Markets closed higher today.
Nifty 50 opened higher, and the rise may have been mainly due to optimism and a rise across major IT stocks.
Private bank stocks and IT stocks rose the most today. Pharma stocks and healthcare stocks fell the most.
Global markets: US markets fell on Thursday. Most Asian markets closed significantly lower today. Most European markets fell. (as of 6 pm IST).
News
India’s forex reserves rose $964 million to $675.16 billion for the week ended on July 10.
The government will revise the series of the Index of Core Industries (ICI) with the base year 2022-23 on 20 July. The number of core industries has increased to 9 from 8 with the addition of iron ore.
MakeMyTrip’s Indian subsidiary confidentially filed for an IPO with SEBI. The company and its subsidiary, ibibo Holdings, will sell shares in the IPO, as per its filing to the U.S. SEC.
Stocks Updates
Adani Enterprises: subsidiary Adani Defence Systems & Technologies Ltd (ADSTL) will acquire the remaining 44.6% stake in Flight Simulation Solutions Pvt Ltd (FSSPL) for Rs 820 crore, taking its stake from 55.40% to 100% and its effective stake in FSSPL from 72.80% to 100%.
JSW Steel: net profit rose 113% year-on-year to Rs 4,651 crore in the Apr-June quarter. The board also approved selling shares worth up to Rs 811 crore in JSW One Platforms Ltd (JOPL) through an offer for sale in its proposed IPO.
Waaree Energies: received an additional 212 MW solar module order from an international renewable energy customer, taking the total order from the customer to 562 MW. The modules will be supplied in FY27.
Federal Bank: net profit rose 36.78% year-on-year to Rs 1,256 crore in the Apr-June quarter..
Airtel: received a Rs 6.59 lakh penalty notice from DoT for alleged violation of subscriber verification rules in Andhra Pradesh. The company will pay the penalty and not contest it.
Word of the Day
Institutional Investor
An institutional investor is a large organisation that invests money on behalf of investors
Such investors are not individually operated. They are professionally managed by dedicated teams.
Some examples of institutional investors are mutual funds, pension funds, hedge funds, insurance companies, etc.
Even large family offices are often classified as ‘institutional investors’ owing to their organisational structure and the large amounts of money they manage.
6 Day Course
Theme: companies with extra cash
Day 5:Friday
We have covered most of the things companies do with extra cash.
Some more that are left are: increasing working capital and employee rewards) bonuses and employee share option buybacks, etc.
Something to understand about this is that different companies treat their cash differently.
Some always pay dividends to maintain their reputation even if they should ideally pre-pay their debt before that.
Some companies are very careful about debt and choose to keep that to a minimum before all else.
Some are comfortable with debt and pour as much money as they can into future growth.
Some choose to return the money to shareholders via dividends and share buybacks because they do not wish to retain the cash for any purpose.
Some simply build a cash reserve as a measure to fight difficult times in the future.
Many do a combination of the above.
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Featured Question
Q. “What is private placement?”
Public issue = offered to the public
Private placement = offered to a private group of investors
For example, an IPO is a public issue where a company offers its shares to the public.
A private placement would be a case where a company offers its shares to a select group of investors. Usually, this would be a group of institutional investors like pension funds, private equity funds, etc.
Private placement does not always mean shares are being offered. Bonds too can be offered via private placement.
Private placement is usually a faster way for companies to raise money since the scrutiny and paper work required is lesser.
Public issue is usually better for getting a better price/deal (price discovery) since it gives access to a wider set of investors.
Many companies opt for private placement if they want to raise money fast and with less work.
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