. Introduction of RuPay Credit Card on UPI

        Paytm made it even more convenient for customers and merchants to make payments by introducing the RuPay Credit Card on UPI. This new feature lets customers enjoy the benefits of using credit cards, while merchants benefit from the increased business by accepting credit cards using assets such as QR Codes.

        1. Massive Growth Potential

        Paytm has set its sights on a future where India could potentially have 100 million merchant entities and over 500 million payment customers. The payment and other services subscriptions market is expected to grow substantially, further boosting Paytm’s growth prospects.

        1. Foray Into The Lending Sector

        Paytm aims to expand its presence in the lending sector by partnering with major Non-Banking Financial Companies (NBFCs) and banks to fully leverage the potential of small digital credit on the Paytm platform. In Q3 FY 2023, the value of loans disbursed by Paytm’s financial institution partners through its platform surged to ₹9,958 crore, an impressive growth of 357% year-on-year and 36% quarter-on-quarter.

        1. Committed to RBI Compliance and Operational Excellence

        Paytm is committed to working closely with the Reserve Bank of India (RBI), focusing on Paytm Payments Bank Ltd and Paytm Payments Services Ltd. The company will prioritize operational risk management and compliance for sustained success.

        What’s Next?

        Paytm faces increased competition with the entry of Jio Financial Services. Moreover, the RBI imposed a fine for violating KYC norms. The company could benefit from the growing adoption of digital payments in India, considering the subscription numbers for payment devices and payment volume on its platform are consistently rising.

        Despite ongoing competition and regulatory challenges, Paytm’s stock performance reflects its determination and adaptability in the ever-evolving world of finance. Whether Paytm is successful in achieving its goal is yet to be seen.

        *Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

        No more posts to show

        Frequently asked questions

        Get answers to the most pertinent questions on your mind now.

        No FAQs found in this category.

        What is an Investment Advisory Firm?

        An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

        An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

        An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

        An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.