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  • Reliance Industries Case Study: Marketing Strategy and SWOT Analysis

    Reliance Industries Case Study: Marketing Strategy and SWOT Analysis

    Do you know how Reliance Industries became one of India’s most successful and popular companies?

    As we know, Mr. Dhirubhai Ambani started Reliance in 1958 in Mumbai, Maharashtra. The business includes different industries like energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.

    This blog will break down the marketing strategies and SWOT analysis of Reliance Industries. Still, before we delve deeper into it, we will briefly look at the history of Reliance Industries.  

    About Reliance Industries

    Reliance Industries is India’s largest company in terms of market cap (as of 7 Feb 2024) and is involved in energy, refining, textiles, retail, and telecommunications business. Incorporated by the famous tycoon Mr. Dhirubhai Ambani and managed by Mr. Mukesh D. Ambani. It is the 100th largest company worldwide. As of 7 Feb 2024, Reliance Industries market cap stood at INR19.05 lakh crore.

    Here are the quick stats about the Reliance Industry:

    Founded byMr. Dhirubhai Ambani
    IndustryConglomerate
    Founded In1958
    Company TypePublic
    HeadquartersMumbai, Maharashtra, India
    Area ServedAcross the globe
    Key PersonMukesh Ambani, Chairman & Managing Director
    SectorsOil and Gas, Chemicals, Telecommunications, Retail, Media, etc.
    RevenueINR 10,00,122 crores in FY 2024
    Profit after tax (PAT)INR 79,020 crores in FY 2024
    Total assetsINR 17,55,986 crore in 2024
    SubsidiariesJio Platforms, Reliance Reliance Retail, Network18 Group, Alok Industries, Reliance Foundation, Indiawin Sports, etc.  

    Market Information of Reliance Industries

    Current Market Price ₹1,281
    Market Capitalization (in ₹ Crores)17,32,955
    52 Week High₹1,609
    52 Week Low₹1,156
    Dividend Yield0.39%
    ROCE9.61%
    (Data as of 28 March 2025)

    Read Also: Reliance Power Case Study: Business Model, Financial Statements, And SWOT Analysis

    Marketing Strategy of Reliance Industries

    Reliance Industries Limited has a wide range of target audiences to serve. So, let us understand how the company serves its offerings using the Marketing Mix Model framework, which covers understanding its product, pricing, advertising, & distribution strategies.

    Product Strategy

    Reliance Industries, one of India’s largest conglomerates, spans various sectors and accounts for 20% of the nation’s exports. Its portfolio includes Reliance Fresh, Reliance Trends, Reliance Mart, and more.

    Pricing Strategy

    Reliance Industries follows different pricing strategies for different sectors. This company follows the pricing penetration for retail, telecommunications, and health. When Reliance launched Jio, it offered free services to its customers to enhance its market share.

    The telecommunications industry was at a loss, but Jio still decided to provide unprecedented offers to customers to increase their customer base. This led to a complete revolution in the industry as smaller players could not fight such a rough battle and hence had to shut shop. Outlets such as Reliance Fresh provide products directly to the consumer at a discounted price. Reliance Industries focuses on pricing analysis before making a price decision. This strategy has helped them gain unrivaled positions in the industry.

    Place & Distribution Strategy

    Reliance Industries has a strong presence throughout the nation. Reliance Retail is the largest retailer with more than 1500 stores in the country, and other brands such as Reliance Fresh, Reliance Footprint, and Reliance Digital have reached Tier 1 and Tier 2 cities. While Tier 3 is still majorly yet to experience the wonders of the company.

    Promotion & Advertising Strategy

    The promotional strategy of the Reliance industry is a mix of all types of theories, including pamphlets, ads, and word of mouth. Reliance also focused on 360 branding and brand promotion. They use the tagline “Growth is Life” and have encapsulated their sentiments about taking people together.

    Reliance Industries Limited owner Mukesh Ambani also acquired the rights of the Mumbai Indians for 10 years, bringing the Reliance brand to the limelight. After that, Jio launched the hashtag #DigitalIndia in the market, which encourages youth to be digitally active. Reliance Industries’ success factor for Jio is ensuring the deliverables to their consumers to make them habituated to the service, which impacted their competitors in ways they hadn’t even imagined!

    Marketing Campaign

    Reliance marketing campaigns keep the brand presence alive in consumers’ minds and build trust, which directly impacts the goodwill of the company. Let’s get into the market campaigns of Reliance:

    • Reliance Jio launched a campaign named Jio Dhana Dhan in 2017. This campaign is still ongoing and holds the market with its new, updated products and services.
    • Reliance Retail enhanced its advertisement volume after the pandemic to retain the audience’s attention.
    • For its marketing campaigns, Reliance Digital mainly focuses on showcasing the latest technology products, features, and services available at its stores. One of the recent ad video campaigns was named “Technology se Rishta Jodo”. This ad was a big hit on the internet, with 9m+ views, and it even got many positive comments.

    Read Also: Jio Financial Services: Business Model And SWOT Analysis

    SWOT Analysis of Reliance Industries

    Let’s move into Reliance Industries SWOT Analysis. It includes a deep study of the company’s strengths, weaknesses, opportunities, and threats.

    Strengths

    • Reliance Industries is India’s biggest conglomerate company in terms of revenue and profitability. It is a well-known brand across the globe.
    • It has diversified into several businesses, such as telecom, retail, petroleum, media, and many more. This reduces the effect of seasonality on the company’s performance.
    • The company is successful because they have a holistic approach to growth and progress. This has been demonstrated by their decades of complete dominance over people’s hearts.
    • Reliance Industries is also heavily involved in CSR activities like sustainable development, education, healthcare, uplifting the financially unfortunate, girl child protection, etc.

    Weaknesses

    • The weakness of Reliance Industries lies in the challenge of maintaining its market position amidst high competition. However, this risk is somewhat mitigated by the company’s dynamic and competent management, which helps navigate the competitive landscape effectively.
    • The company also faced controversies and conflicts such as stock manipulation, the Krishna Godavari Basin gas issue, etc. While many of these controversies turned out to be hoaxes, they still hold enough power to materially affect the stock price.

    Opportunities

    • Reliance Industries also partnered with other brands to expand their business by using small-scale manufacturers to meet high demand during peak seasons.
    • To avoid competition, Reliance Industries should consider buying small and weak players. This tactic has also proven quite effective in consistently increasing its profits.  
    • Tying up with the global oil industry players will help the Reliance industry to boost its oil business.

    Threats

    • In recent times, Reliance Industries’ sales growth rate has declined. This could be taken as nothing more than a hiccup or the beginning of a trend.
    • High competition from big conglomerates such as Adani can reduce Reliance’s market share in some sectors.

    Key Performance Indicators

    ParticularsMarch 2024 March 2023 March 2022
    Operating Margin (%)14.1412.9413.65
    Net Profit Margin (%)8.728.439.65
    ROE (%)8.779.317.78
    ROCE (%)9.389.378.02
    Current Ratio1.181.071.12
    Debt to Equity Ratio0.410.440.34

    Future Outlook

    Reliance Industries is positioning itself as a leader in both traditional and emerging sectors, with a strong focus on sustainability. It is also ramping up its petrochemical and retail businesses with significant investments in digital platforms and 5G services. Reliance plans to establish a capacity of 100 GW of solar energy by 2030 and achieve net-zero carbon emissions by 2035, aligning with global sustainability goals. Moreover, the company plans to establish 100 Compressed Biogas (CBG) plants, which will consume 5.5 million tonnes of agricultural residue, reduce 2 million tonnes of carbon emission, and produce 2.5 million tonnes of organic manure annually. As India’s largest conglomerate, Reliance is well-positioned for long-term growth, driven by diversification and strong government support for clean energy.

    Conclusion

    There is no doubt that, at the moment, Reliance is the largest public company in India, with a strong brand image and brilliant marketing strategies. Reliance Industries is leading in various sectors like petroleum, oil, retail, and gas because of its product quality and efficiency. 

    Reliance Industries’ growth motto is “Growth is life”. Their marketing strategies, such as 360 branding and strategic partnerships, have contributed to their success. However, many segments operate in a competitive environment, which could dampen the revenue growth of the company in the long term. In summation, always do thorough research before investing in the company and consult your financial advisor.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1TCS Case Study: Business Model, Financial Statement, SWOT Analysis
    2Vedanta Case Study: Business Model, Financial Statement, SWOT Analysis
    3Nestle India Case Study: Business Model, Financial Statement, SWOT Analysis
    4BPCL Case Study: Business Model, Product Portfolio and SWOT Analysis
    5Apollo Hospitals Case Study : Business Model, Financial Statements, And SWOT Analysis

    Frequently Asked Questions (FAQs)

    1. Who is the owner of Reliance Industries?

      Mr. Mukesh Ambani is the owner of Reliance Industries.

    2. What type of company is Reliance Industries?

      It is an Indian multinational conglomerate headquartered in Mumbai.

    3. What are the products of Reliance Industries?

      Reliance Industries has a long list of products ranging from textiles, petroleum, refining, telecommunications, groceries, and many more.

    4. When was the Reliance Industries founded?

      The company was founded in 1958.

    5. Which companies come under Reliance Industries?

      Reliance Retail, Jio, Reliance Fresh, Reliance Foundations, Reliance Trends, Reliance Digital, and many more.


  • NFO Alert: PGIM India Large & Mid Cap Fund

    NFO Alert: PGIM India Large & Mid Cap Fund

    The universe is vast and so is the world of investment. If you are planning to start your investment journey, several options await you in the market. The popularity of the stock market is increasing every day and everyone wants to invest but due to a lack of proper guidance and financial awareness, a retail investor always carries a fear of loss of funds.

    Here comes into the picture, Mutual Funds. A Mutual Fund is an investment product through which a retail investor can invest indirectly into shares and different asset classes and their investment will be managed by a team of professional fund managers.

    If you’re new to the Mutual Funds world, then checkout our blog: Mutual Funds: Meaning, Types, Features, Benefits and How They Work.

    Today we will introduce you to the most commonly used jargon in the Mutual Fund Industry ‘NFO’ or New Fund Offer.

    What is an NFO?

    NFO

    A New Fund Offer (NFO) signifies the introduction of a new mutual fund scheme by an Asset Management Company (AMC) to the market, available for subscription by both retail and institutional investors. The primary objective behind launching an NFO is for the AMC to gather capital for purchasing securities to establish the fund’s portfolio.

    NFOs can be subscribed for a fixed period. Once the duration of subscribing to NFO closes, the fund can be easily sold and bought by the general public (in case of open ended funds) and the NAV allotted for the same fluctuates as per the market movement.

    The Risks associated with an Investment in NFO

    1. The NFO doesn’t have any track record therefore you cannot track its previous performance.
    2. The fund manager’s capabilities are also a parameter that should be kept into consideration before investing in an NFO because the performance of the fund manager can be checked in the fund returns after a particular period, which is not available in an NFO.
    3. The performance of NFOs is generally unpredictable as they need time to establish themselves and show good returns.

    PGIM Asset Management Company

    Before we delve deeper into the details of PGIM Large & Mid Cap Fund NFO, let us give you an overview of PGIM AMC.

    PGIM stands for Prudential Investment Management India. It is a global investment firm of US-based Prudential Financial Inc.

    The AMC offers a wide range of 20 open-ended funds that are managed by thirteen professional fund managers. PGIM also offers Portfolio Management Services (PMS) and Alternative Invest Funds (AIF). PGIM India Mutual Fund has a presence across 27 cities in the country.

    Details of the NFO

    NFO Details

    PGIM has launched NFO in the Large & Mid Cap category. The large & mid-cap category of mutual funds refers to a category in which a minimum investment of 70% of assets is required into Equity with a minimum of 35% in large-cap stocks and 35% in mid-cap stocks because large & mid cap funds are considered a blend of stability and growth. Larg-cap is considered as safer and gives you consistent returns whereas mid-cap provides higher returns.

    Note: Risk in mid-cap is comparatively higher than large-cap securities.

    In April 2019, the AUM of large & mid-cap funds across the industry was around 47,833 crores and as per the data of October 2023, the AUM of large and mid-cap funds stood at 1,87,575 crores. So, a growth of 4x was seen in just 4.5 years!

    There are a total of 29 actively managed large & mid-cap funds available in the industry.

    Read Also: Bandhan Long Duration Fund NFO: Objective, Benefits, Risks, and Suitability Explained

    Why invest in large & mid-cap funds?

    1. Growth Potential – The large and mid-cap mutual funds category offers higher growth potential to investors as compared to the large-cap mutual funds category.
    2. Flexibility – The Fund manager has the flexibility to choose between mid-cap and large-cap stocks depending on market conditions.
    3. Broader Representation – The large and mid-cap fund category has a broader representation of the market segment.
    4. Diversification – Diversification of your portfolio among large and mid-cap stocks helps the investor mitigate the risk associated with mutual funds.

    Why you should not invest in large & mid-cap funds?

    1. Absence of small-cap stocks – Large & mid-cap funds do not have much exposure to small-cap stocks. This may cause the fund to earn lower returns during bull runs as historically, small cap index has earned higher returns than large and mid-cap indices.
    2. Lower flexibility as compared to Flexi Cap funds – Since large and mid-cap funds have been mandated to have at least 35% exposure to large and mid-cap stocks, flexibility to exit a downward trending market is limited. This may lead to higher losses as compared to flexi cap funds, which do not have any such conditions.

    Who can invest in Large & Mid Cap Funds?

    1. Investors who are looking to diversify their portfolio can opt for large & mid-cap funds.
    2. Large and mid-cap funds are also suitable for investors who wish to reap the benefit from the growth of both large and mid-cap stocks.
    3. Investors who have an investment horizon of more than 5 years can also opt for these funds, should their risk profiles allow it.

    Fund Managers and their Stock Selection Approach

    The fund will be managed by 5 different fund managers named

    • Mr. Vinay Paharia (Equity)
    • Mr. Anandha Padmanabhan Anjeneya (Equity)
    • Mr. Utsav Mehta (Equity)
    • Mr. Puneet Pal (Debt)
    • Mr. Ojasvi Khicha (Overseas Investment)

    Fund managers of PGIM large and mid-cap stocks choose companies with a market cap greater than 1000 Crore to build their stock portfolio. Also, their stock selection strategy includes investing in IPOs. Additionally, the company must have a good track record of capital allocation.

    Fund Facts

    1. Date of Issue of NFO – 24th Jan 2024
    2. Closing Date of NFO – 7th Feb 2024
    3. Type of Scheme – It’s an open-ended large and mid-cap equity scheme.
    4. Investment Objective – The objective of this fund is to provide long-term capital growth through investment in equity-related instruments.
    5. Plan/Option – Payout of Income Distribution cum capital withdrawal option Reinvestment of Income Distribution cum Capital Withdrawal Option and Growth Option.
    6. Minimum Investment – Minimum 5000/- for lumpsum and 1000/- for SIP.
    7. Purchase and Switch in – Minimum 5000/- and multiples of Rs 1 thereafter.
    8. Additional Purchase – Minimum 1000/- and in multiples of Rs 1 thereafter.
    1. SIPs – Minimum of 5 instalments with an amount of Rs 1000/- each and in multiple of Rs 1 thereafter.
    2. Exit Load – If you exit before 90 days of unit allotment. You are liable to pay an exit load of 0.5% and NIL after that.
    3. Benchmark Index* – Nifty Large Mid Cap 250TRI

    *Benchmark refers to a base with which the performance of the fund is compared.

    Read Also: What is NFO? Features, Types, & How to Invest in It

    Conclusion

    There is no doubt that large and mid-cap funds have greater potential in terms of return as compared to solely large-cap funds but they generate an extra return on the cost of higher risk.
    Therefore, before making any investment choice it is always suggested to consult your financial advisor. Also, assess your investment horizon and risk profile.

    Frequently Asked Questions (FAQs)

    1. What is going to happen once I invest in NFO during its subscription period?

      The fund house will receive your invest and then use it to actively manage stocks in the large and mid cap category with the objective to seek long term capital growth.

    2. Units of NFO will be allotted in how many days?

      The units of NFO will be allotted within 5 days after the closure of the subscription period.

    3. Is there any lock-in period in PGIM India Large & Mid Cap Fund if not, then how long should I stay invested?

      No, there is no lock-in in PGIM India Large & Mid Cap Fund but the fund house recommends a tenure of at least 5 years as the ideal time to stay invested in the mutual fund.

    4. What is the base NAV of any NFO?

      The base NAV of NFO is Rs 10 but the NAV of a mutual fund unit is derived from the value of the underlying securities and the accumulated profits since scheme launch.

    5. Is SIP allowed in NFO and how much do I need to pay monthly?

      Yes, you can do an SIP in NFO and you can start an SIP in this mutual fund with just Rs. 1000.

  • Apeejay Surendra Park Hotels Limited: IPO Analysis

    Apeejay Surendra Park Hotels Limited: IPO Analysis

    Imagine a hotel experience that perfectly blends modern luxury with timeless heritage! Apeejay Surrendra Park Hotels (ASPHL), an Indian hospitality player, is ready to debut on the Indian Stock Exchanges with its upcoming IPO. But is it an investment opportunity worth exploring?

    Buckle up! In today’s blog, we will examine the company’s financials, business model, and key IPO details along with the risks and opportunities that await investors.

    Key Details

    1. Apeejay Surrendra Park Hotels IPO is a main-board IPO, which means that the post-issue paid-up capital will be a minimum of 10 crores.
    2. The IPO is a book-built issue of INR 920 crore. It is a combination of a fresh issue of INR 600 crore and an Offer For Sale (OFS) of INR 320 crore.
    3. The IPO will open for subscription on February 5, 2024, and close on February 7, 2024.
    4. The company has set the price band for shares at INR 147 to INR 155, and the minimum lot size is 96 shares.
    5. JM Financial, ICICI Securities and Axis Capital Limited are the book-running lead managers of the IPO and Link Intime India Private Limited is the registrar for the issue.
    6. The minimum amount of investment required by retail investors is INR 14,880.
    7. The initiation process for the IPO is scheduled for February 9, 2024.
    8. The IPO will be listed on Stock Exchanges, NSE and BSE on February 12, 2024.
    9. The promoters of the company are Karan Paul, Priya Paul, Apeejay Surrendra Trust, and Great Eastern Stores Private Limited.
    10. The company has allocated the IPO proceeds to repay the loan amount and address general corporate purposes.

    Opportunities linked with the IPO

    1. Apeejay Surrendra boasts a strong record of consistently growing brand portfolios that fulfil the needs of various segments.
    2. The company enjoys healthy financials with an almost 96% growth in Total income and also turned profitable in FY23 with a strong net profit of 48 Crores while exceeding 90% occupancy rates in owned hotels.
    3. Established brands of the hotel, which include ‘The Park’ and the ‘Zone by The Park’, have gained recognition and loyalty and significant competitive advantage over the years.
    4. An uptrend in Debt Service Coverage Ratio (DSCR) and Interest Service Coverage Ratio (ISCR) is visible with the DSCR reaching 1.63 in FY23 from 0.4 in FY22 and ISCR reaching 2.05 in FY23 from 0.3 in FY22.     

    Risks Linked with the IPO

    Risk in IPO
    1. The Indian hospitality sector is fiercely competitive, with strong and established players like ITC Hotels and Marriott Hotels competing for the market share. This could lead to big changes in topline figures if Apeejay Surrendra Park loses its market share.
    2. Economic uncertainties and fluctuations in tourism can expose the hotel industry to seasonality, impacting both occupancy rates and profitability.
    3. Almost 75% of the total income is realised from top 5 owned hotels, with the PARK Kolkata contributing a staggering 21.75% to the total income alone. This exposes Apeejay Surrendra Park hotels to the risk of Revenue concentration.
    4. Almost 49% of total bookings come from Online Travel Agents. While this is a growing industry, in an effort to increase their profits, these online travel agents could increase their convenience fees and other charges. This could substantially affect Park Hotels’ topline figures.
    5. A significant portion of the IPO involves selling existing shares (OFS), which means the company is not raising fresh capital. This might not directly fuel growth.

    Read Also: Rashi Peripherals Limited: IPO Analysis

    Apeejay Surendra Company Overview

    Apeejay Surrendra Park Hotels Limited is an India-based hospitality company. It holds the position of the eighth-largest hotel chain in India in terms of chain-affiliated hotel rooms with asset ownership. It is also renowned for its distinctive and personalized approach to hospitality, providing modern and stylish hotels tailored to both business and leisure travellers. ASPHL operates under 5 brands, namely:

    1. The Park is positioned as an upscale brand with luxury offerings with a philosophy that focuses on design, style and service.
    2. The Park Collection encompasses small luxury properties located at the selected travel destinations.
    3. Zone by the Park brand is positioned at the upper midscale level and is designed for price-conscious and design-conscious customers.
    4. Zone Connect by the Park is an upper midscale brand that networks its essence and design philosophy from Zone by The Park.
    5. Stop by the Zone is an economy motel brand that aims to provide convenient accommodation with easy access to parking, free Wi-Fi, and food services.

    All the brands are located in the prime locations of Bangalore, Chennai, Goa, Hyderabad, Indore, Kolkata, Mumbai, Navi Mumbai, New Delhi, and Vizag. The group will soon open hotels in other areas such as Chettinad, Patiala, Pune, and Kolkata.

    The hotels built by the group carry contemporary designs with luxurious interiors, furniture, paintings and accessories. Apart from this, the company focuses on relevant social issues and promotes art and culture in each region.

    Apeejay operates 27 hotels across luxury boutiques, upscale, and upper-midscale categories, with a pan-India presence in metro cities and aims to build upon existing brands, create an expanded group of upscale and upper-mid-scale hotels in strategic locations in India and abroad, leverage the cooperation between hospitality, food and beverage business while achieving strong profitability.

    Did you Know?

    The Park opened its first hotel in Kolkata in 1967, featuring 149 rooms on Park Street, which led to the company’s name.

    Apeejay Surendra Business Model

    Business Model of Apeejay

    Apeejay operates hotels by directly owning hotel properties, securing long-term leases for land and buildings, and entering into operation and management agreements on a contractual basis. The brand names are used on hotels constructed by third parties.

    Hotels operated under the ownership model are located on freehold and leasehold land that belongs to the company.

    Government authorities or private institutions lease some of the hotels, with lease terms ranging from five to fifty years, and renewals are possible upon expiration.

    Apeejay brand operates some hotels through operating and management contracts. Typically, the term of such contracts ranges from 8 to 25 years, with termination options available to either party.

    The fundamental hotel operations departments are front office, housekeeping, food and beverage service, food production and spa services while focusing on customer experience and comfort through quality service offerings.

    The Apeejay Park Hotel’s business model includes three different store formats:

    • A kiosk format comprising a store size of about 80 to 100 square feet.
    • A cafe format comprising a store size of about 350 to 400 square feet.
    • A restaurant format comprising a store size of about 800 to 1000 square feet.

    Awards & Recognitions

    Below mentioned are some of the accolades for ASPHL:

    • TripAdvisor Travelers Choice Awards in the year 2022-23
    • World Luxury Hotel Awards in the year 2023.
    • EEF Excellence Awards in the year 2022 for excellence in sustainable tourism.
    • CNBC TV18 Hotelier Awards in the year 2021

    Financial Statements – A Snapshot

    ParticularsFY 2021 (in millions)FY 2022 (in millions)FY 2023 (in millions)
    Revenue/Total Income1,902.902,678.305,244.30
    EBITDA228.46582.931,770.95
    Profit(758.84)*(282.02) *480.62
    Profit Margin(39.88%)*(10.53%)*9.16%
    Debt5,834.005,500.106,137.59
    Total assets12,803.3913,617.9012,751.76
    Debt-to-Equity Ratio1.091.210.99
    *(The figures in bracket shows the company incurred net loss for the particular FY)

    Read Also: Strategies To Boost Your IPO Allotment Chances

    Conclusion

    ASPHL’s IPO and planned expansion projects show its ambitious growth plans. Apeejay’s diverse brand portfolio and emphasis on innovation have helped them well to capture the opportunities in the Indian hospitality market.

    However, navigating industry competition and economic uncertainties will be important for Apeejay’s success. Do not forget to conduct proper research and analyse your risk tolerance before investing in the ASPHL IPO.

    Frequently Asked Questions (FAQs)

    1. What is the price band for the ASPHL IPO?

      The IPO price band for ASPHL is set at INR 147 to INR 155 per share.

    2. What will the IPO proceeds be used for?

      The IPO proceeds will be used for debt repayment and general corporate purposes.

    3. What makes ASPHL unique?

      ASPHL offers a set of diverse services that cater to different segments, from budget-friendly options to luxury stays.

    4. Who are the major competitors of ASPHL?

      ASPHL competes with major hotel chains like ITC Hotels and Marriott etc.

    5. Is investment in ASPHL IPO a good option for investment?

      Investing in ASPHL IPO should only be done after careful consideration of your financial objectives and risk tolerance. However, you should perform your own analysis before investing.

    Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

  • Rashi Peripherals Limited: IPO Analysis

    Rashi Peripherals Limited: IPO Analysis

    The Indian tech giant Rashi Peripherals Limited (RPL) is all set to tap the public market with its much-anticipated INR 600 crore IPO! Are you excited to own a piece of this company in the Information and Communication Technology (ICT) distribution landscape?

    In today’s blog, we will share the key details about the IPO and a brief overview of the company. 

    Key details of the IPO

    1. Rashi Peripherals IPO is a book-built issue of INR 600 crores. The issue is completely fresh and will be opening for subscription from February 7, 2024, to February 9, 2024.
    2. Rashi Peripherals IPO is a main-board IPO, which means the post-issue capital is more than 10 crores.
    3. The price band of IPO is INR 295 to INR 311 per share.
    4. The listing date for Rashi Peripherals IPO is fixed at February 14, 2024.
    5. JM Financial Limited and ICICI Securities Limited are the book-running lead managers of the Rashi Peripherals IPO, whereas Link Intime India Private Ltd is the registrar for the issue.
    6. The fund’s return process is scheduled for Tuesday, February 13, 2024.
    7. The company will be listed on both the exchanges, i.e., NSE & BSE.
    8. The company promoters are as follows – Krishna Kumar Choudhary, Sureshkumar Pansari, Kapal Suresh Pansari, Keshav Krishna Kumar Choudhary, Chaman Pansari, Krishna Kumar Choudhary (HUF), and Suresh M Pansari HUF.
    9. Rashi Peripherals IPO’s objective is to raise capital from the market is to fund working capital requirements and prepayments and repayments of borrowings.
    Category of InvestorsAllocation of shares
    EmployeesNo employee quota
    Anchor AllocationCarved out of the QIB Portion
    QIB Shares Offered96,46,302 shares (50% of the net IPO offer size)
    NII (HNI) Shares Offered28,93,891 shares (15% of the net IPO offer size)
    Retail Shares Offered67,52,411 shares (35% of the net IPO offer size)
    Total Shares Offered1,92,92,604 shares (100.00% of IPO size)
    Source – RHP

    Read Also: IPO Alert – Capital Small Finance Bank

    Company Overview

    Company Overview

    Rashi Peripherals was incorporated in the year 1989 and carries experience of more than 33 years. The company took its time in rising to glory, and now it is one of the leading national distributors of global technology brands in India for Information and Communications Technology (ICT) products. It also offers end-to-end value-added services such as pre-sale activities, solutions design, technical support, marketing services, credit solutions, and warranty management services.

    The company also operates in Singapore. It has two subsidiaries – Znet Technologies Private Limited in India and Rashi Peripherals Pte Limited in Singapore.

    Business Model

    Rashi Peripherals operates in the following two business verticals:

    • PES (Personal Computing, Enterprise, and Cloud Solutions) – Under this vertical, the company distributes personal computing devices, enterprise solutions, embedded designs/ products, and cloud computing. These include Laptops, Desktops, Routers, and Switches.
    • LIT (Lifestyle and IT essentials)– LIT includes the distribution of products such as graphic cards, CPUs, motherboards, storage and memory devices, lifestyle peripherals, and accessories that include keyboards, mouse, web cameras, monitors, wearables, casting devices, fitness trackers and gaming accessories, power equipment such as UPS and inverters, and networking and mobility devices.

    Rashi Peripherals holds 50 branches that operate for sales and service centres, and 63 warehouses as of September 30, 2022. The company has a direct presence in 680 locations in India and 53 global technology brands, with 9,996 customers in FY23.

    Distribution Channel

    Rashi Peripherals has a vision of being a multi-channel pan-India distributor and leader with an emphasis on general trade, modern trade and e-commerce channels.

    • General trade includes hybrid resellers who sell to online marketplaces and retail channels, regional distributors, retailers, brand stores, original equipment manufacturers, etc., which are collectively known as ‘Channel Partners’.
    • Modern trade includes large-format retail, multi-format retail, and small-format retail chains.
    • E-commerce includes some of India’s leading online marketplaces.

    Over the years, Rashi Peripherals has consistently added new global technology brands to its portfolio and worked with them to distribute products across categories. Some of the top brands distributed by the company are: Asus, Fitbit, HP, Intel, Lenovo, LG, Philips, Samsung, Logitech, and Luminous.

    Key Strengths

    Strengths of Rashi Tech
    1. RPL ranks among the fastest-growing distribution partners in India’s ICT distribution market and offers a well-established channel across India.
    2. The Indian tech sector is expected to witness growth, which will eventually benefit the Rashi Peripherals distribution business.
    3. Return on Equity (RoE) stands at a comfortable 19.33%.  
    4. The industry is low capital-intensive, thus RPL does not manufacture any of its products, which indicates that the requirement to take further debt is substantially low.
    5. Repeat customers bring in almost 92% of revenue while maintaining a 6.3% growth in total customers. This indicates the company’s strong ability to retain and satisfy customers.
    6. The company has a high trade receivable turnover ratio, indicating that it is very efficient in collecting receivables from its clients.

    Weak Points

    1. The Information and Communication Technology (ICT) industry in India is highly competitive (Indian competitors include Savex Technologies Private Limited, Ingram Micro India Private Limited, and Redington (India) Limited). Both domestic and foreign players can significantly affect the top-line figures of the company.
    2. The company’s net profit margin stands at 1.3%, but the industry generates profit from volume rather than margins.
    3. The top 8 suppliers account for almost 83% of the total purchases. Any changes in the contracts with these suppliers could cause significant damage to the company’s financials as RPL does not manufacture any of its products.
    4. RPL’s Inventory turnover ratio decreased significantly in FY23, this may indicate the company’s inability to manage inventory well.

    Awards & Recognitions

    • Digital Terminal Most Preferred National Distributor 2023
    • VAR India VAD Award 2022
    • Samsung MSP Solutions Champion 2023
    • Digital Terminal Best ICT National Distributor in India 2023
    • LG Most Dynamic National Distributor in 2022
    • Intel Partner of the Year Award 2022,
    • HP Most Trusted and Preferred Distributor Award 2022
    • Samsung Top Distributor Partner in B2B Business in 2022

    Highlights of Financial Statements

    ParticularsFY 2023FY 2022
    Revenue/Total IncomeINR 9,469 croreINR 9,322 crore
    Profit-after-TaxINR 123.34 croreINR 182.51 crore
    Return on Equity Ratio19.33%37.56%
    Debt to Equity Ratio1.531.52
    Inventory Turnover Ratio6.629.93
    Trade Receivables Turnover Ratio9.349.58
    Trade Payables Turnover Ratio8.8310.52
    Debt Service Coverage Ratio (DSCR)0.20.26
    Source – RHP

    Read Also: IPO Alert: Entero Healthcare Solutions Limited (EHSL)

    We can say that the company experienced a minor growth in its revenue in FY 2023 as compared to the previous financial year. However, profit margins were decreased due to a larger decrease in profits.

    Conclusion

    To wrap it up, Rashi Peripherals Limited IPO is a mainboard and medium-risk investment. Although the company holds a strong track record and a wide network of distributors and operates in a competitive industry. It is suggested that investors carefully assess the risks and other factors before investing in the IPO.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    3Mukka Protein IPO: Business Model, Key Details, Financial Statements, and SWOT Analysis
    4Bharat Highways InvIT IPO: Business Model, Financials, Key Details, and SWOT Analysis
    5Pune E-Stock Broking Limited IPO: Key Details, Business Model, Financials, Strengths, and Weaknesses

    Frequently Asked Questions (FAQs)

    1. What is the minimum investment amount in Rashi Peripherals IPO?

      The minimum lot size for the IPO is 48 shares, with an estimated cost of INR 14,928 at the lower end of the price band.

    2. What does Rashi Peripherals do?

      Rashi Peripherals is a large distributor of ICT products and offers several IT hardware and software solutions.

    3. Who are the book running lead managers for the IPO?

      J.M. Financials and ICICI Securities.

    4. What is the listing date?

      14th February, 2024.

    5. How can I apply for the IPO?

      You can apply for the IPO either through your broker or the ASBA facility available with the banks.

  • CAT Bonds: An Easy Explainer

    CAT Bonds: An Easy Explainer

    CAT is an animal right or Common Admission Test; this is what you have heard till now. Now, there is some twist in the plot. We also have bonds that are known as CAT Bond, financial instrument offering investors high returns and helping society prepare for the worst.

    Don’t be shocked, in our today’s blog, we will explain what CAT bonds are. 

    History of CAT Bonds

    History of CAT Bonds

    Have you ever wondered how do insurers manage their risks? Suppose, a natural disaster came which caused massive destruction. To compensate the claimants for the damage, insurance companies have to shell out a lot of funds; by this, insurance companies can even go bankrupt. So, to manage this risk they have their risk management in place, right?

    Before the invention of CAT Bonds, the insurers used the traditional method of re-insurance to manage such catastrophic risks. Re-insurance involves transferring a part of the risk to another insurance company. This process is also known as “Risk Transfer”. However, as the frequency of natural disasters increased, reinsurance became insufficient.

    In the year 1992, Hurricane Andrew, a category 5 hurricane, struck Florida and caused widespread destruction. The insurance industry faced severe and staggering losses, which eventually highlighted the need to re-evaluate risk management practices.

    In the aftermath of Hurricane Andrew, the first catastrophe bond was issued in the year 1997 named “Tempest Re”.

    The year 2005 Hurricane Katrina marked a turning point and was one of the costliest disasters in the history of the United States and the CAT Bonds came to the rescue since these bonds performed the way they were meant to. The event spurred the growth and significance of CAT Bonds in the market and insurers started seeking CAT Bonds as alternative risk-transfer solutions.

    The CAT Bonds market has consistently evolved since Hurricane Katrina, and today these bonds cover diverse risks.

    CAT Bonds – An Overview

    The word ‘CAT’ is derived from the word Catastrophe, which refers to an event that causes great suffering or damage.

    CAT Bonds or Catastrophe bonds are a type of insurance-linked security (ILS) that transfers specific risks from an insurance company to investors. They are a debt financial instrument that allows the insurers to manage their exposure to natural disasters such as earthquakes, floods, wildfires, etc. These bonds provide a way for these companies to obtain additional financial protection against large-scale and unexpected losses.

    Read Also: Electoral Bonds Explained: What Are They and Why Did Supreme Court Ban It?

    How do CAT Bonds work?

    When an insurance company issues CAT Bonds, they promise to pay interest to investors. If, in any case, a predefined disaster occurs and meets certain criteria, the insurance company does not have to pay back the principal to the investors. Instead, the money is used to cover the losses caused by catastrophes. It is a way for insurance companies to manage their risk and for investors to earn a higher return. Pretty cool! Isn’t it?

    The proceeds from issuing CAT Bonds are placed in a collateral account and sometimes may be invested in low-risk instruments such as T-Bills.

    The criteria for a catastrophe bond are generally defined in the bond’s terms and conditions (known as ‘Indenture’ in the bonds’ world). These criteria can differ depending on the specific conditions. In the case of a hurricane catastrophe bond, the criteria might include factors like the intensity of the hurricane, the damage caused, etc.

    Investors can benefit from the bonds through the interest payments they receive. When investors buy CAT Bonds, they lend money to the issuing insurance company. In return, they receive regular interest payments over the bond’s term, and if no qualifying catastrophe occurs during that period, the investors get back the principal amount at the end of the term. So, investors can generate a return through the interest payments while supporting disaster relief efforts. CAT bonds are a unique way to combine financial investment and social impact.

    Did you know?

    The World Bank has a cat bond market access facility for member countries.

    Risks Involved in CAT Bonds

    Investors in CAT bonds face certain risks. One of the major risks is that if a qualifying catastrophe occurs, the investors may not get back their principal amount and the funds would be used to cover the losses caused by the catastrophe. Additionally, the interest payment received may be lower than expected if there are no qualifying catastrophes during the bond’s term. It is always a good idea for investors to carefully evaluate the risks before making any investment.

    How are the returns on CAT Bonds calculated?

    The returns on CAT Bonds are calculated depending on the interest mentioned in the terms and conditions. Suppose, you invest INR 10,000 in a CAT Bond with a coupon of 5% (read it as interest rate). If no qualifying catastrophe occurs during the bond’s term, you will receive an annual interest of INR 500. (5% of INR 10,000). At the end of the tenure, you would get back your initial investment of INR 10,000.

    Benefits of CAT Bonds

    1. For Insurers, CAT Bonds offer a way for insurers to transfer risk to the capital markets, freeing up their capital to write more insurance. This can help them to improve their risk management and financial stability.
    2. For Investors, CAT Bonds carry the potential for high returns because they are not so liquid and have a higher risk of default than traditional bonds.
    3. Further, they also help you to diversify your portfolio because they are not in any way linked with other asset classes.

    CAT Bonds in India

    While catastrophe bonds are more commonly seen in international markets, including the United States and Europe, they have not gained much traction in India just yet and are still in their nascent stage.

    However, there is growing interest in exploring CAT Bonds as a risk-minimising source for the insurance sector in India. It can be an interesting development to keep an eye on in the coming future!

    Read Also: Detailed Guide on Bond Investing: Characteristics, Types, and Factors Explained

    Conclusion

    To wrap it up, CAT Bonds is a complex financial instrument that can be a valuable tool for both investors and insurers since it bridges the gap between risk management in the insurance industry and capital market opportunities.

    Challenges like climate change and other  natural uncertainties exist, but consistent innovation, interest of the investor and supportive frameworks hold promise for future growth.

    Considering the high-risk profile of CAT Bonds, it is suggested that you do thorough research and seek professional advice before investing in it.

    Frequently Asked Questions (FAQs)

    1. Why do CAT Bonds exist?

      CAT Bonds exist because they help insurers manage risk and avoid financial instability caused by natural disasters. And for investors, they get higher returns.

    2. Are CAT Bonds risky?

      Yes! Cat bonds are riskier than traditional bonds, and investors can lose their capital if a trigger event happens.

    3. Are there any ‘exotic’ CAT Bonds covering unusual risks?

      CAT Bonds generally focus on natural disasters; some bonds have covered volcanic eruptions and political instability.

    4. Do CAT Bonds always offer high returns?

      Not necessarily! Returns of CAT Bonds depend on specific risk profiles and market conditions. Although CAT Bonds returns are fascinating, they can also carry higher risk as compared to traditional bonds.

    5. How liquid are CAT Bonds?

      CAT Bonds are comparatively less liquid than Corporate or Government bonds. However, their unique risk profile can attract long-term investors.

  • Flair Vs DOMS: Unveiling The Best In Stationery Industry

    Flair Vs DOMS: Unveiling The Best In Stationery Industry

    Standing in a stationary shop and wondering which pen to buy for your project or trying to choose which colour palette to choose to paint your canvas? We often end up in such situations, and do you know there are two listed companies in India operating in this industry?

    The two companies are Flair and DOMS. These two companies are household names in India, catering to the diverse needs of students, artists, and professionals. Let’s explore these two companies.

    Flair Writing Industries Limited

    The company was established in the year 1976. Flair is a prominent name in the world of writing instruments, specifically in India. It is headquartered in Mumbai and was founded by Mr Khubilal Jugraj Rathod with a range of metal pens.

    The company is committed to quality and innovation, consistently striving to develop new and improved writing devices. Flair’s pillar stones include commitment to Quality and innovation. It develops and manufactures a wide variety of products that are tailored to today’s continuously shifting market.

    Did you know?

    Pierre Cardin pens are the most widely used flair pens and a style statement with world-class quality.

    DOMS Industries Limited

    DOMS Industries is another major brand in the Indian market. The company was originally incorporated as ‘Writefine Products Private Limited’ and in October 2006, it was renamed to “DOMS Industries Private Limited”. It traces its lineage back to over 4 decades.

    The company has achieved significant growth and brand recognition since its establishment. It offers a wide range of products such as drawing materials, gifting items, pens, and geometrical instruments, paper materials, kits & combos, etc. The company has a strong distribution network in over 45 countries.

    Comparative Analysis

    comparative analysis

    Market Capitalisation (As of 2 February 2024)

    Flair – Flair is a small-cap company with a market cap of INR 3,419 crore.

    DOMS Industries – DOMS Industries is also a small-cap company with a market cap of INR 8,615 crore.

    Share Price (As of 2 February 2024)

    Flair – INR 324

    DOMS Industries – INR1420

    Product Portfolio

    Flair provides a diverse range of writing products such as pens, pencils, crayons, etc. and stationery products, such as notebooks, diaries, calculators, etc. The products are generally affordable, high-quality, and are meant for everyday use. Flair’s recent developments in premium collections are noteworthy.

    On the other hand, DOMS Industries boasts a wider variety of scholastic stationery and art materials such as paints, canvas, brushes, and even office supplies. The company caters to both basic and professional artistic needs. The company’s collaboration with Milan-listed FILA has helped them emphasize producing quality materials to fulfil the evolving customer needs.

    Quick look at IPOs

    Before delving into the financials, it is important to learn that both DOMS and Flair made waves in the Indian IPO market in late 2023 to offer investors a chance to tap into the booming stationery market of the economy. Let’s have a head-to-head analysis of their IPOs:

    Listing Date

    Flair – December 1, 2023

    DOMS Industries – December 20, 2023

    IPO Price

    Flair – INR 304

    DOMS Industries – INR 790

    DOMS Industries raised a total of INR 1,200 crore. The issue was a combination of a fresh issue of INR 450 crore and an Offer for sale (OFS) of INR 750 crore. The final issue price was INR 790 per share. Its main objective was to utilise the proceeds from IPO to expand its manufacturing capacity for a wide range of writing instruments, and markers to strengthen its brand presence in the Indian market. It was listed at INR 1,400 per share on the Indian Stock Exchanges which is 77.2% higher than the issue price.

    Flair raised INR 593 crore through a fresh issue of INR 365 crore and an Offer for sale of INR 228 crore. The company plans to invest this capital in a new manufacturing facility for writing instruments in Gujarat with a major focus on international expansion. The final issue price was fixed at INR 304 per share and was listed at 503 which is 65% above the IPO price of INR 304.

    We can say that both DOMS Industries and Flair IPOs offered unique opportunities for investors, and the long-term success will depend on the company’s ability to execute its growth strategies.

    Financial Statement Analysis

    Financial statement analysis

    Let’s have look at the financial numbers of both the companies (As of March 2023):

    MetricsDOMS Industries (in INR crores)Flair (in INR crores)
    Revenue1,086917
    Net Profit 88111
    Fixed Assets309201
    Current Liabilities204155
    Investments47522
    Loans & Advances1,348158

    Takeaways from the above table are as follows:

    • DOMS Industries generally possesses higher revenue and wider market penetration.
    • Flair has narrow profit margins because their focus is on affordable pens and competitive pricing and dependence on sales volume.
    • Additionally, DOMS has a higher inventory turnover ratio because of its global presence as compared to Flairs which showcases strong sales.

    For your knowledge, the inventory turnover ratio (Higher the better) depicts how often a company sells or replaces its inventory over a given period.

    Read Also: What is IEPF? Introduction, Reasons for Transfer, and Process of Claiming Explained

    Conclusion

    Both companies, i.e., Flair Writing Industries Limited and DOMS Industries Limited are excellent choices for stationery and writing needs in India, with their own set of strengths as well as target consumers. Opting between the two completely depends on individual preferences and choices.

    Keep in mind that both companies operate in a dynamic market with several influencing factors. Do proper research and seek professional advice to guide you to your perfect stationery match.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    5ITC vs HUL

    Frequently Asked Questions (FAQs)

    1. Which company offers a wider range of products?

      DOMS takes the crown here since the company offers products such as art materials and craft supplies that are far beyond writing.

    2. Which brand is more affordable?

      Flair is more affordable than DOMS with competitive pricing across their product range.

    3. Who is the market leader in the game of pens?

      Of course, Flair! Flair was established in the year 1976 and has maintained its legacy in the pen market since then. You must have used the Flair pen in your school / college.

    4. Which company cares more about the planet and gives back to society?

      DOMS Industries focuses more on sustainability and tries to implement eco-friendly practices while manufacturing products.

    5. Which company is leading innovation in stationery-related items?

      DOMS Industries emphasises on quality and premium products whereas Flair prioritizes smooth writing and comfortable grip.

  • Unveiling the Budget 2024: Key Takeaways

    Unveiling the Budget 2024: Key Takeaways

    Budget 2024 highlights

    Budget Day is considered one of the important days for many stakeholders, including the Individuals, Businesses, Markets, and what not! Today, i.e., 1 Feb 2024, our country’s Finance Minister, Nirmala Sitharaman, presented her 6th Union Government Budget for the Financial Year 2024-25.

    The Budget stands as a crucial point in the nation’s financial journey as it is a stepping stone for its economic landscape. However, this was the Interim Budget, which means temporary, or say, short-term budget presented by the current Government before the upcoming elections.

    The full or Regular budget will be announced by the new government in July 2024 after the general elections. Even if the same government comes back in power after the elections, the administration will change, which will announce the full budget. As of today, the dates for the upcoming general elections are yet to be announced by the Election Commission of India.

    Moving back to the Interim Budget, the finance minister completed her speech in almost an hour. Let’s delve into the key highlights:

    Budget 2024

    Infrastructure

    Infra spending increased

    A nation’s progress is often measured by its infrastructure development. The interim budget allocates significant resources to accelerate infrastructure projects across transportation and communication sectors.

    1) The Government has allocated substantial funds for the coming FY 24-25. It has allocated INR 11 lakh cr. for capital expenditure.

    2) Regarding the railways, 40,000 bogeys are to be transformed to Vande Bharat standards. Further, three major railway corridors were also announced:

    • Port connectivity corridor
    • Energy, mineral, and cement corridor
    • High traffic density corridor.

    3) FM applauded the current Infrastructure growth in our country and also mentioned in her speech that Indian carriers have placed orders for 1,000 new aircraft.

    Read Also: Budget 2024: Explainer On Changes In SIP Taxation

    Women Empowerment

    1)  The Govt. has reserved 1/3rd of the legislative seats for women of the nation.

    2) “Lakhpati Didi” Scheme – Aim to empower 2 crore women in villages, has reached 83 lakh self-help groups. It gained renowned success and benefited almost 9 crore women.

    3) FM also mentioned about the “Triple Talaq” in her speech, which is now illegal.

    Direct and Indirect Taxes

    1) FM started the Taxes part by applauding the GST collections, which touched a record high. Further, she stated that Industry leaders view the GST transition as a positive one.

    2) The IT filing processing will now take only 10 days, which is a considerable reduction in existing processing time.

    3) Regarding Direct and Indirect taxes, no such change was announced in the budget by FM. However, there was one good news amongst this; existing tax demands of up to INR 25,000 of previous years (up to FY 2009-10) are to be withdrawn by the IT department.

    Fiscal Deficit

    1) For the FY 2023-24, the revised estimate of fiscal deficit is 5.8% of GDP.

    2) Fiscal deficit for next year, i.e., 2024-25, is estimated at 5.1% of GDP.

    Other Key Announcements

    1) App. 25 crore people in the country got freedom from poverty. Further, govt. has provided financial assistance to app. 11.8 crore farmers under PM KISAN Yojana.

    2) 7 IITs, 16 IIITs, 7 IIMs, 15 AIIMS, and 390 Universities have been set up.

    3) FM emphasises focus on strengthening of domestic macro factors including Domestic Tourism and Infrastructure Investment.

    4) For the youth of the nation, Pradhan Mantri Mudra Yojana (PMMY) has sanctioned 43 crore loans amounting to INR 22.5 lakh crore.  A corpus of INR 1 lakh cr. will be established with a 50-year interest free loan. It will be for long-term financing or re-financing with low or nil interest rates.

    5) One crore households will get up to 300 units of electricity every month with rooftop solarisation.

    6) Girls in the age group of 9-14 will get free cervical cancer vaccination.

    7) The Defence budget is to be increased to INR 1,111,111 crore, which will be 3.4% of our country’s GDP.

    Market Reaction

    Market Reaction on Budget

    On Budget Day, the Market participants had a neutral reaction. The major indices, such as Nifty 50 and Sensex, remain flattish, and so do the major sectors. However, PSU banks and Auto stocks saw a minor rally. Let’s have a look at the top gainers and losers:

    Top Gainers

    Company NameSectorPercentage Change
    Maruti SuzukiAuto + 4.4%
    Bank of IndiaBanking + 4.1%
    Punjab National BankBanking + 3.88%

    Top Losers

    Company NameSectorPercentage Change
    Larsen and ToubroConstruction– 2.35%
    Ultratech CementManufacturing– 2.41%
    GrasimTextile– 2.13%

    India VIX

    There is one Index that saw the sharpest decline, i.e., India VIX. It is now trading at below 14, down almost 10%.  

    If you’re not familiar with the word VIX, it stands for Volatility Index. It represents the market perception for the next 30 days. The higher the VIX, the higher the volatility in the market. It is also known as the “Fear Index”.

    Historical Data

    Let’s see how markets reacted to the past budgets. As this was the Interim Budget, we have compiled data for the past Interim Budgets only and analysed how markets had reacted on those days. Have a look at the table below:          

    Interim Budget DateFinance MinisterSensexNifty Major Movement
    01-Feb-19Piyush Goyal+0.59%+0.58%Auto and Defence stocks were the biggest gainers.
    17-Feb-14P.Chidambaram+0.48%+0.41%Biggest Gainers: Tata Power +4.81%, Mahindra and Mahindra +2.83%
    16-Feb-09Pranab Mukherjee-3.42%-3.39%Realty and Hospitality stocks ended with heavy loss.
    03-Feb-04Jaswant Singh-1.31%-2.25%Almost all sectors were in red.

    Read Also: What To Expect In The Budget 2024?

    Conclusion

    The Union Interim Budget of 2024 addresses immediate challenges, prioritizing infrastructure related expenditures and current fiscal deficit. The government aims to propel the nation towards sustainable growth.

    As citizens like us and major stakeholders analyse the budget’s impact, the hope is that these strategic measures will lay the groundwork for a resilient and prosperous India.

    Frequently Asked Questions

    1. Is the 2024 budget an interim budget?

      Yes, the budget presented by the Finance Minister on 1 February 2024 was an interim budget before the General Elections.

    2. What are the major announcements in this Budget related to Individual Taxation?

      There were a lot of anticipations before the budget regarding the change in the tax slabs or increase in the Section 80C limit of the Income tax act. Unfortunately, no such announcement was made by the FM.

    3. How much capital the govt. allocated to Infrastructure spending in the budget?

      There were major announcements in the budget regarding the Infrastructure spending. The Govt. has increased the spending by 11.11% and allocated INR 11 lakh cr. for Capex.

    4. How did markets react on the budget day?

      Markets remained flattish on the budget day as market participants reacted neutrally.

    5. What is India VIX?

      India Volatility Index, also known as the “Fear Index” represents the market perception for the next 30 days. The higher the VIX, the higher the volatility in the market.

  • Mastering Your Finances: Beginner’s Guide To Tax Savings

    Mastering Your Finances: Beginner’s Guide To Tax Savings

    Mastering Your Finances Beginner's Guide To Tax Savings

    It is understandable that the word ‘Tax’ can bother every individual with an income. But worry not, today’s blog will break down how to save tax into bite-sized pieces!

    Generally, there are two types of taxes:

    1. Direct Tax – A tax which is levied on individuals / businesses and cannot be transferred to anyone. For example, income tax and property tax.
    2. Indirect Tax – A tax which is levied on goods and services and is charged from the final consumer. Businesses collect these taxes from consumers and give it to the Government. For example, GST, Excise duty, Customs duty, etc.

    Learning how to save on income tax is an important part of personal finance. Here are some basics of income tax and a beginner’s guide on how you can reduce it.

    What is Income Tax?

    Meaning of Income Tax

    Income tax is the tax imposed by the government on the income of individuals and businesses. It is a mandatory financial contribution in most countries.

    The Income Tax Act in India was enacted in 1961 and outlines the rules and regulations for calculating and collecting income tax from individuals. The objective of the act was to limit tax disparities and foster economic growth.

    Below listed are some key features to know about income tax:

    • In the case of individuals, salary, wages, interest income, rental income, and capital gains are taxed, whereas businesses are taxed on profits earned from business operations.
    • Your taxable income is calculated by subtracting certain deductions and exemptions from your total income, and then individuals or corporations are taxed as per their income tax slab.
    • Income tax is structured in a progressive manner, i.e., the higher income is subject to the higher taxes.
    • Income tax is one of the primary sources of revenue for the government and is utilised to fund public services such as education, infrastructure, etc.
    • Individuals are required to file income tax returns with the government annually. The filing procedure involves reporting income, deductions, and other financial information. There are various Income Tax Return (ITR) forms such as ITR-1, ITR-2, etc. We will learn about these forms in another blog.

    Heads of Income Tax

    Now, let us delve deeper and learn about the heads under which your income is taxable. Heads are categories into which your income is classified for tax purposes. There are five main heads of income:

    1. Income from Salary

      This head includes wages, bonuses, allowances, gratuity and other employment income. The employer generally deducts tax deducted at source or TDS from the employee’s salary. Under this head, exemptions that can be availed include:

      HRA (house rent allowance), conveyance allowance, leave travel allowance (LTA), and medical allowance.

      Do remember that salary income is taxable on a due basis or receipt basis, whichever is earlier.

        2. Income from House Property

        The rental income that an individual earns from letting out a property they own is taxable under the head income from house property. The property can either be a self-occupied property or deemed-to-be-let-out property. That is, if you own two properties the second one is considered as deemed-to-be-let-out, and if you have taken a loan to purchase or construct the property, you can claim a deduction for the interest paid on the loan.

        3. Income from Profits & Gains of Business or Profession

          This head comprises the profits earned from the business’s operations that involve the sale of goods, manufacturing, etc. and the income earned by professionals such as doctors, lawyers, etc. All expenses that include rent, salaries, and office expenses for business are deductible.

          4. Income from Capital Gains

            Income from capital gains refers to the profits earned from selling capital assets such as real estate, stocks, bonds, etc.

            There are two types of capital gains:

            • Long-term capital gains (LTCG) – LTCG is subject to change as per the asset class. For example, gains from the sale of equity shares held for more than one year are taxed at a rate of 10% above INR 1 lakh.
            • Short-term Capital Gain (STCG) – Similar to LTCG, these are also subject to change as per the asset class. For example – gains from the sale of debt held for a short duration of less than a year are taxed at the rate of 15%.

            Checkout our blog to learn about taxation of mutual funds in India: Decoding Mutual Funds Taxation In India

            5. Income from other sources

              Income from other sources, also known as the residuary head of the income, includes all income that does not fall in the other four main heads. Any income you receive that is not covered in the above-mentioned heads fits into ‘Income from other sources’. This generally includes interest income, dividends income, gifts, lottery, etc.

              Read Also: What is Non-Tax Revenue – Sources and Components

              How to save Tax?

              How to save taxes

              Knowing the heads, let us discuss some strategies individuals and businesses can implement to save tax.

              Tax Saving – Individuals

              1. Know your tax basics and understand the tax brackets as applicable to your income.
              2. Be careful about the tax implications of your investments because long-term capital gains often have lower tax rates as compared to short-term capital gains.
              3. Utilise deductions under Section 80(C) of the Income Tax Act and invest up to INR 1.5 lakh in financial instruments like PPF, ELSS funds, NPS, ULIPs, etc. These investments not only offer you fascinating returns but also tax benefits.
              1. Utilise the exemption provided for HRA (house rent allowance) if you receive HRA as a part of your salary. For example, if you live in a rented house, you can claim HRA to reduce your taxable income.
              2. Consider investing in tax-saving bonds that are issued by the government.
              3. You can also claim deductions for expenses like tuition fees for the education of your child, principal repayment on home loans, and contributions to certain retirement funds.
              4. Donate to charitable institutions since these donations qualify for deductions under section 80(G).
              5. Premiums paid for health insurance policies for your spouse, children, or oneself are eligible for deductions under section 80(D).
              6. Keep in mind to maintain all the essential documents, receipts, and proofs of your investments and expenses that you claim for deductions.

              Tax Saving – Businesses & Corporates

              1. Choosing a business structure (sole proprietorship, partnership, or LLC) can significantly affect the tax treatment.
              2. Businesses need to recognise the deductible expenses such as rent, utilities, office supplies, employee salaries, advertising, and other business-related expenses.
              3. Businesses can also claim deductions under Section 179 to expense the property purchase cost.
              4. It is suggested to provide employee benefits such as health insurance, retirement plans, etc. since these benefits provide tax advantages and aid in employees’ well-being and retention.
              5. Suppose the businesses have incurred losses in a given financial year. In that case, the net operating loss can be carried forward to offset the taxable income in other years, thereby providing the tax benefits.
              6. Deductible expenses for research and development (R&D) can reduce the taxable capital gains for businesses.
              7. Investing in tax-free infrastructure bonds issued by the government, such as REC & NHAI Bonds are qualified for deduction under section 54 EC of the Income Tax Act. Individuals can also claim deductions under section 54 EC by investing in tax-saving infrastructure bonds.
              1. Businesses can also claim tax deductions for machinery depreciation of up to 20% if acquiring new machinery in a year.

              Read Also: 5 Must-Read Best Swing Trading Books for Trader

              Conclusion

              Tax saving is not just about keeping your tax bill low; it is about making clever financial decisions to safeguard your present and future. Tax laws are complex to understand and are subject to changes. Do not forget to seek guidance from tax professionals for better understanding.

              Frequently Asked Questions (FAQs)

              1. When was the Income Tax Act of India was enacted?

                Income Tax Act of India was enacted in the year 1961.

              2. What are the 5 heads of the income tax in India?

                Income from Salary, Income from house property, Income from Profits and gains of Business or Profession, Income from capital gain, and Income from other sources.

              3. How can I reduce my taxable income?

                You can claim deductions for eligible expenses such as insurance premiums, home loan principal amount repayment, and investment in tax-saving financial instruments. Remember to consult with tax expert at the time of filing your tax return.

              4. Are there penalties for non-compliance with tax laws?

                Yes, there are certain penalties for non-compliance with tax laws. We will cover this topic in a separate blog.

              5. What is the maximum deduction limit in Section 80C?

                As of January 2023, you can claim deduction in Section 80C up to INR 1.5 lakh.

            1. Havells Case Study: Business Model and SWOT Analysis

              Havells Case Study: Business Model and SWOT Analysis

              Havells is a well-known and multi-national electrical equipment company in Noida, India. It is a leading brand in the Indian market known for its quality, durability, and innovation.

              The company is a major player in both the Fast-Moving Electrical Goods (FMEG) and power distribution equipment sectors. Havells’s product portfolio is enormous and fulfils the requirements across residential, commercial, and industrial sectors. Currently, it employs almost 6,822 people and has 15 manufacturing units. It was listed on stock exchanges in the year 2001, and since then it has shown persistent growth in its share price. Its share is currently traded at a price of INR 1,620.

              Havells Case Study

              History of Havells

              Havells holds a rich history. In 1958, seeds of Havells were sown when Haveli Ram Gandhi set up a small electrical trading shop in Delhi. In the year 1971, Qimat Rai Gupta, a distributor of Mr. Gandhi, acquired the company from Haveli Ram and renamed it Havells India Limited. Gupta’s main -focus was on manufacturing rewirable switches and changeover switches. In the 1990s, Havells embarked on a series of strategic acquisitions and expanded its market reach.

              Some of the major acquisitions of Havells are as follows:

              • Year 1994 – ECS – A prominent switchgear manufacturer.
              • Year 1999 – Standard Electricals – A famous brand for industrial switchgear and motors.
              • Year 2001 – Crabtree India – A premium brand for electrical accessories.

              Products of Havells

              Brands of Havells include Lloyd, Crabtree, Standard, Reo, and Havells Studio.

              The product portfolio of Havells is as follows.

              1. Switchgear – Domestic Switchgears, Capacitors, Switches, Industrial Switchgears.
              2. Cables – Power Cables, Flexible Cables.
              3. Lighting and Fixtures – Professional Luminaires, Consumer Luminaires.
              4. Electrical Consumer Durables – Fans, Appliances, Water Heaters.
              5. Others – Motors, Solar, Pump, Water Purifiers, and Personal Grooming Products.
              6. Lloyd Consumer – Air Conditioners, Televisions, Washing Machines, Refrigerators.

              Business Model & Marketing Strategy of Havells

              Marketing strategy of Havells

              Havells emphasises research and development for producing and developing safer, smarter, and sustainable products and understands the needs of the consumers. It has built a long-term strategic relationship with the suppliers and focuses on assuring high-quality and efficient product development, which is supported by vertically and horizontally integrated manufacturing along with the in-house operations.

              The company adopted an omni-channel distribution strategy that is supported by modern technology. The company ensures fast delivery of goods and services through its strong distribution network.

              Havells holds a robust global presence and maintains brand attraction through national advertising, celebrity engagement, digital campaigns, in-shop advertising, etc. Moreover, it provides its customers with after-sales services to maintain long and healthy relationships.

              We can say that the company’s major focus is on innovation, digitisation, and talent. It commits to ethical practices, thereby building brand loyalty and positive community relations. Havells has built a resilient and adaptable business model that allows them to navigate market fluctuations and stay at the forefront of the electrical and home appliance industry.

              Read Also: Eicher Motors Case Study: Business Model & SWOT Analysis

              Advertising Campaigns of Havells

              1. Havells had an ad campaign known as “Hawa Badlegi” that has been used for several years. This campaign tackled various social issues, such as gender equality, environmental awareness, etc., with its emotional stories.
              2. #SwitchToHavells was an interactive social media campaign to encourage users to switch from their electrical products to Havells.
              3. ‘Havells ka Devas’ campaign was launched, turning 100 Havells fans into a Ganesh idol on a billboard to celebrate the festive spirit.
              4. Some of the famous TV commercials of Havells include #ZindagiKiSharing with Havells Smart Home Appliances, Havells Lighting #HarLightMeinDelight, Havells Water Purifiers (Sahi Paani Ka Sign Havells Alkaline).
              5. Havells’s advertisement campaign – ‘Let’s End Darkness’, was launched with several known faces and highlighted the idea of efficient lighting solutions for homes and offices to dismiss physical darkness.

              Havells – Awards & Recognitions

              Year 2022

              • Golden Pin Product Design Award for Freedom Architectural Light.
              • CII Design Excellence Award for Lloyd Elante Washing Machine.
              • Design Wall Awards, Platinum Winner, Delhi.
              • DIA Design Intelligence Award for Vogue Highbay.

              Year 2021

              • India Design Mark 2021 for Silencio Mixer Grinder.
              • India Design Mark 2021 for Puro Storage Electric Water Heater.
              • CII Design Excellence Award 2021 for Freedom Adaptable Architectural Light.
              • Good Design Japan 2021 for Nu Bulb and Lamb.
              • ICSI CSR Excellence Awards FY 2021-2022.

              SWOT Analysis of Havells

              The Havells SWOT Analysis highlights its strengths, weaknesses, opportunities, and threats, showcasing its market position and growth potential.

              SWOT analysis of Havells

              Strengths

              1. Havells offers a wide range of products that includes home appliances, commercial, and kitchen appliances keeping in mind the consumer’s needs and preferences.
              2. Havells has built a strong brand image over the years and is known for quality and reliability in the electronics industry.
              3. Havells’s major focus on innovation accounts for one of the key strengths.
              4. Havells is a global company with a presence in more than 50 countries operating internationally. This provides the company with a diversified revenue stream.
              5. Havells holds a strong distribution network and reaches more than 14,000 dealers in India ensuring market penetration.
              6. Balancing a strong brick-and-mortar network with an omnichannel distribution strategy for easy consumer access.

              Weakness

              1. Havells’s high debt-to-equity ratio at 2.44 as of December 2023 is a point of concern about the company’s financial stability.
              2. Increasing competition from other FMEG companies creates pressure on Havells and can impact the market share and performance.
              3. Havells is highly dependent on the Indian market and generates over 70% of revenue, making it vulnerable to economic fluctuations.
              4. Havells has seen a decline in profit margins, revenue, and total assets in the recent annual reports, causing market concerns.

              Opportunities

              The increasing demand for infrastructure in India can pose an opportunity for Havells to supply electrical and power distribution equipment in the country.

              1. Havells can enter and explore new markets in Asia, Africa, and Latin America for better opportunities.
              2. Development of E-commerce platforms to tap the untouched segment of the market.
              3. Developing and promoting eco-friendly products so that environmental concerns can be addressed will be a great opportunity for Havells to build a brand image.
              4. Havells can also capitalise on India’s ongoing rural electrification drive to target rural customers and increase its product reach.

              Threats

              1. Increasing the cost of raw materials such as copper and aluminium can greatly affect production costs and profit margins.
              2. Innovations from competitors can threaten the existing market share and customer base.
              3. Other local brands offering cheaper electrical products, especially in rural areas can be a challenge for Havells.
              4. Changing government policies and regulations related to energy efficiency or foreign trade can impact the business operations of Havells.

              Read Also: BSE Case Study: Business Model And SWOT Analysis

              Conclusion

              Havells success story is exemplary and stands as proof of hard work. The company’s business model is driven by consistent innovation and diversification of the product portfolio. Havells has a wide distribution network to reach various segments of the company. However, a high debt-to-equity ratio and dependence on the Indian market for revenue can be a matter of concern. Careful financial management can help the company mitigate risks and achieve long-term stability.

              S.NO.Check Out These Interesting Posts You Might Enjoy!
              1ICICI Bank Case Study: Financials, KPIs, Growth Strategies, and SWOT Analysis
              2Vedanta Case Study: Business Model, Financial Statement, SWOT Analysis
              3Nestle India Case Study: Business Model, Financial Statement, SWOT Analysis
              4BPCL Case Study: Business Model, Product Portfolio and SWOT Analysis
              5Apollo Hospitals Case Study : Business Model, Financial Statements, And SWOT Analysis

              Frequently Asked Questions (FAQs)

              1. Who was the founder of Havells?

                Qimat Rai Gupta.

              2. Is Havells a listed Company?

                Yes, the company launched its IPO in 2001.

              3. In which year Havells acquired Crabtree?

                Crabtree was acquired by Havells in the year 2001.

              4. What are the brands of Havells?

                Lloyd, Crabtree, Standard, Reo, Havells Studio.

              5. What is the full form of FMEG?

                FMEG stands for Fast-Moving Electrical Goods.

            2. Tata Motors vs Maruti Suzuki? Analysis of Auto Stocks

              Tata Motors vs Maruti Suzuki? Analysis of Auto Stocks

              Passionate about cars and dreaming of buying a new one but cannot afford it for considerable reasons? No worries, you can still invest in auto stocks. In this blog, we will explore the two well-recognised auto stocks: Tata Motors and Maruti Suzuki.

              Tata Motors

              Tata Motors is India’s largest automobile company and is a leading global manufacturer of cars, utility vehicles, buses, trucks, and defence vehicles. It was incorporated in the year 1945 and was a part of the Tata Group which was founded by Jamshedji Tata in the year 1868.

              Some of the world’s most iconic brands, including Jaguar Land Rover in the UK and Tata Daewoo in South Korea, are part of the automotive operations of the group.

              The company is committed to developing innovative and sustainable vehicles for the future of mobility. By operating on a philosophy of ‘giving back to society’.

              Maruti Suzuki

              It is a well-known company in India and has an intriguing history with the evolution of the Indian Automotive industry. In 1981, the Indian Government established Maruti Udyog Limited which was a joint venture with Suzuki Motor Corporation of Japan.

              Maruti Suzuki India Limited is a subsidiary company of Suzuki Motor Corporation, Japan that currently holds almost 58% of the equity of the company. It is one of the largest car makers. The company manufactures and sells passenger vehicles in India and is also the largest exporter of passenger vehicles in India.

              The company believes in value creation and connects well with the customers to understand their needs.

              Maruti Suzuki vs. Tata Motors – A Comparative Analysis

              comparative analysis

              Both Maruti Suzuki and Tata Motors are leading automobile companies catering to the needs of different segments.

              Maruti Suzuki holds a dominant position in the market with a significant market share in the passenger segment. In contrast, Tata Motors has a smaller share but is a leader in the commercial segment.

              Market Capitalisation (As of 30 Jan 2024)

              • Tata Motors – ₹3,15,751 Crore
              • Maruti Suzuki – ₹3,12,817 Crore

              Share Price (As of 30 Jan 2024)

              Below is the Tata motors vs Maruti Suzuki Share price

              • Tata Motors – INR 859
              • Maruti Suzuki – INR 9,952

              Maruti Suzuki has higher profitability and market capitalisation, whereas Tata Motors is facing challenges in the passenger vehicle segment but is profitable in the commercial segment.

              Product Portfolio

              • Tata Motors – Tata Motors offers SUVs like Nexon, Harrier, and Safari. Sedans like Tiago, Altroz, etc.
              • Maruti Suzuki – The company offers fuel-efficient, affordable, compact Hatchbacks and Sedans such as Wagon R, Baleno, Dzire, Alto 800, Swift, etc.
              trends

              The automotive industry in India is currently seeing a rapid transformation, driven by several key trends. Some of the ongoing trends are listed below.

              1. Electrification

              Electrification is undoubtedly the most important trend since the adoption of electric vehicles is consistently increasing due to concerns about climate change and government policies. Experts and industry analysts predict this growth will continue in the coming years.

              2. Autonomous Driving

              The development of self-driving cars is another major trend. While fully autonomous vehicles are still some years away, at-least in India, advancements in sensor technology and artificial intelligence are progressing each day, which could lead to significant changes in car usage.

              3. Connectivity

              Cars are becoming more connected and advanced with features like real-time traffic updates, in-vehicle infotainment systems, etc. This trend is being driven by the Internet of Things (IoT) and 5G networks, allowing cars to communicate with each other.

              4. Shared Mobility

              The rise of ride-sharing services is creating a change in the way people think about car ownership. The car-sharing services are more reasonable, affordable, and convenient alternatives as compared to owning a car. This trend is likely to grow as technology evolves.

              5. Sustainability

              The auto industry is also focusing on providing consumers with more sustainable vehicles by using recycled materials, and reduced emissions in the manufacturing process. This will eventually improve the fuel efficiency.

              Financial Analysis – Tata Motors vs. Maruti Suzuki

              Have a look at the table with an in-depth analysis of the recent financial statements of both the companies:

              MetricsTata Motors (in crores)Maruti Suzuki (in crores)
              Net ProfitINR 3,783INR 3,706
              RevenueINR 106,758INR 37,902
              Total AssetsINR 336,081INR 84,596
              Current LiabilitiesINR 155,027INR 20,107
              Debt-to-equity Ratio2.770.02
              PE Ratio66.9030.51

              From the above table, we can see that:

              • Tata Motors leads with comparatively higher revenue and high net profits.
              • Maruti Suzuki, on the other hand, has a much lower debt-to-equity ratio, which implies a stronger and stable financial position.
              • Both the stocks have relatively high P/E ratios, which reflects the investors’ expectation of future growth.

              Impact of Market Conditions on Auto Stocks

              1. During economic expansion or boom, consumer confidence rises and so does their income, leading to a boost in car sales and stock prices.
              2. Lower interest rates can make car loans affordable, which in turn will stimulate the demand for auto sales. Conversely, higher interest rates can reduce borrowing and dampen sales, affecting the stock price negatively. 
              3. Fluctuations in fuel prices can have a significant impact on consumer car-buying decisions. Rising fuel prices will boost the sales of fuel-efficient cars.
              4. An upgrade in the technology like the development of electric vehicles can create new opportunities for the auto sector and enhance their stock prices.

              Read Also: Mahindra & Mahindra vs Tata Motors: Which is Better?

              Conclusion

              Ultimately, choosing between Tata Motors and Maruti Suzuki depends on your investment goals and risk appetite. Risk-averse investors can avoid auto stocks because of their unpredictability in revenue. Keep in mind to do thorough research before making any kind of investment decision and find which stocks best align with your investment needs.

              Additionally, remember that auto companies operate in a cyclical industry, which means economic growth can significantly influence their sales volume.

              S.NO.Check Out These Interesting Posts You Might Enjoy!
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              2Tata Motors vs Maruti Suzuki
              3Tata Steel vs. JSW Steel
              4TCS vs Wipro
              5IndiGo vs SpiceJet

              Frequently Answered Questions (FAQs)

              1. Which brand saves you more at the pump?

                Maruti Suzuki is well-known for its fuel-efficient engines.

              2. Who zooms ahead in the race for Electric Vehicles?

                Both the auto stocks are actively investing and focusing on EVs and analysing the future growth of this segment.

              3. Is the auto industry a cyclical industry?

                Yes, the auto industry is cyclical as sales can be significantly influenced by economic growth.

              4. Are there any other Indian automakers to consider?

                There are several other stocks, such as Hero Moto Corp, Mahindra & Mahindra, Eicher Motors, Bajaj Auto, TVS Motors, Ola, etc.

              5. What are the biggest challenges faced by the auto sector?

                Some of the biggest challenges the auto sector faces are rising input costs, global shortage of semiconductors, shifts in consumer preferences, etc. 

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