Pocketful

Category: Investing

  • What is Nominal Yield?

    What is Nominal Yield?

    If you’ve ever explored the bond market, you’ve likely come across the term nominal yield. While it might sound technical at first, the concept is actually quite straightforward.

    In this blog, we’ll break down what nominal yield means, how to calculate it step by step, when it’s useful, etc. Whether you’re new to bonds or simply refreshing your knowledge, this guide will help you understand nominal yield with ease.

    Understand the Nominal Yield 

    The interest amount a bond pays you annually expressed as a percentage of its face value is known as the nominal yield, or coupon yield. It is calculated by dividing the annual coupon payment by the bond’s face value. Nominal yield does not take into account the bond’s market price, purchase price, or holding period.

    Some Points to Remember: 

    • The nominal yield remains constant regardless of the bond’s market price.
    • Buying the bond for more or less than its face value has nothing to do with your nominal yield.
    • Additionally, you should consider factors like the yield to maturity (YTM) and current yield if you want a better idea of your actual earnings.

    Nominal Yield Formula 

    Nominal Yield = (Annual Coupon Payment / Face Value of the bond) * 100

    where, 

    1. Annual coupon payment is the fixed interest amount the bond pays you every year. 
    2. Face Value is the original value of the bond 

    Step-by-Step Calculation 

    Suppose you have a bond that is worth ₹1,000 and every year it pays you ₹80 as interest or coupon payments, which is called the annual coupon.

    Step 1: Find out the annual coupon payment

    This is the interest amount the bond pays you every year. In this case, it’s ₹80.

    Step 2: Find out bond’s face value 

    The face value (also called par value) is the original value of the bond, i.e., the amount the issuer agrees to repay the bondholder at maturity. In most cases, bonds are issued with a face value of ₹1,000 (sometimes ₹100 for smaller bonds). In this example, it is ₹1,000.

    Step 3: Apply the Formula 

    So here:

    Nominal Yield = (80 /1000) × 100 = 8%

    Step 4: What does that mean?

    It means that your bond will pay you 8% of its face value of ₹1,000 each year. As long as you keep the bond, you will receive ₹80 every year.

    Uses of Nominal Yield 

    1. Immediate Bond Comparisons

    Are you having trouble choosing between several bonds? You can quickly figure out which one pays higher interest based on face value by looking at nominal yield.

    For instance, you already know that Bond B pays you more annually, without using a calculator if Bond A has a nominal yield of 7% and Bond B has 9%.

    2. A Simple Method to View Your Interest Income

    Simply put, nominal yield indicates how much money you will receive annually from the bond. It is helpful when all you want to know is, “How much will I earn?

    3. Effective, If the Bond Is Up to Par

    Nominal yield actually provides you with a fairly accurate picture of your return if the bond is selling for the same price as its face value.

    4. Ideal for New Investors

    Nominal yield is a simple way for beginners to understand bond returns. It shows the fixed annual interest as a percentage of the bond’s face value, without involving complex calculations or market price fluctuations.

    5. Useful for Financial Planning

    Nominal yield makes financial planning easier if you are looking for a steady income by estimating how much you will receive annually.

    Read Also: What are Bond Yields?

    Difference between Nominal Yield & Current Yield 

    FeatureNominal YieldCurrent Yield
    DefinitionThe bond’s fixed yearly interest based on face valueThe return you’re getting right now based on the market price of the bond
    Formula(Annual Coupon ÷ Face Value) × 100(Annual Coupon ÷ Market Price) × 100
    What’s it based on?The original value of the bond (face value)The actual market price of the bond
    Does it change?No, it stays the sameYes, it moves as the bond’s market price changes
    Good for beginners?Absolutely. very simple to understandYes, but you need to know the bond’s market price
    Consider Market Price?NoYes

    Limitations of Nominal Yield

    1. It overlooks the true cost you incurred

    Nominal yield doesn’t consider the bond’s purchase price; it only considers its initial (face) value. Therefore, the return on investment isn’t as high or low as it might appear if you purchase a bond for more or less than its face value.

    2. Ignores the Bond’s Remaining Time

    The nominal yield remains constant whether a bond matures in two years or twenty.

    3. Ignores the Wider Picture

    Nominal yield solely considers the annual interest you receive. It doesn’t account for things like;

    • Variations in the market value of the bond
    • If you decide to reinvest the interest
    • Any increase or decrease in capital
    • Or even inflation

    4. It is Not Very Helpful If the Bond Isn’t Real

    Particularly in the secondary market, most bonds are not traded at their exact face value. The nominal yield may provide a completely inaccurate picture of the true return if a bond is being sold at a premium or discount.

    5. It is Not the Best Option for Long-Term Planning

    It is not the most reliable figure if you plan on investing long-term because it leaves out a lot of information, such as future interest rate changes or how long you will hold the bond.

    Read Also: What is Coupon Bond?

    Conclusion 

    If you want to quickly gauge how much interest a bond pays annually, nominal yield is good. It is simple, easy to understand, and ideal for situations in which a bond is trading at face value.

    But remember, it just gives you an overview. The expected total return, the number of years you will hold the bond, and the actual price you paid are not considered. For a more complete picture, you should also consider other metrics like yield to maturity (YTM) and current yield.

    The bottom line? Nominal yield is a useful starting point, but it should not be the only factor in your decision-making. Think of it as the starting point for smarter, more informed bond investing.

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    Frequently Asked Questions(FAQs)

    1. Is the nominal yield just another word for the interest rate?

      Yes! The coupon rate is also known as the rate the bond promises to pay each year.

    2. Is it possible for nominal yield to change over time?

      No! Even if the market price goes up or down, it stays the same for the life of the bond.

    3. What sets apart current yield from nominal yield?

      Current yield is based on the bond’s current market price, which is generally more accurate than nominal yield, and is based on the bond’s face value.

    4. Is nominal yield useful if I did not pay full price for the bond?

      Not really. If you bought the bond for less or more than its face value, the nominal yield does not reflect how much money you actually made.

    5. Do zero-coupon bonds have a yield?

      No! They do not have a nominal yield because they don’t pay interest every year.

  • Historical Trend of Gold Rate – Gold Price History in India

    Historical Trend of Gold Rate – Gold Price History in India

    Gold has always held a significant place in Indian households, whether for weddings or investments. Over time, its prices have risen sharply due to factors like geopolitical events, economic changes, and growing demand. 

    In this blog, we will explore the historical trend of gold prices in India, along with the key factors affecting its prices and why the prices of gold have risen exponentially in the last few years.

    Evolution of Gold Prices in India

    The changes in gold prices in India reflect global events, economic policies, and evolving demand. Let’s explore how prices have moved from the 1960s to the present day.

    The Early Days (1960s-1970s)

    • In 1960, the price of gold was around ₹60-₹100 per 10 grams.
    • Unlike today, people generally didn’t own gold, and imports were restricted.
    • Around 1970, the gold prices saw a sharp jump because of rising global oil crises, inflation, and instability in global economic conditions.

    Liberalization Phase (1990s)

    • During the liberalization phase, restrictions on gold imports were lifted.
    • This increases the demand for gold. Hence, pushing the prices above 4000 INR per gram.

    Golden Era (2000-2010)

    • From 2000 to 2010, this period can be called the Golden Period of Gold.
    • The major financial crises, like the dot-com crash and the global financial crisis of 2008, increased the price of gold to around 18000 INR by the end of 2010.

    Covid Period (2019-2021)

    • In the year 2020, the COVID-19 pandemic hit the world and made gold a haven for investors. 
    • Due to COVID, the prices of gold touched around 50,000 INR per 10 grams.

    Current Scenario (2021-2025)

    • Since early 2021, gold has been volatile, fluctuating between ₹48,000 and ₹65,000 per 10 grams.
    • Various global events took place during this period, including the Russia-Ukraine war, rising interest rates, the Israel-Iran conflict, etc. 

    Historical Gold Rates in India

    The table below shows the historical gold rates in the country since 1964:

    YearPrice (₹ per 10g of 24K)
    196463.25
    196571.75
    196683.75
    1967102.50
    1968162.00
    1969176.00
    1970184.00
    1971193.00
    1972202.00
    1973278.50
    1974506.00
    1975540.00
    1976432.00
    1977486.00
    1978685.00
    1979937.00
    19801,330.00
    19811,670.00
    19821,645.00
    19831,800.00
    19841,970.00
    19852,130.00
    19862,140.00
    19872,570.00
    19883,130.00
    19893,140.00
    19903,200.00
    19913,466.00
    19924,334.00
    19934,140.00
    19944,598.00
    19954,680.00
    19965,160.00
    19974,725.00
    19984,045.00
    19994,234.00
    20004,400.00
    20014,300.00
    20024,990.00
    20035,600.00
    20045,850.00
    20057,000.00
    20068,490.00
    200710,800.00
    200812,500.00
    200914,500.00
    201018,500.00
    201126,400.00
    201231,050.00
    201329,600.00
    201428,006.50
    201526,343.50
    201628,623.50
    201729,667.50
    201831,438.00
    201935,220.00
    202048,651.00
    202148,720.00
    202252,670.00
    202365,330.00
    202477,913
    20251,01,660
    (Data as of 28 August, 2025)

    Factors Affecting Gold Rates in India

    The key factors affecting gold rates in India are as follows:

    1. Rising Interest Rate: With the rise in the interest rate, fixed-income securities became more attractive, and investors prefer to invest in fixed-income securities. Due to this, the demand for gold may drop, hence reducing the prices of gold.
    2. Demand: During the festive and wedding season, the demand for gold will increase, and because of limited supply, the price of gold will increase.
    3. Geopolitical Conditions: During geopolitical tensions, wars, trade disputes, or economic crises, gold is considered a safe haven, which increases demand and pushes up its price.
    4. Government Policies: Import duties implemented by the government on gold can directly affect the domestic gold prices. The higher the import duty, the higher the gold price.

    Why are Gold Prices Rising?

    The key factors why the prices of gold are rising are as follows:

    1. Global Tension: Geopolitical tension across the globe, such as the Israel-Iran conflict, the Russia-Ukraine War. The fear of economic slowdown led to an increase in gold prices.
    2. Weakening of Indian Currency: Over the past few months, the rupee has weakened against the dollar, and the import of gold has become more expensive.
    3. Central Bank Purchasing: The central banks of developing countries are purchasing gold in order to reduce their dependency on the US dollar, which increases the demand and price of gold.

    Conclusion

    On a concluding note, historically, gold has always found a way to shine. Indians have always considered gold not only as an investment option but also as a status symbol. In the short run, prices of gold might see some volatility; however, in the long run, the trend has been steadily upward. However, in the past year, because of geopolitical events, the prices of gold have increased exponentially. Therefore, it is advisable to consult your investment advisor before making any investment in gold.

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    5Top 10 Reasons to Invest in Gold

    Frequently Asked Questions (FAQs)

    1. What is the reason for the daily fluctuation in gold prices?

      Daily fluctuations in gold price are due to the following factors such as global economic conditions, movement in currency prices, geopolitical events, demand and supply of gold.

    2. Which is the purest form of gold?

      24K (carat) gold is considered the purest form of gold and is considered 99.99% pure, followed by 22K (carat) gold, which is generally 91% pure. The remaining 9% is a mixture of different other metals such as copper, silver, etc.

    3. Why are different countries’ central banks purchasing gold?

      The central banks of different countries purchase gold because they want to increase their gold reserves in order to reduce their dependence on the USD. 

    4. How to invest in digital gold?

      There are various modes through which one can invest in gold digitally; the options include Gold ETF, Gold Mutual Fund, SGBs, etc.

    5. How can Indian rupees affect the gold prices?

      When the Indian rupee weakens against the US dollar, imported gold becomes more expensive, driving up domestic gold prices even if global rates remain stable.


  • How AI and Machine Learning Are Changing Investment Strategies

    How AI and Machine Learning Are Changing Investment Strategies

    Making informed decisions based on available information has always been at the core of investing. Traditionally, investors relied on charts, financial statements, and intuition to guide their choices. However, with advancements in artificial intelligence (AI) and machine learning (ML), investors now have tools that can process massive volumes of data, uncover hidden patterns, and support faster, more precise decision-making.

    AI is no longer a distant concept. From robo-advisors that build personalized portfolios to algorithms capable of forecasting market trends in real time, these technologies are already transforming how both institutions and individual investors approach the market.

    In this blog, we will take a closer look at how AI and ML are reshaping investment strategies and examine whether these technologies have the potential to outperform human judgment.

    AI & Machine Learning in Finance – An Overview 

    In finance, artificial intelligence (AI) refers to computers that have the ability to “think” just like people. AI is faster than humans at analyzing huge volumes of financial data, and identifying patterns that humans might overlook.

    Machine learning (ML) is a key subset of AI. It is the mechanism through which these systems learn and improve. By evaluating historical data, machine learning (ML) teaches computers to get more accurate on their own without needing to stick to strict guidelines. Their ability to make predictions and provide useful insight improves with the amount of data they see.

    Example 

    • Robo-advisors that make investment portfolio recommendations according to your objectives.
    • Smart algorithms that try to predict changes in stock prices.
    • Systems that identify fraudulent activity on your account.

    Read Also: How AI and Machine Learning Are Transforming Trading Strategies?

    How AI Changes Investment Strategies 

    Investing has changed over time. The majority of strategies were based largely on human judgment, hours of research, and a little intuition. AI has emerged as a powerful assistant in the modern era, helping investors make quicker, wiser, and more sensible choices.

    This is how it is having an impact:

    1. Using Big Data for Better Understanding

    These days, markets are more than just numbers. AI is able to identify signals that humans might miss by filtering through content such as news headlines, social media buzz, and even satellite photos. It is comparable to having a super-analyst who is constantly alert.

    2. High-frequency trading

    Trades can be completed in a matter of seconds because of AI-driven algorithms that can identify patterns and respond immediately. Real-time, automated processes that once required whole teams of analysts are now possible.

    3. Tailored Portfolios

    AI is now able to create an investment plan that truly fits your objectives, risk tolerance, and time horizon by using robo-advisors. What is the best part? Without you having to do anything, it continuously adjusts and rebalances.

    4. Intelligent Risk Control

    Although markets can be unpredictable, artificial intelligence (AI) can help by identifying early indicators of volatility or unusual activity. This allows investors more time to respond and safeguard their capital.

    5. Removing Emotion from Investing

    As we all know, emotions can cause us to follow the herd, panic sell, or chase after short-term gains. AI is emotionless. Analyzing investor behavior keeps strategies grounded and logical.

    Identifying market trends before they become evident is one of the most intriguing ways that AI is transforming investing. AI is capable of looking into huge amounts of data, making connections, and pointing out potential directions rather than merely examining charts and historical performance.

    This is how it operates:

    1. Examining Past Information: AI examines years, even decades, of changes in interest rates, prices, and business performance. It can make predictions about how markets might act in similar scenarios by identifying trends.
    2. Evaluation of the Market’s Attitude: To determine investor sentiment, AI tools look at analyst reports, news headlines, and even posts on social media. AI is able to detect excessive optimism or fear before it manifests itself in stock prices.
    3. Identifying Unobserved Signals: Stock charts sometimes miss the most crucial signals. This “alternative data” is gathered by AI, which then uses it to make predictions.
    4. Adjustments in Real Time: Like markets, AI is subject to sudden shifts. AI can adapt in real time, responding immediately to fresh data, in contrast to traditional models that may update monthly or quarterly.

    Why Human Oversight Still Matters 

    Although AI is intelligent, it is not perfect. No machine is capable of accurately capturing the human, emotional, and unforeseen factors that drive markets. This explains why investing still largely depends on human expertise.

    We cannot yet give everything to the machines for the following reasons:

    1. AI Is Not Always Correct: Predictions will not be accurate if the incoming data isn’t. Humans can help by verifying, challenging, and adding common sense in this situation.
    2. Markets Are More Than Just Data: Numbers do matter. However, events like sudden political decisions, international conflicts, or even a change in public sentiment can influence markets in ways that artificial intelligence may not be able to comprehend. Investors with experience are able to see beyond what is apparent.
    3. Morality Is Important: AI follows patterns without considering accountability. Human oversight ensures decisions remain not only profitable but also ethical and compliant with regulations.
    4. Experience Is Worth It: Although AI is faster than humans at scanning data, it does not have an idea about human sense and life lessons from previous market ups and downs. It is difficult to replace the human standpoint.

    Read Also: How AI is Transforming Stock Market Predictions

    The Future of AI in Investments 

    Although AI has already begun to alter how we invest, the most captivating part is yet to come. The technology will become more involved into daily financial decisions as it becomes advanced and widely available.

    Here is a glance at what the future may hold,

    1. Portfolios that are genuinely personal: No more formulaic approaches. AI has the potential to build portfolios that feel customized, taking into account not only your objectives and income but also your spending patterns and risk tolerance.
    2. Constant Financial Planning: AI could instantly modify your investments in response to market movements, removing the need for a quarterly review. Consider it a dynamic plan that changes in real time to fit into the surroundings.
    3. Smart Ethical Investing: AI may be able to analyse vast datasets, such as labour practices or climate reports, to assist investors in businesses that align with their values and have positive social impacts.
    4. Consultants powered by AI: Giving financial advisors superpowers is the goal, not replacing them. Advisors can spend more time advising and establishing human connections with clients while AI handles the data processing.
    5. AI That Goes Beyond Analysis: Beyond just crunching numbers, generative AI may be able to write readable reports, run “what-if” scenarios, and even make simple strategy recommendations.

    Conclusion 

    While AI and machine learning cannot guarantee flawless results, they provide powerful tools that enhance the speed, depth, and intelligence of investment decisions. The key lies in finding the right balance, i.e. leveraging AI’s ability to process vast datasets while still relying on human judgment, experience, and strategic thinking.

    Looking ahead, the future of investing will likely be defined by collaboration between machine intelligence and human insight. For investors who are open to adapting, this synergy has the potential to unlock new opportunities and shape more resilient strategies.

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    6Best AI-Based Trading Strategies Explained

    Frequently Asked Questions (FAQs)

    1. Is it possible for AI to correctly predict the stock market?

      Nobody can do it perfectly. However, AI can identify patterns and trends more quickly than humans.

    2. What distinguishes machine learning from artificial intelligence in the financial industry?

      While machine learning (ML) is the process by which machines “learn” from data to get better over time, artificial intelligence (AI) is the general concept of machines acting logically.

    3. Is it safe to use robo-advisors?

      Yes, the majority are subject to strict regulations. However, it is a good idea to look into their fees and history.

    4. Will AI take the place of human financial advisors?

      Not completely. While AI manages the data, humans continue to contribute their expertise, knowledge, and compassion.

    5. How does AI lower the risk of investments?

      Investors can take less time by using it to identify early indicators of fraud, volatility, or unusual market activity.

  • Best Multibagger PSU Stocks in India for 2025

    Best Multibagger PSU Stocks in India for 2025

    Historically, PSU stocks, or shares of government-owned companies, were largely overlooked by investors due to slow growth, political interference, and modest returns. However, these stocks have made remarkable comebacks in recent times. Several multibagger PSU stocks even delivered returns exceeding 200%, restoring the confidence of long-term investors.

    In this article, we will highlight 10 such PSU stocks that have generated impressive profits and are expected to continue performing well in the coming years.

    What Makes a PSU Stock a Multibagger ?

    A PSU stock qualifies as a multibagger when its robust financial fundamentals, consistent profitability, and strategic market opportunities result in its stock price appreciating several times over the initial investment. Such growth is typically influenced by factors like strong earnings growth, government support, sectoral tailwinds, and operational efficiency. Lets look at these factors in detail.

    • Government reforms and policies : The government is now providing professional management to private-like PSUs. Disinvestment, delisting and better governance are increasing the growth and profitability of companies.
    • Sector support : There is huge government spending in sectors like defense, railways, energy and infrastructure. Stocks like HAL, BEL, IRFC are benefiting from this.
    • Strong balance sheet and high dividend : Most PSU companies are debt-free and give large dividends as returns – like Coal India or NTPC. This gives investors a double benefit in returns.
    • Growth hidden in valuations : Many PSU stocks are available at cheap valuations due to being ignored for a long time. As soon as the company shows improvement, investors’ confidence returns and the share price rises rapidly.
    • Long-term perspective : It takes time to become a multibagger. Investors who have been patient have earned multifold returns even in PSUs.

    10 Multibagger PSU Stocks Based on Market Capitalisation

    CompanyCurrent Market Price (in ₹)Market Capitalisation (in ₹ crore)52-Week High (in ₹)52-Week Low (in ₹)
    Hindustan Aeronautics Ltd (HAL)4,4092,94,8635,1663,046
    Bharat Electronics Ltd (BEL)3672,68,013436240
    Coal India Ltd3752,31,287542349
    Indian Railway Finance Corp (IRFC)1221,59,893183108
    Power Finance Corporation (PFC)3931,29,562566357
    Mazagon Dock Shipbuilders2,7101,09,3343,7781,918
    NHPC Ltd79.980,22010071
    BEML Ltd3,88416,1734,8752,346
    Engineers India Ltd (EIL)19510,949255142
    Shipping Corporation of India2129,882277138
    (Data as of 26th August, 2025)

    Read Also: Multibagger Penny Stocks

    Overview of the 10 Multibagger PSU Stocks in India 

    A brief overview of the Multibagger PSU Stocks in India is given below:

    1. Hindustan Aeronautics Ltd (HAL)

    Hindustan Aeronautics Ltd i.e. HAL is the name of India’s air power which has been the backbone of our fighter planes and helicopters for decades. This company not only manufactures modern fighter jets like Tejas, but also specializes in aircraft maintenance, upgrades and support systems. HAL’s network is spread across the country and it is also continuously promoting defense exports. Under ‘Make in India’, HAL has emphasized on indigenous aircrafts and technologies, which has strengthened both India’s strategic power and self-reliance.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -8.26287.18647.52
    (Data as of 26th August, 2025)

    2.  Bharat Electronics Ltd (BEL)

    Bharat Electronics Ltd i.e. BEL is a strong name in the country’s defense technology. This company manufactures radar systems, missile guidance, and communication devices for the army. The special thing is that BEL is no longer limited to just the defense sector – it is also working on civil projects such as smart city solutions, medical devices and election systems (such as EVM). The company is constantly researching new technologies and strengthening ‘Make in India’. Today BEL has become an important link in the direction of India’s technological self-reliance.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    19.54259.95883.1
    (Data as of 26th August, 2025)

    3. Coal India

    Coal India is not just a company, it is the backbone of the country’s energy needs. This is the same name that has been continuously supplying coal to thermal power plants and large industries in India for years. It has many units spread across the country which handle work from mining to transportation. Today, when the country talks about energy security, Coal India is at the forefront. The company has improved mining methods in the last few years, has also taken care of the environment and has made the work better by adopting technology.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -30.1763.4164.73
    (Data as of 26th August, 2025)

    4. Indian Railway Finance Corporation (IRFC)

    IRFC is the financial backbone of Indian Railways. This company works to raise and manage funds for railway projects. Whether it is the purchase of new trains, expansion of infrastructure or financing of mega projects IRFC is engaged in strengthening the railways silently. It comes under the Ministry of Railways and is a fully government-owned company. In 2025, when the modernization of railways is gaining momentum, the role of IRFC has become even more important as it is making this growth possible economically.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -32.45475.53392.15
    (Data as of 26th August, 2025)

    5. Power Finance Corporation (PFC)

    Power Finance Corporation is an important financing company for India’s power sector. This company provides long-term loans and financial assistance to power projects, increasing the capacity of power distribution and generation across the country. PFC is playing an active role in turning the government’s ’24×7 electricity’ mission into ground reality. The company’s network is spread across the country and it has access to large power developers. By 2025, PFC is also increasing investment in areas like green energy, renewable sources and grid upgrades.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -23.6307.23396.34
    (Data as of 26th August, 2025)

    6. Mazagon Dock Shipbuilders

    Mazagon Dock Shipbuilders is India’s leading government shipbuilding company, which builds warships and submarines especially for the Navy. Many state-of-the-art ships are built in this yard located in Mumbai, which increases the strength of the Indian Navy. Mazagon Dock is not limited to just construction, but is also fully capable of design, testing and maintenance. In recent years, the company has focused on indigenous technology and self-reliant defense projects. By 2025, Mazagon Dock has established itself as a strategic and futuristic PSU.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    25.731,430.983,030.64
    (Data as of 26th August, 2025)

    7.  NHPC Ltd

    NHPC i.e. National Hydroelectric Power Corporation is India’s largest hydro power company. This company is running large hydroelectric projects in the hilly and river-dominated areas of the country. NHPC’s work is not limited to power generation only, but it also focuses on sustainable use of water sources and environmental balance. In 2025, NHPC has emerged as a leading PSU in clean energy and environment-sensitive power generation, a strong partner towards making India energy self-reliant.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -16.87125.77260.72
    (Data as of 26th August, 2025)

    8. BEML Ltd

    BEML i.e. Bharat Earth Movers Limited, is a multi-sector PSU that manufactures heavy machinery for defense, mining and railway sectors. From tanks to railway coaches and metros BEML’s products are being used in every corner of the country. The company is headquartered in Bengaluru and focuses on indigenous manufacturing and technological self-reliance. In 2025, BEML has proven itself as a fast-growing PSU with new contracts and export orders in the defense and infrastructure sectors.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -0.84165.53595.42
    (Data as of 26th August, 2025)

    9. Engineers India Ltd (EIL)

    Engineers India Ltd is a government company that provides engineering, design and consultancy services for oil-gas and infrastructure projects. Be it a refinery or a petrochemical plant, a pipeline project or a city gas network — EIL’s expertise is visible everywhere. The company is taking up projects not only domestically but also internationally. By 2025, EIL has also started working on green energy and climate-sensitive projects, further strengthening its identity as a modern, responsible and technology-enabled PSU.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -8.92186.98178.57
    (Data as of 27th August, 2025)

    10. Shipping Corporation of India (SCI)

    Shipping Corporation of India i.e. SCI is India’s leading merchant navy company providing marine freight, tanker service and offshore support services. Its services are spread across the country as well as internationally. SCI is playing an important role in increasing India’s maritime trade capacity. In recent years, the company has upgraded its fleet and adopted digital technology. By 2025, SCI is taking itself in a new direction by moving from public to private transition and better management.

    Know the Returns: 

    1Y Return (%)3Y Return (%)5Y Return (%)
    -22.6583.42237.95
    (Data as of 27th August, 2025)

    Key Performance Indicators (KPIs)

    The key performance metrics of Multibagger PSU Stocks are mentioned below:

    CompanyOperating Margin (%)Net Profit Margin (%)ROE (%)ROCE (%)Debt to Equity
    Hindustan Aeronautics Ltd (HAL)34.9526.8623.9117.410.00
    Bharat Electronics Ltd (BEL)29.9022.2426.6433.720.00
    Coal India Ltd33.0524.3035.6724.240.09
    Indian Railway Finance Corp (IRFC)99.4223.9412.3449.987.83
    Power Finance Corporation (PFC)96.9928.6519.5265.868.25
    Mazagon Dock Shipbuilders26.8219.9230.3934.50.00
    NHPC Ltd54.6832.847.576.210.99
    BEML Ltd11.387.2710.1311.430.08
    Engineers India Ltd (EIL)20.4915.2821.7223.440.00
    Shipping Corporation of India17.9714.5010.1410.000.23
    (Data as of March, 2025)

    Read Also: List Of Best PSU Stocks in India

    Factors to be Considered Before Investing in PSU stocks

    The opportunity to invest in Multibagger PSU stocks is definitely big, but every opportunity also comes with some risk and requires prudence. Paying attention to the points given below is the mark of a smart investor:

    • Understand the role of the company and the situation of the sector : Every PSU works in a different sector – like energy, defense, infrastructure or finance. Before investing, it is important to understand what is the policy support of that sector and what is the growth potential in it in the coming years.
    • Do not take a decision just by looking at past returns : PSU stocks have performed well in recent years, but investing just by looking at old charts can be wrong. It is important that you see whether the company has a solid basis to move forward or not – like new order book, project pipeline and policy support.
    • Government involvement and disinvestment policy : PSU companies have a government stake, which can sometimes lead to political decisions rather than commercial ones. While the disinvestment policy has proved beneficial for many companies — it is important to be clear about its timing and impact.
    • Check valuations properly : PSU stocks may look cheap, but their valuations may also be down due to poor business outlook or fundamentals. Invest keeping in mind the PE ratio, book value and future earnings.
    • Policy and regulatory risks : Public companies are often affected quickly by policy changes — such as tax policies, licensing or environmental regulations. Therefore, it is important that you also evaluate the company’s business model from the perspective of these risks.
    • Understand the dividend and return structure : PSU stocks often pay high dividends, which is good for long-term income. But sometimes companies only pay dividend-based income and growth is low. Understand this balance of returns before investing.
    • Have a long-term perspective : Multibagger PSU stocks are not created overnight. They take time — sometimes up to 2–4 years. So if you are expecting quick returns, this strategy is not for you. Only patience and understanding can yield true profits.

    Read Also: Top 5 PSU Penny Stocks List in India

    Conclusion

    Investing in PSU stocks can be rewarding if approached with thorough research and a disciplined, long-term strategy. Public sector companies are becoming increasingly attractive due to strong order books, improved corporate governance, and government policy support. However, each stock should be evaluated carefully based on its sector performance, valuation metrics, and growth potential. For investors with a long-term perspective, PSU stocks have the potential to generate substantial returns. It is advised to consult a financial advisor before investing.

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    Frequently Asked Questions (FAQs)

    1. What are multibagger PSU stocks?

      These are the stocks of government companies that have the potential to give multifold returns over time.

    2. Are PSU stocks safe for beginners?

      Yes, but it is important to understand the company’s position and sector well before investing.

    3. How long should I hold a multibagger PSU stock?

      It is better to have a 3 to 5 year perspective in such stocks.

    4. Do PSU stocks give good dividends?

      Yes, most PSU companies pay regular and high dividends.

    5. What risks are involved in PSU stock investment?

      Risks may include policy changes, political interference and disinvestment.

  • Small-Cap ETFs to Invest in India

    Small-Cap ETFs to Invest in India

    Do you know that the biggest investment opportunities often hide in plain sight. We all hear about the big companies like Reliance or TCS, but a lot of rapid growth actually takes place in smaller, lesser-known companies that are just beginning to establish themselves. These are the small-cap companies, which have the potential to grow much faster than the giants.

    The challenge, however, is that finding these hidden gems can be tough. Not every small-cap company turns into a success story, and betting on just one can be risky. To manage this, investors often need exposure to multiple small-cap stocks in order to diversify and spread their risk. This is where Small-Cap ETFs (Exchange-Traded Funds) come in. An ETF acts like a smart basket of stocks, bundling together dozens of promising small companies in one place, making investing simpler and more efficient.

    In this blog, we’ll dive into why so many smart investors are looking to invest in Small-Cap ETFs in 2025 and walk you through some of the best options in the Indian market. 

    What is a Small-Cap Company?

    These are the listed companies that are ranked by SEBI based on their total value or market capitalization.

    • Large Cap : The top 100 biggest companies in the Indian financial markets based on market capitalization are known as large cap companies. These companies are generally stable with strong fundamentals.
    • Mid Cap : These are the next 150 companies ranked between 101 to 250. They are relatively well-established businesses that demonstrate steady growth and have significant potential for further expansion.
    • Small Cap : These include all companies ranked below 251 by market capitalization. They are typically smaller in size, carry higher risk, but also offer greater growth potential compared to large-cap and mid-cap companies. 

    These small-cap companies are often young, dynamic, and have massive room to grow. They could become the big names of tomorrow. But, just like small companies, they are also more sensitive to economic changes and can be very risky.   

    What is an ETF?

    An ETF (Exchange-Traded Fund) is an investment product that holds a collection of securities, such as stocks or bonds, and trades on the stock exchange just like a regular stock. Instead of investing in one company at a time, an ETF allows you to invest in a whole group of companies in a single purchase.

    Think of it like buying fruits: if you wanted apples, bananas, and oranges, you could buy each separately or simply pick up a pre-packed fruit basket that already has a mix of them. An ETF is that fruit basket, but filled with company shares instead of fruits.

    A Small-Cap ETF is a basket that contains shares of many small-cap companies. By investing in it, you get exposure to the growth potential of these smaller firms while spreading your risk across a wide range of them, rather than betting on just one.

    Read Also: Best ETFs in India to Invest

    Small-Cap ETFs for 2025

    Now that we know the basics, let’s look at three interesting small-cap ETFs available in India. Think of them as three different types of shopping baskets.

    1. HDFC NIFTY Smallcap 250 ETF 

    This ETF’s goal is to perfectly copy the performance of an index called the Nifty Smallcap 250. This index is a list of the largest 250 small-cap companies in India. The ETF buys shares of all 250 companies in the same proportion as the index. 

    • AUM (Assets Under Management) : Around ₹1,319 crore, this is the total money people have invested in this ETF. A large AUM is a good sign as it shows investor confidence and usually means the ETF is easy to buy and sell.   
    • Expense Ratio : This is the small annual fee you pay, 0.20% for HDFC. For every ₹10,000 you invest, you only pay ₹20 per year. This is very low and doesn’t reduce returns that much.   
    • Tracking Error : It is around 0.16%, this number tells you how well the ETF is copying its index. A lower number is better, and 0.16% is excellent. It means the fund manager is doing a great job.   
    • Liquidity : Very high liquidity, as  millions of units are traded every day, so you can buy or sell it easily without any issues.   

    2. Motilal Oswal Nifty Smallcap 250 ETF  

    This ETF also tracks the Nifty Smallcap 250 Index, aiming to deliver returns that closely correspond to the performance of the broader small-cap market. Its investment strategy is identical to HDFC’s, as it replicates the index by holding all constituent stocks in the same proportion.

    • AUM : Its assets under management is around ₹125 crore, this is smaller than HDFC’s, which is understood for a newer fund.   
    • Expense Ratio : This is a bit higher than HDFC’s, approx 0.31%. For a product that does the same thing, you are paying a little more in fees.   
    • Tracking Error : Around 0.22%. This is also very low and shows good management, but it’s slightly higher than HDFC’s number.   
    • Liquidity : It has good trading volumes, so buying and selling are generally not a problem.   

    3. Mirae Asset Nifty Smallcap 250 Momentum Quality 100 ETF  

    The Mirae ETF starts with the same 250 small-cap companies but then applies a filter. It picks the top 100 stocks that show momentum, which means companies whose share prices have been rising strongly recently and companies with strong fundamentals, like good profits and low debt. This is called a “smart-beta” or “factor-based” strategy. The idea is to own not just the whole market, but a smarter, potentially better-performing slice of it.   

    • AUM : It has an asset under management of around ₹658 crore. This shows that many investors are interested in investing in an ETF with a smart investment strategy.   
    • Expense Ratio : This is double as compared to HDFC’s fee around 0.47%. This higher cost is what you pay for the extra research and filtering process.   
    • Tracking Error : Around 0.25%, this shows that the ETF is good at following its own special Momentum Quality 100 index.
    • Liquidity : Very liquid, with high trading volumes, making it easy to trade.   

    Advantages and Disadvantages of small cap ETF to Invest 

    Advantages 

    • High Growth Potential : Small companies can grow much faster than large, established ones, potentially giving you very high returns.   
    • Instant Diversification : With one click, you own a piece of hundreds of companies, if one company does poorly, it doesn’t sink your entire investment.   
    • Low Cost : ETFs are much cheaper to own than most mutual funds. Most of your funds stay invested and work for you.   
    • Easy to Trade : You can buy and sell them anytime during the market hours, just like a stock.   

    Disadvantages 

    • High Volatility : The prices of small-cap ETFs can swing up and down instantly, they are not suitable for investors who get affected easily.   
    • Economic downturn : During a market downturn or recession, small-cap stocks tend to fall much harder and faster as compared to a large-cap stocks.   
    • Long-Term View : To get good returns, you must be prepared to stay invested for a long time, ideally 5 to 7 years or more. 

    How to Choose the Right ETF?

    Some of the key factors to consider before choosing the right ETF for your financial needs are given below:

    1. Expense Ratio : Always check the expense ratio as a lower fee means higher returns for you over the long run.   
    2. Tracking Error : A low tracking error means the fund is doing well in the market, showing its efficiency.   
    3. AUM and Trading Volume : Look for ETFs with a large AUM and high daily trading volume, this ensures you can buy and sell it easily in the market. 
    4. Understand the Index : Know what you are buying. Are you investing in ETFs that completely copies the whole index (like with HDFC and Motilal) or uses a special strategy (like with Mirae).   

    Read Also: Types of ETFs in India: Find the Best for Your Investment

    How to Invest in ETFs?

    You can invest in ETFs by following the steps mentioned below:

    1. Open a Demat and Trading Account : This is your account for holding and trading shares and ETFs. You can open one online with brokers like Pocketful in a few minutes.   
    2. Complete Your KYC : You will need to submit your PAN card, address proof, and other documents for a one-time verification process.
    3. Add Funds : Transfer money from your bank account to your trading account.
    4. Search and Buy : Open your broker’s app, search for the ETF’s name or ticker, enter the quantity you want to buy, and click ‘Buy’.
    5. Monitor Your Investment : The ETF units will appear in your Demat account. You can track their performance on your app. 

    Conclusion

    Small-cap ETFs can be a powerful tool to build wealth over the long term. They offer an exciting mix of high growth potential and diversification at a low cost. However, they come with high risk and are not suitable for everyone. The right choice for you depends entirely on your personal financial goals, how much risk you are comfortable with, and your investment philosophy. Take your time, do your research, and choose the ETF that feels right for you. Furthermore, it is advised to consult a financial advisor before investing in any stock or ETF.

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    5What is Nifty BeES ETF? Features, Benefits & How to Invest?
    6What is Gold ETF? Meaning & How to Invest Guide
    7List of 10 Top Smallcap Stocks in India on NSE

    Frequently Asked Questions (FAQs)

    1. Are small-cap ETFs better than investing in individual small-cap stocks?

      Individual small-cap stocks can give high returns but carry high risk. Small-cap ETFs spread your money across many companies, reducing risk while still giving exposure to growth potential.  

    2. Can beginners invest in small-cap ETFs considering the risk? 

      They are considered high-risk because their prices can be very volatile. However, because an ETF holds many stocks, the risk is spread out. If you have a long-term investment plan (5+ years) and can handle the price swings, then even beginners can invest in small cap ETFs.   

    3. When can a small-cap ETF give good returns? 

      To see meaningful returns and ride out the market’s ups and downs, it is generally recommended to stay invested for at least 5 to 7 years. They are not suitable for short-term goals.   

    4. Why is ‘expense ratio’ important?

      The expense ratio is a small annual fee charged by the fund company to manage the ETF. It’s important because it directly reduces returns of an investor.   

    5. How are my profits from these ETFs taxed in India?

      If you sell equity ETF units within 12 months, gains are taxed at 20%. For holdings over 12 months, the first ₹1.25 lakh of gains per year is exempt; amounts above are taxed at 12.5%.

  • Difference Between Shares and Stocks

    Difference Between Shares and Stocks

    Stock market investments are a great way of building wealth over time. This is, however, true only if a person understands the concept, meaning, and essential terminologies associated with stock investments, as it requires considerable research. In the financial world, two terms that are widely confused are “shares” and “stocks.” While they are often used interchangeably, they have distinct meanings in the context of investing.

    In this blog, we will explain the difference between stocks and shares, their types, benefits, and risks so you can invest with clarity and confidence.

    What is a Stock?

    A stock is a blanket term that represents a person’s ownership stake in one or several companies. Having a stock means that you gain some part of a company’s assets, earnings, or production; this means you partially own the company, hence you are one of its many shareholders. At this point, stocks are considered financial instruments that can be bought and sold on the stock market.

    Investors are granted certain rights assuming they own the required stocks of a certain company:

    • Voting rights in company decisions, such as in the case of common stock
    • Dividends
    • Capital appreciation, which comes when the price of a stock increases

    All stocks are held electronically in a Demat (dematerialized) account, which acts as your digital storage of securities. The stocks do not have to be from the same company, as they can be from different companies. That prime reason is what makes the term stocks wider in scope as compared to shares.

    What is a Share?

     A share is the smallest unit of ownership in a company. Simply shares are the individual parts that constitute a stock. If a corporation issues 10,000 shares and you hold 100 of them, then you own 1% of the company.

    For example : Imagine that Adani Green Energy Limited (AGEL) has 10,000 total shares. By buying one share, you hold 0.01% of the company. When the value of the share increases, that in turn increases the value of your investment.

    In other words, “stock” is a company’s investment as a whole, while “shares” are the components of that investment in a single corporation.

    Read Also: Difference Between Bonds and Stocks

    Stocks and Shares: What Are the Differences? 

    Comparison Attribute StockShare
    MeaningStocks represent part of ownership in a single or multiple companies.Share represents a single unit of ownership in a company.
    Paid up value Stocks are generally considered fully paid.Shares can be partly or fully paid-up
    ValueThe market price of stocks varies across companies and stock categories.Shares of a specific company have the same or equal value.
    CategoriesStocks are of two types, common and preferred, which can be further divided into growth stocks, blue-chip stocks, etc. Shares are categorised into common shares and preference shares

    Types of Stocks 

    Depending on the level of risk, goals for capital, and investments, stocks differ from other investments. Below are a few of the most common stock types: 

    1. Common Stock

    They have voting rights attached to it, investors can vote in crucial company decisions. Dividends are not guaranteed in common stocks even talking about the liquidation situation, the common stockholder comes last in line for compensation.  

    2. Preferred Stock

    Preferred stocks are shared by few companies. In this type of stock the stockholder gets a guarantee to get dividend payments. If the company gets into a situation where it gets liquidated the preferred stockholder gets compensation but voting rights are not given in this stock.

    3. Large-cap Stocks

    These stocks are of the companies that are well established and financially strong with huge market capitalization (Top 100 companies by market cap in India). These stocks are known for their strong brand value, stability, continuous growth and earning, even regular dividend payments. Due to their strong foothold they are less risky and less volatile to global changes. For eg : Reliance Industries, TCS, HDFC Bank etc.  

    4. Mid-cap Stocks

    Mid cap stocks, or mid cap equities, are stocks of companies ranked from 101 to 250 by market capitalization. These companies typically show solid growth potential plus demonstrate qualities like well established blue-chip companies. Investment in mid-caps provides a balanced-risk and return, these stocks are less volatile compared to small caps and mid cap stocks provide more growth than large cap stocks.

    5. Small-cap Stocks

    Small-cap stocks are companies ranked below 251 by market capitalization in India.  These represent newer businesses with the potential of achieving great returns but come with a lot of risks. These companies are characterized by high volatility, limited resources, small market shares, and sensitivity to volatile market conditions.

    6. Growth Stocks

    Growth stocks are those that will be able to grow at a greater rate than the rest of the market, usually these stocks are from the healthcare and technology sector. These firms use their profits to reinvest instead of giving out high dividends which leads to a higher price to earnings ratio. These also tend to appreciate in value dramatically which results in capital appreciation for investors. 

    7. Blue-chip Stocks

    Often tagged to large-cap stocks, ‘blue-chip’ describes the stocks of well-known companies that are financially stable and have a history of consistent earnings, dependable dividends, and a good reputation. They are considered safe investments relative to other stocks.

    Types of Shares 

    Shares can be classified into different categories, based on their rights, returns, or other priorities. 

    1. Equity or Common Shares

    Equity shares signify the fundamental ownership of a company and gives the shareholder voting rights in making important decisions for the company. A significant capital appreciation and wealth growth can be received from this type of share, but these shares are at highest risk and getting dividends are not certain, and the shareholder will be last to liquidate the assets after preferred shareholders and creditors.

     2. Preference Shares

    Preference shares indicate ownership of the company but with priority over equity shares. Holders also receive dividends prior to common stockholders and have a greater claim on the company’s assets if liquidation occurs, however they lack voting rights and preference shares are less risky than equity shares but they offer less capital appreciation.

    Read Also: Difference Between Trading and Investing

    Benefits of Investing in Stocks 

    Investing in stocks has several financial advantages: 

    • Wealth Creation: Stocks generally appreciate over time and increase in value, as the company grows for its economical expansion. As compared to bonds and saving accounts interest, stocks have outperformed if invested for a long period of time, making them a good option to increase wealth.    
    • Diversification: Investing in different industries and companies reduces overall portfolio risk. Diversification helps in mitigation of sector based global challenges thus investing in multiple sectors helps in securing your invested capital. 
    • Liquidity: Stocks can be easily bought or sold with ease on exchanges as digital mode is evolving, this helps investors to access the stock anytime anywhere . 
    • Dividend Income: Some stocks provide periodic dividend payments, which can give investors a regular income. This investment can also be helpful for reinvestment purposes.  
    • Control and Ownership: Important decisions can be influenced, as equity shareholders have voting power according to their stock holdings. 

    Risks Involved in Stock Market Investments 

    • Volatility: Stock markets witness frequent price changes due to global market news, economic conditions, or company performance leading to risking investors capital. 
    • Market Risk: A downturn in the market conditions will most likely drag even strong stocks down, regardless of their original value.
    • Liquidity Risk: Some stocks basically that have less trading volume or small growing companies stocks, might be difficult to sell when required. This can impact the investor that is looking for instant cash out from their shares. 
    • Emotional Investing: A vast majority of investors tend to buy and sell based on personal emotions like fear of losing capital or greed to gain high profits, this can cause avoidable losses. Rumours or news may sometimes lead the investor to such a situation. 

    Conclusion

    In the world of financial markets, understanding the distinction between stocks and shares is a fundamental step for every investor. Stocks represent overall ownership in one or more companies, while shares are the specific units that define this ownership within a single company. Grasping these concepts not only strengthens financial knowledge but also enables smarter and more confident investment decisions, whether the goal is long-term wealth creation or short-term trading opportunities. It is advised to consult a financial advisor before investing.

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    Frequently Asked Questions (FAQs)

    1. Are stocks and shares the same thing?

      No, stocks and shares are not the same. The term ‘stocks’ refers to a larger concept which includes the ownership of more than one company while ‘shares’ are specific quantifiable pieces of ownership in a singular company. 

    2. How do I start investing in shares or stocks?

      To start stock investing, you need a registered broker providing a trading account and a Demat account for example, Pocketful that provides free account registration and demat account opening or any SEBI registered platform.

    3. What is the safest way to invest in the stock market for beginners?

      For starters, the lowest risk methods are investing in professionally managed and diversified financial instruments like Mutual Funds or ETFs. ETFs and Mutual Funds require less skill and knowledge or blue-chip stocks of renowned companies that have shown consistent growth over the years can also be used.

    4. Can I lose money while investing in shares?

      Absolutely, while the stock market is filled with opportunities for trying to make money, it always comes with serious risks attached to it.

    5. What do I actually own if I buy a company’s stock?

      You own a certain amount of shares of that company, which makes you a partial owner of that specific business.

  • Most Famous Penny Stocks in India

    Most Famous Penny Stocks in India

    Can you imagine starting an investment with as little as ₹10? If not, then let us introduce you to the world of penny stocks. These are shares of companies that trade at low prices, often between ₹10 to around ₹50. Because of their affordability, investors can buy a large number of shares with a small amount of money. However, they come with equally high risks, as their prices are extremely volatile and can swing sharply in a short time. In some cases, these companies manage a successful turnaround, and their stock prices soar, delivering extraordinary returns. Such stories attract investors searching for the next big opportunity. 

    In this blog, we will talk about some of the most famous penny stocks in India, but also highlight the risks you need to be aware of.

    India’s Top 10 Most Famous Penny Stocks

    Before we move forward let’s look at some key market information. This table gives you a quick snapshot of these companies’ stock price, market capitalization, etc. The companies are listed in the decreasing order of market capitalization.

    Company NameCurrent Market Price (in ₹)Market capitalization (in ₹ crores)52 Week High (in ₹)52 Week Low (in ₹)
    Suzlon Energy Ltd.59.480,7618646
    Vodafone Idea Ltd.6.5871,29016.66.12
    Yes Bank Ltd.19.160,0102516
    IRB Infrastructure Developers Ltd.45.427,44766.941
    Reliance Power Ltd.44.418,38476.529.2
    Trident Ltd.28.114,34040.223.1
    Jaiprakash Power Ventures Ltd.18.712,82327.712.4
    Alok Industries Ltd.18.29,04729.813.9
    GTL Infrastructure Ltd.1.511,9342.921.22
    Dish TV Ltd.5.0392615.94.70
    (Data as of 18 August 2025)

    Note: The companies mentioned above may or may not be financially strong. This list is based on their popularity as well-known penny stocks in India and should not be taken as a recommendation to invest. The term “famous” here is subjective, as it reflects the attention these stocks receive among retail investors rather than their actual financial performance.

    Overview of Most Famous Penny Stocks in India

    An overview of the top 10 famous penny stocks in India are given below:

    1. Suzlon Energy Ltd.

    Suzlon Energy Ltd was a pioneer in India’s wind energy sector, a true world leader. But it grew too fast, took on massive debt, and was nearly blown away by financial troubles.

    The company makes wind turbines and provides complete renewable energy solutions. In recent years, with a focus on reducing debt and a global push for green energy, Suzlon has shown signs of a comeback. It has become profitable in recent years, and its performance is improving.

    Read Also: Suzlon Energy Case Study

    2. Vodafone Idea Ltd.

    Vodafone and Idea were two separate telecom giants. But then, a new player entered the market and started a fierce price war. To survive, these two giants merged to become Vodafone Idea (Vi).

    Today, Vi is one of India’s leading telecom companies, providing telecom and other digital services to millions. However, the company is struggling with huge debt and has been losing customers. Its stock price is low, but its market cap is massive because of the huge number of shares in the market. For investors, Vi is a bet on survival and a potential turnaround in the ever growing Indian telecom market.

    Read Also: Vodafone Idea Case Study

    3. Yes Bank Ltd.

    It was once a fast-growing private bank, but then it collapsed dramatically due to bad loans. To save the banking system from a shock, a group of other banks, led by the State Bank of India, came together to rescue it.

    Yes Bank is a full-service commercial bank offering everything from savings accounts and credit cards to corporate loans. After the rescue, the new management has been working hard to clean up the past dues and rebuild trust. The stock is famous because millions of investors are watching, hoping to see this company rise again.

    Read Also: Yes Bank Case Study

    4. IRB Infrastructure Developers Ltd.

    IRB Infrastructure Developers Ltd. Every time you drive on a smooth new highway, there’s a chance a company like IRB Infra built it. It is a major player in India’s highway development, using the Build Operate Transfer (BOT) model.

    The company’s business is to build and manage road and highway projects across the country. This is a long-term, capital-intensive business, the company’s performance depends on getting more government contracts, managing toll collections, and handling its large debt. For investors, it’s a stake on the continued growth of India’s infrastructure.

    5. Reliance Power Ltd.

    With the “Reliance” name attached, this company was launched with grand ambitions to solve India’s power problems. It is part of one of India’s largest business groups.

    Reliance Power develops and operates power projects using coal, gas, and hydro sources. However, the journey has been tough, with challenges related to debt and project execution. The stock is famous because of its brand name and the sheer scope of developments. Its future is tied to India’s growing energy sector and the company’s ability to manage its large scale operations.

    Read Also: Reliance Power Case Study

    6. Trident Ltd.

    Trident has a story of steady growth. The company has grown from a yarn manufacturer to a diversified business with interests in textiles, paper, and chemicals.

    Trident is a leading global manufacturer of terry towels and also produces paper and yarn. While it is a relatively stable and well-run business, its low share price puts it among the famous penny stock for investors. It represents a different kind of opportunity for a smaller, growing company.

    7. Jaiprakash Power Ventures Ltd.

    JP Power is part of the Jaypee Group, a conglomerate deeply involved in building India’s infrastructure. Its story is linked to the country’s development journey, with all its ups and downs.

    The company operates both hydro (water-based) and thermal (coal-based) power plants. JP Power is famous for having extremely high trading volumes, which means a huge number of small investors are buying and selling it every day. It’s a high risk and reward investment in the power sector.

    8. Alok Industries Ltd.

    Alok Industries was a huge name in the Indian textile industry. But like many large companies, it faced financial trouble and went into bankruptcy. Then came a powerful new owner, Reliance Industries.

    The company is a diversified textile manufacturer, making everything from yarn to fabrics and home textiles. The story here is all about the turnaround potential under the management of one of India’s biggest and most successful companies. Investors are betting that Reliance can help in the fast revival of this company.

    9. GTL Infrastructure Ltd.

    You may not have heard of GTL Infra, but you have likely used its services. The company is part of the invisible backbone of our mobile communication network. It was a pioneer in the business of sharing telecom towers.

    GTL Infra owns and manages thousands of telecom towers and leases them out to telecom operators like Airtel, Jio, and Vi, who place their equipment on them. The company’s performance is directly tied to the financial health of the telecom industry.

    10. Dish TV India Ltd.

    Dish TV was a pioneer, bringing satellite television into the homes of millions of Indians. It was India’s first DTH (Direct-to-Home) television service provider.

    Today, the company is facing a new battle, the way we watch entertainment has changed and with the rise of OTT platforms like Netflix and Amazon Prime, new challenges are arising. Dish TV has been struggling with falling revenues and profits as it fights to stay relevant. It is a household name, which makes it famous, but its future is full of challenges.

    Key Performance Indicators

    Company NameBasic EPS (in ₹)Net Profit Margin (%)ROE (%)ROCE (%)
    Suzlon Energy Ltd. 1.5219.0233.9224.15
    Vodafone Idea Ltd.-4.01-62.850.0-1.98
    YES Bank Ltd.0.797.915.111.06
    IRB Infrastructure Developers Ltd.10.7386.9232.685.95
    Reliance Power Ltd.7.3438.8718.045.91
    Trident Ltd.0.735.308.0010.23
    Jaiprakash Power Ventures Ltd.0.8914.899.5910.05
    Alok Industries Ltd.-1.64 -21.980.00-5.40
    GTL Infrastructure Ltd.-0.67-65.110.00-0.97
    Dish TV Ltd.-2.53-31.100.00-3.61
    (Data as of March 2025)

    Advantages and Disadvantages

    There are clear advantages of investing in penny stocks that attract people, but the disadvantages are just as significant.

    Advantages 

    • High Potential Returns : This is the biggest attraction, because the price is so low, even a small jump can mean huge profits. For example, if a stock moves from ₹2 to ₹4, you have doubled your money, a 100% return.
    • Low Entry Cost : You don’t need a lot of money to start. With just a few thousand rupees you can buy a large number of shares. This makes new investors feel empowered.

    Disadvantages 

    • High Volatility : The prices of these stocks can swing wildly. A stock can jump 50% in one day and fall 50% the next. The risk of losing your entire investment is very high.
    • Low Liquidity : This is a hidden danger “Liquidity” means how easily you can sell your shares. For many penny stocks, there are very few buyers. You might want to sell, but it might take a while to sell these stocks. 
    • Lack of Information : These companies are often not covered by big financial analysts. This information gap can be used by scammers. A common scam is the “pump and dump,” where operators spread fake positive news to “pump” up the price, and when investors buy in, they “dump” their shares, causing the price to crash.

    Read Also: 10 Best Penny Stocks with High FII Holding

    Key Factors to Consider before Investing in Penny Stocks

    Before you even think about buying a penny stock, here is a simple checklist to follow.

    • Check the Company’s Financial Health : One should not only consider the stock price but also look at the basics such as, is the company making any profits, are there too many debts, are the sales growing. You should check the company details before investing.
    • Check the Trading Volume : Volume means the number of shares being traded each day. A stock with high volume (millions of shares traded) is generally easier to sell. A stock with very low volume is a red flag as they are less liquid.
    • Check the Management and Promoters : Who is running the company, do they have a good reputation in the market as per business. Also, check the promoter holding, if the original owners (promoters) are holding a large chunk of the company, it can be a sign of confidence. If they are selling their shares, it could be a warning sign.
    • Diversification is Important : All investors should consider this, never put all your money into one penny stock. Divide your investment across different types of assets to reduce your risk. If one goes down, the others might save you.

    Read Also: 10 Best High Volume Penny Stocks In India

    Conclusion

    Penny stocks offer the dream of massive returns from a small investment, but the reality is that they might fail, and investors may lose money. It is crucial to understand that investing in penny stocks can be highly speculative. You may hear about good returns and the low prices might be tempting, but the risks are enormous.

    Before you decide to buy any penny stock, do your own thorough research about the companies and remember diversification is important. Furthermore, it is advised to consult a financial advisor before investing in any stock.

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    Frequently Asked Questions (FAQs)

    1. What are penny stocks?

      They are shares of companies that are very cheap but also very risky. They have the potential for big returns, but you could also lose all your money.

    2. Can beginners invest in penny stocks? 

      Beginners should be extremely careful. Because these stocks are so volatile and risky, it’s very easy to lose money. It is generally advised that beginners shall start with more stable and well known companies before venturing into penny stocks.

    3. How can I buy or trade penny stocks in India? 

      You can buy penny stocks just like any other stock through an online trading platform like Zerodha, Upstox, or Pocketful, using your Demat account.

    4. Can Penny stocks rise rapidly?

      Their growth can be very fast, sometimes doubling or tripling in a short period. However, their prices can also fall just as quickly. The growth is highly unpredictable and is never guaranteed.

    5. Penny stocks shall be seen as long term or short term investments? 

      There is no fixed time limit. It depends on your investment strategy and risk tolerance. Some people trade them for the short term to profit from price swings, while others may hold them for the long term, hoping the company turns around. Because of the high risk, it’s important to monitor them constantly.

  • 10 Low PE Ratio Stocks in India

    10 Low PE Ratio Stocks in India

    In recent times, many stocks have been trading at high valuations, making it a bit difficult for investors to find value stocks. In such times, stocks with low price-to-earnings ratios, i.e. stocks trading at low prices relative to earnings can prove to be a better investment option. The PE ratio helps indicate whether a stock is expensive or cheap relative to its earnings. But it is not right to invest just by looking at low PE – the company’s earnings, future growth and fundamentals should also be strong. 

    In this blog, we will tell you about 10 such low PE stocks in India, which are worth considering for investment in 2025.

    What is a Low PE Ratio and Why Does it Matters?

    The Price-to-Earnings (PE) ratio is calculated by dividing a company’s current market price per share by its earnings per share (EPS), indicating how much investors are willing to pay for each unit of earnings. In simple words, if a company’s PE ratio is 10, it means that investors are paying ₹10 for the company’s ₹1 earnings. This ratio helps to tell whether a stock is expensive or cheap.

    Types of PE Ratio

    PE ratio is mainly of two types – Trailing PE and Forward PE. Trailing PE is based on the actual earnings of the last 12 months, while Forward PE is calculated on the basis of future estimated earnings. It is important to understand both while investing, as they show the valuation of the company from different perspectives.

    Sector-wise Variations in PE Ratio

    The average PE of every industry is different. For example, FMCG companies usually have high PE because their earnings are stable, while PE is low in metal, infrastructure or PSU sectors. Therefore, a stock cannot be called good or bad only on the basis of low PE, but it is important to understand it in the context of its sector.

    Why do investors like low PE stocks?

    Stocks with low PE ratio are often considered cheap and investors feel that there is scope for growth in them. If the fundamentals of the company are strong, then there is a possibility of getting good returns in the future. This is the reason why investors focusing on value investing constantly look for such stocks.

    10 Best Low PE Ratio Stocks in India for 2025

    CompanyCurrent Market Price (in ₹)Market Capitalisation (in ₹ crore)P/E Ratio
    Power Finance Corporation4161,37,1365.60
    Bank of Baroda2441,26,2596.45
    Coal India3822,35,4167.14
    ONGC2342,94,1908.09
    Indus Towers33690,5509.28
    State Bank of India8247,60,5579.53
    Tata Motors6522,39,93711.1
    GAIL1721,13,28911.6
    Life Insurance Corporation of India9065,73,23411.7
    Vedanta4301,68,12712.5
    (Data as of 11 August 2025)

    Overview of the Top Low PE stocks in India

    A brief overview of the Low PE Stocks in India is given below:

    1. Power Finance Corporation (PFC)

    PFC is a government-owned non-banking financial company and the primary lender to India’s power sector. It finances generation, transmission, and distribution projects, with a growing focus on renewable energy initiatives like solar and wind. The company is also upgrading its digital lending platforms for faster, more transparent approvals. Backed by strong government support and sector leadership, PFC plays a critical role in enabling India’s transition towards cleaner, more efficient power infrastructure while maintaining high operational expertise in project financing.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -16.47%339.18%480.85%
    (Data as of 11 August 2025)

    2. Bank of Baroda

    Bank of Baroda is one of India’s largest public sector banks with a strong domestic and international presence. It has been modernising operations by expanding digital banking services, enhancing its mobile banking offerings, and growing its retail and MSME portfolios. The bank is strategically increasing its branch and ATM network to improve accessibility. Its proactive measures in improving asset quality and customer experience have positioned it as one of the most progressive PSU banks adapting quickly to changing banking trends.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    0.16%104.07%419.94%
    (Data as of 11 August 2025)

    3. Coal India

    Coal India is the world’s largest coal mining company, responsible for meeting a major portion of India’s energy requirements. It operates numerous mines and is expanding capacity through new projects like Kotre Basantpur and Chandragupt. The company is actively implementing modernization measures, focusing on technology adoption. While challenges such as labor disputes occasionally arise, Coal India retains its dominant position in the sector and is vital for energy security, while also contributing to infrastructure and industrial growth.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -27.73%69.16%193.74%
    (Data as of 11 August 2025)

    4. ONGC

    Oil and Natural Gas Corporation (ONGC) is India’s largest oil and gas exploration and production enterprise. Beyond its core hydrocarbon operations, ONGC is diversifying into clean energy sources including hydrogen fuel, biofuels, and offshore wind. The company is also working on optimizing resource utilization through innovative extraction techniques in regions like Arunachal Pradesh. With a strong emphasis on ESG practices, ONGC invests in environmental protection, community development, and sustainable business operations, maintaining its position as an energy sector leader.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -29.71%73.91%194.02%
    (Data as of 11 August 2025)

    5. Indus Towers

    Indus Towers is a leading telecommunications infrastructure provider, operating a vast network of mobile towers across India. Serving major telecom operators like Airtel and Reliance Jio, it plays a central role in enabling 4G and 5G connectivity. The company is expanding its network coverage while adopting energy-efficient and remote monitoring technologies to reduce operational costs and improve reliability. Indus Towers continues to drive digital connectivity by supporting telecom growth and fostering technological advancement in India’s communications ecosystem.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -18.72%72.44%70.01%
    (Data as of 11 August 2025)

    6. SBI (State Bank of India)

    State Bank of India is the country’s largest bank, offering a broad spectrum of retail, corporate, and rural banking services. It is at the forefront of digital innovation with mobile banking, UPI payments, QR-based solutions, etc. SBI also focuses on financial inclusion, reaching underserved regions via its strong network of branches and strong brand trust. SBI remains central to India’s financial system while adapting swiftly to evolving customer needs.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    0.53%58.64%323.05%
    (Data as of 11 August 2025)

    Read Also: SBI Case Study

    7. Tata Motors

    Tata Motors is a diversified automotive manufacturer producing passenger cars, commercial vehicles, and electric vehicles (EVs). The company has been focusing on its EV strategy and increasing exports to international markets. It is also driving innovation in connected and sustainable mobility while enhancing its market share in the commercial vehicle segment. Through its subsidiary Jaguar Land Rover, Tata Motors maintains a strong global luxury automobile presence, blending technology, design, and eco-friendly practices across its product lineup.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -38.59%35.56%422.89%
    (Data as of 11 August 2025)

    Read Also: Tata Motors Case Study

    8. GAIL

    GAIL is India’s largest state-owned natural gas processing and distribution company. It operates an extensive network of pipelines and is expanding into new geographic regions, including the North-East and North-West. The company supports the growth of CNG and PNG infrastructure while adopting sustainable practices for greater efficiency. GAIL plays a pivotal role in promoting cleaner energy alternatives and aims to strengthen India’s transition towards a low-carbon economy through reliable gas supply infrastructure.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -23.42%96.26%165.22%
    (Data as of 11 August 2025)

    9. Life Insurance Corporation of India (LIC)

    LIC is India’s largest life insurance company, with decades of trust serving millions of policyholders. Its product portfolio spans life insurance, annuities, pensions, and investment-linked plans. In recent years, LIC has strengthened its digital footprint, enabling online premium payments, claims tracking, and policy servicing through mobile applications. The corporation integrates strong corporate governance practices post-listing while strategically diversifying investments across sectors. With unmatched reach and brand loyalty, LIC remains the backbone of India’s life insurance industry.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    -18.69%32.74%4.57%
    (Data as of 11 August 2025)

    Read Also: LIC Case Study

    10. Vedanta

    Vedanta is a diversified natural resources company engaged in mining and metals, including zinc, aluminium, copper, iron ore, etc. The company is actively trying to fulfil its ESG commitments, focusing on energy efficiency and sustainable mining practices. It has restarted key mining activities to boost production and is investing in modern technologies to improve operational performance. Vedanta’s integrated operations and multi-commodity portfolio allow it to leverage market opportunities across natural resources while aligning with global sustainability benchmarks.

    Know the Returns: 

    1Y Return3Y Return5Y Return 
    0.99%66.41%242.02%
    (Data as of 11 August 2025)

    Read Also: Vedanta Case Study

    Key Performance Indicators (KPIs)

    CompanyOperating Margin (%)Net Profit Margin (%)ROE (%)ROCE (%)
    Power Finance Corporation96.9928.6519.5265.86
    Bank of Baroda27.4115.9914.142.12
    Coal India33.0524.3035.6724.24
    ONGC9.955.6210.5411.15
    Indus Towers49.0932.9730.5627.70
    State Bank of India21.8016.0916.871.91
    Tata Motors8.896.3323.9618.45
    GAIL9.097.7214.6411.59
    Life Insurance Corporation of India6.394.8837.971.01
    Vedanta22.8213.4236.3626.92
    (Data as of March 2025)

    When a Low PE Stock is NOT always a Good Buy?

    On seeing a low PE ratio, many investors immediately assume that this stock is cheap and will give good returns in the future. But this is not always the case. Sometimes there are some serious reasons hidden behind this low PE, which is important to understand.

    • Unusual profits causing high EPS : Sometimes a company suddenly shows a big one-time profit – like selling an asset or getting tax exemption. This increases EPS and reduces the PE ratio, but it is not sustainable.
    • Sector in decline : When low PE stocks belong to an industry in long-term decline such as one based on outdated technology or an obsolete business model, their future performance is likely to be weak.
    • Value Trap vs Value Buy : Low PE can sometimes become a value trap too as stocks with low PE may look cheap but in reality have no prospects of further growth. 

    Factors to Consider Before Investing in Low PE Stocks

    Various factors to consider before investing in low PE stocks is given below:

    • Evaluate the company’s future growth Potential : It is not right to assume a stock to be undervalued just by looking at low PE. First of all, it is important to see how strong the company’s business is, what is its future potential and how fast it is growing in its sector.
    • Understand the real reason behind low PE Ratio : It is very important to analyze why the PE ratio of any stock is low. It is possible that the company is really undervalued, but it is also possible that its value in the market has fallen due to its poor financial condition. Investing without understanding the underlying reason can be risky.
    • Do look at future earnings : Investing in low PE shares proves beneficial only when the company has the potential to earn good returns in the future. If the company’s growth is stagnant or the market share is continuously falling, then even a stock that looks cheap can be harmful.
    • Industry and Peer Comparison is important : To evaluate a company with low PE, you should compare the company with other companies in the same sector. If the PE across the industry is low, it could be a sector-specific reason.
    • Analyse management quality and company legacy : No matter how attractive the valuation, investing in a company with a poor track record of financial performance or untrustworthy management is unlikely to be a sound decision. Strong corporate governance and consistent performance should always take priority.

    Conclusion

    Low PE stocks are often considered cheap and attractive investment options, but it is not wise to base your decision on this single metric alone. It is important to also take into account the company’s growth prospects, industry position, management quality and long-term vision. With the right research, low PE stocks can indeed turn out to be multibaggers. It is advised to consult a financial advisor before investing.

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    Frequently Asked Questions (FAQs)

    1. What is a low PE stock?

      A low PE stock is one whose Price to Earnings ratio is lower than its peers or sector average. 

    2. Are low PE stocks always good for investment?

      No, not every time. Sometimes the PE ratio also goes down due to the company’s unusually high earnings in a specific reporting period or due to lack of growth potential.

    3. What should you check before investing in a low PE stock?

      The company’s fundamentals, future growth, credibility of management and the sector condition must be analyzed before investing in any stock.

    4. Does Low PE always mean the stock is undervalued?

      Not necessarily. Sometimes the PE ratio looks low due to the high one-time earnings that are not expected to repeat or due to lack of growth potential.

    5. Should beginners invest in Low PE stocks?

      If you are new to the stock market, then first understand the company’s fundamentals and invest only after taking advice from your financial advisor.

  • NTPC vs Power Grid: Business Model, Financials & Future Plans Compared

    NTPC vs Power Grid: Business Model, Financials & Future Plans Compared

    NTPC and Power Grid are major contributors to India’s energy needs. NTPC is the leader in electricity generation, while Power Grid manages the transmission network across the country. In this case study, we will compare NTPC vs Power Grid based on business model, financial performance and future plans. If you want to understand these two companies better or are comparing them for investment purposes, then this blog will be useful for you.

    Company Overview: NTPC

    NTPC (National Thermal Power Corporation) is a major public sector company under the Government of India, which is considered to be the largest power generating company in the country. It was started in 1975 and today its headquarter is located in New Delhi. Over the years, NTPC has not limited itself to just generating electricity from coal, but now it has also become active in areas like hydro, solar, wind and nuclear.

    What does the company do?

    NTPC mainly generates electricity through thermal power plants and supplies it to state governments and discoms. At present, its total installed generation capacity is around 80 GW. NTPC has many large power stations across the country – such as Singrauli (UP), Korba (Chhattisgarh), Ramagundam (Telangana) and Vindhyachal (MP). Apart from this, the company is also expanding aggressively in renewable energy.

    • Recent Major Events : NTPC generated around 438.6 billion units of electricity in 2024-25, which is about 4% more than last year. During this period, the company has also added 3,972 MW of new capacity. NTPC is now moving into areas like green hydrogen, pump storage and nuclear energy, so that it can prepare for the long-term energy needs of the country.
    • Role and Importance : NTPC is an important part of the country’s baseload power supply – that is, the electricity that is needed 24×7. Its high plant load factor (PLF) makes it one of the most reliable in the industry. NTPC is considered a stable and sustainable company in India’s energy sector, with good stable income with low risk due to power purchase agreements (PPAs) and government support.

    Business Model – NTPC Limited

    • From thermal to renewable : NTPC’s business model is no longer dependent only on coal. It has also become active in hydro, solar, wind and nuclear power. This is a big step towards energy transition, which makes the company look ready for the future.
    • Long-term PPAs : NTPC’s biggest strength is its long-term power purchase agreements (PPAs). These agreements give it assured revenue and stability of income, which is a sign of confidence for investors.
    • Beyond production – own coal mining : NTPC is now mining coal on its own along with power generation. This gives it self-sufficiency in fuel supply and keeps costs under control.
    • Government support and strategic expansion : Being under the central government, NTPC benefits from strategic plans, grid support and funding. This company is not only moving towards commercial success, but is also contributing to India’s net zero goal.

    Company Overview : Power Grid Corporation of India

    Power Grid is an important public sector company of the Government of India, which handles the electricity transmission network of the country. It was established in 1989 and is headquartered in Gurugram, Haryana. Today Power Grid manages more than 85% of the country’s inter-state transmission, which delivers electricity generated in one corner of the country to another.

    What does the company do?

    Power Grid primarily builds, operates and maintains high voltage transmission networks. It ensures that electricity from power producers across the country is transmitted to states and distribution companies in a safe and stable manner. Today it has more than 1.80 lakh kilometers of transmission lines and more than 5.5 lakh MVA of transformation capacity.

    • Recent major events : The company also commissioned several new lines this year and increased investments in projects such as Green Energy Corridor, North East Grid, and Digital Transmission Network. Apart from this, the company also monetized some transmission assets through its existing PGInvIT scheme.
    • Role and Importance : Power Grid is the backbone of the country’s 24×7 power supply system. Without it, power generating companies cannot deliver their product to customers. The company’s regulated tariff model and stable cash flow make it a reliable option for investors. It is a company that works on low risk and stable returns.

    Business Model – Power Grid Corporation

    • Transmission Focused Operation : Power Grid’s entire business is based on power transmission. It operates ultra high voltage transmission lines across the country and maintains the balance of power between states.
    • Regulated Return Model : Its business model is based on tariffs fixed by CERC, which gives the company a fixed return, regardless of whether the demand is low or high. This keeps the company’s earnings stable.
    • Infrastructure Monetization : Power Grid has monetized some of its assets through PGInvIT, which gives it capital to invest in new projects and keeps the balance sheet light.
    • New initiatives and digital grid : The company is now moving beyond traditional transmission and entering areas like electric vehicle charging, fiber network, and digital substation. This is preparing it for the future transmission model.

    Comparative Analysis : NTPC Vs Power Grid

    ParticularsNTPCPower Grid
    Current Price (₹)333292
    Market Cap (₹ Crores)3,23,0932,71,671
    52-W High (₹)448366
    52-W Low (₹)293247
    FII Holdings as of March 202517.79%26.78%
    DII Holdings (as of March 2025)27.33%18.35%
    Book Value (₹)19099.6
    PE Ratio13.8 17.5
    (Data as of 7 August 2025)

    Financial Statements Analysis 

    Income Statement Comparison 

    ParticularsNTPCPower Grid
    Total Income190,86247,459
    Total Expenses147,70919,354
    EBIT43,15228,104
    Net Profit21,73915,631
    (All values are in INR crores and the data is as of March 2025)

    Balance Sheet Comparison 

    ParticularsNTPCPower Grid
    Current Liabilities104,50240,245
    Current Assets111,78239,376
    Reserves & Surplus174,37483,362
    (All values are in INR crores and the data is as of March 2025)

    Cash Flow Statement Comparison 

    ParticularsNTPCPower Grid
    Cash Flow from Operating Activities50,43536,223
    Cash Flow from Investing Activities-45,799-23,533
    Cash Flow from Financing Activities-4,073-12,357
    (All values are in INR crores and the data is as of March 2025)

    Key Performance Ratios (KPIs) 

    ParticularsNTPCPower Grid
    Operating Profit Margin (%)20.9660.77
    Net Profit Margin (%)11.5534.13
    ROE (%)12.7216.75
    ROCE (%)9.4012.32
    Debt to Equity (x)1.341.41
    (Data as of March 2025)

    Future Plans of NTPC Limited

    • Towards sustainability through Brighter Plan 2032 : NTPC has set a target of decarbonisation, water conservation and net-zero townships by 2032. The company wants to make its townships Scope-2 net zero by FY25-26.
    • Fast pace in renewable energy : NTPC aims to add 60 GW of green energy (solar, wind, hydro) capacity. In FY25, the company added 3 GW solar and 2 GW thermal capacity.
    • Big planning in nuclear energy : NTPC is now also venturing into nuclear power and plans to add 30 GW capacity in the coming years, including sites like Mahi Banswara.
    • Capex and innovation : The company will invest ₹87,600 crore between FY25-27, including renewable projects and 1,000 MW of pumped storage.

    Future Plans of Power Grid Corporation of India

    • Emphasis on green energy transmission : Power Grid has put a big focus on the green energy corridor. With the support of the government, the company is laying new transmission lines for renewable energy across the country.
    • Capex and network expansion : The company is investing more than ₹10,000 crore in FY25, especially for expanding the transmission network and substation modernization.
    • International expansion : Power Grid is working on interconnection projects outside India to Nepal, Bhutan, and Bangladesh to increase trans-national power trading in the future.

    Who is better: NTPC vs Power Grid?

    • Business area and focus : NTPC is primarily focused on power generation, which includes sources like thermal, hydro, solar and nuclear, while Power Grid’s focus is completely on transmission and grid management. Both companies are the backbone of the power sector, but their role is different.
    • Revenue and profitability : NTPC’s revenue comes mainly from power generation and the company’s scale is large. Power Grid’s revenue is stable and less risky as its business model is based on long-term transmission projects. Both have good EBITDA margins, but there is a difference in structure.
    • Growth and capex plans : NTPC is expanding extensively in segments like renewable and nuclear, while Power Grid is investing in future transmission networks and digital operations. Both have long-term and stable growth strategies.
    • Direction of Green Energy : NTPC aims to achieve more than 60 GW of green energy capacity by 2032. Power Grid, on the other hand, is developing the transmission infrastructure of green energy so that the reach of renewable power can increase across the country.
    • Risk and Stability : NTPC’s model is slightly more capital intensive and regulatory risky due to being linked to generation. Whereas Power Grid’s transmission business remains relatively stable and predictable.

    Both companies have their own expertise and niche. No company can be said to be better as it depends on the investor’s objective and risk profile.

    Read Also: Mahindra & Mahindra vs Tata Motors: Which is Better?

    Conclusion

    NTPC and Power Grid both companies are playing a very important role in India’s energy system. One generates electricity, the other supplies it across the country. Their presence will not only strengthen India’s energy infrastructure, but will also help meet future needs. Both have different strategies, expansion plans and performance, but it is not easy to call one better. It is clear from this comparison that both these companies will continue to be a strong base in India’s growth story.

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    Frequently Asked Questions (FAQs)

    1. What is the core difference between NTPC and Power Grid?

      NTPC generates electricity (generation) while Power Grid transmits electricity across the country.

    2. Which company is older – NTPC or Power Grid?

      NTPC is older; it was established in 1975, while Power Grid was formed in 1989.

    3. Are both NTPC and Power Grid government-owned companies?

      Yes, both are government companies and come under the central government.

    4. Which company has more revenue – NTPC or Power Grid?

      As per the data of 2025, NTPC has more revenue income.

    5. Are NTPC and Power Grid good for long-term investment?

      Both these companies run on stable and strong business models, so they are considered suitable for long-term investment.

  • Secured and Unsecured Bonds: Understand the Difference

    Secured and Unsecured Bonds: Understand the Difference

    Every investor wants their invested money to be safe and also get good returns. When it comes to investing in bonds, the most important thing is to understand which bond is right for you. There are two types of bonds available in the market – secured bonds and unsecured bonds. There is a big difference between the two: in one your money is backed by an asset, while in the other the risk is higher. 

    In this blog, we will give complete information about secured vs unsecured bonds in simple and clear language, so that you can invest wisely.

    What Are Bonds and Why Do Companies Issue Them?

    A bond is a debt instrument through which a company or government borrows money from the investors or general public and promises to pay fixed interest payments in return. After the completion of the certain period, i.e., at maturity, the investor gets his principal amount back. Bonds are also called fixed income products because the returns in them are pre-determined.

    Why do Companies and Governments issue Bonds?

    Companies and governments prefer to raise funds through bonds instead of taking a loan from the bank, because this gives them access to capital at a lower interest rate and for a longer period. Also, through bonds they can meet their financial needs without giving up any equity stake.

    What is the role of creditworthiness and collateral?

    The safety of a bond largely depends on the creditworthiness of the issuing institution. While some bonds are backed by collateral, others rely solely on the issuer’s promise to repay. The former are known as secured bonds, where pledged assets act as a safety net for investors in case of default. The latter are unsecured bonds, which carry higher risk since they offer no such asset-backed protection and depend entirely on the issuer’s ability to repay.

    If you have ever bought bonds from any other platform, you must have seen words like “secured” or “AAA-rated”. But these words sometimes seem like mere technical information until you understand their real significance. Let us learn about secured and unsecured bonds in detail.

    Read Also: What Are Corporate Bonds?

    What Are Secured Bonds?

    Secured bonds are bonds that are secured by an asset or collateral. This means that if the company issuing the bond defaults, investors have the right to claim the collateral. The collateral can be in the form of property, machinery, inventory, or any other asset.

    These bonds are less risky because even if the issuer is not trustworthy, there is still a possibility of recovery of investor money from the asset. This is why their interest rate on secured bonds is often slightly lower than unsecured bonds, but the security is higher.

    Example : Suppose a real estate developer issues secured bonds to fund the construction of a new commercial complex. These bonds are backed by the land and the under-construction property itself. This means that if the developer fails to repay, investors can recover their money through the sale or ownership of the pledged property, offering a strong layer of protection.

    These types of secured bonds are linked to stable revenue sources or assets, giving investors the assurance of a guaranteed return on their invested money even if the issuing agency runs out of funds for some reason.

    Secured Bonds are ideal for people who want to take less risk such as:

    • Retired individuals
    • Senior citizens
    • Investors who prefer capital protection
    • People who want a stable and secure income in their portfolio

    So, if you are risk averse and looking for a stable income, secured bonds can be a suitable option for you.

    Read Also: What is Coupon Bond?

    What are Unsecured Bonds?

    Unsecured bonds are bonds that do not have any collateral. This means that if the company issuing the bond defaults, investors have no claim over any assets of the issuing company to recover their money. Investing in these bonds depends entirely on the creditworthiness and financial strength of the company. These bonds usually offer higher interest rates than secured bonds to compensate investors for higher risk.

    Example : Suppose an NBFC (Non-Banking Financial Company) issues unsecured bonds or debentures to raise funds for its expansion. These bonds are issued without backing from any specific assets, meaning investors rely solely on the company’s creditworthiness and track record for repayment. If the company incurs losses or goes bankrupt in the future, these investors will get repaid  only after the secured bond holders and other primary creditors have been paid.

    Unsecured bonds are better for investors:

    • Who are willing to take a little more risk
    • Who have experience in analyzing the company’s credit rating and financials
    • Who can accept the potential risk to capital in exchange for higher returns

    If you want to invest in such bonds, then give preference to AAA or AA rated issuers and stay away from high-yield bonds without proper research. Investing without proper research can cause significant losses, especially if the issuer has a weak financial position.

    Secured vs Unsecured Bonds: Key Differences

    FeatureSecured BondsUnsecured Bonds
    CollateralBacked by specific assets or property (e.g., land, equipment)No collateral; based solely on issuer’s creditworthiness
    Risk LevelLower risk as it is an asset-backed securityHigher risk as repayment depends entirely on the issuer’s financial strength
    Interest RateGenerally lower, as the bond is considered saferTypically higher to compensate for the increased credit risk
    Repayment PriorityPaid before unsecured creditors in case of defaultPaid after claims of all secured creditors are settled
    Issuer TypeOften issued by infrastructure firms, public sector companies, or asset-heavy companiesFrequently issued by corporates, NBFCs, or private firms with good credit ratings
    Credit Ratings ImpactRatings depend on both asset value and issuer profileRatings rely primarily on the issuer’s profile and repayment track record
    Investor SuitabilitySuitable for conservative investors prioritizing capital protectionSuitable for experienced investors seeking higher returns with moderate to high risk

    Read Also: What are Bond Yields?

    Risk & Return Trade-Off: Which One Should You Choose?

    The most important question while investing in bonds is to choose safety or higher returns?

    How much is the risk?

    Secured bonds have low risk because they are secured by an asset. If the issuer defaults, the investor can claim the asset. Hence, they are considered suitable for retired people or those who want a secure income. On the other hand, unsecured bonds do not have any security. If the issuer fails to make payments, investors of the unsecured bonds are repaid after secured bondholders are paid, making unsecured bonds a risky investment.

    How much is the return?

    Secured bonds have relatively low interest rates (e.g. 7–8%), as there is more security. In contrast, unsecured bonds offer higher returns (e.g. 9–11%), but with risk.

    Which is right for whom?

    If your focus is on capital safety, then secured bonds are a better option. However, if you are seeking higher income, can tolerate greater risk, and are capable of assessing a company’s credibility, unsecured bonds can also be a good option. Always ensure you check the credit rating before investing.

    Read Also: Electoral Bonds Explained: What Are They and Why Did Supreme Court Ban It?

    Conclusion

    It is very important for an investor to understand the difference between secured bonds and unsecured bonds. While secured bonds offer more security, unsecured bonds may offer a slightly higher return but also carry risk. Secured vs unsecured bonds should be carefully weighed while planning your investment strategy to get the right balance between risk and return. It is important to consult a financial advisor before investing.

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    Frequently Asked Questions (FAQs)

    1. What is the main difference between secured and unsecured bonds?

      Secured bonds are backed by an asset, while unsecured bonds do not have any such collateral.

    2. Are secured bonds safer than unsecured bonds?

      Yes, secured bonds are considered safer because repayment is guaranteed by an asset.

    3. Do unsecured bonds offer higher returns?

      Mostly yes, because the risk is higher in these, so the interest rate is also slightly higher.

    4. Can individual investors buy secured bonds in India?

      Yes, many government and corporate secured bonds are available for individual investors.

    5. Which type of bond is better for beginners?

      Secured bonds are better for beginner investors as they have lower risk.

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