US debt at record high, BPCL's profits up 141%, & more — Daily Digest
Wednesday, 13 August 2025
Markets opened above yesterday’s closing point.
Nifty 50 closed in green. The rise was likely due to positive sentiments in the market around the falling retail inflation in India and steady US inflation data.
Healthcare stocks and pharma stocks rose the most today, while PSU bank stocks and oil and gas stocks fell the most.
Global markets: US markets rose. Asian markets also rose, except for the Australian market. European markets also rose (as of 6 pm IST).
News
The US national debt crossed $37 trillion, a new record, according to the US Treasury Dept data. The budget deficit (government spending minus government income) grew 19% year-on-year to $291 billion.
SEBI has proposed a new framework to simplify the transfer of securities from nominees to rightful heirs and avoid tax problems.
Fractal Analytics, an AI and analytics service provider, has applied for a Rs 4,900 crore IPO with SEBI.
Bluestone Jewellery IPO was subscribed 2.70 times. Retail subscription: 1.35 times. IPO is closed for subscription.
Stocks Updates
BPCL: net profit rose 141% year-on-year to Rs 6,839 crore in the April-June quarter.
Max Healthcare: net profit rose 30% year-on-year to Rs 308 crore in the April-June quarter. It will also add a 130-bed hospital in Dehradun by 2028 by investing Rs 170 to Rs 200 crore. The hospital will be developed by Goyal Agrim Infra Realty and handed over to the company on lease.
Muthoot Finance: net profit rose 73% year-on-year to Rs 2,016 crore in the April-June quarter. It will also invest Rs 500 crore and Rs 200 crore in two wholly owned subsidiaries, Muthoot Money and Muthoot Homefin (India) respectively.
Samvardhana Motherson: net profit fell 51% year-on-year to Rs 512 crore in the April-June quarter.
Zydus Lifesciences: the US FDA had no observations after an inspection at its formulation manufacturing plant at SEZ II, Ahmedabad.
One 97 (Paytm): the RBI has granted the company's subsidiary, Paytm Payments Services, an in-principle approval to operate as an online payment aggregator.
Word of the Day
Authorised Capital
It is the maximum number of shares a company is allowed to issue to its shareholders
This limit is specified in the company’s Memorandum of Association (MoA) — a legal document created when the company is registered. It is also mentioned in other documents like the annual reports of the company.
The authorised capital can be increased later by following a formal approval process.
Usually, companies choose to issue only part of its authorised capital initially, keeping the rest for future needs.
Example: if a company’s authorised capital is Rs 1 crore, it may issue only Rs 40 lakh worth of shares at the start and keep Rs 60 lakh worth for future expansion.
6 Day Course
Theme: illiquid shares
Day 3: Wednesday
The illiquidity of shares is determined by two factors: number of shares traded and the share price.
Number of shares traded:
The greater the number of shares traded, the better the liquidity.
Since more shares are available with more investors, the chance of someone wanting to sell or buy is higher.
This is why smaller companies with less shares being traded tend to be illiquid more often. Larger companies with many shares being traded usually do not have liquidity problems.
Small-cap companies tend have illiquidity issues more than large-cap companies.
Another factor is the price per share:
Lower share price means more people can afford the shares. This leads to better liquidity.
A high share price means fewer people can buy/sell the shares so liquidity can be lower.
This does not mean the companies themselves are bad investments — some stocks that have given very high returns have high share prices and face liquidity issues sometimes.
Many companies want better liquidity for their shares and hence, try to keep the share price more affordable.
Such companies tend to split the shares when the share price goes up too much.
Featured Question
Q. “For the last 2 years, mutual funds gain is in negative. No Ads by Sachin or Dhoni. Is ‘mutual fund sahi hai’ Is turned to ‘mutual fund sahi nahi’ ??”
Your observation about mutual fund returns is correct — they have not been great over the recent period.
But this is nothing new.
Investing in equity mutual funds is never smooth. The returns are good over a long term.
Over a short term, the returns can be poor and even negative sometimes.
This is why investment in equity mutual funds is not encouraged for short durations.
Only when an investor has an investment horizon of greater than 3-4 years should equity mutual funds be opted for.
Even within equity mutual funds, there are subcategories.
Some of the riskiest kinds of equity mutual funds are better suited only for 6-7 years or more.
Whatever we are seeing in the mutual fund returns so far is nothing new — we have seen such periods of underperformance many times over the last few decades.
Returns have mostly been good when measured over 5 years.
In fact, the tragic part about investing in equity mutual funds is that investors tend to invest only in the good times.
But the best returns are made by investing in the times when the markets are down.
Investing only in the good times leads to mediocre or poor returns.
Unfortunately, many of the ads you are talking about also stop playing on TV/Internet when the markets are doing poorly.
To better understand this, please look at mutual funds’ returns history.
You will notice that almost every equity mutual fund has had periods of poor/negative returns — even the best mutual funds.
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