Markets ended lower compared to yesterday’s closing point. Both Nifty and Sensex opened in green but started falling around 10:30 am and ended in red.
IT stocks and consumer durable stocks fell the most today. Media stocks and realty stocks rose the most.
Global markets: US markets rose on Monday. Most Asian markets rose on Tuesday. Most European markets traded mixed (as of 6 pm IST).
News
SEBI settled adjudication proceedings against 5 Adani group companies after settling with an amount of Rs 1.50 crore over corporate governance issues highlighted in the Hindenburg report.
NPCI clarified that merchants do not bear the cost of GST on MDR as it will be adjusted against GST payable on sale of goods, clarifying concerns on additional burden on merchants.
Varmora Granito’s Rs 1,096.04 crore IPO was subscribed 0.11 times on day 1. Retail subscription: 0.20 times. The IPO will close for subscription on 24 September.
Stock Updates
NTPC: subsidiary NTPC Green Energy started commercial operations of another 56.7 MW of wind capacity in Gujarat.
Samvardhana Motherson: holders of its Rs 1,500 crore CCDs can start converting them into shares from 1 Oct. Any remaining CCDs will compulsorily convert by September 2027, increasing the share count.
Bank of Baroda: set up BOB Pension Fund Management Company Ltd to enter the pension-fund management business. The bank plans to invest about Rs 80.10 crore for an 80.10% stake.
Dixon Tech: invested Rs 2.55 crore for a 51% stake in newly incorporated Adivistar Electronics India Pvt Ltd, which will manufacture electronic devices including smartphones as an OEM.
Persistent Systems: its Nagarro acquisition deal has received enough shareholder acceptances to move ahead, and it also plans to delist Nagarro from the Frankfurt Stock Exchange.
Word of the Day
Debentures
It is a type of debt that a company takes from investors.
Companies take money from investors and agree to return it later, usually with interest.
These are called debentures.
Some debentures come with a condition that instead of returning the money in cash, the company can give shares to the investor.
These are called convertible debentures
Some of the main types of debentures are:
- Non-convertible Debentures (NCD): cannot be converted into shares and are repaid in cash
- Compulsorily Convertible Debenture (CCD): must be converted into shares of the company
6 Day Course
Theme: how fund managers handle money
Day 2: Tuesday
Let’s understand withdrawals.
Around most times, mutual fund managers are both receiving money from investors and having to pay back to withdrawing investors.
This balance tips from time to time.
In times when the incoming money and outgoing money is the same, they simply use the incoming money to pay the withdrawers.
When the withdrawals exceed the incoming amounts (like during market corrections, crashes, etc), they have to pay investors from the cash reserve.
If the cash reserve is small, or if the withdrawals are very high, fund managers have to sell assets to create cash for investors.
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Featured Question
Q. “What's a greenshoe option?”
In a company’s IPO, if the demand for shares is high, a green shoe option lets the underwriter offer extra shares.
The underwriter is the investment bank or other organisation that handles the entire IPO process for the company going for the IPO.
Usually, up to 15% additional shares can be offered using the green shoe option.
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Informative write up.