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HCL Vs Infosys: Which is Better?

India’s IT industry has made a strong presence globally, with HCL Technologies and Infosys being the two major players. Infosys today offers its services in 56 countries and its brand value is expected to exceed $16 billion in 2025, making it among the top 3 IT service brands in the world. HCLTech, on the other hand, is active in 60 countries and has more than 200 delivery centers.

In this blog, we will compare various aspects of “HCL vs Infosys” to help investors, analysts, and students understand the position of these companies.

Company Overview: HCL Technologies

HCL Technologies, popularly known as HCLTech, is one of the top IT companies in India. It was started in 1976 by Shiv Nadar and his team. Earlier this company was hardware focused, but in the 90s it entered the software and IT services sector. Today HCLTech is working in more than 60 countries of the world and has 200+ delivery centers and 150 innovation labs. Its clients come from sectors like banking, healthcare, auto, telecom and retail. The chairperson of the company is Roshni Nadar Malhotra and the CEO is C. Vijayakumar, who is leading the global growth of HCL.

Business model

HCL Tech’s business model is quite diverse and this company provides a variety of services in different sectors. It has three main business verticals:

IT and Business Services (ITBS): This includes application development, cloud, digital processing and infrastructure services.
Engineering and R&D Services (ERS): Technology solutions ranging from product design to manufacturing.
HCL Software: Operates solutions acquired from IBM such as AppScan, BigFix and Notes/Domino.

In terms of revenue, the company earns from fixed-price and time-based contracts, as well as sells its products on a subscription model. HCL’s focus is on value-driven and client-need-based service delivery, making it trusted by customers around the world.

Company Overview: Infosys

Infosys was started in 1981 by Narayan Murthy and his team with a capital of just ₹ 10,000, and today it is counted among the most trusted IT companies in India. The company is operating in more than 56 countries and its brand value has crossed $ 16 billion in 2025. Infosys is recognized globally for its digital transformation, AI and cloud solutions.

Its clients include Fortune 500 companies, and it provides technology services in sectors such as BFSI, healthcare, manufacturing, and retail. The CEO and MD of Infosys is Salil Parekh, under whose leadership the company is constantly moving towards innovation and growth.

Business Model

The business model of Infosys is client-centric and technology-driven. The company earns revenue from four main areas:

Digital Services: Which includes cloud, data analytics, and AI based solutions.
Consulting and Outsourcing: Provides services to clients from end-to-end business strategy to IT implementation.
Enterprise Applications: Solutions on platforms like SAP, Oracle.
Managed Services: Long-term support of infrastructure and applications.

Infosys’ model is scalable and globally competitive, in which the ‘Global Delivery Model’ plays a major role. This model helps the company to provide high-quality services at low cost.

Who is Better: HCL Technologies Or Infosys?

In 2025, both HCLTech and Infosys have shown significant progress in their respective fields.

Financial performance : Talking about financial performance, Infosys’ total revenue was around ₹ 1.66 lakh crore, which is far ahead of HCLTech’s around ₹ 1.19 lakh crore. Also, Infosys’ net profit and operating margin are also better than HCLTech, which reflects the company’s operational efficiency and profitability.
Strategic focus : In terms of strategic focus, HCLTech has secured large contracts in cloud migration and AI services, giving it a strong market presence among large enterprise clients. At the same time, Infosys has emphasized on AI-based new products and language model development, thereby playing a leading role in digital transformation.
Global Presence : The global presence of both the companies is almost the same, both are operating in about 60 countries. But Infosys has been slightly better in adding new clients, which has diversified its revenue streams and customer base.
Future plans : Both companies have prioritized balanced growth in their future plans. HCLTech is planning further expansion in the cloud and AI sector, while Infosys is focusing on improving operating margins and responsible use of AI.

Overall, both companies are strong in their respective domains of expertise and are making significant contributions to the IT industry. Saying who is better depends entirely on the investor’s risk profile and analysis of the company’s fundamentals. It is essential for investors to conduct a thorough analysis of both the companies along with management’s track record in delivering results before investing.

Comparative Analysis: HCL Technologies Vs Infosys

Particulars	HCL Technologies	Infosys
Current Price (₹)	1,740	1,623
Market Cap (₹ Crores)	4,72,151	6,74,187
52-W High (₹)	2,012	2,007
52-W Low (₹)	1,303	1,307
FII Holdings as of March 2025	19.14%	29.4%
DII Holdings (as of March 2025)	15.48%	34.46%
Book Value (₹)	257	231
PE Ratio	27.1	25.4

(Data as of 21 June 2025)

Financial Statements Analysis

Income Statement Comparison

Particulars	HCL Technologies	Infosys
Total Income	1,19,540	1,66,590
Total Expenses	95,635	1,28,566
EBIT	23,905	38,024
Net Profit	17,399	26,750

(All values are in INR crores and the data is as of March 2025)

Balance Sheet Comparison

Particulars	HCL Technologies	Infosys
Reserves & Surplus	69,112	93,745
Current Liabilities	28,039	42,850
Current Assets	62,109	97,099
Other Assets	28,960	30,135

(All values are in INR crores and the data is as of March 2025)

Cash Flow Statement Comparison

Particulars	HCL Technologies	Infosys
Cash Flow from Operating Activities	22,261	35,694
Cash Flow from Investing Activities	-4,914	-1,946
Cash Flow from Financing Activities	-18,561	-24,161

(All values are in INR crores and the data is as of March 2025)

Key Performance Ratios (KPIs)

Particulars	HCL Technologies	Infosys
Operating Profit Margin (%)	20.42	23.32
Net Profit Margin (%)	14.86	16.41
ROE (%)	24.96	27.87
ROCE (%)	30.84	35.85
Debt to Equity (x)	0.03	0.00

(Data as of March 2025)

Future plans of HCL Technologies

The future plans of HCL Technologies are mentioned below;

Investing and scaling in Generative AI : HCLTech has further strengthened its AI strategy in FY25. The company has launched platforms such as “AI Force” and “Enterprise AI Foundry”, which optimize the entire lifecycle of software development and product engineering. In the first quarter of FY25, HCLTech has signed 12 new AI-integrated deals, many of which involve developing AI solutions.
Global expansion and partnerships : The company has further expanded its partnership with Google Cloud, under which 25,000 engineers will be trained on Google Gemini. In addition, HCLTech plans to set up a new AI/Cloud lab in Singapore, which will contribute to AI innovation and talent development in collaboration with local institutions.
Employee skilling and training : By the end of FY25, HCLTech aims to train 50,000 employees in generative AI. For this, the company is using platforms such as “AI Force” and “AI Foundry”, which will enable employees to develop and implement AI-based solutions.
Acquisitions and strategic partnerships : HCLTech plans acquisitions to strengthen its portfolio in regions such as Japan and Europe. The company is focused on semiconductor, automotive and platform-based businesses, which can provide stable revenue streams.

Future plans of Infosys

The future plans of Infosys are mentioned below;

Investments in Generative AI and Cloud Services: Infosys forecasts its revenue growth for FY25 to be between 3% and 4%, reflecting the growing demand for AI and cloud services. The company is currently working on over 225 generative AI projects, and has integrated GenAI components across all of its service lines.
Strategic Partnerships and Acquisitions : Infosys has partnered with companies such as “Citizens Financial Group” and “Telstra”, enabling it to drive AI-driven transformation in the financial services and telecommunications sectors. In addition, the company has acquired “InSemi”, a German R&D company, strengthening its chip-to-cloud strategy.
Employee Skilling and Training : Infosys has made significant investments to train its employees in GenAI, and its employees have already built over 3 million lines of code using large language models. The company aims to enable its employees to develop and implement AI-powered solutions.
Responsible AI and Ethics : Infosys has launched the “Responsible AI Toolkit”, which helps ensure the ethical use of AI. This toolkit is helpful in identifying and addressing security risks, privacy violations, biased results, and other related issues.

Conclusion

Both HCLTech and Infosys are major players in the Indian IT sector, which have gained a strong foothold in the market on the basis of their respective strengths and strategies. While Infosys focuses more on digital innovation and operational excellence, HCLTech emphasizes on cloud services and large enterprise contracts. Both have displayed strong financial performance, but their future growth plans are different. Therefore, investment decisions should not be made only on the basis of financial metrics, but keeping in mind the company’s future plans, your individual goals and risk tolerance. It is advised to consult a financial advisor before investing.

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Frequently Asked Questions (FAQs)

What is the main difference between HCLTech and Infosys?
HCLTech focuses more on cloud and enterprise services, while Infosys leads in digital innovation and operational excellence.
Which company has better financial performance in 2025?
Infosys revenue and profit margins are better than that of HCLTech.
Are both companies expanding globally?
Yes, both companies are operating in around 60 countries and adding new clients.
Which company is investing more in AI and cloud services?
Both companies are investing in AI and cloud, but HCLTech has recently been more active in securing contracts related to cloud services.
Should I invest in HCLTech or Infosys?
The investment decision depends on your investment strategy and risk tolerance as both companies are strong players in the IT sector.

June 23, 2025

What is Angel Tax?

Once a major problem related to startup funding, called angel tax, is now a thing of the past. In the July 2024 budget, the government decided to completely abolish this tax, which came into effect from April 1, 2025. Earlier this tax was levied when a startup raised funds by selling shares at a price higher than its value.

In this blog, we’re going to explore what the angel tax was, how it impacted startups, and why its complete abolition from April 1, 2025, marks a significant turning point for the Indian startup ecosystem.

What is Angel Tax?

Angel tax is a tax that was levied on unlisted companies (especially startups) when they sell their shares at a price higher than their Fair Market Value (FMV). The excess amount was considered “income from other sources” and was taxed at around 30.9%

Rate of Angel Tax

About 30.9% tax was levied on the amount received above the FMV. Apart from the base tax, it also included cess and surcharge.

Why was it called the “Angel” tax?

Because this tax specifically impacted investors called “angel investors”—people who invested in startups at an early stage.

When did it start?

This initiative was introduced by the Government of India in the 2012 Finance Budget (Finance Act 2012) and was implemented by April 2013

Is it still in effect?

No, its complete abolition was announced in the July 2024 budget, and has been implemented with effect from 1 April 2025.

Why Was Angel Tax Introduced?

The reason behind the introduction of Angel Tax was:

Introduction to curb black money : Angel tax was first introduced in 2012 with the aim of curbing the investment of black money in the name of startups. At that time, many companies used to issue shares at a premium much higher than their real value, which increased the possibility of tax evasion and money laundering.
Legal aspects : To implement this tax, the government added section 56(2)(viib) to the Income Tax Act. This means that if a private company raises money by selling shares at a price higher than their actual value, then that extra amount will be considered as income and will be taxed. According to the government, this was necessary so that those who raise funds through illegal means could be controlled.
Impact on startups : Although its purpose was to increase transparency tax revenues, many genuine startups and angel investors suffered from it. There were obstacles in funding and investors also started hesitating. This was the reason why the government decided to abolish it in 2024.

Who Has to Pay Angel Tax? (Applicability Criteria)

The scope of angel tax was initially quite limited, but it affected all unlisted companies that raised funds by issuing shares at a price higher than their FMV. In most cases, these were startups that raised money from angel investors for initial investment.

If a startup was not recognized by DPIIT, and sold shares at a price higher than FMV, it would have to face this tax. However, recognized startups were exempted from this tax with certain conditions.

Calculation of Angel Tax with Example

Angel tax was calculated based on the difference between the Fair Market Value (FMV) of the shares and the price at which they were actually sold. If a startup sold shares whose FMV was supposed to be ₹100 at ₹150, the difference of ₹50 was considered as “additional income” and was taxed.

Example : Suppose a startup sold 1,000 shares at ₹150 per share while their FMV was ₹100.

Total amount = ₹1,50,000
Value as per FMV = ₹1,00,000
Excess amount = ₹50,000 (taxable)

How was FMV determined?

As per Income Tax Rule 11UA, startups could determine FMV in two valid ways:

NAV (Net Asset Value): The value was determined based on the company’s assets and liabilities.
DCF (Discounted Cash Flow): The company’s estimated future cash flow was discounted to today’s value.

Safe Harbour Rule : Rule 11UA provided that if the premium is up to 10% more than the FMV, the difference will not be considered taxable. This helped avoid tax disputes on small valuation mistakes.

Impact of Angel Tax on Indian Startups

The impact of Angel Tax on Indian startups can be summarized in the following points below:

Raising funding became difficult : When angel tax was implemented, many startups had trouble raising investment. Investors were afraid that if they invested above the Fair Market Value, they might receive a notice from the tax department.
Investors’ hesitation : Angel investors had to bear the risk of tax at the initial stage. Due to this, many people started shying away from investing in new startups, due to which innovative ideas were not able to get the necessary funds.
Some big examples : In 2015–16, the bank accounts of TravelKhana (Duronto Technologies) were frozen and an amount of ₹33 lakh was seized by the tax department. Similarly, a company named Babygogo lost an amount of about ₹72 lakh due to tax disputes. These incidents were an indication that Angel Tax not only stopped funding but also affected the day-to-day financial activities of startups.

Angel tax had inadvertently made the investment environment in India negative, thereby slowing down the startup ecosystem.

Recent Updates on Angel Tax (As of 2025)

Angel Tax to be abolished in Budget 2024‑25 :

On July 23, 2024, Finance Minister Nirmala Sitharaman announced in the Union Budget 2024‑25 that Angel Tax is being abolished for all investors.
It has been fully implemented from April 1, 2025.

What is its effect?

Now DPIIT recognized startups will not face any angel tax for neither domestic nor foreign investors.
This relieved both startups and angel investors of tax hassles and legal uncertainty.
The DPIIT secretary confirmed in January 2025 that the decision had led to a rise in “reverse flipping” startups now setting up headquarters in India rather than overseas.

Angel Tax is gone and this has strengthened India’s startup ecosystem and the investment environment has become even more positive after Budget 2025.

Conclusion

The decision to abolish angel tax in 2025 has proved to be a big positive step for the Indian startup ecosystem. This has not only increased investor confidence but has also made it easier for companies working on new ideas to get funding. The tax uncertainty that startups have been facing for a long time has now been relieved. These changes taken by the government show that India is now more prepared to encourage innovation and startups here will find a strong, stable and reliable environment in the years to come.

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Frequently Asked Questions (FAQs)

Is Angel Tax still applicable in India?
No, Angel Tax is not applicable on DPIIT recognized startups from 1st April 2025.
What was the rate of Angel Tax?
Any amount exceeding the FMV was taxed at approximately 30.9%.
Who was most affected by Angel Tax?
Angel investors and early startups faced the most problems due to this tax.
Why did the government remove Angel Tax in 2025?
The government took this decision to promote startups and improve the investment environment.

June 23, 2025

What Is The Difference Between Large Cap, Mid Cap, And Small Cap Funds?

Before investing in the stock market, it is important to understand what large-cap, mid-cap and small-cap funds are. Every fund has a different risk and return profile, and it is beneficial to choose the right category based on your investment goals. According to SEBI, companies are classified into three categories based on their market capitalisation: large cap, mid cap, and small cap. Mutual funds invest in shares of these companies and based on their investment portfolios, these mutual funds are also categorized as large, mid and small cap funds.

In this blog, we will understand in simple language what the difference is between small cap, mid cap and large cap funds and which one may be better for you.

What is Market Capitalization?

When assessing the size of a company, the first thing that comes to mind is its market capitalization. This actually shows the total market value of that company – that is, how much the company is worth today.

The formula is:

Market Capitalization = Current share price × Total number of outstanding shares

SEBI Classification of Large Cap, Mid Cap, and Small Cap

When it comes to understanding the market size and risk associated with a company, SEBI (Securities and Exchange Board of India) market cap ranking is the most relevant guide. SEBI updates the ranking of companies every six months and divides them into three groups based on their size:

Large Cap: Companies that fall in the top 1 to 100 ranks based on market cap are considered as such. These are usually well-known, strong and stable companies like Reliance Industries, TCS, HDFC Bank, etc.
Mid Cap: These include companies ranked 101 to 250, which are in the growth stage and have the potential to become large caps in the future. Example: Trent, Cummins India, AU Small Finance Bank, etc.
Small Cap: Companies that are ranked lower than 251 can be considered as small cap companies. These have the potential to grow rapidly but also have a higher risk associated with them. Example: IndiaMART, RBL Bank, Happiest Minds, etc.

If we understand the concept of small cap, mid cap and large cap, then it can help investors decide mutual funds to invest in and get a better understanding in which type of companies their money is being invested in.

What Are Large Cap Funds?

Large cap funds are mutual funds that invest in companies with a large market capitalization i.e., companies with ranking between top 1 and 100. These companies are known for their strong business models, stable revenues and long track record. Hence, these funds offer the most stability to investors.

Large cap companies usually have established their name and credibility in the market, making their stocks less volatile. This is why these funds have a lower risk and are suitable for investors who want stable and reliable returns over a long period of time.

Advantages:

Lower price fluctuations
Stable returns with low risk
Suitable for long term investors

Disadvantages:

Lower returns than mid and small cap mutual funds.

What Are Mid Cap Funds?

Mid-cap funds are mutual funds that invest in companies with a market ranking between 101 and 250. These companies are neither too big nor too small, that is, their size is between large and small cap. This is why these funds offer investors a balanced option with a mix of higher returns and safety.

Mid-cap companies are usually in the growth stage, with the potential to become large caps in the future. Hence, their growth prospects are good, but at the same time they are also more volatile.

Advantages:

Possibility of better returns than large caps
Lower risk than small caps
Helpful in maintaining balance in the portfolio

Disadvantages:

Higher volatility than large caps
Impact on returns during recessions

What Are Small Cap Funds?

Small cap funds are mutual funds that invest in companies that rank 251 and below in the market cap rankings. These companies are relatively new, small and have the potential to grow rapidly. Hence, this fund category attracts investors who are willing to take a little more risk to earn higher returns.

Small cap funds are considered to be the most volatile among all the mutual fund categories, but they also have the highest potential to become multibaggers in the long term.

Advantages:

High growth potential
Possibility of great returns in the long term
Opportunity to earn big returns with small investments

Disadvantages:

High risk and high volatility
First to be affected in a recession or market downturn

Small Cap vs Mid Cap vs Large Cap Funds – Key Differences

Feature	Large Cap Funds	Mid Cap Funds	Small Cap Funds
Risk Level	Low risk, more stability	Moderate risk with some volatility	High risk, highly volatile
Return Potential	Stable but relatively limited returns	Higher return potential than large caps	Highest return potential, but comes with greater risk
Investment Horizon	Long-term (5+ years), suitable for retirement or safety	Medium to long-term (5–7 years)	Long-term (7–10 years), requires patience and risk tolerance
Investor Type	Conservative investors seeking steady growth	Investors willing to take moderate risks	Aggressive investors aiming for high growth
Impact of Market Movements	Least affected during market downturns	Moderate fluctuations during market changes	Most affected during market volatility

Which fund is right for whom?

When it comes to comparing small cap vs mid cap vs large cap, the simple answer depends on the investor’s needs and risk profile:

If one wants stability and does not want to take too much risk, then large cap funds are better.
If you can tolerate a little higher return and a little risk, then mid cap is a balanced option.
And if you are ready for long term growth and are not afraid of short term volatility and higher risks, then small cap funds may be for you.

Which One Should You Choose?

When deciding between large, mid and small cap funds, you should consider the following factors:

Understand the risk appetite : Every investor has a different risk appetite. Some investors are willing to take more risk, while some want safe and stable returns. If you want a safe investment, then large cap funds are a better option. On the other hand, mid cap and small cap funds offer more risk along with higher returns.

Pay attention to the investment horizon : If the investment period is short (3–5 years), then large cap funds are most suitable as they provide stability. On the other hand, better returns can be obtained by investing in mid and small cap funds for a long period (5–10 years or more).

Decide your financial goals : What is your goal? Buying a house, children’s education, retirement planning or wealth creation? If your goal is to keep the capital safe, then a large cap fund is a good option. If your focus is on growth and wealth creation, then mid and small caps can be better options.

Avoid Concentration in One Category : It is not wise to invest all the money in just one fund category. Diversification is important and it is advised to divide the investment in a balanced manner in all three categories (Large, Mid, Small). This not only reduces the risk, but also offers better risk-adjusted returns in different market situations.

Think Long-Term & Be Patient : Mutual fund returns are affected by ups and downs in the market, but there is a possibility of good growth in the long term – especially in mid cap and small cap if you are patient and disciplined.

Conclusion

While investing in the stock market, it is very important to know how large cap, mid cap and small cap funds work and what is the difference between them. Each fund category has its own features – some offer stability, while others offer the opportunity for rapid growth.

If the categories of these funds and their risk profile are understood properly, then investment decisions can be taken more strategically. This understanding not only balances the risk but also gives better returns in the long run. Every investment made with the right information and strategy can bring you one step closer to your financial goal. It is advised to consult a financial advisor before investing.

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Frequently Asked Questions (FAQs)

What is the main difference between large cap, mid cap, and small cap funds?
The main difference between different types of funds is the size of companies they invest in. Large cap funds invest in established companies, mid cap funds include medium-sized companies, and small cap funds include small companies.
Which type of fund is safer for beginners?
Large cap funds are considered safer for beginner investors as they have greater stability.
Can I invest in all three fund types together?
Yes, investing in all three together keeps the portfolio diversified and the risk is also balanced.
Do small cap funds give better returns than large cap?
Small cap funds can give higher returns in the long term, but they also have higher risk.
How do I decide which fund is right for me?
This depends on your age, risk taking ability and investment period.

June 23, 2025

What is CAMS KRA? How to check KYC Status?

We all know that it is mandatory to complete the KYC (Know Your Customer) process before you can invest in financial assets such as mutual funds. To make this process easy and control it from a single place, SEBI implemented the KRA (KYC Registration Agency) system, one of which is CAMS KRA. This agency stores and manages the KYC details of investors on a central platform.

In this blog, we will discuss the CAMS KRA in detail and how to check the KYC status.

What is CAMS KRA?

The full form of CAMS KRA is Computer Age Management Services – KYC Registration Agency. It is a leading KRA (KYC Registration Agency) of India, which got approval from SEBI in mid-2012. CAMS started in 1988 as an RTA (Registrar & Transfer Agent), but later it also started providing KYC verification services. The main work of CAMS KRA is to collect the KYC information of investors, verify it, and store it in a central database and share it with all financial intermediaries like mutual fund houses, brokers, and other SEBI-registered institutions.

The advantage of this is that once KYC is done, there is no need to submit documents on different platforms again and again. CAMS KRA has developed a trusted and regulated system, which makes the investment process fast, easy and secure.

How many KRAs are there in India?

There are 5 SEBI-registered KRAs in India that handle the KYC process of investors. The work of every KRA is almost the same, but there may be some difference in technical interface, speed and user experience.

Names of main KRAs :

CAMS KRA (CISPL)
CVL KRA (CDSL Ventures Limited)
Karvy KRA
NSDL KRA
NSE KRA (DotEx International)

KYC done with any of the KRAs is valid and once it is done, then the same process does not have to be done again in other intermediaries.

Types of CAMS KRA KYC Forms

Every individual has a different financial profile, and accordingly, different types of KYC forms have been created on CAMS KRA. Choosing the right form makes the KYC process easier and faster. Below are some of the main form types:

Individual KYC Form : This form is for those who wish to invest in their individual name. It is required to be filled before starting investing in mutual funds, stocks or other financial products. Documents required: PAN card, Aadhaar card, address proof, and photo.

Non-Individual KYC Form : This form is for companies, trusts, partnership firms, HUFs (Hindu Undivided Families), etc. The format of the form and documents is different as there can be more than one authorized signatory. Documents required: Registration certificate, board resolution, PAN card, ID proofs of authorized representatives, etc., depending upon the applicant.

Minor KYC Form : This form is to be filled if an investment is being made in the name of a minor. It includes the child’s information as well as the guardian’s details and documents. Documents required are the child’s birth certificate, guardian’s PAN and Aadhaar.

Since the purpose of each form is different, it is very important to understand the type of form correctly while submitting the documents. This ensures that the KYC process is completed without any hindrance.

Advantages of CAMS KRA

CAMS KRA is a platform that not only makes the KYC process easy, but also completes it with confidence and regulations. Here are some of its key benefits:

Fast processing : The verification process usually takes between 2 to 10 working days, depending on the accuracy of submitted documents and completion of IPV.
Simple and clean interface : The website is designed in such a way that anyone can easily fill the form and upload documents, even if they do not have much technical knowledge.
Facility to check status anytime : If you want to know how far the KYC has progressed, you can login to CAMS KRA and check the status anytime and update the information if needed.
Compliance with SEBI rules : This platform works completely as per the regulations made by SEBI, which ensures that the process is being done in a transparent and correct manner.
No compromise on data security : User information like PAN, Aadhaar and other details are completely encrypted and stored on secure servers to ensure no data is leaked or misused.
Valid everywhere: Once KYC is completed on CAMS KRA, it is accepted by most mutual funds, stock brokers and other financial platforms. There is no need to re-do KYC.

CAMS KRA KYC Process: Step‑by‑Step

It is important to complete KYC before you start investing. Completing KYC through CAMS KRA is a simple process that can be completed both online and offline.

Step 1: Fill the correct form

First, choose the KYC form as per your profile (Individual, Non-Individual or Minor). The form requires basic information like name, date of birth, mobile number and address.

Step 2: Submit documents

PAN card, Aadhaar card (or other address proof), passport size photo and active mobile number are required. In online KYC, these have to be scanned and uploaded, while offline, a physical copy is given.

Step 3: In-Person Verification (IPV)

IPV is mandatory, which can be done through a video call or by visiting the nearest centre. Its purpose is to confirm the identity.

Step 4: Verification and Status Update

After verification of all the documents and details, the KYC status becomes “Verified” which can be checked online.

The entire process is regulated by SEBI and UIDAI, keeping investor data secure.

How to Check Your CAMS KRA KYC Status

Knowing whether KYC is complete or not is as important as submitting the documents. Many times, due to lack of information about the process, people assume that their KYC is completed, while it is stuck in the process. Therefore, it is wise to check the KYC status in time.

Online method

You can check your CAMS KRA KYC status by following the below steps:

First of all, go to camskra website.
Select “KYC Status” option.
Enter your PAN number there.
As soon as you submit, your KYC status may show as Registered, Validated, On Hold, or Rejected, depending on the progress and verification of your documents..

Offline method : For those who are not comfortable doing it online, they can visit the nearest CAMS centre and check the status by providing PAN details. The team at the centre helps with the process and informs the status immediately.

It is important to keep your KYC status updated to avoid investment disruptions, especially when the documents have been submitted recently.

Different CAMS KRA KYC Status

KYC status indicates the stage of identity and document verification in the investment process. Each status has a specific reason and the next step needs to be decided accordingly:

KYC Registered / Verified : This means that the entire process has been completed successfully. The documents have been verified and now there will be no hindrance in investing.
Under Process : This status means that the verification of documents or in-person verification (IPV) is still going on. The process may take some time to complete.
On Hold / Rejected : This means that some discrepancy has been found in the submitted documents such as difference in name, wrong address, incomplete form, etc.

CAMS KRA vs Other KRAs

There are five registered KRAs authorised by SEBI to regulate and record the KYC process in India CAMS KRA, CVL KRA, Karvy KRA, NSDL KRA and NSE KRA. All these agencies have the same objective: to keep a record of investors’ KYC information in a standardised and secure system.

Each KRA works as an independent entity but has interoperability. This means that if KYC is done on one KRA, the same information is considered valid on the platform of another KRA as well. This eliminates the need for investors to get a new KYC done every time.

Each KRA has its own system, data security model and technology structure. However, all KRAs are required to follow the rules and standards set by SEBI – to keep the process transparent and reliable.

Different financial institutions (such as mutual funds, stock brokers, etc.) are registered with these KRAs, but all have to follow the same KYC rules. The only difference is in which KRA the process is being done through.

Some of the common problems related to CAMS KRA KYC and their solutions are:

1. PAN details not showing: Sometimes errors like “PAN not found” can come up. In such a case, first check whether the correct PAN number has been entered or not, and whether it is linked in the government records or not.

2. Name or address not matching : If the name or address given in the KYC form is different from the document, then verification gets hindered. It is important that the information is filled exactly as per the documents.

3. Status is showing Rejected or On Hold : In such cases, often some documents are incomplete or some mistake is left. Read the remarks carefully and correct the mentioned deficiency and upload it again.

4. Technical issue : If the website is not loading properly, then clear the browser cache, try another browser or try from mobile.

Conclusion

CAMS KRA is an easy, secure and reliable way to complete the KYC process. Its interface and service are very useful for everyone, whether a new investor or an already registered one. Operating as per SEBI guidelines, this platform provides a strong foundation to start investing. With the right documents and a little time, anyone can easily check their KYC status and complete the process.

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Frequently Asked Questions (FAQs)

What is CAMS KRA?
CAMS KRA is a SEBI-registered agency that registers and verifies KYC details of investors.
How can I check my CAMS KRA KYC status?
KYC status can be checked by entering PAN number on CAMS KRA website.
Is CAMS KRA KYC valid for all platforms?
Yes, once KYC is completed it is valid across platforms.
What documents are required for KYC with CAMS KRA?
PAN card, Aadhaar card and a photo are usually required.
Can I update my KYC details online?
Yes, details can be updated by filling the online form and uploading new documents.

June 21, 2025

Wipro Vs Infosys: Which is Better?

Wipro and Infosys are two very important names in the Indian IT industry. Both companies have been active in technology services for the last several decades and now have a strong presence at the global level. Infosys is today considered a leader in modern technologies like AI, cloud and digital transformation, while Wipro is also expanding rapidly in these areas.

In this case study, Wipro and Infosys will be compared on the basis of their business model, financial performance and future growth strategies, so that it becomes clear which company is ahead.

Company Overview – Wipro

Wipro’s story is one of growing from a domestic oil company to a global IT leader. It was founded in 1945 in Amalner, Maharashtra, when it manufactured vegetable oil under the name “Western India Vegetable Products”. When Azim Premji took over the reins of the company in 1966, he completely changed its direction. In the 1980s, it took its first step towards the IT sector and in 1981, India’s first minicomputer was developed. Within a few years, in 1982, its name was changed to Wipro Limited and in 1999 it became one of the few Indian IT companies to be listed on the New York Stock Exchange.

Global Presence and Leadership : Wipro is headquartered in Bengaluru and today its services are spread across more than 65 countries. By 2024, more than 2.3 lakh people worked for the company, of which about 37% are women. Talking about leadership, Srinivas Palia is its CEO since April 2024, who is leading the transformation phase of the company.

Business Model

Wipro’s operations are divided into four major segments in which the company shows its expertise:

IT Services : Services like software development, IT consulting and system integration.
Cloud and Infrastructure : Cloud migration, management and security solutions.
Digital Transformation : Providing end-to-end solutions to companies for digital transformation.
Consulting : Providing strategic advice while balancing both business and technology.

Wipro’s revenue in the financial year 2023-24 was around $ 11 billion, with more than 99% coming from IT services.

Strategic Acquisitions

To expand globally and adopt new technologies, Wipro has made several key acquisitions over the past few years:

Capco (2021) : Strengthened its foothold in financial services consulting
Appirio (2016) : Rapidly expanded cloud computing capabilities
Designit (2015) : Added design-focused services

Wipro’s journey is an example of a classic business transformation where the company not only transformed itself by shifting from traditional industry to technology, but also created a strong identity in the global IT world. On the strength of a vision, right decisions and continuous innovation, Wipro is today counted among the most trusted IT companies in India.

Company Overview – Infosys

Infosys was founded in 1981 by just seven engineers, with an initial capital of just ₹10,000. At that time, no one had any idea that this small startup would one day be counted among the largest IT companies in the world. In 1999, Infosys created history by getting listed on NASDAQ and today the company is providing its services in 56+ countries.

Global presence and leadership : Infosys’ headquarters in Bengaluru leads global operations today. As of 2024, the company employs more than 3.43 lakh people, of which more than 40% are women. Salil Parekh is currently the CEO of the company and under his leadership, Infosys is constantly setting new records of growth.

Business Model

Infosys’ business model focuses on both technology and consulting. The company provides customized IT solutions to global clients in the B2B segment, which includes four key services:

IT Consulting and Strategy: Providing advice and solutions to automate and optimize business processes.
Application Development and Management: Creating and maintaining software based on client needs.
Infrastructure Services: Managing cloud migration, secure networks, and IT operations.
Outsourcing Services: Outsourcing services related to BPO, finance, and HR.

Infosys’ total revenue in FY 23-24 was around $19.11 billion, with more than 95% of revenue coming from these technology services.

Acquisitions and Innovation

Infosys has always been at the forefront of innovation and technology. To further strengthen its portfolio, it has made some important acquisitions:

Skava: To gain expertise in digital commerce and mobile app development
Panaya: To improve ERP system testing and automation
BASE life science (2022): To increase the reach of the life science sector in Europe

The company also launched its own innovative products such as:

Finacle: Core banking solutions for the banking sector
Infosys Nia: Business automation tools based on artificial intelligence

Infosys’ journey starts from a small dream to becoming a global brand. Behind this is a clear vision, innovation in technology, and strong leadership team. Today, Infosys is not just an IT company, but a platform that is taking businesses around the world towards the digital future.

Comparative Analysis: Wipro Vs Infosys

Particulars	Wipro	Infosys
Current Price (₹)	266	1,622
Market Cap (₹ Crores)	2,79,180	6,73,751
52-W High (₹)	325	2,007
52-W Low (₹)	225	1,307
FII Holdings as of March 2025	11.13%	29.4%
DII Holdings (as of March 2025)	7.47%	34.46%
Book Value (₹)	79.1	231
PE Ratio	21.3	25.3

(Data as of 20 June 2025)

Financial Statements Analysis

Income Statement Comparison

Particulars	Wipro	Infosys
Total Income	92,972	1,66,590
Total Expenses	74,025	1,28,566
EBIT	18,947	38,024
Net Profit	13,192	26,750

(All values are in INR crores and the data is as of March 2025)

Balance Sheet Comparison

Particulars	Wipro	Infosys
Reserves & Surplus	80,269	93,745
Current Liabilities	28,625	42,850
Current Assets	77,777	97,099
Other Assets	37,059	30,135

(All values are in INR crores and the data is as of March 2025)

Cash Flow Statement Comparison

Particulars	Wipro	Infosys
Cash Flow from Operating Activities	16,942	35,694
Cash Flow from Investing Activities	-8,073	-1,946
Cash Flow from Financing Activities	-6,396	-24,161

(All values are in INR crores and the data is as of March 2025)

Key Performance Ratios (KPIs)

Particulars	Wipro	Infosys
Operating Profit Margin (%)	21.26	23.32
Net Profit Margin (%)	14.80	16.41
ROE (%)	15.94	27.87
ROCE (%)	19.03	35.85
Debt to Equity (x)	0.20	0.00

(Data as of March 2025)

Future Plans of Wipro

Future business plans of Wipro are listed below:

Restructuring of business model : In 2025, Wipro has revised its global business structure. Now the company has divided its services into four major units – technology services, consulting, engineering and business process services. Its aim is to provide more specialized and quick service to its clients.
Focus on innovation and research : A 60,000 square feet ‘Wipro Innovation Network’ center has been launched in Bengaluru, where research is being done on future technologies like AI, blockchain, quantum computing and cyber security. The company believes that quantum computing can be used commercially by the end of 2025.
International partnerships : Wipro has recently signed a £500 million deal with Phoenix Group (UK). Apart from this, a multi-year contract has been signed with US cyber security company Entrust to develop security solutions.
Emphasis on talent development : Wipro plans to hire more than 10,000 freshers by FY26. The company is adopting a ‘Train-Then-Hire’ model, where youth will first be taught skills and then hired. This will create a quality talent base.
Investment in healthcare sector : Wipro has announced an investment of $960 million in India in collaboration with GE Healthcare. The funds will be used to manufacture PET CT scanners and other advanced medical devices.

All these initiatives clearly show that Wipro wants to make itself a future-ready IT leader in the coming years on the basis of technology, innovation, talent and global deals.

Future plans of Infosys

Future business plans of Wipro are listed below:

Focus on global expansion : Infosys is constantly expanding its international footprint. In 2025, the company has announced new delivery centers and innovation hubs in markets like Canada, Europe and the US. Its aim is to connect more deeply with local clients and strengthen the ‘near-shore’ model.
Investment in AI and generative technology : Infosys launched its in-house generative AI platform Topaz in 2024, and in 2025 it is being used extensively in client projects. The company is focusing on making business processes smarter through AI, automation and machine learning.
Big deals and long-term projects : Recently Infosys has signed a 5-year deal worth €454 million with Danske Bank (Denmark). Apart from this, a mega AI and cloud-based project is also being worked on with Liberty Global, which will stabilize the company’s long-term revenues.
Human Capital Development : Infosys continues to maintain its fresher-friendly approach in 2025 as well. The company aims to train millions of young students through Infosys Springboard and Lex Platforms, so that they can be prepared for the digital age. Also, internal employees are also being trained in new technologies under the company’s “Reskill and Redeploy” program.
Healthtech and Sustainability Initiatives : Infosys is now also moving into the healthtech and green energy sector. The company aims to become carbon neutral by 2025 and has invested towards operating its data centers with green energy. Apart from this, there is also an emphasis on developing AI-supported solutions for healthcare clients.

Infosys’ strategy is clear: through global expansion, AI-focused innovation, long-term deals and skill development, the company is preparing itself for future challenges.

Who is Better: Wipro or Infosys?

Both Infosys and Wipro are moving in different directions in 2025. Infosys is focusing on AI and international client deals, while Wipro has adopted a new global business strategy and is focusing on developing new technologies through innovation centers. While Infosys is focusing on long-term solutions and skill development, Wipro is entering new sectors like healthcare and quantum technology. Who is better depends on how well these companies can execute their business plans in future. Furthermore, investors should conduct a thorough fundamental analysis and consider their risk profile before investing in any of these shares.

Conclusion

Both Wipro and Infosys have been strong players in the technology industry for a long time. While Infosys has managed to maintain stable growth through its client network and digital solutions, Wipro seems to be proactive in constantly changing and exploring new areas. Both these companies have adapted to the changing technology landscape in different ways. One is growing rapidly, while the other is reshaping its business model to prepare for the future. It is difficult to decide who will come out ahead due to which it would be wise to consult a financial advisor before investing.

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Frequently Asked Questions (FAQs)

Which company has higher revenue, Wipro or Infosys?
Both Wipro and Infosys have good earnings, but Infosys has had higher revenue in recent years.
Which company is better in AI technology?
Infosys has invested heavily in AI technology and their generative AI platform is much talked about.
Is Wipro investing in new sectors?
Yes, Wipro is active in new areas like healthcare and quantum technology.
Who has a larger global presence?
Infosys’ global network is considered to be larger than that of Wipro.
Which company focuses more on employee skill development?
Both companies are working on skill development, but Infosys’ programs are on a larger scale.

June 21, 2025

Voltas vs Blue Star: Which is Better?

With the increasing temperature during the summer season, everyone seems to be rushing to purchase a new air conditioner. While global warming is a serious concern, this growing demand for air conditioners also presents an opportunity for innovation and growth within the air conditioning industry. Companies specializing in cooling technologies are now in a position to develop more energy-efficient, eco-friendly solutions.

In this blog, we will compare Voltas Limited and Blue Star Limited, the top players in the Indian Air Conditioning industry.

Voltas Limited Overview

Voltas was incorporated in 1954 as a result of a collaboration between Tata Sons and Volkart Brothers. By the year 1960, it had established itself as a prominent player in the Indian refrigeration and air conditioning industry. The company has expanded its production capacity and ventured into Middle Eastern countries. It has a strong presence in Southeast Asia and Africa. The company has executed various large projects in the UAE, Qatar, Oman, and Saudi Arabia. The headquarters of the company are situated in Mumbai.

Business Model of Voltas Limited

There are major business segments of Voltas as listed below:

Cooling Products: The company offers cooling solutions for residential, commercial and industrial use. Their product portfolio includes air conditioners, water and air purifiers, and commercial freezers.
Electro and Mechanical Projects: Voltas has executed various electrical and plumbing projects in India and other countries. They have provided services to Burj Khalifa and Ferrari World.
Water Treatment: They also provide pumps and other services related to water treatment.

Blue Star Limited Overview

Blue Star was established in 1943 by Mohan T. Advani. Initially, it operated as a reconditioning company. Later, the company ventured into the manufacturing of ice candy machines and bottle coolers. In the late 2000s, the company expanded into electrical, plumbing and fire-fighting contracting businesses. In 2017, the company formed a wholly owned subsidiary called Blue Star International FZCO to manage global sales. The company has seven manufacturing plants across India. Their products, like room air conditioners, water purifiers, air purifiers, commercial refrigeration, etc, have become a household name. The company has its headquarters situated in Mumbai.

Business Model of Blue Star Limited

Blue Star has primarily three business segments:

Commercial Air Conditioning System: A significant portion of the company’s revenue comes from providing air conditioning solutions to large-scale projects. It offers central AC services, ducting systems and MEP (Mechanical, Electrical, Plumbing and Fire Fighting Solution) services for various buildings, factories etc.
Cooling Products: It also manufactures products such as inverter AC, split AC, Window AC, deep freezer, etc.
Electronic and Industrial Systems: Blue Star provides marketing, distribution, and servicing of imported professional electronics and industrial equipment through its wholly-owned subsidiary, Blue Star Engineering & Electronics Ltd.

Market Information

Particulars	Voltas Limited	Blue Star Limited
Current Market Price (INR)	1,268	1,604
Market Capitalisation (In Crores)	41,956	32,981
52 Week High (INR)	1,946	2,420
52 Week Low (INR)	1,135	1,521
Book Value (INR	197	149
P/E Ratio (x)	50.9	56.7

(As of 20 June 2025)

Performance Comparison

Return	Voltas Limited	Blue Star Limited
1 Month	2.09%	-0.47%
6 Months	-24.97%	-18.95%
1 Year	-14.74%	-3.94%
5 Years	130.60%	534.28%

(As of 20 June 2025)

Financial Statement Comparison

Income Statement Comparison

Particulars	Voltas Limited	Blue Star Limited
Total Revenue	15,737	12,042
Total Expenses	14,358	11,207
EBIT	1,378	835
Profit After Tax	960	592

(All values are in INR crores and the data is as of March 2025)

Balance Sheet Comparison

Particulars	Voltas Limited	Blue Star Limited
Reserves & Surplus	6,480	3,023
Current Liabilities	6,013	4,944
Current Assets	8,877	6,312
Other Assets	3,290	285

(All values are in INR crores and the data is as of March 2025)

Cash Flow Statement

Particulars	Voltas Limited	Blue Star Limited
Cash Flow from Operating Activities	-224	688
Cash Flow from Investing Activities	157	-463
Cash Flow from Financing Activities	-99	-162

(All values are in INR crores and the data is as of March 2025)

Key Performance Ratios

Particulars	Voltas Limited	Blue Star Limited
Operating Profit Margin (%)	8.94	6.87
Net Profit Margin (%)	6.23	4.95
ROE (%)	12.91	19.28
ROCE (%)	19.31	24.82
Debt to Equity (x)	0.13	0.07

Future Plan of Voltas Limited

To expand its business operations, the company is planning to expand its product portfolio by providing efficient and eco-friendly air cooling systems. The company has recently launched the appliances under the Voltas Beko brand name to accelerate its growth in the home appliance segment. The company is also planning to expand its operations in the Middle East and Africa.

Future Plan of Blue Star Limited

To become a leader in air conditioning and the commercial segment, the company is spending a huge amount on R&D to introduce innovative products. The company is planning to invest a huge sum of money to establish manufacturing units in Himachal Pradesh and Mumbai. The company is expected to increase its market share to 14.25% from 13.75 %. The company is also focusing on strengthening its distribution and after-sales services.

Who is Better: Voltas Limited or Blue Star Limited?

Both companies have their strengths and weaknesses. Voltas is supported by the Tata Group brand and has a competitive edge in residential AC solutions. It is considered a top player in terms of volume. Voltas has also provided their cooling equipment in Burj Khalifa, and other top commercial and residential buildings. On the other hand, Blue Star offers a more diversified product range in the commercial segment, and it has a significant presence in the commercial sector. It provides solutions like HVAC, MEP, etc. It is difficult to say which one is better as it depends on the company’s fundamentals, future financial performance and investor’s risk profile. You are required to analyse both companies’ financial statements thoroughly before making any investment decision or consult a financial advisor to make an informed investment decision.

Conclusion

On a concluding note, both Voltas and Blue Star are prominent players in the Indian air conditioning industry. Voltas has partnered with Beko to offer refrigerators, washing machines and other household items, thereby strengthening their market position. On the other hand, Blue Star is primarily focusing on providing innovative cooling solutions. Both companies are aggressively expanding their business operations by providing a wide range of cooling solutions. However, before investing in any of these companies, it is advisable to consult your investment advisor and consider your risk profile.

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5	Tata Motors Vs Ashok Leyland: Which is Better?

Frequently Asked Questions (FAQs)

Which is the older company, Blue Star or Voltas?
Blue Star is the older company as it was founded in 1943, whereas Voltas was established in 1954.
Which companies are major competitors for both Voltas and Blue Star?
Both companies face intense competition from various companies such as LG, Daikin, Hitachi, Samsung, Godrej, etc.
Which of Blue Star and Voltas is the bigger company?
Based on market capitalisation, Voltas is the bigger company.
Is Voltas a part of the Tata Group?
Yes, Voltas Limited is a part of the Tata Group, established due to the collaboration between Tata Sons and Volkart Brothers.
Which company has the higher FII holding among Voltas Limited and Blue Star Limited?
As of 31st March 2025, Voltas Limited has a higher FII holding of 21.96% compared to 16.94% in Blue Star Limited.

June 20, 2025

Government Bonds India – Types, Advantages, and Disadvantages of Government Bonds

For conservative investors looking for stable returns, investing in government bonds can be a viable investment option as they offer predictable returns. These financial instruments are issued by the Central and State Governments and they provide a secure way to invest and contribute toward the nation’s development.

In this blog, we will discuss the various types of Government bonds in India and discuss its benefits and drawbacks. Moreover, we will highlight key factors an investor should consider before purchasing them.

Types of Government Bonds in India

The Indian government offers a diverse range of bonds tailored to meet distinct investment objectives, such as:

1. Fixed-Rate Bonds

These bonds guarantee a set interest rate for the duration of the bond’s life. For example, a 7% GOI 2026 bond will continue to pay 7% annually until maturity. Such bonds are beneficial for conservative investors focusing on earning a steady income stream.

2. Floating Rate Bonds (FRBs)

FRBs offer variable interest payments as its interest rate is reset according to a specific benchmark at specified time intervals, usually every six months. These types of bonds are beneficial in situations in which the investors are anticipating an interest rate rise.

3. Sovereign Gold Bonds (SGBs)

SGBs offer investors an opportunity to invest in gold without possessing the physical asset itself. Additionally, SGBs give a 2.5% interest per year and are linked to market gold prices. They have a maturity period of 8 years with an exit option available after 5 years. As of 2025, the scheme has been stopped but existing bonds can still be bought in the secondary markets.

4. Inflation-Indexed Bonds (IIBs)

These bonds are structured in a way where they protect the investment from inflation by adjusting the principal amount and interest payments, here inflation is measured by the Consumer Price Index (CPI). They assist investors by offering returns that are above inflation in order to sustain purchasing power.

5. 7.75% GOI Savings Bonds

These Bonds were introduced in 2018, they come with a 7.75% annual interest rate and a maturity period of 7 years. They are ideal for a medium-term investment strategy.

6. Treasury Bills (T-Bills)

Treasury Bills are for short-term periods of 91,182, or 364 days. They are bought at a discount and redeemed at their full value. Designed for investors with a short-term focus, Treasury Bills are often seen as a reliable investment option.

7. State Development Loans (SDLs)

Issued by State Governments, SDLs are very similar to G-Secs, but these have a bit higher interest rate because of additional risk. They are borrowed to fund the state’s fiscal deficit and utilized to finance state level projects and other expenditures. Recent innovations like the introduction of bond forwards are expected to increase the demand for SDLs and thus lower the borrowing costs for Indian states.

8. Green Bonds

These bonds are usually issued to finance projects that are environmentally eco-friendly. The Government of India is paying more attention to green bonds or other assets that fund environmentally friendly projects that help in mitigation of climate change. For example, there are plans to issue green bonds worth ₹25,000 crore in the financial year 2025.

9. Masala Bonds

Masala bonds are those which are issued outside India and denominated in Indian Rupees. Hence Indian entities can raise capital from foreign investors without currency risk. The term Masala was initiated by the International Finance Corporation and these bonds have been issued to fund infrastructure development.

Factors to Consider Before Investing in Government Bonds

Investing in government bonds might give the impression that it is relatively simple, however, making the correct investment requires some understanding of the following elements. Before investing your money in govt bonds, consider the following questions:

1. Investment Horizon

The duration of your investment is extremely important. In India, government bonds are available in different tenures, some are short term (like Treasury Bills) while others, including the 7.75% GOI Savings Bonds, can take 7 years or more. If your goals are short-term (like purchasing a laptop or paying for a class), then short-duration bonds will be more useful. For long-term goals (like financing a college education, or saving for a business), opt for long-term duration bonds.

2. Interest Rate Environment

As is the case with all financial instruments, bonds are also affected by interest rate changes. If the economy is going through a period of rising interest rates, it means that new bonds pay a higher coupon rate. The older bonds with lower rates will become less popular, causing their prices to dip in the secondary market. On the contrary, when interest rates drop, older bonds become more valuable. If you are expecting a rise in interest rates, avoid long-term fixed-rate bonds. Instead, opt for Floating Rate Bonds or short-term instruments.

3. Inflation

Returns are affected by the rising inflation. Suppose you have invested in a fixed-rate bond with an interest return of 6% per annum while inflation is at 7%, your real return will be negative 1%. In the long term, this can adversely affect your financial position.

Inflation-Indexed Bonds (IIBs) counteract this problem. They are designed to adjust the income yield to inflation so the purchasing power is maintained.

4. Liquidity

Not all government bonds have the same ease of sale. Some bonds ( for example, G-Secs) can be sold in the secondary market, while others (for example, 7.75% GOI Bonds) restrict the bond holder until maturity or payment of penalties for early surrender.

Should you find yourself in need of accessing the funds prior to the bonds’ set maturity date, make sure to select bonds with more favorable secondary market liquidity or consider bond mutual funds and ETFs which have more straightforward exit strategies.

5. Tax Consequences

Like all other gains realized on financial assets, the interest payment you receive from government bonds will be added to your taxable income and taxed accordingly. If your income falls in the higher income tax slab then your net earnings may be greatly reduced.

Advantages and Disadvantages of Government Bonds in India

Like any other investment, government bonds in India have their own set of advantages and disadvantages. Let’s dig deeper into each one:

Advantages

1. Safety and Security: Government bonds are one of the safest investment options. They carry full government guarantee, which means the Reserve Bank of India (RBI), and the Central/State Government back these, thus significantly reducing the chances of default.

2. Predictable Returns: Fixed-rate bonds make certain returns readily available over the bonds period of maturity. This means that you will have a clear understanding on how much you are earning on an annual basis, which aids in making better financial decisions.

Example: Market fluctuations have no impact on a person who invests ₹1 lakh on a 7% fixed rate GOI bond, as the amount will remain the same at ₹7,000 every year till maturity.

3. Portfolio Diversification: Including government bonds in an investment portfolio diversifies the risk. Equities and mutual funds do yield stronger returns, but their unpredictability is off the charts. Consequently, bonds do help in lowering the overall portfolio risk along with providing consistent returns.

4. Accessible to Retail Investors: In the past, bonds issued by the government were primarily targeted at institutional investors. Now, through direct platforms such as RBI Retail Direct, individuals can easily purchase and sell bonds online without the use of brokers. The low minimum investment makes it more attractive starting at ₹1,000.

Investors are able to gain exposure to government bonds through mutual funds or ETFs that exclusively invest in G-Secs.

5. Support for Nation Building: Purchasing government bonds serves as a ticket for indirect participation in public projects such as constructions, educational institutions, and health care systems. Hence, it becomes an appropriate investment which comes with a sense of responsibility.

Disadvantages

1. Lower Returns: If you want the security of government bonds, you will receive less of a reward in the form of returns when compared to corporate bonds or equities. Equity mutual fund investments may deliver returns of 12% annually while governmental bonds yield approximately 6% to 7%

2. Interest Rate Risk: When interest rates change, bond prices fluctuate. This means that long term bonds are much riskier due to this capital loss if you are planning to sell before the bond matures.

3. Inflation Risk: Certain bonds don’t change their value based on inflation. As we know, inflation is a detrimental result of an economy overheating and down the road, inflation may drastically diminish the value and purchasing power of money in terms of goods and services.

4. Liquidity Constraint: Unlike other bonds, a subset of government bonds cannot be easily traded on secondary markets and certain bonds cannot even be sold due to penalties. Bonds that are tradeable may have low liquidity in the secondary market which may lead to delays, price drops, or even diminished demand completely.

5. Interest Income Taxation: Most government bonds with interest attached to them suffer the consequence of being fully taxable. This is particularly true if you are in a higher tax bracket, as it lowers the effective return you receive.

Conclusion

The government bonds in India are reliable investment options as they guarantee predictable returns making them suitable for more conservative investors. It is important to know the different types of bonds, their characteristics, and the risks that come with them in order to invest appropriately and achieve your financial objectives. However, it is advised to consult a financial advisor before investing.

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Frequently Asked Questions (FAQs)

What is the minimum amount one can invest in government bonds in India?
The minimum investment amount differs from one type of bond to another.
Are government bonds subject to tax?
Interest earned from government bonds comes under tax liabilities, but some bonds like the Sovereign Gold Bonds give tax relief on capital gains if claimed after a certain period of time.
In what ways am I able to procure government bonds in India?
Bonds are available for purchase through the RBI Retail Direct, NSE, BSE, or through licensed banking and financial institutions.
Are Non-Resident Indians (NRIs) permitted to invest in bonds issued by the government of India?
NRIs can invest in Government bonds but they must comply with certain rules and eligibility parameters defined by the Reserve bank of India.
What is the effect of selling a government bond before its maturity date?
Selling a bond prior to its maturity date in the secondary market can lead to profits or losses depending on the market price in the secondary market.

June 20, 2025

Fake Payment Screenshot Scam: How to Identify and Avoid It

In today’s world, everyone is in a hurry and digital payment mode plays an important role in it by helping you save time. However, with the rise of online payment modes, the number of frauds has also increased, which has caused various individuals to suffer losses.

In this blog, we will explain one such online payment fraud, which is known as “Fake Payment Screenshot”, and will also explain to you how to avoid such a fake screenshot.

What is a Fake Payment Screenshot?

A fake payment screenshot is an image designed by fraudsters to show that a financial transaction has been completed successfully. However, in reality, no money is transferred or paid. The fraudsters make an individual or business believe that the payment has been made successfully, which eventually leads to a financial loss for the investor. Nowadays, one can easily create such images using online tools.

Characteristics of a Fake Payment Screenshot

The key characteristics of a fake payment screenshot are as follows:

Fake Information: In a fake payment screenshot, the details like transaction ID, amount, date, and time, etc are not authentic.
No Real Time Confirmation: There is no real-time confirmation, i.e. the receiver does not receive any real-time confirmation from the bank account.
No Track Record: The receiver has no track record of receiving any payments, as there is no such transaction.

How Fake Payment Screenshots Are Created and Misused

This scam usually plays out very smoothly. A person selects the item or service and casually says they’ll pay via UPI. Everything feels normal.
Instead of actually sending money, they quickly generate a fake payment confirmation using an editing tool or a spoof app. Within seconds, they show you a convincing “payment successful” screen.
They don’t stop there. The scammer often rushes the moment—asking you to hand over the product, saying they’re in a hurry, or assuring you the money will reflect shortly.
Trusting what you see on their phone, you complete the transaction. Only later, when you open your own bank or UPI app, do you realize the truth: no payment ever came through.

How to Detect a Fake UPI Payment in Seconds?

Many people fall for fake UPI payments because they trust what they see on the sender’s phone. But if you take just a few seconds to check properly, you can avoid losing money.

Screenshots Cannot Be Trusted: Screenshots are just images that do not confirm payment. Scammers do this all the time, so if the payment doesn’t land in your account it never happened, and no amount of screenshot trickery changes that.
Look at Your Own Payment App: Unless the payment is real, no creation of the sender’s imagination can substitute a screen of your app that shows an updated balance or new transaction. Payments are processed immediately, so if the app is not updated then no payment was sent.
Know the UTR: UTR in banking references every transaction, and every legitimate UPI payment has a UTR. Fake payment notifications are missing numbers, or have UTRs that do not match the number you have.
Verify the UPI ID and the Associated Name: Before you accept or confirm any payment, however, be sure of the name in the app. Scammers may use UPI IDs that look the same and may be misleading. If the name is even marginally different, don’t proceed and confirm.
Beware of False Security in Alert Sounds and SMS Notifications: The announcements and SMS messages are not reliable. They may come through late and are even faked sometimes. The only evidence of a payment that you should believe is the one in your bank or UPI app. Everything else can’t be trusted.

Common Fake Payment Methods Used in Online Scams

Online payment scams often rely on visual tricks and pressure tactics rather than real money transfers. Scammers know most people glance at a screen instead of verifying the payment in their own app. That moment of trust is where fraud happens.

Altered Payment Proofs: Instead of making a payment, fraudsters frequently show doctored transaction receipts. A real screenshot is modified to change numbers, dates, or reference IDs. These fake proofs are convincing, especially when sellers are busy and unable to inspect every detail closely.
Fake Payment Apps and Spoofed Screens: Some scammers use prank or spoof payment apps that imitate real UPI platforms. These apps display a fake “payment successful” screen for services like PhonePe, Paytm, or Google Pay. The message appears genuine on the scammer’s phone, but no funds are actually transferred. Only checking your own bank or UPI app confirms the truth.
Misleading UPI IDs and False Status Messages: Another common trick is sharing look-alike UPI IDs that appear legitimate but belong to a different account. In some cases, scammers show a fake transfer screen marked as “processing” or “pending,” claiming the money will reflect shortly.
Fake Transaction Records: Using tampered apps, fraudsters may display entirely fabricated payment histories. These screens are meant to build trust by showing multiple past transactions. In reality, none of these entries exist in the official banking system.
Pressure and Psychological Manipulation: Many scams succeed due to human behavior, not technology. Scammers act impatient, create urgency, and insist the payment has already been sent. In crowded or fast-moving environments, sellers may hand over goods without confirming the payment themselves.

How Do Fraudsters Use a Fake Payment Screenshot?

The most common scenario where fake screenshots are used by a fraudster is as follows:

Offline Merchants: In this busy world, sometimes shopkeepers do not focus on double-checking whether the payments are received or not. Therefore, they are targeted by such fraudsters.
Online Businesses: Various individuals are running their businesses on social media platforms like Instagram, Facebook, etc., and they provide their services and products based on the screenshot provided by the customer.
Cash Transaction: In this scenario, the fraudster approaches an individual and asks them for cash. Once the victim gives them cash, they share the fake screenshot, indicating they have transferred the amount, causing loss to the victim.
Fake Transfer: Under this, the fraudster calls an individual and tells them that they had mistakenly transferred the money, sends them the screenshot and asks them to refund the amount.

How to Avoid Fake Payment Screenshot Scam?

There are various methods through which one can avoid losses due to fake payment screenshots; a few of these methods are mentioned below:

Verification of Transaction: You must check the transaction ID in your bank statement or UPI application to confirm the payment. As each UPI ID is different, if it does not match your bank statement or is not reflected in your bank statement, then the payment is not made by the concerned person.
Timing: Every transaction ID has a unique time stamp mentioned on it. So, whenever you receive any payment screenshot, you must first check the time stamp as it is possible that it may not be recent as fraudsters generally make mistakes while fabricating fake screenshots.
Authentic Platform: The platform you use for payments must be secure and authentic. It should have advanced security features to protect you against fake payment screenshots scams.

Real Examples of Fake UPI Payment Scams in India (and How to Avoid Them)

UPI payments have made money transfers fast and easy, but scammers have found new ways to trick people with fake payment proofs. Here are some real-life examples of fake UPI payment scams that happened across India – and the lessons you can learn from them.

1. Student Lost His Laptop and Semester Fee

A college student needed money to pay his semester fee, so he decided to sell his laptop online.
The buyer sent a real-looking payment screenshot and said the transfer was done. Believing it, the student handed over his laptop. Later, he checked his account and realized the money was never received. By then, the buyer had disappeared.

What Went Wrong: He trusted the screenshot instead of confirming the payment in his bank or UPI app.

How to Avoid It: Never rely on screenshots or messages. Always open your own app and check whether the amount has actually been credited before giving away your item.

2. Electronics Shop Lost an iPhone 16 to Fake Paytm Payment

In Sanand, Gujarat, two fraudsters used a fake Paytm app to show a fake transaction success screen.
They ordered an iPhone 16 from Moje Motabhai Electronic Showroom, sent a fake payment receipt on WhatsApp, and walked away with the phone. The store later found that no payment was made. Thankfully, police caught the scammers within hours — but not every victim is so lucky.

What Went Wrong: The staff believed a WhatsApp screenshot without verifying the transaction.

How to Avoid It: Before giving any product, log in to your business UPI or payment gateway account and confirm the payment is visible there.

3. Petrol Pump Staff Fooled for Urgent Cash

In Indore, Madhya Pradesh, two men visited several petrol pumps saying they urgently needed cash for a medical emergency. They offered to pay through PhonePe, showed fake payment screenshots, and took real cash from the staff. The scam continued until they were finally caught.

What Went Wrong: The staff fell for the emotional story and accepted a screenshot as proof.

How to Avoid It: No matter the situation, never hand over cash unless the payment reflects in your account. Always verify before you trust.

Conclusion

On a concluding note, in the digital world where online payments are the new normal, fraudsters use every possible technique to deceive people. Therefore, you need to be vigilant and use approved platforms for making and receiving payments. You can verify the screenshots’ transaction ID with your bank account or check the time stamp. You have to keep yourself updated about the methods used by such fraudsters; only then can you prevent yourself from any fake payments scams.

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4	Explainer on UPI Scams: Latest Scams, Economic Data, Government Actions, and Prevention Tactics
5	Financial Scams in India: Types, Resolution, and Awareness

Frequently Asked Questions (FAQs)

How does a fraudster make a fake screenshot?
A fraudster generally uses photo editing tools to create a fake payment screenshot, which generally replicates the screenshots of the original payment.
How are Fake Payment Screenshots Made?
Fraudsters use editing or fake UPI apps to create screenshots that look real. Making or using them is illegal and can lead to jail.
How to Check if a Screenshot is Real or Fake?
Always check your own UPI or bank app. If the amount isn’t shown there — the payment didn’t happen. Fake screenshots often have wrong fonts or UTR numbers.
Why Are Fake Payment Scams Increasing?
Because editing apps are easy to use, and many sellers trust screenshots without checking their accounts.
How to Prevent Fake UPI Scams?
Confirm every payment in your app.Don’t rush – take 30 seconds to verify.Never trust screenshots or messages.
What to Do If You’re Scammed?
Report to your bank and cybercrime.gov.in immediately.Keep screenshots, chats, and other evidence ready for police.
Can You Trust UPI Soundboxes?
No. Soundboxes can be tricked by fake apps.Always check the transaction in your app before handing over goods.
How to verify the payment screenshots?
The payment screenshot can be verified only by checking the time stamp on it, and double-checking the same with your bank or payment application.
Is there any tool which can identify the payment screenshot?
No application or website can detect the authenticity of any payment screenshot.
Can I take any legal action against someone using a fake payment screenshot?
Yes, if you find someone who is using a fake screenshot, then you can inform the concerned authorities about the same as it is a punishable offence.
What is the most reliable and instant way to verify the UPI payments?
The most reliable source to verify the payment is to check your bank account or official payment application.

June 20, 2025

10 Best Consumption Stocks in India

With a population exceeding 140 crores and a steadily rising middle class, India is one of the fastest-growing consumer markets in the world. Higher disposable incomes, urbanization, and changing lifestyles are fueling demand across sectors like FMCG, retail, and consumer durables. As a result, companies in the consumption space are becoming key drivers of the country’s economic growth.

In this blog, we will give you an overview of the top consumption companies in India along with the benefits of investing in them and the factors which one should consider before investing in any consumption stocks.

What are Consumption Stocks?

Consumption stocks refer to those companies that primarily engage in the manufacturing and distribution of goods and services that households consume on a daily basis. Some companies focus on producing everyday essentials, while others specialize in crafting luxury items. These companies are directly linked to the country’s growth.

Top 10 Consumption Stocks in India

Top 10 consumption stocks in India based on market capitalization are mentioned below:

Titan Limited
Polycab India Limited
Hindustan Unilever Limited
ITC Limited
Nestle India Limited
Britannia Industries Limited
Dabur India Limited
Marico Limited
Godrej Consumer Products Limited
Colgate Palmolive India Limited

Read Also: Top 10 Best Summer Stocks in India

Market Information of Top 10 Consumption Stocks

Company	Current Market Price (in ₹)	Market Capitalisation (in ₹ crores)	52-Week High (in ₹)	52-Week Low (in ₹)
Hindustan Unilever Limited	2,390	5,61,766	2,660	2,044
ITC Limited	325	4,07,137	472	321
Titan Company Limited	4,019	3,56,696	4,312	2,925
Nestle India Limited	1,306	2,51,956	1,333	1,055
Britannia Industries Limited	5,940	1,43,141	6,337	4,506
Godrej Consumer Products Limited	1,246	1,27,465	1,309	980
Marico Limited	752	97,649	780	578
Polycab India Limited	6,999	1,05,397	7,948	4,555
Dabur India Limited	525	93,093	577	420
Colgate Palmolive (India) Limited	2,180	59,300	2,975	2,032

(Data as of 22 January 2026)

Best Consumption Stocks in India – An Overview

A brief overview of the best consumption stocks in India is given below:

1. Hindustan Unilever Limited

The company was founded in the late 1980s by the Lever Brothers. They launched their first product in India as a sunlight soap. The first company launched by Unilever in India was Hindustan Vanaspati Manufacturing Company in 1931. Later in 2007, the company changed its name to Hindustan Unilever Limited to match the name of its parent company. The company’s headquarters are in Mumbai.

Read Also: Hindustan Unilever Case Study

2. ITC Limited

ITC was originally known as Imperial Tobacco Company of India. It was founded in 1910. The company changed its name to Indian Tobacco Company in 1970, and later in 1974, it changed it to ITC Limited. The company is operating in various sectors, including FMCG, hospitality, packaging, etc. The company’s headquarters are located in Kolkata.

Read Also: ITC Case Study

3. Titan Company Limited

Titan Limited was founded in 1984 as a part of the Tata Group. It was incorporated as a result of a joint venture between the Tata Group and the Tamil Nadu Industrial Development Corporation (TIDCO). The company offers various products like jewellery, watches, eyewear, fragrance, etc. The company has performed exceptionally well in the past and is carrying the legacy of the Tata Group. The company’s headquarters are situated in Bengaluru.

Read Also: Titan Case Study

4. Nestle India Limited

Nestle India Ltd, the world’s biggest food and beverage company, has a long and illustrious history that began in the 1860s. The narrative begins with the formation of the Anglo-Swiss Condensed Milk Company in 1866, which produced ground-breaking milk products. Simultaneously, a German pharmacist, Henri Nestle, invented “Farine Lactee” to lower the newborn death rates. These businesses were successful because of their creative milk products, which catered to urban consumers with shifting lifestyles. The two businesses merged in 1905 to form Nestle. The headquarters of the company are situated in Gurgaon.

Read Also: Nestle India Case Study

5. Britannia Industries Limited

Britannia Industries LtdThe company was founded in 1892 by British entrepreneurs and was initially known as Britannia Biscuit Company Limited. Later in 1979, its name was changed to Britannia Industries Limited. Bombay Burmah Trading Corporation, which is a part of the Wadia Group, owns a majority stake in this company. In 1986, the company launched the Good Day biscuit brand and became a household name. It was the first company to introduce sliced, wrapped breads in India. The company has its headquarters situated in Kolkata.

6. Godrej Consumer Products Limited

Godrej Consumer Products Ltd The company was established in 2001 as a result of a demerger from Godrej Soaps Limited. Being a part of the renowned Godrej Group and due to their popular products like Godrej Soap, hair colours like Godrej Expert, etc., it soon became a household name in India. The company has aggressively expanded globally and has a strong presence in Asian and African countries. The company’s headquarters are situated in Mumbai.

7. Marico Limited

The company was founded in 1988 and started manufacturing hair oil and edible oil named Parachute and Saffola. Initially, the company was named Marico Foods Limited, and later in 1989, it changed its name to Marico Industries Limited. It has established a manufacturing plant in Kerala to produce coconut oil. To expand its operations, the company raised capital through an IPO in 1996 and became a publicly listed company. The company’s headquarters are situated in Mumbai.

Know the Returns:

8. Polycab India Limited

Polycab India Ltd was founded in 1964 as Sind Electric Store, a dealer of electrical products. Later, in 1996, it was incorporated as Polycab Wires Private Limited. Today, the company has a market share of around 25% in the Indian electrical market and offers products like fans, LED lighting, switches, switchgear, solar products, etc. It has its headquarters in Mumbai.

1Y Return (%)	3Y Return (%)	5Y Return (%)
-18.59%	175.64%	660.96%

(Data as of 22 January 2026)

Read Also: Polycab Case Study

9. Dabur India Limited

Dabur India Limited was founded in 1884 by Dr. S.K. Burman. The company established its first production unit in Garhia. The company launched the digestive tablet Hajmola, which became very popular among Indian households. Later in 1997, the company entered into the fruit juice business and in 2003, the company demerged its pharma business into a separate entity. The product portfolio consists of health supplements, digestives, oral hygiene, skin care products, etc. The company’s headquarters are situated in Ghaziabad.

Read Also: Dabur Case Study

10.Colgate Palmolive (India) Limited

Colgate Palmolive Limited was founded as a unit of the international FMCG brand. In 1954, the company opened its first manufacturing unit in Mumbai and launched its first product called Colgate. Later in 1970, the company expanded its product portfolio and launched various other products such as oral care and home care items. It has expanded its distribution network over time. The headquarters of the company is situated in Mumbai.

Read Also: Colgate Palmolive India Case Study

Key Performance Indicators (KPIs)

Company	Operating Profit Margin (%)	Net Profit Margin (%)	ROE (%)	ROCE (%)	Debt to Equity
Hindustan Unilever Limited	22.99	16.91	21.55	22.91	0
ITC Limited	35.66	46.38	49.61	36.41	0
Titan Company Limited	9.07	5.51	28.70	36.93	0.88
Nestle India Limited	21.24	15.99	79.98	57.17	0.19
Britannia Industries Limited	17.28	12.19	50.01	59.40	0.28
Godrej Consumer Products Limited	21.47	12.89	15.43	24.21	0.32
Marico Limited	20.02	15.30	40.99	36.90	0.10
Polycab India Limited	12.80	9.12	20.55	27.96	0.01
Dabur India Limited	19.26	13.84	16.36	20.31	0.07
Colgate Palmolive (India) Limited	32.02	23.78	86.32	111.06	0

(Data as of March 2025)

Benefits of Investing in Consumption Stocks

There are significant benefits of investing in consumption stocks, a few of which are as follows:

Stable Demand: The products manufactured by consumption companies generally have a stable demand even during economic slowdowns.
Growth Potential: The company, which primarily operates in the consumption sector, tends to have a strong growth potential due to rising income levels.
Diversification: One can easily diversify their portfolio and reduce the risk in it.
Low Debts: Consumer companies generally have a strong balance sheet and low debt. They also tend to have stable cash flows.

Factors to be Considered before Investing in Consumption Stocks

The key factors which one should consider before investing in consumption stocks are as follows:

Market Share: One should need to consider the market share of the company; companies which have higher market capitalisation tend to have stable growth.
Financial Performance: The companies with higher profit margins and net profit, and low debt, are preferred by the investors.
Corporate Governance: The company with strong corporate governance policies and capable management team are preferred by investors.
Dividends: Consumption stocks generally declare dividends regularly, which are suitable for investors who want passive income.

Read Also: 10 Best Copper Stocks in India

Future of Consumption Stocks

The Indian consumption sector has a very bright future, which is primarily driven by demographic diversification, urbanisation, etc. With the rise of disposable income, the demand for consumer goods will increase. Also, with the rise of e-commerce platforms and digital transformation, the demand for consumption sector products will increase. However, with the increase in competition, the profit margins of the company will be affected. It is also expected that India’s consumer market will grow by 46% by 2030.

Conclusion

On a concluding note, the Indian consumption industry has performed exceptionally well in the recent past because of increasing consumer income, and the consumption is expected to rise further in future. However, there are certain factors that one should keep in mind before investing in consumption stocks. The factors include financial performance, market share, profit ratio, etc. Therefore, it is advisable to consider your risk profile and consult your investment advisor before making any investment decision.

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

Frequently Asked Questions (FAQs)

How can I invest in consumption stocks?
To invest in consumption stocks, one needs to have a demat and a trading account. Now with Pocketful, you can easily open a demat account online without paying any fees.
Which stocks are the top consumption stocks in India?
The top consumption stocks in India are Titan Limited, Polycab India Limited, Dabur India Limited, Marico Limited, Britannia Industries Limited, Hindustan Unilever Limited, etc.
What are the major factors which can affect the performance of consumption stocks?
The major factors that can affect the performance of consumption stocks are economic conditions, demand, financial performance, etc.
Are consumption stocks considered a defensive investing option?
Yes, consumption stocks are considered defensive stocks because the demand for such products is not affected by economic downturns.
Do consumption stocks pay dividends?
Yes, consumption stocks tend to declare high dividends regularly, which can be a suitable option for investors seeking passive income.

June 20, 2025

Types of Futures and Futures Traders

With the rise in intraday trading, the volumes of derivative instruments such as futures and options have increased considerably. You also must have heard about futures trading and may also want to start trading it. But if you are not aware of the technical terms associated with futures contracts, then it can cause huge losses.

In this blog, we will explain futures contracts, along with the types of contracts and types of traders.

Meaning of Future Contracts

A futures derivative contract is a financial instrument traded on the stock market whose price is derived from an underlying asset such as commodities, stocks, indices, interest rates, or currencies. In simple terms, it is a standardized contract between two parties to buy or sell a specified quantity of an underlying asset at a predetermined price on a specific date. It is traded on an exchange and thus is often used by traders to speculate on the future price fluctuations.

Features of a Future Contract

The key features of a futures contract are as follows:

Exchange Traded: Future contracts are traded on stock exchanges. One can only buy or sell a futures contract only through a regulated stock exchange.
Standard Contract: Futures contracts are standardised in terms of quantity, quality and settlement dates.
Obligations: In futures contracts, both parties, as buyers and sellers, are required to fulfil their obligations on expiry.

Types of Futures

There are four types of futures contracts available in India, details of which are mentioned below:

1. Commodity Futures

This type of futures contract has different types of commodities as its underlying assets such as agri commodities like cotton, soybeans, etc., energy commodities like crude oil, natural gas, etc. and metals such as gold, silver, etc.

Example of Commodity Futures: Let’s say an investor is bullish on the prices of gold and is expecting them to rise in the next month. Therefore, to earn profit from this price movement, he purchases a gold futures contract price which will increase in value if the value of the physical gold increases

2. Currency Futures

In currency futures, the parties agree to exchange a fixed quantity of two currencies on a futures date. Therefore, these contracts are based on currency exchange rates. These contracts help an individual eliminate the exchange rate risk arising from international trades. The parties involved in these contracts are usually hedgers and don’t close their contracts before the expiration date.

Example: Mr. A is an importer. He imports goods from the US and has to make payments in USD after a few days and the current USDINR rate is 83. He is expecting that the USDINR will rise shortly, which will increase expenses for Mr. A due to depreciation of INR. He decides to buy a futures contract and purchase the USDINR futures contract at 83. At the end of one month, the price of USDINR rises to 84; in this case, he made a profit of 1 INR, and if the market lot of USDINR futures contract is 1000, he made a total profit of INR 1000.

3. Interest Rate Futures

It is a type of future contract which is used by a trader to hedge their position against the risk of a change in interest rate. These contracts are generally used by bond market traders. The underlying assets of these futures contracts are bonds, treasury bills, government bonds, money market securities, etc. The prices of interest rate futures contracts move inversely to the direction of interest rates.

Example of Interest Rate Future Contract: Mr. A has entered into a long futures contract of a bond for 102 INR per contract, having a lot size of 2000. He is expecting that the interest rates will fall shortly, and with this fall, the price of the contract rises to 104 per contract. This allows him to earn a profit of 2 INR per contract, and therefore the total profit is 4000 INR.

4. Equity Futures:

The underlying asset of an equity futures contract can be a stock or an index. Investors try to determine the future rise and fall in price of the underlying asset. Based on this, they take a long or short position in the futures contract of the same underlying. These contracts are also traded by market participants who have a significant stake in the underlying asset, and wish to protect downside risks.

Example: Mr A expects that the price of Reliance Industries will rise shortly, and based on this assumption, he decided to buy a futures contract of Reliance Industries. At the time of entering the contract, the price of Reliance was around ₹1700 per share, and on the date of expiry, the price rose to ₹1750 per share. Therefore, he made a profit of ₹50 per share and its lot size is 500; hence the total profit is 500 * 50 = ₹25,000.

Types of Futures Traders

The two types of futures traders are:

1. Hedgers

A hedger is a trader who uses derivatives instruments to reduce or eliminate the risk of unfavourable price movement in an existing portfolio of assets. It is like buying portfolio insurance to reduce the financial risks.

Example: Suppose you hold 500 shares of Reliance Industries Limited, and you are concerned about the decline in Reliance Industries’ share price. To protect your portfolio from such risk, you can sell the futures contract of Reliance and hedge your position. In this case, if the spot price of Reliance Industries falls, your futures contract will gain and offset the losses incurred in the equity portfolio.

2. Speculators:

Generally, short-term traders fall under this category as they often predict the prices of the underlying securities, based on which they take long and short positions in futures contracts. Unlike hedgers, they do not have direct exposure to the underlying asset and their primary objective is to profit from short-term price fluctuations.

Example: A trader may not have shares of Reliance Industries shares but believes that the price will rise shortly. Based on this assumption, he buys a futures contract and realizes a profit as the share price rises.

What Should You Do: Hedging or Speculating?

Whether to hedge or speculate using a futures contract depends on the investor’s preference and objective. If you own an asset or are planning to invest in an asset, then your primary objective should be to protect your portfolio against unexpected price movement, i.e. you should hedge.

On the other hand, if you want to take advantage of frequent price movement of the underlying asset, then you can speculate using a future contract. However, trading in futures contracts can be risky and result in considerable losses; therefore it is suggested only for those willing to take high risks.

Conclusion

On a concluding note, one can earn profit by trading in futures through speculation, but it carries high risk. Futures can also be used to minimise or eliminate the risk of adverse price movements through hedging. As it is a leveraged product, it needs to be used only after considering your risk profile. It is always advisable to consult a financial advisor before making any decision.

S.NO.	Check Out These Interesting Posts You Might Enjoy!
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3	What is Quantitative Trading?
4	Arbitrage Trading in India – How Does it Work and Strategies
5	What is Options Trading?

Frequently Asked Questions (FAQs)

In which asset classes can we trade in futures contracts?
We can execute futures trades in commodities, currency, equity and interest rate as an asset class.
Who are the market participants of Future Market?
The futures market generally involves two types of traders: hedgers and speculators.
Do I need to hold the futures contract till expiry?
No, you are not required to hold futures contact till expiry as you can exit your position any time before expiry.
Why is futures trading risky?
Future trading is a leveraged instrument, i.e. it generally requires a small margin to start trading, which makes futures trading very risky.
How are futures contracts settled in India?
In India, futures contracts are settled either in cash or physical settlement.

June 19, 2025

Blog

Company Overview: HCL Technologies

Business model

Company Overview: Infosys

Business Model

Who is Better: HCL Technologies Or Infosys?

Comparative Analysis: HCL Technologies Vs Infosys

Financial Statements Analysis

Income Statement Comparison

Balance Sheet Comparison

Cash Flow Statement Comparison

Key Performance Ratios (KPIs)

Future plans of HCL Technologies

Future plans of Infosys

Conclusion

Frequently Asked Questions (FAQs)

What is the main difference between HCLTech and Infosys?

Which company has better financial performance in 2025?

Are both companies expanding globally?

Which company is investing more in AI and cloud services?

Should I invest in HCLTech or Infosys?

What is Angel Tax?

Rate of Angel Tax

Why Was Angel Tax Introduced?

Who Has to Pay Angel Tax? (Applicability Criteria)

Calculation of Angel Tax with Example

Impact of Angel Tax on Indian Startups

Recent Updates on Angel Tax (As of 2025)

Conclusion

Frequently Asked Questions (FAQs)

Is Angel Tax still applicable in India?

What was the rate of Angel Tax?

Who was most affected by Angel Tax?

Why did the government remove Angel Tax in 2025?

What is Market Capitalization?

SEBI Classification of Large Cap, Mid Cap, and Small Cap

What Are Large Cap Funds?

Advantages:

Disadvantages:

What Are Mid Cap Funds?

Advantages:

Disadvantages:

What Are Small Cap Funds?

Advantages:

Disadvantages:

Small Cap vs Mid Cap vs Large Cap Funds – Key Differences

Which fund is right for whom?

Which One Should You Choose?

Conclusion

Frequently Asked Questions (FAQs)

What is the main difference between large cap, mid cap, and small cap funds?

Which type of fund is safer for beginners?

Can I invest in all three fund types together?

Do small cap funds give better returns than large cap?

How do I decide which fund is right for me?

What is CAMS KRA?

How many KRAs are there in India?

Types of CAMS KRA KYC Forms

Advantages of CAMS KRA

CAMS KRA KYC Process: Step‑by‑Step

Step 1: Fill the correct form

Step 2: Submit documents

Step 3: In-Person Verification (IPV)

Step 4: Verification and Status Update

How to Check Your CAMS KRA KYC Status

Different CAMS KRA KYC Status

CAMS KRA vs Other KRAs

Common problems related to CAMS KRA KYC and their solutions

Conclusion

Frequently Asked Questions (FAQs)

What is CAMS KRA?

How can I check my CAMS KRA KYC status?

Is CAMS KRA KYC valid for all platforms?

What documents are required for KYC with CAMS KRA?

Can I update my KYC details online?

Company Overview – Wipro

Business Model

Strategic Acquisitions

Company Overview – Infosys

Comparative Analysis: Wipro Vs Infosys