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  • What Is Proprietary Trading?

    What Is Proprietary Trading?

    Trading in the financial markets is typically done with clients’ money but some firms also trade with their own capital to generate profits. This model is called proprietary trading (prop trading). This trading model is becoming increasingly popular today, as many prop trading firms offer skilled traders the opportunity to trade with their own capital. The increasing use of technology, data analytics, and algorithmic trading has also significantly developed this field. In this article, we will understand what prop trading is and how it works.

    What Is Proprietary Trading?

    Proprietary trading, or prop trading, is the process by which a financial institution such as a brokerage firm, bank, or specialized trading firm trades in the financial markets using its own capital. The purpose of trading is not to execute orders for clients but to earn profit from changes in market prices. Prop trading typically involves trading in instruments such as stocks, futures, options, currencies (Forex), and commodities.

    Key Concept of Proprietary trading

    In the typical brokerage model, firms earn brokerage or commissions by trading for clients. In contrast, in prop trading, the firm takes positions in the market and relies solely on profits from market movements. Therefore, both risk and return are relatively higher.

    Example : Suppose a brokerage firm believes that a company’s stock may rise in the future. She can then buy that stock with her own funds and sell it when the price rises, earning a profit. Any profit from such a trade goes directly to the firm, as it doesn’t use client money.

    How Proprietary Trading Works

    • The Firm Uses Its Own Capital: The most important aspect of proprietary trading is that the firm trades with its own funds. The firm sets aside a certain amount of capital for trading, and positions are taken in the market from that. Client funds are not used here, so any profit or loss from a trade directly affects the firm.
    • Market Analysis and Strategy: Before placing a trade, the trading team understands the market situation. This involves analyzing price movement, volume, market trends, and data. Based on this, it is decided which stock, index, or other instrument would be best to trade.
    • Executing the Trade: Once the strategy is finalized, traders place buy or sell orders through the trading platform. Prop trading typically involves trading in markets such as stocks, futures, options, and currencies. Larger trading firms often use advanced trading software for faster execution.
    • Risk Management: Controlling risk is crucial in prop trading, as the firm’s money is involved. Therefore, companies typically set daily loss limits, position limits, and stop-loss rules to prevent significant losses.
    • Profit Sharing Model: If a trade results in a profit, many prop trading firms share it under a profit-sharing model. Typically, the trader receives a portion of the profit, while the firm retains the rest.

    Read Also: What is Turtle Trading?

    Types of Proprietary Trading Strategies 

    • Arbitrage Trading: In arbitrage, traders exploit small price differences in different markets. If a stock or asset is priced low in one market and high in another, they buy at a lower price and sell at a higher price. Large prop trading firms consistently profit from such small price differences.
    • Market Making: Market making aims to provide liquidity on both the buying and selling sides of the market. In this, the firm places buy and sell orders simultaneously. Profits typically come from the difference between the bid price and the ask price.
    • Statistical Arbitrage: In this strategy, trading decisions are made using data and quantitative models. Traders identify stocks or assets whose prices are generally correlated. When unusual differences are observed, trades are entered based on that.
    • High-Frequency Trading (HFT): High-frequency trading uses very fast computer systems and algorithms. It involves making a large number of trades in a fraction of a second, attempting to profit from small price movements.
    • Momentum Trading: Momentum trading focuses on market trends. If a stock is consistently rising, buying is done in line with that trend. Similarly, selling opportunities are sought during a falling trend.

    Proprietary Trading vs Traditional Trading

    Basis of comparisonProprietary TradingTraditional Brokerage Trading
    Capital In this the firm trades with its own money.In this, trading is done with the client’s money.
    Main ObjectiveEarning profits directly by trading in the market.Investors can trade and earn brokerage.
    RiskIn case of loss, the entire risk lies with the firm.The risk lies with the investor or client.
    Trade decisionThe decision to trade is made by the firm’s traders or algorithms.The decision to trade is usually made by the clients themselves.
    Method of earningEarnings are made from profits generated from market movements.Earnings are made from brokerage fees or commissions.
    Profit SharingIn many prop firms, the trader is given a profit share.Here the trader does not get any profit share, only brokerage is charged.
    ExampleProp desks of prop trading firms or brokerages.Trading done through normal demat and trading accounts.

    Advantages of Proprietary Trading

    • Potential for Higher Profits: In prop trading, firms trade by taking positions directly in the market. Therefore, earnings are not limited to brokerage, but rather, profits are earned directly from changes in market prices.
    • Advanced Trading Tools: Most prop trading firms provide traders with advanced trading platforms, real-time market data, and analytics tools, allowing for more accurate trading decisions.
    • Systematic Risk Management: Prop trading typically has a pre-established risk management system. This includes loss limits, position sizes, and other rules to reduce the potential for large losses.
    • No Requirement of Large Capital: In many prop trading models, traders trade using the firm’s capital. This eliminates the need for traders to use large personal funds.
    • Professional Trading Environment: Trading at prop trading firms is typically based on research, data analysis, and a clear strategy, making the trading process more professional and systematic.

    Read Also: What Is CFD Trading and How It Works?

    Risks and Challenges in Proprietary Trading 

    • Market Risk: In proprietary trading, a firm trades with its own funds, so if the market suddenly moves in the opposite direction, the firm suffers a direct loss. Due to the large capital involved, losses can be significant.
    • Strict Risk Management Rules: To control risk in prop trading, firms typically impose rules such as daily loss limits, maximum drawdowns, and position size limits. Adherence to these rules is mandatory for traders.
    • Pressure for Consistent Performance: Prop traders are expected to consistently perform well and maintain profits. Consistent losses can lead to a reduction in trading capital or even a suspension from trading.
    • Regulations: Strict regulations and oversight apply to prop trading in many countries. For example, following the 2008 financial crisis, the Volcker Rule was implemented in the United States, placing limits on the proprietary trading activities of certain banks.
    • Dependence on Technology and Systems: Proprietary trading heavily relies on advanced trading platforms, algorithms, and real-time data feeds. Any technical failure, system outage, or latency issue can disrupt trades, lead to missed opportunities, or cause significant financial losses in fast-moving markets.

    Can Individual Traders Join Proprietary Trading Firms?

    Today, many prop trading firms also offer retail traders the opportunity to join. This typically requires the trader to first pass an evaluation challenge, which requires adherence to a set profit target and risk rules. If the trader successfully completes this stage, they are granted a funded trading account. This account holds the trading firm’s capital, and the trader trades in the market using that capital.

    Most firms adopt a profit-sharing model, where the trader receives a fixed percentage of profits. However, adherence to daily loss limits, maximum drawdowns, and other risk rules is mandatory when trading.

    Yes, proprietary trading is permitted in India, but it can only be done under regulations. Typically, this activity is performed by SEBI-registered brokerage firms and financial institutions. These firms trade in the market using the company’s own capital through their trading desks. Complying with such trading requires adherence to exchange regulations, capital standards, and all necessary reporting rules. On the other hand, typical retail investors do not engage in prop trading directly; they typically invest or trade individually through their demat and trading accounts.

    Conclusion

    Proprietary trading is a model in which financial firms attempt to profit by trading in the market using their own capital. This requires a sound strategy, market understanding, and strong risk management. Today, the increasing use of technology and data analysis has further developed prop trading. If understood correctly, it is a vital part of the financial markets.

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    6What is Quantitative Trading?
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    8What is Algo Trading?
    9Arbitrage Trading in India – How Does it Work and Strategies
    10Silver Futures Trading – Meaning, Benefits and Risks
    11What is Inverse ETF?
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    Frequently Asked Questions (FAQs)

    1. What is Proprietary Trading?

      In proprietary trading, a firm trades in the market with its own funds and attempts to make a profit.

    2. How is Proprietary Trading different from normal trading?

      In normal trading, investors trade with their own funds, while in prop trading, the firm uses its own capital.

    3. Can individual traders join proprietary trading firms?

      Yes, some prop trading firms allow traders to trade with a funded account after an evaluation or challenge.

    4. Is Proprietary Trading allowed in India?

      Yes, it is allowed in India, but compliance with SEBI and exchange regulations is required.

    5. Which markets are used in Proprietary Trading?

      It typically involves trading in stocks, futures, options, forex, and commodities.

  • ETF vs FOF: Key Differences

    ETF vs FOF: Key Differences

    The key to success in investing is diversification. An investor shouldn’t invest their capital in a single asset or fund. While it comes to diversification, there are two options available, which include ETF and FOF.

    In today’s blog post, we will give you an overview of ETFs and FOFs along with their key differences.

    What are ETFs?

    ETFs are commonly known as Exchange Traded Funds and are a passive investment option offered by Asset Management Companies. ETFs predominantly invest in a basket of stocks or other assets. ETF tries to mirror the performance of the underlying index in which it invests. They are traded like any other stock on the exchange. To purchase and sell an ETF one is required to have a demat and trading account.

    Features of ETFs

    The key features of ETFs are as follows:

    1. Exchange Traded: The ETFs are traded on the stock exchange like any other stock. Hence, one can trade in it during the trading hours only.
    2. Demat Account: It is mandatory to have a demat and trading account if you wish to invest in ETFs.
    3. Cost-Effective Investment: Exchange Traded Funds or ETFs generally have lower management fees because of a passive investment approach. Hence, they are suitable for investors seeking cost-effective diversified investment options.
    4. Diversification: The amount invested in ETFs is diversified into several securities. Hence, it provides portfolio diversification through a single investment and reduces risk.

    What are FOFs?

    A Fund of Funds is a type of fund offered by asset management companies that invests in units of other mutual funds or ETFs and does not directly invest in securities. In FOF, a fund manager selects a mutual fund or ETF based on their investment objective and invests in it. Unlike ETFs, it does not require a demat and trading account.

    Features of FOF

    The key features of FOF are as follows:

    1. Investment in Other Funds: FOFs invest in the units of other mutual funds or ETFs instead of directly investing in stocks and other securities.
    2. No Requirement of a Demat Account: As in the case of investment in stocks and ETFs, having a demat account is mandatory. But it is not essential to have a demat account while investing in FOF.
    1. Higher Expense Ratio: FOF generally has a higher expense ratio as investors have to pay the expense ratio of FOF along with the underlying fund.
    2. Global Market Access: Many FOFs invest their money in various international funds, which allows an investor to diversify their portfolio globally.

    Read Also: ETF vs Index Fund: Key Differences You Must Know

    Difference between ETFs and FOF

    The key difference between ETFs and FOFs is as follows:

    ParticularETFsFOFs
    InvestmentETFs invest their money in a basket of index-tracking the performance of the underlying security.FOF invests their money in the units of other mutual funds or ETFs.
    Purchase OptionETFs can be purchased on the stock exchange during the trading hours.Investment in FOFs can be made anytime, like mutual funds.
    Trading and Demat AccountIt is mandatory to have a demat and trading account if one wishes to invest in an ETF.A trading and demat account is not required to invest in FOF.
    ExpensesETFs generally have a lower expense ratio, offering a cost-effective investment option. The expense ratio is generally higher in FOF due to layers of fund management.
    Change in PriceThe prices of ETFs change throughout the trading session.The NAV of funds are disclosed at the end of the trading day.
    TransparencyThe portfolio of ETFs is disclosed daily.The transparency of the FOF depends on the underlying funds.
    Flexibility of InvestmentInvestors can place different types of orders, such as limit orders, market orders, etc. Such trading features are not available in FOF.
    BrokerageBrokerage and other charges are applicable while investing in ETFs.Investors are not required to pay any brokerage charges.

    ETF or FOF, which one should you choose?

    Both ETFs and FOFs offer different types of investment avenues for investors. If you have a demat and trading account and prefer a low-cost investment option, then you can consider investing in an ETF. On the other hand, if you want to have a simple mutual fund-type investment, then you can invest in FOF. They both offer diversification in a portfolio. However, the ultimate choice depends on the investor’s investment option and risk profile.

    Read Also: Gold ETF vs Gold Mutual Fund: Differences and Similarities

    Conclusion

    On a concluding note, both ETFs and FOFs offer an investor an opportunity to diversify their portfolio through a single investment option. ETFs are traded on a stock exchange similar to any other stock. Whereas FOFs are like a mutual fund which has different mutual fund holdings as its underlying assets. FOF does not require regular monitoring, unlike ETF. However, both ETFs and FOFs carry certain risks related to market volatility. Therefore, it is advisable to consult your investment advisor before making any investment in these two.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    5ETF vs Index Fund: Key Differences You Must Know
    6Sovereign Gold Bonds vs. Gold ETF: Which is a Better Investment?
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    8SIP in ETF: How to Invest Regularly in ETFs
    9Margin Trading vs Short Selling – Key Differences
    10Difference between Margin Trading and Leverage Trading

    Frequently Asked Questions (FAQs)

    1. Do ETF and FOF both track the index?

      ETFs are a passive investment option which tracks the performance of different indices. However, FOF invests their money in various mutual fund units, which can either be an index or an active fund.

    2. Which is a more cost-effective investment option between ETF and FOF?

      ETF is a more cost-effective investment option because it has a lower expense ratio and is passively managed. FOFs have a slightly higher cost as it also involves the expense ratio of the underlying fund.

    3. Is a Demat account required to invest in both ETF and FOF?

      No, a Demat account is only required for investment in ETF, not for FOF. ETFs are traded on the stock exchange, and FOFs can be bought and sold similarly to a mutual fund.

    4. Can I invest in an ETF anytime?

      No, as ETFs are traded on the stock exchange, they can be bought and sold during market hours.

    5. Do FOF invest in international funds?

      Yes, various FOFs invest their money in international mutual funds and ETFs. Through which an investor can diversify their portfolio globally. 

  • VPF vs PPF: Which Is Better for Tax Saving?

    VPF vs PPF: Which Is Better for Tax Saving?

    Most Indians only think about two things when it comes to savings, first is to beat the rising prices and other is to save the direct taxes. The Indian government helps the citizens to save on taxes through 80C of the Income tax Act. But in the financial year 2025 – 2026 if you pick the right choice you can save more of your income. There are two most popular ways in which you can do this, Voluntary Provident Fund (VPF) and the Public Provident Fund (PPF). 

    These are two safe options as they are backed by the government, but they both work differently. One is specifically for the salaried person, the other one can be opted by anyone.By comparing them, you can decide which fits your goals. At Pocketful, we want to make this choice easy and clear for you.

    What is VPF (Voluntary Provident Fund)?

    VPF is designed for salaried employees to save some extra money. From your salary a part of your salary goes to the Employees’ Provident Fund (EPF) account. Generally this is 12% of the basic pay. Here VPF allows the employees to put more than this and you can even choose to save your whole basic salary if you want. This extra money goes into your existing EPF account.

    To put your money is very easy, employees just need to contact the HR to deduct more from your monthly salary. Here you get the salary in your account after all these deductions which helps in saving more automatically. The interest rate you get is the same as EPF, which is 8.25% for the year 2025-26. It is a safer option as it is managed by a government body called EPFO. 

    VPF can only be used by salaried employees as every employee is given a Universal Account Number (UAN) at work. If you have your own business or work as a freelancer, you cannot use VPF. For employees, it helps build a huge fund for the future because of the high interest rate. But remember, if you save more than Rs.2.5 lakh in a year, the interest on the extra amount will be taxed.

    What is PPF (Public Provident Fund)?

    PPF is a famous long-term savings plan which started in 1968 to help people save small amounts over many years. Here you don’t need to have a company to open a PPF account. It is a 15-year plan, which makes it perfect for long-term goals like a child’s education or your retirement. This is a central government scheme making it a safe savings option. 

    You can open a PPF account at a bank or a post office with as little as Rs.500. The maximum amount you can put is Rs.1.5 Lakhs per year and you get an interest rate of 7.1%. The government reviews this rate every three months. A great thing about PPF is its “EEE” tax status. This means you get a tax break when you invest, you pay no tax on the interest, and no tax when you take the money out.

    Anyone who lives in India can open a PPF account. You can be a salaried worker, a shop owner, or someone who stays at home. You can also open an account for your children. You can only have one PPF account in your name. If you need money for an emergency, you can take a loan after 3 years or a partial withdrawal after 5 years.

    Read Also: ETF vs Index Fund: Key Differences You Must Know

    Difference Between VPF vs PPF

    Feature Voluntary Provident Fund (VPF)Public Provident Fund (PPF)
    Interest Rate 8.25% (as of 2025-2026)7.1% (as of 2025-2026)
    Who can opt Salaried employees with EPFAny Indian resident 
    Minimum SalaryNot fixed Rs.500
    Maximum savingsUp to 100% of basic salaryRs.1.5 lakh per year
    Lock-in Period Until retirement or leaving job15 years
    Tax on Interest Taxable if you save > Rs.2.5 lakhs/yearAlways tax free
    Safety High (government backed)High (government backed)

    Interest Rates Comparison: VPF vs PPF

    If you are looking for the highest return then VPF is the option as here the interest rate is 8.25% for 2025-26 ( it is the same for the last two years). You get a very high interest rate in this as there is no risk attached. 

    PPF on the other hand offers an interest rate of 7.1%. The government checks this rate every three months. Although this is lower than VPF, the interest you earn in PPF is 100% tax-free. In VPF, if you are a high earner and put in more than Rs.2.5 lakh a year, you will have to pay tax on your interest. This makes both options quite similar for many people.

    If you save less than Rs.2.5 lakh a year, VPF gives you more money because 8.25% is better than 7.1%. But if you don’t have a corporate job, PPF is the best way to save. At Pocketful, we think a mix of both can be a great way to balance high returns with tax-free benefits.

    Eligibility Criteria

    VPF is only for people who are employed in a company that offers EPF. You need a Universal Account Number (UAN) to start. If you work in a large office, you likely already have this. If you are a doctor with your own clinic or a freelancer, you cannot use VPF.

    PPF is open to everyone and every Indian citizen can open a PPF account. You can be a worker, a business owner, or a student. You can open an account at your post office or banks like SBI. You can even have a PPF account if you already have a VPF account. This makes PPF very flexible for all families.

    Contribution Limits and Tenure

    For VPF, there is no fixed limit like Rs.1.5 lakh in PPF and you can save up to 100% of your basic pay. This is great if you want to build a large fund quickly. Just remember, your employer only matches the mandatory 12% part, not the extra VPF part.

    For PPF, you must save at least Rs.500 every year. The most you can put in is Rs.1.5 lakh per year. If you put in more, you won’t get interest on the extra money.

    VPF is directly tied to your job and you can stay locked until you retire. If you change jobs, you can move your balance to the new company. PPF has a fixed 15 years lock-in and after this you can take the money or extend it for 5 years at a time.

    Withdrawal Rules & Liquidity

    For VPF:

    • Money can be taken out if you have no job for more than 2 months.
    • You can withdraw for requirements like a child’s wedding or for medical bills.
    • You can take out money to buy or build a house.
    • If you take it out after 5 years of working, it is tax-free.

    For PPF:

    • There is a lock-in period and you can take all the money after 15 years.
    • You can make a small withdrawal after 5 years.
    • 50% of your balance can be taken out four years ago.
    • Any money you take out from PPF is always 100% tax-free.

    Read Also: Digital Gold vs Gold ETF: Which is Better?

    Risk & Safety Comparison

    Both VPF and PPF are safe options to keep your savings safe and growing simultaneously. The government promises that your money is safe and the interest will be paid. Unlike stocks, the value of these funds never goes down. They are ideal for people who want to be sure their money is safe for the future. VPF is managed by the EPFO, and PPF is a direct government scheme.

    Advantages and Disadvantages of Voluntary Provident Fund (VPF)

    Advantages

    • Offers a very high interest rate of 8.25% right now.
    • Savings are deducted automatically from your salary, making it effortless.
    • There is no fixed upper limit like Rs.1.5 lakh for your savings.
    • It is a safe, government-backed fund for your retirement.
    • Compounding helps your money grow significantly over long periods.
    • You get tax deductions under Section 80C if you use the old tax regime.

    Disadvantages

    • Only available to salaried employees with an EPF account.
    • Money is usually locked until you leave your job or retire.
    • Interest becomes taxable if you save more than Rs.2.5 lakh in a year.
    • Your employer does not contribute extra money to the VPF portion.
    • Withdrawals are taxable if you take the money out before 5 years of service.
    • No 80C tax benefits are available if you choose the New Tax Regime.

    Advantages and Disadvantages of Public Provident Fund (PPF)

    Advantages 

    • Offers “EEE” tax status where investment, interest, and maturity are all tax-free.
    • Open to every Indian resident, including self-employed people.
    • Your balance is safe from legal claims or debt recovery.
    • Very low entry cost as you can start with just Rs.500 a year.
    • You can extend the account in 5-year blocks after it matures.
    • You can take a loan against your balance at a low interest rate.

    Disadvantages

    • The total investment is capped at a maximum of Rs 1.5 lakh per year.
    • There is a long mandatory lock-in period of 15 years.
    • The interest rate (7.1%) is usually lower than the VPF rate.
    • Interest rates are reviewed and can change every three months.
    • You are strictly allowed only one PPF account in your name.
    • No tax deduction benefits if you decide to use the New Tax Regime.

    Which One is better for you?

    • Employment Status: If you are a salaried employee with an EPF account, VPF is a preferred and easy choice for good returns. But if you are self-employed or a business owner then PPF is the only choice that you have. 
    • Investment Goals: If you are saving for your future needs like retirement then PPF is the best option as the money gets locked in and if you are looking to save money and use it after sometime then VPF is the option.  
    • Risk Appetite: Both the saving plans are risk free so you can put money according to your needs.
    • Liquidity: VPF is a flexible savings plan on the other hand PPF is a rigid savings plan due to fixed lock-in. 

    Read Also: ETF vs Stock – Which One is the Better Investment Option?

    Conclusion

    Picking between VPF and PPF depends on your job and your future plans. VPF is great for employees who want high returns and easy, automatic savings. PPF is a flexible and tax-free plan that works for everyone in the family.

    You don’t have to pick just one. If you have a salary, you can use VPF for high returns and PPF for its tax-free benefits. Both are safe and will help your wealth grow. The most important thing is to start today so your money has more time to grow.

    For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors Pocketful.

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    8SIP vs Lump Sum: Which is Better?
    9FD (Fixed Deposit) vs Stocks: Which is the better investment option?

    Frequently Asked Questions (FAQs)

    1. Can I have both a VPF and a PPF account?

      Yes you can use VPF at work and also open a separate PPF account at a bank for the additional savings.

    2. Is the interest in VPF always taxed? 

      It is only taxed if you put in more than Rs 2.5 lakh in one year. For most people, it stays tax-free below the above said limit.

    3. What happens to my PPF account after 15 years? 

      You can take all your money out, or you can extend it for 5 years at a time. You can do this extension as many times as you like.

    4. Can I stop my VPF contribution if I need more cash? 

      Yes, you can generally tell your HR to stop or change your VPF contribution once or twice a year.

    5. Which is better for my child’s future? 

      PPF is often better because you can open it in your child’s name and the 15-year time matches well with when they will need money for college.

  • What Is Power of Attorney (POA) in a Demat Account? 

    What Is Power of Attorney (POA) in a Demat Account? 

    To make your investments and trade in the stock market you require a Demat account. This account acts like a digital locker for your shares. While setting this account up you must have heard about the POA full form which stands for Power of Attorney. 

    Most of the new investors are curious about what is POA and why POA is needed. It is a type of a document that allows the broker the right to move shares out of your account when you sell your shares.

    When an investor signs this document they get a unique record on your account. The POA number depicts the specific code which tracks this legal agreement between the investor and the broker. Using a POA in share market trades makes life much easier for you as an investor. 

    What Is Power of Attorney (POA) in a Demat Account?

    POA acts as a permission slip where it gives the right to the broker that they can take shares from your account only when you decide to sell them. Here you are still the owner of your shares. The broker is just the person who helps move them from your locker to the buyer.

    Let us understand this with an example, let’s say that being the owner of the car you have put your car in a safe locked space. And if you are looking to sell your car you must have to go to that space, take out your car and drive it to deliver it to the buyer. But this will take a lot of time and effort.

    But what if you have given a “Specific Power of Attorney” to the owner of the garage and you have given them a spare key, but they can only use it if you send them a message saying, “I have sold the car, please deliver it to the buyer.” The manager cannot use your car for personal trips or sell it to anyone else without your order. In the stock market, your broker is the garage manager and the POA is that spare key.

    The role of a POA is to handle the “debit” or the outgoing side of your trades. When you buy shares, you don’t need a POA because the shares are coming into your account automatically. This is only required when you sell, transfer or pledge your securities. The main task that it looks for is moving up shares to the stock exchange or use them as a guarantee to get extra money for trading.

    How Does POA Work in a Demat Account?

    The process begins when the investor signs the POA form when you open your account. Your broker then records this permission in their system. This is how you get connected with your digital signature to the actual share holdings.

    Wherever you open the app and want to sell your shares you just click on the “sell” button and the broker acts on your behalf. Here the broker looks at the sell order and as per rights given under POA the broker asks the depository (like NSDL or CDSL) to move the shares from sellers account to the buyers account. The depository checks if the POA is valid and then transfers the shares to the exchange so the buyer can get them.

    The broker or Depository Participant (DP) behaves like a helping hand. Their job is to follow your orders as it is. They are guided by strict rules from SEBI. The POA is only triggered when you take an action, like selling a stock or pledging shares to get more trading margin. Without your sell order, the broker cannot move anything.

    Types of Power of Attorney in Demat Accounts

    There are mainly two types of POA that every investor should know about. One is very common, and the other is something you should usually avoid for basic investing.

    1. Specific (Limited) POA

    This is the standard version used by almost everyone. It gives the broker permission to do only 4 or 5 specific things. These include selling your shares, pledging them for margin, or helping with mutual fund transfers. It is valid as long as your account is open, it is a safe option as there are limitations on what the broker can act upon. 

    2. General POA

    A General POA is very broad in nature as it gives the person holding it the power to do almost anything on your behalf. They could open new accounts or move your money around. This is rarely used in the stock market unless you are using a high-end service where a professional manages everything for you. For a normal investor, this is not recommended.

    Read Also: What is Demat Debit and Pledge Instruction (DDPI)?

    Why Do Brokers Ask for POA?

    Brokers ask for a POA to make sure your trades don’t get stuck by some minor mistake. In the Indian market, everything moves very fast. When you sell a share today, it must reach the exchange very quickly.

    • Quick and Easy Settlement: The POA allows the broker to send your shares to the buyer immediately, which helps in avoiding penalties for the late delivery.
    • Ease of Trading: Without a POA, you would have to give a physical or digital slip for every single sale. If you trade ten times a day, doing this manually would be very annoying and could lead to some mistake.
    • Margin Trading: If you want to trade with more money than you have in cash, you can “pledge” your shares as a guarantee. The POA makes this process instant and hassle free.
    • No Repeated Approvals: It is a one time procedure where once you sign it, you don’t have to worry about the paperwork every time you book a profit.

    Is POA Mandatory for a Demat Account?

    Many people think they must sign a POA to open an account, but that is not true. According to SEBI guidelines, a POA is completely optional and investors can open a Demat account and start investing even without it.

    If you choose not to give a POA, you can still sell your shares. However, you will have to use a system called “e-DIS.” In this system whenever you would like to sell your share you have to manually enter a 6 digit TPIN and for final verification an OTP will be shared to your registered mobile number.

    Recently we have seen that brokers have opted for a new safe option known as DDPI (Demat Debit and Pledge Instruction) which works like the limited POA (limitations on broker) but this option has tighter restrictions and is more secure for the investors. You can either opt for POA, DDPI or can sell the shares manually using the TPIN method. 

    Benefits of Giving POA

    Here are multiple perks if you give a POA to a trusted broker like Pocketful.

    • Fast Execution: The shares that you have sold reach the buyers account within time and you avoid the short delivery fines (if not shared within time). 
    • Zero Paperwork: No physical slips or couriers are required to be shared with your broker, just sign the POA one time and you can stay care free. 
    • Better Opportunities: As there is a rapid fluctuation in the market by giving a POA you can sell your shares instantly the moment you get the right price. 
    • Simple Pledging: The extra shares in your demat account can give you extra limits for intraday or F&O trading. 

    Risks and Concerns of POA

    Trust Factor: Here the biggest concern is that you are giving powers directly to your broker to move your shares on your behalf but if the broker is not honest at any moment then there is a risk of misuse.

    • Old Formats: Earlier POA forms had a broad spectrum to cover but modern versions like DDPI are much more reliable and safe for the investors. 
    • Monitoring: One shall always check their account statement and SMS alerts to monitor if the movements are correctly done or not. As here you would have to give a penalty if something goes wrong. 

    Read Also: FIFO in Demat: Meaning, Rules & Tax Impact

    How to Give (Execute) POA for a Demat Account

    To activate POA for your trading account you would need to follow the given steps:

    • Registration Form: The first step is to download the POA or DDPI form, from the broker’s website. 
    • Fill the Details: Here you need to put your name and provide your 16-digit Demat account number.  
    • Check the Limits: One should always cross check that you are only giving rights for tasks like “settlement” and “pledging”. 
    • Sign Online or Offline: You can opt if you want to e-sign via mobile number (aadhar linked) or go for the offline method.
    • Get Confirmation: You will receive an email of confirmation as soon as the depository registers your POA.

    Safety Tips Before Granting POA

    Before you sign any document, keep these tips in mind to stay safe:

    • Reputation Matters: One should only rely on brokers that are registered with SEBI and also have a decent track record. 
    • Read the Clauses: Always cross check before signing the final document and be cautious about any clause that states or gives the broker the power to handle your bank account or give total control over the account. 
    • Track Alerts: Always pay attention to the SMS and emails you get from NSDL or CDSL.
    • Nominee is a Must: Nominee is a must add for your account as this keeps your family protected. 

    Read Also: What is a Basic Service Demat Account?

    How to Revoke or Modify POA

    You have the power to cancel your POA at any time you feel so. It does not bind you for a fixed period of time.

    • How to Revoke: A formal written request needs to be shared with your broker for revoking the signed document although some brokers even let you do this process online by e-signing the revocation letter/form.
    • How to Modify: If any changes required the old POA needs to be cancelled and a fresh POA needs to be signed as per the new conditions. 
    • Processing Time: The revocation request can be usually processed within 3 to 5 working days, once done you have to only use your TPIN and OTP for selling your shares. 

    Conclusion

    Power Of Attorney is a tool that is designed to help the investor to ease down their trading faster and easier. It acts as a helping assistant for moving your sold shares to the buyers account, so that investors like you can focus on planning your next move rather than focusing on the timely movements of shares. Although this is optional, most of the traders prefer this as it relieves the investors from risk of penalties due to delayed procedure or any technical fault. By staying alert and choosing a transparent platform like Pocketful, you can trade with peace of mind and keep your costs low.

    For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors Pocketful.

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    Frequently Asked Questions (FAQs)

    1. Is POA mandatory to open an account?

      No, accounts can be opened without it. You will just have to manually enter your TPIN and OTP every time you make a sell trade. 

    2. Can the broker sell my shares without my order?

      No the brokers are bound with only certain things in which they can act, legally the POA only works when you place a sell order yourself. The broker cannot just decide to sell your holdings on their own.

    3. What is a POA number?

      This is a unique reference number that is linked to your agreement that has been signed between you with the broker. It is stored with the depository to show that the broker has permission to move your shares.

    4. Is the new DDPI system better than POA?

      Yes, DDPI is considered safer as there are more limitations to the broker’s task and it can easily be digitally signed. This is a modern version of a POA which is recommended by SEBI.

    5. Can I cancel my POA later?

      Yes, you can easily revoke or cancel your POA at any time by simply informing your broker through a written or digital request. 

  • What Is Short Delivery in Share Market?

    What Is Short Delivery in Share Market?

    Trading in the stock market is just like shopping online where you pick a stock, pay the money, and wait for it to reach your account. But sometimes, the stock you bought does not arrive on time in your account. This situation is called a short delivery.

    If you want to know what is delivery in share market, it is the simple process where shares move from the seller’s account to the buyer’s account. When you buy shares to keep for a few days or years, it is called delivery in stock market trading. Usually, this happens smoothly. But if the seller does not have the shares they sold, a mistake happens in the delivery in share market process.

    Beginners must understand this because it explains why your shares might be missing and how the stock exchange protects your money.

    Short Delivery in the Stock Market

    To put it simply, short delivery is a “delivery failure.” It happens when the person who sold you the shares fails to give them to the exchange on time. A short delivery means the seller sold shares they did not actually have in their account. 

    This is a type of settlement shortfall which tells us that the clearing corporation did not receive the shares from the sellers account within a designated time on the settlement day. Here the clearing corporation is unable to credit the buyer’s demat account on the other hand buyer’s funds are transferred to the clearing house where the assets are shown missing which leads to flag the transaction as default.

    Because they don’t have the shares, the exchange cannot move them to your account. The trade is still valid, but the shares are “short” or missing. 

    When Does Short Delivery Occur?

    It generally takes place during the pay-in-process, where brokers transfer the securities sold by their clients to clearing corporations. If the broker does not have shares in his pool then shortage is identified. This can happen in following ways: 

    • The seller sold shares that were not yet settled in their account (BTST trades).
    • The seller initiated an intraday short position but was unable to buy the shares back due to a lack of liquidity or the stock hitting an upper circuit.
    • The shares in the seller’s account were pledged or under a legal lien, making them ineligible for transfer.

    Key Terms You Should Know

    • Seller: The person who sells the shares and is responsible for sending them.
    • Buyer: The person who pays money and expects to get shares in their account.
    • Settlement: The final step where money goes to the seller and shares go to the buyer.
    • Clearing Corporation: A middleman like NSE Clearing that makes sure everyone gets what they were promised.

    Read Also: What is a BTST Trade?

    How Short Delivery Happens

    • Selling Shares Without Actual Delivery: This is the most common type where the shares are not present in the seller’s demat at the time of trade. This is frequently seen in Buy Today, Sell Tomorrow (BTST) transactions. 
    • Technical or Operational Issues: This can even happen due to connectivity failures where timely instructions of share transfer are disrupted between the broker’s internal systems and the depository (NSDL or CDSL). Also, if the seller has different classes or shares and the broker identifies the wrong International Securities Number (ISIN) the transfer will fail and even depository lags may affect the share transfer. 
    • Errors in Broker or Trader Transactions: Human error like selecting “delivery” instead of “intraday” can affect the transaction if it is not noticed before the market ends, this can lead to delivery obligations that cannot be met. Also bugs in the brokers risk management system allows the sale of the shares that are already being used as margin collateral leading to shortage during pay-in-phase. 
    • Settlement Problems in the Trading Process: When a stock hits its “upper circuit,” it means the price has risen to its maximum limit for the day, and there are only buyers left in the market with no sellers. If a trader has a short position in such a stock, they will find it impossible to buy back the shares to square off their position. This forces the trade into the settlement cycle as a short delivery.

    Understanding the Settlement Process in Stock Trading

    What is the T+1 / T+2 Settlement Cycle?

    Earlier in India settlement used to take more time but now it has been transformed. Previously it used to take T+2 days to settle meaning a trade executed on Monday will be settled by Wednesday. But in 2023 this settlement cycle transitioned to the T+1 settlement cycle. In T+1 cycle T stands for the day the order is executed and T+1 means one additional day when the share must be delivered and the funds are paid out. 

    This shift has reduced the margin requirements and counterparty risks, but it has also halved the time available for brokers and depositories to resolve any operational discrepancies. 

    How Shares Move from Seller to Buyer

    It is a highly digitized process where once the sell order is executed, shares of clients are marked by the seller’s broker; these are then moved to the broker’s “pool account” and from here they are sent to the clearing corporation’s account. After this the clearing corporation identifies all the buying brokers and transfer is made to the respective pool account and in the final step it is credited into individual buyer’s accounts.  

    Role of the Stock Exchange and Clearing Corporations

    The exchange (NSE or BSE) is the marketplace and the Clearing Corporation acts as the guard. They guarantee that the buyer will not lose money even if the seller makes a mistake.

    What Happens If Short Delivery Occurs?

    • Auction by the Exchange: In this the exchange identifies all the undelivered shares and an auction is announced, this auction is separate from the regular market and other people who want to sell their shares can do it during this time.  
    • Exchange Buys Shares: The exchange also buys shares from these auctions and places “buy” orders for the required quantity. The price offered in these auctions is generally higher (20% above the previous day closing) and if enough participants are there within the price range then the exchange buys them and delivers it to the original buyer.
    • Impact on Buyers and Sellers: The buyer has to experience a delay in receiving the shares and if the stock price falls during this time opportunity cost is faced, although they are financially protected as they receive shares or cash premium. For sellers their sale is canceled and they are even charged for the cost of the auction. Also if the exchange buys it at a high price then the seller has to pay the difference.
    • Penalties or Charges Involved
      • Valuation Debit: The exchange blocks a certain amount from the seller’s broker to cover the auction price.
      • Statutory Charges: GST at 18% is applied to the penalty and other exchange charges.
      • Price Difference: The cost of buying the shares in the auction compared to the original sale price.
      • Auction Penalty: A standard penalty of 0.05% of the total trade value is levied by the clearing corporation.

    Read Also: What is Delivery Trading?

    Short Delivery Auction Explained

    It is a secondary market where the exchange buys shares to fix a delivery failure. It happens daily between 2:00 PM and 2:45 PM.

    The exchange sets a “price band” for the auction. It is usually up to 20% higher or lower than the previous day’s closing price. 

    The formula used is: Auction Price Band = Closing Price ± ( Closing Price x 20%) 

    Timeline of the Auction Process

    • Day 1 (T): Trade happens.
    • Day 2 (T+1): Short delivery is found and the auction is held in the afternoon.
    • Day 3 (T+2): Shares are delivered to the buyer.

    Example of Short Delivery in the Stock Market

    Step-by-Step Scenario:

    1. Lets say on Monday Mr.Verma sells 100 shares of “ABC Ltd” at Rs.500, even though he doesn’t own them and he plans to buy them back at 3:30 PM at a cheaper price. 
    2. But ABC Ltd hits an upper circuit on the same day and he cannot buy the shares back.
    3. Then on Tuesday morning, the exchange sees that Mr. Verma has no shares to give.
    4. And on Tuesday afternoon, the exchange holds an auction and buys 100 shares from someone else at Rs.550.

    The person who bought from Mr. Verma on Monday gets the shares on Wednesday and in this situation they have to pay an extra amount.

    Mr. Verma has to pay the Rs.50 extra per share (Rs.5,000 total) because the auction price was higher additionally he also pays a penalty and taxes.

    Impact of Short Delivery on Investors

    Effects on Buyers 

    • Delayed Ownership: As the shares are not delivered the buyer cannot use them for trading or as collateral until he gets them into his demat account. 
    • Inability to Sell: As the shares are not in account buyers cannot sell them if the share is at a good price in the market which can lead to loss of the potential profits. 
    • Cash Settlement Risk: If the auction fails due to some reason the buyer is rewarded with cash instead of shares but the buyer might have done the investment for a long-term share for growth.

    Risks for Sellers

    • Financial Loss: The share price in auction is generally higher than the original price of the share which leads to direct monetary loss. 
    • Blocked Capital: In the auction process 120% to 150% of the traded value is blocked by the broker as a security against the potential auction cost. 
    • Reputational/Account Risk: Continuous short deliveries can lead to restrictions on the client by the broker and even the client can be reported to the exchange. 

    How Investors Can Avoid Short Delivery

    • Share Availability: One shall always check their holdings before selling the shares. You need to make sure they are not unsettled shares.
    • Settlement Timelines: You should never sell your shares the next day unless you are clear about the risk. 
    • Avoid Trading Errors: Traders shall always double check the selected option and look if “Delivery” is not selected if you are planning to do a quick “Intraday” trade. 
    • Maintain Sufficient Margin: One shall always have enough balance so the broker can adjust if things go wrong while you are short-selling for the day. 

    Short Delivery vs Short Selling

    FeatureShort DeliveryShort Selling
    MeaningA mistake where shares are not given A plan to profit from the failing prices
    IntentionNo, usually it’s an errorYes this is a deliberate strategy
    OutcomeLeads to auction and penaltiesPosition is closed by buying back
    LegalitySettlement failure, penalized Fully legal and allowed for intraday 

    Important Things Beginners Should Know

    Investors shall look for prominent companies as big companies like Reliance or TCS trade in large numbers due to which short delivery is very rare. But investors shall always be cautious about small companies as they trade with few shares in the market and short delivery can happen more often. 

    Here the stock exchange acts as a referee and makes sure that if the seller makes any mistake then the buyers shall get the compensation fairly. 

    Knowing about T+1 helps you manage your money. You will know exactly when you can sell your shares again without any risk.

    Read Also: What is Turtle Trading?

    Conclusion

    Short delivery may sound dangerous but this is a situation that can take place in the market. The best part is the system is created to protect your interest. Whether you are a buyer or a seller, you shall always be aware of the rules of the market for making the right move. You shall always watch your holdings and look for the right broking platform which can make trading simple. 

    For the latest market news and insights, download Pocketful – offering zero brokerage on delivery, advanced F&O tools, and an easy-to-use platform.

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    Frequently Asked Questions (FAQs)

    1. Is short delivery a scam? 

      No, it is not a scam or illegal but it is a recognized settlement risk that happens when a seller fails to provide shares on time.

    2. Will I lose my money if my shares are short delivered? 

      No. The exchange will either get you the shares through an auction or give you cash compensation that is often higher than the current market price.

    3. How much is the penalty for short delivery? 

      The defaulting seller pays an auction penalty of 0.05% of the value, plus the price difference in the auction, and 18% GST on the charges.

    4. Can short delivery happen in intraday trading?

      Intraday trades are closed on the same day and short delivery generally takes place in delivery based trades where shares move between accounts.

    5. How long does it take to get my shares after a short delivery? 

      Buyers may receive the shares in their demat account on T+2 day, which takes place one day after the auction takes place. 

  • Impact of Iran War on Indian Shipping Sector and Shipping Stocks

    Impact of Iran War on Indian Shipping Sector and Shipping Stocks

    The news around the war involving Iran has caused a lot of tension around the world. For India, this is not just a distant conflict. It is a major event that changes how we trade and how our markets move. If you are an investor, you must understand the impact of the Indian shipping sector & impact of Iran war. 

    When a major power like Iran is involved in a conflict, the sea routes become dangerous. This leads to a direct Iran war impact on shipping stocks because companies have to pay more for fuel and insurance. 

    The Middle East is the center of global energy. Most of the oil and gas we use comes from this region. When war breaks out, investors usually get scared. They sell their stocks and move their money to safe things like gold. In India, we have already seen the Sensex and Nifty drop when news of the war first came out. This happens because India depends heavily on the Middle East for energy. We also sell a lot of goods like rice and clothes to these countries. If the ships cannot move safely, our economy feels the pain.

    Strategic Importance of the Strait of Hormuz?

    The Strait of Hormuz is a very narrow piece of water between the Persian Gulf and the Gulf of Oman. It is the only way for tankers to carry oil out of the Middle East to the rest of the world. Even though it is very small, it is the most important chokepoint in the global economy. At its narrowest point, the shipping lanes are only two miles wide in each direction. If this passage is blocked, there is no easy alternative to move such a large amount of oil.

    About 20 million barrels of oil pass through this strait every single day. This is about 20% to 25% of all the oil used in the world. It is not just about oil. About 20% of the world’s Liquefied Natural Gas (LNG) also comes through here, mostly from Qatar. For India, this gas is very important for power and making fertilizers. When there is a threat of war, the cost of moving these goods goes up instantly. This happens because shipping companies have to pay much higher prices for fuel and for the safety of their ships.

    The reason this affects global shipping costs is simple. When the strait is at risk, insurance companies charge a “war risk” fee. Also, some ships might choose to avoid the area altogether. If fewer ships are willing to go there, the cost to rent a ship increases. These higher costs eventually make everything more expensive for the common person. For India, which imports about 89% of its crude oil, any trouble in the Strait of Hormuz is a big risk to our economic stability.

    How the Iran Conflict Disrupts Global Shipping Routes

    When war starts, the normal paths that ships take are no longer safe. The first problem is vessel delays and congestion. Ships often have to wait in safe areas until they get permission to move. This creates a “traffic jam” at sea. Sometimes, tankers are seen waiting on both sides of the Strait of Hormuz because they are afraid of being attacked. These delays mean that raw materials do not reach factories on time, which can stop production in many industries.

    The second big change is route diversions. To stay safe, many ships are now avoiding the Middle East and the Red Sea. Instead, they go all the way around the bottom of Africa, known as the Cape of Good Hope, making the journey way much longer. It adds about 14 to 25 days to a single trip. Because the journey is longer, ships use much more fuel. This also means there are fewer ships available globally because each ship is busy for a longer time on a single trip.

    Rising war risk insurance premiums are another hidden cost. Normally, insuring a ship is a standard cost. But during a war, insurance companies may raise their prices by 50% or even more. Some insurers might even refuse to cover ships going to certain ports. This makes it very expensive for companies to operate. All these extra costs are passed down to us, the consumers. This is why we see the prices of imported goods going up during a conflict.

    Impact on Global Supply Chains and Trade

    The war creates a shock that is felt by every country. The most direct impact is the jump in freight rates. This is the price paid to move goods in a container or a tanker. When routes are longer and risks are higher, these rates can shoot up very fast. For example, some container shipping prices rose by 8% in just one week. For oil tankers, the cost of moving oil to India can become four times more expensive than usual.

    We also face container shortages and shipping delays during this situation as longer routes are taken by the ships via Africa. This leads to a shortage of empty containers for the next batch of exports. Goods at ports like Mundra or JNPT in India. When products are stuck at the port, the cash flow of businesses is hit which then leads to empty shelves in stores.

    There is also a big impact on commodity exports and imports. The Middle East is a huge supplier of fertilizers and metals like aluminum. About one third of the world’s urea passes through the Strait of Hormuz. If this supply is cut off, the price of fertilizer goes up, which eventually makes food items more expensive. This portrays that tension in one region can lead to higher prices of goods and commodities in a different region. 

    Impact on India’s Trade and Logistics Sector?

    India has very strong trade ties with the Middle East and products worth $60 billion to $65 billion are sold in this region every year. Higher shipping costs make the exporters suffer. They have to pay 20% to 30% more for freight and insurance. This makes Indian products more expensive in the global market. For example, exporters of Basmati rice have already faced trouble because their ships are stuck or the costs are too high to manage.

    Energy imports are the biggest risk for India, as we get a huge part of our oil and gas through the Strait of Hormuz. If oil prices stay above $100 per barrel, it costs India billions of extra dollars. This also makes the Indian Rupee weaker against the US Dollar. A weaker Rupee makes everything we import, like electronics and machinery, more expensive resulting in higher inflation across the whole country.

    The logistics sector inside India is also on high alert, because ships are getting delayed and goods are piling up at our ports. It is estimated that nearly 6 to 7 lakh containers linked to Gulf trade were affected by the uncertainty. This delay hurts our manufacturing companies. For instance, the pharmaceutical industry gets raw materials from China by sea. If these ships are delayed, the cost of making medicines can go up by 30% or more.

    Immediate Market Reaction in Indian Shipping & Logistics Stocks

    When the conflict started, the Indian stock market reacted with a lot of volatility. The Sensex and Nifty fell by about 3% to 4% in just two days. Port and logistics stocks were hit even harder, with some falling as much as 10% in a single day. Investors were worried that if trade slowed down, these companies would make much less profit. They also feared the impact of high fuel costs on their margins.

    Volatility is common during such times as stock prices swing up and down based on the latest news. For example, if there is talk of a ceasefire, the stocks might recover. But if an oil facility is attacked, they fall again. Experts say that while this looks scary, you should not panic. History shows that markets usually recover from such events after a few months. However, the initial reaction is always one of fear and caution.

    Investors are also concerned about cargo volumes. If fewer ships come to Indian ports because of the war, the port operators earn less money. There is also the risk of physical damage. Some Indian companies have assets in the Middle East. If a storage tank or a terminal is damaged in the conflict, it directly affects the company’s value. This is why investors track these stocks so closely every day.

    Indian Shipping Stocks That Could Benefit from Higher Freight Rates

    It might sound strange, but some companies can actually benefit from a crisis. This is true for shipping lines that own their own ships. When there is a shortage of ships, the price to rent one goes up. During these times companies can even charge higher freight charges resulting in high profits. 

    • Shipping Corporation of India (SCI): This is one of the largest shipping companies in India. This company has its own fleet of tankers and gas carriers. When oil routes become dangerous and rates go up, SCI can earn more from its ships. Investors often buy SCI stocks during such times because they see it as a way to profit from rising shipping prices.
    • The Great Eastern Shipping Company: This is another major player in the private sector. It has a lot of tankers that carry crude oil and petroleum products. Like SCI, it benefits when global freight rates rise. It also has a subsidiary that provides services for oil exploration, which can see more demand if countries try to produce more of their own oil.

    Port and Logistics Stocks That Could Face Headwinds

    While shipping lines might benefit, port and logistics companies often face difficulties. These companies need a steady flow of ships to make money.

    • Adani Ports and Special Economic Zone: This is the biggest private port operator in India. About 15% of the container volume at its Mundra port is linked to the Middle East. If trade with the Gulf slows down, its cargo volumes could drop. This is why its stock price often falls when the war intensifies.
    • JSW Infrastructure: This company has a liquid storage terminal in the UAE. This facility was reportedly hit by drone debris, which caused some damage. Any such disruption in the conflict zone is bad for the company’s profits. It also has plans to expand in the region, which could be delayed because of the war.
    • Gujarat Pipavav Port: This port relies on services that move through the Red Sea and the Gulf. In the past, when there was trouble in these waters, shipping lines skipped this port to save time. This leads to lower volumes and lower income for the company.

    Secondary Impact on Other Logistics-Linked Companies

    The impact of the war spreads to other related businesses too.

    • LPG Logistics: India imports about 90% of its LPG which comes through the Strait of Hormuz and companies like Aegis Logistics take care of the cooking gas imports.
    • Container Operators: In India container movement within India is done by trains and companies like CONCOR handle this. Delayed international shipments makes it very unpredictable for companies to manage the right train schedule.  
    • Airport Logistics: For urgent needs like medicines or electronics air freight is used and with closed airspace over the middle eastern region planes have to travel through longer routes. This results in costlier air freight and companies managing these cargo tend to witness higher cost and lower volumes. 

    Key Risks Investors Should Watch

    If you are planning to invest during this time you shall keep the following point in mind:

    • Strait of Hormuz Closure: If there is a full blockade it could affect 20% of the world’s oil trades which can lead to a huge economic shock. 
    • Oil Prices: If the Brent crude price will be above $100 it can cause a very high inflation situation in India. 
    • Insurance Costs: With high insurance costs many ships might simply stop travelling.
    • Supply Chain Shifts: If the war lasts for a long time, companies might look for new ways to trade which could lead to exclusion of Indian ports, resulting in long term loss for the nation. 

    Conclusion

    The Iran war shows us how countries are connected, for India the impact on shipping and logistics can directly affect the economy. Some shipping companies might look for higher profits but overall the economy will suffer. Investors shall stay calm and look for long-term reliable companies. The war in Iran is a reminder of how connected the world is. For India, the impact on shipping and logistics is real and markets have faced such situations earlier as well and are also aware about how to recover. 

    For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors Pocketful.

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    Frequently Asked Questions (FAQs)

    1. Why do shipping stocks go up during a war? 

      During war ships have to take longer routes, there are fewer vessels available for everyone else. This allows shipping companies to charge much higher prices, which can increase their profits.

    2. How does the Iran war affect the price of things in India? 

      The war makes oil more expensive. Since almost everything in India is moved by trucks or ships that use fuel, the cost of transport goes up. This leads to higher prices for groceries, electronics, and even flight tickets.

    3. Will the war stop India’s exports to the Middle East? 

      Exports haven’t stopped, but they are facing huge delays. About $4 billion of Indian exports could be at risk every month if the conflict continues. 

    4. What happens if the Strait of Hormuz is closed? 

      If it is closed, about 20% of the world’s oil and gas supply would be cut off. This would cause a global energy crisis, very high petrol prices in India, and a major shock to the stock market.

    5. Should I sell my logistics stocks now? 

      While the market might be volatile in the short term, historical data shows that stocks often recover once the situation stabilizes. 

  • Middle East Tourism Crisis 2026: Impact on Travel, Airlines & Tourism

    Middle East Tourism Crisis 2026: Impact on Travel, Airlines & Tourism

    Along with the news about the conflict between the countries of the Middle East and the USA, the news related to the cancellation of flights and rising flight costs is also spreading very fast. So you must be thinking about how it will impact the tourism sector across the globe.

    In today’s blog post, we will give you a brief about how the Iran War is impacting travel, airlines and the global tourism industry. 

    What is the 2026 Middle East Tourism Crisis?

    A tension is escalating between the various countries of the Middle East and the USA. This situation has erupted into a tourism crisis, which is disrupting the tourism of different countries. Various travel hubs, such as Dubai, etc. have seen reduced passenger traffic. Air space of Iran has been shut down, so the airlines are rerouting the flights, which eventually increases fuel cost and fare. This has not only slowed down tourism in the Middle East but also impacted global travel and tourism. 

    How the Iran War is Impacting Travel Demand

    The Iran War is impacting travel demand in the following manner:

    1. Reducing Tourist Confidence: The Iran war is reducing the confidence of investors as fear and uncertainties are rising among tourists. Hence, tourists are postponing and cancelling their travels to the Middle East.
    2. Drop in the arrival of tourists: The travel to Middle East countries is reducing day by day. And it is expected that tourism will fall by 11 to 27% in 2026.
    3. Air Space Restriction: The airspace of Iran has been shut down, which are forcing airlines to take longer routes, which makes travelling more time-consuming and inconvenient.
    4. Uncertain Travel Plan: As the travel advisory and flight schedules across the world are changing very frequently, this is making it difficult for travellers to plan their trips.

    Impact on Airlines and the Aviation Industry

    The war between Iran, Israel and the USA is negatively impacting the airlines and aviation industry in the following manner:

    1. Cancellation of Flights: The airlines are temporarily suspending or cancelling their flights on several routes to ensure the safety of passengers.
    2. Increasing Operating Cost: The operating cost is increasing due to higher fuel consumption and a rise in crude oil prices.
    3. Low Occupancy: There is a constant fear among the passengers in the conflict-affected area, which has led to lower seat occupancy.
    4. Affecting Global Connectivity: The major tourist places like Dubai and Doha, etc., are seen to have limited connectivity because of a reduced number of flights in these regions.

    Impact on the Global Tourism Industry

    The global tourism industry is significantly impacted by the war between Iran, the USA and Israel in the following manner:

    1. Decline in International Travel: International travel has seen a significant reduction as the tourists are becoming more cautious about visiting any country.
    2. Change in Destination: Arab countries like Dubai, Doha, etc., are considered a preferred destination by tourists. However, after the current geopolitical tension, there is a structural shift in travel destinations.
    3. Related Industries: Along with the tourism industry, there is a significant impact on other related sectors such as hotel, retail, aviation, etc.
    4. Increasing Cost: Due to the limited supply of crude oil by the arab countries and diversion in travel routes, the cost of travelling has increased significantly.

    Key Factors to Consider Before Planning a Trip

    There are various key factors which a tourist is required to consider before planning a trip in the current geopolitical conditions:

    1. Checking Travel Advisory: The travel advisories are continuously announced by the governments of various countries. Hence, it is advisable to check travel advisories before making any trip booking.
    2. Flexible Booking: One should opt for the hotel and flights with free cancellation and rescheduling options to avoid any financial loss in case of delay or rescheduling.
    3. Change Destinations: As the conflict is increasing between Iran, the US and Israel, it is advisable to change the travel destination and opt for some other location.
    4. Higher Travel Cost: The travel cost has increased significantly due to additional surcharges by the airlines due to the shortage of crude oil. Hence, revaluation of the trip cost is necessary before making any bookings.
    5. Buy Travel Insurance: It is advisable that one should purchase a travel insurance policy so that in case of any delay, cancellation of the trip, or medical emergencies, the cost will be borne by the insurance company. 

    Conclusion

    On a concluding note, the middle east crises between Iran, Israel and the USA is affecting various sectors of the economy around the globe. It has not only affected the regional travel to Iran but also includes the global tourism sector. Its ripple effect can be seen across airlines, the hospitality sector, etc. Closure of airspace, regular travel advisories from countries have created a panic situation among the travellers. Along with this, the rising cost of oil has increased the cost of travelling. However, historically, it has been seen that once stability returns, travel demand will rebound again. Hence, before making any investment in the tourism and aviation sector, it is advisable to consult your investment advisor. 

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    3Will LPG Cylinder Prices Increase Due to the Iran War?
    4Why Oil Prices Rise During War | Iran-US War
    5How the Iran War Impact on Oil, LPG, Gold & Inflation?
    6Best Oil and Gas Stocks to Watch as Global Oil Prices Surge
    7Top Sectors to Watch During Geopolitical Tensions in India

    Frequently Asked Questions (FAQs)

    1. How is the conflict between Iran, Israel and the USA affecting international travel?

      As the conflict has resulted in restricted airspaces along with the rising fuel cost, and airlines are bound to take longer routes, this has affected international travel negatively.

    2. Which sector is most affected by the Middle East crisis?

      The sectors which are mostly affected by the Middle East crisis are airlines, tourism, and hospitality.

    3. How much time will it take to end the Middle East crisis?

      The situations are continuously evolving and are expected to end quickly, depending on the intent of Iran and the USA.

    4. Why are flight tickets getting expensive?

      The flight tickets are getting expensive because of rising fuel costs, and the rerouting of flights, etc.

    5. What is the Middle East crisis of 2026?

      A major war-like situation is going on currently in the middle east region between Iran, Israel and the USA. This situation is affecting various industries across the globe. 

  • Madhusudan Kela Portfolio: Top Stocks and Holdings (2026)

    Madhusudan Kela Portfolio: Top Stocks and Holdings (2026)

    Many investors closely follow the portfolios of well-known market veterans to understand emerging investment themes. This allows them to understand the right ways to analyse and select stocks that can help build a strong portfolio. 

    One such person who has attracted various investors is Madhusudan Kela. He is known for his work in the country’s finance sector. At the same time, Madhusudan Kela portfolio reflects a perfect mix of varied sectors that have helped him to create a good wealth.

    But the question over here is, what are the top Madhusudan Kela stock picks in 2026 that you should know? Read this guide to get the answers.

    Who Is Madhusudan Kela?

    When it comes to the equity investors and fund managers, Madhusudan Kela stands out. He is often known as Madhu Kela. He was born in a small town in Chhattisgarh known as Kurud. If you see his background, he came from a simple family. His father worked for a bank.

    He completed his school education in his hometown at a Hindi-medium school. Then he moved to Mumbai. He completed his Master’s in Management Studies from K. J. Somaiya Institute of Management Studies and Research in 1991.

    He has worked for over 3 decades with different companies. His work in the Indian capital market is what actually stands out. He is a member of the Venture Capital Investment Committee of SIDBI for the Fund of Funds for Startups initiative.

    Additionally, he is also associated with the Confederation of Indian Industry and the Federation of Indian Chambers of Commerce and Industry. He has worked for major companies such as CICO, UBS, and Reliance Capital Limited.

    Focusing on education, he founded Plaksha University. He is a trustee of the same as well. He won several wards including the Business Standard Equity Fund Manager of the Year Award in 2004.

    He is known for sharing his views with others through media platforms. As of now, he is working as the Managing Director of MK Ventures Capital Limited.

    Madhusudan Kela Latest Portfolio 2026

    Knowing the portfolio starts with understanding the strategy. This will help you understand the basic psychology behind his investing and which sectors he preferred over others. So, here is a quick view of the portfolio.

    StocksHolding ValueQty HeldDec 2025 Holding %Sep 2025 %
    Choice International1,220.2 Cr1,60,54,8337.20%8.90%
    Mkventures Capital287.5 Cr28,58,02774.40%74.40%
    Windsor Machines169.3 Cr65,15,5067.50%7.70%
    Prataap Snacks119.2 Cr11,00,0004.60%4.60%
    Sangam103.2 Cr24,40,6994.90%4.90%
    Indostar Capital75.3 Cr33,79,8342.10%2.50%
    Rashi Peripherals54.3 Cr16,07,7172.40%2.40%
    Bombay Dyeing36.4 Cr32,75,7391.60%1.70%
    SG Finserve35.8 Cr9,51,7731.70%1.70%
    IRIS RegTech29.0 Cr10,72,0005.20%5.20%
    Niyogin Fintech23.2 Cr50,20,0004.50%4.50%
    Unicommerce eSolutions19.6 Cr18,34,3011.68%1.70%
    Repro18.3 Cr4,75,0003.29%3.30%
    Kopran9.2 Cr7,04,5931.50%1.50%
    Emkay Global8.1 Cr2,89,2431.10%–
    Nazara Technologies–––1.20%
    NOTE: All the information in the table is based on the external public sources. They are bound to change. The details shared here are only for informational and educational purposes.

    Company Overviews

    Now that you know Madhusudan Kela stocks, it is crucial that we know a little about these companies as well. Here is a brief overview of what these companies are all about.

    1. Choice International

    Choice International is a financial services company offering stockbroking, wealth management, investment banking, and advisory services. It focuses on retail investors, SMEs, and institutions seeking capital market access and financial solutions.

    2. MK Ventures Capital

    MK Ventures Capital is the company founded by Madhusudan Kela. The company works in the equity market and portfolio management. It focuses on identifying high-growth companies across emerging sectors in India.

    3. Windsor Machines

    Windsor Machines is a company that manufactures plastic processing machinery. The company provides machines to various other companies, including packaging and automotive. Its models support modern manufacturing and industrial production.

    4. Prataap Snacks

    Prataap Snacks must have heard of the Yellow Diamond Chips. This is the company that produces them. The company offers a wide variety of snacks and focuses on large-scale retail distribution.

    5. Sangam

    Sangam produces yarn, fabrics, and ready-to-stitch garments. The company supplies domestic and export markets. It focuses on the production and the inegtarted services as well. This is a prime reason for faster growth.

    6. Indostar Capital

    Indostar Capital Finance is a non-banking financial company that provides vehicle finance, SME lending, and corporate loans. It mainly serves small businesses and transport operators across India’s growing credit market.

    7. Rashi Peripherals

    Rashi Peripherals distributes technology products, including laptops, smartphones, and IT accessories. The company connects global technology brands with retailers and enterprises. It has a wide network.

    8. Bombay Dyeing

    Bombay Dyeing is a well-known textile brand that needs no introduction. It is known for its quality and range of home textile products, such as bed linen and towels. It also develops the residential and commercial projects.

    9. SG Finserve

    SG Finserve is a financial services company providing lending and investment solutions. It focuses on credit opportunities, structured finance, and capital markets activities to support businesses and financial growth.

    10. IRIS RegTech

    IRIS RegTech develops regulatory technology solutions. These are the ones that help organisations manage compliance, reporting, and financial disclosures. Its software supports businesses and regulators in efficiently handling complex regulatory requirements.

    11. Niyogin Fintech

    Niyogin Fintech company provides digital financial services. It partners with fintech platforms and financial institutions to expand access to financial products.

    12. Unicommerce eSolutions

    Unicommerce eSolutions offers supply chain and warehouse management software for e-commerce businesses. Its technology helps brands and marketplaces manage their working end-to-end.

    13. Repro

    Repro India provides print-on-demand publishing and content distribution services. It works with publishers and educational institutions to deliver books and learning materials through digital printing and supply chain solutions.

    14. Kopran

    Kopran is a pharmaceutical company. It manufactures active pharmaceutical ingredients and formulations. It supplies medicines to domestic and international markets.

    15. Emkay Global

    Emkay Global provides brokerage, investment banking, research, and wealth management services. It serves institutional investors, corporations, and high-net-worth clients in Indian capital markets.

    16. Nazara Technologies

    Nazara Technologies is a gaming and esports company. It works on mobile games, interactive entertainment, and sports media platforms. It operates across India and international markets.

    Read Also: 10 Top Investors In India And Their Portfolios

    Sector Wise Analysis

    There is no doubt that Madhusudan Kela’s portfolio shows a perfect balance of multiple sectors. The mix is important for helping you manage risk and ensure that no single situation negatively impacts your portfolio. Here are the key insights.

    1. Financial Services and Fintech: It is one of the most prominent sectors in the portfolio. There are fintech, equity, and other companies that exert significant influence. As more individuals gain insights into building financial security, the sector’s growth potential is high.
    2. Technology and Digital Platforms: Businesses need better technology to manage their daily operations. This is where the technology-driven businesses are gaining importance. The companies involved in operational and tech support are growing fast due to a proactive rise in demand.
    3. Consumer Businesses: The demand for better consumer products is always there. But a few companies, like the ones selling good snacks, stay ahead of the rest. Adding such companies to the portfolio offers stability even when the market is volatile in nature.
    4. Manufacturing and Industrial Sector: This is the backbone of the economy. Every industry needs manufacturing tools and machines to complete its processing. Investing in capital goods offers long-term growth potential. But mind that these are not companies that can offer high returns in the short run.
    5. Healthcare and Pharmaceuticals: There is no doubt that this is one of the sectors growing rapidly, and nothing actually impacts it widely. The research, the need for better medical facilities, and support are boosting the sector to new heights. 
    6. Digital Entertainment and Gaming: The digital education, gaming, and entertainment have grown multifold in the past few years. The demand for apps and gaming is supported across every sector, making this a high-growth sector in the future.
    7. Publishing and Content Services: Publishing and content services support the education and knowledge ecosystem. Even with the digital ear, there is a high demand for these services, and this is to support the visibility. This is a reason for consistent growth here. 

    Investment Strategy

    The Madhusudan Kela portfolio reflects a clear investment style built around conviction and deep understanding. The companies in the portfolio are selected based on their background and sector. A simple analysis for you is here.

    1. Focus on Emerging Growth Businesses: He often invests in companies that are still developing their full potential. These businesses may not yet be market favourites. But if you actually analyse these, these are ones with improving fundamentals and expanding demand. This gives them the ability to grow steadily over time.
    2. Preference for Mid-Sized Companies: Many companies in the Madhusudan Kela stocks list fall in the mid-cap space. These firms usually have established operations but still have enough room to expand, making them attractive to investors seeking long-term value creation.
    3. Long-Term Holding Approach: His portfolio shows patience rather than frequent buying and selling. Once conviction is built around a business, he tends to stay invested through cycles and allows the company’s growth to reflect gradually in its valuation.
    4. Sector Diversification: The portfolio spreads across financial services, technology, manufacturing, consumer businesses, and pharmaceuticals. This diversification makes the portfolio stable. This allows it to work well even when there is turmoil in one of the sectors.
    5. Strong Focus on Business Fundamentals: Investment decisions usually revolve around business quality, demand outlook, management capability, and balance sheet strength. Rather than reacting to short term price movements, the emphasis remains on long term business performance.

    Read Also: Best Free Stock Portfolio Tracker in India

    Interpretation of Portfolio Positioning

    Looking at the structure of the Madhusudan Kela portfolio offers useful insight into his investment thinking. The companies chosen reflect both established sectors and emerging themes shaping India’s economic growth.

    1. Clear Tilt Toward Financial Services: A noticeable portion of the portfolio sits in financial and fintech businesses. This shows confidence in India’s expanding credit ecosystem and markets. This is a sign that knowing the market trends can help greatly.
    2. Increasing Exposure to Technology Platforms: If you see, the portfolio focuses on upcoming and new technologies as well. The idea here is simple. The businesses are changing and adoption of the same in your portfolio can be really helpful. 
    3. Selective Consumer Exposure: Consumer-oriented companies provide stability within the portfolio. This can be simple food or even the household supplies. Adding some of these companies can help a great deal.
    4. Participation in Industrial Growth: Exposure to manufacturing and industrial companies is a sign of belief that the economy is growing. Also, these are the companies that serve as the baseline for many other sectors.
    5. Inclusion of Niche and Emerging Segments: Some holdings belong to specialised or niche industries that are still evolving. This is key as these are rge industries with speedy growth potential but needs caution as well.

    Key Insights for Investors

    The Madhusudan Kela stocks portfolio offers several useful lessons for investors who want to build a thoughtful and disciplined investment approach.

    • Focus on finding the companies that are in their developing stage.
    • Create a good portfolio with patience and a proper balance.
    • Have exposure to multiple sectors.
    • Be keen to know the fundamentals and past history.
    • Have proper plans for entry and exit.
    • Analyse and update every 3-6 months to avoid losses.

    Conclusion

    The Madhusudan Kela portfolio reflects an investment style centred on patience, conviction, and careful sector selection. All the companies in his portfolio are selected based on deep analysis of the market.

    For investors who wish to follow his plan, it is important to understand market well. Diversification is key here and should focus on a deeper approach. And if you are looking for more such insights on the stocks, then register with Pocketful and start investing right.

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    Frequently Asked Questions (FAQs)

    1. What type of companies does Madhusudan Kela prefer?

      Most of the companies in Madhusudan Kela portfolio are mid-sized with strong fundamentals. These companies are on their growing stage and support the economy.

    2. Does Madhusudan Kela frequently change his portfolio?

      No. His portfolio usually shows stability across quarters. This gradual change in the portfolio allows tracking and avoids impulse actions that can impact negatively.

    3. Why does he invest in mid-cap companies?

      Mid-cap companies often offer higher growth potential. These companies are still in a stage where they carry good potential for future. So, this offers better results.

    4. Which sectors appear most often in his portfolio?

      Financial services, technology platforms, manufacturing businesses, consumer companies, and healthcare-related firms are among the sectors that frequently appear in his investments.

    5. What can investors learn from his strategy?

      The key lessons include staying patient and focusing on the business fundamentals. This is followed by proper management, deeper analysis, and also identifying companies that are still growing rather than chasing already popular stocks.

  • Top Sectors to Watch During Geopolitical Tensions in India

    Top Sectors to Watch During Geopolitical Tensions in India

    Whenever the geopolitical tension rises, the stock market tends to become volatile and unpredictable. But not all the sectors need to be negatively impacted by such events; there are a few industries which perform well during such periods.

    In today’s blog post, we will give you an overview of the top sectors to watch during geopolitical tension. along with the key factors to consider before investing in it. 

    Current Geopolitical Tension

    Currently, geopolitical tension is escalating across the world. This geopolitical crisis involves Iran, Israel, and the US. This conflict escalated when the USA and Israel launched various missiles at Iran, and this conflict involved various countries. This conflict has disrupted the global supply chain related to crude oil, gas, etc. As a region known as the Strait of Hormuz, which is a crucial oil transportation route, has been captured by Iran.

    Top Sectors to Watch During Geopolitical Tensions

    The top sectors to watch during geopolitical tension is a follows:

    1. Defense Sector
    2. Oil and Gas Sector
    3. Pharma Sector
    4. Information and Technology Sector
    5. Commodity Sector
    6. Renewable Energy

    Overview of Top Sectors to Watch During Geopolitical Tensions

    1. Defence Sector

    The defence sector is one sector that tends to be in the spotlight during geopolitical tensions since the government usually increases military expenditure to enhance national security. In India, the government has been focusing on domestic defence production and decreasing the dependence on imports. This has provided a high growth potential to companies that deal with aircraft manufacturing, defence electronics, missiles and surveillance systems. In the event of increased geopolitical risks, the defence companies might get increased orders from the government, which can increase their revenues and future growth potential. Due to this, defence stocks are usually closely monitored by investors in times of global uncertainty.

    2. Oil and Gas Sector

    The oil and gas industry is among the most sensitive industries where geopolitical tensions rise. War in oil-producing countries, particularly the Middle East, can cut supply chains and cause abrupt rises in crude oil prices. In the case of India, where much of the crude oil is imported, the developments can have major effects on the economy and energy markets. The oil exploration companies, which are upstream companies, might gain, and refining and marketing companies might be adversely affected by increased prices in the oil market. Due to the fact that energy is a key factor in economic activity, the sector becomes highly sensitive when it comes to conflicts across the globe.

    3. Pharma Sector

    The pharmaceutical industry can be regarded as a defensive industry since demand for medicine and healthcare products is consistent despite political and economic factors experienced in the world. This is because people still require basic medicines, vaccines, and medical care even when geopolitical crises strike. India is a major manufacturer of generic drugs in the world, which exports drugs to numerous foreign markets. This well-established international base makes pharmaceutical firms stable. Pharma stocks are sometimes considered a comparatively safer investment option during uncertain periods since the industry is likely to experience steady demand and sound financial results.

    4. Information and Technology Sector

    Information technology (IT) is an important sector in India’s economy and tends to be stable during geopolitical problems. Most Indian IT firms make much of their income out of international clients, especially in the United States and Europe. The currency fluctuations resulting from geopolitical tensions can be favourable to the Indian IT exporters when the US dollar is strong. Moreover, cybersecurity, digital infrastructure, and technology solutions are usually required more during global conflicts, which also contributes to the demand for IT services. The IT sector is still a preferred investment option by investors due to its high export levels and digital growth patterns.

    5. Commodity Sector

    Geopolitical developments have a significant impact on the commodity sector, which covers metals, minerals, and other raw materials. Global supply chains can be interrupted by conflicts, sanctions and trade restrictions, leading to commodity prices fluctuating. For example, when there is tension between countries that produce huge amounts of resources, then the price of metals such as steel, copper, or aluminium may increase. Companies manufacturing metals and other firms in the mining industry are directly affected by these price fluctuations. During the geopolitical tensions, commodity companies in India would have the advantage of increased world prices. Subsequently, this industry has become a key area of interest to most investors who are keen on knowing how the world is affecting supply and demand.

    6. Renewable Energy

    The renewable energy industry is acquiring more importance in the midst of geopolitical tension, particularly when international oil and gas supply is disrupted by conflicts. It has boosted investment in renewable energy sources like solar, wind and green hydrogen. India has also been on a mission to increase its renewable energy capacity as part of its long-term sustainability and energy independence objectives. With geopolitical uncertainties pointing to the dangers of over-dependence on conventional energy sources, renewable energy companies are likely to be an important part of future energy consumption.

    Key Factors to Consider before Investing during Geopolitical Tensions

    There are various key factors to consider before investing in the geopolitical tensions:

    1. Volatility: Due to geopolitical events the market suddenly fluctuates which can lead to significant volatility in the short-run making impulsive decisions based on it.
    2. Crude Oil Prices: Conflict in the oil-producing countries can push the oil prices higher. And India is heavily dependent on the import of crude oil, so it is advisable to analyse the overall market sentiment before making any investment.
    3. Financial Performance: The financial performance of the individual company needs to be analysed, and one should only invest in companies with a higher profit margin, consistent revenue, etc.
    4. Diversification of Investment: The investment during the volatile market conditions should not be made in one stock or sector. Therefore, one must diversify their investment portfolio across different industries to reduce risk.

    Advantages of Investing During Geopolitical Tensions

    1. Sector-Focused Expansion Possibilities: Industries such as aerospace/military suppliers, energy resources, and raw materials frequently see uplift from heightened need and elevated costs when international friction arises.
    2. Steadiness Through Protected Industries: Fields like healthcare and technology tend to hold up well because of steady consumer needs and broad international reach, assisting in lowering portfolio vulnerability.
    3. Profit from Rising Material Valuations: Interruptions in worldwide product flows can propel costs for petroleum, base metals, and natural fuels upwards, favorably impacting associated enterprises.
    4. Appealing Extended Horizon Acquisition Moments: Share price dips during periods of unpredictability can present chances to purchase shares with solid underlying value at more favorable prices.

    Risks of Investing During Geopolitical Tensions

    • Increased Market Volatility: Global political occurrences have the potential to spark swift and erratic shifts in the markets, leading to greater near-term hazards.
    • Rising Inflation Due to Oil Prices: Elevated petroleum rates may fuel inflation, adversely affecting numerous industries and the broader economic expansion.
    • Currency Fluctuations: Instability in exchange rates can influence corporate profits, particularly for firms reliant on imports or those with international exposure.
    • Sectoral Imbalance: Certain industries may see gains, yet others such as construction, property, and consumer spending might experience deceleration during these times

    Conclusion

    On a concluding note, increasing geopolitical tension in the region creates uncertainty in the market, making it highly volatile. Different sectors or industries respond in a different manner during such conditions. Some industries, such as pharma, oil, IT, etc., can perform well, whereas industries like infrastructure, real estate, etc., tend to show a significant correction. For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors Therefore, one must consult their investment advisor before making any investment during the geopolitical uncertainties. 

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    4Why Oil Prices Rise During War | Iran-US War
    5How the Iran War Impact on Oil, LPG, Gold & Inflation?

    Frequently Asked Questions (FAQs)

    1. Which are the sectors that can perform well during the current geopolitical tensions?

      There are various sectors, such as defence, pharma, oil and gas, IT, renewable energy, etc., that can perform well during geopolitical tensions.

    2. Is it safe to invest during geopolitical crises?

      Yes, it is safe to invest during geopolitical crises. One should invest for a longer duration as markets tend to be volatile in the short-term. Also, it is advisable to consider your risk profile and consult your investment advisor.

    3. Why do crude oil prices increase during the war?

      As the war in the Middle East region can significantly disrupt the global supply chain, eventually increase the prices of crude oil.

    4. Which industry is mostly affected by rising crude oil prices?

      Industries like aviation, logistics, etc., are significantly impacted by the rising crude oil prices.

    5. How to invest in stocks during geopolitical crises?

      To invest in stocks during geopolitical crises, one must open a demat and trading account and select the stocks of sectors which can perform well during such conditions. Pocketful also offers you an opportunity to open a lifetime free demat and trading account, as it also offers free brokerage on delivery trades.

  • Best Oil and Gas Stocks to Watch as Global Oil Prices Surge

    Best Oil and Gas Stocks to Watch as Global Oil Prices Surge

    As the war between Iran, the US and Israel is going on, the global prices of oil and gas are rising, because Iran produces a large amount of the world’s total consumption of crude oil. Hence, investors are curious about the impact of rising crude oil prices on Indian Stocks. 

    In today’s blog post, we will give you an overview of the best oil and gas stocks to watch as global prices surge.

    Why Global Oil Prices Impact the Indian Oil and Gas Sector

    India imports a larger portion of its crude oil and gas from different countries to complete its requirements. Hence, any changes in global crude oil and gas prices can significantly impact the Indian crude oil prices. As in the current scenario, global crude oil prices are rising because of the war between Iran, the USA and Israel and the global crude oil supply chain is disrupted, leading to a rise in crude oil prices globally. This price rise will benefit the companies engaged in exploration, selling and marketing of oil and gas in India. 

    Best Oil and Gas Stocks to Watch in India

    The best oil and gas stocks to watch in India are as follows:

    1. Reliance Industries Limited
    2. Oil and Natural Gas Corporation Limited
    3. Bharat Petroleum Corporation Limited
    4. GAIL Limited
    5. Oil India Limited
    6. Hindustan Petroleum Corporation Limited
    7. Adani Total Gas Limited
    8. Petronet LNG Limited
    9. Chennai Petro Limited
    10. Mahanagar Gas Limited
    CompanyCurrent Market Price (INR)Market Capitalisation (in INR crore)52-Week High52-Week Low
    Reliance Industries Limited1394188642616121115
    Oil and Natural Gas Corporation Limited265333818293205
    Bharat Petroleum Corporation Limited300130155392260
    GAIL Limited14796917203144
    Oil India Limited47376898524322
    Hindustan Petroleum Corporation Limited34673729508320
    Adani Total Gas Limited51556640798454
    Petronet LNG Limited28943290326264
    Chennai Petroleum Corporation Limited1054156951103516
    Mahanagar Gas Limited1013100101587989
    (As of 17th March 2026)

    Overview of Best Oil and Gas Stocks 

    1. Reliance Industries Limited

    Reliance Industries Limited company was incorporated in 1966 by Dhirubhai Ambani. After the death of Dhirubhai Ambani, his son Mukesh Ambani took over the company. And later expanded the company’s operations into various sectors, such as retail and communication. The company’s headquarters is in Mumbai.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    12.5825.6335.9
    (As of 17th March 2026)

    2. Oil and Natural Gas Corporation Limited

    This company was founded in 1956 and is one of the largest public sector energy companies in India. It works under the Ministry of Petroleum and Natural Gas. ONGC is primarily engaged in the exploration, production, and distribution of crude oil and natural gas. Its headquarters are situated in New Delhi.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    15.2172.89141.96
    (As of 17th March 2026)

    3. Bharat Petroleum Corporation Limited

    The company was founded in 1952 as a result of a joint venture between the Indian Government and Burmah Shell. Later, when the government acquired the Burmah Shell, BPCL converted into a fully owned government company. The company is engaged in the marketing and distribution of petroleum and its related products to retail users. The company’s headquarters is situated in Mumbai.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    14.6670.6638.87
    (As of 17th March 2026)

    4. GAIL Limited

    GAIL Limited company was established in 1984 as a public sector undertaking to develop a natural gas transmission network in India. The company was listed on the Indian Stock Exchange in 1997. The company is expanding its natural gas pipeline network across the country. The company’s headquarters is in New Delhi.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    (5.9)33.7659.81
    (As of 17th March 2026)

    5. Oil India Limited

    Oil India Limited company was founded in 1959 and works under the Ministry of Petroleum and Natural Gas. The company mainly operates in the North-East region of India. It became a publicly listed company in 2009. The company has exploration facilities in other countries. Its headquarters are situated in Assam.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    25.07176.19448.22
    (As of 17th March 2026)

    6. Hindustan Petroleum Corporation Limited

    The company was incorporated in 1974 and was initially known as Esso India, and later, after nationalisation, it was renamed as Hindustan Petroleum Corporation Limited. Later in 2018, it was acquired by ONGC Limited. The company got itself listed on the stock exchange in 1977. The company’s headquarter is situated in Mumbai.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    6.38113.97119.48
    (As of 17th March 2026)

    7. Adani Total Gas Limited

    Adani Total Gas Limited is one of the leading players in the gas distribution space. The company was incorporated in 2005, and over time, it has expanded its presence in supplying piped natural gas to households, industries, etc. It became a publicly listed company in 2018. The headquarters of the company is situated in Ahmedabad.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    (14.29)(42.44)(30.52)
    (As of 17th March 2026)

    8. Petronet LNG Limited

    The company was incorporated in 1998 to develop Liquid Natural Gas and distribute it among the citizens of the country. The company was listed on the Indian Stock Exchange in 2004. Over the years, the company has expanded its operations and developed infrastructure to supply LNG. The headquarters of the company is situated in New Delhi.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    1.5523.9426.14
    (As of 17th March 2026)

    9. Chennai Petroleum Corporation Limited

    Chennai Petroleum Corporation Limited company was incorporated in 1965 and was initially known as Madras Refineries Limited. It was established as a joint venture between the Government of India, AMOCO, and the National Iranian Oil Company. Later in 2001, after the IOCL increased its stake in the company, it was renamed as Chennai Petroleum Corporation Limited. The headquarters of the company is situated in Chennai.

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    89.72316.26855.34
    (As of 17th March 2026)

    10. Mahanagar Gas Limited

    Mahanagar Gas Limited company was established in 1995 as a result of a joint venture between GAIL and BG Group. The objective of the company is to provide a strong network of gas distribution in urban areas and to promote the use of cleaner fuels. It offers CNG along with PNG. The company became a publicly listed company in July 2016. The headquarters of the company is located in Mumbai. 

    1 Year Return (%)3 Years Return (%)5 Years Return (%)
    (22.72)2.96(11.57)
    (As of 17th March 2026)

    Key Factors to Consider Before Investing in Oil and Gas Stocks

    The key factors which one can consider before investing in oil and gas stocks are as follows:

    1. Global Oil Prices: This is one of the key factors that one should consider before making any investment in oil and gas stocks. The companies engaged in the exploration of oil and gas may see fluctuation in their profit margins.
    2. Government Regulations: The performance of the oil and gas sector is directly influenced by the government policies and regulations. Different types of subsidies and windfall taxes can significantly impact the company’s performance.
    3. Financial Performance: The company’s performance is directly linked with their financial performance. Their profit margins, debt levels, cash flows, etc., can impact a company’s performance.
    4. Demand: The global demand for oil and gas is influenced by economic and industrial activities. A growing economy generally has higher demand, which can help oil and gas companies. 

    Future Outlook of the Indian Oil and Gas Sector

    The future outlook of the Indian oil and gas sector is very strong due to increasing demand for energy. The companies in India engaged in exploration, marketing and distribution of oil and gas are expected to grow in future. Along with this, the government is also subsidising the companies by promoting the usage of natural gas. However, these companies are diversifying into renewable energy but still have strong growth potential in the long run.

    Conclusion

    On a concluding note, due to the war between Iran, Israel and the USA, the global crude oil prices are rising, and there are various countries, such as India, which are significantly dependent on the import of oil from Arab countries. This will impact the profitability of the Indian companies engaged in the selling and distribution of oil and gas. One can invest in these companies for the medium to long term to earn a profit. But it is advisable to consult your investment advisor before making any investment decision. For more market news and insights, download Pocketful – offering users zero brokerage on delivery trades and an easy to use platform designed for both beginners and experienced investors.

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    Frequently Asked Questions (FAQs)

    1. Why global rise in prices affecting Indian oil and gas stocks?

      India imports a large portion of its crude oil from different countries. And if the global crude oil price rises, it can affect the profit margins of Indian oil and gas stocks.

    2. Which factors should an investor consider before investing in oil and gas stocks?

      There are various factors, such as the prices of global crude oil, government policies and regulations, and company profitability.

    3. How to invest in oil and gas stocks?

      To invest in crude oil and gas stocks, one must open a demat and trading account. Pocketful offers you an opportunity to invest in oil and gas stocks by opening a lifetime free demat account with zero brokerage on delivery.

    4. How can geopolitical tension impact crude oil prices?

      Due to geopolitical tensions, the global supply chain has been disrupted, pushing crude oil prices upward and making crude oil expensive in India.

    5. Name the best Oil and Gas Stocks to purchase due to the Global Oil Price Surge?

      The best oil and gas stocks to purchase amid the global oil price surge include Reliance Industries, ONGC, Oil India Limited, IOCL, BPCL, etc.

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