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This category will talk of the news of the day and our analysis of the event.

Global Stock Market Index: 20th October 2024 Weekly Recap

Global Stock Market Index: 20th October 2024 Weekly Recap

This week, the global stock market traded on a mixed note, with investors largely optimistic and looking for the next big trigger to push higher. The central bank continues to unveil more support for the struggling economy in China as data indicated growing deflationary pressures. In Europe, favorable inflation data prompted countries to cut rates further to boost growth.

Crude oil dropped by more than 6.5% last week as fears of Israel striking Iran’s petroleum infrastructure subsided. Gold, on the other hand, continued to soar higher, gaining 2% during the week. 

Let’s look at how the major stock market indices did this week

IndexPrevious Day Change (%)WoW Change (%)
US Markets
Dow Jones0.090.96
S&P 5000.400.85
Nasdaq0.630.80
European Markets
FTSE 100-0.321.27
CAC 400.390.46
DAX0.381.46
Asian Markets
Nifty 50 0.46-0.71
Nikkei 2250.18-1.58
Straits Times0.411.68
Hang Seng3.48-1.37
Taiwan Weighted1.852.56
KOSPI-0.60-0.25
SET Composite-0.351.34
Jakarta Composite0.323.18
Shanghai Composite2.831.36

World Stock Market Index US Markets

Encouraging economic indicators in the third quarter has boosted investors’ confidence in the US market. The value of US retail sales increased 0.4% in September, up from 0.1% in August. However, industrial production dropped 0.3% in September, against 0.3% growth in August. The Federal Reserve has attributed this decline to Hurricanes and strikes at the Boeing factories. 

Let’s check how the top US indices performed during the week. 

Dow Jones

Dow Jones struggled to gain ground on Friday, with a significant pullback in American Express stock causing the index to close flat. Weekly, the index closed 0.96% higher. 

S&P 500

Strength in utility and real estate stock pushed the broader S&P 500 index 0.40% higher on Friday, helping the index to close the week 0.85% higher and post a sixth consecutive weekly gain. 

Nasdaq

Netflix’s better-than-expected quarterly performance, which resulted in the stock rising 11%, pushed the Nasdaq up 0.63% on Friday. On a week-on-week basis, the index closed higher by 0.80%.

World Stock Market Index European Markets

The European Central Bank cut key deposit rates to 3.25%, marking the first back-to-back reduction in 13 years. The European Commission’s statistics office reported that annual inflation was 1.7% in September, down from its initial estimate of 1.8% and well below the ECB’s target of 2%.

Now, let’s look at how different economies performed during the week. 

FTSE 100

Slower-than-expected UK inflation and a decline in wage growth paved the way for the Bank of England (BoE) to lower borrowing costs. In Friday’s session, FTSE 100 traded slightly weak and was down by 0.32%. It increased by 0.46% on a week-on-week basis.

CAC 40

Gains in consumer goods, technology, and essential materials drove France’s primary stock market index, the CAC 40, higher this week. The index rose 0.39% on Friday and 0.46% on the week. 

DAX

The rate cut boosted the German stock market to close at a record high at the end of the week, gaining 0.38% on Friday. On a week-on-week basis, the index was 1.46%. 

World Stock Market Index Asian Markets

Strength in the Japanese and Chinese indices helped the other major Asian indices trade with a positive bias this week. Due to improved sentiment, the positive momentum is likely to continue.  

Look at how the major stock market index performed during the week. 

Nifty 50

The Nifty 50 was volatile during the week due to mixed quarterly earnings reports. On Friday, the index closed 0.46% higher, but on a week-on-week basis, it was down by 0.71% higher. 

Nikkei 225

Factors like easing inflation and reduced chances of a rate hike again this year have kept Japan’s primary stock market index, Nikkei 225, less volatile. On Friday, the index was up by 0.18%, but on a week-on-week basis, it lost 1.58%. However, the weakening of the Yen has been a cause of concern for policymakers.

Straits Times

Singapore’s primary stock market index, Straits Times, traded with a positive bias. During Friday’s session, it was up by 0.41%, and on a week-on-week basis, it closed higher by 1.68%.

Hang Seng

Chinese stocks rebounded in Friday’s session as the world’s second-largest economy posted better-than-expected economic growth. However, the concern about deflation remains. On Friday, the Hang Seng index was up by 3.48%, helping to recover some of the weekly losses. Week-on-week, the index was down by 1.37%.

Taiwan Weighted

Taiwan’s primary stock market index, the Taiwan Weighted Index, traded higher on Friday, up 1.85%. On a week-on-week basis, the index rose 2.56%. 

KOSPI

Profit booking on Friday’s session caused the South Korean stock market to close 0.60% lower, pulling the index down on a weekly basis. It was down 0.25%. 

SET Composite

Thai stocks traded weak during Friday’s session, closing down 0.35%. However, the index rose 1.34% weekly, maintaining positive momentum for another week.

Jakarta Composite

The Indonesian stock market index, Jakarta Composite, traded flat on Friday, slightly up by 0.32%. On a weekly basis, the index was up 3.18%.

Shanghai Composite

China’s third-quarter GDP increased by 4.6% compared to last year, exceeding expectations and allowing the stock market to continue its bullish performance. On Friday, the Shanghai Composite rose 2.83%, reversing its weekly losses. It increased by 1.36% over the previous week.

Wrapping Up

As we wrap up the week, global stock markets showed mixed trends, with optimism rising as investors watch for the next big trigger. Key economic updates from China and Europe are shaping the outlook, while crude oil has sharply dropped, providing comfort to emerging economies. The U.S. markets remained strong, while Europe showed resilience with rate cuts fueling growth. Asian markets, too, witnessed some volatility but showed positive momentum. 

The focus will be on how global economic factors, especially in China and Europe, continue to impact markets and investor sentiment.

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 a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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CBDT Introduces Form 12BAA: A New Way to Reduce TDS on Salaries

CBDT Introduces Form 12BAA: A New Way to Reduce TDS on Salaries

The Central Board of Direct Taxes (CBDT) has introduced a new form, 12BAA, to help salaried individuals reduce the Tax Deducted at Source (TDS) from their salaries. This is a significant development as it provides taxpayers with a more efficient way to manage their tax liabilities.

This new regulation, allowing employees to notify their employer about TDS from other income sources or TCS (Tax Collected at Source) collected during significant purchases, took effect on October 1, 2024. CBDT introduced this new form 12BAA, which allows employees to inform their employers about tax deductions from income sources beyond their salary. These sources could include fixed deposits, insurance commissions, dividends from shares, or taxes collected when making large purchases like cars or foreign currency. Source: Economic Times

Understanding Form 12BAA

Form 12BAA is a declaration form that salaried employees can submit to their employers to claim deductions or exemptions that may reduce their taxable income. This form allows them to inform their employer about taxes paid on other sources of income or expenses. It’s similar to Form 12BB, which is used to declare investments, ensuring the correct amount of tax is deducted from the salary.

Key Benefits of Form 12BAA

  • Reduced TDS: By accurately declaring deductions and exemptions, employees can ensure that the TDS deducted from their salaries is not excessive.
  • Enhanced Tax Compliance: Using Form 12BAA helps individuals comply with their tax obligations more efficiently.
  • Simplified Tax Filing: Providing accurate information on Form 12BAA can simplify filing income tax returns.
  • Comprehensive Tax Reporting: Modified form 12BB will allow employees to report additional income details, claim house property losses, and claim TCS credit through the employer, making the tax process more efficient and reducing evasion.
  • Form 12BAA to Boost Take-Home Pay: Form 12BAA will help employees reduce tax deductions on their salary by factoring in taxes paid from other income sources, ultimately increasing their take-home pay.

How Form 12BAA Helps Employees Reduce TDS from Salaries

TDS Deduction Based on Declarations
Employees can now inform their employers about TDS deducted from other income sources or TCS collected during major purchases. Before this, there was no formal way to convey this information to employers, but the new form provides a standardized mechanism for doing so.

Mechanism for Reporting Other Taxes

-Employees can now inform their employers about TDS deducted from other income sources or TCS collected during major purchases.-Before this, there was no formal way to convey this information to employers, but the new form provides a standardized mechanism for doing so.

Source: timesofindia

When to Submit Form 12BAA

Salaried employees can submit Form 12BAA to their employers anytime during the financial year. However, submitting the form at the beginning of the financial year is generally recommended to maximize the benefits of reduced TDS.

How to Submit Form 12BAA

Submitting Form 12BAA is relatively straightforward. Employees can obtain the form from their employers or download it from the CBDT website. Once completed, the form should be submitted to the employer along with supporting documents, if required.

Important Considerations

  • Accuracy: It is crucial to ensure that the information in Form 12BAA is accurate and complete. Inaccurate information may lead to penalties or other legal consequences.
  • Supporting Documents: Employers may require supporting documents to verify the claims made in Form 12BAA. It is essential to provide all necessary documentation to avoid delays or discrepancies.
  • Regular Updates: If any income or deductions are changed during the financial year, you may need to update Form 12BAA accordingly.

Income Tax Laws on Salary Tax Deductions

Employer’s Duty to Deduct Tax

  • Under Section 192 of the Income-tax Act, employers must deduct tax from the salary paid to employees.
  • The tax deduction is based on the employee’s chosen tax regime, either the new or old system.

Choosing Between Tax Regimes

  • Employees have the option of choosing between the new tax regime, which offers lower tax rates but fewer exemptions, and the old regime, which includes various deductions and exemptions.

Investment Declaration for Lower TDS

  • Employees need to submit an investment declaration to their employer to reduce the tax deducted from salary. This helps employers adjust the TDS by accounting for eligible deductions and exemptions based on the regime selected by the employee.

Additional Tips for Maximizing Tax Savings

  • Plan Ahead: Start planning your tax deductions and exemptions well in advance to ensure that you take advantage of all available opportunities.
  • Consult a Tax Professional: If you are unsure about which deductions or exemptions you are eligible for, it is advisable to consult with a tax professional for guidance.
  • Stay Updated: Stay informed about the latest tax laws and regulations to avoid penalties or interest charges.

By understanding and effectively utilizing Form 12BAA, salaried employees can significantly reduce their TDS liabilities and optimize their tax savings.

FAQ

  1. What is Form 12BAA?

    Form 12BAA is a new form introduced by the Central Board of Direct Taxes (CBDT) to simplify the process of claiming salary tax deductions. This form allows individuals to directly declare their eligible deductions to their employers, reducing the amount of Tax Deducted at Source (TDS) withheld from their salaries. This is a significant step towards making the tax filing process more efficient and convenient for taxpayers.

  2. Who can benefit from Form 12BAA?

    Form 12BAA is primarily beneficial for salaried individuals with eligible deductions under various sections of the Income Tax Act, such as Section 80C, 80D, or 80E. By submitting this form to their employers, they can ensure that the correct amount of TDS is deducted, preventing the need for excess tax to be paid during the annual tax filing process.

  3. How does Form 12BAA work?

    To use Form 12BAA, individuals need to provide their employers with a duly filled form and supporting documents for their claimed deductions. The employer will then verify the provided information and adjust the TDS deducted from the employee’s salary accordingly. This streamlined process eliminates the need for manual calculations and reduces the chances of errors.

  4. What are the benefits of using Form 12BAA?

    Using Form 12BAA offers several advantages to salaried individuals. It simplifies the tax filing process by reducing the need for manual calculations and adjustments during the annual tax return. Additionally, it helps taxpayers avoid paying excess TDS, which can be a significant financial burden. By accurately declaring their deductions, individuals can ensure that they pay only the correct amount of tax, optimizing their financial situation.

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warree energies and deepak builders ipo

Waaree Energies IPO Seeks ₹4,321.44 Cr, Deepak Builders ₹260.04 Cr – Explore Objectives, GMP, Financials and More.

Are you keeping an eye on the latest IPOs? Waaree Energies IPO and Deepak Builders are making waves with their upcoming offerings, aiming to raise a combined ₹4,581.48 crores. Waaree Energies is leading the charge with a whopping ₹4,321.44 crore, while Deepak Builders is looking to raise ₹260.04 crore.

You must be curious about what’s driving these IPOs, right? Let’s get into the details, from their objectives to the buzz surrounding their Grey Market Premiums (GMPs). We’ll also examine both companies’ financial health to see if they’re worth the hype.

Waaree Energies Ltd. IPO

Offer Price₹1427 – ₹1503 per share
Face Value₹10 per share
Opening Date21 October 2024
Closing Date23 October 2024
Total Issue Size (in Shares)28,752,095
Total Issue Size (in ₹)₹4,321.44Cr
Issue Type Book Built Issue IPO
Lot Size9 Shares
Listing atBSE, NSE
Source: SEBI

Waaree Energies Ltd. is launching an IPO worth ₹4,321.44 crores. This IPO is structured as a book-built issue, consisting of a fresh issue of 2.4 crore shares totaling ₹3,600.00 crores and an offer for sale (OFS) of 0.48 crore shares valued at ₹721.44 crores.

Retail investors can participate in the IPO with a minimum investment of ₹13,527, which equates to a bid of 9 shares. For high-net-worth individuals (HNIs), the minimum investment required varies: sNII investors need to apply for 15 lots (135 shares), amounting to ₹202,905, while bNII investors must apply for 74 lots (666 shares), with an investment of ₹1,000,998.

Allocation Shares of Waaree Energies IPO

The allocation of shares is based on multiples of 9, with retail investors able to invest up to 14 lots (126 shares), which would cost ₹189,378. HNIs can go as high as 73 lots (657 shares) for sNII, amounting to ₹987,471.

ApplicationLotsSharesAmount
Retail (Min)19₹13,527
Retail (Max)14126₹189,378
S-HNI (Min)15135₹202,905
S-HNI (Max)73657₹987,471
B-HNI (Min)74666₹1,000,998
Source: SEBI

Objectives of Waaree Energies IPO

The primary objectives of the Waaree Energies IPO are twofold:

  1. Part-financing the cost of setting up a 6GW Ingot Wafer, Solar Cell, and Solar PV Module manufacturing facility in Odisha, India.
  2. Utilizing the proceeds for general corporate purposes.

GMP of Waaree Energies IPO

As of October 18, 2024, the Grey Market Premium (GMP) for Waaree Energies IPO was ₹1330. A price band of ₹1503 brings the estimated listing price to ₹2833 per share, indicating an expected gain of 88.49% per share at listing. Source: Livemint

Company Overview of Waaree Energies IPO

Incorporated in 1990, Waaree Energies Limited is a major player in India’s solar PV module manufacturing space, boasting an installed capacity of 12 GW. The company offers a variety of solar energy products, including:

  • Multicrystalline modules
  • Monocrystalline modules
  • TopCon modules include flexible bifacial modules (Mono PERC) and building-integrated photovoltaic (BIPV) modules.

Waaree Energies operates four manufacturing facilities across 136.30 acres in Gujarat, India. These are located in Surat, Tumb, Nandigram, and Chikhli. The company holds various ISO certifications, ensuring high manufacturing and marketing standards and supplying solar photovoltaic modules.

SWOT Analysis of Waaree Energies Ltd.

STRENGTHSWEAKNESSES
Largest Solar PV Module Manufacturer in India, with advanced facilities and global accreditations.

A diversified customer base, both domestically and internationally.

Strong financial track record, with significant growth in revenue and profits over the past few years.

Extensive pan-India retail network and a solid order book, providing steady business visibility.

An experienced management team with a clear growth strategy.		Heavy reliance on solar energy demand, which is subject to government policies and market conditions.

Significant dependence on raw material imports, making the company vulnerable to supply chain disruptions and price fluctuations.
OPPORTUNITIESTHREATS
Growing demand for renewable energy and solar power presents a large market potential.

The expansion of manufacturing capacity with the new 6GW facility in Odisha could drive future growth.

Opportunities to diversify product offerings in solar technologies and expand further into international markets.		Competition from other global and domestic players in the solar energy space.

The potential impact of technological advancements could require significant investment to stay competitive.

Regulatory changes in India or globally could affect market demand and operational costs.

Financials

Waaree Energies has demonstrated strong financial growth in recent years. Between FY23 and FY24, the company’s revenue increased by 70%, while the profit after tax (PAT) surged by 155%. Over the past two years, revenue grew from ₹29,458.51 lakh in FY22 to ₹116,327.63 lakh in FY24, representing a 294.9% increase.

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Source: SEBI

Deepak Builders & Engineers IPO

Offer Price₹192 – ₹203 per share
Face Value₹10 per share
Opening Date21 October 2024
Closing Date23 October 2024
Total Issue Size (in Shares)12,810,000
Total Issue Size (in ₹)₹260.04 Cr
Issue Type Book Built Issue IPO
Lot Size73 Shares
Listing atBSE, NSE
Source: SEBI

Deepak Builders & Engineers is launching an IPO with a fresh issue of 1.07 crore shares totaling ₹217.21 crores and an offer for sale (OFS) of 0.21 crore shares valued at ₹42.83 crores. Investors can bid in multiples of 73 shares, with the minimum investment required being ₹14,819. For retail investors, the maximum bid can go up to 949 shares, amounting to ₹192,647.

The allotment of the IPO will be finalized on October 24, 2024, and the tentative listing date on BSE and NSE is October 28, 2024.

Allocation Shares of Deepak Builders & Engineers IPO

High-net-worth individuals (HNIs) have different bidding tiers. For sNII investors, the minimum investment starts at 14 lots, and they can bid up to 67 lots. bNII investors need to apply for at least 68 lots with an investment of ₹1,007,692.

ApplicationLotsSharesAmount
Retail (Min)173₹14,819
Retail (Max)13949₹192,647
S-HNI (Min)141,022₹207,466
S-HNI (Max)674,891₹992,873
B-HNI (Min)684,964₹1,007,692
Source: SEBI

Objectives of Deepak Builders & Engineers IPO

The funds raised from the fresh issue are planned to be used for:

  1. Repaying or prepaying certain company borrowings.
  2. Meeting the working capital requirements to support business expansion.
  3. For general corporate purposes

GMP of Deepak Builders & Engineers IPO

As of October 18, 2024, the Grey Market Premium (GMP) for Deepak Builders & Engineers’ IPO is ₹32. With a price band set at ₹203, the estimated listing price is ₹235, reflecting an expected 15.76% gain per share.
Source: Livemint

Company Overview of Deepak Builders & Engineers IPO

Deepak Builders & Engineers India Limited, founded in September 2017, specializes in constructing administrative, institutional, and industrial buildings, hospitals, stadiums, and residential complexes. They are engaged in several high-profile construction and infrastructure projects across Punjab, Haryana, Rajasthan, Uttarakhand, and the Union Territories of Chandigarh and Delhi.

The company has completed turnkey projects, including architectural design, civil work, MEP (Mechanical, Electrical, Plumbing), firefighting systems, and IT infrastructure. The business operates in three main verticals:

  1. Construction Projects
  2. Infrastructure Projects
  3. Sale of products

Currently, the company is managing 12 ongoing projects, which include:

  • Four hospital and medical college projects.
  • One administrative and institutional building.
  • One industrial building.
  • Four infrastructure projects related to railway station development.
  • Two road and bridge projects, including rail over bridges.

SWOT Analysis of Deepak Builders & Engineers 

STRENGTHSWEAKNESSES
Proven expertise in turnkey construction projects across various healthcare, institutional, and industrial sectors.

Growing presence in infrastructure projects, including railway station development and road/bridge construction.

Strong financial growth, with revenue and profitability showing impressive increases over recent years.

Ongoing projects in multiple states and union territories, ensuring diverse revenue streams.		Limited geographical reach within India, with projects concentrated in only four states and two union territories.

High dependency on large, government-funded infrastructure projects, which can be vulnerable to policy changes and budget constraints.
OPPORTUNITIESTHREATS
Expansion into new regions or sectors could provide significant growth potential.

Increasing government focus on infrastructure development across India presents opportunities for further contract wins.

Potential to scale up the business and enter into PPP (Public-Private Partnerships) for larger infrastructure projects.		Intense competition from other established construction firms, both locally and nationally.

Economic downturns or changes in government spending priorities could impact the demand for large-scale construction projects.

Possible delays in project execution due to external factors like supply chain disruptions or regulatory hurdles.

Financial Strength

Deepak Builders & Engineers has experienced significant growth over the past two years. Between FY22 and FY24, the company’s revenue increased by 41.6%, from ₹3,649.87 lakh to ₹5,167.42 lakh. This growth was accompanied by a strong increase in profitability, with Profit After Tax (PAT) rising from ₹176.64 lakh in FY22 to ₹604.1 lakh in FY24, a growth of 242%.

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Source: SEBI

In the last year alone (FY23 to FY24), the company’s revenue grew by 19%, and PAT increased by 182%, showcasing strong financial performance.

Conclusion

With Waaree Energies and Deepak Builders gearing up for their IPOs, the Indian stock market is set for an exciting week. Investors will closely watch these offerings as they represent opportunities in the renewable energy and construction sectors. However, conducting thorough research and considering your risk tolerance before making any investment decisions is crucial.

OTHER IPO RESOURCES
IPO | Current IPO | Upcoming IPO | Listed IPO

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 a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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Hyundai IPO Hits a Speed Bump With 42% Subscription On Day 2 : 4 Reasons Why

Hyundai IPO Hits a Speed Bump With 42% Subscription On Day 2 : 4 Reasons Why

Hyundai Motor India (HMI) has dominated the automotive market since its 1996 launch in India. Understandably, when the country’s second-largest car manufacturer’s (after Maruti) IPO launched on 15 October, it was met with much anticipation. However, the ₹27,870 crore IPO, the largest in India’s history, saw merely 0.18 times subscription on its opening day. While the subscription stood at 42% on Day 2, it shot up marginally to 51% on the closing day, with its GMP sinking to below 1%. Source: Mint

Market experts are attributing the lukewarm response to many factors. Here’s a lowdown on what these are and how the IPO has performed so far:

All You Need To Know About the Hyundai IPO

  • The IPO has a price range of ₹1,865 to ₹1,960 per share
  • The NII portion, comprising high-net-worth individuals, was subscribed 0.13 times, while retail investors subscribed 0.26 times. The portion for employees (discounted price of ₹186 per share) was subscribed 0.8 times (80%).
  • 35% of share reservation is for retail investors, 50% for qualified institutional buyers (QIBs), and 15% for NIIs.
  • ₹8,315 crore (about 30% of the IPO size) was raised from 225 anchor investors, including funds owned by the Singapore government

Source: Economic Times

Hyundai IPO – One of the Largest in India in 2024

Hyundai is one of the largest IPOs in India this year and joins the ranks of other big names in various sectors: 

SrIssue NameIssue Size (Rs Cr)Listing DateOffer Price (Rs)Total Subscription (Rs in Crores)
1Hyundai Motors India27,870.16Oct 22, 20241,865 – 1,96041,889.50
2Vodafone Idea Limited18,000Apr 25, 2024111,25,820
3Bajaj Housing Finance Limited6,560Sep 16, 2024704,42,340.8
4Ola Electric Mobility Limited6,145.56Aug 09, 20247627,347.74
5Bharti Hexacom Limited4,275Apr 12, 20245701,27,737
Source: Chittorgarh

However, despite the initial buzz, Hyundai’s IPO witnessed an unexpected slowdown. Here are the top reasons why. 

4 Factors Why Hyundai IPO Didn’t Shift into Top Gear

High Offer Price 

One of the biggest concerns investors have raised is the IPO pricing. Many analysts believe the offer price was at the higher end of the spectrum, discouraging potential buyers. Indian investors have become accustomed to a fair IPO bump, and the prospect of limited gains or losses has reduced the enthusiasm.

A more attractive pricing could have garnered wider support from retail and institutional investors, creating a positive buzz around the listing. Instead, the high valuation may have deterred many potential buyers, who may now wait for a more favorable entry point.

Massive Cash Outflow to Korea

Hyundai Motor India’s substantial dividend payouts to its South Korean parent company have also raised investor concerns. The large amount of money transferred from India has created a negative perception, particularly when the government actively promotes foreign direct investment (FDI) in the automotive sector.

While the company has clarified the legal nature of these transactions, the sheer amount of the cash outflow has raised questions. A more transparent communication strategy could have helped minimize concerns and highlight the positive aspects of these transactions, including Hyundai’s success in the Indian market.

Concerns About Financial Stability

The decrease in cash and bank balances due to dividend payments has also increased concerns about Hyundai’s expansion plans. Investors may be worried that the company may have to rely heavily on external borrowings to fund its future growth, potentially impacting its financial performance and stability.

While the company’s balance sheet is light on assets and the cash flow from operations is robust, which could mitigate financial stability concerns, a more proactive communication strategy would have been beneficial in addressing investor anxieties and maintaining confidence.

Prioritizing South Korean Interests

There is a perception that Hyundai Motor Company’s primary motivation for the IPO was to improve its valuation back home in South Korea. This suggests that the company may have prioritized its interests over those of Indian investors.

While the IPO could have been a win-win situation for both parties, the focus on maximizing benefits for South Korean shareholders may have alienated Indian investors. A more balanced approach considering the interests of domestic and foreign investors would have been more conducive to the IPO’s success.

Conclusion

Hyundai was among India’s most anticipated IPOs. However, its slow performance offers valuable lessons for future issuers. A well-thought-out pricing strategy, transparent communication, and a focus on aligning the interests of all stakeholders are crucial for attracting investor interest and ensuring the success of an IPO. By addressing these mistakes, Hyundai can learn from this experience and position itself for future growth in the Indian market.

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

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 a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

FAQ

  1. Why did Hyundai Motor India’s IPO not receive the expected subscription levels?

    Several factors contributed to the slow subscription for Hyundai’s IPO. These include the IPO’s perceived high price, the company’s substantial dividend payouts to its South Korean parent, concerns about its financial stability, and the perception that Hyundai Motor Company prioritized its interests over those of Indian investors.

  2. What was the subscription rate for Hyundai’s IPO on Day 3?

    The subscription rate for Hyundai’s IPO on Day 3 was 51%.
    Source: cnbcTV 18.com

  3. How much did Hyundai Motor India raise from anchor investors?

    Hyundai Motor India raised ₹8,315 crore (about 30% of the IPO size) from 225 anchor investors.

  4. What’s Hyundai’s IPO subscription among different investor categories?

    The subscription for Hyundai’s IPO was moderate across all investor categories. Retail investors subscribed 0.26 times, qualified institutional buyers (QIBs) subscribed 0.41 times, and non-institutional investors (NIIs) subscribed 0.13 times.

  5. What lessons can be learned from Hyundai’s IPO experience?

    Hyundai’s IPO experience highlights the importance of fair pricing, transparent communication, and balancing the interests of all stakeholders. By addressing these factors, future issuers can improve their chances of attracting investor interest and ensuring the success of their IPOs.

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Bajaj Auto Stumbles 9.5%: Weak Q2 Results and Lowered Guidance Spark Investor Sell-Off

Bajaj Auto Stumbles 9.5%: Weak Q2 Results and Lowered Guidance Spark Investor Sell-Off

Bajaj Auto, the renowned Indian two-wheeler manufacturer, experienced a significant 9.5% drop in its stock price on Thursday, October 17th, 2024. This decline followed the release of disappointing second-quarter (Q2) FY25 financial results and a downward adjustment to the company’s full-year sales forecast.

Bajaj Auto Share Price Tumbles 9.5%

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Source: Moneycontrol

Bajaj Auto Q2 Performance Misses Expectations

While Bajaj Auto reported a 9.2% year-on-year increase in net profit for Q2, this figure fell short of analyst expectations. Investors were likely anticipating a stronger showing, particularly given the company’s previous track record.

Moreover, revenue surpassed the ₹13,000 crore milestone for the first time, reaching ₹13,247 crore for the quarter ending September 2024 – an increase of 20% compared to ₹10,838 crore in the same quarter last year. However, some analysts might have anticipated a more substantial growth. The profit for the quarter stood at ₹1,385 crore, reflecting a 37% decline from the ₹2,020 crore reported in the corresponding period of the previous year. Source: Moneycontrol

Financial Metrics:

Market Cap in Crores (as of 17.10.24)CMPPE RatioRevenue in Crores(Q2FY25)Net Profit in crores(Q2Fy25)Stock Price CAGR (5 Yrs)
₹2,89, 219₹10,35739.2₹!3,247₹1,38530%
Source: Screener.in

However, the bigger concern for investors was the company’s downward revision of its sales guidance for FY25. This suggests that Bajaj Auto is anticipating slower growth in the coming quarters than its initial projections.

Brokerages Turn Cautious

The weak Q2 performance and revised guidance have prompted several brokerages to adopt a more cautious stance on Bajaj Auto’s stock. While some analysts remain bullish on the company’s long-term prospects, they acknowledge the near-term challenges.

Brokerage Views:

  • Macquarie: Maintains a “neutral” rating, citing disappointing gross margins.  
  • Jefferies: Expresses optimism on the auto sector overall but remains cautious about Bajaj Auto.
  • Citi issued a ‘sell’ recommendation for Bajaj Auto with a target price of ₹7,800 per share, indicating a potential downside of 33% from the last closing price ₹11,616. 
  • Citi was surprised by the cautious outlook on festive demand despite Vahan data showing a 12% year-on-year increase in registrations.
  • HSBC sets a target price of ₹14,000 per share for Bajaj Auto, highlighting its 30% growing market share. 

These mixed brokerage signals have contributed to the uncertainty surrounding Bajaj Auto’s near-term prospects. Investors are likely waiting for further clarity before making any significant investment decisions.

Source: Moneycontrol

Potential Reasons for Lower-Than-Expected Performance

Multiple factors may have affected Bajaj Auto’s lackluster Q2 performance and lowered guidance. Some potential reasons include:

  • The company’s Q2 performance fell slightly below expectations, primarily due to a marginal miss in average selling prices (ASPs) and gross margins.
  • Slowdown in Domestic Demand: The Indian two-wheeler market may be experiencing a slowdown, which could impact Bajaj Auto’s sales volumes.
  • Rising Input Costs: Inflationary pressures and an increase in the cost of raw materials could be squeezing profit margins.
  • Supply Chain Disruptions: Ongoing global supply chain disruptions might hinder the company’s ability to meet production targets.

Can Bajaj Auto Recover?

Despite the recent setbacks, Bajaj Auto remains a leading player in the Indian two-wheeler market. HSBC expects the next major disruption to come from the formalization of the e-rickshaw market, with Bajaj Auto’s potential entry playing a key role in this development.

The company enjoys a strong brand reputation, a robust distribution network, and a commitment to innovation. Here are some key factors that could influence the company’s future performance:

  • Demand Recovery: A potential rebound in domestic two-wheeler demand could significantly improve Bajaj Auto’s sales figures.
  • Cost Management: Effective cost management strategies could help mitigate the impact of rising input costs and improve profitability.
  • Focus on Exports: A continued focus on exports could provide a vital source of growth for Bajaj Auto.
  • Product Launches: Introducing new and innovative products could help Bajaj Auto maintain its competitive edge in the market.

The coming quarters will be crucial for Bajaj Auto. The company’s ability to navigate the current challenges and capitalize on growth opportunities will determine its future trajectory.

Investor Takeaway

The recent sell-off in Bajaj Auto’s stock presents an opportunity for investors to take a calculated approach. The near-term outlook appears cautious, and investors should consider their risk tolerance and investment horizon before making any decisions.

Further Considerations:

  • Monitor future company announcements and analyst reports for updates on Bajaj Auto’s performance.
  • Analyze the overall health of the Indian two-wheeler market and the broader economic landscape.
  • Compare Bajaj Auto’s performance with those of its competitors.

*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.

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Realty Sector Soars: Top 10 Cities Record 88% Price Hike in 5 Years, Delhi-NCR Leads with 145% Growth

Realty Sector Soars: Top 10 Cities Record 88% Price Hike in 5 Years, Delhi-NCR Leads with 145% Growth

India’s real estate sector, particularly in metropolitan regions, has seen significant price hikes in recent years. Average prices for new launches in the top 10 cities surged by 88% over the last five years, as highlighted in a recent report by PropEquity, a real estate data analytics firm.

In particular, two regions in Delhi-NCR have recorded a remarkable 145% surge in housing prices during this period. This sharp growth prompts crucial discussions about the future of real estate in other cities and its broader impact on homebuyers, investors, and the real estate sector.

Source: Economic Times

According to recent data from Knight Frank, 173,241 residential units were sold across eight key markets in India during the first half of 2024. This reflects a 10.6% year-on-year increase in sales, achieving the highest half-yearly figures in 11 years.

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Note: Monitored markets include Mumbai, National Capital Region (NCR), Bengaluru, Pune, Hyderabad, Ahmedabad, Kolkata, and Chennai.
Source: globalpropertyguide.com

According to the data based on PropEquity, from 2019 to 2024, approximately 15,000 projects, including apartments, floors, and villas, were launched in India’s top 10 cities. These cities include Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Thane, Navi Mumbai, Pune, Noida, and Gurugram.

Housing price rise of new launch projects across top 10 Indian cities

Cities20192024OverallY-o-Y
GurugramRs.7500Rs.19,500160%32%
NoidaRs.6500Rs.16,000146%29%
BengaluruRs.5051Rs.10,02098%20%
HyderabadRs.4686Rs.8,50081%16%
ChennaiRs.4451Rs.8,02380%16%
PuneRs.7300Rs.12,60073%15%
Navi MumbaiRs.8500Rs.14,40069%14%
KolkataRs.4457Rs.7,50068%14%
ThaneRs.7200Rs.11,95066%13%
MumbaiRs,25,820Rs.35,50037%7%
Average88%18%

Source: Economic Times

Housing Price Surge in Delhi-NCR

In the past five years, two key locations within the Delhi-NCR region, namely Greater Noida and Noida Extension, have experienced unprecedented increases in property prices. This price rise is primarily attributed to several factors, including infrastructure development, improved connectivity, and rising demand for residential spaces. As per reports, the cost of new housing projects in these areas has surged by more than 145%, reflecting the growing attractiveness of these areas for buyers and developers.

Key Highlights of the Report

Gurugram’s Major Price Surge

  • Gurugram saw the highest price increase for newly-launched housing, rising from ₹7,500 per square foot in 2019 to ₹19,500 per square foot in 2024.
  • This marks a significant 160% increase over five years.

Noida’s Rapid Growth

  • Housing prices in Noida surged from ₹6,500 per square foot in 2019 to ₹16,000 per square foot in 2024.
  • This represents a 146% rise in five years.

Bengaluru’s Notable Price Increase

  • Bengaluru’s housing prices increased from ₹5,051 per square foot in 2019 to ₹10,020 per square foot in 2024.
  • This indicates a 98% rise over the five years.

Hyderabad’s Steady Rise

  • Hyderabad’s prices climbed from ₹4,686 per square foot in 2019 to ₹8,500 per square foot in 2024.
  • This reflects an 81% growth in five years.

Chennai’s Significant Growth

  • Housing prices in Chennai jumped from ₹4,451 per square foot in 2019 to ₹8,023 per square foot in 2024.
  • This marks an 80% rise during the same period.

Mumbai’s Moderate Price Increase

  • Mumbai experienced a more modest 37% price rise, moving from ₹25,820 per square foot in 2019 to ₹35,500 per square foot in 2024.

Factors Influencing Real Estate Prices Across Cities

Various factors shape the price trends in different cities, some common across regions and others specific to the local market dynamics.

  1. Lockdown Savings: Increased savings during lockdowns and minimal income disruptions among middle- and high-income groups have fueled demand in India’s residential real estate market.
  2. Economic Growth: A robust economic growth outlook has further boosted interest in residential properties. 
  3. Infrastructure Development: Infrastructure development, including new roads, metro lines, and airports, plays a significant role in boosting property prices. Areas with better connectivity and amenities attract more buyers and investors.
  4. Urban Expansion: As Delhi’s central regions become overcrowded and expensive, many homebuyers and investors have shifted their focus to the peripheral areas of NCR, pushing up property prices.
  5. Demand-Supply Gap: With increased demand for residential properties and limited land availability, prices have been driven upward due to the mismatch between supply and demand.
  6. NRI Interest: Increased investment from non-resident Indians (NRIs) has contributed to demand.
  7. Stock Market Gains: Rising stock market performance has created wealth, further fueling property investments.
  8. HNIs and UHNIs Engagement: High-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs) actively seek real estate opportunities.
  9. Real Estate Regulations: Government regulations, such as RERA and the implementation of the Goods and Services Tax (GST), have significantly impacted the real estate market. These regulations have increased transparency and improved buyer confidence, increasing demand and rising prices.

Average price per square foot of new housing project in Mumbai, Noida, Gurugram in 2024

CityAverage Price/Sq.ft
MumbaiRs. 35,500
GurugramRs. 19,500
NoidaRs. 16,000

Mumbai remains the priciest city in terms of per-square-foot pricing. Notably, in 2019, Mumbai was the only city with average prices for new launch projects surpassing ₹10,000 per square foot. By 2024, this threshold had been crossed by all but three cities: Hyderabad, Chennai, and Kolkata.

Source: Economic Times

Impact of Housing Price Surge on the Real Estate Sector

1. Homebuyers’ Dilemma

Rising property prices have made it increasingly challenging for potential homebuyers to find affordable housing. While the increased demand in areas like Greater Noida and Noida Extension reflects the popularity of these regions, it also limits options for middle-income groups. Many buyers are now forced to either increase their budget or look for properties in more remote locations.

2. Real Estate Investment

On the other hand, the price rise has been beneficial for investors. Those who invested in these areas five years ago have seen substantial returns, with property values appreciating significantly. The steady price increase will likely attract more investors to these regions as they seek to capitalize on future growth.

3. Developer Incentives

The booming real estate prices have encouraged developers to launch new Greater Noida and Noida Extension projects. With the possibility of higher profits, developers are focusing on delivering quality projects with modern amenities, catering to the growing demand for luxury and premium housing in these areas.

5. Shift Towards Suburban Areas

As property prices in metropolitan cities continue to rise, many buyers opt for homes in suburban areas with relatively lower prices. This trend has been particularly evident in cities like Delhi-NCR, Mumbai, and Bengaluru, where buyers move to peripheral areas for more affordable options.

6. Luxury Housing Segment Growth

While the demand for affordable housing has increased, there has also been a growing demand for luxury and premium housing in metropolitan cities. Developers are now focusing on high-end projects catering to affluent buyers willing to pay a premium for better amenities and locations.

7. Impact on the Rental Market

The surge in property prices has also affected the rental market, with rental rates rising in tandem with property values. In cities like Mumbai and Bengaluru, rental rates have increased significantly over the past few years, making it more expensive for tenants to find affordable accommodation.

What’s Next For The Realty Sector?

The sharp rise in housing prices in Delhi-NCR and other cities reflects the evolving dynamics in India’s real estate sector. As infrastructure development and urban expansion continue, property prices may rise further in the coming years. However, the market is also likely to see increased demand for affordable housing, with more buyers looking for homes that fit their budget.

The real estate market offers significant opportunities for investors, especially in regions that are still undergoing development. However, homebuyers face the challenge of finding affordable housing options as prices continue to rise.

As the real estate market continues to evolve, it will be important for buyers and investors to monitor local trends, government policies, and infrastructure developments that can influence property prices in their respective cities.

*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

  1. Why has the real estate sector seen such a significant price hike recently?

    The surge in real estate prices can be attributed to several factors. Firstly, the pandemic-induced work-from-home trend has shifted housing preferences, with buyers seeking larger homes with amenities like private gardens and study spaces. This increased demand has outpaced supply, driving prices up. Secondly, low interest rates have made homeownership more affordable, stimulating demand. Additionally, government initiatives like affordable housing schemes and infrastructure development projects have contributed to the growth of the real estate market.

  2. Which cities have experienced the most significant price hikes in the past five years?

    Delhi-NCR has witnessed the most substantial price increase, with a staggering 145% growth. Other cities with significant appreciation include Mumbai, Bengaluru, Hyderabad, and Pune. These cities have benefited from strong economic growth, job creation, and infrastructure development, making them attractive to homebuyers and investors.

  3. What are the implications of such a significant price hike for homebuyers and investors?

    While the price hike offers opportunities for investors to capitalize on the market’s growth, it can be challenging for first-time homebuyers. The rising cost of living and limited affordability may make it difficult for some to enter the market. However, options like affordable housing schemes and government-backed loans can help mitigate the impact.

  4. What are the prospects for the realty sector in India?

    The Indian real estate market is poised for growth, driven by factors such as urbanization, rising incomes, and government initiatives. However, regulatory changes, economic fluctuations, and geopolitical events could impact the market’s trajectory. Buyers and investors must stay informed about market trends and consult with experts to make informed decisions.

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mazgaon dockyard share price jump

Share Price of This Stock is Up 7.24% with 100%+ Returns in a Year!

Are you closely watching the stock market and wondering why Mazagon Dock Shipbuilders continue to rise while other stocks struggle? This company has been on a remarkable upward trajectory, delivering returns that would make any investor take notice. Over the past year, Mazagon Dock has rewarded its shareholders with an astonishing 100% return. But what’s even more impressive is the 1500%+ growth it has achieved over the last three years. What factors are driving this extraordinary performance in the stock market?

On Tuesday, Mazagon Dockyard’s share price saw a significant jump of 7.47%, reaching a high of ₹4600 after opening at ₹4289.5. This happened even as broader market sentiment remained weak, showcasing the stock’s resilience. The sharp rise in the share price boosted the company’s market capitalization to ₹91,381 crore, further cementing its position as one of the top performers in the defense and shipbuilding sector.

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Source: NSE

In the context of its performance, Mazagon Dock has consistently outpaced market trends, showing sustained growth in both stock value and financial health. The stock’s designation as a multibagger—delivering returns far beyond typical market benchmarks—highlights the company’s potential and its ability to generate impressive profits for its shareholders.

Mazagon Dock Stock Performance & Technical Indicators

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Source: NSE

After reaching a high of ₹5860, Mazagon Dock’s stock price fell to ₹3852 during a market correction. However, the stock is now showing signs of recovery, with strong buying activity. It has moved above important technical levels, specifically ₹4315, which indicates that the stock might continue to rise in the near future.

In simpler terms, the stock has good support around ₹4200 and ₹4000, meaning it’s less likely to fall below these levels in the short term. On the upside, the ₹4800-₹4900 range is being watched closely. If the stock can break through this range, it may see further upward movement. Source: Business Today

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Mazagon Dock’s Strong Business Fundamentals

Mazagon Dock Shipbuilders Limited (MDL) is not just a stock with impressive numbers but also a company with a rich legacy. Established in 1774, MDL has built over 800 vessels since 1960, including warships, submarines, and offshore platforms. Recognized for its critical role in India’s defense sector, MDL was awarded the prestigious ‘Navratna’ status in June 2024, marking its position as one of India’s top-performing public sector enterprises. This recognition underscores MDL’s strong financial health and strategic importance in strengthening India’s defense capabilities.

Recent Developments Fueling Growth for Mazagon Dock

A string of new projects and contracts is also contributing to Mazagon Dock’s growth trajectory:

1. AI-based Security Project for MAHAGENCO:

MDL secured a ₹121.67 crore contract from Maharashtra State Power Generation Company Limited (MAHAGENCO) to implement an advanced AI-based security system at its power plants in Uran and Pophali. This government project is slated for completion by October 2025, adding to MDL’s growing list of prestigious contracts.

2. Multipurpose Cargo Vessels for Navi Merchants, Denmark:

MDL recently began production on its first Multipurpose Cargo Vessel (MPV) under a $86.05 million contract. These hybrid propulsion vessels are designed for icy conditions and will meet strict environmental standards. The first of six vessels is expected to be delivered by April 2026, further expanding MDL’s international footprint.

Mazagon Dock Financial Performance

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Source: Q1 Results

Mazagon Dock’s financial performance has also been good, contributing to its stock market success. According to the Q1FY25 results, the company’s net sales rose 8.5% to ₹2,357.02 crore, while net profit surged 121.45% to ₹696.10 crore compared to the same quarter last year. On an annual basis, the company saw a 24% increase in net sales to ₹10,568.05 crore, with net profit rising by 73% to ₹1,936.97 crore in FY24 compared to FY23.

Moreover, the company remains debt-free as of June 30, 2024, adding to investor confidence in its financial health. The order book stands at an impressive ₹36,839 crore, ensuring continued revenue flow in the near future. Source:  Financial Results

Institutional Confidence

Institutional investors have also shown increasing confidence in Mazagon Dock’s potential. As of June 2024, Foreign Institutional Investors (FIIs) increased their stake to 2.44%, while Domestic Institutional Investors (DIIs) raised theirs to 0.83%, indicating rising institutional interest in the company’s stock.

Conclusion

Mazagon Dock Shipbuilders has stood out in the Indian stock market, showing resilience and growth even as broader market trends have been less favorable. The stock has delivered significant returns, driven by a combination of factors such as robust technical indicators, strong financial performance, and a series of new contracts and projects that are expected to contribute to future growth.

Looking ahead, the ₹4800-₹4900 price range is seen as a key resistance level. Market watchers may observe how the stock performs around this range, as breaking through these levels could indicate further upward movement. As the company continues to execute its plans, maintain strong financial health, and deliver on its order book, it remains an important stock to follow in the Indian defense and shipbuilding sector. Investors will likely keep a close eye on whether Mazagon Dock can sustain its current momentum amidst changing market conditions.

*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.

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q2 results

Reliance, Network 18 Q2FY25 Earnings Released – Hits, Misses, and Surprises

The second quarter of the fiscal year 2025 (Q2FY25) has concluded, and with it, a wave of earnings reports from various companies. Among the most anticipated releases were those from Reliance Industries, Network 18, PVR Inox Ltd, Orient Hotels,  and Avenue Supermarts Ltd. While some companies experienced a decline in profits, others surprised the stock market with their impressive performance.

Let’s delve into the key highlights of Q2FY25 earnings. We’ll analyze the hits, misses, and surprises that emerged from these reports. 

Reliance Industries Q2 Results

Reliance Industries Limited is a multinational conglomerate. It has diversified interests in various sectors, including petrochemicals, refining, retail, telecom, and technology. The company is one of India’s largest corporations and a major player in the global energy and consumer goods markets.

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
18,35,90827.1231,886231,53528,38326,17819,82019,101
Source: moneycontrol

Reliance Industries, India’s leading conglomerate in oil, telecom, and retail, reported revenue of ₹231,535 crore for the quarter ending September 2024. This marks a 0.15% decrease compared to the ₹231,886 crore recorded in the same quarter of September 2023.

Additionally, gross profit dropped by 7%, while net profit declined by 3%, amounting to ₹19,101 crore this quarter, down from ₹19,820 crore in the corresponding period last year.

PVR Inox Ltd. Q2 Results

PVR Inox Ltd. is the largest multiplex chain in India. It operates a network of cinemas across the country, offering a premium movie-watching experience. The company is known for its state-of-the-art theaters, comfortable seating, and diverse range of films. PVR Inox has played a significant role in popularizing the multiplex culture in India and has been at the forefront of the country’s growing entertainment industry.

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
15,955–20001622222-15166-12
Source: Screener.in

PVR Inox reported revenue of ₹1,622 crores for the quarter ending September 24, a 21% decline from the same quarter last year. The company incurred a loss of ₹12 crores, contrasting sharply with the notable net profit of ₹166 crores achieved in the quarter ending September 23.

Sterling Wilson Q2 Results

Sterling Wilson Renewable Energy Ltd. is a leading global EPC (Engineering, Procurement, and Construction) company specializing in renewable energy projects. It offers comprehensive solutions for solar power plants, including design, engineering, construction, and operation and maintenance services. 

Market Cap in Crores (as of 15.10.24)PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
13,610–7601030-314-559
Source: moneycontrol

Sterling Wilson marked a revenue of ₹1,030 crore for the quarter ending September 2024, reflecting a 35% rise from the ₹760 crore posted in the same quarter of September 2023. Moreover, gross profit soared by an impressive 566%, and net profit surged by 116%, reaching ₹9 crore this quarter, compared to a loss of ₹55 crore in the corresponding period last year.

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Alok Industries Q2 Results

Alok Industries Ltd. is a leading textile manufacturing company in India. It specializes in producing a wide range of fabrics, including denim, cotton, and polyester. Alok Industries has a strong global presence and supplies its products to major brands and retailers worldwide. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
11,907–1359886-43-117-175-262
Source: moneycontrol

Alok Industries registered revenue of ₹886 crore for the quarter ending September 2024, a 34% decline from the ₹1,359 crore recorded in the same quarter of September 2023. Additionally, gross profit fell by 172%, and the company posted a loss of ₹262 crore, widening from the ₹175 crore loss in the corresponding period last year.

Avenue Supermarts Ltd. Q2 Results

Avenue Supermarts Ltd. is the parent company of the popular supermarket chain DMart. It operates a network of hypermarkets and supermarkets across India, offering a wide range of products at competitive prices. DMart is known for its value-for-money offerings and has gained a significant market share in the Indian retail industry. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
2,72,52710112,62414,445831886623659
Source: moneycontrol

Avenue Supermarts Ltd. reported a revenue of ₹14,445 crore for the quarter ending September 2024, marking a 14% increase from the ₹12,624 crore recorded in the same quarter of September 2023. Gross profit rose by 6%, while net profit climbed by 5% to ₹659 crore this quarter, compared to ₹623 crore in the corresponding period last year.

Oriental Hotels Q2 Results

Oriental Hotels Ltd. is a leading hospitality company in India. It operates a chain of luxury hotels, including the iconic Taj Mahal Hotel in Mumbai. Oriental Hotels is known for its exceptional service, luxurious accommodations, and rich heritage. The company has a strong presence in key tourist destinations. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
3,13474.191103141788
Source: moneycontrol

Orient Hotels registered a revenue of ₹103 crore for the quarter ending September 2024, reflecting a 13% increase from the ₹91 crore recorded in the same period of September 2023. Gross profit also grew by a significant 21%, reaching ₹17 crore compared to ₹14 crore in the same quarter last year. However, the company did not report any net profit for this quarter.

Network 18 Q2 Results

Network18 Media & Investments Ltd. is a leading media conglomerate in India. It operates a diverse portfolio of television channels, digital platforms, and print publications. Network18 is known for its news channels, including CNN-News18 and CNBC TV18, which are popular among viewers. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
9,152–18661825-275-248-148-188
Source: moneycontrol

Network 18 reported a revenue of ₹1,855 crore for the quarter ending September 2024, showing a slight decrease of 2% from the ₹1,866 crore recorded in the same period of September 2023. The company posted a loss of ₹188 crore for this quarter, compared to a ₹148 crore loss in the corresponding quarter last year.

Just Dial Q2 Results

Just Dial Ltd. is a leading local search and information platform in India. It provides users with a comprehensive database of businesses, services, and products across various categories. Just Dial’s user-friendly interface and extensive listings have made it a popular choice for people looking for information about local businesses and services. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
10,37533.3261285377072154
Source: moneycontrol

Just Dial reported a revenue of ₹285 crore for the quarter ending September 2024, reflecting a 9% rise from the ₹261 crore recorded in the same period of September 2023. Gross profit surged by 89%, and net profit saw an impressive 113% increase, reaching ₹154 crore this quarter, compared to ₹72 crore in the corresponding period last year.

Premier Polyfil Q2 Results

Premier Polyfil Ltd. is a leading manufacturer of nonwoven fabrics. It produces a wide range of products, including geotextiles, industrial fabrics, and filtration media. Premier Polyfil’s products are used in various industries, including construction, agriculture, and automotive. 

Market Cap in Crores (as of 15.10.24) PE RatioRevenue (In Crores)Gross Profit (In Crores)Net Profit (In Crores)
Sep 23Sep 24Sep 23Sep 24Sep 23Sep 24
74830.2767971058
Source: moneycontrol

Premier Polyfil reported a revenue of ₹79 crore for the quarter ending September 2024, marking a 3% increase from the ₹76 crore recorded in the same period of September 2023. Gross profit jumped by 42%, while net profit saw a significant 60% rise, reaching ₹8 crore this quarter, compared to ₹5 crore in the same quarter last year.

*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

  1. What is the significance of Q2FY25 earnings reports?

    Q2FY25 earnings reports provide valuable insights into the financial performance of companies during the second quarter of the fiscal year ending in March 2025. These reports help investors assess a company’s profitability, growth prospects, and overall financial health.

  2. Which companies are worth following in Q2FY25 earnings?

    There are 26 companies that investors should closely watch during the Q2FY25 earnings season. These include prominent names across various sectors such as technology, banking, pharmaceuticals, and consumer goods. Keeping track of these companies’ performance can help investors identify potential investment opportunities or risks.

  3. What are the key factors to look for in Q2FY25 earnings reports?

    When analyzing Q2FY25 earnings reports, investors should focus on several key factors. These include revenue growth, profit margins, earnings per share (EPS), cash flow, and management’s guidance for the future. Additionally, comparing a company’s performance to industry benchmarks and its own historical data can provide valuable insights.

  4. Are there any surprises or unexpected trends in Q2FY25 earnings?

    Q2FY25 earnings season has seen some surprises and unexpected trends. Some companies have exceeded market expectations with strong financial results, while others have fallen short. It’s important to stay updated on these developments as they can significantly impact stock prices and market sentiment.

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dmart share price slips

DMart Share Price Fell by 9.47%: 5 Major Reasons!

With the festive season in full swing and e-commerce platforms thriving, have you wondered why DMart’s parent company, Avenue Supermarts (DMart) share price plummet by 9.47% in early trade on Monday?

The stock hit a low of Rs 4,139 on the NSE, down from its previous close of Rs 4,572. This sharp drop has left many investors questioning what went wrong for one of India’s leading retail chains. Let’s look into the five key factors behind this disappointing performance in the stock market. [Source: NSE]

AD 4nXfjuf6gfM2INJ 3esyleTQpy1JJJk1Ny1K8Imx9GDy61V3HnvNkkADP6OtH6tOLoZCeyFt9CRA9vTP7bEzU4TiDteYyErOQ2z4HwiuYWhGRXnPU 9yd KartD3Rh867npYZsNjGRRi ArmNUBl6LJ7eKDJz?key=Z5e6qeSXL51zyD TiJ6byg
Source: NSE

5 Reasons for DMart’s Share Price Drop

1. DMart’s underwhelming Q2 results

DMart’s Q2 earnings were disappointing, even with a 6% year-on-year increase in net profit.

AD 4nXf5xCiZEWZ7yIWHIp7mzBOxI7hhR8nuMtxCdTJZwEODWHTABfqb2n sPw6aMw7Iimn0h1iqQQwBBm7tzCyCnqOEjR6HKl3K9oTcpn3Aa7wV8r46U YkhpRkxu4ZvXWmFmp70L 9amDr3g4FiOvz7kj3CB0?key=Z5e6qeSXL51zyD TiJ6byg
Source: Economic Times
  • Revenue vs. Expectation: Revenue for the Q2 results stood at Rs.14,050.32 crore, a 14% rise from Rs 12,307.72 crore last year. However, this fell short of analyst expectations, with the market hoping for stronger growth.
  • Profit Decline: The 12% sequential drop in profit after tax (PAT) compared to the previous quarter caught investors off guard. This decline in profitability overshadowed the YoY revenue rise, indicating inefficiencies and rising costs.
  • Brokerage Downgrades: Following these results, several brokerages, including Bernstein, downgraded DMart’s stock with target prices as low as Rs 3,702, further shaking investor confidence. The underperformance reflects that even though the company is growing, it is not growing fast enough to meet market expectations.

Source: Economic Times

2. Increasing competition from quick commerce

The rise of quick commerce platforms like Swiggy Instamart, Dunzo, and Zepto has intensified competition in DMart’s core metro markets.

  • Shift in consumer preferences: These platforms offer ultra-fast grocery deliveries (within 10-30 minutes), making them an attractive option for urban customers seeking convenience. As a result, DMart has lost some foot traffic and customer share, particularly in metropolitan areas.
  • Impact on DMart Ready: Although DMart has its own online service, DMart Ready, it has struggled to match the rapid fulfillment times offered by these competitors. The management has acknowledged that quick commerce is having a noticeable effect on the company’s high-performing metro stores.
  • Long-term threat: The quick commerce model has disrupted traditional brick-and-mortar retail, and DMart will need to respond swiftly and strategically to regain its competitive edge.

3. Slow Revenue Growth

DMart’s revenue growth has significantly decelerated compared to its past performance.

AD 4nXd5IuKMmsI5JbC Q5Gu9A014Qtb0NB vhx UnE2l0jT30E6YAE
Source: Economic Times
  • Revenue Sluggishness: According to Bernstein, DMart’s revenue growth was the slowest in four years, and like-for-like (LFL) growth was the weakest in three years, at just 5.5% in Q2. This is a sharp decline from the company’s consistent growth of over 10% in previous years.
  • Maturity of Older Stores: Part of this slowdown is due to the natural maturity of older stores. As DMart’s early stores reach capacity, their contribution to growth has diminished, dragging down the overall performance.
  • Comparing Quarter-on-Quarter: In Q1FY25, DMart posted a 9.1% LFL growth, but in Q2, this dropped to 5.5%, marking a worrying trend of deceleration.

4. Rising operational costs

DMart is grappling with rising costs as it scales up operations and invests in service improvements.

  • Higher Employee Costs: In an effort to improve customer experience and expand future capabilities, DMart’s employee costs have increased more than expected, cutting into profitability.
  • EBITDA Margin Squeeze: The company’s EBITDA margin contracted by 27 basis points (bps) YoY, reflecting the impact of higher overheads. These expenses are tied to better service offerings, but the immediate financial impact has been negative.
  • Modest Margin Expansion: On the positive side, general merchandise and apparel sales recovery led to a slight expansion of gross margins by 21 bps YoY. However, this was not enough to offset the hit from operational costs.
  • Ongoing Investment: While these cost increases aim to strengthen DMart’s long-term positioning, they are weighing on short-term profitability, a concern for investors looking for immediate returns.

5. Slowdown in store additions

Store expansion, a critical part of DMart’s growth strategy, slowed down in Q2.

  • Fewer Store Openings: DMart opened six new stores in Q2, compared to nine in the same period last year. This brought the total store count to 377. While the company typically opens more stores in the second half of the fiscal year, the slower pace in the first half has raised concerns about overall growth.
  • Growth Potential: Analysts, including Bernstein, remain hopeful that DMart will reach its target of adding 45 new stores by the end of FY25. The company has demonstrated its ability to expand aggressively, driving revenue growth.
  • Future Outlook: DMart’s ability to return to a 20% growth trajectory depends on its success in adding new stores and increasing retail area. Store expansion remains critical for DMart, as it allows the company to penetrate new markets and reach more customers.

What Lies Ahead for DMart?

Despite the current challenges, DMart remains a key player in India’s retail space. Analysts believe the company could return to its previous growth trajectory if it manages to overcome competition from quick commerce platforms and continues to focus on store expansion. However, these efforts may take 3-5 quarters to reflect in DMart’s financials fully. 

Conclusion

DMart’s 9.47% drop in share price reflects several pressing challenges, from disappointing earnings to rising competition and operational inefficiencies. While the company remains a strong player in India’s retail sector, it must address these issues head-on to regain investor confidence and maintain its growth momentum. How DMart adapts to the rapid rise of quick commerce and manages its cost structure will be crucial in determining its performance in the coming quarters.

*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 Equentis – 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.

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The Rise of OFS: 3 Reasons Why Startups Opt for Investor Exits Over Growth Capital

The Rise of OFS: 3 Reasons Why Startups Opt for Investor Exits Over Growth Capital

The landscape of startup funding is experiencing a significant shift. While venture capital (VC) funding grabbed attention in recent years, there’s now a rise in startup IPOs with more “Offer for Sale” (OFS) portions. This shows a growing focus on investor exits as new capital becomes harder.

The increase in the “Offer for Sale” (OFS) portions shows that investors are eager to exit and cash out their investments. They are also achieving this by selling shares through pre-IPO secondary rounds, which allows them to generate liquidity before the company officially goes public. This trend highlights the pressure on investors to secure returns as their investment cycles end.

What is OFS

Before diving into the details, let’s first understand OFS. OFS, or Offer For Sale, is a way for promoters of public companies to sell their shares directly to the public through a bidding process on the stock exchange. This method allows them to reduce ownership and meet the minimum public shareholding requirements.

Increase in Startup IPO Offers-for-Sale Driven by Fund Cycles and Investor Exits

  • In 2021-22, offers-for-sale (OFS) by investors made up 48% of startup IPO share sales by value, compared to 63.3% in the broader IPO market.
  • As of FY25 (until 4 October), OFS by investors has risen to 64% of startup IPO share sales, the highest in four years, versus 51.21% in the overall IPO market.
  • The rise in OFS is largely due to fund managers nearing the end of their fund lifecycle, requiring them to sell large stakes in IPOs to return money to investors.
  • This reduces the capital startups can raise from IPOs for growth but offers more opportunities for new investors as India’s stock market hits record highs.
  • According to the Prime Database, startups raised ₹5,385 crore through OFS and ₹3,039 crore in fresh capital in FY24.
  • Five of eight startups that went public in September 2023 had a higher OFS component.
  • Indian startups raised ₹1,359 crore in fresh capital and ₹1,681 crore via OFS in FY24.
  • In FY22, startups raised ₹21,680 crore in fresh capital and ₹21,146 crore through OFS.
  • EasyMyTrip, Nazara Technologies, and Cartrade Tech, which went public in 2021, issued no fresh capital, focusing instead on investor exits.
  • Unicommerce eSolutions followed a similar strategy in its August 2023 IPO.

Source: Mint

Startup IPOs OFS Vs. Broader Ecosystem

AD 4nXcmWQlprBbmmI ka95964aIL2sohy4BlrGMJH9dxAU8EOV9HWhQ rr5duIRKB6JAOj2vA
Source: Mint

OFS Trends in Startup IPOs

  • Zomato’s 2021 IPO saw investors sell shares worth ₹375 crore, while the company raised ₹9,000 crore through fresh share issues.
  • Unlike Zomato, most startup IPOs in 2021 favored offers-for-sale (OFS) as investors’ primary exit strategy.
  • According to NSE data, startups like Mamaearth, Go Digit, Awfis, Ixigo, and FirstCry saw a higher OFS portion compared to fresh capital issues.
  • According to its draft prospectus, Swiggy’s upcoming IPO will also follow this trend, with a larger OFS component of ₹6,664 crore compared to a fresh issue of ₹5,500 crore. Source: Mint

Indian Startup IPOs Over the Last Years

NameOpening DateOFS/Total Issue Amount %
UnicommerceAugust 6, 2024100
IxigoJune 10, 202484
AwfisMay 22, 202479
MamaearthOctober 31, 202379
FirstcryAugust 6, 202460
DigitinsuranceMay 15, 202457
ZaggleSeptember 14, 202330
YatraSeptember 15, 202322
Note: The figures are a percentage of the OFS for the total issue. Source: Mint

Decoding the Shift

Exits are crucial for generating investment returns for venture capitalists and other early-stage investors. There are three primary ways for them to achieve an exit:

  • IPO: A company goes public, allowing investors to sell their shares on a stock exchange and potentially realize significant gains.
  • Mergers and acquisitions (M&A): A larger, established company acquires the startup, providing investors with liquidity through the sale of their shares.
  • Secondary Transactions: Existing investors sell their shares to new investors before an IPO, allowing them to exit their investments early.

Historically, IPOs have been a less common exit strategy for Indian startups than the US or China. However, the recent surge in IPO activity coupled with high OFS portions indicates a growing emphasis on exits for investors.

Unveiling the 3 Reasons Behind the Rush for Exits

Several factors are contributing to the increased focus on exits:

  • Shifting Market Conditions: The global economic slowdown and rising interest rates have led to a more cautious approach from VC firms. This has caused a decline in new funding rounds for startups, particularly in later stages.
  • Maturing Portfolio Companies: Many startups that received significant funding in the past are now reaching a stage where an IPO or acquisition becomes a viable exit strategy.
  • Investor Liquidity Needs: VC funds typically have a finite lifespan and must generate returns for their Limited Partners (LPs) – the investors who provide them with capital. Exits through IPOs or secondary transactions allow them to do so.

A Signal of Investor Sentiment

The significant increase in the size of OFS portions within recent startup IPOs is particularly noteworthy. An OFS allows existing investors to sell a portion of their shares during the IPO. This indicates a strong desire among early-stage investors to achieve liquidity and potentially lock in profits, especially in a market with more uncertainty.

Potential Implications for the Startup Ecosystem

While the increased focus on exits can be seen as a positive sign for investor returns, it could also have some broader implications for the startup ecosystem:

  • Impact on New Funding: A focus on exits may reduce the amount of capital available for new startups. This could have a chilling effect on innovation and entrepreneurship, especially in riskier sectors.
  • Valuation Concerns: A large influx of shares through OFS could potentially put downward pressure on a startup’s post-IPO stock price, making it more challenging for companies to raise additional capital after going public.
  • Importance of Sustainable Growth: There’s a risk that the focus on exits may overshadow startups’ long-term growth prospects. Investors and founders must balance achieving liquidity and building sustainable businesses that create value over a long period.

Conclusion

In the 1990s, companies going public focused entirely on raising fresh capital through IPOs to fund business expansion, as there were few other funding options in India. This trend shifted with the rise of alternative investment funds—private equity, venture capital, and angel investors—who provided companies with funding in private markets at high valuations.

The current dynamics of the startup funding landscape necessitate a thoughtful approach. While exits are critical for generating returns and attracting new investors, ensuring a steady flow of capital for promising new ventures is equally important. The success of the Indian startup ecosystem will depend on striking a balance between investor liquidity needs and fostering sustainable long-term growth for innovative companies.

Know more about:
IPOs | Current IPOs | Upcoming IPOs | Listed IPOs | Closed IPOs | IPO Performers

*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. What are the key factors driving the shift towards OFS among startups?

    Several factors are contributing to the rise of OFS among startups. First, the volatile economic conditions have made it challenging for startups to secure growth funding at favorable terms. Second, many startups seek liquidity to exit their investments and realize returns, especially after years of growth and development. Third, OFS can potentially result in higher valuations for startups, as investors may be willing to pay a premium to acquire shares in a promising company.

  2. How does OFS compare to traditional methods of raising capital, such as venture capital or private equity?

    OFS offers several advantages over traditional methods of raising capital. It can provide a quicker and more efficient way for startups to exit investments and realize profits. Additionally, OFS can help startups achieve higher valuations by tapping into a broader pool of investors. However, OFS also comes with certain risks, such as market volatility and the potential to dilute ownership.

  3. What are the potential challenges and risks associated with OFS for startups?

    While OFS offers several benefits, it also has potential challenges and risks. Market volatility can significantly impact the success of an OFS, and startups may not achieve their desired valuation. Additionally, OFS can lead to a dilution of ownership for existing shareholders. To mitigate these risks, startups should carefully consider their timing and pricing strategies for an OFS and work with experienced advisors to ensure a successful execution.

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Frequently asked questions

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

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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.