⭐️ #LIC THE GIANT

While we all eagerly wait for LIC's IPO, here are some facts & figures about the giant called LIC.

🔸 28.62 crore - Individial policies

🔸 ₹38.04 lakh crore - Total assets

🔸 ₹6.82 lakh crore - Total income

🔸 ₹4.02 lakh crore - Premium income

(1/4) 👇 ⭐️ #LIC THE GIANT (contd.)

🔸 ₹2.86 lakh crore - Payment to policy holders

🔸 ₹34.36 lakh crore - Total life fund

🔸 ₹1.84 lakh crore - First year premium income

🔸 2.29 crore - Total claims settled

🔸 ₹1.47 lakh - Total claims amount paid

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⭐️ HOW MARKET DEPTH WORKS

🔸 A lot of traders (especially intraday) look at a stock’s market depth table to determine the upcoming moves and accordingly take their BUY / SELL decisions.

🔸 Read below how market depth data can sometimes be misleading and lead to losses

[1/6] 👇 Here's how most traders read the market depth:

🟢 If there are higher number of buyers (bids) means the stock is in demand and will go up.

🔴 If there are higher number of sellers (offers) means the stock is in supply and will go down.

But that is not how it works.

[2/6]👇

📕 HOW CREDIT CYCLE WORKS

One day a man visits a debt ridden hotel.

1⃣ He gives the owner ₹10,000 as advance for booking his one week stay in the hotel.

2⃣ The hotel owner takes the ₹10,000 and goes to pay his debt to his food supplier.

{1/4} 3⃣ Food supplier rushes to pay the farmer and dairy.

4⃣ Farmer runs to pay the land lord from whom he took a loan for his crop.

5⃣ The land lord rushes to pay the event manager who managed his daughter’s wedding on credit.

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⭐️ SEBI SELLING MARGINS

Here's the logic behind SEBI's new rule to impose margins on selling shares from your holdings.

Say you sell shares from your holdings on Monday.

As per the current settlement cycle of T+2 days, the shares will be debited from your demat on Wed.

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https://twitter.com/stocktalk_in/status/1300435218537410561

But that T+2 days cycle leaves a possibility of you transferring those shares to someone on Tuesday i.e. before the shares are debited from your demat on Wednesday.

This creates a short delivery settlement risk.

Brokers already have systems in place to avoid this.

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📕 #SEBI GUIDELINES FOR MARGINS

1⃣ As per new SEBI rules, buying and selling of shares will require upfront margin.

Eg: If you want to buy shares worth ₹1 lakh then you must have ₹20K margin cash in your trading account & the balance of ₹80K to be paid within 2 days.

{1/5} 2⃣ If you want to sell ₹1 lakh worth of shares from your holdings then too you must have minimum ₹20K margin cash in your account, failing which penalties will be levied.

You can keep extra cash / or can pledge your other holdings for the stipulated margin required.

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⚡️ #YESBANK RESULTS DECLARED!

FINANCIAL HIGHLIGHTS (Q1-FY21)

🟢 Interest Income: ₹1908 Cr

🟢 Total Income: ₹2529 Cr

🟢 Net Profit: ₹45 Cr

🟢 Interest Margin: 3%

🔴 Advances: ₹1,64,510 Cr

🟢 Deposits: ₹1,17,360

🔴 Balance Sheet: ₹2,55,485

🔴 CASA: 25.80% ⚡️ #YESBANK RESULTS DECLARED!

ASSET QUALITY (Q1-FY21)

🔴 Gross NPA (%): 17.30%

🟢 Net NPA (%): 4.96%

🟢 Provisions (%): 75.10%

🟢 CET-1: 13.40%

🟢 CAR: 20%

🔴 Book Value: ₹14.60

🟢 EPS: ₹0.04

🟢 ROE: 0.8%

📕 A Quick Guide on SUPPORT LEVELS & DEMAND ZONES

🔸 Have you ever noticed how a stock quickly moves up after it drops to a certain price level?

🔸 People say "the stock has taken support" or "bounced back from support level"

Let's understand why the bounce happens;

{1/7} 🔸 The basic logic behind support level (also known as demand zone) is related to how big institutional investors buy shares.

🔸 When institutional investors take a position they have a huge qty of shares to buy & so they want the order to be filled at a particular price.

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📕 A Quick Guide on OPEN INTEREST (OI)

1⃣ What is OI?
OI is simply the number of outstanding contracts (open positions) for a given stock

For eg: A stock having OI of 1 lakh means there are 1 lakh open positions (long & short)

* OI data is available only for F&O segment

(1/7) How is OI calculated?

2⃣ As the name suggests OI represents the "interest" of traders in a given stock

For eg: If trader A has 10 long positions and trader B has 7 short positions then the total OI will be 17

That means buying interest is more than selling interest

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📕 THE SATYAM SCAM

🔸 On the morning of 7th January 2009, Ramalinga Raju, Chairman of Satyam Computers submitted a letter to the board of directors.

🔸 In the letter, he openly confessed of committing a fraud of ₹7,000 crore over a period of 5 yrs.

Here's the letter 👇

{1/4} 🔸 Satyam Computers was a company listed on Indian as well as US stock exchanges (ADRs).

🔸 When the news of the letter broke out, it sent out shock waves throughout the stock markets.

🔸 Satyam stock fell 80% that day from ₹185 to ₹35.

🔸 Next day, stock fell to ₹6.

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📕 WHAT EXACTLY IS P/E RATIO

🔸 Let’s try to avoid textbook definitions and formulae and instead understand the core concept of P/E ratio in simple words.

🔸 Assume that you and your best friend decide to start a new business venture.

(1/n) 🔸 Each one of you contributes ₹50,000 towards the business as starting capital.

🔸 In return each of you get 5,000 shares of ₹10 each.

🔸 Now here’s the capital structure:
- Total capital: ₹1,00,000
- No. of shares: ₹10,000
- No. of shareholders: 2 (50% each)

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🌟 OPPORTUNITY & DECISION

This is a real world story of a friend.

In 2003, the friend's father was looking out for a job and interviewed in Eicher Motors.

Friend was studying in 4th grade. A typical middle class family from Mumbai.

Father got selected for the job.

(1/10) The job was for a senior position.

Eicher Motors offered him a salary of ₹21,000 per month with additional stock option bonus of 5000 stocks of Eicher Motors credited over next 3 years.

At the same time, the father had applied at HPCL.

He got selected there as well.

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⚠️ VODAFONE IDEA

For the past few days we’ve been doing a lot of research on the telecom companies.

1️⃣ Reliance Jio

2️⃣ Bharti Airtel

3️⃣ Vodafone Idea

Lot’s of not so good points about Vodafone Idea.

Retail investors usually don’t like to hear critical views.

Share or not? Alright, so it looks like a lot of us are willing to learn more about Idea.

So here’s what we’ll do;

Instead of just sharing the data one-way, we’ll make it an interactive session dedicated to #VodafoneIdea

This way we all can do our own research and collectively learn from it

#VEDANTA DE-LISTING:

SHAREHOLDING:

🔶 PROMOTERS: 50.14%

🔷 PUBLIC: 49.48%

- Mutual Funds: 11%

- Foreign Investors: 15%

- LIC: 6.5%

- Retail Investors: 7.5%

- Others: 10%

✅ 34% is held by institutional investors.

✅ Institutions will resist de-listing price.

(1/n) 👇 #VEDANTA DE-LISTING:

PROCESS:

🔶 Company makes a public announcement of proposal of de-listing (done).

🔶 Company seeks the following approvals:

- Approval from board of directors (via board meeting)

- Approval from shareholders (via special resolution)

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📕 HOW MARKET DEPTH WORKS:

🔸 A lot of traders (especially intraday) look at a stock’s market depth table to determine the upcoming moves and accordingly take their buy / sell decisions.

🔸 Here's how market depth data can sometimes be misleading and lead to losses.

(1/6) 👇 🔸Here's how most traders read the market depth:

✅ If there are higher number of buyers (bids) means the stock is in demand and will go up.

✅ If there are higher number of sellers (offers) means the stock is in supply and will go down.

But that is not how it works.

(2/6) 👇

#PAYTM COMPANY ANALYSIS:

🔶 COMPANY:

- One97 Communications Ltd.
- Regd: 2000, New Delhi

🔶 INCOME STATEMENT:

- Revenue: ₹3,391 Crore
- Expenses: ₹7,255 Crore
- Net Loss: ₹3,960 Crore

🔶 CAPITAL STRUCTURE:

- Paid-up Capital: ₹6 Crore
- Auth Capital: ₹104 Crore

(1/n) #PAYTM COMPANY ANALYSIS:

🔶 KEY PERSON:

- Name: Mr. Vijay Shekhar Sharma

- Designation: Founder, MD & Chairman)

- Remuneration: ₹ 3 Crore

- Other Benefits: 2 cars, drivers, home, meal, fuel, insurance, medical, utility bills, PF, gratuity, etc.

- Shareholding: 16%

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📕 HOW ROTOMAC SCAM WAS DONE

🔸Company: Rotomac Global Pvt. Ltd. (RGPL)

🔸Promoters:
- Vikram Kothari
- Sadhana Kothari (wife)
- Rahul Kothari (son)

🔸Size of Scam: ₹3,695 crore

🔸Type of Scam: Bank Loans (unpaid)

🔸Period of Scam: 2008-2014

(1/2) Before we understand the scam, we need to first understand an important concept that was used to execute the scam - Interest Rate Differential (IRD)

🔸What is IRD?
IRD is simply the difference between interest rates between two securities.
Eg: Loans, currencies, etc.

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📕 WHY MOST INVESTORS FAIL?

🔸Most retail investors are introduced to the stock markets via news channels, stock websites or by friends.

🔸They start investing their hard earned money without understanding how the #StockMarket works.

(1/7) 👇 🔸Analyzing a company is out of question. They don't even know how to read a company's financial statements like balance sheet, etc.

🔸What next? They start hunting for stock tips given by market experts.

🔸Finally, they make their first investment based on a tip.

(2/7) 👇

📕 HOW & WHY COMPANIES FAIL

The biggest challenge a company faces is developing its ability to adapt to changing business environments.

Any company, however big or stable, is not immune to a downfall if it fails to adapt quickly

Let’s consider JET AIRWAYS.

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#StockMarket Jet Airways started in 1993 and quickly became the top private airline in India.

Their USP: Excellent in-flight service.

They enjoyed the loyalty of the rich class, bollywood celebs, corporates, commoners, etc.

They enjoyed peak market share for more than a decade.

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🧠 TRADING PSYCHOLOGY:

1️⃣ When your trade goes wrong, you’ll find it extremely difficult to exit the trade and book a loss.

2️⃣ Your mind will trick you into thinking that the trade might work based on some random information.

3️⃣ This “waiting” will work 9/10 times.

(1/4) 4️⃣ Every time it works, your mind will reward you with a rush of dopamine (feel good sensation).

5️⃣ It will reinforce your thought process of “waiting till it works”.

6️⃣ Finally, the 10th time when it doesn’t work, you end up waiting till the trade blows your account.

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📕 A Quick Story:
Ipca Labs and the rise of its stock price by +40% in the last 2 months.

🔸 For the last 5 years, US FDA had imposed a complete ban on import of any drugs from #IpcaLabs

🔸 The reason cited by #USFDA was manufacturing lapses at Ipca's factories

(1/5) 🔸 As the coronavirus pandemic broke across the world, a drug called #Hydrochloroquine (HCQ) was found to be effective against the virus.

🔸 India's pharma companies have always been producers of cheap generic drugs.

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📕 A Quick Guide on OPEN INTEREST (OI)

1⃣ What is OI?
OI is simply the number of outstanding contracts (open positions) for a given stock

For eg: A stock having OI of 1 lakh means there are 1 lakh open positions (long & short)

* OI data is available only for F&O segment

(1/7) 2⃣ How is OI calculated?

As the name suggests OI represents the "interest" of traders in a given stock

For eg: If trader A has 10 long positions and trader B has 7 short positions then the total OI will be 17

That means buying interest is more than selling interest

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