Sir,
I can phrase my reply With reference to Banks and CG companies being cyclical. These both cycles are inter related to interest rates.
Banks experience high growth when Interest rates are low. Banks also are more liberal in giving loans when Interest Rates are low.
Consumers also can afford a lot more when their EMI is low. So the companies need to produce more as their capacity will be exhausted. So they order more CG to expand business.
Interest rates can not be low forever as Inflation raises and governments have mandate to protect the value of their currency. So they start raising interest rates and this cycle continues.
Here is the Other Comprehensive Income, see if you can correlate the two and get the numbers at least approximately correct. You can download the PI Industries AR FY22 to check and then explain.
I want to understand the accounting behind it WITH the numbers in question, not just in theory. My understanding is that all numbers in CFS should be traceable to BS or P&L.
Sir,
It seems you have misunderstood Cash Flow hedges to be same as Unrealised Foreign Currency Gain/ Losses.
Unrealised Foreign Currency Gain/ Losses arise due to Cash/ cash equivalents held in Balance sheet. This item is an Non cash item used only for reconciliation purpose.
Example the company had 10$ at end of year 1 when exchange rate was Rs. 75. So net reported cash on balance sheet is Rs 750. Assuming the figure at end of year 2 is also 10$ and exchange rate is now at Rs.100 reported cash on balance sheet is at Rs. 1000. In CFO thatâs why this gain is substracted and loss is added.
Cash Flow Hedges are simply Currency Futures bought by company. If company has underlying receivables, then classify gains/losses through OCI else do it through P&L.
sorry to go into theory as there is nothing to reconcile here. If you think its necessary you can reduce/increase cash on Balance sheet by that figure and balance it through equity.
Companies with low free float have high demand for their shares resulting in premium for their shares more than intrinsic value. Moreover it can be easily manipulated.as supply of shares is low.
Inherently all stocks are cyclical. If economy is going through bad phase earnings of most companies suffer. I am not aware of any such website.
The classification difference is based on free float Mcap and not full MCap as per my understanding. Moreover there is no standard definition on what is Small cap/ Largecap.
The operator is one who jacks up the price and then dumps. These operations are illegal and SEBI periodically cracks the whip. Do star investors get prosecuted? The answer is Yes, if the intention is just for above mentioned operation. The media does not hilight the penalties imposed or if they have settled with SEBI.
The last point about whether star investors who have many such micro cap stocks, earn from themâŚi would like to try answering itâŚ
As we all know, when shareholding crosses 1% of the total shares, then name of such investor becomes public as they have to notify exchanges. So whenever we see portfolio of any star investors, we need to.understand that we are only seeing those shares where this 1% shareholding threshold is crossed. They may have many large cap shareds where its below that limit. We get to see only tip of the iceberg.
Secondly whenever promoters want to jackup the share prices of microcap they may tell the star investors ro buy those shares, may be promoters themselves provides money to purchase it and also some fees to star investor for using his name. We cannot substantiate all this as there is no documentary proof.
Each stock is different, if the company is posting profits, then there will be demand, when there are no sales, no profits, there is no urgency to buy, no demand, so sudden movement in the price, and people who want to buy want to buy at a lower price, as the price may remain range bound until it goes up or down.
LIC did not post good numbers, so nothing is happening, and there will be unloading of shares in the future, to bring the promoterâs holding down. Dmart is in demand because it posts good sales and profits, although as price has reached higher levels, it came down, it could go up again slowly. So each case is different.
In case of LIC , its just the first ipo through which just 3.5% shareholding is made public by govt of india thats why float is less. But as per IRDA rule, within next 5 years this public shareholding has to be made minimum 25% so soon within next 5 years , may each year they will come out with FPO ( Further Public offer) so float will increase
As answers mentioned above LIC has major problems. I will try to list them as crisply as possible
For decades, government used LIC as a last resort to boost the market whenever government wants to sell its stake be it IDBI/UTI or whatever govt enterprise in problem. So LIC is kind of last fund provider of funds to government.
Please go through the comparison I wrote for Big 4 Life insurance companies and you can understand that LIC lags on all parameters. Size matters but growth and profitability are more important for market.
As @Mudit.Kushalvardhan said the supply of shares is going to come. Remember LIC is a very large company(as an aprrox. comparision itâs balance sheet is as large as Indiaâs Budget) with respect to Indian market. Considering above SEBI has allowed it exemption from 25% free float. But on some day all those shares are going to get in to market.
LIC shareholders were expecting a premium listing but it proved a dud. Market has limited capacity in absorbing shares. So when expectations are negative and no one is willing to buy naturally share price comes down.
May be I will correct my answer on free float. Free float is a multiplier for negative expectations it multiplies negatively and vice versa.
Low float is a double edged sword. A small demand will send the price through the roof whereas, if something worse happens, the price fall will be steep or one may not get a chance to exit due to circuit.
But i dont think LIC has low free float. Infact its free float is more than the the outstanding equity shares of many listed companies. It has a massive 632.5 cr shares outstanding and free float of 2.32% comes to around 15 cr shares. Thats almost 7 times the total outstanding shares of Abbott India (total oustanding and not abbottâs free float). Imagine this monster
On any given day almost 15 -20 lakh shares are traded on NSE alone which is more than almost 90% of the listed companies
Recently I was going through one Twitter thread on security of Demat account. There one option caught my attention which I was not aware earlier. âFreeze account for Debit/Creditâ, anyone knows how to do it in NSDL? I did a high level searching in NSDL portal but did not find something useful so I raised a query to NSDL for the same,but if anyone in this forum tried this option before please guide how to do it.
Sir,
If you want the promoters shareholding you can get in NSE so you can for those with more than 1%. You can get all FPI holding as on reporting date in Annual Return. Thatâs all we get to know of the shareholders. If they are holding less than 1% they are not visible. MCA has same data filings.
Sir,
I guess you are talking about voluntary debit freeze. It is done whenever you encounter any fraudulent transaction being done/ you are going abroad/ you donât want to sell for any reason. This will not stop corporate actions. Previously it used to be done by giving a form to Broker. I donât know whatâs the latest online procedure.
(Net block + Capital work in progress ) > 1.5 * (Net block preceding year + Capital work in progress preceding year ) AND
Sales last year > 25 AND
Debt to equity < 3 AND
Market Capitalization > 100
Hereâs the screener query that I use.
You may want to add more filters based on your preferences/understanding to filter out some noise.
(total oustanding and not abbottâs free float). Imagine this monster