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  • Tata Technologies Case Study: Business Model and Marketing Strategy

    Tata Technologies Case Study: Business Model and Marketing Strategy

    Tata Technologies Case Study: Business Model and Marketing Strategy

    Tata Technologies Limited is a leading Indian multinational product engineering company, known for its expertise in the automotive, aerospace, and industrial heavy machinery sectors.

    The company was incorporated as ‘Core Software Systems’ in 1989 as the automotive design unit of Tata Motors with major focus on car designing and development, and was later renamed to “Tata Technologies” in the year 2001.

    In the year 1994, the company separated itself from Tata Motors and marked the beginning of an independent journey. Since then, Tata Technologies has grown to become a global leader in providing engineering and digital services and several other areas.

    Currently, it operates 18 delivery centres across India, North America, Europe, and the Asia-Pacific region. Almost 65% of its business market is outside India. The company’s acquisitions, such as INCAT International in 2005 and Cambric Corporation in 2013, have played a key role in its growth.

    The company offers services in three major areas that include automotive, industrial heavy machinery and aerospace. Here is a quick overview of what the company does:

    1. Product engineering and design

    This includes developing cutting-edge products, from concept to launch, for global clients.

    2. Product life cycle management

    Management of the entire product lifecycle from inception to end-of-life.

    3. Manufacturing Solutions

    Design and implement efficient and cost-effective manufacturing processes.

    4. Digital Transformation

    Helps the clients leverage digital technologies so that their business operations and products can be improved.

    Tata Technologies Case Study

    Business Model – A detailed analysis

    Tata Tech - Business Model

    Tata Technologies’ business model is categorised into the following lines of business:

    1.     Services Offering

     

      • Providing outsourced engineering services and digital transformation services to global manufacturing clients.

      • Specialisation in digital thread which, enables solutions across processes and enterprises.

      • Provides engineering services to clients in the automotive and aerospace verticals of the company.

      • The automotive sector area includes concept design, tear down and benchmarking, vehicle architecture, body engineering, chassis engineering, etc.

      • The aerospace sector area includes Airframe designs, cabin interiors, and electronic equipment in aircraft.

     2.   Technology Solutions

     

      • Reselling third-party software applications, primarily product lifecycle management (PLM) software and solutions.

      • Provide services like consulting, implementation, system integration, support, and education solutions in manufacturing skills including upskilling and reskilling, to public sector institutions and private institutions including colleges and universities. 

    The company offers these services and industry verticals across the industry verticals of auto, aerospace, and industrial heavy machinery.

    The top 5 clients of Tata Technologies: Tata Motors, Jaguar Land Rover, Airbus, Boeing, and John Deere.

    Sales and Marketing

    The company works on a ‘Key Account Management’ approach wherein it identifies potential clients and tries to build strong relationships with them.

    Sales, marketing, and technical teams work together to deliver customised solutions and positioning of the brand with the promotion of social media campaigns.

    The company also has various subject matter experts. They closely work with sales, collect customer feedback and analyse the latest trends in the technology.

    Quality Check

    The company aims to provide consistent global delivery by implementing the Project Health Quality Index and continuously trying to improve its services.

    The main competitors of Tata Technologies are TCS, L&T Technology Services, KPIT Tech, and Wipro.

    Also, as of September 2023, the company employed 12,451 people, including 11,608 full-time and 843 temporary employees.

     

    SWOT Analysis

    SWOT analysis of Tata Tech

    Strengths

    1. Strong presence in the automotive and aerospace sectors.

    2. The company invests in engineering research and development, and also focuses on delivering quantifiable results for the clients.

    3. Strong brand recognition for providing commitment and reliability and concentrating on innovation.

    Weakness

    1. Revenue heavily relies on a few key clients, making them vulnerable to economic downturns or project cancellations.

    2. Faces tough competition from other engineering service providers.

    Opportunities

    1. The increasing demand for digital transformation services has allowed the company to expand its digital engineering and PLM offerings.

    2. The company is continuously making an effort to develop a strategic partnership with other technology companies. This will be an excellent opportunity for the company to open up new avenues for growth and innovation.

    3. Growing demand for sustainable solutions across is an opportunity for the company in eco-friendly design and manufacturing of products.

    Threats

    1. Any kind of economic downturn can impact the revenue of the company

    2. Rapid advancements in technologies like automation and artificial intelligence could lead to technological disruptions

    3. Companies in the market may offer services at lower costs. This can pose a threat to the company.

    Tata Technologies IPO

    Tata Group launched its IPO after almost 20 years.

    The valuation of the IPO was INR 3,042 crores, out of which 4.63 crore shares were sold by Tata Motors, 97 lakh shares were sold by Alpha TC Holdings Pte Ltd., and 48 Lakh equity shares were sold by Tata Capital with a price band of Rs 475-500 per equity share to the public.

    The company was listed on 30 November 2023, on NSE & BSE.

    Industry 4.0 & Tata Technologies

    Industry 4.0 is a phase of the Industrial Revolution that emphasizes automation, interconnectivity, and machine learning.

    Essential components of Industry 4.0 are as follows:

    IoT (Internet of Things)

    This connects physical devices and equipment through sensors and networks.

    Artificial intelligence and Machine learning

    Analyses and interpret data to optimise the process and make independent decisions.

    Cloud Computing

    Cloud platforms help in the storage and processing of huge amounts of data that enables accessibility of data from different locations.

    Cyber-physical Systems

    Integration of physical and digital systems to provide seamless connections between the physical and virtual world

    Tata Technologies is also trying to embrace Industry 4.0 by connecting stages of product development and manufacturing through a digital thread. They are also designing and implementing smart factories with robots to increase the company’s efficiency and create virtual replicas of physical products.

    In June 2023, Tata Technologies signed a MoA with the Tamil Nadu government to transform 71 ITIs in Tamil Nadu into technology centres.

    Conclusion

    Tata Technologies is a key player within the Tata group of companies that contributes to innovation and excellence in different sectors. As we look ahead, it remains a key player in driving new progress in digital engineering services.

    Frequently Asked Questions (FAQs)

    1. When was Tata Technology founded?

    Ans. Tata Technologies was founded in 1989.

    2. Who are Tata Technologies‘ top clients?

    Ans. Tata Motors, Jaguar Land Rover, Airbus, Boeing, John Deere.

    3. When was the company listed on NSE & BSE?

    Ans. The company was listed on 30th November 2023.

    4. Who are the competitors of Tata Technology?

    Ans. The competitors of Tata Technology are TCS, KPIT tec, Wipro, etc.

    5. The company has signed an MoA with which city for industry 4.0?

    Ans. The company has signed an MoA with Tamil Nadu.

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

  • Risk Management In Trading: Meaning, Uses, and Strategies

    Risk Management In Trading: Meaning, Uses, and Strategies

    Quick Summary of Risk Management

    First, we need to understand what is risk and the factors that create risk in the stock market before we learn about risk management.

    In mathematical terms, risk is measured by standard deviation. It is a standardised measure of variation from the mean whether upside or downside. However, traders are more concerned about downside deviation. In simple language, risk in trading means traders fear losing the capital deployed in the market.

    Various factors like market fluctuations, interest rate changes, volatility, and poor financial results can cause risk.

    Risk management in trading

    What is Risk Management?

    Risk management is considered a cornerstone for effective trading. It involves identifying, analysing and mitigating potential risks in capital preservation while trading and achieving long-term success.

    Traders, when trading in stocks, commodities, currencies, or any kind of financial instrument, implement different risk management strategies to control and minimise the losses incurred on their capital.

    Effective risk management helps the trader to make informed trading decisions, help overcome fear and greed, and generate better returns.

    Strategies of Risk Management

    1. Position Sizing

    Position sizing means determining the capital allocation on a particular trade depending on the total capital and risk appetite.

    2. Stop-loss Orders

    Setting pre-defined stop loss orders while trading not only automatically exits your positions but also reduces risk and minimises potential losses. You can trail your stop loss which means that you can modify your stop loss based on the changes in prices of the stock.

    3. Risk-Reward Ratio

    Aim for trades with risk-reward ratios greater than 1:1, meaning potential profit outweighs loss and try focusing on trading opportunities with limited downside potential.

    4. Defining risk tolerance

    Before entering into a trade, do not forget to define the maximum loss you can afford if a security slips into losses. Risk tolerance is generally based on your financial goals. Avoid taking excessive risks.

    5. Hedging

    Hedging is defined as a financial strategy that traders and investors use to protect their portfolios. It offsets losses with gains by taking an opposite position in the financial instrument you are trading.

    6. Diversification

    Remember the famous saying, “Do not put all your eggs in one basket”. Do not concentrate your capital on a single stock or financial asset. Diversification of the portfolio is crucial to avoid over-exposure to risks.

    7. Cost-Averaging

    When averaging the stocks, you buy them at different low prices at regular intervals. This helps in managing the price risk.

    Read Also: What is Carry Trade? Definition, Example, Benefits, and Risks

    Algorithmic Trading & Risk Management

    Algorithmic Trading & Risk Management

    Algorithmic Trading, also known as algo trading, involves the usage of computer algorithms to execute trades.

    No doubt that algorithmic trading in recent times has been revolutionary since it provides traders with speed, automation, efficiency, and no human bias while executing trades. However, it comes with risk and can amplify your losses. Therefore, it is necessary to manage the risk caused by algo trading.

    Strategies for risk management are more or less similar for manual and algorithmic trading. In addition to the above-mentioned strategies, other points that a trader needs to focus on are as follows:

    1. Conduct thorough back testing to analyse the past performance of the algorithm that you are using. Try implementing the strategies in different and extreme market conditions to ensure proper working. This will help you identify potential risks.

    2. Do work on failover mechanisms to manage technical failures and analyse how the algo will react in such situations.

    3. Regularly monitor algorithm performance, track risk metrics, and adapt strategies as needed.

    Trading Psychology and Risk Management

    Trading Psychology and Risk Management

    Trading psychology and risk management are two important pillars of successful trading, intricately woven together like the warp and weft of a well-made fabric. You need to control your emotions to implement effective risk management.

    Phycological factors like overconfidence, greed, and fear of loss can lead to poor risk management and impulsive decisions. Identifying your emotional triggers can help you manage your losses and mitigate the risks involved.

    You need to train your mind and develop a plan while trading in the markets and cultivate the discipline to stick to your trading plan so that you can achieve long-term success.

    Remember that trading psychology and risk management are ongoing processes that you need to continuously learn to refine your strategies and do not forget to seek professional advice to get valuable insights about the market.

    Risk Management for Day Traders

    Risk management is necessary for intra-day traders since they carry out several daily trades. This increases the chances of losses. Therefore, day traders should stick to their pre-determined risk limit and avoid overtrading.

    Developing a trading plan that defines the entry/exit point for your trades can help the day-traders in risk management. If a day trader wishes to manage the risk, he or she must be particular with leverage. Leveraging can lead to an increased risk of losses.

    Identify and trade with the prevailing trend. This can improve the probability of success and reduce the likelihood of being on the wrong side of a significant move. Do not trade just because you incurred a loss in your previous trade. Revenge trading often led to losses.

    Risk Management – Forex and Options Trading 

    The above-mentioned strategies for risk management work well with forex and options trading.

    But forex trading, with its high leverage and 24/7 market access, carries significant risks. By implementing the strategies discussed above and using technical analysis to understand the market trends, you can execute proper risk management to preserve your capital.

    In the case of Options trading, apart from the above-listed points, additional areas to keep in mind so that the risk can be managed are

    1. Aiming for delta-neutral positions to minimise exposure in direction trades.

    2. Use credit spreads like bull call spreads or bear put spreads to reduce the exposure.

    3. You should be aware of the effect of implied volatility on the prices of the option and adjust your positions accordingly.

    4. Options lose their value with time because of theta decay. One must adjust position size and expiry dates accordingly to manage the risk.

    Read Also: What is Price Action Trading & Price Action Strategy?

    Conclusion

    On a parting note, risk management is a wise practice. It helps to safeguard your capital and guides your journey towards long-term growth. It does not matter if you are a seasoned trainer or a newbie, intraday trader or positional trader, analysing risk and understanding is important to function in the market.

    There is no one-size-fits-all approach. Your risk management plan should be personalised as per your risk tolerance and capital availability.

    Frequently Asked Questions (FAQs)

    1. What is risk management?

      Risk management involves identifying, analysing and mitigating potential risks in capital preservation while trading and achieving long-term success.

    2. What are some common risk management strategies?

      Some common risk management strategies are position sizing, hedging, stop loss orders, etc.

    3. Why risk management is important for traders?

      Risk management is important for traders since it helps in minimising losses and capital preservation.

    4. What is position sizing?

      Position sizing means determining the capital allocation on a particular trade depending on the total capital and risk appetite.

    5. Is risk management the same for all traders?

      Risk management is not the same for all traders because it depends on individual trading style and capital.

  • Mutual Fund Taxation – How Mutual Funds Are Taxed?

    Mutual Fund Taxation – How Mutual Funds Are Taxed?

    Taxation summary

    Mutual funds are pooled investments that aim to provide capital growth to investors in the long term. They are classified according to asset class, financial goals, and structure. There’s an entire universe of mutual funds.

    As mutual funds can be of different types, so is their taxation. Now, you must be guessing, that is okay, but why should I care? Taxation on mutual funds varies due to various factors. Ignoring this can significantly impact your net returns post taxation. In this blog, we will learn how taxation impacts your returns on mutual funds investment.

    In India, after the budget of 2023 and finance bill, the benefit of indexation is no longer available on debt mutual funds. Hold on; things will be clarified by the end of the blog.

    Taxation rules are defined based on certain factors:

    1. Type of Fund: Equity-oriented or Debt-oriented.
    2. Type of Plan: Growth or IDCW (Income distribution cum capital withdrawal).
    3. Holding Period: Short term capital gain tax or Long term capital gain tax.

    Earnings from Mutual Funds Investment

    There are two ways you can earn from investing in mutual funds:

    1. Capital Gains: When you sell an asset at a price higher than initial buying price, you earn capital gains. In case of mutual funds, allotment is done based on NAV.

      For example – You bought ten units of mutual funds having NAV of 100. Your total buying was 10*100 = INR 1,000. Now, after some time, you sold these ten units at 120. So, you earned 20*10= INR 200, i.e., capital gains.
    2. Dividends: Mutual funds invest money in several companies, and when mutual funds receive dividends from those companies, the fund manager adjusts this dividend in two ways:
    3. Growth Option: In this, the fund manager will re-invest the dividend received in the portfolio, and you won’t get any pay check.
    4. IDCW: Income distribution cum capital withdrawal, the Fund manager will transfer the dividend received to you and will not re-invest the money.

    Taxation

    Now, for taxation purposes, both capital gains and dividends are taxed separately, we will uncover them one by one. Let’s start with dividends then we will move to capital gains tax.

    Dividends Taxation

    As discussed above, in the case of dividends, there are two options available to the investors:

    Growth: In case of growth, all your returns are classified as capital gains tax. So, no need to worry about separate taxation on dividends.

    IDCW: In this method, you will receive the dividends directly in your account. In India, dividends are taxed at your tax slab. For example, you fall in a 30% tax slab and receive dividends worth INR 50,000 in a year. So, out of total dividends, 30% of 50,000, i.e., INR 15,000 will go to the tax authorities.

    IDCW is only suggested to investors looking for a regular source of income. However, the growth option is more tax-efficient and ideal for long-term investors.

    Capital Gains Taxation

    For capital gains, mutual funds are broadly classified as Equity-oriented or debt-oriented. After the fiscal budget of 2023, there are three categories of taxation: Equity, Debt and Debt with indexation benefit. The exposure of a mutual fund’s equity component determines which category the fund is in. Have a look at the table below:

    capital gains taxation

    So, funds investing more than 65% in equity and equity-related instruments, are taxed as per Equity taxation. Fun Fact: Arbitrage funds come under equity taxation.

    Now, coming to the holding period. Your holding period also affects taxation. The holding period is different for all three categories. Check the table below:

    Holding period classification

    As you can observe, for equity-oriented funds, STCG will apply if the holding period is less than a year and LTCG if the holding period exceeds one year. In case of less than 35% exposure in equity, neither STCG nor LTCG will apply. Your gains are taxed at your income tax slab rate.

    There are hybrid funds in the market, these are the combination of equity and debt funds. They can be either equity-focused or debt-focused. If equity-focused (at least 65% in equity), then equity taxation will apply else debt taxation.

    Now again, tax rates are different for STCG and LTCG. At this point, you must be scratching your head; so many rules. Don’t worry, we have created a cheat sheet for you. Have a look at the chart below:

    Mutual funds cheat sheet

    Note that, in the case of LTCG in equity, there is no tax till the income of one lakh; post this limit a 10% tax is applicable without indexation benefit. In case of STCG in equity, there is flat 15% tax on gains without indexation benefit.

    Indexation benefit on debt funds – In this, your buying value will be inflation-adjusted so that your taxable income is reduced. Longer the holding period, higher the benefit of indexation.

    Now, which has the lowest taxation? Generally, there is no straight answer. It will depend on the type of mutual fund you are invested in and your holding period. However, between debt and debt with indexation, latter is the clear winner.

    Read Also: Long-Term Capital Gain (LTCG) Tax on Mutual Funds

    Conclusion

    We have covered all the aspects of mutual funds taxation in India. In summation, it broadly depends on the type of mutual fund you invest in and your holding period.

    Equity-oriented mutual funds are tax efficient but carry higher risk, and in case of debt-oriented funds, your slab rate will impact your tax majorly. If you fall in “no-tax” bracket, then small gains in a short holding period will carry no tax. Further, the longer your holding period, the more tax-efficient you will be.

    Based on this, one can analyses their portfolio and plan their entry and exit. For example, you have an unrealized profit of INR 80,000 in an equity mutual fund and want to take out this profit. Here, a better approach would be to analyses your holding period and act accordingly. If you have been invested for 11 months, then probably waiting for one more month is ideal, where LTCG will apply on your 80,000 gains. Do remember that in case of equity, no tax is there till one lakh.

    Read Also: Arbitrage Mutual Funds – What are Arbitrage Funds India | Basics, Taxation & Benefits

    Frequently Asked Questions (FAQs)

    1. What are slab rates in taxation?

      These are brackets based on the age and income of an individual; each bracket will carry different taxation.

    2. Do I need to pay any tax if my realized profit is INR 95,000 from selling an equity mutual fund after 14 months?

      No, in this case, LTCG will apply, and in equity LTCG, no tax is there till one lakh.

    3. What is IDCW?

      IDCW (Income Distribution Cum Capital Withdrawal) means dividends received from mutual funds will be transferred to you.

    4. What is Indexation benefit?

      Your buying value will be inflation-adjusted so that your taxable income is reduced.

    5. For long term investing, which is better, growth plan or IDCW?

      For the long-term, a growth plan is preferred.

  • What is ONDC? Is it the Future of E-Commerce in India?

    What is ONDC? Is it the Future of E-Commerce in India?

    ONDC - Open Network for Digital Commerce

    The Department for Promotion of Industry and Internal Trade (DPIIT) conducted research during the COVID-19 pandemic in the country to understand its impact on small sellers and the functioning of the local supply chain.

    As a result of the research, it was found that there is a lack of connection between online demand and the ability of local retailers to participate and engage. Further, studies on the matter helped the government to discover the bottlenecks of the existing digital commerce ecosystem in India.

    Then, consultations were held with multiple ministries and industry experts to identify possible solutions to address the bottlenecks in India’s digital commerce ecosystem. Taking inspiration from population-scale solutions such as the UPI, IMAP/SMTP (email protocols), HTTP (protocols for data communication and browsing), etc., ‘Open Network for Digital Commerce (ONDC)’ was proposed to revolutionise digital commerce in India (source – ondc.org).

    The DPIIT then constituted a committee of experts to analyse the potential of ONDC.

    What is ONDC Is it the Future of E-Commerce in India

    What is ONDC

    ONDC stands for Open Network for Digital Platform and is a non-profit initiative in India aimed at developing an open e-commerce ecosystem. It is a government-backed project initiated by the Department for Promotion of Industry and Internal Trade (DPIIT) in December 2021 to develop open e-commerce and provide a digital marketplace for all businesses, irrespective of their size of affiliation. It poses a prospective alternative to other e-commerce giants like Flipkart & Amazon.

    ONDC uses the Unified Payments Interface (UPI) projects as a base model. The UPI allows users to send or receive money irrespective of the payment platforms (Paytm, Phonepe, etc.) on which they are registered.

    Investors of ONDC include giants like Kotak Mahindra Bank, Bank of Baroda, CDSL, SBI, ICICI bank, NABARD, SIDBI, etc. and is currently in its testing stage in cities like Delhi NCR, Mumbai, Bangalore, etc. as of July 2022, the ONDC has expanded its network in Noida, Lucknow, Chennai, Kolkata, Pune etc.

    Let us understand the concept of ONDC with a simple example:

    Suppose you want to purchase a wallet; you will start surfing on different e-commerce sites like Amazon, Myntra, etc., and suddenly you think about ONDC. Currently, ONDC has not launched its application, but there are partner apps where you can do this: Paytm, Magicpin, Mystore, etc.

    In the Paytm app, there is a separate section of ONDC. All you have to do now is browse through the accessories section, filter out the wallet you want to purchase and make a payment. Simple!

    Any platform or application can participate in the ONDC network. It operates on an open protocol and a network-centric model that is like the UPI of e-commerce. Have a look at the illustration below:

    ONDC network centric model
    Source: ondc.org

    ONDC is a decentralised platform which means no single entity can control or regulate the network, which is good for small businesses.

    Although it is still in the development phase, it has gained substantial reach in India, with several major companies and organisations already participating in the network.

    ONDC and its impact on E-commerce

    ONDC impacts e-commerce in multiple ways:

    1. It reduces entry barriers for businesses of different sizes, making it easier for them to create an online presence.
    2. Customers can search across different platforms and compare the prices of the products. It enhances user convenience.
    3. It provides transparency, which helps customers find the best deals and enables them to make informed buying decisions.
    4. ONDC can help remove the digital divide by providing rural consumers access to a wide range of products and services. This could lead to increased economic opportunity in rural areas.
    5. It fosters competition and helps the different online platforms to innovate, eventually leading to lower prices and increased economic opportunities.

    Role of Government

    The Indian Government plays a crucial and multifaceted role. Below mentioned points state how the government is involved:

    1.     The government frames the policy framework and regulations of ONDC to ensure fair competition.

    2.     The Government of India provided the initial funding of ONDC to kickstart the development and infrastructure.

    3.     The government advertises, trains resources, encourages research and development and provides adequate support to SME businesses..

    ONDC and the Evolution of Digital E-commerce in India

    ONDC initiative will support transforming the ₹2.85 Lakh Crores (USD 38 Billion) Indian digital commerce market. It will help in the economic development of the country and will provide ample opportunities to millions of retailers and unemployed people.

    Further, it will help in the expansion of digital commerce with cost reduction. These costs can include acquisition costs and inventory costs.

    Challenges faced by ONDC

    ONDC, despite its potential to revolutionize Indian e-commerce, faces several challenges that need to be addressed for its success.

    1.     Giant E-commerce platforms like Amazon & Flipkart have established userbase and customer networks. It can be a challenge for ONDC to make people understand the concept of open protocol and convince them.

    2.     Since ONDC is still in its developing stage, chances are likely that customers might not be familiar with the usage of ONDC. Building awareness and providing education about the open network can be challenging.

    3.     Maintaining large volumes of data and transactions and ensuring smooth integration across different platforms registered under ONDC is a complex task. Building a robust infrastructure is crucial to tackle this.

    4.     Integrating ONDC efficiently with existing logistics and supply chain infrastructure can be a challenge. It is vital for smooth delivery and fulfilment.

    ONDC vs. Traditional E-commerce Models.

    ONDC operates on a network-centric model.

    If we talk about existing platform-centric models or traditional e-commerce models, both the buyers and the sellers must use the same application or platform to carry out business transactions. In contrast, in network-centric model of ONDC, buyers can access all the services currently provided by various sellers on various platforms through a common network.

    ONDC is backed by the government whereas traditional e-commerce platforms function independently without any involvement of the government.

    ONDC majorly focuses on SMEs, while traditional e-commerce platforms may or may not work in the interest of small businesses.

    Working of ONDC

    Workings of ONDC

    A retail seller needs to register on ONDC and list the services and products on the platform. Once listing is done using the ONDC’s open protocol, products and services can be found by the consumers on different e-commerce platforms.

    Whoever searches for the product will be able to see the location of the seller and can buy from the nearest shop available to ensure the fastest delivery.

    Conclusion

     ONDC aims to “democratize” digital commerce, moving it away from platform-centric models like Amazon and Flipkart to an open network. The transactions are executed through an open network.

    It has the potential to revolutionize Indian e-commerce by promoting open networks and fair competition. It may enable more sellers to be digitally visible. Analysing ONDC’s progress can give us valuable insights into the future of e-commerce in India and beyond.

    We hope that the blog answered all your thought-provoking questions about ONDC.

    Frequently Asked Questions (FAQs)

    1.   In which year ONDC was established?

    Ans. ONDC was established in the year 2021.

    2.   Who established ONDC?

    Ans. ONDC was established by the Department for Promotion of Industry and Internal Trade (DPIIT).

    3.   On what model does ONDC operate?

    Ans. ONDC operates on a network-centric model.

    4.   Is ONDC a UPI app/platform?

    Ans. No, it is not a UPI app rather, it is like the UPI of e-commerce.

    5.   Who are the investors of ONDC?

    Ans. Investors of ONDC include giants like Kotak Mahindra Bank, HDFC Bank, SBI, etc.

  • LIC Case Study: Business Model and SWOT Analysis

    LIC Case Study: Business Model and SWOT Analysis

    Lice Case Study: Business Model and SWOT Analysis

    Everyone is familiar with LIC so much that for us, life insurance means LIC. But have you wondered what the business model of LIC is? How big is it, and how does it impact the insurance world?

    In this case study, we will be answering such questions.

    The Life Insurance Corporation of India (LIC), established in 1956, is a public life insurance company headquartered in Mumbai, India. The primary objective of LIC is to enhance the quality of people’s life by spreading life insurance products to the underprivileged and economically backward population.

    LIC has six associate companies and seven subsidiaries. It ranks #1 among the insurance companies in India by size.

    LIC went public in May 2022; however, only 3.5% of the equity is owned by the public and the rest 96.5% is owned by the promoter and promoter group, i.e., the government of India.

    LIC Case Study

    Read Also: Kotak Mahindra Bank: Business Model and SWOT Analysis

    Key Facts of LIC (FY 22–23)

    1. LIC is operating 2,048 branches and 1,580 satellite branches. In comparison, HDFC Life (major competitor) has only 467 branches.

    2. LIC has overseas operations in 14 countries.

    3. LIC has issued 27.74 crs. individual policies, assuring a sum of INR 5,868,481 crs.

    4. In FY 22-23, LIC reported a net profit of INR 788,043 crs.

    5. LIC has a market share of 71.76% in insurance policies.

    Business Model of LIC

    Business model of LIC

    It’s simple: LIC sells insurance-related products to a wide range of customers. Consider the situation: you completed your graduation and were placed in a global MNC. Now, to secure your future, you’re looking for life insurance and get in touch with an insurance agent. The agent briefs you about all the current offerings. After analysing and trusting the brand value of LIC as Government of India backs it, you decided to go with LIC and bought life insurance from them.

    Here, you’ll be giving money to LIC in the form of premiums on your policy for a period of time, say 10 years. LIC, in return, offers you financial benefits in case of unforeseen situations.

    Now, LIC will invest this premium in various financial instruments: Stocks, Bonds, Mutual Funds, etc. In this situation, you are the only customer. As of September 2023, LIC has issued 27.74 crs. individual policies, assuring a sum of INR 5,868,481 crs. It’s a whopping number.

    As of November 2023, they are managing assets worth INR 4,397,205 crs. which is close to the assets under management (AUM) of the entire mutual funds industry in India. Imagine how big LIC is!

    Check out our blog to learn more about AUM: What is Asset Under Management (AUM) in Mutual Funds

    Breakup of State-wise Business

    StateMarket share (in%)
    Maharashtra12%
    West Bengal12%
    Uttar Pradesh10%
    Gujarat6%
    Tamil Nadu6%
    Karnataka6%
    Rajasthan4%
    Andhra Pradesh4%
    Others39%

    Read Also: Zepto Case Study: Business Model, Financials, and SWOT Analysis

    LIC Product Offering

    LIC offers numerous insurance plans to a broad range of customers, ranging from individuals to various groups (employers, institutions, etc.). It follows a customer centric approach and an efficient claim settlement process.

    As of November 2023, LIC is offering more than 50 products ranging from insurance plans to health plans. It has an extensive distribution network of more than 1.2 million agents. Have a look at the chart below demonstrating the broad offering of LIC:

    LIC Products

    As you can observe from the above graph, LIC has a broad universe of offerings with insurance plans further divided into five categories:

    1. Endowment Plans: It is a participating plan which offers a combination of protection and savings.
    2. Whole Life Plans: Life insurance that provides financial protection throughout life.
    3. Term Insurance Plans: It is a life insurance that offers financial protection for a fixed period.
    4. Money Back Plans: It is a type of life insurance in which money is returned after a set period, in case of no contingency.
    5. Riders: These are add-on benefits purchased along with the insurance.

    LIC Distribution Network

    LIC has a vast distribution network, which sets it apart from its peers. As of March 2023, it has:

    1. 13.47 lakh individual agents and 160 corporate agents.
    2. 19,437 micro insurance agents.
    3. 3,628 branches and satellite offices.
    4. 295 brokers.

    Read Also: Axis Bank Case Study: Business Model, Product Portfolio, and SWOT Analysis

    SWOT Analysis of LIC

    SWOT analysis of LIC

    Strengths

    1. Brand Value: LIC is the oldest and largest insurance player in the industry, having a massive customer base. The brand value that LIC has created is a significant strength of it.
    2. Product Base: Its broad range of product offerings with a mix of participating and non-participating products is a huge advantage.
    3. Network: LIC has the largest force of insurance agents. The number has crossed 13 lakhs in FY 22-23. Further, LIC has 2,048 branches, 1,580 satellite branches, 19,437 micro-insurance agents and 295 brokers.

    Weakness

    1. Lack of Online presence: LIC sells its policies via agents. It has an extensive network of agents all over India. However, the online presence of LIC is not up to the mark, and it heavily depends on insurance agents to sell its policies, which is a weak point in today’s digital world.
    2. Ineffective Advertising: LIC advertising falls short as compared to its competitors. One of the reasons that the LIC market’s share has been reduced in recent times.
    3. Lack of Innovation: Due to the massive size of LIC and red tape, it often lacks innovation and fails to diversify its products as per the evolving needs of the young generation.

    Opportunities

    1. Market Size: There has been rapid growth in India in recent times, poverty is decreasing, and financial stability is increasing. With India’s massive population, LIC has an excellent opportunity to increase its market share.
    2. Online Services: LIC is an offline dominant business driven by its agents. There’s a great opportunity to expand its online presence.
    3. Increased Awareness: In India, financial awareness is increasing, which gives the opportunity to launch new products based on the demand of the evolving customers.

    Threats

    1. Govt. Stake: LIC is a govt. owned entity where 97.5% of the stake is held by Govt. of India, operations of the LIC can be heavily influenced by it.
    2. Private Players: Tough competition from private players in the industry is a significant threat. In 2000, the Govt. of India allowed private players in the insurance industry and since then, the market share of LIC in insurance policies has kept on decreasing.
    3. Technological Challenges: There have been a lot of new developments in the fintech industry – digital lending, insurance, etc. However, if we look at LIC, it has a lot to do which poses a potential threat in an already declining market share.

    Read Also: Paytm Case Study: Business Model and Marketing Strategy

    Conclusion

    LIC is a behemoth and the largest insurance player in India. It offers a wide range of insurance products, having an extensive distribution network. LIC’s massive portfolio also accelerated its income stream.

    As the insurance sector continues to develop in India, LIC’s ability to adapt to constantly evolving environment will be a key factor in maintaining its market share. In other words, digital presence is essential in today’s world. The sharp decline has been seen in the operations of PSUs whenever government allowed private players in the industry. BSNL and Air India are flagship examples of this, but can LIC be an exception? Only time will tell.

    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 administers LIC?

      The Ministry of Finance.

    2. Who are LIC’s competitors?

      LIC faces tough competition from HDFC Life, SBI Life, ICICI Lombard, etc.

    3. What is a satellite office?

      It is a kind of mini-office set-up by LIC in areas where no LIC branch available nearby.

    4. What are participating and non-participating insurance policies?

      In participating policies, one can enjoy the profits earned by the insurer, while in non-participating policies, there is no such provision.

    5. When did LIC establish?

      LIC was established in 1956.

  • What Is An IPO Mutual Fund? Should You Invest?

    What Is An IPO Mutual Fund? Should You Invest?

    IPO Mutual Fund

    Recently, there have been a lot of new IPOs in Indian markets that have given stellar listing gains to investors. However, the better the potential IPO, the lesser the chances of getting an allotment for Retail Investors. Don’t worry; we will be discussing how you can invest in an Initial Public Offering (IPOs) via the mutual fund route.

    NFO

    Mutual funds are pooled investments that aim to provide capital growth to investors in the long term. They are classified according to asset class, financial goals, and structure. In this blog, we will discuss the thematic funds—IPO theme.

    Thematic funds are similar to sectoral funds, which fall under equity mutual funds category and are professionally managed by a fund manager. Their strategy involves investing in a particular theme, e.g., IPO theme, Digital and tech theme, etc.

    Classification of mutual funds

    There is one such mutual fund in the industry that will enable you to invest in quality IPOs without worrying about allotment status. We are referring to “Edelweiss Recently Listed IPO Mutual Fund”. It is a thematic fund that will assist you in investing in quality IPOs that have either recently been listed or are going to be listed on the exchanges.

    Edelweiss converted its “Maiden-Opportunities Fund”, a close-ended scheme launched in February 2018, to the “Recently listed IPO Fund, an open-ended scheme” open to new investments since June 2021.

    As per Edelweiss, the following is the strategy of the fund:

    1. The fund will invest in the recent 100 IPOs to capture listing and post-listing gains.

    2. The fund will invest in new-age businesses that are getting listed in the Indian market.

    3. The fund will invest in companies across sectors with a bias towards small and mid-caps that promise growth.

    4. The fund will not invest in weak businesses that can be highly impacted by market shocks.

    Read Also: Why Invest in an IPO and its Benefits?

    Characteristics of the Fund:

    As of December 2023:

    1. More than 72,000 people have invested in this mutual fund.

    2. Its expense ratio is 0.92% and has an exit load of 2% if redeemed within six months.

    3. Since inception, the fund has given an app. annualized return of 15%.

    4. Only such thematic mutual fund available in the industry.

    5. The fund’s asset under management (AUM) is INR 943 crs.

    Positives if you invest in such thematic mutual funds:

    Positives of investing in thematic mutual funds
    1. Get access to a large number of IPOs with minimal investment amounts without the headache of research and analysis.
    2. You don’t have to worry about the non-allotment of IPOs, as such funds place bids via the QIB route (Qualified Institutional Buyers).
    3. High growth potential as the fund will invest in new-age businesses with a bias towards small and mid-caps.

    Negatives if you invest in such thematic mutual funds:

    1. IPO-themed funds are relatively new in the industry, with a minimal track record. Further, there is only one IPO-themed fund in the industry as of December 2023, so comparing its characteristics and returns can be challenging.
    2. Thematic funds have a narrowly defined investment focus, which provides less freedom to the fund manager to invest in profitable companies.
    3. The fund’s AUM may get smaller if the quality of new IPOs declines.
    4. Thematic funds are not suitable for short-term horizons. These funds may have negative or poor returns during the bear market or in the short term.
    5. Thematic funds substantially carry more risks than other categories of mutual funds, as news and events related to a particular sector can impact the entire sector.

    Conclusion

    We have discussed one of the thematic funds, the IPO theme. Thematic funds are equity mutual funds that invest in a particular theme. As we discussed above, the IPO theme is relatively new, and the only fund available in the industry as of now is the “Edelweiss Recently Listed IPO Fund”. Assessing the long-term prospects of such funds can be challenging. Further, thematic funds generally carry a higher risk than other categories of mutual funds because of their concentrated approach and smaller investment universe.

    The optimal asset allocation approach is to choose mutual funds after consulting with a financial advisor and assessing your investment horizon and risk appetite. Investments in thematic mutual funds shouldn’t constitute a significant portion of your portfolio.

    Read Also: What is an IPO Subscription & How Does it Work?

    Frequently Asked Questions (FAQs)

    1. What are some examples of thematic funds?

      Digital and AI theme, IPO theme, Clean energy theme, etc.

    2. What is the risk profile of thematic funds?

      Thematic funds carry a very high level of risk.

    3. How many IPO-themed mutual funds are available in the industry?

      As of December 2023, only one fund invests in the IPO theme.

    4. What are the Sectoral Funds?

      Both are almost similar; thematic funds focus on themes such as IPO, Digital India, etc., while sectoral funds focus on a particular sector such as Healthcare, FMCG, Financials, etc.

    5. What is QIB?

      QIB stands for Qualified Institutional Buyers. These are institutional buyers with expertise in capital markets. Example: Mutual Funds, Alternative Investment Funds, Endowment Funds, etc.

  • Nykaa Case Study: SWOT Analysis, Business Model and Marketing Strategy

    Nykaa Case Study: SWOT Analysis, Business Model and Marketing Strategy

    Nykaa is an Indian brand of beauty and cosmetic products. It was founded by Falguni Nayar in 2012. Since then, it has evolved into a lifestyle brand offering a curated selection of 1900+ brands and 1 lakh+ products across skincare, makeup, fragrance, health, haircare, etc.

    It is a dominant player in the market and is continuously trying to adapt and innovate itself to align with consumer preferences. Its omnichannel approach, curated product selection, and focus on building a loyal community position it for sustained growth in the years to come. In this blog, we will analyze Nykaa’s strengths, weaknesses, opportunities, and threats, along with Nykaa’s marketing strategy.

    Nykaa case study

    Nykaa is a public company that was initially incorporated as FSN E-Commerce Ventures Private Limited and was listed on the stock exchange in 2021. As of December 2024, Nykaa’s shareholding pattern is as follows:

    Investor TypeHolding Percentage (%)
    Promoter52.16
    FII9.05
    DII23.56
    Public15.23

    Nykaa’s USP includes a first-mover advantage, a strong brand identity in the cosmetics industry, and a data-driven approach with personalized recommendations for customers. Nykaa’s target audience is primarily women aged 18–50 and beauty influencers. Nykaa has extensively used brand marketing and social media reach to build its customer base. The phrase “Be Bold and Be Good” drives Nykaa, and the company is still working toward its goals.

    Nykaa is a D2C brand of consumer products with 145 BPC stores and 9 fashion stores across 60 cities that work on an inventory-based model, i.e., the company buys the products from the manufacturers and stores them in warehouses. Products are sold either through online apps or in offline stores.

    Nykaa also has a series of in-house fashion and beauty brands. Some of them are Nykaa Cosmetics, Kay Beauty, and Nykaa Naturals. The apparel and accessories verticals consist of 1,350 brands.

    Download Nykaa Case Study PDF

    Market Details of Nykaa (FSN E-Commerce Ventures Ltd.

    Current Market Price ₹164
    Market Capitalization (in ₹ Crores)47,019
    52 Week High 230
    52 Week Low146
    Book Value4.56
    P/E Ratio892
    (Data as of 17 March 2025)

    Read Also: D Mart Case Study: Business Model and Marketing Strategy

    SWOT Analysis of Nykaa

    SWOT Analysis of Nykaa

    Strengths

    1. Nykaa captures a significant market share when it comes to online beauty. It created a strong customer base and brand loyalty, which gives the company its first-mover advantage.

    2. Unlike generic e-commerce platforms, Nykaa offers a carefully curated range of authentic beauty and wellness products catering to diverse needs and preferences.

    3. Nykaa’s engaging content, user-friendly interface, and social media presence fascinate the young generation of India.

    4. Nykaa offers its customers a wide variety of products in various categories.

    5. Nykaa has shown exponential and exemplary growth over the years with continuous expansion in its product lines.

    Weakness

    1. Maintaining inventory and storage of beauty products can be complex and challenging, leading to stockouts and inefficiencies. This can negatively impact the customer shopping experience.

    2. Nykaa also faces tough competition from other D2C brands, which can put the company under immense pressure, thereby affecting its margins.

    3. No free delivery below INR 700 can make it unattractive to customers with low budgets.

    4. Nykaa hardly spends on research and development activities, which can limit its capacity to compete with other beauty brands, and as a retail business with both offline and online presence, functioning without proper R&D can lead to operational challenges.

    5. Overdependence on the female demographic can affect the business.

    Opportunities

    1. Nykaa can tap international markets, which can help the company increase its customer base and revenue.

    2. Acquisitions of niche brands can cater to the needs of customers and create a new customer base.

    3. The existing loyalty program of the brand can be enhanced and improved with some exclusive offerings, which can eventually help boost customer retention.

    4. Nykaa can further invest in AI-powered solutions for product recommendations, chatbot customer service, and AR/VR beauty consultations. This can improve operational efficiency and potential customers.

    Threats

    1. Tough competition from other brands is a threat for Nykaa, as this can move their price-sensitive customers to other, more affordable alternatives.

    2. Evolving consumer preferences and buying behavior can be a threat to the beauty brand if it does not align with the changing trend.

    3. At the time of listing, the company’s valuation stood at $15.36 billion. A significant decline can be seen in the valuation of the company post-listing. Further, as of March 2025, the company is trading at a P/E of INR 892, which is high as compared to its peers.

    4. Evolving technologies like augmented reality (AR) and virtual reality (VR) offer try-on methods to customers. If not implemented with a seamless experience, it can be a threat to Nykaa.

    Read Also: Hindustan Unilever Case Study: Business Model, Financials, and SWOT Analysis

    Marketing Strategies of Nykaa

    Marketing Strategies of Nykaa

    1. Product Strategy

    Nykaa is currently offering a diverse range of 1500+ beauty and wellness products. The company has also recently launched its product brand, which is adding an extra dimension to its product basket. Nykaa aims to be a one-stop destination for people of all age groups and offers beauty products from both national and international brands with a presence across major markets like the U.A.E., Mauritius, and the U.S.A.

    It tries to offer curated products suitable for various skin tones and types to its customers that align with their needs and are also in trend. The brand also launches limited-edition products and collaborates with celebrities and influencers to create exclusive collections. It personalizes the product experience by offering recommendations based on individual purchase histories and reviews from other users. The brand also promotes environment-friendly packaging to promote sustainability.

    Nykaa has also launched Nykaa fashion and Nykaa men. We can say that the product strategy of Nykaa is dynamic.

    2. Pricing Strategy

    The company generally focuses on cost-based pricing, where it analyses the cost of acquiring and distributing products and adds a markup to decide the final price, and prestige pricing, where the company has collaborated with different luxury brands like MAC, Anomaly, Aveda, etc., catering to high-end consumers.

    Nykaa runs promotional campaigns, discounts, and special offers during festive sales to attract customers and drive sales. It also offers diverse payment options, including cash on delivery, credit card EMI, and buy-now-pay-later schemes, making purchases accessible to a broader customer base.

    3. Place / Distribution Strategy

    Nykaa’s omni-channel presence has helped the company evolve over the years. The brand provides three options to customers. They can visit either Nykaa’s luxe store for a premium shopping experience or on-trend stores for budget shopping. The third option is to buy products online via Nykaa’s web and mobile app.

    In recent years, the company has tried to expand its network. It has collaborated with different logistics partners to offer flexible delivery options like express delivery and scheduled delivery in some locations.

    4. Promotion Strategy

    Nykaa engages with its customers through blog posts, makeup tutorials on YouTube, and articles to spread informative content among the audience. This creates a sense of trust among the customers. The company also collaborates with influencers to promote its trendy products. It sends targeted emails to customers based on their purchase history, preferences, and interests, offering personalized recommendations and promotions.

    Nykaa leverages influencers through its customized creator-focused product and program called the Nykaa affiliate program, which enables external content creators to publish content on behalf of the company across several digital platforms. Further, the company continuously posts deals and giveaway alerts on social sites to attract customers.

    Read Also: Nestle India Case Study: Business Model, Financial Statement, SWOT Analysis

    Key Performance Indicators (KPIs)

    ParticularsFY2024FY2023FY2022
    Operating Profit Margin (%)2.372.192.48
    Net Profit Margin (%)0.680.481.09
    ROCE (%)9.976.445.58
    Current Ratio1.221.592
    Debt to Equity Ratio0.540.330.25
    (Data as of 17 March 2025)

    Future Outlook of Nykaa

    Nykaa is poised for significant growth in the coming years, driven by expansion into international markets, strategic acquisitions, and technological advancements. The company aims to enhance its AI-driven personalized shopping experience and integrate AR/VR solutions for virtual product trials. With an increasing focus on sustainability, Nykaa plans to introduce more eco-friendly packaging and expand its organic and cruelty-free product range. Additionally, the brand is strengthening its offline presence by opening more Nykaa Luxe and On-Trend stores across Tier 2 and Tier 3 cities. As digital adoption rises, Nykaa is expected to strengthen its market leadership by leveraging data-driven marketing and influencer collaborations.

    Conclusion

    Nykaa’s journey from a fledgling e-commerce platform offering beauty products to a platform that innovates with vision and is adaptable as per the choices and preferences of the customer is phenomenal. The brand knows how to capitalize on opportunities well. It has carved out a significant niche in the Indian market and has the potential to further expand its business, shaping the future of the beauty market.

    If you have enjoyed reading our blog, check out the related case study: Flipkart Case Study- Business Model and Marketing Strategy.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
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    3TCS Case Study: Business Model, Financial Statement, SWOT Analysis
    4Hindustan Unilever Case Study: Business Model, Financials, and SWOT Analysis
    5Vedanta Case Study: Business Model, Financial Statement, SWOT Analysis

    Frequently Asked Questions (FAQs)

    1. Who founded Nykaa?

      Nykaa was founded by Falguni Nayyar in 2012.

    2. Does Nykaa sell products for females only?

      No, Nykaa is not only for females; it also sells grooming and personal care products for men.

    3. Is Nykaa a public company?

      Yes, Nykaa is a public company listed on the NSE & BSE.

    4. Who are the competitors of Nykaa?

      Nykaa faces tough competition from Purplle, Myntra, Ajio, etc.

    5. What is the biggest sale introduced by Nykaa?

      The biggest sale of Nykaa is the “Nykaa Pink Friday sale”.

  • Multi-Cap Vs Flexi-Cap Mutual Funds? Which Is Better For You?

    Multi-Cap Vs Flexi-Cap Mutual Funds? Which Is Better For You?

    Multi cap vs flexi cap

    You are a well-versed investor and recently stumbled upon multi-cap and flexi-cap mutual funds and asked yourself, what exactly is the difference. We will unfold your question in today’s blog.

    Firstly, if you are new to the world of mutual funds, check out our blog: Mutual Funds: Meaning, Types, Features, Benefits and How They Work.

    Mutual funds are classified according to asset class, financial goals, and structure. Multi-cap and Flexi-cap are both similar to other equity mutual funds, which are pooled investments, and they aim to provide capital growth to investors in the long term. Both funds fall under the umbrella of active mutual funds.

    Multi-Cap Vs Flexi-Cap Mutual Funds

    Read Also: Equity Mutual Funds: Meaning, Types & Features

    Multi-Cap Funds

    Multi-cap funds are active equity mutual funds that invest in large-cap, mid-cap, and small-cap stocks. As per the latest circular released by SEBI, at least 75% of the investments made by multi-cap mutual funds are in equity and equity-related instruments. The investments should be made in the following manner:

    1. Investments in large-cap companies: at least 25% of the total assets.
    2. Investments in mid-cap companies: at least 25% of the total assets.
    3. Investments in small-cap companies: at least 25% of the total assets.

    The advantage of multi-cap funds is that your capital is invested in all three caps (at least 25%), with mid and small caps being more volatile than large caps, which can yield an ample return in the long run. However, keep in mind that there is no guarantee that multi-cap funds will outperform other mutual fund classes; in fact, multi-cap funds can be more volatile in the short run.

    Flexi-Cap Funds

    The Securities and Exchange Board of India (SEBI) and the Association of Mutual Funds in India (AMFI) have launched a number of initiatives in India to raise public awareness and confidence in the financial sector.

    SEBI introduced this category of mutual funds in November 2020 after receiving recommendations from the Mutual Fund Advisory Committee (MFAC). As per the circular released by SEBI, it is an open-ended, dynamic equity scheme investing across large-cap, mid-cap, and small-cap stocks.

    In the flexi-cap fund, at least 65% of the investments should be invested in equity and equity-related instruments. However, as compared to multi-cap funds, there is no minimum criterion to invest this 65% across large, small, or mid-cap stocks. The advantage of flexi-cap funds is that fund managers have more investment flexibility to invest money across large, mid, and small caps.

    Let’s look at the below comparison. We have selected one mutual fund from each category:

    1. Parag Parikh Flexi Cap Fund
    2. Nippon India Multi Cap Fund
    Parag Parikh flexi cap vs Nippon India multi cap
    Source: Valueresearch

    As you can observe, the Parag Parikh flexi-cap fund has more investment in large-cap funds than the Nippon India multi-cap fund. Further, the Parag Parikh flexi-cap fund has only a 1% investment in small-cap stocks. Flexi-cap funds provide more flexibility for investments as compared to multi-cap funds, as there is no regulatory requirement for flexi-cap funds.

    Choosing Between Multi-Cap and Flexi-Cap:

    ParticularsFlexi-cap fundMulti-cap fund
    Equity ExposureAt-least 65% investment in equity and equity-related instrumentsAt-least 75% investment in equity and equity-related instruments
    Asset AllocationFund managers have flexibility in asset allocationAt-least 25% in each of the cap: large, mid and small
    RiskVery HighVery high
    VolatilityLow as compared to multi-capHigh as compared to flexi-cap
    TaxSubject to both STCG and LTCGSubject to both STCG and LTCG

    Read Also: What are Small Cap Mutual Funds? Definition, Advantages, and Risks Explained

    Conclusion

    We have discussed the similarities and differences between flexi-cap and multi-cap mutual funds. Both are equity mutual funds and provide diversification to your mutual fund portfolio. However, the key difference in both is the equity exposure and the asset allocation. The minimum percentage of equity and equity-related instruments that flexi-cap funds and multi-cap funds can invest in is 65% and 75%, respectively. Further, multi-cap funds must invest at least 25% in each class: large, mid, and small-cap, whereas flexi-cap funds have greater flexibility.

    The best mutual fund strategy is to select mutual funds based on your risk appetite and time horizon after consulting with your financial advisor.

    Frequently Asked Questions (FAQs)

    1. Are multi-cap and flexi-cap active or passive funds?

      Both multi-cap and flexi-cap are active mutual funds means they are actively managed by a professional fund manager.

    2. Can flexi-cap funds invest in debt securities?

      Yes, as long as a fund has at least 65% of its investments in equity.

    3. What is the risk profile of flexi-cap and multi-cap funds?

      The risk profile for both funds is very high, as both are equity mutual funds.

    4. Are multi-cap funds more volatile than flexi-cap funds?

      In general, the answer is yes, because multi-cap funds must invest at least 25% in small-cap and mid-cap funds due to regulatory requirements, whereas no such requirement for flexi-cap funds.

    5. When did flexi-cap funds launch?

      In November 2020, SEBI introduced flexi-cap funds.

  • Top Indicators Used By Intraday Traders In Scalping

    Top Indicators Used By Intraday Traders In Scalping

    Scalping

    Ever heard of the term “Scalping”? What is it, how traders use it, etc? Don’t worry, we will unwind all these questions in this blog.

    Top Indicators Used By Intraday Traders

    Scalping is a trading strategy that involves buying / selling securities in large amounts but for a very short time frame. The time frame can be as short as a few seconds. The ideology behind this strategy is that people think it is easier to make quick profits in a shorter time than to get stuck in long periods.

    Illustration of a Scalp Trade:

    Illustration of scalping

    Traders who do scalping are often known as “scalpers.” Scalpers use a combination of technical indicators for quick decisions and the identifying entry and exit points. In this blog, we will learn about the technical indicators that scalpers often use.

    Key Features of Scalping

    1. The time frame used by most scalpers ranges from 1 minute to 15 minutes. In a few cases, it can be as low as a few seconds.

    2. Generally, scalping is considered less risky than long or multiple-time frame strategies such as swing trading or positional trading.

    3. High Frequency Traders (HFTs) indulge in scalping and generally use Algorithmic trading.

    4. Scalpers often trade with pre-determined entry and exit levels and are quick to take off profits or book losses.

    Benefits of Scalping

    1. Less risky: As discussed, scalpers trade in a very short time frame with pre-defined entry and exit levels, eliminating the potential risk of significant losses.

    2. Only technical, no fundamental: Scalpers operate in a short time frame where decisions are purely based on technical indicators and no fundamental analysis (stock news, events, financial analysis) is used.

    3. All-weather strategy: Scalping is an all-weather strategy that can be used in bullish as well as bearish markets.

    Drawbacks of Scalping

    1. Transaction Costs: Scalpers indulge in multiple trades during the day, which results in very high transaction costs, including but not limited to: Brokerage, STT, Stamp duty, Exchanges fees, etc. In cases of low margins, transaction costs often eat up entire profits.

    Check out our blog: Different Types of Charges in Online Trading

    2. Tech Issues: Scalping means buying or selling in a very short time frame, and scalpers often use algorithmic trading. Even a few seconds of delay can significantly hamper the outcome of a trade and tech issues are common in India, including broker-related glitches, internet connectivity, etc.

    3. May not be suitable for illiquid securities: Scalpers generally prefer trading in highly liquid securities, as to buy / sell in large quantities, liquidity is a must requirement. In certain markets, liquidity is not enough, which shortens the horizons of scalpers, and they end up trading in scattered markets.

    4. Shorter time frames are less reliable: As explained above, they trade in a very short time frame. However, there is a general phenomenon: the longer the period, the more reliable the indicator. Therefore, scalpers are prone to false signals which increases their challenges.

    Read Also: What is Scalping Trading Strategy?

    Technical Indicators Used in Scalping

    Technical Indicators

    So far, we have discussed scalping, its key features, merits, and demerits. Let’s deep dive into the most commonly used intraday technical indicators used by scalpers for trading in equity, commodities, and forex markets:

    1. Moving Averages

    Moving averages are price-based indicators, meaning they combine current and historical prices. It is the average of the price of security over a specified number of periods. The most popular moving average periods used by traders are the 20, 60, 100, and 200 periods. A widely followed moving average crossover signal is between 50 and 200 periods, often referred to as the “Golden Cross”.

    Moving averages can be of multiple types and are less volatile than the price of a security. The most popular averages used by traders are: Simple Moving Average (SMA) and Exponential Moving Average (EMA). The key difference between the two is that SMA uses equal price weights while EMA gives more weight to the recent prices. 

    Moving averages are often used to identify potential buy or sell levels. When a moving average of a particular time frame, say 20 periods, crosses another moving average of another time frame, say 50 periods, it is a bullish crossover. They are also used to identify support and resistance levels; the longer the timeframe, the stronger the support or resistance level.

    2. MACD Indicator

    Moving Average Convergence Divergence (MACD) is a momentum technical indicator formed by the difference between short-time frame and long-time frame moving averages. It is formed by the two lines:

    1. MACD Line: It is the difference between two EMA of different time frames (generally 26 and 12 periods).
    2. Signal Line: It is the EMA (9 periods) of the MACD line.

    It is often used to identify potential buy or sell signals.  When the MACD line crosses above the signal line, it indicates a buying signal, or vice versa.

    3. Bollinger Bands

    Renowned trader John Bollinger developed Bollinger bands. Bollinger bands provide an approximate range of security that is expected to trade within. It consists of three bands: the upper, middle, and lower bands. While the middle band is the moving average of a particular time frame, say 20 periods, the upper and lower bands are decided based on the standard deviation.

    The more volatile the security, the higher the standard deviation and wider the range of upper and lower bands.

    4. Relative Strength Index

    It measures the level of recent price change in a security computed over a rolling time period. It is used to evaluate overbought or oversold zones. It can also be used to identify potential reversal points. It moves in a range of 0 to 100.

    Generally, an RSI above 70 is considered an overbought zone, while an RSI below 30 is considered an oversold zone.

    5. Stochastic Oscillator

    The stochastic oscillator is a momentum indicator developed in 1950 and used to identify overbought or oversold zones. It is formed by comparing the closing price of a security to a range of its prices, say the 14-day moving average.

    It ranges from 0 to 100, and generally, above 80 means security is in overbought zone and below 20 means security is in oversold zone.

    Relative Strength Index (RSI) and Stochastic Oscillator are both used to measure momentum. RSI is widely used in directional markets, and stochastic oscillators are widely used in sideways markets.

    6. Fibonacci Retracement

    The Fibonacci sequence, discovered by an Italian mathematician, has applications in various aspects of life, including technical analysis in the financial markets. It is a set of steadily increasing numbers where each number is equal to the sum of the preceding two numbers. Example: 0, 1, 1, 2, 3, 5, 8,…

    Fibonacci Retracement is a popular tool used in technical analysis to identify potential levels of support and resistance and has great relevance in the technical analysis world. The most common “Fibonacci Retracement” levels are 23.6%, 38.2%, and 61.8%

    Analysing the potential level of retracement using “Fibonacci levels” offers great insights to a trader.

    Checkout our blog: Fibonacci Retracement: Complete Guide on How to Use and Strategy

    7. Parabolic SAR

    Parabolic SAR (stop and reverse), or PSAR, is a technical indicator developed by American engineer J. Wells Wilder. The “Parabolic SAR” indicator is a series of dots plotted either above or below the price of the security. When a security is in a bullish trend, a dot is positioned below the price; in a bearish trend, it is positioned above the price.

    It is often used to identify the trend’s direction and potential buy / sell signals. Further, it is used by traders to determine the range of trailing stop-loss orders.

    The de-merit of PSAR is that sometimes it may generate false signals, which results in poor earnings for scalpers.

    Read Also: How to Choose Stocks for Intraday the Right Way?

    Conclusion

    In this blog, we have unwinded scalping and widely used technical indicators by scalpers. However, it’s essential to remember that technical analysis is subjective and should be used along with other tools and indicators for more comprehensive decision-making.

    Although it is not suggested to new traders, if one wants to start scalping trading, making quick decisions, proper strategy, and risk management are must-haves to become a successful scalper.

    Further, the indicators that we have discussed above are useful for traders, but it’s essential to remember that no analysis method guarantees 100% prediction and prudent risk management is crucial in trading whether it is scalping or positional trading.

    Frequently Asked Questions (FAQs)

    1. What is the time frame used by scalpers?

      Generally, scalpers trade in the 1 minute to 15 minute range.

    2. What are the most common Fibonacci Retracement levels?

      23.6%, 38.2%, and 61.8%

    3. Can scalpers trade in bearish markets?

      Yes, scalping is a all weather strategy.

    4. Is there a need for Fundamental analysis in scalping?

      No, scalping is purely based on technical analysis

    5. Does an RSI of 90 indicates an overbought or an oversold zone?

      Traditionally, an RSI above 70 indicates an overbought zone.

  • Indian Oil Case Study: SWOT Analysis and Marketing Strategy

    Indian Oil Case Study: SWOT Analysis and Marketing Strategy

    Indian Oil Case Study

    Indian Oil Corporation (IOC) is the largest Indian public-sector oil and gas company, overseen by the Ministry of Petroleum and Natural Gas. It was formed in 1964 through the merger of Indian Oil Company Limited (established in 1959) and Indian Refineries Limited (established in 1958). The company has subsidiaries in Mauritius, Sri Lanka, and the Middle East.

    The company was established with the objective of refining and marketing petroleum products in India, but over the years it has expanded its business operations, including exploration and production, renewable energy, and petrochemicals.

    With an ideology of being ‘Pehle Indian Phir Oil,’ IOC focuses on the well-being and progress of the nation above all. To further emphasize this commitment, a new core value, ‘Nation First,’ was introduced alongside the existing values of care, innovation, passion, and trust on June 30, 2023. This date is historically significant as it marks the day in 1959 when Indian Oil Company Ltd. was incorporated.

    Indian Oil Case Study

    A few key facts about the IOC as of March 2024:

    1. IOC ranked 116th in the Fortune Global 500 list of the world’s largest companies.
    2. IOC has filed 1,736 patents as of March 2024.
    3. It has a refining capacity of 70 million metric tonnes per year (MMTPA) and operates 1,788 CNG stations.
    4. The Indian Oil Group owns and operates 9 refineries and has an over 17,000 km pipeline network.

    Market Information of Indian Oil Corporation 

    Current Market Price ₹129
    Market Capitalization (in ₹ Crores)1,81,740
    52 Week High₹186
    52 Week Low₹111
    Dividend Yield9.34%
    ROCE21.1%
    (Data as of 28 March 2025)

    Read Also: Castrol India Case Study: Business Model, Product Portfolio, And SWOT Analysis

    SWOT Analysis of Indian Oil Corporation

    Swot analysis

    We have done a SWOT analysis of IOCL . It is a management technique that analyses the strengths, weaknesses, opportunities, and threats of a company.

    Strengths

    1. IOC is a renowned and trusted brand in India. It supplies cooking gas to majority of Indian families and has a network of 12,861 distributors as of 2023. It has the largest downstream pipeline network of around 17,564 km which helps in the transportation of processed petroleum and crude oil.

    2. IOC is the major oil company in India, with significant economies of scale and a large refining capacity that allows it to fulfil the country’s demand for petroleum products.

    3. IOC carries a diversified business portfolio that includes refining, marketing, production, and exploration. This helps the company mitigate the risk caused by changes or fluctuations in another business segment.

    4. IOC has a vast distribution network, including retail outlets, and enjoys multiple benefits since it is under the supervision of the Ministry of Petroleum and Natural Gas.

    5. IOC has invested in advanced technologies for refining and production processes, enhancing efficiency and staying competitive in the industry. Also, it has Asia’s best research and development in the areas of lubricants and pipelines, with around 60 acres of campus near Delhi.

    Weakness

    1. Any kind of changes in the global price of oil can lead to adverse effects on the company and have significant impacts on the profitability of the company. Also, rules, regulations and policies of the government can slow down the growth of the company.

    2. IOC faces tough competition from companies like ONGC, Reliance, and Bharat Petroleum. IOC needs to develop and implement strategies in a way that can help to compete with other companies.

    3. The oil and gas industry, including refining, faces increasing scrutiny for its environmental impact. Compliance with stringent regulations can be a challenge.

    4. Although IOC is punching above its weight, it currently has a limited presence in renewable energy.

    Opportunities

    1. Digitalization and AI can help IOC onboard potential customers and analyse various trends. This could be a great opportunity for the company to grow rapidly.

    2. The Indian government supports the development of renewable energy and has launched various programs and incentives under “Atmanirbhar Bharat”. This could help the IOC expand its renewable energy business.

    3. The company is venturing into the production of alternative fuels, biofuels, or other innovative products to align with changing consumer preferences and environmental considerations.

    4. Growing economy will benefit the company over the coming years since India’s demand for oil is also rapidly increasing. The company is exploring opportunities in renewable energy so that it can align with global trends.

    Threats

    1. IOC faces increased competition from both domestic and international players. This can significantly affect the market share of the company.

    2. Talent risks, such as talent attraction and retention, can impact IOC’s growth and long-term sustainability.

    3. Environmental regulations can increase the input cost and operational expenses of the company.

    4. Changes in consumer behaviour like a shift towards other sources of energy like electric vehicles can be a sort of threat to petroleum-based products.

    Marketing Strategy of IOC

    Marketing strategy of IOC

    IOC uses a combination of traditional and modern marketing techniques to maintain its market leadership in the oil and gas sector.

    1. Pricing Strategy

    We are well aware that IOC is a government-owned company. The government makes major pricing decisions. The prices may vary from state to state in India. The IOC follows the geographic pricing mechanism while deciding prices, i.e., the prices are categorised into metro cities, national capital regions, and state capital regions. Also, the taxes imposed and subsidies provided by the Government impact the final selling prices of the oil. To check the latest pricing, you can visit the official website of the company.

    Read more in our blog on – how oil prices affect the stock market.

    2. Product Strategy

    IOC occupies the major share of the market when it comes to petroleum products in India. It has almost 70% share in downstream pipelines and 30% in refining capacity. The IOC product basket includes petrol, diesel, LPG (liquified petroleum gas), other refined products like kerosene and naphtha for industrial and commercial uses; petrochemicals like ethylene, benzene, lubricants, natural gas such as LNG and CNG.

    3. Place/Distribution Strategy

    IOC employs a multi-level distribution strategy to reach its extensive customer base across India. The company’s distribution strategy includes a network of direct and indirect channels. Distribution through direct channels includes petrol pumps. IOC has a vast network of around 36,000 petrol pumps across the country. With approx. 12,000 LPG distributorships that distribute LPG cylinders to households as well as industrial spaces. Distribution through indirect channels includes collaboration with supermarkets, merchant stores, and e-commerce platforms to sell lubricants, greases and other products.

    IOC operates its subsidiaries in Sri Lanka, UAE and other countries. It holds ten major refineries in places like Gujarat, Mathura, Panipat, Guwahati etc.

    4. Promotion Strategy

    Indian Oil has a history of launching memorable advertisements to keep its wide-ranging customer base intact. These campaigns have been instrumental in promoting and advertising the IOC brand. Some of the advertising campaigns for strategic marketing are listed below:

    • “Fill it to Feel it” in 2018 to highlight the fuel efficiency of IOC’s XTRAPREMIUM petrol.
    • “I Belong Here” in the year 2020 celebrated diversity by showcasing people from different cultures coming together to use IOC products.
    • “Sure Khayal Rakhega” in the year 2022 with a focus on LPG cylinders.
    • “Indane – Ek Bandhan Sath” in the year 2023 to show the emotional connection that families share with the LPG cylinders.
    • “Servo: The Power to Perform” is still ongoing.

    The above-mentioned campaigns and product development initiatives by IOC demonstrate its ability to create convincing advertisements with which common people can relate. After all, they know how to retain customers.

    Key Performance Indicators

    ParticularsMarch 2024 March 2023 March 2022
    Operating Margin (%)8.182.576.52
    Net Profit Margin (%)5.361.284.15
    ROE (%)22.75718.79
    ROCE (%)23.909.2317.61
    Current Ratio0.730.770.76
    Debt to Equity Ratio0.6710.93
    (Data as of 28 March 2025)

    Future Outlook

    Indian Oil Corporation (IOC) is strategically modifying its business operations to meet India’s growing energy demands while emphasizing sustainability. The company plans to expand its refining capacities, notably increasing the Panipat Refinery from 15 to 25 million metric tonnes per annum (MMTPA) and the Gujarat Refinery from 13.7 to 18 MMTPA by December 2025. In 2024, IOC announced a partnership with Panasonic Energy to establish 5 GWh of lithium-ion battery manufacturing by 2031 and boost its renewable energy capacity to 31 GW by 2030. Overall, IOC is committed to achieving net-zero operational emissions by 2046, aligning with global sustainability goals.

    Read Also: Case Study of Petrol & Diesel Price History in India

    Conclusion

    To conclude, IOC is the leading energy provider in India and is trying to diversify its product basket to offer the best to its customers. It has its own set of strengths and challenges. Its capacity to overcome changing market conditions, technological changes, and environmental obstacles places it in a strong position to contribute to India’s transition to energy security and sustainability.

    S.NO.Check Out These Interesting Posts You Might Enjoy!
    1Hindustan Unilever Case Study
    2Case Study on Apple Marketing Strategy
    3Reliance Power Case Study
    4Burger King Case Study
    5D Mart Case Study

    Frequently Asked Questions (FAQs)

    1. In which year was the IOC established?

      IOC was established in 1964.

    2. Who is the competitor of IOC?

      IOC faces tough competition from Reliance, ONGC, Hindustan Petroleum, etc.

    3. How many refineries are there in India?

      As of December 2023, there are 23 oil refineries in India.

    4. What is the full form of LPG?

      LPG stands for Liquified Petroleum Gas.

    5. What is the initial objective of the IOC?

      The company was established to refine and market petroleum products in India.

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