The terms IPO (Initial Public Offering) and shares are fundamental concepts in the world of finance and understanding the difference between the two is crucial. An IPO is the process by which a private company goes public by offering its shares for the first time to the general public. It’s a way for the company to raise capital. Shares, on the other hand, represent ownership units in a company, and they can be bought and sold on the stock market after the IPO. Understanding the difference helps investors make informed decisions about participation in public offerings or buying shares on the open market.
In this blog, we will explain IPO and shares, their types, and the differences between them.
What is an IPO?
An IPO, or Initial Public Offering, is a process through which a private company offers its shares to the public for the first time. This transition from a private to a public entity allows the company to raise capital, expand, and gain market visibility. Investors need a Demat Account to hold shares electronically, and a trading account is required to trade these shares easily. After the IPO, shares are listed on the stock exchange allowing buying and selling of shares at market driven prices. The difference between IPO and stock is that IPO is an event, while stocks are the actual assets offered in the IPO. Understanding IPO vs. stock is key for anyone interested in the financial market.
Fixed Price Issues: In a Fixed Price Issue, the company sets a specific price for its shares and allows the investors to know the exact purchase price before going public. The company hires underwriters who determine the share price at which the securities will be allotted if the IPO application is successful. However, the price is set without considering the investor’s demand for shares, which can affect investment returns.
Book Building Issues: In contrast, a Book Building Issue involves a price range within which the investors can place bids, and the final price is set based on the demand for shares within that range. This method captures the market demand for shares and results in better price discovery.
What is a Share?
A share, commonly known as common stock or an ordinary share, represents a unit of ownership in a company. It entitles shareholders to a portion of its profits and voting rights. Shareholders have the right to vote on key issues such as election of board members or the approval of major company policies. They may also receive dividends, although these are not guaranteed and depend on the company’s profitability.
However, in the event of liquidation, common shareholders are paid after bondholders and preferred shareholders. Common shares are what investors trade in the stock market, making them a popular choice for individual investors looking to participate in a company’s growth. However, ordinary shares often carry more risk and may offer higher potential for returns if the company’s profitability increases.
Types of Shares
The two types of shares are mentioned below:
Common Shares: A common share represents an ownership unit in a company and gives shareholders voting rights and dividends. However, in the event of liquidation, common shareholders are last to receive payouts after creditors and preferred shareholders.
Preferred Shares: On the other hand, preferred shares have priority over common shares when dividends and assets are distributed during liquidation. However, these shares generally lack voting rights.
Difference Between IPO and Share
The main difference between an IPO (Initial Public Offering) and a share lies in their definitions and roles in the financial market. An IPO is the process through which a private company offers its shares to the public for the first time, enabling it to raise capital. It’s simply a debut event for a company’s stock on the stock market.
On the other hand, a share represents a unit of ownership in a company. After the IPO, shares are available for trading on stock exchanges, and they are what investors buy and sell in the secondary market. In short, an IPO is the event, while shares are the tradable assets. To invest in an IPO, individuals need a Demat Account to hold shares electronically and can use a trading account to easily buy and sell shares.
In summary, anIPO is an event in which a company offers its shares to the public for the first time, marking its transition from private to public ownership. This process allows the company to raise capital and expand its operations, while shares represent the actual units of ownership in a company that investors buy and sell on the stock exchange. Investors need a Demat Account to hold these shares electronically and can use depository participant’s (DP)platforms to access their trading accounts for trading shares.
FAQs
What is the main difference between an IPO and a share?
An IPO is the process through which a private company offers its shares to the public for the first time, allowing it to raise capital and become publicly traded. A share, however, is an individual unit of ownership in a company that investors buy or sell on the stock market.
Can I buy shares without participating in an IPO?
After an IPO, the company’s shares are listed on the stock exchange, where the investors can buy and sell them freely in the secondary market regardless of whether they participated in the IPO.
What are the different types of shares?
Common shares and preferred shares are the two types of shares.
What are the risks involved in buying shares through an IPO vs. buying them in the open market?
IPO investments carry risks as the company is newly listed and may have a limited track record. Volatility and other market factors can cause the share price to be overvalued, making it risky to purchase shares in the open market.
Do I need a Demat Account to buy shares through an IPO?
A Demat account is essential for holding shares electronically, whether purchased through an IPO or the secondary market.
Commodity trading is the process of buying and selling of commodities such as gold, crude oil, copper, etc., in spot markets or derivative markets. Commodity trading has numerous advantages as it helps market participants diversify their portfolios, speculate on future price movements, etc.
However, commodity trading can result in significant losses as prices can change suddenly due to certain factors such as weather, global demand, political events, etc. This makes it difficult to predict how much profit or loss a trader might make.
In this blog, we will discuss the pros and cons of commodity trading, which will help you make smarter trading decisions.
Pros of Commodity Trading
The pros of commodity trading are:
1. Protection Against Inflation
Commodity trading provides a powerful hedge against inflation. Market participants can use derivative contracts to protect their portfolios against inflation. Furthermore, futures contracts allow traders to lock in the price of a commodity for a transaction at a future date. This helps them fix the cost of raw materials and mitigate the impact of rising inflation.
When inflation rises, the price of raw goods rises, and these can specifically include goods like oil, metals, and agricultural items. For example, for a business reliant on raw materials for its manufacturing activities, it is essential to control the input costs. If inflation is expected to rise, the company can buy the futures contracts of the specific raw material and basically fix their buying price for a transaction at a future date.
2. Portfolio Diversification
Commodities are usually traded through futures and options on platforms like MCX. These contracts are not strongly correlated with traditional assets, such as equities and bonds. For example, commodities like gold or oil often perform well when stock markets are underperforming, thus decreasing your portfolio’s overall risk.
3. Opportunity During Global Events
Global events can cause significant price movements in commodities. Trading on exchanges like MCX provides the opportunity to profit from such volatility, as global crises frequently impact commodities prices.
4. Higher Returns
Commodity trading offers margin trading, which means traders can hold a large position with a small capital. If prices move favorably, the profits are significant. However, leverage is also associated with increased risk, as if prices move in the opposite direction, losses can be significant.
5. Transparent and Fair Pricing
Commodity trading often occurs on regulated exchanges such as MCX, ensuring transparent pricing and no price manipulation. All trading takes place on electronic commodity trading platforms, which helps prevent price manipulation. This increases the market participant’s confidence and makes the market more transparent and trustworthy.
Commodity trading involving futures and options can be risky. This is primarily because of the leverage involved, which is why even small price movements can result in big losses.
2. Price Volatility
Commodity prices can fluctuate rapidly. This can be due to a variety of factors, such as weather, regulatory changes and world events. Just for instance, a natural calamity can harm crops or halt oil production, which can increase prices.
Similarly, a reduced demand for a specific commodity can cause price declines. These unexpected price swings are difficult to forecast. Even experienced traders sometimes struggle with these unpredictable price changes, making commodity trading dangerous and complex to manage.
3. Requires Deep Knowledge
Successful commodity trading requires a thorough grasp of market trends, supply and demand dynamics, etc. This helps you make wise trading decisions, particularly when trading in futures and options.
For example, price swings can be induced by political upheaval in OPEC nations. Because of the turmoil, oil prices may rise or fall significantly, making wise trading decisions extremely tough.
Things to Keep in Mind Before Trading in Commodities
You should remember the following points before trading in commodities:
A higher trading volume in a specific commodity means more market participants are actively buying and selling, which can lead to bigger price changes. It also results in more trading opportunities.
Know how much risk you’re willing to take. High-risk trades can give you more profit, but they also carry a higher chance of losing money.
Keep a close watch on the price trends of commodities. Prices of some commodities can go up fast and drop just as quickly, which makes them risky.
Don’t put all your money into one commodity. Spreading your trading positions across commodities reduces risk and increases your chances for profit.
Commodity trading on platforms such as MCX can provide lucrative trading opportunities. However, trading in commodities also involves risks as commodity prices can be extremely volatile. This is due to variables such as weather, politics, and global demand, which make these markets unpredictable.
Understanding how prices change is critical for success in commodities trading helps you stay on top of market trends. Knowing your financial objectives and the amount of risk you’re prepared to accept is critical.
Choose which commodities to trade and look for strategies on how to take advantage of price fluctuations effectively. Understanding your risk tolerance is crucial. Diversifying your trading positions across many commodities reduces risk.
Stay updated, monitor market movements, and alter your trading plan when necessary. With the appropriate strategy, you can make well-informed trading decisions, helping you achieve your financial goals.
S.NO.
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Commodity trading is the buying and selling of raw materials like gold, oil, and agricultural products in spot or derivative markets to profit from price fluctuations and hedge against risk.
What are the key advantages of commodity trading?
Commodity trading offers protection from inflation, portfolio diversification, and potential high returns. Futures contracts can be used to lock in prices, and market volatility during global events creates additional trading opportunities.
What risks are involved in commodity trading?
Commodity trading carries high risk due to leverage and unpredictable price volatility. Market price changes due to weather, global demand shifts, or political events can result in significant financial losses.
How does commodity trading act as a hedge against inflation?
Commodity trading, particularly through futures contracts, enables traders to lock in prices. This strategy protects against rising raw material costs during inflationary periods.
What should traders consider before engaging in commodity trading?
Traders should assess risk tolerance, monitor market trends, diversify positions, and gain deep market knowledge. Understanding supply and demand dynamics is crucial for making informed trading decisions.
A commodity Index tracks the price movements of a basket consisting of different kinds of underlying commodities. Commodity indices help traders and investors create benchmarks that reflect the overall performance of the commodity market.
In this blog, we will give information about the commodity index, its types, and major commodity indices in India.
Commodity Index: An Overview
A commodity index represents essentially a weighted index that gauges the price performance of a certain group of commodities. Commodity Indices are meant to expose traders to the wide world of commodities. Some of the most frequently traded commodities in the portfolio might include crude oil, natural gas, gold and silver.
Commodity indexes are different from other indexes. This is because their returns usually depend only on the price changes of the commodities in the index. Unlike stocks or bonds, commodities don’t pay dividends or interest. As commodities don’t offer these payouts, the commodity index returns are solely based on the price performance of underlying commodities.
Types of Commodity Indices
Here are some common types of commodity indices:
1. Broad Commodity Indices
These indices cover a broad commodity universe across different sectors. In India, the MCX iCOMDEX Composite index tracks the performance of crude oil, zinc, gold, etc., thereby covering energy, base metal, and precious metal sectors. The most prominent global broad commodity index is the S&P GSCI (Goldman Sachs Commodity Index). It encompasses 24 commodities, ranging from energy to agriculture to metals.
2. Sector-Specific Commodity Indices
These indices focus specifically on commodities of certain sectors such as energy, agriculture, and other products. In India, the MCX iCOMDEX Base Metal index tracks the performance of Aluminium, Copper, Lead and Zinc. Globally, the S&P GSCI Electric Vehicle Metals Index is a well-known index that tracks the performance of cobalt, copper, aluminium, nickel, and iron ore.
3. Single Commodity Indices
These indices show the price performance of a specific commodity, such as gold, crude oil, etc. For example, MCX iCOMDEX Gold tracks the performance of gold. Other examples of single commodity indices in India are MCX iCOMDEX Silver, MCX iCOMDEX Zinc, etc.
Some of the most common benefits of commodity indices include:
1. Diversification
Trading in commodity indices is an excellent way for portfolio diversification. By trading in a commodity index, a trader gains exposure to multiple commodities, reducing the risk of relying on the performance of a single asset class. For instance, the MCX iCOMDEX Base Metal index has futures contracts with a ticker symbol named MCX METLDEX, which consists of futures contracts of aluminum, copper, lead, nickel and zinc as its underlying.
2. Inflation Hedge
Commodities, particularly precious metals like gold and silver, have long been considered a hedge against inflation. When inflation rises, the price of commodities like gold and oil often increases. Trading in futures contracts of Indian commodity indices such as MCX iCOMDEX Bullion and MCX iCODMEX Base Metal can help traders safeguard their portfolios during inflationary periods.
3. Economic Indicator
Commodity indices also serve as indicators of economic health. Since commodities are essential for industries like manufacturing, construction, etc., their prices are often tied to the overall economic conditions. By monitoring commodity indices, traders can gain insights into global demand and supply trends.
4. Access to Commodity Markets
While commodity trading can be capital-intensive, access to ETFs provides cost-effective options. By investing in ETFs of specific commodities such as gold and silver, you can gain exposure to commodity price movements without having to deal with the complexities of trading individual commodities or managing physical assets.
Multi Commodity Exchange (MCX) offers 12 commodity indices in total, consisting of composite indices, sectoral indices, and single commodity indices. Indices are given below:
Composite indices: MCX iCOMDEX Composite index
Sectoral Indices: MCX iCOMDEX Bullion index, MCX iCOMDEX Energy index and MCX iCOMDEX Base Metal index.
Single Commodity Indices: MCX iCOMDEX Gold index, MCX iCOMDEX Copper index, MCX iCOMDEX Crude Oil index, etc.
Trading indexes allow you to avoid focusing on specific commodities. It’s an easy method to track the market while minimizing risk. Commodity indices, whether in metals, energy, or agriculture, are an excellent starting place for inexperienced traders.
How to Invest in a Commodity Market Index?
You can invest in the commodity market index in the following ways:
Mutual funds and ETFs can be used to invest or trade in commodities, such as gold and silver.
Another way of trading in commodity indices is through futures contracts. Futures contracts of MCX iCOMDEX Bullion and MCX iCODMEX Base Metal index are available for trading.
Futures and options contracts of specific commodities, such as gold, silver, crude oil, copper, etc., are also available for trading.
Commodity indices help market participants track the performance of the underlying commodities Trading Platform and also provide a way to diversify their portfolio through investing and trading in ETFs, mutual funds, futures and options. In India, MCX provides 12 commodity indices, which consist of composite indices, sectoral indices, and single commodity indices. However, it is advised to consult a financial advisor before investing or trading in commodities.
S.NO.
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A commodity index tracks the price movements of a basket of commodities, helping traders and investors measure the overall performance of the commodity market.
What are the types of commodity indices?
Commodity indices are categorized into broad indices, sector-specific indices, and single commodity indices.
How do commodity indices help in portfolio diversification?
Commodity indices provide exposure to multiple commodities, reducing dependence on a single asset class and thereby enhancing risk management and diversification.
Why are commodities considered an inflation hedge?
Commodities like gold and oil tend to increase in value during inflationary periods, making them effective in preserving purchasing power.
How can one invest in commodity indices?
Investors can trade through mutual funds, ETFs, or futures and options contracts of sectoral indices like MCX iCOMDEX Bullion and MCX iCOMDEX Base Metal.
The commodity market plays a crucial role in the global economy. Here, derivative contracts of commodities are traded. It provides a platform for producers and consumers to manage risks and, at the same time, allows traders to take advantage of price movements.
Commodities are bulk-produced raw materials. These can be wheat, soybean, or precious metals. They must meet certain quality and quantity standards to be eligible as an underlying asset of the derivative contracts. These derivative contracts are traded widely among multiple buyers and sellers.
In this blog, we will discuss the types of commodity markets in India.
What is a Commodity Market?
A commodity market is a platform where commodities such as gold, silver, crude oil, agricultural products, etc., are bought and sold. These transactions can happen either via spot transactions or through derivative contracts.
These markets act as bridges between the sellers and buyers of commodities. This way, producers can sell their goods and also hedge against the volatility in the prices while consumers can get the commodities needed at the cheapest price possible.
The commodity market in India can be broadly classified into different types. Some of the common types of commodity markets include:
1. Spot Market
The spot market, or cash market, is a marketplace where commodities are bought and sold for immediate delivery. This market is characterized by physical transactions. Here, buyers and sellers negotiate prices based on the prevailing market conditions. The buyers often take possession of the commodity immediately after the payment has been made.
2. Derivatives Market
Futures
Futures contracts allow you to trade, buy or sell commodities for delivery in the future. The market allows buyers and sellers to enter contracts to purchase or sell a particular commodity at a specified price at a predetermined date.
Options
An option is a type of financial instrument that gives the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price, known as the strike price, on or before a set expiration date.
Options are of two forms:
Call Options: Give the holder the right but not the obligation to buy the asset.
Put Options: Give the holder the right but not the obligation to sell the asset.
Options can be traded before expiration. However, the actual transfer of the asset occurs only after the option is exercised.
Forwards
Forwards contracts are similar to futures contracts but differ in one key aspect. Futures contracts are traded on organized exchanges and have a standardized contract size. On the other hand, forward contracts are over-the-counter (OTC) financial instruments, due to which these contracts are negotiated directly between buyers and sellers.
The commodity market in India offers a wide range of commodities for trading. Here are the types of commodities in the commodity market:
Agricultural commodities: These include grains (e.g., wheat, chana), oil and oilseeds (e.g., soybeans, mustard seeds), spices (e.g., coriander, turmeric), etc.
Energy commodities: These comprise crude oil and natural gas.
Metal commodities: These are commodities made of metal, such as precious metals (gold, silver), base metals (copper, aluminium), etc.
Commodity Trading Platforms
In India, commodity trading is facilitated by various exchanges and platforms. Some of the commodity trading platforms include:
National Commodity & Derivatives Exchange (NCDEX)
Multi Commodity Exchange of India (MCX)
Benefits of Commodity Trading
Commodity trading offers several benefits, including:
1. Diversification
Commodity trading provides access to numerous commodities, which allows traders to spread risks more effectively. They can trade commodities like metals, energy, and agriculture and reduce their reliance on a single sector as these commodities serve as raw materials for multiple sectors of the economy. Commodities are traded all over the globe, which makes them less susceptible to market manipulation. Commodities enable traders to pursue trading opportunities in multiple financial assets and thus limit exposure to a specific financial instrument or sector.
2. Hedging
In commodity trading, hedging guards against unexpected price volatility. Through forward contracts, businesses can fix the cost of their raw materials, helping them maintain consistent financial performance.
Hedging helps traders lessen their exposure to unfavorable market movements. This tactic reduces the risk of adverse price fluctuations causing significant losses.
3. Liquidity
Commodity markets are extremely liquid. This allows traders to execute transactions quickly with minimum price impact. High trading volumes ensure that trades are completed without delay. This liquidity makes it simple to buy and sell assets, which is of extreme importance when trading in large quantities.
4. Transparency
The transparency of commodity markets is excellent. The commodity exchanges in India provide an easy-to-use platform and effective trading environment. Real-time price updates guarantee precision and reliability.
Everybody has access to market data, thereby promoting well-informed decision-making. Transparency reduces the possibility of unfair practices and manipulation. It enables traders to confidently assess conditions and take decisive action.
To succeed in commodity trading, it’s essential to develop a well-defined trading strategy. Here are some strategies to consider:
Fundamental analysis: This involves examining the core elements that influence commodity prices, i.e., the supply and demand dynamics, weather conditions, and international events.
Technical analysis: Charts and technical indicators can be utilized to recognize patterns and trends in commodity prices and get an idea of future price trends.
Risk management: Employ stop-loss orders and position sizing to manage risk and reduce possible losses.
Diversification: Engage in trading different commodities and apply a range of trading strategies to avoid concentration risk.
Conclusion
Commodities trading through spot transactions and derivative contracts offer a large number of businesses and traders an opportunity to buy, sell and trade commodities. Staying informed about the various types of commodity markets, types of commodities trading platforms opens up a lot of trading opportunities.
A well-defined trading strategy used with proper risk management can help you capitalize on trading opportunities offered by the commodity market in India. Consult a financial advisor before trading in commodities.
S.NO.
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What are the main types of commodity markets in India?
India has spot markets for immediate delivery and derivatives markets, including futures, options, and forwards, where commodities are traded as underlying assets of derivative instruments for future delivery.
What types of commodities are traded in India?
Commodities in India are classified into agricultural (wheat, soybeans, spices), energy (crude oil, natural gas), and metals (gold, silver, copper, aluminium), traded across different commodity exchanges.
How do futures and forward contracts differ in commodity trading?
Futures contracts are standardized and traded on regulated exchanges, while forward contracts are private, over-the-counter (OTC) agreements with customizable terms between buyers and sellers.
What are the key benefits of commodity trading?
Commodity trading offers diversification, hedging against price fluctuations, high liquidity, and market transparency, enabling traders to reduce risk and take advantage of price movements.
What strategies can improve success in commodity trading?
Successful traders use fundamental analysis (supply-demand, weather, global events), technical analysis (charts, indicators), risk management (stop-loss, position sizing), and diversification across multiple commodities and strategies to minimize losses.
Understanding how to use the intraday trading time effectively can completely change your trading performance. India’s stock markets operate for a fixed time period, and having the knowledge of the timings is crucial for a profitable trading journey.
Market operating hours in India have been established to enable traders to plan their trades effectively. Certain time periods during the trading hours have enough liquidity to enable fast-paced execution.
The Indian stock market features a pre-opening session and a main trading session. The pre-opening session begins at 9:00 AM and continues briefly till 9:15 AM. This early period prepares the conditions for the entire market day. Most intraday trading occurs during the period following 9:15 AM.
Let’s discuss the main trading session and the intraday opening and closing times.
Main Trading Session and Intraday Opening and Closing Time
The Indian stock market is open for trading for a specific time period. Intraday Trading operations commence sharply at 9:15 AM and proceed without interruption till 3:30 PM. Most traders schedule their trading activities during these particular times.
During the first session, from 9:15 AM until 11:30 AM, trading volumes tend to be high. The market demonstrates elevated volume together with powerful price changes during this period.
The trading volume increases further during the post-lunch period. Trading volume remains high throughout the span of 1:00 PM until 3:30 PM.
You need to stay attentive throughout the trading day. Each trading segment has distinct characteristics and risks that present unique trading opportunities.
The official intraday closing time occurs at 3:30 PM. However, based on your broker’s risk management policies, your intraday positions can be squared off five to ten minutes before 3:30 PM. Trading operations cease for the day at 3:30 PM. The majority of traders hurry to close their positions just before the market closing time.
Many traders ask, How can we know the best time for intraday trading? Your trading strategy determines the best time for intraday trading.
1. Markets are Highly Volatile during the Early Hours
The market features volatile price fluctuations within the first hour after 9:15 AM. During this time window, traders try to earn substantial profits by capitalizing on substantial price changes. Quick trading decisions in these situations can yield substantial trading profits.
The mid-session period presents several trading opportunities for traders who base their trading strategy on patterns and technical indicators. The market usually displays noticeable trends within the time frame between 11:30 AM to 1:00 PM. This period is less hectic. This situation allows traders to patiently hold on to profitable trading positions and doesn’t require frequent trading.
2. Watch the Clock for End of Day Moves
Before intraday closing time, the market becomes particularly active. Activity in the market rises significantly between 2:30 PM and 3:30 PM, i.e., during the last trading hour. The market conditions during this period offer high liquidity alongside high momentum, which makes it the best time for intraday trading.
3. Follow the News Trends
Market news requires your constant observation. Price movements of indices and financial assets are affected when economic reports and corporate financial disclosures are released. News events can cause significant price fluctuations in a short span of time, so you should always stay updated and ready to take advantage of these news events.
4. Monitor technical indicators
Technical analysis using volume, indicators and other tools can help traders identify future market trends.
Accurate analysis can provide trading signals for entering or exiting positions in the market.
Every trader is unique, and it is essential to identify the trading segments that best suit your trading strategy. Experiment with various time slots to identify the best time for intraday trading. Start with small capital to analyze the market conditions. You will start to discover regular trends that match your trading approach through continuous observation.
The essential aspect of intraday trading involves maintaining discipline throughout the trading session. You should stick to your trading plan after identifying the most suitable intraday session for consistent profitability. A well-defined trading strategy and risk management systems help you prevent making decisions based on emotions.
While monitoring stock prices, you notice that the market is particularly volatile during the morning session. A trader with a trading strategy focussing on long straddle positions in the options with a 1:3 risk-reward ratio has the potential to earn decent profits during this session.
On the other hand, if someone relies on trading patterns, they can wait for the mid-session period as the volatility is lower during this period. Lower volatility reduces the possibility of a false breakout, enabling traders to earn consistent profits.
2. Simple Strategies for Success
The first part of the trading day might bring peaceful conditions. The late session occasionally presents unexpected market conditions. Develop multiple trading strategies for different trading sessions and conditions. Shift from one strategy to another according to what the market currently indicates.
The majority of trading platforms deliver real-time market data to their users. Technical indicators and volume data are displayed on these platforms, which helps you decide the best time for intraday trading for your customized trading strategy.
To succeed in intraday trading, you need to understand the characteristics of specific hours during the trading session. The blog includes instructions about intraday trading hours along with information about important trading sessions and strategies to determine the best time for intraday trading. Pay constant attention to the intraday closing time to avoid auto-square-off. It is advised to consult a financial advisor before trading.
What are the official trading hours for intraday trading in India?
The Indian stock market operates from 9:15 AM to 3:30 PM for intraday trading. However, brokers may square off intraday positions before 3:30 PM, depending on their risk policies.
When is the best time for intraday trading?
The best time depends on your trading strategy. The first hour after 9:15 AM is highly volatile, making it ideal for quick trades. Mid-session (11:30 AM – 1:00 PM) is calmer and suited for pattern-based trading. The last hour (2:30 PM – 3:30 PM) offers high liquidity and momentum.
Why is the market so volatile in the morning?
The market is highly volatile during the opening hour due to overnight global market trends, economic news, and corporate announcements. This period experiences large price movements, making it ideal for traders who can react swiftly to price changes.
How does news impact intraday trading?
News reports, such as economic data releases, corporate earnings, and government policies, can cause sudden price fluctuations. Traders must stay updated to capitalize on market movements triggered by financial disclosures or unexpected global events.
How can technical indicators help in intraday trading?
Technical indicators like moving averages, RSI, Bollinger Bands, and volume analysis help identify trends and entry/exit points. Traders use these tools to confirm market direction and avoid emotional trading decisions, improving overall profitability.
Stock market enthusiasts throughout India seek to understand how to choose stocks for intraday trading as part of their elaborate trading strategy. Stock market participants do intraday trading to obtain quick profits by making numerous transactions throughout the day.
The correct stock selection stands as the key determinant for trading outcomes. The following article provides essential guidelines together with proven methods to determine optimal stocks for intraday trading.
Stock Selection for Intraday: What to Look For?
The objective when picking stocks for intraday trading is to find those with high price volatility. Stocks that display substantial daily price fluctuations make the best choices because they present numerous chances to earn profits. The essential factors mentioned below will help us better understand the process of intraday stock selection.
1. Liquidity Matters
A high trading volume generally indicates stocks will have better liquidity. Stocks experience high trading activity due to numerous market participants engaging in frequent transactions. Quick execution of trades combined with the expected execution price is the main benefit of doing intraday trading in liquid stocks.
Intraday trading heavily depends on liquidity as an essential element.
Stock liquidity describes the ease of trading stock without triggering substantial price alterations.
The optimal solution to how to select stock for intraday one day before is to choose stocks with a high average trading volume for the past several days.
The quick execution of trades without price slippage becomes possible because of this strategy.
2. Price Range and Volatility
It is vital to choose stocks that exhibit a wide price movement. A stock showing substantial daily price movement creates substantial trading opportunities for traders.
The best choice for intraday trading consists of stocks that exhibit high volatility because they demonstrate frequent substantial price movements.
Stocks that experience daily price movements exceeding 1% or 2% usually make suitable choices for intraday trading.
3. Market Sentiment and News
Stock prices undergo significant changes due to news events that occur within the market hours. Intraday traders can take advantage of the short-term price movements due to stock-specific news.
The right way to choose stocks for intraday trading is to stay on top of corporate announcements and earnings reports, as well as government policy changes and economic news announcements.
Stock selection for intraday trading should not be delayed until the market opens. The process of stock selection the day before provides you with an advantage and eliminates morning preparation time.
1. Study the Previous Day’s Performance
Identify the most liquid stocks from the previous session that showed significant movement. The stock that demonstrates price movement along with high trading volume normally maintains this pattern the following day.
You should review stocks that experienced substantial price changes, paying special attention to those stocks that ended near their daily peaks or valleys.
The stocks that showed price movement in the previous session, backed by strong trading volumes, usually maintain that same trend into the next trading day.
When trying to figure out how to pick stocks for intraday, stocks with high trading volume from the previous session should also be examined. Higher stock liquidity allows smooth execution in intraday trades.
2. Identify Pre-Open Trends
To prepare for intraday trading, it is essential to monitor trends before the market opens. The pre-open session in the Indian financial markets enables investors to get an idea of future stock price movements before the start of regular market hours. The degree of movement in pre-open trading indicates the market momentum that will prevail throughout the day and presents the best answer for how to select stocks for intraday.
3. Use Stock Screeners
Stock screeners operate as efficient tools that let you choose the stocks for intraday trading according to their volume, price movement, and volatility levels.
A stock screener lets you quickly filter out stocks suitable for your intraday strategy before the market opens.
Your time efficiency improves significantly while you maintain a ready selection of intraday stocks.
Choosing Stocks for Intraday: Tools and Techniques
The process of stock selection for intraday trading needs proper tools combined with analysis techniques to discover optimal trading opportunities. The following list provides proven approaches to stock selection.
1. Technical Analysis
Stocks showing defined upward or downward trends make the best targets for intraday trading because their current momentum indicates they will likely continue to follow the trend during the day.
The technique requires analysis of charts, which requires traders to use several indicators to forecast future price trends.
The most commonly used technical indicators for analysis are moving averages, Relative Strength Index (RSI), and Bollinger Bands.
2. Sector Performance
Factors within specific sectors can cause collective movement among stocks that belong to that sector. For example, positive news regarding the banking sector can create favorable market conditions for other banking stocks and cause them to perform better.
Sector performance monitoring allows investors to identify stocks suitable for intraday trading.
Traders should read plenty of industry-specific news and economic reports to identify stocks suitable for intraday trading.
The selection of suitable stocks for intraday trading demands traders to focus on market liquidity and volatility together with market sentiment. Pre-open session study, technical analysis, and analyzing stock’s previous day’s performance allow traders to effectively achieve stock selection for intraday trading.
The selection process for intraday stocks requires both attention to specific details and time spent practicing these skills. The methods presented in this article will boost your chances of success in the demanding intraday trading environment.
Frequently Asked Questions (FAQs)
How do I choose the best stocks for intraday trading?
Select stocks with high liquidity and significant daily price movements. Monitor market trends, news events, and sector performance to identify the best trading opportunities.
How do I choose the best stocks for intraday trading?
Liquidity ensures quick trade execution without major price fluctuations. High trading volume stocks allow traders to enter and exit positions efficiently, minimizing slippage and maximizing profits.
How can I pick stocks for intraday trading one day before?
Analyze the previous day’s performance, identify high-volume stocks, check pre-open market trends, and use stock screeners to shortlist potential stocks for the next trading session.
What tools are useful for intraday stock selection?
Technical indicators like Moving Averages, RSI, and Bollinger Bands, along with stock screeners and sector performance analysis, help traders identify the best stocks for intraday trading.
How does news impact intraday stock selection?
Market news, corporate announcements, and government policies trigger price volatility. Tracking financial updates helps traders capitalize on short-term price movements for better intraday stock selection.
With the introduction of commodity transaction tax (CTT), commodity trading in India slowly turned a new page, altering how investors speculate in the market. Not only has this tax made trading more expensive, but the nature of the markets has also shifted as well.
So, let’s have a look at the effects taxation on commodity trading has on your trading strategy and financial planning.
Effects of Trading Costs and Market Behavior
The Commodity Transaction Tax (CTT) in India was introduced on 1 July 2013. This tax on commodity trading was announced during the Budget 2013 by the former Finance Minister P. Chidambaram. This levy is a carbon copy of the Securities Transaction Tax on equities and is created to ensure that there is equality in taxation across different financial securities. You have to pay these charges as a seller of the non-agricultural commodity derivatives.
Currently, the CTT rate is 0.01%, a seemingly tiny amount. But when trading in high volumes, these small percentages can account for huge amounts. The result of this increase in trading costs has been a tangible impact on the behavior of market participants. Volumes have been dipping noticeably among high-frequency traders and speculators who trade on small profit margins and rely on sheer trading volume.
Now, each trade costs more, and traders are carrying out fewer but more incisive trades. If this shift continues, it could lead to a less liquid market, which may, in turn, reduce the popularity of commodities trading.
Different opinions have emerged about the impact of the CTT on the efficiency of the market. Critics say it may keep small investors and hedgers away from the market, thus upsetting the proper functioning of the market.
A few traders have shifted to agricultural commodities that are outside the ambit of CTT. This shift is in line with other emerging trends in trading patterns and calls for a better analysis of the effects of taxes on the trading behavior of market participants.
The CTT is not the only commodity trading income tax. You also need to know how your profits and losses are taxed. Profits from buying and selling derivative contracts of a particular commodity are classified as business income in India, not as capital gains under the Income Tax Act. The classification carries strategic implications. If your commodity trading profits are speculative (i.e., cash-settled derivatives) in nature, then these profits can only be offset against speculative losses. You can’t offset these losses against income from non-speculative trading activities, which involve the delivery of physical commodities at the expiration of the derivatives contract.
However, non-speculative trading involving the actual delivery of commodities is more flexible. In this case, you can offset speculative and non-speculative profits with losses, offering greater scope for tax planning while trading commodities. Speculative business losses can be carried forward for 4 years, while other non-speculative losses can be carried forward to set off future speculative and non-speculative gains for 8 years.
Traders playing the long game can use these rules to minimize their commodity trading income tax liability over time. In the event of a year with more losses than gains, this strategy can save you a lot of tax. This only works if traders keep detailed records of their transactions and keep them separate from speculative and non-speculative activities. Beyond aiding tax planning, this also ensures compliance with tax regulations, avoiding penalties for misrepresentation or oversight.
The use of CTT was done in line with a fiscal approach concerning taxation of commodity transactions. The tax was launched in 2013 with the view to reduce speculation and, at the same time, increase government revenues.
However, the policy has attracted criticism. Critics argue that it hurts the competitiveness of Indian commodity exchanges against global counterparts.
This is particularly important given that, unlike many other markets around the world, India levies a higher transactional cost. The trading volumes have been significantly affected by the commodity trading income tax.
Market research indicates that India’s commodity trading volume lowered after 2013, which could be a result of CTT. There is still controversy over the issue of reconsidering or eliminating the CTT.
Advocates of CTT see it as contributing both to market stability and revenue, while opponents look at its detrimental effect on efficient market functioning. To investors and brokers, it is vital to keep up with regulatory changes.
This means that to adapt to current policies, it is not only necessary to respond to change but, more importantly, to anticipate how fiscal change might impact existing trading strategies and the market.
Market regulations compel market players to consider various techniques and strategies in the management of risk and taxation to break even and avoid violation of the law.
The Indian commodity trading landscape witnessed a significant reduction in trading volumes due to the implementation of CTT in 2013. Moreover, the classification of gains and losses as speculative and non-speculative further complicates the taxation procedure.
Understanding the taxation treatment of trading profits and losses enables traders to better handle capital gain tax on commodity trading Plateform by updating their trading strategies for managing profits and losses. However, it is necessary to consult a financial advisor before trading in commodities.
What is the Commodity Transaction Tax (CTT) in India?
The Commodity Transaction Tax (CTT) is a tax on non-agricultural commodity derivatives, introduced on July 1, 2013, at 0.01% per transaction.
How are profits from commodity trading taxed in India?
Profits from commodity trading are classified as business income under the Income Tax Act. Speculative profits (cash-settled trades) are taxed differently from non-speculative profits (delivery-based trades), affecting tax planning strategies.
Can speculative and non-speculative losses be carried forward?
Yes, speculative losses can be carried forward for 4 years, while non-speculative losses can be carried forward for 8 years. Non-speculative losses can be offset against both types of profits.
How has the introduction of CTT affected commodity trading in India?
CTT has increased trading costs, leading to lower market liquidity. Many traders shifted to agricultural commodities, which are exempt from CTT, making Indian commodity exchanges less competitive globally.
What should traders consider for better tax planning in commodity trading?
Traders should maintain records, use loss carryforward rules, and stay updated on tax policies. Consulting a financial advisor helps optimize tax strategies while ensuring compliance with regulations.
To finance its activities, the government depends on a variety of revenue streams. One of these significant revenue streams is non-tax revenue. This covers fines, public service fees, and other penalties. The government uses these funds to pay for services and numerous development projects.
Non tax revenue is smaller than tax revenue. However, it is still significant. Profits from public sector companies are another source of non tax revenue for the government. These revenues fund the government’s operations without relying solely on taxes.
What is Non-Tax Revenue?
Non tax revenue is a type of cash inflow the government gets and uses to fund the development of the nation. This is done without collecting taxes. It includes service fees, dividends from public investments, etc. Payments for public services also help generate non-tax revenue. These mainly include things such as electricity, gas, and water. This revenue decreases the reliance on tax collections.
For example, when people pay for government services, it is considered non-tax revenue. Dividends from public-sector undertakings and loan interest contribute to this income. Non-tax revenue helps fund government programs and infrastructure.
Examples of Non Tax Revenue
In India, non tax revenue examples include a variety of fees and penalties. For example, paying for services such as a driver’s license or a passport contributes to non-tax revenue. Similarly, payments for public utilities fall into this category. These could be water, electricity, and gas.
Fines for late tax payments or traffic violations are another type of non-tax revenue. Income from public-sector companies, such as IRCTC, PNB, SBI, etc., also contributes to this total. Non-tax revenue also includes fees collected for exams such as the UPSC or SSC.
These resources help the government raise money to fund public initiatives and services. Non-tax revenue is critical for sustaining public services and infrastructure without relying solely on tax revenue.
1. Service Fees – Services, including civil registrations, passport issuing, visa processing, and municipal services like waste collection and water supply, are all paid for with fees.
2. Interest on Loans – Interest on loans made to states and organizations for infrastructure and other development projects generates revenue.
3. Petroleum Licensing and Exploration – Royalties, license fees, and profit-sharing from oil and gas exploration are the sources of revenue.
4. Dividends and Profits – The government receives dividends from its investments in public sector undertakings (PSUs) and financial institutions, as well as having an ownership stake in earnings.
5. Police and Security Services – By offering security services to businesses and state governments through police units like the CISF, the government generates income.
6. Communication Services – Telecom operators pay fees for using the spectrum, which helps fund communication infrastructure.
7. Road Usage and Tolls – Highway tolls provide revenue that is utilized for the upkeep and enhancement of transportation infrastructure.
8. Broadcasting Fees – The government receives money from license fees paid by Direct-To-Home (DTH) providers and commercial TV channels.
9. Sale of Commodities – The sale of printed products, such as stationery and official publications, generates revenue for the government.
10. Defence Services – Revenue is derived from services provided to defense personnel, including sales from the Canteen Stores Department (CSD).
Components of Non-Tax Revenue
1. Fines and Penalties – Funds collected from individuals or organizations that violate laws or regulations.
2. Sale of Government Assets – Income derived from the sale of government properties or shares in state-owned firms.
3. Interest on Loans – Revenue earned from loans extended to states, union territories, and various entities.
4. Petroleum License Fees – Charges for obtaining rights to explore oil and gas in designated areas.
5. Dividends and Profits – Income from state-owned enterprises and surplus transfers from the Reserve Bank of India.
6. Communication Services Fees – Fees paid by telecom operators for using spectrum or other related services.
7. Power Supply Fees – Bill payments received by the central electricity generation authority for providing power supply.
8. Broadcasting Fees – Income from radio and television operators as well as other broadcasting services.
9. Road and Bridge Usage Fees – Revenue from tolls for using national highways, roads, and bridges.
8. Administrative Service Fees – Income from services like passport and visa issuance, auditing, and more.
9. Sale of Stationery and Publications – Revenue is generated by the selling of official publications, stationery, and government gazettes.
Difference Between Tax Revenue and Non-Tax Revenue
There is a big difference between tax and non tax revenue. Here’s a table for the same:
Tax Revenue
Non-Tax Revenue
Source: Collected through compulsory payments. E.g., income tax, corporate tax, and sales tax.
Source: Collected through voluntary transactions or government-owned entities.
Stability: Typically a more stable and predictable source of income. This is mainly because taxes are systematically collected.
Stability: Can fluctuate significantly. This is because it is based on government policies, economic cycles, or other actions.
Volume: Forms the largest portion of government income. This makes up a significant part of the national budget.
Volume: Represents a smaller, but still important, portion of total revenue.
Impact: Often leads to a direct burden on businesses and individuals.
Impact: Less reliant on public participation. Due to this, it can be more flexible.
Role of Non-Tax Revenue in Economy
Non-tax revenue constitutes an important share of a country’s economic system. This is especially true in countries with large public sectors or state-owned enterprises.
Such revenue provides flexibility to governments when reducing the tax burden. This is done while raising funds for some of the important infrastructure projects. Here are the ways non-tax revenue contributes to the economy:
1. Reducing Dependence on Taxes
Non-tax revenue helps reduce dependence on taxes. These can be burdensome for businesses and individuals. With this, non-tax revenue thereby encourages economic growth.
2. Funding Public Infrastructure and Services
Non-tax revenues are often used to fund significant infrastructure projects. The main examples include roads, schools, and hospitals.
3. Supporting Fiscal Stability
Non-tax revenue supports the stability of government finances. This is specifically for economic uncertainty or recession. For example, during a downturn, a sale of a state-owned enterprise can fill the budget deficits.
Now, you must have understood that when non tax revenue is used to finance government initiatives and services, the need for taxes becomes less important. During difficult times, non-tax revenue maintains economic stability and supports public endeavors.
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Non-tax revenue is the income that the government earns from sources other than taxes, such as service fees, fines, dividends from public-sector companies, and interest on loans. It helps fund public services and infrastructure projects without increasing the tax burden.
How does non-tax revenue differ from tax revenue?
Tax revenue is collected through mandatory payments like income tax, sales tax, and corporate tax, while non-tax revenue comes from voluntary payments from tolls, service charges, and profits from public enterprises.
What are some examples of non-tax revenue in India?
Examples include fees for passports and driver’s licenses, tolls on highways, dividends from state-owned companies like SBI and IRCTC, fines for traffic violations, and payments for utilities such as electricity and water.
Why is non-tax revenue important for the economy?
Non-tax revenue reduces dependence on taxation, provides additional funds for infrastructure and public services, and ensures financial stability, especially during economic downturns.
What are the key sources of non-tax revenue?
Major sources include service fees, interest on government loans, petroleum licensing fees, dividends from public enterprises, toll charges, broadcasting fees, and administrative charges for government services.
A Demat account is an absolute must-have for holding shares and securities traded in the financial markets. Research shows that in 2024, there were 46 million more demat accounts.
In addition to this, people are now opting for a joint demat account. This allows multiple individuals to jointly hold and manage investments stored in a single demat account.
You can open a Demat account online. This reduces the ownership structure’s complexity and opens up more possibilities for families, business partners, or spouses wanting to pool together their investments.
What is a Joint Demat Account?
A joint demat account can be defined as an account that allows two or more individuals to jointly hold and manage securities. A joint bank account functions similarly by giving the account ownership of shares to several holders.
A joint Demat account can have up to three account holders. This includes one primary and two joint holders. The primary account holder is responsible for the account. Although the primary account holder is responsible for the account, all demat account joint holders have equal rights in managing the investments.
Prominent Features and Benefits of a Joint Demat Account
Some of the most common features and benefits of a joint demat account include:
1. Pooling Resources
Joint account holders can pool their funds and make shared investments with a joint demat account. This helps increase the overall investment amount, allowing joint holders to invest more effectively.
2. Reduced Maintenance Fees
A joint demat account allows everyone to split the maintenance costs. This reduces overall fees. This makes it an economical choice for those looking to manage investments together. Sharing these expenditures is much cheaper than keeping separate accounts for each member.
3. Smooth Estate Transfer
If one of the demat account joint holders dies, the surviving holder(s) will immediately take over the account. This simplifies and expedites the process of transferring assets. It eliminates the need for complex legal formalities.
Who Can Open a Joint Demat Account?
Joint demat accounts can be opened for anyone fulfilling depository participant (DP) criteria. Joint demat accounts can be opened by the following individuals:
Residents of India above 18 years of age.
NRIs that comply with applicable regulations.
The holders can be unrelated to each other: business partners, friends, family members, etc., can co-own a joint demat account. However, all holders must conform to KYC norms.
Documents Required for Opening a Joint Demat Account
When you open joint demat account online, it requires the following documents:
PAN Card: A copy of the PAN card for each account holder.
Photographs: Recent passport-size photos of all account holders.
Proof of Identity: Documents like an Aadhaar card, Voter ID, passport, or driver’s license.
Proof of Address: Documents such as an Aadhaar card, utility bill, or passport to verify the address.
Bank Account Proof: A cancelled cheque or a recent bank statement of the primary account holder.
Income Proof: A salary slip, bank statement, or income tax return acknowledgement.
Select a Depository Participant (DP) that is registered with the NSDL or CDSL.
2. Fill Out the Application Form
You can get the joint demat account opening form from the DP’s website. All account holders are required to disclose their information. Verify the accuracy of all the information.
3. Attach Required Documents
Upload scanned copies of the identity proofs, address proofs, bank proofs, and photographs of all the holders. These should all be self-attested by the holders concerned.
4. Complete KYC Formalities
All holders should submit KYC forms and complete in-person verification if needed.
5. Submit the Application
Submit the application and the documents in their complete form on the DP’s website.
6. Verification and Approval
After verifying the details submitted, the DP shares the login details and authorizes it.
Points to Consider Before Opening a Joint Demat Account
Here are the key joint demat account rules to consider before opening an account:
1. Approval of All Account Holders
Transactions in a joint demat account require approval from each account holder. The transaction is invalid if full consent is not obtained. This guarantees that everyone is aware of the activities occurring within the account.
2. No Changes to Account Holder Details
Once the joint demat account is opened, you cannot change details such as names or birth dates. If there is an error, you will have to create a new account. To avoid future account issues, make sure to double-check all information before applying.
3. Tax Responsibility
In a joint demat account, the primary account holder is liable for paying capital gains taxes. Despite the fact that there are several account holders, the principal holder is responsible for paying taxes.
4. One Trading Account Only
Only one trading account is connected to the joint demat account. This is usually held by the principal account holder. This main holder is the recipient of all messages pertaining to the account. This implies that they are in charge of overseeing the account. They also get information about all the activities occurring within the account.
5. Account Changes after Opening
You cannot convert an individual Demat account into a joint one. To open a joint account, you must apply from the start.
By now, you must have understood how to open joint demat account. Understanding the principles and techniques can help you maximize your money. It’s an excellent choice for anyone wishing to invest jointly.
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Can I add or remove joint holders after opening a joint Demat account?
No, once a joint Demat account is opened, you cannot add or remove joint holders. If any changes are required, you will have to close the existing account and open a new one.
Is it possible to convert an individual Demat account into a joint Demat account?
No, an individual Demat account cannot be converted into a joint Demat account. You must apply separately for a joint account from the beginning.
Who is responsible for taxation in a joint Demat account?
The primary account holder is responsible for paying capital gains tax, even though the account has multiple holders. Tax liabilities are calculated based on the transactions made in the account.
Can all joint account holders access the trading account linked to the joint Demat account?
No, only the primary account holder has access to the trading account linked to the joint Demat account. The principal holder also receives all transaction-related notifications.
What happens to a joint Demat account if one of the account holders passes away?
In case of the demise of one of the joint holders, the surviving holder(s) continue to manage the account. The account is seamlessly transferred without complex legal formalities.
The Indian wires and cables industry rides on growth in real estate, infrastructure, renewable energy, and telecommunications. Hence, there is a huge opportunity for the investors looking for some reliable stocks with proven performance. The top 10 cable stocks in India can be a valuable addition to your portfolio in terms of both capital appreciation and diversification.
This blog is meant to discuss major cable companies according to market capitalization.
Overview of the Industry
The Indian cable and wire industry is set for a boom over the next decade, growing at an 11% rate annually to reach a size of ₹1,200 billion by 2030. The speedy developments of urbanization, government infrastructure programs such as smart cities, and the aggressive push toward digitization all contribute to the growth in developing economies.
The industry has witnessed some remarkable milestones within the organizations, together with extremely impressive and active financials and product innovations. Here’s a detailed examination of the best cable stocks in India and why one should watch them.
Market Information of Cable Stocks
Company
Current Market Price(in ₹)
Market Capitalization(in ₹ Crores)
52-Week High (in ₹)
52-Week Low (in ₹)
Polycab India Ltd.
5,666
85,225
7,607
4,278
KEI Industries Ltd.
3,484
33,289
5,040
2,884
Finolex Cables Ltd.
890
13,612
1,700
831
RR Kabel Ltd.
1,144
12,959
1,903
1,118
Diamond Power Infrastructure Ltd.
91.2
4,836
194
28.4
Sterlite Technologies Ltd.
100
4,889
155
95.2
Universal Cables Ltd.
566
1,964
939
380
Paramount Communications Ltd.
61.2
1,866
101
59.7
Dynamic Cables Ltd.
725
1,756
1,095
337
V-Marc India Ltd.
310
757
494
69.6
(Data as of 12 February 2025)
Overview of the 10 Best Cable Stocks in India
1. Polycab India Ltd
About:
Initiated way back in 1968, Polycab India Ltd is currently India’s largest wire and cable manufacturer. It’s created a huge name in the industry by having products ranging from cables to fibre optics.
Key Milestones:
IPO of Polycab in 2019 is considered a huge success as it raised around ₹1,345 Crores.
The company crossed ₹10,000 crore revenue landmark in 2020 due to its high-quality products.
Diversification into fast-moving electrical goods (FMEG) with fans, lights, and switches.
Growth drivers:
Strategically equipped with a broad product portfolio, innovation in product development within Polycab has made it a credible choice among various cable share lists. Adding to all the prime hype building points is its strong financial performance coupled with a good exposure to exports, thus making it a potential investor interest.
Y Return (%)
3Y Return (%)
5Y Return (%)
31.33%
151.18%
437.37%
(Data as of 12 February 2025)
2. KEI Industries Ltd
About:
Founded in 1968, KEI Industries Ltd is one of the prominent and leading manufacturers of power cables, house wires and stainless steel wires in India.
Key Acquisitions and Milestones:
In 2010, they teamed up with Brugg Cables of Switzerland to introduce EHV cables.
Acquired contracts for many renovations from the government in the light of railway electrification and renewable energy.
By 2022, the company had also successfully achieved the around ₹6,908.17 crores revenue threshold.
During the FY 2023-24, the company achieved a turnover of ₹8,104.08 Cr.
Growth Drivers:
The strong industrial and infrastructural presence of KEI renders it a preferred stock for long-term investors.
Y Return (%)
3Y Return (%)
5Y Return (%)
4.36%
258.27%
555.34%
(Data as of 12 February 2025)
3. Finolex Cables Ltd
About:
Finolex Cables is one of India’s oldest companies, founded in 1958 as manufacturers of electrical and communication cables to serve a variety of industries, including telecommunications and automotive sectors.
Key Mile Stones:
Created the first jelly-filled telecom cables in the year 1998, which revolutionized the very core of the telecom industry.
Expanded to include electric and automobile cables in the PVC insulation during the year 2000.
Have been able to demonstrate robust financial performance wherein revenues are estimated to stand at ₹3,900 crores in 2023.
Growth Drivers:
Finolex is focusing on quality and innovation, which is going to guarantee its stranglehold over the Indian cable market.
Y Return (%)
3Y Return (%)
5Y Return (%)
-16.53%
91.32%
125.22%
(Data as of 12 February 2025)
4. RR Kabel Ltd
About:
RR Kabel was established in 1999 and is known for innovating and introducing eco-friendly products. It deals with industrial and household cables, too.
Key Milestones:
Very first Indian cable firm to have green wires certified in environment sustainability.
IPO: 2023, which raised another ₹1,964 crores to further strengthen its financial position.
Associates with few of the major developers in the real estate sectors for the development of the projects of urban infrastructures.
Growth Drivers:
Being one of the best cable stocks in India because of focusing towards green solutions as well as products of premium quality.
Y Return (%)
3Y Return (%)
5Y Return (%)
-20.88%
-2.12%
-2.12%
(Data as of 12 February 2025)
5. Diamond Power Infrastructure Ltd
About:
Diamond Power Infrastructure Ltd was established in 1970 with the purpose of manufacturing power cables and conductors for the utility and energy sectors.
Key Milestones:
2007 – Opened the country’s first fully integrated conductor and cable manufacturing facility. This brought the company competitive advantage and diversified sources of income.
Mainly associated with major contracts for crucial works in state electricity board projects.
Growth Drivers:
Growing Sectors that Acquired Capacity by the strength in power and innovative focus will suffice growth potential.
Y Return (%)
3Y Return (%)
5Y Return (%)
217.51%
50,877.78%
1,66,736.36%
(Data as of 12 February 2025)
6. Sterlite Technologies Ltd
About :
Sterlite Technologies Ltd is a global leader in optical fibre cables and digital network solutions. Founded in 2000.
Key milestones:
Acquired Elitecore Technologies as a software and digital enhancement in 2015.
Partnerships with telecom operators set up in 2021 to enable the rollout of the 5G services in India.
The footprint has expanded globally, and a large chunk of the revenue is through exports.
Growth Drivers:
Sterlite tops the list of cable share for the industry, remains at the leadership position in the telecom sector, and keeps its eye on future-ready technologies.
Y Return (%)
3Y Return (%)
5Y Return (%)
-27.57%
-51.24%
-19.09%
(Data as of 12 February 2025)
7. Universal Cables Ltd
About:
Universal Cables was established in 1962 in association with the MP Birla Group and is concerned only with power and special types of cables.
Key Milestones:
In 2009, the company collaborated with Japan’s Furukawa Electric Industries to form a joint venture for the manufacture of optical fiber cable in India.
The company supplied cables for metro rail and high-speed rail projects in India.
The company had revenues of ₹1,800 crores solely from the solid order book in the year 2023.
Growth Drivers:
With strategic partnerships and high-quality products, Universal Cables is rightly placed as one of the top contenders among the top 10 cable stocks in India.
Y Return (%)
3Y Return (%)
5Y Return (%)
14.42%
244.50%
250.81%
(Data as of 12 February 2025)
8. Paramount Communications Ltd
First founded in 1955, this has been a company involved in manufacturing power and telecom cables. Paramount Communications Ltd designs products to serve both government and private sectors.
Key Milestones:
Helped in the supply of cables for the Delhi metro project.
Expand to the European markets, adding export revenues.
It is developing growth steadily depending on contracts in the defense and aerospace markets.
Growth Drivers:
Niche expertise of paramount brings a positive outlook in future investments.
Y Return (%)
3Y Return (%)
5Y Return (%)
-37.29%
375.10%
730.61%
(Data as of 12 February 2025)
9. Dynamic Cables Ltd
About:
Dynamic Cables is a company that was founded in 2007 and is focused on the manufacturing and supply of various cables for power transmission, distribution, and projects in the renewable energy sector.
Key Milestones:
Enlarging the capacity of production dramatically increased the output in 2018.
Top supplier for solar power in India.
Constant and sustainable growth in financials due to strong domestic and international demand.
Growth Drivers:
Dynamic Cables is all aligned to the green targets set for India, which promise a future avenue for further growth.
Y Return (%)
3Y Return (%)
5Y Return (%)
64.07%
406.96%
406.96%
(Data as of 12 February 2025)
10. V-Marc India Ltd
About:
V-Marc India was set up over forty years ago, in 1971, especially to manufacture industrial and power cables.
Key Milestones:
Started with control and instrumentation cables as part of its portfolio in 2015.
Started cooperating with global distributors to further its global reach.
Has registered a CAGR of 20% revenue over the last five years.
Growth Drivers:
V-MArc has innovation and a strong export network making it a reliable share market player in the wire company share market.
This unique opportunity in investing makes for the best cable stocks in India where investment can be done for companies with high growth drivers, infrastructure development, digital transformation, and extension of renewable energy. Although Polycab India, KEI Industries, and Finolex Cables have continued to perform, some new companies, such as RR Kabel and Dynamic Cables, show tremendous potential for growth.
Investing in these stocks lets you gain exposure to the growing Indian cables industry. Be it for a long or short period, dividends can be expected from these top 10 cable stocks in India, which can also be a strong part of a balanced portfolio.
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