Most Expensive Stocks in India – Top 12 Companies with Highest Share Price

There are thousands of stocks listed on the major stock exchanges in India, the BSE and NSE. Some of them are trading dirt cheap in single digit rupees, while many are trading in three, four or five digit figures. While investing in stocks, investors should never look at the price alone. Rather they should look at the value associated with the company.

In this article let’s take a look at the most expensive stocks in India.

Most expensive stocks in India at a glance (Top 12 Companies in terms of highest share price)

 Stock nameStock price
1MRF Ltd.Rs. 73,100
2Honeywell Automation India Ltd.Rs. 39,278
3Page Industries Ltd.Rs. 38,430
43M India LtdRs. 25,700
5Shree Cement Ltd.Rs. 25,590
6Nestle India LtdRs. 19,320
7Abbott India LtdRs. 18,668
8Tasty Bite Eatables LtdRs. 13,139
10Bajaj Finserv LimitedRs. 16,917
9Procter & Gamble Hygiene and Health Care LtdRs. 15,135
11Polson Ltd.Rs. 11,902
12Bharat Rasayan LtdRs. 10,005

Now let’s take a detailed look at the most expensive stocks in India

MRF LTD.

Share price as 06/12/21 – Rs. 73,100

Originally setup in the year 1946 as manufacturer of toy balloons, MRF today is the largest tyre manufacturing company in India. With 9 state-of-the-art factories across India, it also ranks among the top 20 global manufacturers in the world. MRF is largest domestic Original Equipment Manufacturer (OEM) tyre supplier for a wide range of tyres ranging from two-wheelers to fighter aircrafts.

Honeywell Automation India Ltd.

Share price as 06/12/21 – Rs. 39,278

A top player in electronics, instrumentation and process control equipment industry, Honeywell Automation India specializes in integrated automation and software solutions for enhanced productivity, safety and security for residential and commercial premises. Honeywell Automation’s key products include building control systems, distributed control systems and smart transmitters.

Page Industries Ltd

Share price as 06/12/21 – Rs. 38,430

Page Industries Ltd. is an exclusive licensee of American brand, Jockey International in the  Indian subcontinent and select countries in the Gulf region. It manufactures distributes and markets swimwear, innerwear and for adults as well as kids. Established in the year 1994, the company has also exclusive licensee rights of Speedo International Ltd. for manufacturing, marketing and distribution of the Speedo brand in the country. JOCKEY is the company’s flagship brand and a market leader in the innerwear category.

Shree Cement Ltd.

Share price as 06/12/21 – Rs. 25,590

Incorporated in 1979, Shree Cement Ltd is a leading cement manufacturer in India with operations across northern and eastern part of India. Headquartered in Kolkata, Shree Cement has a consolidated cement production capacity of 44.4 million tonnes per annum(MTPA) and ranks as the largest single location cement manufacturer in Northern part of India. The company offers three cement brands known as Bangur Cement, Shree Ultra Jung Rodhak Cement and Rockstrong Cement and also has a power generation capacity of 742 MW.

3M India Ltd.

Share price as 06/12/21 – Rs. 25,700

3M India Ltd is is a diversified technology and science company with a worldwide presence in different segments such industrial, health care, consumer, safety and graphics and energy businesses.

Nestle India Ltd.

Share price as 06/12/21 – Rs. 19,320

A subsidiary of Nestle S.A. of Switzerland, Nestle India Ltd is a top ranking player in the FMCG segment in India with massive presence in milk & nutrition beverages, cooking aids, chocolate & confectionery segments. Headquartered in Gurgaon, the company manufactures and markets its products under popular brand names like Nescafe, Maggi, Milkybar, Milo, Kit Kat , Milkmaid and Nestea. The company has 8 manufacturing facilities in India and four branch offices spread across Mumbai, Delhi, Chennai and Kolkata.

Abbott India Ltd.

Share price as 06/12/21 – Rs. 18,668

A subsidiary of Abbott Laboratories (USA), Abbott India Ltd is one of the largest MNC pharmaceutical companies in India. Abbott India Ltd. is engaged in the discovery development manufacture and marketing of pharmaceutical diagnostic nutritional and hospital products.

Bajaj Finserv Limited

Share price as 06/12/21 – Rs. 16,917

A holding company for different financial services businesses under the umbrella of Bajaj Group, Bajaj Finserv Limited is engaged in the business of wealth management, asset management, lending and insurance. The company holds 55.13% stake in Bajaj Finance and 74% stake each in Bajaj Allianz Life Insurance Company & Bajaj Allianz General Insurance Company.

Procter & Gamble Hygiene and Health Care Ltd.

Share price as 06/12/21 – Rs. 15,135

Incorporated in 1964, Procter & Gamble Hygiene and Health Care Limited is a top ranking player in FMCG segment in India. Some of its top brands include Whisper in the female hygiene category,  Vicks in health care category and Old Spice in men’s shaving category. The company is a subsidiary of Procter & Gamble Company USA in India.

Tasty Bite Eatables Ltd.

Share price as 06/12/21 – Rs. 13,139

Incorporated in the 1985, Tasty Bite Eatables Ltd. manufactures and markets a diverse range of shelf stable all-natural and ready-to-serve food products. The company specializes in prepared foods segment and caters to institutional users such as retail customers, corporate customers as well as hotels and quick-service restaurants (QSR).

Polson Ltd.

Share price as 06/12/21 – Rs. 11,902

Polson Ltd. specializes in the manufacturing and sale of organic, inorganic chemicals and vegetable tannin materials to leather industries, domestically and globally. Established in the year 1906, the company originally setup as a coffee manufacturer, later diversified into other business activities such as pharmaceuticals, agriculture, diary, leather chemicals and real estate.

Bharat Rasayan Ltd

Share price as 06/12/21 – Rs. 10,005

Established in 1989, Bharat Rasayan is a chemical manufacturing company which specializes in the production of Grignard Reagents, Fatty Acid Anhydrieds, Esters and Solvents and Pharma / Drug intermediates. The company is one of the largest manufacturers of ingredients used in the cosmetic industry, especially for personal care. Bharat Rasayan has a world class manufacturing plant based in Maharashtra and also provides custom and contract manufacturing services.

– Written and contributed by Pradeep Sukumaran.

How Retirement Planning Can Help You to Lead a Comfortable 2nd Innings?

Retirement is a time when your monthly income stops but your monthly expenses don’t stop. Many people often ignore retirement planning when they are earning with an assumption that they can depend on their children or relatives for their financial needs post retirement. However, when the actual time comes, they learn the hard way and end up compromising even on basic necessities.

Some key reasons to start retirement planning as early as possible:

To be financially independent

Expenses for household, travel expenses, lifestyle and health require adequate finances as long as one is alive. With each passing year the lifespan of people are increasing due to better living conditions and medical facilities. Hence it is necessary to have a regular source of income. This can help one to remain financially independent even after retirement take care of various expenses.

Rise of nuclear families

With joint-family systems are on the decline, the number of nuclear families are rising day by day. Due to this, nowadays there are more number of senior citizens who live on their own. This trend is likely to increase over the next few decades.

Increasing inflation

Given the huge spike in inflation consistently over the last few decades, monthly household expenses post retirement will go by 3-5 times. This will put a heavy burden on one’s pockets especially in the absence of regular and guaranteed income.

Increasing health issues with old age

As age increases, health problems are also likely to increase. Stress, poor sleeping habits and lack of adequate exercise during working years often extracts a toll on one’s health post retirement. Despite advances in medical technology, the treatment costs have also gone up significantly. Lack of adequate and regular income after retirement can result in a compromise on good treatment.

Bottom line

When you are financially independent you can enjoy and live life on your terms without depending on anyone. With regular income even after retirement, one can enjoy life and follow their passions and hobbies. Retirement planning using a pension plan that offers guaranteed income on a regular basis can help you lead a comfortable retirement life without worrying about money.

– Written and contributed by Pradeep Sukumaran.

Tega Industries IPO Opens on 1st Dec 2021 – Know All Details Here

Tega Industries Ltd., a leading player in the polymer-based mill liners is all set to roll out its IPO on 1st December 2021.  Tega Industries IPO will close for subscription on 3rd December 2021. The company manufactures and distributes over 55 specialized products to global clients engaged in mineral beneficiation, mining and bulk solids handling industry.

According to the Red Herring Prospectus, the company will not receive any proceeds from the offer as it involves only the offer for sale.

Some quick facts about the Tega Industries IPO:

Price band of Tega Industries IPO

The price band for the Tega Industries is between Rs. 443 to Rs.453 per share

Lot size

The minimum lot size for the Tega Industries IPO is of 33 shares.

Issue size

The issue size for IPO is Rs. 619.22 crores.

Listing date

Shares of Tega Industries are likely to be listed on 13th Dec 2021.

Key strengths and opportunities

  • Leading player in the polymer-based mill liners
  • Strong focus on quality control and continuous research and development
  • Experienced promoter group
  • Extensive sales and distribution network across 19 countries
  • Highly skilled and dedicated work force

Key factors to keep in mind while investing in the IPO:

In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:

  • The company’s  global manufacturing facilities and operations may expose it to the risks  associated with doing business in foreign countries, which may adversely impact its financial condition and operations.
  • In case there is a failure in expanding or effectively managing the company’s sales and  distribution network, domestically and overseas, there could be an adverse effect on the company’s business.
  • Tega Industries is dependent on 3rd party logistics and support service providers for the delivery of raw materials and finished products. Any disruptions in their services may impact the company’s business adversely.
  • The company is dependent on a few key suppliers of certain raw materials with whom it does not have long term contracts or exclusive arrangements. Any shortage or delay in the supply of these raw materials or an increase in price, may affect the company’s business and operations.
  • For detailed information on the risks associated with the IPO, please refer to the Red Herring Prospectus.

To invest in the Tega Industries IPO click here.

– Written and contributed by Pradeep Sukumaran.

How to Check Go Fashion IPO Allotment Status Online?

With the Go Fashion IPO Allotment finalized, many investors are anxiously looking forward to check if their bid has been accepted. The ₹1,013.6 crore IPO of Go Fashion, a leading player in the women’s bottom-wear segment in India was over-subscribed by 135.46 times.

Investors can check their Go Fashion IPO Allotment status by visiting the BSE website or via the registrar’s website.

How to check Go Fashion IPO allotment status online by visiting the BSE website?

1. Visit the official website of BSE using the link

www.bseindia.com/investors/appli_check.aspx.

2.  You will see a page ‘Status of Issue Application’.

3. Select ‘Equity’ option

4. Choose Go Fashion (India) from the dropdown menu

5. Enter your Application number

6. Enter your PAN number

7. Check on the Captcha ‘I am not a Robot’. Click submit

8. Click on ‘Search’

How to check allotment status on the registrar’s website?

1. Visit the registrar’s website using the link https://kcas.kfintech.com/ipostatus

2.  You will see a page ‘Ipo Allotment Status’.

3. Choose Go Fashion (India) from the dropdown menu in Select IPO tab

5. Select any one from Application number, Client ID or PAN ID

6. In application type select between ASBA and non-ASBA

7. Enter your application number

8. Enter Captcha

9. Click on Submit

The above steps can help you check Go Fashion IPO Allotment status online.

In case you have not received the Go Fashion IPO Allotment, you are likely to receive the refund by 26th November. Those who have received the Go Fashion IPO Allotment will receive the shares in their demat account by 29th November. The shares of Go Fashion IPO are likely to list on the exchanges on 30th November.

Go Fashion (India) is a top player in the women’s bottom-wear segment in India and markets its products under the brand name of ‘Go Colors’, through 450 exclusive brand outlets as well as large retailers, company website and online shopping portals.

To open a free trading and demat account and trade at the lowest brokerage rate of just Rs. 18/- per order click here .

– Written and contributed by Pradeep Sukumaran.

Star Health IPO Opens on 30th Nov 2021 – Should You Invest in Star Health IPO?

The initial public offering of Star Health and Allied Insurance Company Ltd. (Star Health), a leading player in the private health insurance space in the country is all set to hit the markets on 30th November 2021. Star Health IPO will be open for subscription till the 2nd December 2021. The company offers health insurance for retail and corporate clients as well as travel insurance and accident insurance.

According to the Red Herring Prospectus, the proceeds from the Star Health IPO would be utilized by the company towards augmentation of its capital base.

Some quick facts about the Star Health IPO:

Price band of Star Health IPO

The price band for the Star Health is between Rs. 870 to Rs. 900 per share.

Lot size

The minimum lot size for the Star Health IPO is of 16 shares.

Issue size

The issue size for Star Health is Rs. 7249.18 crores.

Listing date

Shares of Star Health are likely to be listed on 10th December 2021.

Key strengths and opportunities

  • The penetration rate of health insurance in India is very low compared to other developing and developed nations. This offers a huge potential for growth to companies in the health insurance business in India.
  • India’s young population with a median age of 28 years and rising incomes provides an enormous business potential.
  • The outbreak of Covid-19 pandemic in the year 2020 has increased the awareness of health insurance substantially.
  • Retail health insurance business is expected to growth at a CAGR of 23% between FY21 to FY25 as compared to 15% and 11% CAGR growth in Group and Government business respectively.
  • Star Health has the largest number of individual agents and the largest market share of 16% among private health insurance companies.
  • Star Health has the lowest expense as proportion of gross premium amongst the Standalone Health insurers.
  • The company has one of the largest and well spread distribution networks in the health insurance industry and integrated ecosystem.

Key factors to consider while investing in IPO:

In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:

  • Failure to continue to adapt to technological change and the evolving use of data in the health insurance industry in India, could adversely affect the company’s ability to maintain or increase its business volumes, profitability and market share.
  • Pandemics, such as COVID-19, and other disastrous events, such as natural disasters could materially increase the company’s liabilities for claims raised by policyholders, resulting in losses in the company’s investment portfolios, and adversely affect its business, financial condition and results of operations.
  • The company has incurred losses in Fiscal 2021 and may incur losses in the future, which could adversely affect its operations and financial conditions.
  • For detailed information on the risks associated with the Star Health IPO, please refer to the Red Herring Prospectus.

To invest in the Star Health IPO click here.

– Written and contributed by Pradeep Sukumaran.

Best Books on Stock Market and Investing

“An investment in knowledge pays the best interest” – Benjamin Franklin 

Equity investments have the potential to generate tremendous wealth for investors over a long term despite the severe volatility associated with them. However, when it comes to reality, only a handful of investors are actually able to make it big. One of the greatest reasons why many investors are unable to unlock the true potential of their investments in equity is the lack of adequate knowledge.

In today’s digital age, where there is no dearth of information, it is important to separate the chaff from the wheat and focus on learning the right things from the right sources.

One such effective way to gain knowledge about investing is by reading the best books on stock market written by successful investors. After all, the experience is considered as the best teacher and nothing can beat it when it comes from those who aced the investing journey and emerged successful not just once but consistently.

In this article, let’s take a look at the best books on stock market. Some of these books on stock market and investing have not specifically written in relation to Indian stock markets. However, it does not really matter as the basics are the same, irrespective of whether it is domestic or global markets.

Some of the best books on stock market and investing are:

‘The Intelligent Investor’ by Benjamin Graham

Also revered as the father of value investing, Benjamin Graham is highly successful investor whom Warren Buffett considers as his mentor.  ‘The Intelligent Investor’ is a highly recommended book for investors who want to discover strategies for achieving long-term investment goals through investing.

The book explains in detail about different strategies an investor can employ for safe and successful investing without taking bigger risks. The value investing principles described in this book by Benjamin Graham are very much relevant even in today’s world and is considered the holy grail among the best books on stock market and investing.

‘Common Stocks And Uncommon Profits’ by Philip Fisher

Philip Fisher a successful value investor who ranks among the top influential investors of all time.

His book ‘Common Stocks And Uncommon Profits’, is considered a gospel in the world of financial analysis. First published in the year 1959, the book teaches investors about analysing the quality of a business and its capability to generate profits for creating a winning portfolio.

‘One Up On Wall Street’ by Peter Lynch

Peter Lynch is a highly successful investor and mutual fund manager who managed to generate a portfolio return averaging 30% annually for a period of 13 years. In this book Peter Lynch has explained in detail the advantages an ordinary investor has over professional investment managers and how any ordinary investor can utilize these advantages for success in stock markets.

 ‘The Little Book that Beats the Market’ by Joel Greenblatt

Joel Greenblatt is an immensely successful value investor and author of many bestselling books. In this book, Joel Greenblatt has described in detail the process through which investors can generate higher returns compared to the market and professional managers by using the simple formula of investing in good businesses at bargain prices.

‘The Richest Man in Babylon’ by George Samuel Clason

George Samuel Clason is an American author widely known for his popular book ‘The Richest Man in Babylon’ which was first published in the year 1926. The book is considered a timeless classic in world of personal financial advice and covers valuable investment lessons through a collection of parables based in the ancient city of Babylon. Despite being almost 90 decades old, the simple yet effective concepts for wealth building chronicled in the book are practically relevant even in current age. By practicing these concepts in their day to day life, anyone can become wealthy over the years.

‘The Essays of Warren Buffett: Lessons for Corporate America’ by Warren Buffett and Lawrence Cunningham

Considered as one of the most successful investors of all time, Warren Buffett is a strong advocate of value-investing and the current chairman and CEO of Berkshire Hathaway. He has a penchant for investing in undervalued companies at an earlier stage, many of which have become multibagger with time and created multi-generational wealth.

First published in the year 1998, the book ‘The Essays of Warren Buffett: Lessons for Corporate America’ by Warren Buffett and Lawrence Cunningham has undergone many revisions with time. In the book, Lawrence Cunningham, an author and professor has brilliantly summarized Warrant Buffett’s wonderful investment strategies from the latter’s collection of letters to the shareholders of Berkshire Hathaway from time to time.

‘How to Make Money in Stocks: A Winning System in Good Times Or Bad’ by William J. O’Neil

William J. O’Neil is a highly successful author, entrepreneur and stockbroker. The book is based on a detailed study of market winners from the year 1880 to the year 2009 and is a must read for both new and seasoned investors who want to make smart investments. The book also covers proven techniques for finding winning stocks at an initial stage and as well as tips on identifying the best stocks, mutual funds, and ETFs for investment gains.

‘Beating the Street’ by Peter Lynch

The book is considered a masterpiece for creating a winning investment portfolio and describes the successful investment strategies used by Peter Lynch for picking wealth creating stocks and mutual funds. Peter Lynch strongly believes that even an individual investor can be as successful like experts in investing and describes the process for it in a detailed manner.

‘Rich Dad Poor Dad’ by Robert Kiyosaki and Sharon Lechter

Robert Kiyosaki is an American author and businessman. The book, first published in 1997, explains the significance of financial literacy, financial freedom, and the steps for creating wealth by investing in different types of assets.

Closing thoughts about the best books on stock market and investing

All the above mentioned best books on stock market and investing have some common factors. Most of these best books on stock market and investing focus on the principles of value investing, the importance of patience in investing, and the need for discipline while investing.

These best books on stock market and investing are a valuable source of knowledge for all investors who are serious about creating wealth through investing.

To start investing in stock market for lowest brokerage rates now by opening an online demat and trading account click here.

– Written and contributed by Pradeep Sukumaran.

Lessons for Investors from Paytm’s IPO Debut

Suhas (name changed), a newbie investor was super excited when he received an allotment for Paytm IPO recently. He couldn’t believe his luck as this was the first time he got an IPO allotment after trying his hands at several other IPO’s recently. However, his excitement quickly turned into disappointment on listing day as the stock closed at Rs. 1564 as compared to its issue price of Rs 2,150 per share.

Touted to be India’s biggest IPO at Rs. 18,300 crores, the mega IPO of One97 Communications Ltd, the parent company of payments app Paytm, ended its debut day with disappointment for retail investors. Amid weak market sentiments, the stock closed 27.24% lower on the listing day.

Paytm is a leading player in online payments market in India and is backed by investment giants like SoftBank, Ant Group and Warren Buffett’s Berkshire Hathaway. The brand has a strong recall value among merchants compared to its peers in the digital payment platforms and also enjoys an early-mover advantage in the segment.

Paytm’s IPO was subscribed 1.89 times, with bids received for 9.14 crore equity shares against offer size of 4.83 crore shares. The retail investor portion was subscribed 1.66 times, whereas the reserved portion of non-institutional investors received 24% subscription. The portion reserved for qualified institutional buyers received bids for 2.79 times.

Key investing lessons for investors from Paytm’s IPO debut:

Read the Red Herring Prospectus carefully before investing

The red herring prospectus is a document filed by a company which intends to float an IPO for raising funds. It provides detailed information to prospective investors including the business model of the company, the objective of the company for raising funds and the risk factors associated with investing in the company.

Avoid herd mentality

In an IPO frenzy market where new age business like Zomato, Policybazaar, Nykaa have raised huge funds from the market with huge listing day gains, investors often overlook the basics and fall for the hype.

In its red herring prospectus Paytm had mentioned that it has incurred net losses for the last three years, including a restated total comprehensive income/(loss) for the year including discontinued operations of Rs.(42,355) million, Rs. (29,433) million and Rs. (17,040) million in FY 2019 and may not achieve or maintain profitability in the future.

The entire episode brought back memories of Anil Ambani’s Reliance Power listing day debacle in the year 2008 for many investors who lost money in the mega Rs. 11,000-crore IPO.

Do your homework before investing

Before its listing, Macquarie Research had given an underperform rating on One97 Communications. The reason according to the foreign brokerage firm was that One97 Communications’ business model lacked focus and direction.

To make matters worse, the stock listed during a sluggish period amid rising concerns of increasing inflation, hike in interest rates and bond yields.

Invest wisely after proper research.

To open a free trading and demat account and trade at the lowest brokerage rate of just Rs. 18/- per order click here .

– Written and contributed by Pradeep Sukumaran.

Go Fashion (India) IPO Opens on 17 Nov 2021 – Know All Details Here

Go Fashion (India) Ltd., a leading player in the women’s bottom-wear segment in India is all set to roll out its IPO on 17th November 2021 and will be open for subscription till the 22th November 2021. Under the brand name of ‘Go Colors’, the company markets its products through 450 exclusive brand outlets as well as large retailers like Reliance Retail Limited, Central, Unlimited, Globus Stores Private Limited, and Spencer’s Retail etc. Besides this the company also markets its products through its website and online shopping portals.

According to the Red Herring Prospectus, the proceeds from the IPO would be utilized by the company towards funding roll out of 120 new exclusive brand outlets, funding working capital requirement and general corporate purposes.

Some quick facts about the Go Fashion (India) IPO:

Price band of Go Fashion (India) IPO

The price band for the Go Fashion (India) is between Rs.655 to Rs. 690 per share.

Lot size

The minimum lot size for the Go Fashion (India) IPO is of 21 shares.

Issue size

The issue size for Go Fashion (India) is Rs. 1031 crores.

Listing date

Shares of Go Fashion (India) are likely to be listed on 30th November 2021.

Key strengths and opportunities

  • A young and growing middle class with rising disposable income is expected to help India’s retail market to grow at CAGR of 6.23% to reach US$ 1,077 billion by FY25 from US$ 796 billion in FY20.
  • Rise in aspirational buying as women have started becoming financially independent and started earning more from a young age.
  • Widespread smartphone penetration with high speed internet and increased digital payments have given a boost to E-tailing making it convenient for women with less time to shop for apparels online.

Key factors to keep in mind while investing in the Go Fashion (India) IPO:

In its Red Herring Prospectus, the company has listed some factors which may impact the future performance of the company, such as:

  • The company reported a loss before tax of ₹ 31.35 million in FY 2021 primarily on account of the impact of COVID-19 on its operations.
  • The company operates in an industry which is fragmented and competes with several regional brands and retailers present in local markets across the country. Apart from intense competition from the unorganized sector, there is also competition from local retailers, non-branded products, economy brands, products of other established brands and from in-house brands launched by Large Format Stores (LSFs) through which the company retails its products.
  • The massive growth of online retailers and current trends of discounting and pricing strategies may adversely affect the company’s pricing ability and the company’s results of operations and its financial condition.

To invest in the Go Fashion (India) IPO click here.

– Written and contributed by Pradeep Sukumaran.

What is T+1 Settlement? – How T+1 settlement will Benefit Investors?

NSE and BSE, India’s top stock exchanges had announced the implementation of the T+1 settlement in phased manner from manner 25 February 2022, starting with the bottom 100 stocks in terms of market value. 500 stocks would be added in the next phase, on the basis of the same market value criteria from the last Friday of March and the process would continue in the same manner every subsequent month.

This announcement has left many investors confused about ‘What is T+1 settlement system?’ and how it works?

In this article, let’s take a detailed look at:

 What is T+1 settlement system?

How T+1 settlement system will benefit Investors?

Before we proceed with the answer to above questions, let’s take a look at the meaning of settlement system.

In stock markets, there is a life cycle for every trade which begins with the placement of an order for buying or selling and ends once settlement of the trade is done. The entire process from start to end can be described as the trade life cycle. Stock markets in India currently follow the T+2 settlement cycle. This essentially means that currently it requires two days for a trade life cycle to be completed in Indian stock markets, from initiation of the buy/sell order to settlement of the trade.

Let’s understand T+2 settlement system with the help of the below example:

An investor sells a certain quantity of XYZ shares he holds in his demat account on Monday. The stock broker through which he has initiated the trade, will receive the proceeds of the share sale on Wednesday. However the money will be credited in the investor’s account only on Thursday, i.e. 3 days after the investor initiated the sell trade.

What is T+1 settlement system?

Under the proposed settlement system it would require only 1 day for the entire trade life cycle to be completed in Indian stock markets, i.e. from initiation of the buy/sell order to settlement of the trade.

Let’s understand proposed settlement system with the help of the below example:

An investor sells a certain quantity of XYZ shares he holds in his demat account on Monday. The stock broker through which he has initiated the trade, will receive the proceeds of the share sale on Tuesday. The money will be credited in the investor’s account on Wednesday, i.e. a day earlier than currently prevailing system after the investor initiated the sell trade.

What are the advantages of the T+1 settlement system?

The proposed settlement system is expected make the functioning of markets more efficient as well as reduced operational and systematic risks. By reducing the settlement cycle by a day from current two days, it will decrease the risk of counterparty pay-in/pay-out defaults as well as lower margin requirements. Besides this, settlement system will also provide investors more liquidity as funds and securities will be accessible one day earlier.

Commenting on the new settlement system at an event, the SEBI chief Ajay Tyagi stated, “The decision to implement T+1 settlement in a phased manner beginning February 2022 will go a long way in protecting investors’ interest”.

Click here to open a free trading and demat account and trade at the lowest brokerage rate of just Rs. 18/- per order.

– Written and contributed by Pradeep Sukumaran.

Nykaa Stock Makes Blockbuster Debut – Should You Buy, Sell or Hold Nykaa Stock?

On its listing day on 10th Nov 2021, the Nykaa Stock made a blockbuster debut at Rs. 2,001, compared to its issue price of Rs 1,125 on BSE, a premium of over 78%. On the first day of the listing, the Nykaa Stock managed to touch an intraday high of Rs 2,248.10, which is 99.8 percent jump over its issue price. At the end of the day, Nykaa stock settled settled at Rs 2,206.70, up by Rs 1,081.70, or 96.15 percent.

With its stellar debut on the bourses, the Nykaa stock not only multiplied the promoter’s wealth by a huge margin but also managed to double the wealth of investors. In terms of market capitalization the Nykaa stock entered the Rs 1 lakh crore on its first day of listing. At the first day’s high, Nykaa’s market cap touched Rs 1,06,318 crore.

Nykaa was founded in the year 2012 by Falguni Nayar, a former investment banker in her late 40s. The company was setup at a time when most beauty products were usually bought off the shelf at retail outlets and stores. Over the past 9 years, Nykaa has become a major player in the online beauty retail space. The company operates over 80 brick and mortar stores in 40 cities across India.

With this huge capital appreciation in a short time, many investors are asking the same question about Nykaa stock;

Is it the time to buy, sell or hold Nykaa stock?

Here are few factors to consider which can help you take an informed decision:

  • Compared to other unicorns in India, Nykaa is a profitable venture. The company’s FY 2021 revenue from operations was Rs 2,440.89 crore. Its stated profit for the FY 2021 was Rs 61.94 crore.
  • Nykaa is a new-age business with first-mover advantage in the online beauty retail space.
  • Nykaa’s business model is highly scalable as India’s beauty and personal care market is grossly underpenetrated currently. It is expected to grow to Rs. 2 lakh crore by the year 2025 from Rs. 1.1 lakh crore in 2021.
  • High speed internet connection with widespread smart phone penetration in the country has opened up India’s online shopping market. This offers a goldmine of opportunity for e-commerce ventures like Nykaa.

Most experts are bullish on the future prospects of Nykaa stock. Given the significant run up in the Nykaa stock, it would be advisable to enter the stock after some correction. If you are too tempted to invest in the Nykaa stock at current levels keep the below wise quote by legendary investor Warren Buffett in mind.

“It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price”.  

To read about lessons for investors from Paytm’s IPO Debut click here.

– Written and contributed by Pradeep Sukumaran.