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  • What are OTM Call Options?

    What are OTM Call Options?

    There are times in the stock market when we expect a stock’s price to rise but don’t want to risk a large amount of capital. In such cases, OTM (Out of the Money) call options can be a cost-effective and limited risk strategy. These are call options with a strike price higher than the current market price, meaning they involve relatively small upfront costs but offer the potential for significant returns. 

    In this blog, we will explain in simple language what OTM calls are, how they work and when it is appropriate to use them.

    What is an Option?

    An option is a type of derivative contract that gives you the right but not the obligation to buy or sell a stock or index at a fixed price called the strike price on or before a specific date. Options are widely used for trading, hedging, and speculation.

    Key Terms You Must Know

    1. Call Option : It gives you the right to buy a stock at a fixed price. It is bought when you think the price of the stock will rise.

    2. Put Option : It gives you the right to sell the stock at a fixed price. It is used when you expect the price to fall.

    3. Strike Price : This is the price at which you can buy or sell the stock.

    4. Premium : The amount you pay to buy the option is called premium. This is the upfront cost.

    5. Expiry Date : This is the last date till which the option is valid. After this date the option expires.

    What are OTM Options?

    OTM (Out of the Money) options are those that have no intrinsic value based on the current market price. In other words, if the option were to expire today, it would be worth nothing because the strike price is not favorable for immediate exercise.

    OTM options are cheaper in premium, as their probability of turning profitable is comparatively less. But this is what makes them attractive for low-cost and high-risk speculative strategies.

    OTM options are mainly of two types:

    • OTM Call Option
    • OTM Put Option

    What are OTM Call Options?

    A call option is a derivative contract that gives a person the right to buy a stock or index at a specified strike price in the future. When we talk about OTM call options, it means that the strike price of the option is above the current market price of the underlying asset.

    For example, if Nifty is currently trading at 25,000 and you buy a call option at 25,300, it is an OTM call option. OTM options have a lower premium because they are less likely to be profitable at expiry. But this low cost makes them attractive for speculative trades.

    How Do OTM Call Options Work?

    • Low premium, high potential returns : OTM call options are generally cheaper because they currently have no intrinsic value. They have value at expiry only when the price of the underlying asset rises significantly above the strike price. This lower cost of entry makes them attractive, but the probability of profit is smaller, which also makes them a higher-risk choice.
    • The premium is your entire risk : When you buy an OTM call, you pay only the premium – and this is your maximum loss limit. If the stock price does not reach the strike price by expiry, you lose only the premium, not more than that.
    • Time Decay causes a decline in value : The effect of time decay (theta) on the value of OTM options is faster. As the expiry approaches, if the price does not move, the value of these options starts falling rapidly.
    • Breakeven Point is Strike Price + Premium : You make profit from OTM calls when the stock price goes above (strike price + premium). For example: If you bought a call option with a strike price of ₹220 and paid a premium of ₹10, then your breakeven will be ₹230 at expiry.

    Read Also: Call and Put Options: Meaning, Types, Difference & Examples

    Real-World Example: Trading an OTM Call Option

    Suppose share ABC is currently trading at ₹1,000. You think that the stock may rise in the coming days. Instead of buying the shares directly, you decide to take an OTM call option with less risk.

    • You buy a call option with a strike price of ₹1,050, with a premium of ₹10.
    • Contract size: Let’s assume 200 shares
    • Total cost = ₹10 × 200 = ₹2,000

    Now suppose the price of ABC shares becomes ₹1,080 on the day of expiry.

    • Intrinsic Value = ₹1,080 – ₹1,050 = ₹30
    • Net Profit per share = ₹30 – ₹10 = ₹20
    • Total Profit = ₹20 × 200 = ₹4,000

    In this way, OTM call options can be a good choice for traders who want to capture a big move with less money, but correct estimation and timing is very important in this.

    Risks and Limitations of OTM Calls

    Trading in OTM calls can be risky due to the following reasons:

    • Usually OTM options become worthless on expiry : OTM call options do not have intrinsic value, and if the price does not go above the strike price by expiry, then this option becomes worthless.
    • Rapid effect of Time Decay : OTM options values are based only on time value. As the expiry approaches, the premium decreases rapidly, due to which the value can almost vanish.
    • A big price move is necessary for profit : Profit will be made only when the price of the underlying asset goes above the strike price + premium. This big move is not possible every time.
    • Buying more quantity can be dangerous : Because of the low premium, new traders often buy a large quantity of OTM options, which greatly increases their risk. In a sideways market, the entire investment can be lost.

    Key Metrics to Watch Before Buying OTM Calls

    Some of the key metrics to look at before buying OTM calls are listed below:

    • Implied Volatility (IV) : IV shows how much volatility is expected in the market. When IV is high, the premium of OTM call options becomes expensive. Buying OTM calls at high IV can make it even more difficult for you to reach the breakeven point.
    • Delta : The delta of OTM call options is very low (between 0.1 and 0.3), that is, the effect of changes in the price of the underlying asset is reflected slowly on the premium. This makes it difficult to get quick profits.
    • Volume and Open Interest : In an option with low liquidity, both entry and exit can be difficult. Always choose options that have both good volume and open interest.
    • Time till Expiry : If the expiry is very close, time decay can rapidly reduce the premium. It is better to choose a slightly farther expiry, especially if you are expecting a directional move.

    Read Also: Difference Between ITM, OTM, ATM in Call and Put Options

    Conclusion

    OTM call options offer the potential for large gains at a relatively low cost, but success depends on accurately estimating the time, direction, and volatility of the market. They are best suited for traders seeking high potential returns with limited upfront risk. However, using them without a clear strategy can be dangerous. Always analyze market data, price movements, and time to expiry before entering a trade. When used wisely, OTM calls can not only protect your capital but also deliver substantial profits at the right moment. However, it is essential to consult a financial advisor before trading in options.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1Option Chain Analysis: A Detail Guide for Beginners
    2What is Options Trading?
    3Bank NIFTY Intraday Options Trading
    4What are Option Greeks?
    5What is Implied Volatility in Options Trading

    Frequently Asked Questions (FAQs)

    1. What is an OTM call option?

      An OTM call option is one whose strike price is above the market price of the asset.

    2. Are OTM call options risky?

      Yes, the risk is higher as there is a possibility of it becoming worthless by the time of expiry.

    3. Why is the OTM call option cheaper than ITM?

      Because there is less possibility of it becoming profitable at expiry, its premium is also less.

    4. Can I make good profit with OTM calls?

      If the market moves fast and in the right direction, then yes, the profits can be good.

    5. Should beginners trade OTM call options?

      Beginner traders should first analyse them and understand the risk before taking entry.

  • Regaal Resources IPO Allotment Status: Check Latest GMP, Steps to Verify Status

    Regaal Resources IPO Allotment Status: Check Latest GMP, Steps to Verify Status

    Regaal Resources Limited, a prominent maize specialty products manufacturer in India, has opened its ₹306 crore IPO for subscription. The offering comprises a fresh issue worth ₹210 crore and an offer for sale amounting to ₹96 crore. The subscription window runs from August 12 to August 14, 2025, with a price band set between ₹96 and ₹102 per share. Following allotment, the company’s shares are scheduled to be listed on both the BSE and NSE on August 20, 2025.

    Regaal Resources IPO Day 3 Subscription Status

    Regaal Resources IPO has seen an extraordinary response, with overall subscription hitting 159.87 times. QIBs subscribed 190.96 times, NIIs 356.72 times, and retail investors 57.75 times.

    Investor CategorySubscription (x)
    Qualified Institutional Buyers (QIB)190.96
    Non-Institutional Investors (NII)356.72
    bNII (above ₹10 lakh)387.71
    sNII (less than ₹10 lakh)294.73
    Retail Individual Investors (RII)57.75
    Total 159.87

    Total Applications: 35,65,292

    Objective of the Regaal Resources IPO

    Regaal Resources Limited intends to allocate ₹159 crore from its IPO proceeds towards the repayment and/or prepayment, either fully or partially, of certain outstanding borrowings. The remaining funds will be used for general corporate purposes.

    Use of IPO ProceedsAmount (₹ Cr)
    Repayment and/ or pre-payment, in full or in part, of our certain outstanding borrowings availed by our Company159
    General Corporate Purposes–

    Regaal Resources IPO GMP – Day 3 Update

    The grey market premium (GMP) of Regaal Resources IPO is ₹24, as on 5:00 PM August 14, 2025. The upper limit of the price band is ₹102, and the estimated listing price as per today’s GMP can be ₹126, giving a potential gain of around 23.53% per share.

    DateGMP (₹)Est. Listing Price (₹)Gain (%)
    14-08-2025 (DAY 3)₹24₹12623.53%

    Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.

    Regaal Resources IPO – Key Details

    ParticularsDetails
    IPO Opening DateAugust 12, 2025
    IPO Closing DateAugust 14, 2025
    Issue Price Band₹96 to ₹102 per share
    Total Issue Size3,00,00,235 shares(aggregating up to ₹306 Cr)
    Listing PlatformBSE, NSE
    RegistrarMUFG Intime India Pvt. Ltd.
    Regaal Resources IPO RHPClick Here

    Important Dates for Regaal Resources IPO Allotment

    EventDate
    Tentative AllotmentAugust 18, 2025
    Refunds InitiationAugust 19, 2025
    Credit of Shares to DematAugust 19, 2025
    Listing Date August 20, 2025

    Regaal Resources Overview

    Regaal Resources Limited is one of India’s largest maize-based specialty product manufacturers, with an installed crushing capacity of 750 TPD. Headquartered in Kolkata, its zero-liquid-discharge facility in Kishanganj, Bihar benefits from proximity to maize cultivation hubs and key markets in East India, Nepal, and Bangladesh. The company produces native and modified starch, co-products like gluten and germ, and value-added products such as maize flour and baking powder, catering to industries including food, paper, animal feed, and adhesives. Between FY 2023 and FY 2025, revenue grew at a CAGR of 36.95%, supported by capacity expansion, diversified sourcing, and a growing domestic and export customer base.

    Read Also: Regaal Resources IPO Day 1: Check GMP, Subscription Status & Key Highlights

    How to Check Regaal Resources IPO Allotment Status

    Regaal Resources IPO allotment can be easily checked online in two ways: from the Registrar’s website and from the BSE or NSE website. This IPO will be listed on both the exchanges – BSE and NSE, so the allotment status will be available to all investors on both platforms.

    Method 1: Registrar’s website (MUFG Intime India Pvt. Ltd.)

    The most reliable way is to check allotment from MUFG Intime India Private Limited’s website.

    How to do:

    • Visit MUFG Intime’s official website
    • Select “Regaal Resources Ltd.” from the IPO list
    • Enter your details PAN number, Application number, or DP/Client ID
    • Click on Submit
    • You will see the allotment status on the screen.

    Method 2: Check from BSE or NSE’s website

    If there is more traffic on the registrar’s website, allotment status can also be checked from BSE or NSE.

    How to do:

    • Visit BSE or NSE’s official website
    • Select ‘Equity’ segment
    • Select “Regaal Resources Ltd.” from the IPO list
    • Enter PAN number and Application number
    • Click on Search

    Frequently Asked Questions (FAQs)

    1. What is the opening and closing date of Regaal Resources IPO?

      Regaal Resources IPO is open on 12 August 2025 and will close on 14 August 2025.

    2. What is the price band of Regaal Resources IPO?

      Its price band is fixed from ₹96 to ₹102 per share.

    3. What is the GMP (Grey Market Premium) of Regaal Resources IPO today?

      The GMP on 14 August 2025 is ₹24, which leads to a possible listing price of ₹126.

    4. What is the total issue size of Regaal Resources IPO?

      The total issue size of the IPO is ₹306 crore, which includes a fresh issue of ₹210 crore and an offer for sale of ₹96 crore.

    5. What is the expected listing date of Regaal Resources?

      This company will get listed on BSE and NSE on 20 August 2025.

  • Difference Between ITM, OTM, ATM in Call and Put Options

    Difference Between ITM, OTM, ATM in Call and Put Options

    In options trading, terms like ITM (In the Money), ATM (At the Money) and OTM (Out of the Money) are part of everyday conversation for any trader. But if you are new to options trading, it is very important to understand the meaning of these three terms and know the difference between them, because they determine the value and risk of an option.

    In this blog, we will learn about what ITM,OTM, and ATM options are and most importantly, how their definition differs in the context of Call Options and Put Options.

    What is a Call Option?

    A call option is a derivative contract that grants the buyer the right, but not the obligation, to purchase a stock or other asset at a predetermined strike price on or before a specified expiration date. Traders usually buy call options when the price of a stock is expected to rise. In this case, if the stock’s market price rises above the strike price, the option becomes “in the money” and starts generating profits.

    The value of a call option comprises of two things:

    • Intrinsic Value (if ITM)
    • Time Value (decreases over time)

    What are ITM, ATM and OTM in Call Option?

    When you buy or sell a Call Option, its value depends on the difference between its strike price and the current market price (spot price). Three terms are used to understand this difference: In the Money (ITM), At the Money (ATM), and Out of the Money (OTM). Let us understand these three terms in detail in the context of Call Option:

    In The Money (ITM) – Call Option

    When the strike price of a Call Option is less than the current price (spot price) of the stock, then that option is considered In the Money (ITM). In this case, the option has intrinsic value because exercising it immediately would allow the buyer to purchase the stock below its market price, resulting in a profit.

    Example : If Reliance stock is trading at ₹1,500 and you have a Call Option of strike price ₹1,450, then the call is said to be ITM.

    At The Money (ATM) – Call Option

    When the strike price and the current price of the stock are almost equal, the option is said to be At the Money (ATM). In this situation, the option has little to no intrinsic value and consists primarily of time value, meaning its worth is derived mainly from the time remaining until expiration and the potential for favorable price movement.

    Example: Reliance stock is at ₹1,500 and you hold a Call Option of ₹1,500, then it is an ATM call option.

    Out of The Money (OTM) – Call Option

    When the strike price is higher than the current price of the stock, the call option is said to be out of the money (OTM). In this case, the option has no intrinsic value, and its value is based only on its time value. If the stock price does not rise over strike price by expiry, the option will expire worthless.

    Example : If Reliance is at ₹1,500 and you have taken a call option of ₹1,700, then it is OTM.

    If you are trading in call options, it is important to understand these three moneyness conditions as they determine how quickly your position can become profitable or expire worthless.

    What is a Put Option?

    Put Option is a derivative contract that gives the buyer the right to sell a stock or asset at a specified strike price by a specified expiry date. Whether to exercise this right or not is entirely up to the buyer. Buying a Put Option is beneficial when the price of a stock or asset price is expected to fall. If the market price goes below the strike price, the option becomes “In the Money” and the buyer starts getting profit. Put Options are often used to hedge existing portfolios or make speculative profits from a falling market.

    Example: If Nifty is trading at 25,000 and you have bought a Put Option of strike price 25,500, then this option will be ITM because you have the right to sell at a higher price than the market.

    What are ITM, ATM and OTM in Put Option?

    The value of Put Options depends on where its strike price stands in comparison to the current market price (spot price). To understand this, we use three terms – In the Money (ITM), At the Money (ATM), and Out of the Money (OTM).

    Below we will understand what these three conditions mean in the context of Put Option and how they affect trading:

    In The Money (ITM) – Put Option

    A put option is considered In the Money (ITM) when its strike price is higher than the current market price (spot price) of the underlying stock. In this case, the option has intrinsic value because exercising it immediately would allow the seller to sell the stock at a price above its current market value, resulting in a profit.

    Example: Suppose a stock is trading at ₹1,900 and you have a Put Option of strike price 2,000 – then it will be ITM.

    At The Money (ATM) – Put Option

    When the strike price and the current market price are almost equal, the option is said to be At the Money (ATM). In this case, the option has no intrinsic value, only time value.

    Example : The stock is at ₹1,900 and you bought a Put Option for ₹1,900 then it is called ATM.

    Out of The Money (OTM) – Put Option

    When the strike price is lower than the current price of the stock, the Put Option is said to be Out of the Money (OTM). OTM puts have no intrinsic value. However, OTM puts can still have time value, which reflects the potential for the stock price to drop below the strike price before expiration, giving the option a chance to become profitable.

    Example : Stock is trading at ₹1,900 and you have a Put Option at ₹1,800 then it is OTM.

    Understanding the moneyness of Put Options is important because it determines how much profit you can make in a falling market and with how much risk. Knowing the difference between ITM, ATM, OTM is very important for smart trading decisions.

    Read Also: Call and Put Options: Meaning, Types, Difference & Examples

    Difference Between ITM, ATM and OTM Options

    CriteriaIn the Money (ITM)At the Money (ATM)Out of the Money (OTM)
    MeaningCall: Strike Price < Spot Price
    Put: Strike Price > Spot Price    		The strike price is nearly equal to the current market price.Call: Strike Price > Spot Price
    Put: Strike Price < Spot Price
    Intrinsic ValuePresentExists to a minimal extent (effectively zero).Absent 
    Option PremiumHighest (intrinsic + time value).Moderate (primarily time value).Lowest (only time value).
    Time Decay ImpactLess impact (mostly intrinsic value)Highest impact (purely time value)Rapid decay if stock price doesn’t move in favourable direction
    Use CaseConservative trading approachTo profit from quick movesSpeculative bets, breakout trades

    Common Mistakes Traders Make in Understanding ITM, ATM, and OTM

    Some of the common mistakes traders should avoid while trading ITM, OTM and ATM options are listed below:

    • Underestimating risks of OTM options as they are cheaper : Many new traders buy OTM options because of their lower premium. But they forget that lower prices does not always mean higher profits. OTM options do not have intrinsic value, and if the price does not move till expiry, the entire premium can become zero.
    • Ignoring Theta Decay : ATM and OTM options lose value the fastest because their entire premium is based on time value. Especially near expiry, their value decreases rapidly – what we call theta decay. Without favorable price movement, these options can quickly become worthless.
    • Not understanding Risks while selling ITM options : Many traders sell ITM options without knowing that if the option is ITM near expiry, they may have to deliver the underlying asset (physical settlement). 
    • Not tracking the Spot Price : To correctly understand the moneyness of the option (ITM/ATM/OTM), it is important to look at the real-time spot price. Many times traders make decisions based on the future price, which can lead to wrong strike selection and result in losses.

    Read Also: Option Chain Analysis: A Detail Guide for Beginners

    Conclusion

    ITM, ATM and OTM options are not just technical terms, they are the foundation of option trading. Whether you buy or sell a Call or a Put, understanding the moneyness can be the difference between profits and losses. In options trading, predicting the correct direction is only half the battle. Choosing the right strike price is equally crucial. It is essential to choose between ITM, OTM, and ATM options based on the risk-reward ratio of your trading strategy and your overall risk management approach. It is advised to consult a financial advisor before trading options.

    Frequently Asked Questions (FAQs)

    1. What is the full form of ITM, ATM and OTM?

      ITM: In The Money, ATM: At The Money, OTM: Out of The Money.

    2. How to know if an option is ITM, ATM or OTM?

      Check the strike price and market price to determine whether an option is ITM, OTM or ATM.

    3. Which option is safer to buy?

      No particular option can be considered the safest to buy, as its value can change significantly with market movements, time decay, and volatility. The choice depends on your trading objective, risk tolerance, and market outlook.

    4. Why is ATM option premium higher than OTM options?

      ATM option premiums are higher than OTM options because ATM options have the highest time value. At the money, the probability of the option expiring in the money is greater than for OTM options, making them more valuable to traders.

    5. Can OTM become ITM before expiry?

      Yes, an OTM option can become ITM before expiry if the underlying asset’s price moves favorably beyond the strike price, giving the option intrinsic value.

  • Exchange of Futures for Physical (EFP)

    Exchange of Futures for Physical (EFP)

    Exchange of Futures for Physical, or EFP, may sound like something reserved for seasoned traders, but at its core, it is a straightforward swap. One party hands over a futures contract, and the other delivers the actual commodity—be it oil, wheat, or gold. This method offers a smoother, more flexible alternative to the formal delivery process and is widely used in industries where physical delivery still matters. 

    In this blog we will break down how EFP works, why it is used, and where you will see it in action.

    Understanding EFP 

    Simply put, an Exchange of Futures for Physical (EFP) is a sort of transaction in which a futures contract holder exchanges it with a person or party who holds the actual physical commodity, such as gold, wheat, or crude oil.

    Think of it this way: your futures contract is like a coupon for a pizza, and your friend already has the pizza. Instead of waiting for the coupon to expire and going through the formal process to claim it, you simply swap the coupon for the pizza right away. Simple, quick, and no extra hassle.

    EFP works the same way for major market participants. Instead of going through the official delivery process via the exchange, it allows them to privately negotiate and swap a futures position for the actual physical asset.

    How Does it Work?

    An Exchange of Futures for Physical (EFP) is like a private trade. A futures contract is an agreement to buy or sell something at a later date. The two parties agree to trade directly with each other instead of waiting for the formal delivery process through the exchange.

    Here is what happens in order:

    1. One party has a long (buy) futures position and the other has a short (sell) position. One person wants to get rid of the contract, and the other person wants the goods.
    1. They talk about the amount, price, delivery terms, and other details in private, away from the trading floor of the exchange.
    1. Futures are traded for real goods: The futures positions are closed out, and the agreed-upon commodity is delivered.
    1. The deal is reported to the exchange. Even though it was made in private, the exchange still needs to be clear and record the deal to make sure everything is legal.

    Key Features 

    Now that we have discussed what an EFP is, what separates it from a standard futures trade? The following are some characteristics that set EFPs apart,

    1. Direct swap

    Fundamentally, an EFP is simply a transaction in which one party surrenders a futures contract and the other delivers the actual commodity, such as wheat, gold, or oil. 

    2. The Deal Is Private

    EFPs are negotiated privately between two parties, as opposed to standard trades that take place on a public exchange. They agree on terms privately.

    3. The Exchange must be notified

    The transaction is not confidential, despite taking place in the background. After everything has been decided upon, it is reported to the exchange, making it official.

    4. Customise the Deal

    What’s amazing about EFPs? Standard terms do not have to apply to you. Whatever works best, how much, where, when, and so forth, can be decided upon by the two parties.

    5. Usually carried out by the major players

    Casual traders are not the target audience for EFPs. Producers, manufacturers, and large organisations that need to move real goods or adjust their positions are more likely to use them.

    Why do Traders use EFP?

    You may be asking yourself, “Why put in all this work for a private swap when you can just continue trading futures normally?” EFP is simply much more convenient for many traders and businesses. They prefer it for the following reasons:

    1. Avoid formal delivery processes

    Futures traders occasionally do not wish to go through the entire formal delivery process through the exchange. They can get right to the point with an EFP, one party receives the goods, and the other party terminates the agreement.

    2. Convert futures into physical commodities when needed.

    Suppose a business used a futures contract to protect itself from fluctuations in wheat prices. EFP allows them to exchange that paper contract for the actual wheat now that they are in actual need of it. If they already have the wheat, they can also convert it into a futures position.

    3. Choose delivery time, place, and quantity.

    Where, when, and how much are all predetermined for standard exchange deliveries. EFP, however, gives both sides the opportunity to discuss what suits them best. Whatever works best for them, they can choose the delivery location, time, and amount.

    4. Adjust positions privately without impacting the market.

    EFPs are frequently used by large traders to adjust their positions or hedges without causing a stir in the open market. These transactions don’t affect prices or attract undue attention because they take place in private.

    5. Maintain discretion for large or sensitive trades.

    Not everyone wants the public trading screen to display their moves. EFPs provide some privacy because they are conducted behind the scenes, which is particularly helpful for large trades or delicate transactions.

    Where are EFPs commonly used? 

    People use EFPs most often in markets where physical delivery is still important, like:

    • The markets for crude oil and energy
    • Gold, Silver, and Copper
    • Agricultural Goods (Wheat, Corn, Soybean)
    • Money and Financial Futures

    Real World Examples 

    Let us look at an example from the market for crude oil.

    • A refinery has bought futures for crude oil, but it now needs the actual crude oil to process at its plant.
    • A producer or supplier with the opposite short futures position wants to get out of futures and deliver real oil.
    • They come to an agreement on an EFP deal, in which they trade and the other party exchanges their futures positions for the same amount of crude oil.
    • The oil is delivered to the refinery, and the futures positions are closed.
    • EFPs are often used by companies that make, refine, or trade commodities to manage their exposure to real-world supply and price changes.

    Regulatory & Exchange Needs 

    1. EFPs require that a futures contract be exchanged for actual goods. It must be a legitimate business transaction; you cannot simply act as though you are trading something for show.
    1. The transaction must be reported to the exchange (such as CME, ICE, or MCX in India) after both parties have approved the swap. In this manner, the exchange can resolve it and ensure that everything is legal.
    1. The quantity, quality, and product type of the physical goods being exchanged should match those specified in the futures contract. A futures contract for 1,000 barrels of oil cannot be exchanged for 700 barrels.
    1. In the event that regulators wish to review the transaction later, the parties involved must maintain accurate records of the transaction, including the terms, the person they traded with, and the proof of delivery.
    1. Not all contracts in the futures market qualify for an EFP. Specific guidelines govern which contracts, usually those that are physically settled.

    Conclusion 

    Exchange of Futures for Physical (EFP) may initially appear to be one of those jargon-heavy financial terms meant for experts. Once you know the basics, though, it is just a clever means for traders to exchange a futures contract for actual commodities such as wheat, gold, or oil.

    Big players who deal in tangible goods and want greater control over delivery schedules of assets are the ones who use it the most. They negotiate terms directly with the other party, bypass the formal process, and keep transactions smooth. 

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1What is Future Trading and How Does It Work?
    2Types of Futures and Futures Traders
    3Difference Between Options and Futures
    4Synthetic Futures – Definition, Risk, Advantages, Example
    5Difference Between Forward and Future Contracts Explained
    6Cost of Carry in Futures Contract
    7Silver Futures Trading – Meaning, Benefits and Risks

    Frequently Answered Questions (FAQs)

    1. Can I use EFP as a small investor?

      No. EFPs are mainly designed for large traders and organizations that deal in substantial futures positions or need the actual delivery of the underlying commodity.

    2. Is EFP secure and legal?

      Completely legal! All that is required to make it official is to report it to the exchange.

    3. What distinguishes EFP from standard futures delivery?

      EFP allows both parties to customise the deal according to their terms. Strict exchange regulations apply to regular futures deliveries.

    4. What is being traded in reality?

      The real commodity is delivered by one party while the other forfeits a futures contract.

    5. Where does an EFP transaction take place?

      Although it is a private agreement between two parties, the exchange is informed once it has been reached.

  • What is SPAN & Exposure Margin?

    What is SPAN & Exposure Margin?

    You have certainly heard of terms like SPAN and exposure margin if you have ever worked in futures and options (F&O) trading. They may appear to be financial jargon at first, but knowing them is essential if you want to trade securely.

    In essence, margins are the up-front money you must deposit with your broker in order to enter derivatives trading positions. It is a combination of two factors, exposure margin and SPAN margin, each of which has different roles in trading risk management.

    This blog will explain what margin in F&O trading means, how exposure and SPAN margins are determined, and why they are important for all traders to understand.

    What is the Margin in Trading?

    You must pay an initial deposit before you buy or sell contracts when trading futures and options (F&O). This is called margin. Think of it as the minimum balance your broker requires in your trading account to ensure you can cover potential losses and avoid defaulting on your trades.

    You can take on positions that are bigger than your available capital would normally allow because of margin, which acts as a financial buffer. Rather than paying the entire contract value when you enter a trade, you only pay a percentage, called the initial margin. For instance, all you need to open a position on a ₹900k equity futures contract with a 15% margin requirement is ₹135k.

    This total margin is generally made up of two parts: 

    1. SPAN Margin 

    2. Exposure Margin 

    What is SPAN Margin?

    In 1988, the Chicago Mercantile Exchange (CME) created the risk-based margining system known as SPAN or Standard Portfolio Analysis of Risk. SPAN margin simulates a number of outcomes, including price and volatility changes, to calculate the worst-case loss your portfolio could sustain. It allows for offsets between correlated trades by calculating margins for your entire portfolio rather than just for individual positions.

    Since SPAN uses scenario analysis instead of a fixed-percentage margin, the amount of margin needed differs according to the time for expiry, portfolio composition, and volatility. If positions offset one another, SPAN can reduce capital requirements by evaluating a full basket of positions at once.

    What is Exposure Margin? 

    The exposure margin is an extra safety net on top of the SPAN margin. It is collected to protect against any sudden changes in the market that the SPAN system might not have taken into account.

    You could say that, a “safety net” that brokers or exchanges need in case something goes wrong. This is fixed as a percentage of the total contract value and changes based on the asset and the rules of the exchange.

    For Example 

    Let us say you want to buy Nifty Futures.

    SPAN Margin – ₹1,50,000

    Exposure Margin – ₹40,000

    Total margin needed = SPAN Margin + Exposure Margin = ₹1,90,000

    To take the position, you need to have this much money in your account.

    Read Also: What is Stock Margin?

    Difference Between SPAN Margin & Exposure Margin 

    BasisSPAN MarginExposure Margin 
    Assessment BasisScenario-based, portfolio-wide risk calculationsFixed percentage buffer on trade value
    FlexibilityVaries with volatility; best for F&O tradesStatic cushion in addition to SPAN
    UsageF&O segments using SPAN modelAll leveraged positions, across trades
    Offset BenefitsAllows netting across long/short in a basketNo offsetting, each trade stands alone

    Why is Margin & SPAN Important for Traders? 

    Understanding how margin and SPAN margin work is not only beneficial but also necessary if you trade futures and options or use any form of leverage. 

    1. They Help You Manage Risk

    The purpose of margin, particularly SPAN, is to ensure that you have adequate money in your account to deal with unforeseen market fluctuations. If things go wrong, it acts as a safety net to shield you and your broker from suffering significant losses.

    2. Efficient Use of Capital

    Leverage allows you to make larger trades without having to pay the entire amount up front, which is one of the best things about margin. By examining your complete portfolio, SPAN goes one step further. You might require less margin if certain trades (such as a call and a put) balance each other out. This means greater adaptability and more economical use of your funds.

    3. Adhering to SEBI Regulations

    You have undoubtedly heard of SEBI’s margin regulations if you trade in India. Before you enter a trade, brokers must gather exposure margins and SPAN. If you do not meet expectations, you may be penalised or, worse, have your positions automatically closed. You can prevent surprises and maintain control by being aware of this.

    4. Maintaining Flexibility in Real Time

    Markets are dynamic. The SPAN margin is recalculated every day, sometimes even within a single day. You can make timely adjustments to your positions, lower your exposure, or add money if you are aware of these changes.

    Conclusion 

    Futures and options trading offer huge possibilities, but they also carry a lot of responsibility. Knowing how exposure margin and SPAN margin operate can significantly impact how safely and effectively you trade. Both are equally significant. You can prevent unnecessary surprises like margin calls and auto square-offs when you understand how much margin you need and why.

    Therefore, always check your margin needs before making a trade, put aside a small amount as a buffer, and adjust your strategy accordingly. You’re already playing the game better than most when you know the rules.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1Margin Pledge: Meaning, Risks, And Benefits
    2What is Intraday Margin Trading?
    3Top Tips for Successful Margin Trading in India
    4What is Margin Funding?
    5Difference between Margin Trading and Leverage Trading
    6Margin Against Shares: How Does it Work?
    7What is Operating Profit Margin?

    Frequently Asked Questions (FAQs)

    1. For what reason do I require both margins?

      The SPAN margin covers the expected risk. It is based on different market scenarios and is meant to protect against likely price changes. On the other hand, exposure margin protects against unexpected risks.

    2. Do these margins fluctuate daily?

      SPAN margin can change when market volatility increases. Unless regulations change, the exposure margin usually remains constant.

    3. Who determines the amount of margin I require?

      Your broker complies with the regulations set forth by the exchange (such as the NSE). Additionally, SEBI closely monitors to ensure that everything is secure and fair.

    4. What happens if my account doesn’t have enough margin?

      You may receive a margin call from your broker requesting additional funds. They may automatically end your position if you don’t.

    5. Is it possible to lower the SPAN margin that I must pay?

      Indeed! Both your overall risk and your SPAN requirement decrease when you make hedged trades, such as combining a call and a put.

  • BlueStone Jewellery IPO Day 2: Check GMP, Subscription Status & Key Highlights

    BlueStone Jewellery IPO Day 2: Check GMP, Subscription Status & Key Highlights

    BlueStone Jewellery and Lifestyle Limited, one of India’s leading omni-channel fine jewellery retailers, has launched its much-awaited ₹1,540.65 crore IPO, consisting of a fresh issue of ₹820 crore and an offer for sale of ₹720.65 crore. The issue opened for subscription on August 11, 2025, at a price band of ₹492–₹517 per share, and will close on August 13, 2025. Post allotment, the company’s shares are set to be listed on both the BSE and NSE on August 19, 2025.

    BlueStone Jewellery IPO Day 2 Subscription Status

    On Day 2, the BlueStone Jewellery IPO saw an overall subscription of 0.66 times, led by QIBs at 0.84 times, while retail investor participation stood at 0.75 times.

    Investor CategorySubscription (x)
    Qualified Institutional Buyers (QIB)0.84
    Non-Institutional Investors (NII)0.23
    bNII (above ₹10 lakh)0.29
    sNII (less than ₹10 lakh)0.11
    Retail Individual Investors (RII)0.75
    Total Subscriptions0.66

    Total Applications: 57,881

    Total Bid Amount: ₹557.47 crore

    Objective of the BlueStone Jewellery IPO

    BlueStone Jewellery and Lifestyle Limited plans to utilize the funds raised from its IPO to meet its working capital needs and for general corporate purposes.

    Use of IPO ProceedsAmount (₹ Cr)
    Funding Working Capital Requirements750
    General Corporate Purposes–

    BlueStone Jewellery IPO GMP – Day 2 Update

    The grey market premium (GMP) of BlueStone Jewellery IPO is ₹2.5, as on 5:00 PM August 12, 2025. The upper limit of the price band is ₹517, and the estimated listing price as per today’s GMP can be ₹519.5, giving a potential gain of around 0.48% per share.

    DateGMP (₹)Est. Listing Price (₹)Gain (%)
    12-08-2025 (DAY 2)₹2.5₹519.50.48%

    Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.

    BlueStone Jewellery IPO – Key Details

    ParticularsDetails
    IPO Opening DateAugust 11, 2025
    IPO Closing DateAugust 13, 2025
    Issue Price Band₹492 to ₹517 per share
    Total Issue Size2,97,99,798 shares(aggregating up to ₹1,540.65 Cr)
    Listing PlatformBSE, NSE
    RegistrarKfin Technologies Limited
    BlueStone Jewellery IPO RHPClick Here

    Important Dates for BlueStone Jewellery IPO Allotment

    EventDate
    Tentative AllotmentAugust 14, 2025
    Refunds InitiationAugust 18, 2025
    Credit of Shares to DematAugust 18, 2025
    Listing Date August 19, 2025

    BlueStone Jewellery Overview

    BlueStone Jewellery and Lifestyle Limited is India’s second-largest digital-first omni-channel fine-jewellery brand by revenue in Fiscal 2024, offering contemporary diamond, gold and platinum designs through its website, mobile app and a pan-India network of 275 stores across 117 cities. Founded in 2011, BlueStone serves customers aged 25–45 with over 7,400 designs across 91 themed collections, supported by three manufacturing facilities in Mumbai, Jaipur and Surat. Its in-house technology stack enables 360° product visualization, real-time inventory tracking, AI-driven merchandising and seamless online-to-offline experiences. The company employs 1,943 full-time staff and utilized over 80% capacity at its Mumbai and Jaipur plants in Fiscal 2025.

    Read Also: BlueStone Jewellery IPO Day 1: Check GMP, Subscription Status & Key Highlights

    Easy Steps to Apply for BlueStone Jewellery IPO via Pocketful

    Step 1 :  Install the Pocketful Application from Play Store or App Store

    Step 2 : Sign up and complete your KYC requirements

    Step 3 : Go to the IPO section from the home page

    Step 4 : Look for “BlueStone Jewellery” in the list

    Step 5 : Tap on Apply and enter your bid details

    Frequently Answered Questions (FAQs)

    1. What is the opening and closing date of BlueStone Jewellery IPO?

      BlueStone Jewellery IPO is open on 11 August 2025 and will close on 13 August 2025.

    2. What is the price band of BlueStone Jewellery IPO?

      Its price band is fixed from ₹492 to ₹517 per share.

    3. What is the GMP (Grey Market Premium) of BlueStone Jewellery IPO today?

      The GMP on 12 August 2025 is ₹2.5, which leads to a possible listing price of ₹519.5.

    4. What is the total issue size of BlueStone Jewellery IPO?

      The total issue size of the IPO is ₹1,540.65 crore, which includes a fresh issue of ₹820 crore and an offer for sale of ₹720.65 crore.

    5. What is the expected listing date of BlueStone Jewellery?

      This IPO is expected to be listed on BSE and NSE on August 19, 2025.

  • Regaal Resources IPO Day 1: Check GMP, Subscription Status & Key Highlights

    Regaal Resources IPO Day 1: Check GMP, Subscription Status & Key Highlights

    Regaal Resources Limited, a prominent maize specialty products manufacturer in India, has opened its ₹306 crore IPO for subscription. The offering comprises a fresh issue worth ₹210 crore and an offer for sale amounting to ₹96 crore. The subscription window runs from August 12 to August 14, 2025, with a price band set between ₹96 and ₹102 per share. Following allotment, the company’s shares are scheduled to be listed on both the BSE and NSE on August 20, 2025.

    Regaal Resources IPO Day 1 Subscription Status

    On Day 1, the Regaal Resources IPO saw a strong start, with an overall subscription of 5.94 times, driven by high demand from NIIs at 10.77 times and retail investors at 5.59 times.

    Investor CategorySubscription (x)
    Qualified Institutional Buyers (QIB)2.94
    Non-Institutional Investors (NII)10.77
    bNII (above ₹10 lakh)10.16
    sNII (less than ₹10 lakh)11.99
    Retail Individual Investors (RII)5.59
    Total Subscriptions5.94

    Total Applications: 3,33,789

    Total Bid Amount: ₹1,272.86 crore

    Objective of the Regaal Resources IPO

    Regaal Resources Limited intends to allocate ₹159 crore from its IPO proceeds towards the repayment and/or prepayment, either fully or partially, of certain outstanding borrowings. The remaining funds will be used for general corporate purposes.

    Use of IPO ProceedsAmount (₹ Cr)
    Repayment and/ or pre-payment, in full or in part, of our certain outstanding borrowings availed by our Company159
    General Corporate Purposes–

    Regaal Resources IPO GMP – Day 1 Update

    The grey market premium (GMP) of Regaal Resources IPO is ₹25, as on 5:00 PM August 12, 2025. The upper limit of the price band is ₹102, and the estimated listing price as per today’s GMP can be ₹127, giving a potential gain of around 24.51% per share.

    DateGMP (₹)Est. Listing Price (₹)Gain (%)
    12-08-2025 (DAY 1)₹25₹12724.51%

    Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.

    Regaal Resources IPO – Key Details

    ParticularsDetails
    IPO Opening DateAugust 12, 2025
    IPO Closing DateAugust 14, 2025
    Issue Price Band₹96 to ₹102 per share
    Total Issue Size3,00,00,235 shares(aggregating up to ₹306 Cr)
    Listing PlatformBSE, NSE
    RegistrarMUFG Intime India Pvt. Ltd.
    Regaal Resources IPO RHPClick Here

    Important Dates for Regaal Resources IPO Allotment

    EventDate
    Tentative AllotmentAugust 18, 2025
    Refunds InitiationAugust 19, 2025
    Credit of Shares to DematAugust 19, 2025
    Listing Date August 20, 2025

    Regaal Resources Overview

    Regaal Resources Limited is one of India’s largest maize-based specialty product manufacturers, with an installed crushing capacity of 750 TPD. Headquartered in Kolkata, its zero-liquid-discharge facility in Kishanganj, Bihar benefits from proximity to maize cultivation hubs and key markets in East India, Nepal, and Bangladesh. The company produces native and modified starch, co-products like gluten and germ, and value-added products such as maize flour and baking powder, catering to industries including food, paper, animal feed, and adhesives. Between FY 2023 and FY 2025, revenue grew at a CAGR of 36.95%, supported by capacity expansion, diversified sourcing, and a growing domestic and export customer base.

    Easy Steps to Apply for Regaal Resources IPO via Pocketful

    Step 1 :  Install the Pocketful Application from Play Store or App Store

    Step 2 : Sign up and complete your KYC requirements

    Step 3 : Go to the IPO section from the home page

    Step 4 : Look for “Regaal Resources” in the list

    Step 5 : Tap on Apply and enter your bid details

    Frequently Answered Questions (FAQs)

    1. What is the opening and closing date of Regaal Resources IPO?

      Regaal Resources IPO is open on 12 August 2025 and will close on 14 August 2025.

    2. What is the price band of Regaal Resources IPO?

      Its price band is fixed from ₹96 to ₹102 per share.

    3. What is the GMP (Grey Market Premium) of Regaal Resources IPO today?

      The GMP on 12 August 2025 is ₹25, which leads to a possible listing price of ₹127.

    4. What is the total issue size of Regaal Resources IPO?

      The total issue size of the IPO is ₹306 crore, which includes a fresh issue of ₹210 crore and an offer for sale of ₹96 crore.

    5. What is the expected listing date of Regaal Resources?

      This IPO is expected to be listed on BSE and NSE on August 20, 2025.

  • Use Cases of AI in the Stock Market

    Use Cases of AI in the Stock Market

    AI has transformed the world in every possible manner and is almost used in every industry, and the stock market is no exception. AI has transformed the stock market’s operations, from executing trades with precision to forecasting stock price movements using historical data and real-time news.

    In this blog, we will give you an overview of use cases of AI in the stock market, along with its key benefits and risks.

    AI in Action: Transforming the Stock Market

    In the world of the stock market, artificial intelligence (AI) refers to the application of complex algorithms and machine learning models to analyze market data, identify patterns, and decide whether to trade or invest. It involves the automation of processes like analyzing sentiment, risk assessment, price prediction, and portfolio management that used to need human intelligence.

    Over time, AI has become an essential tool for traders and investors, enabling faster and more accurate decisions than traditional methods. By processing vast amounts of data in real time, it can detect subtle market trends that might be invisible to the human eye. AI-powered systems can also adapt to changing market conditions, continuously learning and improving their performance. This capability helps reduce emotional bias in trading, allowing for a more disciplined and data-driven approach to investing.

    Features of AI in the Stock Market

    The key features of AI in the stock market are as follows:

    1. Analyse Large Datasets: Massive volumes of structured data, like historical prices, trading volumes, financial statements, etc., can be used, processed, and analysed by AI at a speed and scale which is not possible for humans.
    2. Automated Trades: AI makes it possible for buy and sell orders to be executed automatically based on set rules or strategies.
    3. Sentiment Analysis: AI analyses public sentiment from reports, social media, and news using Natural Language Processing (NLP), and provides its impact on price.

    Read Also: How AI is Transforming Stock Market Predictions

    Use cases of AI in the Stock Market

    The most significant and impactful applications of AI in the stock market include:

    1. Prediction of Market Movement: To forecast future stock movements, artificial intelligence (AI) systems examine huge amounts of past price data, volume patterns, and technical indicators. 
    2. High-Frequency Trading: AI-powered high-frequency trading systems can process millions of transactions per second, capitalizing on microsecond price discrepancies across global markets.
    3. Sentiment Analysis: To assess market sentiment, tools that use AI look for information from news articles, earnings reports, and social media platforms.
    4. Management of Portfolio: Investment portfolios are created and rebalanced by AI-driven robo-advisors according to the risk appetite, investment horizon, and goals of each investor. 
    5. Detection of Fraud: Artificial intelligence (AI) algorithms help in the detection of insider trading patterns, market manipulation, and unusual trading activity. 
    6. Customer Service: AI-powered chatbots are used by brokers to improve customer engagement and operational efficiency by responding to investor inquiries, recommending stocks, and facilitating trade execution.
    7. Preparing Strategies: By leveraging historical data, AI can develop and test trading strategies to assess potential risks and profitability before they are executed in real markets.

    Read Also: Top 10 AI Tools for Stock Market Analysis

    Benefits of Using AI in the Stock Market

    The significant benefits of using AI in the stock market are as follows:

    1. Decision Making: AI helps an individual in analysing large amounts of data collected from multiple sources in less time and make an informed decision.
    2. Faster Execution of Trade: Through AI algorithms, one can execute trades within microseconds, as this can give traders an additional benefit while executing a trade.
    3. Zero Emotions: Since AI operates without emotional influence, it minimizes the impact of feelings like fear or greed, making decisions solely based on data and logic.
    4. Round-the-Clock Monitoring: AI trading systems can work 24/7 and continuously scan the market for trading opportunities.
    5. Risk Management: AI models help minimize potential losses by continuously monitoring market conditions and adjusting risk levels in response to stock price movements.

    Read More: Benefits of AI in the Stock Market

    Risk of Using AI in the Stock Market

    There is a certain risk of using AI in the stock market; a few of such risks are mentioned below:

    1. Limitations in Real Markets: Since AI relies heavily on backtested data, its strategies may not always perform well in real-world scenarios, where market sentiments are often influenced by human emotions.
    2. Transparency: AI models generate solutions based on complex calculations, but often offer limited explanation of their reasoning, resulting in a lack of clarity.
    3. Error: If any coding error occurs in creating AI driven systems, it can lead to significant losses in automated trading.
    4. False Information: AI is not smart enough to analyse which news is false and which is true; therefore, any false news spread online can lead to wrong trading decisions and cause significant losses.
    5. Cyber Security: Any kind of cyber attack might impact the AI system, as cyber attackers can control the bot and intervene in the automated trading system.

    Read Also: Can AI Predict the Stock Market?

    Conclusion

    On a concluding note, AI has brought a revolutionary shift to the stock market in recent years. It is now widely used for risk management, robo-advisory services, and many other applications, enabling the analysis of vast amounts of data within seconds. However, using AI also comes with significant risks, such as cybersecurity concerns, decisions based on false information, etc. Therefore, it is advisable to use AI in the stock market analysis only after consulting your investment advisor.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1How to Use AI for Smarter Investing in India
    2Scope of AI in Investing: Usage, Benefits, and Challenges
    3What is AI Washing? Definition, Tips, Evolutions & Impact
    4How to Use AI for Stock Trading?
    5Stock Market Prediction Using Machine Learning
    6Best AI-Based Trading Strategies Explained
    7Risks of Artificial Intelligence Trading
    8Best Artificial Intelligence (AI) Stocks In India
    9Scope of AI in Investing: Usage, Benefits, and Challenges

    Frequently Asked Questions (FAQs)

    1. Can a retail investor use AI tools?

      Yes, there are many platforms that provide AI tools for retail investors, allowing them to get the benefit of robo-advisory, stock screening, execution of trades, etc.

    2. What are the risks involved in using AI tools in the stock market?

      The significant risk involved in using an AI tool in the stock market is the lack of transparency, cyber threats, false information, etc.

    3. Is it legal to use AI in the Indian stock market?

      Yes, use of AI tools in Indian stock markets is legal, but institutions must comply with SEBI guidelines on algorithmic trading, risk management, and model governance. 

    4. How does AI predict the stock price movement?

      AI predicts the stock price movement based on historical data, news, technical indicators, and financial reports.

    5. Can AI analyse news related to a particular stock?

      Yes, AI can analyse news related to a particular stock as it uses the Natural Language Processing (NLP) algorithms that reads the news, posts and discussion related to a particular stock for making trading decisions.

  • 10 Low PE Ratio Stocks in India

    10 Low PE Ratio Stocks in India

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

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

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

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

    Types of PE Ratio

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

    Sector-wise Variations in PE Ratio

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

    Why do investors like low PE stocks?

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

    10 Best Low PE Ratio Stocks in India for 2025

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

    Overview of the Top Low PE stocks in India

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

    1. Power Finance Corporation (PFC)

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

    Know the Returns: 

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

    2. Bank of Baroda

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

    Know the Returns: 

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

    3. Coal India

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

    Know the Returns: 

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

    4. ONGC

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

    Know the Returns: 

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

    5. Indus Towers

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

    Know the Returns: 

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

    6. SBI (State Bank of India)

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

    Know the Returns: 

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

    Read Also: SBI Case Study

    7. Tata Motors

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

    Know the Returns: 

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

    Read Also: Tata Motors Case Study

    8. GAIL

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

    Know the Returns: 

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

    9. Life Insurance Corporation of India (LIC)

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

    Know the Returns: 

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

    Read Also: LIC Case Study

    10. Vedanta

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

    Know the Returns: 

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

    Read Also: Vedanta Case Study

    Key Performance Indicators (KPIs)

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

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

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

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

    Factors to Consider Before Investing in Low PE Stocks

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

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

    Conclusion

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

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1List Of Best Healthcare Stocks in India
    2List of Best Telecom Stocks in India
    3List Of Best Footwear Stocks in India
    4List Of Best Logistics Stocks in India
    5List of Best Liquor Stocks in India

    Frequently Asked Questions (FAQs)

    1. What is a low PE stock?

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

    2. Are low PE stocks always good for investment?

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

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

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

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

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

    5. Should beginners invest in Low PE stocks?

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

  • BlueStone Jewellery IPO Day 1: Check GMP, Subscription Status & Key Highlights

    BlueStone Jewellery IPO Day 1: Check GMP, Subscription Status & Key Highlights

    BlueStone Jewellery and Lifestyle Limited, one of India’s leading omni-channel fine jewellery retailers, has launched its much-awaited ₹1,540.65 crore IPO, consisting of a fresh issue of ₹820 crore and an offer for sale of ₹720.65 crore. The issue opened for subscription on August 11, 2025, at a price band of ₹492–₹517 per share, and will close on August 13, 2025. Post allotment, the company’s shares are set to be listed on both the BSE and NSE on August 19, 2025.

    BlueStone Jewellery IPO Day 1 Subscription Status

    The BlueStone Jewellery IPO didn’t receive much attention on its first day, with an overall subscription of just 0.39 times. QIBs subscribed 0.57 times, NIIs only 0.04 times, and retail investors 0.39 times.

    Investor CategorySubscription (x)
    Qualified Institutional Buyers (QIB)0.57
    Non-Institutional Investors (NII)0.04
    bNII (above ₹10 lakh)0.03
    sNII (less than ₹10 lakh)0.06
    Retail Individual Investors (RII)0.39
    Total Subscriptions0.39

    Total Applications: 30,036

    Total Bid Amount: ₹330.42 crore

    Objective of the BlueStone Jewellery IPO

    BlueStone Jewellery and Lifestyle Limited plans to utilize the funds raised from its IPO to meet its working capital needs and for general corporate purposes.

    Use of IPO ProceedsAmount (₹ Cr)
    Funding Working Capital Requirements750
    General Corporate Purposes–

    BlueStone Jewellery IPO GMP – Day 1 Update

    The grey market premium (GMP) of BlueStone Jewellery IPO is ₹9, as on 5:00 PM August 11, 2025. The upper limit of the price band is ₹517, and the estimated listing price as per today’s GMP can be ₹526, giving a potential gain of around 1.74% per share.

    DateGMP (₹)Est. Listing Price (₹)Gain (%)
    11-08-2025 (DAY 1)₹9₹5261.74%

    Disclaimer: The above GMP (Grey Market Premium) is just unofficial market information, which is not officially confirmed. These figures are shared for informational purposes only and investment decisions based on these should be based on the investor’s own research and discretion. We do not conduct, recommend or support any kind of transaction in the grey market.

    BlueStone Jewellery IPO – Key Details

    ParticularsDetails
    IPO Opening DateAugust 11, 2025
    IPO Closing DateAugust 13, 2025
    Issue Price Band₹492 to ₹517 per share
    Total Issue Size2,97,99,798 shares(aggregating up to ₹1,540.65 Cr)
    Listing PlatformBSE, NSE
    RegistrarKfin Technologies Limited
    BlueStone Jewellery IPO RHPClick Here

    Important Dates for BlueStone Jewellery IPO Allotment

    EventDate
    Tentative AllotmentAugust 14, 2025
    Refunds InitiationAugust 18, 2025
    Credit of Shares to DematAugust 18, 2025
    Listing Date August 19, 2025

    BlueStone Jewellery Overview

    BlueStone Jewellery and Lifestyle Limited is India’s second-largest digital-first omni-channel fine-jewellery brand by revenue in Fiscal 2024, offering contemporary diamond, gold and platinum designs through its website, mobile app and a pan-India network of 275 stores across 117 cities. Founded in 2011, BlueStone serves customers aged 25–45 with over 7,400 designs across 91 themed collections, supported by three manufacturing facilities in Mumbai, Jaipur and Surat. Its in-house technology stack enables 360° product visualization, real-time inventory tracking, AI-driven merchandising and seamless online-to-offline experiences. The company employs 1,943 full-time staff and utilized over 80% capacity at its Mumbai and Jaipur plants in Fiscal 2025.

    Easy Steps to Apply for BlueStone Jewellery IPO via Pocketful

    Step 1 :  Install the Pocketful Application from Play Store or App Store

    Step 2 : Sign up and complete your KYC requirements

    Step 3 : Go to the IPO section from the home page

    Step 4 : Look for “BlueStone Jewellery” in the list

    Step 5 : Tap on Apply and enter your bid details

    Frequently Asked Questions (FAQs)

    1. What is the opening and closing date of BlueStone Jewellery IPO?

      BlueStone Jewellery IPO is open on 11 August 2025 and will close on 13 August 2025.

    2. What is the price band of BlueStone Jewellery IPO?

      Its price band is fixed from ₹492 to ₹517 per share.

    3. What is the GMP (Grey Market Premium) of BlueStone Jewellery IPO today?

      The GMP on 11 August 2025 is ₹9, which leads to a possible listing price of ₹526.

    4. What is the total issue size of BlueStone Jewellery IPO?

      The total issue size of the IPO is ₹1,540.65 crore, which includes a fresh issue of ₹820 crore and an offer for sale of ₹720.65 crore.

    5. What is the expected listing date of BlueStone Jewellery?

      This IPO is expected to be listed on BSE and NSE on August 19, 2025.

    • Open Free Demat Account

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