The Indian stock markets were closed today on account of Ganesh Chaturthi.
Hence, there won’t be any updates on the Nifty 50, Sensex, Top Gainers, and Top Losers sections today.
Global markets: US markets rose on Friday. Most European and Asian markets fell (as of 6 pm IST).
News
India’s wholesale inflation rose to 9.92% year-on-year in August compared to 9.78% in July. India’s retail inflation rose to 4.82% in August compared to 4.45% in July.
The total revenue from allocated commercial coal mines was Rs 3,090 crore in FY25-26. The government expects annual revenue of around Rs 47,500 crore from the 147 coal blocks since 2020 across 9 states.
SEBI issued a consultation paper, proposing changes to the Closing Auction Session (CAS), market timings and settlement rules for derivative contracts. It has invited public comments until 3 October.
Stock Updates
JSW Steel: NCLT will hear the proposed merger of Piombino Steel into JSW Steel on 24 September. The merger has not yet been approved.
NTPC: subsidiary NTPC Green Energy started commercial operations of another 6.3 MW of its Vanki wind project in Gujarat. NTPC Group’s total commercial capacity has now crossed 90,000 MW.
Grasim: Customs authorities searched Grasim’s Cellulosic Staple Fibre plant in Nagda, Madhya Pradesh, over import-export transactions.
Solar Industries: subsidiary Solar SA Investments agreed to acquire 100% of South Africa-listed Omnia Holdings for about $1.36 billion (Rs 12,951 crore) in cash. Omnia operates across 23 countries in explosives, mining solutions, chemicals and agriculture.
Lenskart: invested about Rs 8 crore to acquire another 1.8% stake in smart-glasses company Ajna, increasing its holding from 7.21% to 9.01%.
Lloyds Metals and Energy: subsidiary Lloyds Global Resources set up a new company called Vector Asset Holdings Ltd in the Isle of Man for holding and financing international investments.
Aurobindo Pharma: subsidiary A1 Biochem Labs invested $1 million in its newly set up US subsidiary, A1 Biochem USA, which will provide contract research and development services.
Word of the Day
Frothy
When the price of something reaches a level where it gets hard to justify, it is said to be frothy. In short, overvalued
A common use case is when the stock markets as a whole become extremely overvalued.
It can be used in case of individual share prices, or even prices of other assets and commodities.
Example: this company’s earnings per share is only Rs 3 but its share price has reached frothy levels at Rs 400.
Overvaluation is a subjective matter. There’s no hard formula for it. So not everyone will agree on the ‘frothiness’ of prices.
6 Day Course
Theme: finding correct valuation
Day 1: Monday
We have heard many times that certain stocks are overvalued or undervalued or fairly valued.
This week, we’ll try to decode this better.
The first and simplest method used by most investors is to use PE Ratio (Price to Earnings Ratio).
In this we are comparing how much a company earns versus how much it costs.
So the ratio is basically comparing the price of one share vs the earnings per share.
This is a basic method and can serve well in many cases.
Usually, investors have a certain number in mind for a stock being undervalued, overvalued, or fairly valued.
Example: one investor might feel that stocks with a PE ratio below 18 are undervalued, 19-22 are fairly valued, and anything above that is overvalued.
But the PE Ratio is only the starting point.
Depending only on this ratio may mean investors miss out on other signals that might tell us more about a stock’s valuation.
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Featured Question
Q. “During delisting what happens to investment, is it a loss or will company provide?”
It depends on how the delisting is happening.
If it is voluntary (company is doing it willingly), they offer a buyback to existing investors.
In short, they buy shares from the existing investor.
Some companies are delisted when they are acquired or merged.
In such cases, they might do a buyback of shares or might provide shares of the new company instead. Sometimes, they do a mix of both.
If the delisting happens for regulatory reasons, the shares stop trading, but investors still own them.
In such cases, they can buy/sell those shares Over the Counter (OTC), which means investors will have to find the person to trade with individually.
The stock exchange will not do it for the investor.
This is difficult and requires work. Many investors tend to treat it as a total loss case.
In case of companies being delisted because of bankruptcy, the share price falls hard.
In such cases also, the shares can be traded OTC but the share price is so low, many investors don’t bother with it and treat it as a full loss.
Or, they may sell it if they find buyers but still the money received in such cases is extremely minimal.
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