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10 Best YouTube Channels for Stock Market in India

The stock market is one of the quickest ways to create wealth and attracts thousands of investors and traders in India. Whether you are an amateur who wants to understand the very basic concepts or an experienced trader seeking to refine their strategies, YouTube has it all to offer. Thousands of YouTube channels in their field of stock market education provide tutorials on stock analysis, investment tips, and trading strategies.

In this article, we’ll be talking about the top 10 YouTube channels for the stock market in India that can help you take your stock market journey to the next level.

Each of these YouTube channels has earned a name for sharing quality stock market information, making them the hotspots for stock market enthusiasts. Let’s head into the details of each of these channels, along with a few of their best-known playlists.

Top Stock Market YouTube Channels Comparison

Channels Name	Subscribers	Videos	Views
Trading Chanakya	479K	1.4K	46,125,737
Pranjal Kamra	6.29M	544	517,633,486
Amit Kukreja	48K	2.6k	13,057,464
CA Rachana Phadke Ranade	5.12M	1.3K	297,613,932
Yadnya Investment Academy	876K	2K	67,502,786
The Financial Analyst	30.6K	235	1,039,336
Elearnmarkets	1.01M	1.7K	83,841,304
Money Grower	270K	339	11,807,040
Asset Yogi	3.8M	670	256,473,409
Nitin Bhatia	1.01M	1.6K	70,768,886

Best YouTube Channel Overview

1. Trading Chanakya

Trading Chanakya is one of the best YouTube channels to learn trading in India. The YouTube channel deep dives into investment strategies and risk management. The channel is recommended for both novices and advanced traders. The channel will help you understand the psychology behind the trading and will help you execute profitable trades in the stock market.

Popular Playlists on Trading Chanakya:

Basics of Stock Market: This playlist for beginners explains the basics of the stock market, including how to analyze stocks and market cycles, along with important financial metrics.

Options Trading: This is a deep dive into options trading strategies, teaching viewers how to use leverage options for profit and manage risks.

Stock Market Analysis: This playlist is for those who already have some knowledge of trading and teaches about technical analysis, chart patterns, and indicators.

Investing for Long Term: This playlist aims at long-term wealth creation through stock investments, where one focuses a lot on the importance of the fundamental analysis.

Why Follow?
Great for novice and advanced traders seeking actionable insights.

2. Pranjal Kamra

Pranjal Kamra is one of the most popular YouTubers teaching about the stock market in India. He explains the most complex concepts in a very simple and easy-to-understand method through his tutorials on stock market investing, personal finance, and financial planning. He teaches the audience about the power of compounding and long-term investing.

Popular Playlists by Pranjal Kamra:

Stock Market for Beginners: A step-by-step guide to understanding the stock markets. This is the perfect playlist for all the new folks.

Investment Strategies: Advanced strategies, including value investing, growth investing and portfolio diversification.

Personal Finance: A comprehensive playlist encompassing financial planning, wealth creation, and retirement planning.

Mutual Funds: This playlist encompasses mutual fund investments, an excellent idea for those who wish to diversify their investments.

Why Follow?
Pranjal’s practical advice and real-life examples make complex concepts easy to grasp.

3. Amit Kukreja

Amit Kukreja is another esteemed name in the category of personal finance and stock market education. His YouTube channel aims to educate people about specific investment strategies, financial planning, and market analysis. Given his detailed and easy-to-follow content, Amit Kukreja simplifies complex financial thoughts for beginners and provides more insight for experienced investors.

Trending Playlists on Amit Kukreja:

Stock Market Insights: In-depth reviews of stock market trends, the latest economic updates, and sector-specific reviews.

Investment Strategies: Tips and strategies for building a diversified portfolio aimed at meeting long-term financial goals.

Mutual Funds Masterclass: Reviewing mutual funds in detail with head-to-head comparisons to guide the audience toward making the right investment choices.

Wealth Planning Basics: Financial planning, retirement planning, and essentials about wealth management.

Why Follow?
His channel provides a balanced mix of theoretical and practical financial knowledge.

4. CA Rachana Phadke Ranade

CA Rachana Phadke Ranade is one of the best stock market teachers on YouTube. With a background in finance, she is a trusted name for financial education. Her channel offers detailed lessons on all aspects of a stock market, be it trading strategy or financial literacy.

Top Playlists on CA Rachana Phadke Ranade:

Stock Market Course in Hindi: It is a complete stock market course for beginners, ranging from basic aspects of the market to advanced topics.

Technical Analysis: Offers deep insights on technical analysis, chart patterns, and key indicators, which helps traders make informed trading decisions.

Fundamental Analysis: The playlist teaches how to analyze a company on the basis of its financial statements and determine intrinsic value.

Investing in Stocks: A playlist of long-term investments focusing on portfolio management and risk management, including diversifying investment portfolios.

Why Follow?
Rachana’s structured courses are excellent for beginners and advanced learners alike.

5. Yadnya Investment Academy

Yadnya Investment Academy is one of the most well-respected channels that has always focused on delivering deep insights into financial planning, mutual funds, and the stock market. It is a platform that empowers retail investors with strategic investment opportunities for long-term wealth creation.

Popular Playlists on Yadnya Investment Academy:

Stock Market Insights: Analysis of the Indian stock market trends based on sectoral performance and macroeconomic conditions.

Mutual Funds Simplified: Guidelines on how to select the right mutual fund as per your financial goals, risk appetite, and specific performance metric.

Detailed Breakdown of listed companies, company fundamentals, and growth prospects for informed decision-making.

Why Follow?
Perfect for those looking to build sustainable investment portfolios.

6. The Financial Analyst

The Financial Analyst is a popular YouTube channel that focuses on stock market analysis, investments, and personal finance. The playlists are meant to help people make better decisions regarding their money.

Most Popular Playlists on The Financial Analyst

Stock Market Analysis: It offers an overview of the current trends in the stock markets, technical analysis, and stock recommendations.

Investment Strategies: Several investment techniques are shared on how to build long-term wealth.

Stock Picks: This playlist features stocks that should be worth investing in, with a detailed analysis of their growth prospects.

Financial Planning: The playlist takes one through the entire personal finance spectrum, from budgeting to wealth management.

Why Follow?
Offers quick, actionable tips for improving financial health.

7. Elearnmarkets

Elearnmarkets is a popular channel that aims to provide educational content to stock market enthusiasts. It is designed for those interested in learning trading and investing from scratch. The channel offers expert guidance with easy-to-understand tutorials, thus making complex financial concepts understandable to everyone.

Popular Playlists on Elearnmarkets:

Stock Market Basics: A playlist of beginner-friendly lessons to understand the basics of the stock market.

Technical Analysis: Comprehensive playlists on chart pattern recognition, indicators, and trading tools necessary for any successful trader.

Financial Planning: The playlist explains personal finance, wealth management, and financial planning.

Advanced Trading Strategies: Options trading, derivatives, and algorithmic trading are covered in this playlist.

Why Follow?
An excellent resource for traders looking to advance their technical skills.

8. Money Grower

Money Grower is a YouTube channel that provides a combination of stock market analysis, trading techniques, and general financial knowledge. This interesting approach to teaching the viewers made Money Grower one of the top stock market YouTube channels.

Most Popular Playlists on Money Grower:

Stock Market for Beginners Series: This all-inclusive series covers the basics of the stock market.

Technical Analysis: Individuals can watch this playlist to learn how to use chart patterns for trading decisions.

Stock Picking: This playlist teaches you how to select individual stocks with long-term growth potential.

Investment Strategies: Learn how to make a very powerful investment portfolio.

Why Follow?
Simplifies technical concepts into easily digestible lessons.

9. Asset Yogi

Asset Yogi is one of the popular channels providing informative content on stock market basics and investing strategies. The channel’s content caters to individuals with different experience levels, breaks down complex financial concepts, and provides actionable insights toward creating wealth. What makes Asset Yogi stand out is its ability to explain academic content through practical applications, which makes it useful for making the right financial decisions.

Trending Playlists on Asset Yogi:

Personal Finance Fundamentals: Beginners can watch this playlist to learn how to manage your personal finances.

Stock Market for Beginners: Learn how the stock market works and start your investing journey smoothly.

Real Estate Investment: A comprehensive guide on how to invest in property, the returns, and the general market trends.

Understanding Mutual Funds: In-depth studies of mutual fund types and returns and criteria that determine the best mutual fund for a particular investor.

Why Follow?
The practical approach ensures relevance to real-life investment scenarios.

10. Nitin Bhatia

Nitin Bhatia is a popular YouTuber in the Indian stock market. He offers excellent content on stock trading, personal finance, and investment strategies. His channel is suitable for both beginners and advanced traders.

Read Also: Best Trading Apps in India

Popular Playlists of Nitin Bhatia:

Stock Market Basics: This is a list of videos for beginners who want to know the basics of investing and trading in the stock market.

Personal Finance: Learn how important financial planning is in life.

Stock Picking: Identify growth stocks and learn how to analyze them.

Investing for the Long-Term: Understand the significance of long-term investing and how to create a diversified portfolio.

Why Follow?
His well-rounded content is beneficial for both beginners and experienced investors.

Conclusion

These YouTube channels provide some of the best educational content on stock markets in India. Be it learning the basics or advanced technical analysis, these channels will help you achieve your financial goals.

With the best stock market YouTube channel, you gain valuable insights, market updates, and upgrade your investing and trading approaches and strategies. Patience, discipline, and the pursuit of knowledge are key success factors in investing. However, it is advised to consult a financial advisor before investing.

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Frequently Asked Questions (FAQs)

Who gives the best stock advice on YouTube?
Some of the best stock advisors on YouTube are Pranjal Kamra, Rachana Ranade, and Trading Chanakya.
Can I learn trading on YouTube?
It is possible to learn trading on YouTube because channels like Trading Chanakya, Elearnmarkets and Rachna Ranade offer quality educational content.
Who is the best stock market teacher?
The best YouTube stock market teacher is Rachana Ranade due to her clear explanations and easy-to-understand content.
Which of the following are the 5 best YouTube channels to learn about the Indian stock market?
The best 5 YouTube channels for the stock market in India are Pranjal Kamra, Rachana Ranade, Trading Chanakya, Elearnmarkets, and The Financial Analyst.
Can I trade based on the information provided by a YouTube channel?
It is advised to consult a financial advisor before making trading decisions.

December 4, 2024

ASBA Meaning, Benefits, and Process

One way to get good returns on your investment is to invest in Initial Public Offerings (IPOs). However, the process of participating in an IPO needs to be straightforward, easy, and reliable. Previously, investors had to wait three months for their share allotment without earning any interest on the blocked amount.

Luckily, this process became more manageable for investors after the Securities and Exchange Board of India (SEBI) introduced the ASBA (Applications Supported by Blocked Amount) in 2008, which became mandatory in 2016.

In this blog post, we will delve deeper into the ASBA process, its benefits, its eligibility criteria, and its application process, both offline and online.

What is ASBA and How Does it Work?

During the 90s, applying for an initial public offering (IPO) was a challenging process. Investors who wanted to apply for an IPO had to fill out a form and send a check to their banker or broker in a fixed price issue. Additionally, it takes around three months to receive notification regarding the IPO allocation, and applicants didn’t receive any interest on the blocked amount.

However, the introduction of ASBA, or Applications Supported by Blocked Amount, by the Securities and Exchange Board of India (SEBI) fundamentally changed the IPO application landscape. The ASBA restricts the number of IPO applications exclusively for the duration of the application window.

In this case, the money gets blocked in your bank account to the extent of application value and will not be deducted until the shares are issued to you and credited to your demat account. If the shares are not issued to the applicant, the money will get unblocked in their bank account. The exciting part is that you would still be able to receive interest on your blocked amount. Now, all applications are submitted exclusively via ASBA or Applications Supported by Blocked Amount mode.

Benefits of ASBA

There are many advantages to investing in an IPO through the ASBA procedure; a few of these are listed below:

Interest – While applying for an IPO, your fund will be blocked in your bank account, but you continue to earn interest on it, which means you do not lose an opportunity to earn income from the blocked fund.
Simple – Applying in IPO through ASBA eliminates the lengthy documentation and payments of cheques, as this process is entirely digital.
Easy Refund – If you have not been allotted any shares in the IPO, your money will be unblocked and released into your bank account.
Average Balance – To prevent fines for failing to maintain the required balance, the money applied through ASBA is simply blocked in your bank account rather than removed, as different banks determine the average quarterly balance in your account.
Transparency – ASBA is a secure process in which an investor personally authorizes to block the amount in their bank account. Both the bank and the Securities and Exchange Board of India oversee the process, which minimizes the risk of fraud.
Prompt Action – Through ASBA, one can immediately apply for the IPO, and the blocked amount will be promptly refunded to your bank account.

Eligibility Criteria for ASBA

The eligibility criteria for using the ASBA facility are as follows-

1. The ASBA process can be used by any individual who is a resident of India.

2. To use ASBA, an applicant needs to have a Demat account and a Permanent account number (PAN).

3. Individuals need to have a bank account with a Self-Certified Syndicate Bank (SCSB).

4. Investors should have sufficient funds in their bank account to cover the bid amount.

How to Apply for ASBA?

Investors can apply either online or offline, depending on their preferences. Here are the processes mentioned below:

Online ASBA Application method

Applying for an IPO through the ASBA facility is an easy and faster process; you can apply through Net Banking or your Demat account:

Net Banking: An investor can apply through their net banking for an IPO; here are the steps mentioned below-

An investor is required to log in to their net banking application.
Select the IPO section from the listed applications.
You will be redirected to the application form.
You need to fill out the required details, including your name, PAN card number, bid price, bid quantity, and the 16-digit unique DP number.
Then click on the submit button, and your application will be submitted successfully, and the amount will be blocked in your account.
After applying for an IPO through the ASBA process, you can check your application on the NSE or BSE website.

Demat Account: The other platform on which you can apply through ASBA is as follows-

Login to your demat account using login credentials.
Once you log into the demat account, go to the IPO section.
Select the IPO in which you wish to apply, and enter the bid quantity and bid price.
Then, you will be required to enter the details of the bank’s UPI, which is registered with your demat account.
You will receive a UPI mandate request in your mobile application after applying.
Approve the request received on your mobile UPI app, and after completing this step, your IPO application will be submitted successfully.

Offline ASBA Application method

Applying an IPO through an offline method, you need to follow some steps, which are mentioned below:

The investor is required to download the ASBA form from the NSE and BSE websites.
You need to fill in the details like your name, your PAN card number, Demat account number, bid quantity, bid price, bank account number and Indian Financial System Code(IFSC).
Submit the application form at the Self-Certified Syndicate bank and collect the acknowledge receipt.
The SCSB will verify your application form and block the bid amount in your bank account.
The bank will upload the details to the bidding platform.
It’s necessary to ensure that the details provided in the ASBA form are correct to avoid being rejected.

Can You Cancel an ASBA Application?

You can cancel your application anytime till the issue is open for bidding. After cancelling the application, your money will be unblocked and will be available the next day.

Conclusion

In conclusion, the Securities and Exchange Board of India (SEBI) made the process of applying for an initial public offering (IPO) much easier, safer, and more transparent in 2008 when it introduced the Applications Supported by Blocked Amount or ASBA method. Retail investors are encouraged and empowered to apply for initial public offerings (IPOs) and take part in the expansion of new businesses. Previously, applying through ASBA was the only option, but now, after 2016, it has become mandatory to apply for an IPO. IPOs contain a lot of risk, so it’s better to consult with your financial advisor before making any investment decisions.

Frequently Asked Questions (FAQs)

Can I cancel my ASBA IPO application?
Yes, you can cancel your ASBA IPO application until the issue is open or the IPO application window is open. Once the application window is closed, you cannot withdraw your application.
What is the meaning of a Self-Certified Syndicate Bank?
Self-certified Syndicate banks are the banks that provide ASBA services to their customers.
Does applying through ASBA increase the chances of allotment of shares?
No, applying through ASBA doesn’t increase the chances of alloting shares; it only provides simplicity in the process of applying for an IPO and secures your fund.
Is it mandatory to apply for an IPO through ASBA only?
Yes, as per the SEBI regulations issued in the year 2016, application in IPO is acceptable only through ASBA; no other method, such as payment through cheques, etc., is acceptable.
Can my ASBA application be rejected?
Yes, your ASBA application might get rejected sometimes because of reasons like insufficient funds in your bank account, multiple applications by the same investor, incorrect information, etc.

December 4, 2024

How to Cancel an IPO Application?

Companies are going public every week via IPOs, and you may find yourself wanting to invest in several companies. However, when applying for an IPO, you might be wondering if you can cancel your IPO application due to shifting market conditions or any unfavorable information about the firm. Don’t worry, we’ve got you covered.

In this blog, we will explain the procedure for canceling your IPO application and understand the reasons behind it.

What is Withdrawal of an IPO Application?

Withdrawal of IPO application is the process used by investors who decide they do not want to proceed with their initial application and want to release their blocked funds. An investor applies to purchase shares offered in the IPO. If, for any reason, he later decides not to buy the share, he can easily do so. It must be noted that the IPO application can only be withdrawn before the issue’s closing date. Some investors withdraw their applications due to market sentiment or the grey market premium, which predicts the company’s likely listing profits.

IPO Cancellation Rules for Different Investor Categories

A variety of investors, including retail investors, anchor investors, non-institutional investors, qualified institutional buyers, and others, apply for an initial public offering (IPO). The investor categories are listed below, along with the regulations governing their IPO application cancellation.

1. Qualified Institutional Buyer (QIB) – QIBs are considered institutional investors who have high capital and cannot cancel their IPO bid.

2. Non-Institutional Investors (NII) or High Net-worth Individuals (HNI) – These are investors who invest more than two lakhs in an IPO application. They cannot cancel their application, but they can modify their bid. However, they cannot lower their initial bid.

3. Retail Investors – This is the category of investor who invests less than INR 2 Lakh in an IPO. They can cancel or modify their bid any time before the closing period of the subscription.

4. Anchor Investors – This is a category of investors who can apply for the IPO before it gets open for the public, and they cannot cancel or withdraw their bid after the allotment of shares because the anchor investor increases confidence in the retail investors about the IPO.

5. Employee – Employees of a company launching an IPO can apply under the employee quota. If the application size is lower than two lakhs, then they can cancel and modify their applications at any time before the IPO closes.

Cancellation Process of IPO Application During the Subscription Period

One may withdraw their IPO application, although the procedure varies depending on the application method.

Withdrawing Your IPO Application via ASBA

If you have applied through the ASBA process, then you need to follow the steps mentioned below-

1. Login to the mobile application through which you submitted your bid.

2. Go to the IPO section, and you will find the order book section.

3. Open the order book and click on the IPO in which you had made the bid.

4. There, you will find an option to withdraw or cancel your bid.

5. By confirming it, your process will be completed.

Withdrawing Your IPO Application via Non-ASBA

An investor can follow the below steps to cancel their IPO applications if they have applied for an IPO via non-ASBA method:

1. First, you need to log into the mobile app or the web platform provided by your stock broker.

2. You need to go to the IPO section and need to select the IPO application in which you want to withdraw your application.

3. You can choose the option to cancel or withdraw the bid.

4. Then, you can revoke the UPI mandate to complete the process.

How to Cancel Your IPO Application on the Pocketful App?

If you have applied for an IPO through Pocketful, then you need to follow the steps mentioned below to cancel your IPO application:

1. Log in to your mobile application with your user ID and password.

2. Then go to the IPO section.

3. Select the IPO in which you wish to withdraw your application.

4. There will be an option to cancel your bid; choose the option.

5. Confirmation will be required, and you need to submit it.

6. Your IPO application will be canceled.

Important Points to Keep While Canceling IPO Application

Before canceling an IPO application there are certain points one should keep in mind before canceling an IPO application-

While canceling an IPO application, nothing will be charged from the investor. Hence, there are no charges for canceling any IPO application.
The bidding process is processed only from 10 AM to 5 PM. Hence, you can cancel your application during this window.
It is suggested that you cancel your bid before the last day, as it may be more stringent on the last day of the issue.
The money blocked in your account might take some time to get back to your bank account as it depends from bank to bank.

Reason to Cancel an IPO application

There are various reasons why an investor cancels an IPO application; the major reasons are mentioned below:

Market Conditions – If there are sudden changes in market conditions or an increase in volatility in the market, because of this, sometimes the investor cancels their application to avoid loss in IPO.
Negative News – Sometimes, the discovery of financial irregularities, legal issues of the company, and weak financial performance will make an investor cancel their IPO application.
Valuation – Sometime after the application made by the investor, they came to realize that the IPO was overvalued, which led to the cancellation of applications by the investors.
Under Subscription – Low demand for the IPO will decrease confidence among the investors, forcing them to cancel their applications.
Peer Comparison – When comparing the company’s performance with its peers, it will result in the cancellation of IPO applications by the investors.

Conclusion

In conclusion, there are no fees if you choose to withdraw your IPO application prior to allocation, and the cancellation process is now completed online, making it simple for investors of all stripes. However, before withdrawing the application, you as an investor must weigh all the facts; your choice should be well-reasoned rather than hasty. But before investing in IPOs, one needs to think about their risk tolerance.

Frequently Asked Questions (FAQs)

How can you cancel an IPO application before allotment?
To cancel an IPO application, an investor has to log in to their Demat account, go to the IPO section, open the order book, select the IPO in which they wish to cancel their application, select the option to cancel or withdraw their bid and confirm their selection, and then your IPO application will be canceled.
Are there any fees to be payable when canceling an IPO application?
No, there are no fees payable while canceling any IPO applications. However, it should also be noted that no fees or charges are payable while submitting IPO applications.
Can I withdraw my IPO application in parts?
No, partial withdrawal is not allowed in IPO applications because IPOs are issued in an equal market with lots of shares.
When can I cancel my IPO bid?
You can easily cancel your IPO bid before the closure of the IPO subscription window; however, if the subscription period is over and the allotment has not been completed yet, then in this case, you may submit a request for cancellation of your bid to the registrar.
What is the maximum amount an investor can apply under the retail quota?
Up to 2 lakh is the maximum amount under which a retail investor can apply for the IPO.

December 4, 2024

5 Top EV Penny Stocks in India 2025

The electric vehicle (EV) market in India is expanding rapidly, which is why investors are looking for opportunities to invest in the EV sector. However, small investors may not be able to invest in them due to the high prices of prominent EV companies. However, there are some companies that have the potential to deliver substantial returns and are also priced under INR 100.

This article provides an overview of the EV industry in India, the top 5 EV penny stocks in India, and key risks and future prospects of the EV industry.

EV Industry in India

India is the third-largest automobile market in the world, which makes it a significant contributor to air and noise pollution. Electric Vehicles can serve as substitutes for vehicles that use fossil fuels. The Indian government has been working actively to achieve 30% of the total automobile sales as EV sales by 2030 and ultimately net zero emissions by 2070. The Government of India has established FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) India scheme, tax benefits for EV owners, charging points establishment, and support for automobile manufacturers to help the development of the domestic EV market.

5 Best EV Penny Stocks in India With Price

The top 5 EV penny stocks list in India are:

Stock Name	Current Price (₹)	Market Capitalization (In ₹ crores)	52-Week Low (₹)	52-Week High (₹)
Wardwizard Innovations & Mobility Ltd.	68.6	9,481	59.2	94.8
Goldstar Power Ltd.	11.2	271	10.1	17.6
Tunwal E-Motors Ltd.	40.4	224	39.2	64
Ola Electric Mobility Ltd.	98.2	43,314	66.6	158
RattanIndia Enterprises Limited	68.4	9,459	59.2	94.8

(Data as of 3 December 2024)

1. Wardwizard Innovations & Mobility Ltd.

Wardwizard Innovations & Mobility Ltd. is one of the most prominent players in the EV sector, and it has a wide range of e-bikes. The company sells its products under the brand names Joy e-Bike and Joy e-Rik. The company began its journey in 2016 and launched its first e-scooter in 2018.

The strengths of the company are:

A broad portfolio of electric two-wheelers.

Strong customer base in Tier 1 and Tier 2 cities.

A strong network of more than 750 dealers.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-29.26%	-43.31%	-454.26%

(As of 18 December 2024)

2. Goldstar Power Ltd.

Goldstar Power Ltd. is a company focusing on the sale of EV batteries. Goldstar Power Ltd. was established in 1982 as a partnership firm and was incorporated as “Goldstar Power Ltd.” in 1999. The company has gained a competitive advantage in manufacturing EV batteries over the years. The company has international clients in Dubai, Uganda, Oman, etc.

The company has a bright future due to the following reasons:

Focus on R&D to manufacture superior batteries.

Strategic partnerships with numerous electric vehicle manufacturers.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-21.24%	1,011.17%	1,029.69%

(As of 18 December 2024)

3. Tunwal E-Motors Ltd.

Tunwal E-Motors Ltd. is another promising choice in the EV sector’s penny stocks list. The company’s focus on high-quality and low-price business models has resulted in a significant customer base. The strengths of the company are:

A wide range of electric scooters and bikes.

The company has more than 330 dealerships in India.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-23.75%	-23.75%	-23.75%

(As of 18 December 2024)

4. Ola Electric Mobility Ltd.

Ola Electric is one of the most popular EV penny stocks in India. The main reason behind the company’s growth is the wide range of EVs produced along with superior battery technology.

The key strengths of the company are:

It has the largest integrated Electric 2-Wheeler (E2W) manufacturing plant in Tamil Nadu.
The company continuously works on developing superior products through its R&D facilities in India, the US and the UK.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
26.71%	26.71%	26.71%

(As of 18 December 2024)

5. RattanIndia Enterprises Limited

RattanIndia Enterprises Limited is a key player in the EV sector. The company sells electric motorcycles under the brand name Revolt. The company’s RV400 bike is the market leader in EV motorcycles, with a range of 150 km and a top speed of 85 km/hr.

The main bullet points are:

More than 100 dealerships across 65 cities in India.

Provides a warranty of 1,50,000 km on its bikes, which is the highest for any EV two-wheeler.

The company has diversified operations.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
-17.61%	29.42%	3,678.33%

(As of 18 December 2024)

Why Invest in EV Penny Stocks?

EV penny stocks offer good investment opportunities due to the following reasons:

The government of India has launched several initiatives and policies to encourage the adoption of EVs among the general public.

Rising petrol and diesel (fossil fuel) prices all over the world.

Innovation in battery technology can decrease the prices of EVs, making them more affordable.

Risks Associated with Investing in EV Penny Stocks

Although the benefits of investing in EV stocks are appealing to investors, they should be aware of the associated risks mentioned below:

Penny stocks are usually illiquid and can experience high volatility.

The EV industry is relatively new, and little information is available related to the financial performance of EV companies, which makes it difficult to analyze them.

Established automotive manufacturers are actively expanding in the EV sector.

Future Prospects

India’s electric vehicle penny stocks future looks very bright. The Indian government’s policies (FAME scheme, tax breaks on EV purchases) and investments in charging infrastructure are spurring the growth of the EV market. Firms that can develop superior battery technologies at an affordable price will be market leaders in the EV sector.

Read Also: Best Trading Apps in India

Points to Consider Before Investing in EV Penny Stocks

Investment in EV penny stocks requires a strategic approach:

Conduct thorough research on the company’s fundamentals.

Analysis of the market trends and investor sentiment.

Evaluate the impact of regulatory changes affecting the EV sector.

Technological Advancements Driving EV Penny Stocks

Technological improvements in battery technology and energy density are fundamental to successful EV businesses’ growth and, hence, their stocks’ success as well. The following aspects will play a key role in the success of EV penny stocks:

Batteries with higher energy density and efficiency.

Development of Quick charging stations.

Electric Motors have better energy efficiency.

Conclusion

The EV sector is one of the fastest-growing sectors in India, and it offers investors attractive investment opportunities. Government-driven electric mobility promotion, combined with increasing environmental consciousness and technological developments, are the key factors behind the growth of the EV industry. Nevertheless, you should thoroughly research the company’s financial statements before investing.

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Frequently Asked Questions

What is an EV penny stock?
An EV penny stock is a stock of a company that operates in the EV sector and has a current market price of less than ₹100.
Are there EV penny stocks in India priced below ₹1?
There are penny stocks in India priced below ₹1. However, it is very rare to find EV penny stocks in this price range. Most EV penny stocks in India cost between ₹1 and ₹100.
How to identify the best EV penny stocks in India?
Financial position, market share, and growth prospects should be analyzed by investors to identify the best EV companies.
What are the risks associated with investing in EV penny stocks?
The risks associated with investing in EV penny stocks include the high volatility, lack of financial data for younger firms, chances of fraudulent practices, and regulatory instability in the EV sector.
How is the Indian government supporting the EV industry?
The Indian government supports the EV industry through initiatives like the FAME scheme, tax benefits for the people who buy an EV, and infrastructure development of the charging stations, amongst others.

December 3, 2024

Piercing Pattern

Technical analysis has gained popularity among the new market participants in recent years. There is a wide range of chart patterns available for traders to predict the market direction, but there are very few chart patterns that predict a bullish reversal in an already established bearish trend. A Piercing pattern is one such pattern that can help you spot buying opportunities near the bottom of the downtrend.

In this blog, we will discuss the Piercing pattern or Piercing Line pattern, its interpretation, advantages and disadvantages. Moreover, we will provide a trading setup to use the pattern effectively and test the setup on a real-world example.

What is the Piercing Pattern?

The Piercing Candlestick Pattern is a bullish reversal chart pattern that consists of two candlesticks. The first candle in the piercing line pattern must be a long, bearish candlestick, while the second candle must be bullish. The bullish candle opens below the closing price of the first candle and closes above the midpoint of the bearish candle. The pattern generally forms near the end of a downtrend, which indicates that the security is going to enter an uptrend.

Interpretation

Whenever a trader sees a Piercing Line pattern, the trader can expect that the downtrend has come to an end and the beginning of a bull run in the security. Traders can use volume analysis for better accuracy. Taking a trade using the Piercing Line Pattern after confirmation from other indicators or analysis can be rewarding for the trader.

Things to consider while looking for a Piercing Line Pattern:

The open price of the second candle must be below the close price of the previous long bearish candle.
The close price of the second candle must be above the middle point of the previous long bearish candle or slightly below the previous candle’s open price.
The high price of the bullish candle must be below the high price of the previous bearish candle.
The trade volume during the first bearish candle should be less than the trade volume in the second candle. In other words, the volume of the bullish candle should be more than that of the bearish candle.

How to Determine Entry, Target & Stop-Loss?

A well-defined trading setup is essential for trading any chart pattern. An individual can follow the below-mentioned steps to effectively use the Piercing pattern.

Entry: When the asset price closes above the open price of the bearish candle in the pattern, traders can create a long position.
Stop-Loss: A stop-loss can be set below the low of the bullish candle.
Target: A target can be set near the resistance levels or as per the risk-reward ratio of an individual.

Example of Piercing Pattern of TATA STEEL LTD.

The above image shows the price chart of Tata Steel on a daily timeframe. The stock was in a downtrend as it declined from INR 130.45 to INR 118.75. On 2 November 2023, the stock formed the Piercing pattern. Pay close attention to the volume data; the trading volume during the bullish candle is more than twice than that of the trading volume during the bearish candle. The stock price increased from INR 119 to INR 140 between 6 November 2023 and 29 December 2023, i.e., a 17% jump in less than 2 months.

Advantages of Piercing Line Candlestick Pattern

The advantages of using a Piercing Line candlestick pattern are:

Strong Bullish Reversal Signal: The pattern signals a possible change in the trend from downward to upward and can thus be a crucial indicator for those trading based on a bullish reversal. It gives a clear bullish signal when the second candle opens lower and closes above the midpoint of the first candle.
Simple to recognize: It is simple to observe on charts because of its simple two-candle structure, which makes it useful for beginners.
Can be used for Different Asset Classes: The Piercing Line pattern can be used for different asset classes, including stocks, forex, and commodities.

Limitations of Piercing Line Candlestick Pattern

The limitations of using a Piercing Line candlestick pattern are:

1. Not Self-Confirming: Like most candlestick patterns, the Piercing Line pattern often requires confirmation from other indicators or subsequent price action for a reliable bullish signal.

2. Only Valid during Downtrends: The Piercing Line pattern is most effective when it appears after a downtrend. In sideways markets or bull markets, the pattern holds little significance.

3. Can Produce False Signals: The Piercing Line pattern can generate false signals in volatile markets, which can cause losses for traders using this pattern.

Conclusion

The Piercing Line candlestick pattern is a reliable bullish reversal pattern that helps a trader realize that the downtrend has come to an end and an uptrend might begin. It is simple and can be used in different markets, which makes it useful for new and experienced traders. It is important to use the pattern in combination with other technical tools or studies to increase the accuracy in trading decisions or reduce the occurrence of false signals. Consult a financial advisor before trading based on the Piercing Line chart pattern.

Frequently Asked Questions (FAQs)

How is the Piercing Line Pattern formed?
The Piercing Line pattern generally forms near the bottom of the downtrend and consists of a long bearish candle, followed by a bullish candle that opens lower but closes above the midpoint of the previous candle.
What does a Piercing Line pattern indicate?
It indicates a bullish reversal in an established downtrend.
Does the Piercing Line Pattern work well at all times?
The pattern works best if it appears after a downtrend. However, in volatile or sideways markets, it may generate false signals.
Is confirmation needed after the formation of a Piercing Line pattern?
When the asset price crosses above the high of the pattern’s first candle, it confirms the pattern’s bullish reversal signal.
Does the Piercing Line pattern generate false signals?
Yes, under volatile market conditions, this pattern will give false signals.

December 3, 2024

Semiconductor Penny Stocks in India with Price List

Investing in Semiconductor penny stocks is quite appealing to many investors seeking high growth with relatively low investment. These stocks are usually traded at less than ₹100 per share and yet can be very rewarding. As the world continues embracing technological advancements and goes further into digital transformation, demand for semiconductors in sectors like renewable energy, telecommunications, automotive, and electronics continues to rise. It can, therefore, be an exciting area of investment in semiconductor penny stocks.

In this blog, we discover what semiconductor penny stocks are, notable semiconductor penny stocks to watch in 2024, their key performance indicators, and more about the benefits and risks, as well as where to invest in these penny stocks.

What is Semiconductor Penny Stock?

The semiconductor penny stocks are shares of those companies that operate in the semiconductor industry directly or indirectly. They can either manufacture semiconductor products in-house, such as microchips or integrated circuits or provide services or products relying heavily on semiconductor technology, like solar energy or industrial automation solutions.

These stocks are considered risky because of the low liquidity and extreme market volatility due to the fact that most penny stock companies are at a growth start-up stage or experiencing some level of financial instability. However, they do have substantial upside potential and, thus, are appealing to investors who are tolerant of risk.

Read Also: Top Mukesh Ambani Penny Stocks

List of Semiconductor Penny Stocks with Price

The semiconductor industry is very important to various cutting-edge technologies. Some of its penny stocks have indeed grown significantly in recent times. Here’s a list of the most promising semiconductor penny stocks to watch in 2024:

Stock Name	Current Price (₹)	Market Capitalization (In ₹ crores)	52-Week Low (₹)	52-Week High (₹)
MIC Electronics	87.8	2,117	32.0	115
Surana Solar Ltd.	48.0	236	25.7	67.0

(As of 2 December 2024)

1. MIC Electronics

Year Established: 1988

Key Business: It is a technology-driven company that operates in industries where semiconductors play a foundational role. It specializes in LED video displays and digital signboard manufacturing, which are constructed using semiconductor-based LED chips. These chips are crucial for converting electrical energy into light energy.
Key business operations:

The company manufactures LED lighting and LED displays such as area lights, bulbs, parking lights, lanterns, and digital posters and also offers digital theme parks.

The company is engaged in the production of EV batteries.

The company is also engaged in Medical Device manufacturing; it is involved in the design, development, manufacturing, and supply of the “Oxygen Concentrators”.

Why It’s a Penny Stock: The company is continuously increasing its R&D efforts to develop next-generation LED display technologies and signalling solutions. It is investing in IoT-enabled solutions and smart city initiatives. It is exploring new market opportunities domestically and internationally to diversify revenue streams. It also aims to generate more revenue from emerging opportunities in Railway PIS, LED Displays, and EV chargers. The company’s 3-year compounded sales growth is 269%, but it is still trading below ₹100, making it an undervalued penny stock. This combination of high growth potential and lower share price indicates the possibility of significant future returns as the company scales its growth.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
138.87%	510.25%	13,184.62%

(As of 18 December 2024)

2. Surana Solar Ltd.

Year Established: 2006

Key Business: Manufacturer of high-efficiency solar panels.

Key business activities:

Solar panel manufacturing and incorporation of semiconductors in the solar energy system.

It is actively expanding its footprint in both the Indian and the international solar markets.

Continuous focus on sustainable energy solutions under the renewable energy thrust in India.

Why It’s a Penny Stock: Surana Solar’s share trades at low prices despite its significant contributions to India’s renewable energy ecosystem. Since semiconductors play a huge role in solar energy solutions, Surana Solar presents a promising semiconductor penny stock to keep an eye on for 2024.

Know the Returns:

1Y Return (%)	3Y Return (%)	5Y Return (%)
39.16%	114.60%	756.55%

(As of 18 December 2024)

Benefits of Investing in Semiconductor Penny Stocks India

The benefits of investing in Semiconductor Penny stocks are:

High Growth Potential

The rising demand for electronic devices and renewable energy solutions presents significant upside potential for penny stocks tied to the semiconductor space.

Diversification

Buying stock in semiconductor penny stocks can be done when diversifying the portfolio, especially within the industries of renewable energy, automation, and electronics, as these three depend on semiconductor-based components.

Affordability

Penny stocks are usually priced much lower compared to the stocks of established companies, making them accessible to larger numbers of investors. It helps to invest in firms with promising prospects and less capital.

Technological Development

Investments in penny stock semiconductors grant access to companies that are developing leading technological innovations of the kind being witnessed in solar power, electric cars, and the Internet of Things.

Disadvantages of Investing in Semiconductor Penny Stocks

The disadvantages of investing in Semiconductor penny stocks are:

High Volatility

Penny stocks tend to be volatile, and semiconductor penny stocks are no exception. Due to this, they often experience sharp price fluctuations, which only puts them in not-so-good books for lower risk tolerance investors.

Liquidity Issues

Semiconductor penny stocks often experience lower trading volumes, leading to liquidity issues. It means that liquidity is still an issue, and big trades may distort stock prices.

Lack of Financial Stability

Many penny stock companies are still not far advanced in growth, so many are likely to be characterized by financial instability. Such companies should be well-researched for their financial health before investing.

Lack of Information

Often, smaller companies do not reveal much about their financials and business strategies; therefore, it is difficult to estimate their potential with reasonable accuracy.

How to Invest in Semiconductor Penny Stocks in India?

An investor can follow the below-mentioned steps to invest in semiconductor penny stocks:

Open Demat and Trading Account: Select the best stockbroker and open a demat and trading account.

Analyze: Conduct a thorough analysis of the financial statements, product demand and growth potential of Semiconductor penny stocks.

Diversify: Diversify in a mix of stocks that can reduce the risks and focus on companies that are operating in sectors related to energy, automation, and electronics.

Monitor: Track your investment’s performance constantly and learn the latest market trends.

Conclusion

Semiconductor penny stocks are an exciting investment opportunity, especially when people try to capitalize on the semiconductor requirement in the renewable energy sector, automation sector, and electronics industry. Potential investments in Mic Electronics and Surana Solar will be good options if risks pertaining to the profile of a penny stock are accepted. High volatility and liquidity issues may pose challenges, but the performance potential of semiconductor penny stocks makes them an interesting consideration for your portfolio of investments.

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Frequently Asked Questions (FAQs)

What is a Semiconductor, and what is it used for?
A semiconductor is a material with electrical properties that allows it to serve as a foundation for computers and other electronic devices. It is a material that has the properties of both an insulator and a conductor.
What is the Semiconductor Industry?
The semiconductor industry makes small electronic chips that provide power to devices like smartphones, computers, cars, solar plates, and LED video displays. These chips control how devices process and store information.
What drives the demand for semiconductors?
Demand is driven by increasing growth in industries like smartphones, laptops, and renewable energy applications.
What are the risks of investing in semiconductor penny stocks?
The risks of investing in penny stocks of semiconductor companies include high volatility, liquidity, and financial instability among small-cap companies. Just do your research well.
Why is a semiconductor penny stock an investment worth considering?
A semiconductor penny stock should be considered for an investment when it has growth potential, is an expanding sector like renewable energy or automation, and has solid financials as well as product offerings.

December 2, 2024

High-Wave Candlestick Chart Pattern

Most candlestick patterns used by the market participants are used to predict future price movements. However, there are some patterns that can signal a consolidation phase. One such pattern is the High-Wave Candlestick pattern.

This blog will discuss the High-Wave candlestick chart pattern, its interpretation, advantages and disadvantages. We will also provide a real-world example to help you better understand the trading setup.

What is a High-Wave Candlestick Pattern?

A High-Wave is a neutral candlestick pattern, which indicates that both buyers and sellers don’t have control over the market direction. The formation of the High Wave candlestick pattern can indicate that the bearish or bullish trend has ended, which might be the beginning of a consolidation phase.

The High Wave candlestick pattern consists of a single candlestick pattern with significant upper and lower wicks. The shadows of the candlestick should be 2x or 3x compared to the body of the pattern. The candle can be bullish or bearish.

Interpretation

Whenever a high wave candlestick pattern forms on the chart, it is a signal that there is an equal amount of pressure from buyers and sellers. Both buyers and sellers try to take control, which is the reason behind long upper and lower wicks. However, neither of them succeeds, and the candle has a small body. The formation of the pattern can be interpreted as the beginning of a consolidation phase.

How to Determine Entry, Target & Stop-Loss?

Now that you know how to identify a High-Wave candlestick pattern in a chart and that it indicates a consolidation phase, let’s talk about how to trade using a high-wave candlestick chart pattern. In the setup below, we will be using a short strangle strategy to take advantage of the sideways markets.

Entry: Individuals can create a short strangle, i.e. sell OTM calls and puts after the formation of the High-Wave Candlestick pattern.
Stop-Loss: Exit the OTM call position if the price gives a breakout above the high of the pattern and exit the OTM put position if the price moves below the low of the pattern.
Target: The maximum profit for the strategy is the combined premiums of the call and put. Individuals can wait for the premium to decrease due to sideways market conditions and realize profits according to their risk-reward ratio.

Example of High-Wave Candlestick Pattern

The above image shows the price chart of ITC on a weekly timeframe. The High-Wave candlestick pattern was formed on 20 December 2021, after which the share price entered a consolidation phase for two weeks. Theta decay due to sideways movement would result in profits in a short strangle strategy.

Advantages of High-Wave Candlestick Pattern

The advantages of the High Wave Candlestick pattern are:

Indicates Market Indecision: The High-Wave candlestick shows market indecision as the buyer and seller have no control over the market direction. This is an indicator that the prevailing trend may be about to end, and a consolidation phase might begin.
Applicable in All Timeframes: High-Wave pattern can form in any time frame; therefore, it can be used in day trading, swing trading, etc.
Clear Risk Management: The High-Wave candle signals indecision, which is a signal for traders to stay cautious and reconsider any long or short position regarding risk exposure.

Limitations of High-Wave Candlestick Pattern

The limitations of the High-Wave Candlestick pattern are:

Needs Confirmation: The High-Wave pattern signal alone cannot be used on a standalone basis; rather, it requires verification from other technical indicators or a confirmation candle to provide a reliable trading signal.
False Signals: Like any other chart pattern, the High-Wave candlestick pattern can give false signals. False signals can cause volatile price movements and result in losses in the short-strangle strategy.
Risk due to Options: As the trading setup involves option positions, trading based on the High-Wave candlestick pattern can be highly risky. Moreover, short positions in options have limited profits and unlimited losses.

Read Also: Bullish Harami Candlestick Pattern

Conclusion

The High-Wave candlestick pattern shows indecision in the market and, in most cases, predicts a pause in the existing trend or the beginning of a consolidation phase. The pattern can be used in any time frame, but it is important to use this pattern in combination with other technical tools for better accuracy. The traders need to use options in their trading strategies to take advantage of the theta decay during the consolidation phase, which makes it risky as trading in options can result in huge losses. It is advised to consult a financial advisor before trading based on this pattern.

Frequently Asked Questions (FAQs)

What does a High-Wave candlestick pattern signify?
It suggests that both buyers and sellers are unable to determine a clear market trend.
Can I use a High-Wave candlestick pattern for intraday trading?
Yes, this pattern can be used for intraday trading in a 15-minute timeframe.
Is the High-Wave candlestick pattern bullish or bearish?
The High-Wave candlestick pattern can feature either a bullish or bearish candle.
How to trade the High-Wave candlestick pattern?
Traders can trade the High-Wave candlestick pattern by using the short strangle strategy.
Is volume a crucial indicator when using a High-Wave candlestick pattern?
A drop in volume with the formation of a High-Wave candlestick pattern indicates a decrease in trading activity and the beginning of the consolidation phase.

December 2, 2024

Closing Black Marubozu Candle

Knowledge about Candlestick patterns is extremely important in today’s financial markets as they help market participants predict future price movements. It is important to realize profits before the downtrend begins. One of the most popular patterns traders use to predict a bearish trend is the Closing Black Marubozu pattern.

In this blog, we will give information about the Closing Black Marubozu candle pattern, its interpretation, and how traders can use it effectively in their trading strategies.

What is a Closing Black Marubozu Pattern?

The Closing Black Marubozu is a bearish candlestick pattern and can either predict the continuation of an existing downtrend or the reversal of an existing uptrend. The key characteristics of a Closing Black Marubozu candle are:

Candlestick: A Closing Black Marubozu candle has no lower wick and a small upper wick. The body of the candle is significantly longer than the upper wick.

As the pattern consists of a single candlestick, it is important to understand the market sentiment and other factors to use it effectively in trading strategies. Let’s look at the interpretation of the pattern.

Interpretation of the Candle

The key points to interpret from this pattern are:

Strong Bearish Signal: The upper wick in the Closing Black Marubozu pattern indicates that buyers tried to push prices higher initially, but sellers were in complete control during the majority of the trading session.

Possible Trend Reversal or Continuation: If the Closing Black Marubozu appears after an uptrend, it can signal a potential trend reversal. On the other hand, if it appears during a downtrend, it may indicate the strengthening of the bearish momentum, suggesting trend continuation.

How to Set Stop-Loss, Target, and Entry Point

When trading based on the Closing Black Marubozu pattern, it is extremely important to have a well-defined trading setup. Here’s how to set a stop-loss, target, and entry point:

Entry: You can create a short position after the formation of the Closing Black Marubozu pattern. Some traders prefer to wait for a small pullback to enter, while others wait for a breakdown below the low of the pattern to confirm the bearish signal.

Stop-Loss: A stop loss can be set above the high of the Closing Black Marubozu candle or a significant resistance level above the pattern.

Target: The target for this trade can be set based on key support levels or by using a risk-to-reward ratio.

Closing Black Marubozu Pattern Example

The above image shows the price chart of Tata Motors on a daily timeframe. The stock was in a downtrend and declined from INR 200 on 15 January 2020 to INR 175 on 28 January 2020. The formation of the Closing Black Marubozu pattern on 31 January 2020 confirms the continuation of the downtrend. The pattern closed at INR 176. Traders can create a short position at INR 165, i.e. the closing price of 1 February 2020, which acts as a confirmation candle to the pattern and place a stop loss near the high of the pattern, i.e. INR 188. There was a small pullback, and then the stock price started to decrease consistently. The stock price declined from INR 165 to INR 128 by 28 February 2020.

Advantages of the Closing Black Marubozu Pattern

The Closing Black Marubozu offers several advantages to traders:

Clear Bearish Signal: The absence of a lower wick indicates that the sellers were in complete control near the end of the trading session.

Can be used in different timeframes: The Closing Black Marubozu pattern can be used to trade in any timeframe, such as minute charts, daily charts, etc.

Can be used with other Indicators: Traders often combine the pattern signal with other studies, such as volume analysis, RSI, MACD, etc., for more accurate bearish signals.

Disadvantages of the Closing Black Marubozu Pattern

Despite its advantages, the Closing Black Marubozu pattern does have its limitations:

Unreliable in Sideways Markets: In volatile or sideways markets, the pattern may not result in the expected downward movement. Instead, stop losses can be triggered, resulting in losses.

Lagging Indicator: The Closing Black Marubozu pattern consists of a significantly long bearish candle, which means a significant amount of bearish trend can be over before the trader creates a short position. Waiting for the pattern to completely form or a confirmation candle after the pattern could lead to late entries and lower profit potential.

Ineffective in Strong Uptends: The pattern’s bearish signal can be useless if the other market factors indicate a bullish movement. The bullish trend could be due to a macroeconomic event or stock-specific news,

Conclusion

The Closing Black Marubozu is a powerful candlestick pattern that can be used to reliably predict bearish price movements. Its reliability increases when the pattern signal is combined with other indicators. However, like any trading pattern, it can generate false signals, which makes confirmation from other technical indicators crucial when trading this chart pattern. It is advised to consult a financial advisor before making trading decisions.

Frequently Asked Questions (FAQs)

What is the difference between a Black Marubozu pattern and a Closing Black Marubozu pattern?
A Black Marubozu pattern has no upper or lower wicks, while a Closing Black Marubozu pattern consists of a small upper wick.
Can I use the Closing Black Marubozu pattern in different market conditions?
The Closing Black Marubozu pattern generates reliable trading signals in trending markets, especially when combined with other technical analysis tools, but its reliability may decrease in choppy or sideways markets.
How to trade based on the Closing Black Marubozu pattern?
Individuals can use Closing Black to create a short position once the asset price gives a breakdown below the low of the pattern.
How can I determine a stop-loss in the Closing Black Marubozu pattern?
You can put a stop-loss near the high of the pattern.
What is the benefit of using a stop-loss?
Traders should have a stop-loss to minimize losses if the price reverses after creating a short position.

November 30, 2024

What is the IPO Allotment Process?

An initial public offering (IPO) is a significant event for a company as it is a process by which the company offers its shares to the public for the first time. IPO investing has been quite popular among investors, and if you intend to invest in one, you must be aware of the regulations governing the distribution of shares in an initial public offering (IPO).

In this blog, we will give you an overview of IPO allotment rules and explain how these shares are allocated.

IPO Allotment Rules

A corporation must launch an initial public offering (IPO) to offer its shares to the general public when it wishes to go public. In India, the Securities and Exchange Board has established various rules that a company must follow to issue its shares to the general public.

The rules related to IPO are mentioned below.

The Registrar oversees the allotment of IPO shares in consultation with the registered stock exchange.
The allotment of IPO depends on the number of shares the company offers and the investor’s bid.
There are different categories of investors, such as Retail, NII and QIB; however, the rules are different for different categories.
Only valid applications are accepted for the allotment. Applications with incorrect information, such as an invalid demat account number or multiple applications using the same PAN card, are rejected.
Applications made at or above the cut-off prices are considered for allotment in the book-building process.
Oversubscription in a particular category can be adjusted with the undersubscription of another category with the consultation of the lead manager, exchange, etc.
The registrar prepares and publishes a document that states the basis of allotment.

How are IPO Shares allotted?

The allotment of shares in an IPO takes several steps, a few of which are mentioned below-

1. Process of IPO Application – Investors apply for an IPO through a bidding process within a specific price range through the ASBA (Application Supported by Blocked Amount) process.

2. Categories and Reservation – Shares are reserved for different categories of investors, such as retail, NII and QIB.

3. Allocation – After the categorization of investors, the shares are allocated to them based on the bid information.

4. Finalization – Once the IPO is closed for subscription, the shares are allotted to the successful bidder based on SEBI guidelines.

5. Debit of Amount – The shares are allotted or credited to the investor’s demat account, and the amount is debited from the investor’s bank account.

6. Refund – For applicants who do not get any shares, the amount reserved for IPO application is unblocked.

7. Communication – The proper communication is made to the successful investor and the shareholders who do not get any shares.

Procedure for Allotment of Shares in IPO

Let’s look at a firm called ABC Limited that issued 10,000 shares and then split those shares into lots of 50 shares. This refers to there being 200 lots overall, and an investor may apply for more than one lot. Various subscription scenarios are mentioned below. This can lead to several results, some of which are listed below:

1. Under Subscription – This situation occurs when the investor’s bids for IPO shares are less than the total number of shares issued by the company. Since more shares are available, each investor is allotted shares for which they applied.

2. Oversubscription – Oversubscription of shares occurs when the total number of shares applied for by investors exceeds the number of shares the company is offering. For this scenario, the Securities and Exchange Board of India (SEBI) establishes the rules that govern the distribution of shares to investors.

3. Small Oversubscription – Every investor with a valid application receives one lot if there is a slight oversubscription, and the remaining lots will be distributed proportionately.

4. Large Oversubscription – According to the rules established by the Securities and Exchange Board of India, the lottery mechanism will randomly distribute the shares to investors and at least one lot to each bidder in the event of a very high oversubscription.

IPO Allotment Calculation

Based on the subscription data, the IPO shares are distributed. The two probable scenarios are listed below.

Undersubscription – All successful bidders are given shares in the event of undersubscription, and each bidder receives the quantity of shares they requested.
Oversubscription – Oversubscription of shares is a situation when the total number of shares applied for by investors exceeds the number of shares the company is offering. Two techniques will be used to distribute the shares to the investors: the lottery system and proportionate distribution.
Proportionately – Under this method, the shares are allotted to the investor proportionately. If an investor has applied for 100 shares and the IPO has been subscribed 20 times, then each investor will receive 5 shares.
Lottery System – Under the lottery method, a random applicant who has applied for the shares at or above the cut-off price is selected.

Important Aspects of IPO Allotment

The process of IPO allotment involves various steps to keep the process transparent; below mentioned are the major aspects of IPO allotment-

Categorization – The applicants are categorized into retail, QIB or NII, and each category has a reservation in the IPO.
Allotment – The shares are allotted to the investors based on the subscription status, such as oversubscription or undersubscription.
Market Lot – The total issue will be divided into lots, which represent an equal number of shares and an investor is required to apply in multiples of the lot size.
ASBA – An investor can bid for an IPO only through ASBA or an Application Supported by the Blocked Amount, a mechanism in which the application amount is blocked in the investor’s bank account.
Communication – Once the allotment is finalized, a message is sent to the investor by the registrar through mail or SMS.
Credit of Shares – The investors to whom the shares are allotted receive shares in their demat account.

Reason for no Allotment of Shares

There can be various reasons why investors might not get any shares in an IPO. Some of these are listed below.

Oversubscription – In case of high demand for shares during the IPO, the chances of receiving an allotment decrease.
Computerized Lottery System – In case of oversubscription, the shares are allotted through a lottery system. In this case, if you are not selected for the allotment, you will not receive any shares.
Error in Application – If you have made an error such as wrong PAN Card details or an incorrect Demat account number while submitting the IPO application, then your application will be rejected, and you will not be allotted any shares.
Multiple Applications – As per the regulations issued by the Securities and Exchange Board of India, if you have submitted multiple applications using the same PAN details, your IPO application will be rejected.
Low Bid Amount– If you have submitted your application with a bid amount below the cut-off price, your application will be rejected and will not be considered for allotment.

Conclusion

To sum up, investors must comprehend the IPO allocation regulations before applying for an IPO. The SEBI has several regulations regarding the IPO process. Investors are categorized into different categories, with a reservation for each category in the IPO. If the IPO is undersubscribed, each applicant is allotted shares for which they applied. On the other hand, if the IPO is oversubscribed, shares are either allotted proportionately or through a lottery system. You must speak with your investment advisor before investing.

Frequently Asked Questions (FAQs)

What could be the possible reason for the non-allotment of shares?
Several factors can lead to the non-allotment of shares in an initial public offering (IPO), but the two main reasons are multiple applications from the same PAN number and oversubscribed IPOs.
How long does the IPO allotment process take?
The IPO allotment process takes around seven days, during which the registrar allots shares to the successful bidder.
How can we increase the chances of getting an IPO allotment?
You can improve your chances by applying through multiple demat accounts registered under different PAN cards and submitting the IPO application at the cut-off price.
Are IPO shares allotted on a first-come, first-served basis?
No, IPO shares are not distributed on a first-come, first-served basis; instead, the distribution procedure is based on the subscription status of an IPO. A computerized lottery procedure will be used to finalize the allocation if the IPO is oversubscribed, and each investor will receive the shares they applied for if it is undersubscribed.
How do you check if an IPO is allotted or not?
You can check the IPO allotment status by visiting the registrar’s website and entering relevant information.

November 30, 2024

Greenshoe Option – Meaning, Types, Example and Benefits

The Indian stock market has witnessed many IPOs recently, with most of them generating huge listing gains. However, huge price increases can cause instability in the financial markets and attract new investors to buy shares near the top. Conversely, an IPO can perform poorly on the listing day, causing panic among investors. This is where the concept of a Greenshoe Option comes in.

In this blog, we will walk you through the concept of the Greenshoe Option, its types and how it works.

What is the Greenshoe Option?

The term “Greenshoe option” is derived from Greenshoe Manufacturing, the first company to use this price stabilization mechanism during its IPO in 1960. It tackles the issue of excess demand for shares and prevents steep price increases once they are listed on a stock market. This option allows the investment banks or underwriters to sell more shares than initially intended, up to 15%. On the other hand, the Greenshoe option also allows underwriters to support the share price by repurchasing the shares at the proposed price if the IPO has not been fully subscribed.

In 2003, the Securities and Exchange Board of India introduced this option for IPOs. The choice benefits the market, investors, underwriters, and businesses. With these choices, businesses can rest assured of their share’s performance on the listing day. This improves investor confidence and makes the IPO more appealing to potential investors.

Types of Greenshoe Options

There are three types of Greenshoe options, and each one uses a unique method to keep prices stable:

1. Full Greenshoe Option – In the event of high demand, the Full Greenshoe option allows underwriters to purchase an additional 15% of the shares originally offered from the issuer at the predetermined price. The underwriter then sells these shares in the market at a profit and tries to control the steep price rises. This also helps in increasing liquidity.

2. Partial Greenshoe Option – In this type, the underwriters can issue more than the shares initially offered but don’t issue the maximum number of shares permitted, i.e., 15%. The underwriters buy additional shares, less than 15% of the issue size, from the company and sell them in the stock market to control excess demand.

3. Reverse Greenshoe Option – The underwriters use this option to protect against sharp declines in share prices on the listing date. In this option, underwriters purchase the shares from the stock market and sell them back to the issuer company at the offer price.

How Does the Greenshoe Option Work?

Below are the steps through which a Greenshoe option works-

1. Commitment of Underwriter – The underwriters decide to buy a certain number of shares from the firm that is issuing them at a specific price.

2. Initial Public Offer – Following that, during the IPO process, the underwriter sells these shares to the general public.

3. Demand for Shares – Following the listing, stock prices may rise with higher demand for the shares.

4. Using the Greenshoe Option – The underwriters choose this option to stabilize the excessive price fluctuations because it enables them to buy more shares from the company at the initial issue price. These shares are then sold to the public, increasing the supply of shares and lowering prices.

Greenshoe Option Process

Below is a description of the entire Greenshoe option procedure.-

1. Agreement – To enable them to sell an extra 15% of the entire issue if demand for shares surpasses expectations, the firm issuing the shares appoints an underwriter and enters into a contract with them.

2. Setting Conditions – In this phase, the business determines the IPO price and the quantity of shares to be distributed.

3. Exercising the Greenshoe Option – Underwriters exercise the Greenshoe option and sell their 15% excess shares over the allotted size when the stock price increases; if the stock price falls, they repurchase shares from the market to make up for the over-allotment.

4. Price Stabilization – There will be a stabilization phase of 30 days after the company’s stock is listed on the exchange and trading starts, during which the underwriters watch the stock price. The underwriter sells more shares if the share price continues to be higher than the IPO price.

Example of Greenshoe Option

Greenshoe options come in many forms, some of which are listed below-

1. Uber – Because of the extreme market volatility in 2019, Uber’s underwriter used the full Greenshoe option to stabilize the share after listing.

2. Alibaba – Alibaba, a Chinese firm, launched one of the biggest initial public offerings (IPOs) ever in 2014. To handle the overwhelming demand for shares, the underwriters used the Greenshoe option.

The aforementioned instances demonstrate that the Greenshoe option is a crucial instrument for controlling share price volatility to benefit investors and the business.

Benefits of the Greenshoe Option

The major benefits of Greenshoe options are as follows –

1. Benefit for Issuing Companies – The major for companies issuing IPO and using the Greenshoe option are as follows-

Price Stability – The business can keep its share price stable during the initial trading phase by using the Greenshoe option.
Reduces the Risk – The Greenshoe option assists the business in lowering the risk associated with a stock price correction.
Increase Capital – By choosing this option, the businesses can raise more money to finance their expansion.
Increase Investor Participation – A successful initial public offering (IPO) boosts investor trust and draws in additional investors.

2. Benefits for Underwriters – The major benefits of the Greenshoe option for underwriters are as follows-

Mitigation of Risk –They can support the share price by using the reverse Greenshoe option.
High Profit – After the listing of shares, if the share prices rise, the underwriters can increase their profits by selling the additional shares at a higher price offered in the market.
Goodwill – If an underwriter has a good reputation regarding post -IPO share price stabilization, more companies will appoint them as their underwriter, increasing their business.

Read Also: Green Hydrogen Industry in India

Conclusion

To sum up, the underwriter uses the Greenshoe option as a key instrument to keep the price of shares stable after listing. This option allows underwriters to issue additional shares in the market to tackle excess demand, which controls sharp price increases. On the other hand, the option also allows them to purchase shares and sell them back to the issuer at the offer price to control sharp share price declines. A 15% limit is set under the Greenshoe option in India. Before making any investment decisions, you are advised to speak with your investment advisor.

Frequently Asked Questions (FAQs)

How can a Greenshoe option help an investor?
The Greenshoe option helps stabilize the stock price and protects investors from extreme price fluctuations.
How many shares can an underwriter sell with the Greenshoe option?
According to the Securities and Exchange Board of India’s regulations, an underwriter may purchase up to 15% more shares at the offer price from the issuer if the demand seems to rise.
What is the meaning of the Greenshoe option?
Once a stock is listed on the stock exchange following an issuance, the Greenshoe option offers price stability. By using this option, the underwriters attempt to manage the stock price volatility by adjusting the supply of shares.
How many types of Greenshoe options are there?
There are three different kinds of Greenshoe options: Full, Partial, and Reverse Greenshoe options.
What is the stabilization period for the Greenshoe option?
The stabilization period for the Greenshoe option is thirty days. During this time, the underwriters monitor the stock price and may buy or sell shares to prevent excessive volatility by using the Greenshoe option.

November 29, 2024

Blog

Top 10 Stock Market YouTube Channels

Top Stock Market YouTube Channels Comparison

Best YouTube Channel Overview

1. Trading Chanakya

2. Pranjal Kamra

3. Amit Kukreja

4. CA Rachana Phadke Ranade

5. Yadnya Investment Academy

6. The Financial Analyst

7. Elearnmarkets

8. Money Grower

9. Asset Yogi

10. Nitin Bhatia

Conclusion

Frequently Asked Questions (FAQs)

Who gives the best stock advice on YouTube?

Can I learn trading on YouTube?

Who is the best stock market teacher?

Which of the following are the 5 best YouTube channels to learn about the Indian stock market?

Can I trade based on the information provided by a YouTube channel?

What is ASBA and How Does it Work?

Benefits of ASBA

Eligibility Criteria for ASBA

How to Apply for ASBA?

Online ASBA Application method

Offline ASBA Application method

Can You Cancel an ASBA Application?

Conclusion

Frequently Asked Questions (FAQs)

Can I cancel my ASBA IPO application?

What is the meaning of a Self-Certified Syndicate Bank?

Does applying through ASBA increase the chances of allotment of shares?

Is it mandatory to apply for an IPO through ASBA only?

Can my ASBA application be rejected?

What is Withdrawal of an IPO Application?

IPO Cancellation Rules for Different Investor Categories

Cancellation Process of IPO Application During the Subscription Period

Withdrawing Your IPO Application via ASBA

Withdrawing Your IPO Application via Non-ASBA

How to Cancel Your IPO Application on the Pocketful App?

Important Points to Keep While Canceling IPO Application

Reason to Cancel an IPO application

Conclusion

Frequently Asked Questions (FAQs)

How can you cancel an IPO application before allotment?

Are there any fees to be payable when canceling an IPO application?

Can I withdraw my IPO application in parts?

When can I cancel my IPO bid?

What is the maximum amount an investor can apply under the retail quota?

EV Industry in India

5 Best EV Penny Stocks in India With Price

1. Wardwizard Innovations & Mobility Ltd.

2. Goldstar Power Ltd.

3. Tunwal E-Motors Ltd.

4. Ola Electric Mobility Ltd.

5. RattanIndia Enterprises Limited

Why Invest in EV Penny Stocks?

Risks Associated with Investing in EV Penny Stocks

Future Prospects

Points to Consider Before Investing in EV Penny Stocks

Technological Advancements Driving EV Penny Stocks

Conclusion

Frequently Asked Questions

What is an EV penny stock?

Are there EV penny stocks in India priced below ₹1?

How to identify the best EV penny stocks in India?

What are the risks associated with investing in EV penny stocks?

How is the Indian government supporting the EV industry?

What is the Piercing Pattern?

Interpretation

How to Determine Entry, Target & Stop-Loss?

Example of Piercing Pattern of TATA STEEL LTD.

Advantages of Piercing Line Candlestick Pattern

Limitations of Piercing Line Candlestick Pattern

Conclusion

Frequently Asked Questions (FAQs)

How is the Piercing Line Pattern formed?

What does a Piercing Line pattern indicate?

Does the Piercing Line Pattern work well at all times?