Markets opened below yesterday’s closing point.
All sectors’ stocks fell today except for the metal stocks and oil and gas stocks. Chemical stocks and PSU bank stocks fell the most.
Global markets: US markets fell. Asian markets showed a mixed trend. European markets fell (as of 6 pm IST).
News
The UK’s inflation rate rose to 3.4% year-on-year in Dec (vs 3.2% in Nov).
The central government approved Rs 5,000 crore equity support to the Small Industries Development Bank of India (SIDBI) to boost its ability to extend credit to MSMEs.
Amagi Media Labs IPO listed on the stock exchanges at a discount of 11.91% on the issue price and closed 3.53% down at the end of the day.
Shadowfax Technologies IPO has been subscribed 0.60 times. Retail subscription: 1.64 times. IPO closes tomorrow (22 Jan).
Stocks Updates
Eternal (Zomato): net profit rose 73% year-on-year to Rs 102 crore in the Oct-Dec quarter. Mr. Deepinder Goyal will step down as the company’s CEO and will be replaced by Mr. Albinder Dhindsa, effective from 1 Feb.
Dr Reddy’s: net profit fell 14% year-on-year to Rs 1,210 crore in the Oct-Dec quarter. Dividend declared: Rs 5 per share. Record date: 27 Jan.
Hindustan Petroleum: net profit rose 58% year-on-year to Rs 4,011 crore in the Oct-Dec quarter.
Apollo Hospitals: received CCI approval to acquire a 30.58% stake in Apollo Health and Lifestyle Ltd for Rs 1,254 crore.
Cholamandalam Investment: allotted Rs 400 crore of non-convertible debentures via private placement, with a 5-year tenure at 7.73% interest rate.
HCL Tech: expanded its partnership with Australia and New Zealand based logistics company, Team Global Express, to provide AI logistics services.
Hero Moto: received a GST demand order of Rs 4.97 crore (plus penalty and interest) for FY20 from the CGST authority in Vadodara, which it plans to challenge.
Indus Towers: incorporated a step-down subsidiary, Indus Infra Uganda Ltd, for telecom tower and infrastructure operations in Uganda.
Lodha Developers: signed an MoU with the Maharashtra government to invest an additional Rs 1 lakh crore in a data centre project.
Word of the Day
Nostro Account
It is a bank account a domestic bank holds in a foreign bank in the foreign currency
Banks use these accounts for foreign exchange transactions and to settle international trade efficiently.
Example: an Indian bank maintains a USD account in a US bank to pay its clients in the US.
There is also the Vostro account which means a foreign bank’s account held in a domestic bank.
6 Day Course
Theme: corporate debt
Day 3: Wednesday
Yesterday we spoke about corporate bonds. Today, let’s talk about corporate loans.
Corporate loans are loans given to companies by banks, NBFCs, other lending institutions, etc.
These loans are of many different kinds.
Syndicated loans: very large size corporate loans.
The big enough amount is lent by multiple banks where one bank acts as the lead lender.
Project finance loans: these loans are given for specific projects only.
For example, a company may take a loan to build a new factory, power plant, etc.
Working capital loans: companies take these for operational requirements.
These can include money for paying salaries, inventory, receivables, etc.
Featured Question
Q. “If in one mutual fund the lump sum investment is stopped, but SIP still exists, as mentioned earlier there might be not enough opportunity in that fund - the fund manager believe it. In that case is it wise to put money in the fund?”
Many times, some very good quality mutual funds stop or limit new investments into the mutual funds.
This is because the mutual fund manager is careful about the returns the mutual fund is giving.
If he/she accepts too much money, and there is not enough opportunity, then the money will be kept in cash form.
This will reduce the returns earned by the mutual fund.
So, fund managers stop taking fresh investments or reduce the amount coming in.
When they reduce the amount coming in (but not stop it), it might be because the opportunities are less — but they are there.
They are most likely accepting only what they think they can invest properly.
Still, investors must remember individual cases vary.
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