Jiten Garg

Can you compare debt and equity on issuance, performance, acceptability, etc.? I read a comment recently stating that debt issuances are more than equity issuances. While the statement is correct, it is important to note that debt gets reissued from time to time where as equity is a going concern instrument. Making such comparisons to paint a picture for debt is outright naive. Likewise, debt or fixed income investment in a portfolio (amongst others) is to reduce volatility. The comparison is not unidirectional on IRR. Finally, several western portfolio concepts taught in textbooks (example 60/40) do not come with application in countries where the dynamics of inflation, rf, decadal equity returns, savings rate, access are different. For a generalisation basis, I haven’t even factored individual preferences/objectives. Application/selection of portfolio investments is a personal choice assuming the beacon of financial understanding. #equity #fixedIncome #issuance #performance #acceptability

١٠

٣ تعليق

The scourge of upfronting and its aftermath😈 If I have to pick one regulatory action which had the maximum impact on the wealth management industry, it would be the banning of the practice of upfronting. What was this practice all about? Say a wealth firm agreed to sell a certain fund which in turn agreed to pay 1.5% commission every year. Now instead of getting this income on a yearly basis, the fund would pay say 4.5% upfront. On day one. The only condition was that the investor had to remain invested. So if the firm sold 1000 crores of the fund, it netted a revenue of 45 crores in the year, as against 15 cr each year, over 3 years. 🎭 A simple business deal between wealth firm & the fund. Instead of making 1.5% every year, the wealth firm made it upfront. So what could be anybody’s problem? Two problems: First has to do with the accounting principle of revenue recognition. But that’s for the auditors to figure. Second, is what should be our concern: > When so much revenue rides on such funds, there is all round focus to sell the living daylight’s out of them. These are like god-sent opportunities for your RMs. 🤑With much less effort, they could now cover a large part of their target. Product peddling acquired a far more aggressive, almost toxic avtaar, client interest getting royally compromised along the way.😠 > This led to a vicious cycle of perverse behaviour, year after year, to the extent that upfront revenue was contributing as high as 60-70% of the wealth firms top line. Thankfully the market regulator realised what was going on and put an end to it in Feb’2023. But this meant a sudden hole in the wealth firms balance sheet🕳️. Say a firm made 500 crores of revenue in FY 2022-23, of which 200 cr was upfront. Next year, the firm found itself in a hole as they couldn no longer negotiate upfront income on other products. So what next? 🙇 Re-base revenue from 300 cr, you made hay while the sun shone, now start afresh. OR Look for ways to fill the hole. My guess is that many have continued to look for ways to plug the hole. And that’s what you need to be aware of. Since the past year, a lot of low grade secondary debt papers are being shown around. The wealth firm has no restriction on the commission they can charge (back to upfront) on such deals. 😎 Typically fintech’s raising money at very high yields. I have also seen highly complex structured debt deals. While you might want the yield, do you have the ability to understand & monitor the risks. Or does your invetsment plan even require such investments? Should you be buying one-off papers, or should you follow the principle of diversification & therefore buy into funds, managed by professionals, which invest in a basket of such papers? May I also suggest something else - do ask your wealth manager how his/her firm is navigating this issue. How are they plugging the hole🕳️? I think it will make for a very interesting and insightful conversation 😉

١٨

١ تعليق واحد

📈 Elcid Investments Becomes India's Highest Traded Script: Surpassing MRF by a Significant Margin! 💼 MRF’s Historical Market Dominance vs. Elcid’s Surge For years, MRF has been synonymous with high-value stock, with its current share price standing at ₹1.2 lakh per share. As one of India’s most prestigious companies, MRF’s stock has long been seen as a symbol of premium valuation and market dominance. However, Elcid Investments has recently surged ahead, with a current share price of ₹2.25 lakh, making it the most valuable stock in the Indian market. This sharp rise in Elcid’s price showcases the immense potential of holding companies that traditionally go unnoticed but hold substantial underlying value in their assets. 📊 The Role of SEBI/BSE Auction in Price Discovery A key driver behind Elcid’s rise is the SEBI/BSE auction, which was instrumental in revealing the latent value of holding companies like Elcid. The auction served as a price discovery mechanism, where investors bid for shares, and the true market value of Elcid emerged. Price discovery is a fundamental concept in financial markets, referring to the process of determining the appropriate market price of a security through the interaction of supply and demand. The auction allowed the market to reprice Elcid’s stock, leading to record-high trading values. At one point, the highest traded value for Elcid reached a staggering ₹4.58 lakh per share before the price stabilized at ₹2.25 lakh. 💵 Price Discovery Settled at ₹2.25 lakh While the highest trading point was ₹4.58 lakh, the final price discovery settled at ₹2.25 lakh. This is a testament to the efficiency of market auctions, where arbitrage opportunities and information asymmetry diminish as more participants contribute to the price-setting process. The auction offered a platform for investors to assess Elcid’s value based on its holdings, net asset value, and future prospects. 📉 Book Value Per Share – A Glimpse into Elcid’s Intrinsic Worth According to Screener, Elcid’s book value per share stands at an impressive ₹5.84 lakh. This figure is crucial for understanding the company’s intrinsic value. In finance, the book value is often compared to the market value to determine if a stock is under- or overvalued. 💡 Why Holding Companies Can Be Hidden Gems Elcid’s surge brings attention to a broader investment strategy focusing on holding companies. These companies typically hold shares of other businesses, and their value is derived from the performance of their investments. Holding companies are often undervalued in the market due to their complex structure and lack of active promotion. However, they can offer high intrinsic value and represent an investment moat, where their diversified holdings provide a buffer against market volatility. #StockMarket #ElcidInvestments #MRF #SEBI #BSE #PriceDiscovery #IntrinsicValue #Investment #HoldingCompanies #Finance #MarketInsights #ValueInvesting

٨

Today's Headlines from : *Economic Times* 📝 Work begins on credit index for MSMEs to boost funding 📝 NPA provisioning for banks moderates in Q2 driven by PSBs 📝 SME IPO: Sebi mulls doubling application size up to Rs 4 lakh, floats consultation paper 📝 Satvik Green Energy files draft papers to raise Rs 1,150 crore via IPO 📝 UPI payment failures due to technical issues fall below 1% 📝 India to contribute 20 pc of global workforce growth between 2023-2050, China share to decline: Report 📝 Havells India to invest Rs 480 cr on new refrigerator manufacturing plant in Rajasthan 📝 PeLocal secures $2 million funding led by Unicorn India Ventures 📝 Rajeev Misra’s OneIM upsizes to $8 billion to boost investments 📝 Deeptech startup Theranautilus raises $1.2 million in round led by Pi Ventures 📝 Food-delivery startup Swish raises $2 million in maiden round led by VC firm Accel *Business Standard* 📝 IHCL plans to double its consolidated revenue, portfolio of hotels by 2030 📝 74% companies want govt to enable real-time audit reporting, says Deloitte 📝 Birla Opus adds fresh coat to raise capacity; commences ops of 4th plant 📝 Adani Infra to pick 30% stake in PSP Projects, make an open offer 📝 Mavco and Avenue Capital Group acquire Hubergroup for global growth 📝 Godrej Industries raises Rs 1,000 crore through NCDs in two tranches 📝 Reliance-backed Addverb to launch next-gen humanoid robots in 2025 📝 RMZ, Colt DCS to invest $1.7 billion in Indian data centre market 📝 India, UK to relaunch FTA talks in 2025, 'address remaining issues' 📝 Rupee depreciates to new low of 84.42 per dollar amid geopolitical tensions 📝 Smartphone PLI scheme rings in record electronics exports, shows data 📝 Subsidy for cargo electric 3-wheelers restored, cap halved to Rs 25k *Financial Express* 📝 NTPC Green to scale up RE capacity to 19 GW by FY27 📝 Yubi Group sets 40-50 per cent growth target in next 3 years 📝 HSBC cuts Sensex 2025 target by 10 per cent 📝 India’s healthcare infrastructure gets a post-pandemic boost: Report 📝 RMZ, Colt DCS to invest $1.7 billion in Indian data centre market 📝 Bharti Global completes acquisition of 24.5% stake in UK’s BT Group *Mint* 📝 Suditi Industries acquires kidswear brand Gini & Jony 📝 UN chief urges aligning climate action with limiting global warming to 1.5°C 📝 Aegis Vopak Terminals files draft papers with SEBI for ₹3,500 crore IPO 📝 Tata Power, Druk Green Power to develop 5,000 MW green energy projects in Bhutan 📝 NBCC aims to double revenue to ₹25,000 crore by expanding real estate ventures 📝 CCPA moves to standardize diamond labelling to protect consumers 📝 NABH and RSSDI collaborate to improve quality of diabetes care in India 📝 Meta to appeal against CCI penalty order

٢

Direct public floats of Debt papers like NCDs have become rare. Companies are raising money by issuing NCDs on private placement, sometimes at crazy rates. There is an urgent need of Direct public float of NCDs with face value of Rs. 1000 or 10000 by large corporates. This will not only help reduce the cost of funding, but will also deepen the retail debt market. Most of the merchant bankers are also associated with outfits, who manage funds. They are interested in private placements for parking of Funds under management in an easy way bypassing the interest of the public and issuer itself.

٣

١ تعليق واحد

𝗧𝘂𝗿𝗻𝗶𝗻𝗴 𝗬𝗼𝘂𝗿 𝗦𝗜𝗣 𝗜𝗻𝘁𝗼 𝗮 𝟭𝟮% 𝗣𝗔 𝗙𝗗 𝗘𝘃𝗲𝗻 𝗗𝘂𝗿𝗶𝗻𝗴 𝗮 𝗡𝗜𝗙𝗧𝗬-𝟱𝟬 𝗖𝗿𝗮𝘀𝗵 | 𝗣𝗮𝗿𝘁 𝟮 - 𝗠𝗮𝗿𝗸𝗲𝘁 𝗧𝗶𝗺𝗶𝗻𝗴 𝗨𝘀𝗶𝗻𝗴 𝗣𝗘 𝗥𝗮𝘁𝗶𝗼 In Part 1 of this series, I examined some of the fatal flaws of a conventional SIP-based investment approach, which can have grave implications, especially if you have a financial goal that is due in let’s say, 5 years from now, and you are trying to achieve this financial goal through an SIP investment. And that is because, going by the historical performance of a 5-year SIP in the NIFTY, you would almost certainly fall short of the amount you were targeting to achieve at the end of your SIP, if your SIP comes to an end at a time when equity markets are going through a downturn. But fret NOT, because there is a way to address this! In Part 2 of this series, I explore a unique strategy to time the markets such that you can accrue returns as high as 39% per annum when equity markets are rallying strongly, and yet, achieve returns comparable to bank fixed deposits even in the middle of a market crash. So please do watch this video to understand this unique strategy that can help us achieve the best of both worlds – high returns when markets deliver, and phenomenally high downside protection even when market do NOT! https://lnkd.in/d6z5Ts7r #SIPinvestment #PERATIO #nifty50intraday #investmentstrategies #stockmarketnews #niftyfifty #indianstockmarket #nse #StockMarketInsights #stockmarketindia #stockmarkettrading #sip #stockmarkettimes #stockmarketinvesting #stockmarketupdate #stockmarketeducation #stockmarketeducationindia #niftytrading #niftyanalysis #stockmarkettips #SipAndSavor #SystematicInvestmentPlan #investmentstrategies #investors #investmentopportunity #stockstowatch #METACAPS #indraanilguha

٤

٤ تعليق

Do not indulge in these .. … unless you have a dedicated in-house team which can do the due diligence and / or you have large enough sums to build a diversified portfolio. I am referring to a deluge of secondary high yielding debt papers (referred to as private credit since these transactions are done outside of the formal banking system) being shown around in the private banking / wealth management industry. These are usually highly structured transactions. If you really wish to allocate money to these, you might as well invest in a private credit fund. Incidentally, since I am in touch with several single Family Offices, they too prefer to invest through a fund route so that there is a team of professionals, who have a track record, who can monitor the borrowing entity, ensure the security is strong, and can diversify across several transactions. The private credit industry has grown leaps and bounds since the global financial crisis. As central banks and regulators have restricted access to bank funding, private credit funds have stepped in. They raise money from family offices, HNis and then lend to borrowers who otherwise won’t get bank funding. Given the nature of these transactions, it’s best professionals manage this. Brokers or your friendly relationship managers are simply intermediating. They won’t know beyond the ABC of these transactions.

٤٧

Clay Capital is the preferred Investment Banking partner and Portfolio Consultant of VC-Funds for a reason... 1. VC Portfolio | Exits and Secondaries : Clay Capital has a large spectrum of placing Unlisted Securities, among Institutions and HNI's with partnerships in INDIA | UAE | USA 2. VC Portfolio | Follow-on Debtraise : Clay Capital's Platform TheFundingKart - is India's Widest Debt Marketplace for Mature Startups 3. VC Funds | LP Sourcing : Clay Capital enables LP Sourcing for VC funds with an operational legacy. The VC Portfolio-Consulting practise that started early 2024 boasts of 20+VC's partnerships at Clay Capital; towards building next-gen Deal Discovery tech… #venturecapital #startupfunding #equityfunding #debtfinancing, TiE Hyderabad, TiE Bangalore, Brand Capital, India Venture Catalysts++ | India's 1st Multi-Stage VC, Mumbai Angels, Indian Venture and Alternate Capital Association (IVCA), IAN Group (formerly Indian Angel Network) We Founder Circle, YourStory Media, Inc42 Media, Entrackr, 100X.VC, Blume Ventures, Elev8 Venture Partners, WEH Ventures, Ideaspring Capital, Brand Capital, India, Wadhwani Foundation, Lok Capital, DSG Consumer Partners StartupNews.fyi, #investmentbanking #fundraising, SaaStr, The Economic Times, Titan Capital, Ivy Capital Partners, Alteria Capital, Stride Ventures , InnoVen Capital India #venturecapital, Tracxn, VCCircle, LetsVenture, T-Hub, Qapita, Upekkha, GSF, SaaSBoomi,#seriesA #seriesB #seriesC #bangalorestartups SaaS Insider, D2C Insider

٣٤

١ تعليق واحد

Passive at Market Highs!! Markets are scaling new Highs everyday. In such a period, any lumpsum investment isn’t good. You might get at the wrong side of the curve. It’s advisable to do Systematic Transfer Plan (STP) Further let’s look at the classic debate of Active vs Passive during such Elevated levels of Market. Advantages of Active over Passive: * They can pick & choose the stocks on the basis of different filters. Active can hold stocks with reasonable valuation. They are not bound to hold any stock just because they are part of an Index. This is not possible in Passive. * Lot of times Market goes through a time correction. This is actually much painful than price correction. Example: As of Friday closing Nifty closed at 22,419. Let’s look at some scenarios 1) Market remains volatile & stays in the close range. Market doesn’t fall much nor rise much. 2) Market falls drastically, due to any reason which is not foreseeable now. 3) Market scales much higher to 25K levels. As an Investor most of us are okay to deal with situations 2 & 3. Yes in situation 2 market drops but we could deal with it by buying dips & so on. Situation 1 is the most difficult to deal with. This is a situation which could extend to “Years”. This is when Index investing gets severely handicapped. They can’t do much as they are tied to index & their performance just mirrros the index. * Active Funds can do a churn in line with Time correction as well. There are always pockets of sectors or stocks that do well in ANY market. This is why Flexi cap funds are the Talk of the town as they can invest in any Market cap stocks (Large/Mid/Small) This is a time to stick to Actively Managed stocks. If you have a committed investment in any ETF or Index fund, just continue to hold them. These factors of market volatilities shall get evened out for a longer period. It is not advisable to make an ENTRY into Passive Funds now. Markets have been constantly delivering returns. The returns can never be so linear & consistent. So brace yourselves for a time correction if not a price correction. Choose STP route to spread any new investments. Try to allocate to Active Funds at this juncture. Follow me for insights on Personal Finance & Wealth Management Disc: views own, discretion advised. #personalfinance #wealthmanagement #certifiedfinancialplanner

١٢

٦ تعليق

Application of the Actively Lazy Style Of Investing September’24 turned out to be yet another good month for us at Magadh Capital PMS. Our Future Stars approach delivered impressive returns of 3.54%/69.54%/57.23% annualized over last 1 month/1 year/ 2 years. Value for Growth approach too notched up solid figures of 2.98%/45.36%/41.43% annualized( More details in the charts below). The month of October till date has been relatively choppy for Indian markets. As on 8th October, 2024 the Nifty 50 index has fallen by about 4.6% from the top. Factors like global geopolitics ( escalation in Israel-Iran faceoff, and rising crude oil prices), unleashing of macroeconomic stimulus by the Chinese government, and heavy selling by foreign investors in India seem to be playing the key roles here. We at Magadh Capital PMS remain fully invested. The current market weakness seems short term in nature. Indian stocks are well placed to create long term wealth. Occasional decline of 8-10% in stock markets is par for the course we feel. Interestingly, in last 5-7 years Indian stock markets have behaved rather ebulliently – displaying uncharacteristically low number of correction along the way. As a result the large number of new market participants – who have started investing in last 5-7 years, and have not experienced a proper bear market ( of the kind seen in 2008 or in 2000-2002), get rattled by even a 5% correction. We reckon that the current episode of market weakness is a typical short term dip and is unlikely to turn into a deep and prolonged bear market. At Magadh Capital PMS we apply what we call as the“ Actively Lazy style of investing” . This style is rooted in our ability to remain idle backed by an active thought process. At Magadh Capital PMS, we believe that laziness and indecisiveness are key to successful investing. Our "Actively Lazy" style emphasizes thinking deeply without feeling the need to act immediately.For example, we focus on understanding big-picture trends like interest rate changes and global conflicts, but avoid rushing into decisions basis these. In the market correction witnessed in October so far, we have not felt the need to act – to sell, or to buy. Intellectually though, we remain fairly active - testing our bottom up stock hypotheses, or trying to figure out what can go wrong for our stock calls. By taking our time and avoiding impulsive actions, we can reduce mistakes and protect our investments. We believe that quality over quantity of decisions is essential for long-term wealth growth. Instead of chasing quick wins, we focus on making sound decisions and minimizing losses. Our "Actively Lazy" approach allows us to ignore distractions and avoid emotional biases that can hinder investment performance. #magadhPMS #stockmarkets #wealthcreation #portfoliomanagement #nifty50 #indianequities #PMSPerformance #investing #behaviouralfinance #sensex

٣٥

٤ تعليق

In my view nothwithstanding increased volatility due to aggressive bets by both FIIs and DIIs , the extent of win by the incumbent government is immaterial . What really matters is utilization of excess funds received from RBI , monsoon progress over the next few months , no surprise in taxation, continuation of existing reforms along with geo political environment and its impact on commodity prices .

١٣

Indian retail options traders (along with some professional fund managers) don't get that playing the victim or crying foul about sophisticated participants won't improve their trading outcomes. The market rewards knowledge and skill, not emotions. Instead, focus on: 1. Getting educated: Success in options trading demands ongoing education. Free and paid resources abound online. No substitute for putting the hours in. 2. Develop a strategy: Impulse trades rarely succeed. Develop a well-defined trading plan that considers risk tolerance, time horizon and position sizing. 3. Respect the market: Understand risk, volatility, utilize stop-loss orders, and avoid chasing unrealistic returns. On the other side of all the complaining, many retail traders are making good returns in options. But they will always be secretive and not be active on social media. Think how big of an opportunity it is if American HFTs are entering and exploiting the Indian options market, instead of thinking that the big guys are out to eat your lunch.

١٥

The timing of your Systematic Investment Plan (SIP) is a common concern among investors: .-Research indicates that the SIP date does not have a significant impact on returns. .-Studies have shown that the returns from SIPs conducted on various dates throughout the month are nearly identical, with minimal differences. .-So, what is the best SIP date? The answer lies in selecting a date that aligns with your convenience. Factor in your salary credit date, bill payment schedules, and other financial obligations to ensure adequate funds in your account². .-Key Points to Remember: - _The SIP date has minimal impact on returns_ - _Choose a date that suits your financial routine_ - _Maintain sufficient funds for your investments_ - _Consider diversifying SIPs across different dates if necessary_ .-Success in SIP investing hinges on discipline, consistency, and a long-term approach. By adhering to these principles, you can navigate your investment journey effectively. #sip #investment #valueethics

٣

Trend Analysis!! With a lot of talks of Markets heating up, stress test, pre elections rally, let’s take a moment to do a bit of trend analysis in Mutual Fund schemes. EQUITY BASED FUNDS: This continues to be the favourite category of Retail investors. It’s not surprising though. This category has a whooping allocation of 85% plus. Within the Equity based funds, the top category is FLEXI CAP FUNDS With Assets under Management (AUM) of 3 lakhs plus crores this has a share of about 6% as a single category. The total AUM of MF all categories (Equities Debt & Others) is 50 lakhs plus crores. The stress tests on Small & Mid plus the lack of performance in Large Caps has made Flexi a Red Hot Category. Within this category, Parag Parikh (not a reco) continues to be undisputed leader. Parag has AUM of about 60K crores which is almost a whooping 20% of the entire Flexi Cap AUM. DEBT FUNDS NOT IN FAVOUR From a retail perspective, active Debt Funds are not in much of interest. Only 11% of the Contributions are to Active Debt fund categories. The reasons could be Indexation taken off - post April 01 2023 all debt fund schemes capital gains will be taxed at slab rates Huge rally in Equity markets- FOMO ruling the retail sentiment to deploy in Equities PASSIVE IS PASSIVE Despite all the hype about Passive strategies the penetration is still around 2% of Retail allocation. Passive has a long long way to go in our Markets. HYBRID IS NEW RISK OFF CATEGORY The aggressive hybrid funds, multi asset funds are the new Risk off categories for Asset allocation. Few top performing categories Arbitrage Funds - due to attractive taxation which is Equity based. On a 6% returns both on Debt funds & Arbitrage, Arbitrage stands out due to Equities based taxation. Multi Asset Funds - due to a splendid rally in Gold, these funds attract investments. They predominantly invest in Equities, Debt, Gold, Real Estate to spread risks. Balanced Advantage Funds Equity & Debt Funds Since “most” of these funds offer Equity based taxation, it’s considered in the Equity allocation from an overall perspective. Take a close look at your portfolio to understand how close are you to trends. Following trends is not essentially a Herd behaviour. We are participating in the Market Mela. Check how well your chosen funds perform within their category. Market highs are best times to exit underperforming funds. Make sure to switch them to high alpha funds within same category. The most important aspect is to understand your Risk Profile, Investment Horizon, Accurate Estimates of Financial Goals. Your Asset Allocation is a function of all these factors. Follow me for insights in Personal Finance & Wealth Management. Disc: views own, discretion advised. #personalfinance #wealthmanagement #certifiedfinancialplanner

١٥

٢ تعليق

In the fight between Liquidity and Valuations . Liquidity always wins in the shorter term more so if it has earnings growth by its side. From the time earnings growth decide to take a breather things start moving towards Valuations. Valuations do eventually catch up in the race of Wealth Creation.

١٤٧

٢ تعليق