Markets closed above yesterday’s closing point.
All sectors’ stocks rose today except for the IT stocks and auto stocks. Realty stocks and media stocks rose the most.
Global markets: Most US markets fell. Asian and European markets showed a mixed trend. (as of 6 pm IST).
News
India and Australia signed a Joint Declaration on Defence and Security and fast-tracked negotiations for a CECA (Comprehensive Economic Cooperation Agreement) while concluding strategic partnerships in maritime security, civil nuclear administrative arrangements, and critical tech supply chains during the 3rd Annual Leaders’ Summit in Melbourne.
Zostel has approached SEBI to review Prism’s (Oyo’s parent company) updated Rs 6,650 crore IPO prospectus, claiming it conceals critical facts about their decade-long 7% equity ownership dispute.
Kusumgar IPO has been subscribed 12.95 times. Retail subscription: 9.43 times. IPO closes tomorrow (10 July).
Laser Power and Infra IPO has been subscribed 0.16 times. Retail subscription: 0.23 times. IPO closes on 13 July.
China’s annual inflation eased to 1% in June (vs 1.2% in May).
Stocks Updates
Reliance: step-down wholly owned subsidiary REC US Holdings, Inc. has been voluntarily dissolved in the US effective 6 July 2026.
SBI: announced the price band for the IPO of SBI Funds Management Ltd (SBIFM). The company also clarified that the QIB bidding period will close on 16 July, correcting an earlier RHP disclosure.
TCS: net profit rose 4.62% year-on-year to Rs 13,349 crore in the Apr-June quarter. Interim dividend announced: Rs 12 per share. Record date: 15 July.
HCLTech: company’s CSR arm, HCLFoundation, signed an MoU with the Uttar Pradesh government to improve waste management and urban sanitation across Hardoi, Prayagraj and Agra.
Power Grid: received the Letter of Intent (LoI) for an interstate transmission project under the TBCB route. The project includes augmentation and bay extension works at substations in Rajasthan and Uttar Pradesh.
Shriram Finance: allotted secured NCDs worth Rs 2,000 crore on a private placement basis — Rs 1,000 crore at 7.80% p.a. coupon and Rs 1,000 crore (including green shoe) at 8% p.a. coupon.
Cholamandalam Investment: allotted 13.55 lakh equity shares following the conversion of 20,000 Compulsorily Convertible Debentures (CCDs) into equity shares. The CCDs were originally issued in the 2023 QIP.
United Spirits: officially closed its manufacturing unit in Malkajgiri, Hyderabad, after receiving regulatory approval to transfer the unit’s excise licence. The unit contributed about 2% (Rs 599 crore) of FY26 revenue.
Word of the Day
Price Band
It is the price range within which IPO investors can bid for IPO shares.
In an IPO, the share price is still being decided based on the demand.
The final price per share is decided somewhere in the price band.
Many IPO investors simply bid at cut-off price meaning they ask for allotment to be done at whatever price is finalised in the price band.
Many investors apply for an IPO at a certain price.
6 Day Course
Theme: ROE & ROCE
Day 4: Thursday
ROE tells us how well a company is using the shareholders’ money.
ROCE tells us how well a company is using all of its long-term money.
If debt is very high, it can cause the ROE to seem very healthy and high. But it shows up in ROCE.
ROE uses earnings after tax and debt repayment. The same is not the case for ROCE.
ROCE is calculated before accounting for interest and tax payment.
Usually, if the ROE is higher than ROCE, it means the company is using its debt well and therefore, return to shareholders is higher.
Does this mean that if the ROCE is higher than ROE, it is not a good sign?
Not really. ROCE being higher than ROE is extremely common since ROCE does not account for debt repayment and taxes.
Featured Question
Q. “When a company launches an IPO, it raises money directly from investors. But once shares begin trading in the market, any price rally benefits only shareholders — the company itself doesn’t receive that money. Similarly, if the share price falls, the company’s operations remain unaffected. Apart from IPO proceeds and dividend payouts, there seems to be no direct financial interaction between a company and its market capitalization. In that sense, does the stock market operate as a parallel world disconnected from the company’s actual business performance? And if so, is investing in stocks essentially just a form of gambling? Thank you.”
The share price and the company’s real operations are very much connected.
When does a share price go up or fall?
One of the main reasons is the company’s operational performance.
When a company does well, its share price starts going up.
Why? Because demand for those shares increases. More people want to own those shares.
And vice versa.
But when a company does well, why do others also want to buy that share?
Because if a company does well, it will give higher dividends.
When a company does poorly, its dividends also fall. That often results in a lower share price.
So a company’s operations affect its earnings. And those earnings directly affect its share price.
Yes, it is true that many companies do not give dividends. That’s mostly because they are in their high growth phase where they are re-investing their earnings back into the business to increase future revenues and profits.
In fact, many investors don’t care about current or even future dividends. All they care about is that the company’s earnings go up — since that causes the company’s share value to go up.
This is why investors react so much to earnings.
In reality, it gets much more complicated than that. Investors look for clues as to what may happen in the future.
They try to form an opinion on potential future earnings and buy/sell accordingly.
This is why all sorts of forward looking metrics get tracked.
This includes everything from future earnings potential, total market size, risks affecting future potential, etc.
All of these factors combined affect the supply and demand for a company’s shares, and therefore its share price.
So we can clearly see that a company’s share price is directly affected by its real world operations and the earnings it makes from the operations.
Often, investors are quite sensitive to the signals from the real world.
Even minor good news can move share prices up. Even minor bad news can do the opposite. The company’s operations and its share price are very closely related.
Yes, there are other factors in the markets independent of the company that can move the share price.
But by and large, companies’ share price is closely related to its real world operations in the long run.
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