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Midcap Funds vs. Smallcap Funds: Everything You Need to Know

Why do some experts consider the best midcap fund safe and the best small-cap fund volatile? Which one should you choose? These may be some of your questions regarding midcap and small-cap funds. Midcaps and small-caps are the two most popular categories in equity mutual fund portfolios. However, there is a wide disparity between them regarding performance, risk, and return. Let’s take a closer look at both of them. [B-01] Understanding market capitalization Market capitalisation is a key concept in understanding mid-cap and small-cap funds. Market capitalisation or market cap is the total value of all stocks or shares of a company outstanding on the stock exchanges. For example, if a company has 100,000 shares that have been issued at ₹10 each, the market cap for this firm would be ₹10 lakh. Companies are categorised based on their market capitalization as follows: Small-cap: Market cap <₹ 5000 crores Mid-cap: Market cap ₹ 5000 crores – ₹ 20,000 crores Large-cap: Market cap >₹ 20,000 crores What are midcap funds? Midcap stocks are those with a market capitalisation ranging from ₹5000 crores to ₹20000 crores. Mutual funds focusing on midcap stocks are called midcap funds. SBI Magnum midcap fund, Kotak Emerging Equity Fund, and HDFC Midcap Opportunities Midcap Fund are some of the prominent midcap funds in India. Although more volatile than large-cap funds, the best midcap funds are considered safer than small-cap funds since they are less prone to volatility and deliver superior returns over a longer period. How to find the best midcap fund As an investor, your aim must be to find the best midcap funds to invest in. Here are two things to look at: Diversification While looking for the best midcap fund, the first factor you need to look at is diversification. A well-diversified portfolio helps reduce overall risk by spreading investments across various sectors. Ensure their portfolios are not overly concentrated in any single sector. Fund Manager’s Track Record While investing in a mutual fund, you trust the fund manager to manage your money. Hence, the next important factor for you to consider is the credibility of the fund manager. While past performance cannot guarantee future results, it indicates a fund manager’s expertise. Ideally, you should look for managers who have shown consistent returns. You can also use fund ratings that objectively assess a fund manager based on their track record. What are small-cap funds? A small-cap fund focuses on investing in stock with a market capitalisation of fewer than ₹ 5000 crores. Since small caps are relatively riskier compared to midcaps, they often deliver much higher returns in the short term. However, you must remember that these stocks are extremely volatile and usually experience sharp declines. Hence, while small-cap stocks are great for generating quick gains, they have fewer chances of providing long-term returns. Axis Small Cap Fund, ICICI Prudential Small Cap Fund, and DSP Small Cap Fund are some of India’s most prominent small-cap funds. How to choose the best one to invest in? Here are two factors you need to consider while choosing the best from a bouquet of small-cap funds: Past Performance: To know whether a fund is performing well, you must keep an eye on its past performance. Although past performance doesn’t always indicate future results, it gives us an idea about a fund’s ability to generate returns. You should also remember that just because a fund hasn’t performed well in the past doesn’t mean it won’t perform well in the future. Several examples of funds that lost money in the last few years but recovered to beat the market. That being said, since small-cap stocks are highly volatile, you want to ensure that the fund manager can manage such volatility. Sector Exposure Small-cap stocks are heavily dependent on the domestic economy. Hence, you should take a close look at the diversification aspect of different small-cap funds before investing. Ideally, you should look for funds that have exposure to multiple sectors. For example, if the fund predominantly invests in consumer stocks, it may suffer during a downturn in the domestic economy. On the other hand, small-cap funds investing in various sectors, such as consumer, IT, banking, and others, will be better positioned to deal with an economic downturn. Midcap Funds vs. Smallcap Funds: Benefits and Drawbacks Now that you have an idea of midcap and small-cap funds, you must wonder which one you should invest in. The best midcap funds will suit you if you are looking for long-term investment opportunities. As discussed earlier, midcaps are more stable than small-cap funds, which means they are less vulnerable to volatility. They also provide greater stability in the long term. However, you need to know that despite their long history of strong returns, midcap funds have not always been reliable. In the past, midcap funds have experienced extended periods of underperformance. That being said, good performance outweighs the underperformance periods. Overall, the best midcap funds have delivered excellent returns over the past decades. However, the best midcap funds will not be appropriate if you are focused on short-term returns. In general, midcaps require a longer time horizon to achieve satisfactory returns. They have also fallen victim to market corrections more frequently than small-caps. To summarise, the best midcap fund is ideally suited for long-term investors. If you don’t mind taking some risk, they can help diversify your portfolio. A small-cap fund, on the other hand, is suitable for short-term investors. If you plan to buy stocks to sell them quickly, then small caps are ideal. In terms of disadvantages, any small-cap fund has a higher risk profile. Since they are more volatile than midcaps, they tend to experience sharp price swings. Furthermore, unlike the best midcap fund, small caps don’t possess much inherent stability. They have less capacity to deliver consistent returns over a long period. [B-02] Both mid-cap and small-cap funds have their advantages and disadvantages. Before deciding where to invest, you need to understand the pros and cons of each category. We suggest you do extensive research and analysis before investing your money. Also, as the market moves through cycles, you need to periodically rebalance your portfolio to ensure it matches your objectives.
08-11-2023
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What You Must Know About Fertilizer Stocks

If you are considering investing in fertilizer stocks, there is some crucial information that you should understand before you make a financial decision. It is important to learn about the growth potential of the fertilizer industry in India and the leading fertilizer stocks to invest in, including considering the RCF share price, GNFC share price as well as other leading fertilizer stocks. Read this article to explore the top fertilizer stocks to invest in and other tips to make wise investment decisions. [B-01] The Fertilizer Industry in India The fertilizer industry in India is one of the most dynamic and rapidly growing sectors. According to market analysts, the Indian fertilizer market will likely experience strong growth in the years ahead. It is stated that the Indian fertilizer market is projected to grow by 4.7% over the next eight years. The major reasons for this projected growth include: Growing Population and the Rising Demand For Food:There is considerable pressure on available resources such as land and water due to the increasing global population. This strong demand for food will also drive increased consumption of fertilizers, livestock feed supplements and other agricultural products. Favourable Government Policies:The Government of India has supported promoting the fertilizer industry since its inception in 1991. It has issued various guidelines and regulations that have helped make the sector more competitive and enabled it to grow at an impressive pace. Additional Factors:Among these policies are cheap credit availability through banks, favourable import tariffs (for imported raw materials), support for R&D activities, concessional taxation rates on exports of finished goods and more. What Does This Mean For Stock Investors? There are several key benefits associated with investing in fertilizer stocks: There is increasing consumer demand worldwide and robust domestic investment among existing players in this market segment. Due to this, there is ample opportunity for new entrants into this space. These entrants can tap into booming market trends quickly without much competition from established players. Fertilizer companies in India are some of the most profitable and stable businesses. They tend to be well-managed and have strong balance sheets. Thus, it makes them attractive investments. The fertilizer market is growing rapidly, owing to rising demand from countries such as China and Japan. This has created opportunities for innovative new players who can bring new technologies or products to the market faster than their competitors. India is one of the world’s leading producers and consumers of nitrogenous compounds, which makes it an essential player in the global fertilizers industry. India has a large and increasingly affluent population. Consequently, there will be increasing demand for food crops that are planted with high-quality fertilizers. Best Fertilizer Stocks Fertilizer stocks are a great way to secure a stable and profitable investment portfolio. These are the top 6 fertilizer stocks for 2022: 1. Rashtriya Chemicals & Fertilizers Ltd Rashtriya Chemicals & Fertilizers Ltd (RCF) is an Indian fertilizer company that produces a range of products including potash, urea, phosphate and nitrogen. It has operations in India and internationally. RCF stock is considered to be one of the best-performing stocks in the country. Over the past few years, the RCF share price has achieved impressive growth due to its diversified product portfolio and strong operational performance. The RCF share price has also been able to sustain this growth by expanding into new markets and developing new products. 2. Gujarat Narmada Valley Fertilizers & Chemicals Limited Gujarat Narmada Valley Fertilizers & Chemicals Limited (GNFC) is India’s largest producer and supplier of fertilizers and chemicals. The company was established in 1976 and operates facilities in nine Indian states. GNFC sells its products to farmers through a network of more than 2,000 authorised dealers. The company offers a wide range of fertilizers and pesticides as well as seeds, soil amendments, water pumps, tractors, and other equipment. It also manufactures environmentally friendly products such as organic fertilizers solutions and biodegradable agricultural waste materials. Over the past few years, the GNFC share price has grown due to its diversified product portfolio and strong operational performance. 3. Fertilisers And Chemicals Travancore Limited Fertilisers and Chemicals Travancore Limited (FACT) produces fertilizers and chemicals. The company produces a range of fertilizers, agrochemicals and agricultural inputs primarily for the Indian market. It also sells its products to other countries through sales channels such as distributors, traders, brokers and retailers. Travancore Limited has production facilities in the states of Kerala and Tamil Nadu. 4. Chambal Fertilisers and Chemicals Limited Chambal Fertilisers and Chemicals Limited (CHAMBLFERT) is India’s leading manufacturer of urea fertilizers and other agricultural chemicals. The KK Birla Group founded Chambal Fertilizers and Chemicals, which is based in Kota, Rajasthan. Chambal Fertilizers and Chemicals produces a wide range of urea fertilizers for both crop production and animal husbandry applications. It also manufactures speciality products including plant growth regulators, defoliants, fungicides, biocides, insecticides and herbicides. 5. National Fertilizers Limited National Fertilizers Limited (NFL), incorporated in the year 1974, is a leading player in India’s fertilizer industry. NFL has five gas-based ammonium-urea plants in Panipat, Bathinda, Nangal (Bhakra Nangal), Vijaipur and Ramagundam. Chennai Petroleum Corporation (CPCL) is also engaged in manufacturing high-speed diesel (HSD). 6. Deepak Fertilisers and Petrochemicals Corporation Limited Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) is an Indian company that produces fertilizers and petrochemicals. Founded in 1979, Deepak Fertilizers and Petrochemicals Corporation Limited was founded in 1979 and is headquartered in Mumbai. Deepak Fertilizers is one of the largest manufacturers of urea in India and also produces ammonia, nitric acid and other fertilizers. The company has a joint venture with Saudi Aramco and partnerships with companies such as Mitsubishi Chemical Corporation. Tips To Invest In Fertilizer Stocks When it comes to investing in fertilizer stocks, there are a few things you should keep in mind: First, consider the demand for the product and ask yourself: Is the fertilizers industry growing or shrinking? What is the outlook for the future? Second, look at the financial health of the company and ask yourself: How much debt does it have? What is its history of profitability? Third, evaluate the management team and ask yourself: Do they have a good track record of success? Are they committed to shareholder value? [B-02] Conclusion The fertilizer industry in India is growing and as a consequence, this is welcome news for firms that can pay dividends to investors. If you are interested in learning more about fertilizer stocks or want to start investing, be sure to do your research and consult with financial experts. For more information on fertilizer stocks, visit Piramal Finance to read more helpful articles like this one and receive guidance and detailed information.
08-11-2023
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All You Need to Know About What is Commodity Trading &amp; How it Works?

Throughout history, goods and commodities have been traded all over the world. Even before the invention of money, people exchanged items in marketplaces. But today’s commodity market has gone through a massive evolution from what it was. You can trade goods like pulses, oils, minerals, precious metals, and farming products in India. You can conduct the commodity trade online through trading brokers. But, to trade in the Indian commodity market, you need to understand what commodity trading is, the types of commodities you can trade in, and how it works. It is similar to equity trading, where you can buy and sell goods in the commodities market at a current or future price. [B-01] What is Commodity Trading? You can buy and sell goods on commodity exchanges just like on stock exchanges. The commodity exchange allows you to buy and sell different goods for profit. The Indian commodity market exchanges are: The Multi Commodity Exchange (MCX), National Commodities and Derivatives Exchange (NCDEX), Indian Commodity Exchange, and National Multi Commodity Exchange. Classification of Commodities in the Today’s Commodity Market Commodities are various items that you use daily. You can use them to produce different finished products or use them in their original form. Today’s commodity market times divide goods into four main groups. They are as follows: Agriculture Commodities: These commodities are products that result from harvesting various crops. Some examples are wheat ragi sugar cotton barley peppercorns tea coffee, etc. Metal Commodities: Metals used for producing other items fall in this class. They are aluminium, Silver, Iron, Nickel, Gold, Copper, Tin, etc. Energy Commodities: Your life relies on these commodities to run or transport things. Examples are coal, natural gas, crude oil, uranium, etc. Bullion Commodities: A bullion is a precious metal you buy on the commodity market. They include silver and gold. How does Commodity Trading in the Indian Commodity Market Work? You can do commodity trading in India through the following ways: 1) Commodity Trading by Futures Contract: The best way to trade commodities is through this method. It involves an agreement or contract. You and another trader decide to buy or sell an item at a specific price at a future date. Suppose you are the buyer. You must pay the seller the specified amount when the commodity is delivered on the agreed date. You will have to pay the amount regardless of the movement of the commodity’s price in the market. 2) Commodity Trading by Investing in Commodity ETFs and Mutual Funds: If you want to invest in the commodity market in times of volatility with lesser risk, these are the best methods. You have to invest in a commodity exchange-traded fund (ETF) or mutual fund scheme which invests in a specific commodity for you. 3) Commodity Trading by Direct Investment: This method makes it possible to trade for certain commodities like gold and silver. But, if you want to invest or trade in bulkier items or involve large amounts, there are more workable ways to do commodity trading. Furthermore, this way of commodity trading for larger quantities comes with logistical difficulties. 4) Commodity Trading by Investing in Stocks: Investing in the stocks of companies associated with a certain commodity is another method of trading on the Indian commodity market. It is not a direct method of making the trade, but it could benefit you if the prices of the stock increase in the future. For example, you can trade in an energy company that produces crude oil by buying its stocks. How Can Commodity Trading in Today’s Commodity Market Benefit You? Some of the benefits that you can get by trading commodities are as follows: 1) Acts as a Hedge Against Inflation: If you are an investor, trading in commodities can work as a hedge in times of inflation. The prices of commodities rise during inflation. This is because their relationship with it is opposite. Stock prices and currency valuation reduce if the country’s inflation levels are high. 2) Diversification of Portfolio: Commodities can diversify your portfolio during low market times. During calamities or economic downturns, prices tend to rise across the board. It will help you to reduce losses from other investment assets. 3) More Time to Trade: The commodity market does not operate like the stock markets. Some specific commodity markets give you a long time to trade. Your trading can improve in some international commodities markets with this extended timeframe. It can help you to make more profits on your trades. 4) Higher Leverage: You can trade in the commodities market with higher leverage provided by the brokers. Higher leverage means more money to invest in buying goods. It helps increase your gains when the commodity’s price moves in your favour. 5) Possibilities of Increased Gains Due to Volatility: The commodity market during times of volatility can allow you to make higher returns on your investment. This market makes many upward and downward price movements. Thus, when you time your entry accurately, it can help you to get good profits. [B-02] Conclusion Today, commodity market trading is an excellent way to make a good return on your investment. But you need to know what you are doing in this market to make it work. So take the time and effort to understand how the commodity market operates first, as knowledge is the key here. Moreover, choose wisely how you want to trade in the commodity market. Most importantly, take the help of an expert in the subject like Piramal Finance, who can guide and help you in the commodity market.
08-11-2023
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All You Need to Know About Car Loan Interest Rates in September 2022

When it comes to car loans, interest rates are one of the most important factors to consider. The interest is how much you will be charged each year on the amount of your loan. It’s expressed as a percentage and is calculated based on the length of your loan, the amount you borrow, and other factors. [B-01] If you’re not careful, you could pay more for your car than you need to. So it’s essential to understand how car loan interest rates work before shopping for a loan. In this blog, we’ll discuss everything you should know about car loan interest rates in India! What is a Car Loan? A car loan is a type of loan used to finance the purchase of a vehicle. The loan is typically secured by the car itself, which means that if you default on the loan, the lender can repossess the vehicle. The terms of a car loan will vary depending on the lender, typically between two and seven years. The interest rate on a car loan is usually fixed, which means that it will not change over the life of the loan. Car loans are available from banks, credit unions, and especially from lenders. If you’re considering taking out a car loan, comparing offers from multiple lenders is essential to finding the best deal. You should also be aware of the potential risks involved in taking out a loan, such as losing your car if you default on the loan. Car Loan Interest Rates in India In recent years, the car loan market in India has exploded. With more and more people choosing to car finance their vehicles, the car loan interest rates on car loans have become increasingly competitive. As a result, getting a car loan with an interest rate as low as 8% per year is now possible. However, there are a few things to keep in mind when looking for a car loan. Interest rates vary, so comparing rates from different banks is crucial before deciding on a loan. Second, the car loan interest rate depends on the tenure of the loan, so it is vital to choose a loan term that is comfortable for you. Finally, remember that the interest rate is only one factor to consider when taking out a loan; be sure to compare processing fees and down payment requirements before making a decision. By keeping these factors in mind, you can be sure to find the best car loan deal for your needs. Car Loan Interest Rates in September 2022 In September 2022, India’s average car loan interest rates were around 9.5%. This is a slight decrease from the current average rate of 9.7%. However, it is still higher than the historical average of 8.6%. The reason for the increase in rates is due to the economic conditions in India. Inflation has been rising, and the government has taken steps to control it. As a result, interest rates are expected to rise further to help control inflation. Borrowers with good credit will still be able to get loans at lower rates, but those with bad credit will likely see their rates increase. Those considering taking out a car loan should shop around and compare rates before making a decision. Factors that Affect Car Loan Interest Rates Car loan interest rates depend on several factors. The type of vehicle Luxury and sports cars typically have higher interest rates than economy or mid-sized vehicles. This is because they’re considered higher-risk investments. The loan term The longer the loan term, the higher the interest rate will be. This is because lenders are taking on more risk by lending money for extended periods. The down payment The larger the down payment, the lower the car loan interest rate. This is because lenders view borrowers with a larger down payment as less risky. Credit history Borrowers with a good credit history usually qualify for lower interest rates than those with poor credit histories. The lender Some lenders are more interested in making money off car loans than others. It’s important to shop around to find the best interest rate possible. By taking these factors into account, you can increase your chances of getting a low-interest rate on your car loan. You can use a car loan interest rate calculator to estimate the car loan rates you are eligible for. How Can You Get the Best Car Loan Interest Rate? There are a few things that you can do to ensure that you get the best rate possible: Try to put down a substantial down payment. This will show lenders that you are serious about the loan and can make payments. Try to get your credit score as high as possible; the higher your score, the lower your interest rate. Try to find a co-signer with good credit. Having good credit to back up the loan will help lower the interest rate. By following these steps, you can ensure that you get the best car loan interest rates possible. Parting Words Car loan interest rates in September 2022 are expected to rise as the economy continues to recover from the COVID-19 pandemic. The Reserve Bank of India raised interest rates twice in 2021, and further increases are likely as inflationary pressures build. This will make it more expensive to finance a car purchase, but it is still possible to get a good deal on a loan if you shop around. Some lenders may offer promotional rates or discounts for certain buyers, so it is essential to compare offers before deciding on a loan. [B-02] With careful planning and tools such as a car loan calculator and comparison shopping, you can find a loan that meets your needs and helps you save money on your car purchase. We hope you are all clear about car loan interest rates in September 2022. But if you still need help with any financial doubts or concerns related to a car loan, you can always contact the finance experts at Piramal Finance!
08-11-2023
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Everything You Need to Know About Intraday Trading

When it comes to stock markets, there are two actions you can take. You can be an investor who buys a company stock and holds it for a long time. Or else, you could be a trader and buy or sell a stock within a short time. If you buy or sell a stock on the same day, you are a trader doing day or intraday trading. The stock market moves up and down the price curve during the entire trading day. So, if you are an intraday trader, the best part is that you can make money on both the moves, up or down. But you must know everything about being an intraday trader before starting day trading. [B-01] Intraday Trading Concepts Some basic concepts you should know about intraday trading are as follows: 1) Square Off: One essential point you must always remember is to square off your trade on the same day. Squaring off means you must buy and sell the stock by the end of the day’s trading session. 2) Leverage: This means the broker providing the trading platform gives you extra money to trade. For example, if you have INR 1000 in your trading account, the broker may leverage that amount by five times. It would mean that now you can buy or sell stocks worth INR 5000 during the day. This leverage is only given for intraday trading and not for long-term trading. 3) Day Trading Brokerage: Every broker who provides a trading account to you charges fees for its services. This fee is the brokerage, which gets charged for every sell or buy order you place. The charge varies from one broker to another. 4) Trading Indicators: In the trading platform, your broker provides, you will get a chart on display. On this chart, there are many technical indicators. These indicators can guide you in predicting the price movement of the stocks. There are many technical indicators available, and each can predict different aspects. So, you should get an in-depth knowledge of them before starting intraday trading. Important Intraday Trading Tips Important tips you must remember while doing day trading are: 1) Select a Business, Not the Stock: As a day trader, you must decide the stock to trade based on the business performance. Thus, it is vital that you first study the financial statements and the background of the company. This way, you know that the company’s stock will perform well in the stock market. Also, the past price movement of the company will give you a reasonable idea of the possible direction you should trade during the day. 2) Choose High Volume Stocks: This intraday trading tip is very important for choosing the right stock. Since this trading method is just for the day, pick high-volume stocks. When a stock has high volumes of transactions throughout the day, the range of price movement is wider. Thus, it allows you to make better profits in a short time with such stocks. 3) Stick to a Consistent Trading Strategy: You must have a consistent trading strategy while day trading. You should know precisely when you will enter and exit a transaction. Make use of the technical indicators available to you to plan your strategy. The vital point here is to stick to the trading strategy no matter the outcome. In the long run, consistency will give better results in intraday trading. 4) Develop the Discipline of Honouring Stop Loss: A stop loss is a price point that determines the most loss you will incur. Develop the discipline to honour this, as it helps in curtailing your trade losses. The stop loss is vital in day trading as the trading amount and quantity are significant. It means that you make high profits and losses with this trading method. 5) Day Trade with Expendable Money: When you are doing day trading, it involves greater risk. Thus, ensure that you use expendable money while using this trading method. This trading method even requires calculating your risk capacity per trade and day. 6) Get Rid of Emotions: It is one of the essential intraday trading tips you must follow. Emotions are the biggest enemy of day trading, and you should ignore them completely. Instead, what is necessary for you is to think objectively. Here, sticking to your trading strategy becomes crucial to make the right trading decisions. This point is going to decide your increasing profits or losses. 7) Never Trade Too Much: Follow a fixed schedule of trading with only a few stocks per day. It will ensure that you trade only a limited number throughout the trading period. The stock market trend can differ from what you anticipated, and you should stop once this happens. This way, you will cut your losses and ensure better gains in your intraday trading. 8) Keep Track of Market Trending News: There are many companies of various industries listed in the stock market. A shift in the trend of any one of them can affect the stock market. Thus, keeping track of the stock market news and changes can help you make intelligent decisions. This point is especially vital in day trading as the trading duration is short. Also, the possibility of taking corrective action is limited. Thus, tracking the news will help you enter and exit promptly. 9) Maintain a Trading Journal: A trading journal is a logbook of all your daily trades. It is where you must enter all your decisions and details of every transaction during the day. This intraday trading tip is a lifeline for all your future trading decisions. Additionally, the trading journal will provide insights into all past right and wrong trades. [B-02] Conclusion If you are someone who has a high-risk tolerance, then you can opt for day trading. This method of trading can be rewarding when you do it properly. Knowledge and practice are the two critical factors when you do intraday trading. Spend time in the stock market and ensure that you consider all the important tips provided above. For further help in day trading, you can confer with Piramal Finance.
08-11-2023
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What are bonus shares, and what are the different benefits of it?

What are Bonus Shares And What Are The Different Benefits Of It? A firm offers bonus shares to its present shareholders. When a corporation cannot pay dividends to its investors, it may distribute those payments to its investors as a “bonus.” The firm may face an inability even if it had a good quarter. The firm also retains a portion of its profits. A firm may only issue bonus shares to its owners, according to the Companies Act of 2013. These are businesses that have made a lot of money or have a lot of cash. Those with a Demat account may readily trade their stocks on the secondary market to fulfil their liquidity requirements. [B-01] Capitalisation occurs when a corporation utilises its earnings or cash reserves to enhance its share capital. The corporation then distributes bonus stock. Some shareholders may be perplexed as to why a corporation would distribute such shares. Potential investors will see the firm as more successful if it earns more money per employee. Distributing Bonus Shares Investors are awarded a bonus in the form of additional shares determined by the number of shares they own. Let’s say a firm announces that it will provide a one-share bonus for every share that is already in circulation. This means that a shareholder who already owns one share of Company X’s stock will be given another share of Company X’s stock in return for the share that they already own. This will happen until the ratio is precisely 1:1 throughout the whole process. Process and Eligibility for Bonus Shares The following are the eligibility criteria for getting bonus shares as an investor: Those who possess corporation shares as of the ex-date- one day before the record date- and the record date will be eligible to receive bonus stock. The shares will be sent on a rolling basis on a T+2 basis, which means that the record date will be two days after the ex-date. Since the company won’t change the ownership of shares on the ex-date, shareholders must buy shares before the ex-date to get bonus shares. After the bonus stock has been given an ISIN(International Securities Identification Number), the bonus shares will be added to the shareholder’s account within 15 days. In this manner, bonus shares are identical to regular shares in all other respects. They are added to the Demat accounts of the existing investors in the company. As we’ve seen, this process usually takes between ten and fifteen days. Benefits of Bonus Shares Bonus shares have many benefits. Here are some of them. Investors may earn extra money while still participating in market growth. The purpose of distributing these shares is to compensate stockholders. Furthermore, the market price of these bonus shares is frequently less than the price per share, making them lucrative and accessible to investors. Furthermore, when investors finally get their bonus share, they are exempt from paying taxes, which is a significant benefit. If you have been a shareholder for a long time and want to expand your investment, you could apply for bonus shares. The corporation provides bonus shares at no additional expense to owners. As the name implies, they increase an investor’s stake in the company and, thus, the value of their holdings. Disadvantages of Bonus Shares for Investors Bonus shares do not result in any extra cash or profits for the firm. So, the distribution of these shares can be both beneficial and bad. Let’s take a look at how this impacts those that are financially stable. Even though there are now more shares in circulation, profits per share have remained the same throughout time. This is because the total amount of money produced is unaffected by the distribution of bonus shares. This also means that stockholders’ earnings will be reduced individually. Types of Bonus Shares Bonus shares are divided into two types which are described below: 1) Fully paid bonus shares 2) Partly-paid-up bonus shares Fully paid Bonus Shares Fully paid bonus shares can be described as those given to investors who already have a few shares. It doesn’t cost the investors anything extra to avail of these shares. Here are some situations in which these bonus shares could be given out: 1) A statement of profit or loss 2) Stockpiles of liquid assets 3) Reserves for redeeming capital 4) Insurance premium savings Partly-Paid Up Bonus Shares A share that has only had a portion of its issue price paid for is said to be ‘partially paid.’ This means that investors can buy shares at a discount. They need only pay a part of the full issue price. When the time comes, the rest of the payment can be made in instalments for partially paid shares. This is something multiple investors use. Partially paid-up bonus shares are those that have received a bonus. Because of profit capitalisation, the uncalled sum is not “called out,” and the shares are completely paid. If a bonus is only partially paid for, the funds for the bonus cannot come from the security account or the capital redemption reserve account. [B-02] Conclusion Bonus shares are a great investment option. But you have to look for investments that give bonus shares. Piramal Finance is one of the leading financial advisors that provide you with the best financial solutions on the market. They will help you invest so that you will receive bonus shares. They will also teach you about bonus shares and how to invest well. This way, you will reap the rewards of smart investments and make great choices too.
08-11-2023
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All you Need to Know About the Gratuity Rule

You must be wondering about your gratuity entitlement if you are an employee. You may have heard about it but need clarification on what it means or how much you can get as an employee. This article will discuss the gratuity rule and how it applies to you as an employee. Keep reading to gather more knowledge about this. This blog post will teach you useful information about it. [B-01] The gratuity law can be claimed by employees who have completed five or more years of service. The gratuity law can be claimed by employees who have completed five or more years of service. This is usually taken as the end of their employment. With an employer and is paid to them on retirement or exit from the job. The gratuity amount that an employer pays to an employee after completing five years of service (or more) is called gratuity. It may be taxable in the employee’s hands if it exceeds Rs 50 lakhs per year. Or such other amount prescribed by law as per Section 32(c) of the Income Tax Act of 1961. The gratuity amount is the last drawn salary multiplied by the years of service completed. The gratuity amount that an employee receives is not taxable in your hands. And will be transferred to you after deducting an appropriate sum for provident fund contributions. Employers pay it to employees on retirement or when they leave their jobs. In the Indian context, gratuity is paid to employees who have completed five or more years of service. It is calculated as the last drawn salary multiplied by the number of years completed. Completed in service, and it is not taxable in the hands of an employee. The amount may be increased if there are exceptional circumstances, such as death due to accidents or natural causes. Retirement on grounds other than age; resignation with one month’s notice, etc., up to a legal maximum (currently Rs 200000/-) . Tax-Related Benefits of Gratuity ● The income tax that one can save from this goes up to 20%. ● With recent modifications to Section 10, gratuity is tax-free up to Rs. 20 lakh (10). ● It is a one-time cash payment made to the worker upon retirement. ● It is a tax-free amount paid by the company, not the employee. ● Statutory gratuities are the only payments free from income taxes. A gratuity is a sum of money given by an employer to a worker in recognition of their efforts, according to the Income Tax Act of 1961, which has exempted them from income tax ever since gratuities are not taxable. The maximum annual gratuity is determined based on the age at which you retire or leave your employer’s employment. It is calculated as below: The gratuity is calculated as follows: ● Last drawn salary ● 15/26 of the last drawn salary (for conductors) or 15/30 of the last drawn salary (for non-conductors). ● This can be reduced by up to 50% if there has been a long illness, maternity leave, or other circumstances. If you have worked for more than ten years with the same employer, you are not entitled to any other benefits. Like medical reimbursement, you may get more monetary relief instead of a pension plan, depending on your position within that organization. ● If you have retired from service, your gratuity will depend upon whether you were an employee during all these years, exactly as per the above calculation methodologies. Last Drawn Salary: 15/30 Number of Completed Years ● Last drawn salary: The average of the last ten months’ salary ● 15/30: The ratio of gratuity to last drawn salary NWC (number of completed years): The number of years you have worked for the company divided by 16. The gratuity limit has been raised from Rs 10 lakh to Rs 20 lakh in March 2018. The gratuity limit was raised from Rs 10 lakh to Rs 20 lakh in March 2018. This is the maximum amount an employee can claim as gratuity, and it’s a fixed amount, not a percentage of their salary. Gratuity is also a gift or parting payment, but it does not have to be paid in cash. Most companies encourage employees to use their savings or tax-free bonds. Gratuity rules for 2021 The 2021 gratuity rules went into effect on April 1, 2021. The following changes that are mentioned below were made. The following items previously considered will be excluded from salary per the new definition under the gratuity rules 2021: ● Bonus, pension, PF contributions, transportation allowance, HRA, overtime, and gratuity. ● Employees’ in-hand pay may be reduced due to these new laws taking effect. The deduction for social security programmes like the Provident Fund (PF) will go up. ● Due to the new law’s restriction, an employee’s allowances cannot exceed 50% of their base pay. Employers must raise employees’ basic salaries by 50%; it will be done to comply with this rule by limiting the allowance to 50% of the total salary. The employer will also pay more in staff gratuities, which are given to employees who have been with the business for more than five years. Employees will receive more benefits than before upon retirement as a result. Retirees should know their gratuity entitlement under the law. ● The gratuity law applies to all employees, regardless of age or service length. ● Employees who have completed five or more years of service are entitled to a gratuity of one month’s salary for every year worked over five years. ● The gratuity amount is the last drawn salary multiplied by the years completed in service (i.e., $80,000 x 6 = $480,000). [B-02] Conclusion This article has helped you better understand the gratuity rule. Gratuity entitlement is a critical topic in India. And we should all be well informed about it to make informed decisions regarding our future. The gratuity rules 2021bought Some significant changes in the gratuity rules have been explained in this article. For additional reading, you should head to Piramal Finance and increase your financial literacy. Keep reading to enhance your knowledge.
08-11-2023
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Everything you need to know about Sukanya Samriddhi Yojana

The well-being of girls is one of the core things which should be focused on. This is especially needed in rural areas. For decades, women weren’t provided with the same facilities and benefits as men in India. Its damage to the progress of society can’t be denied. In today’s society, there are many aspects of girls which can be improved. Some of them include: Education for girls. Healthcare. Employment. Safety. Education for girls is one of the areas which needs the most upgrade. For this, PM Narendra Modi launched the “Beti Bachao Beti Padhao” campaign on 22nd January 2015. One of the most prominent schemes of this campaign was Sukanya Samriddhi Yojana. The article below will discuss everything you need to know about it. [B-01] What is Sukanya Samriddhi Yojana? This scheme is a worthy choice for parents to fund their daughter’s future until her marriage. Under the scheme, the girl’s family should set up a Sukanya Yojana account for her. This should be done before she is ten years old. The account will expire 21 years after being set up. This limit does not apply if the girl marries before the end of that period. The Sukanya Samriddhi Yojana account does not work after marriage. If there are no deposits in any of the years, the banks consider the account “default”. The minimum amount that you can invest is ₹250 per year. This is very helpful for low-income families. The maximum amount is ₹1,50,000 annually. You can set up a Sukanya Samriddhi Yojna account in most authorized post offices and banks. The process is done through online means as well. You should submit the documents for the girl’s identity. These include birth certificates, an Aadhaar card, etc. Other Sukanya Samriddhi Yojna Details You must make annual deposits to the Sukanya Samriddhi Yojna account for 15 years after setting it up. The deposit will continue to accumulate until the account expires. Annual interest will be charged on it as determined by the Government of India. This interest is calculated based on your minimum account balance from the 5th to the end of the month. Henceforth, your best option would be to pay the instalments before the fifth day of every month. Upon maturity, the girl will receive the entire accrued amount. Usually, the account is established and handled by her parents or guardians. Yet, she has permission to operate it herself from the age of 18 by submitting the required documents. When the girl reaches 18 years of age, partial withdrawal of up to 50% of the balance is allowed to meet the need for her education. Besides a written application, you will need a fee slip from the institution. A certified admission offer from the school stating the necessary funds will also do. The withdrawal amount will only be as much as the true demand for the fee. The charges in the admission offer or the apt fee slip given during admission are also covered. The early closure/withdrawal of the account is only valid in the following cases: If the girl suddenly passes away. If the girl is no longer a citizen. The change in citizenship should be informed one month before the bank. The depositor is financially unable to contribute to the account. If the girl marries as soon as she turns 18. The owner of the account should appeal twice: One month before the marriage Three months after the marriage. Calculation of Interest: The Government uses G-sec yields as a basis to determine the interest rates quarterly. Currently, the Sukanya Samriddhi Yojana has a 7.5% interest rate differential over the G-sec rate for a similar maturity. The account will be credited with annual compound interest at the rate that the government will announce. If the account holder chooses monthly interest, it will be calculated on the following basis: On the account’s balance in completed thousands On the balance that will be paid to the account holder In the fraction of thousands that remain, which will continue to earn interest at the rate in effect. The amount rounded off to thousands is considered for monthly interest. The remaining balance will continue to accumulate interest at the current rate. The deposits between the end of the 10th day and the end of the calendar month are used to calculate the interest. It will calculate interest for the entire month. The calculation is based on the account’s lowest balance. Benefits: The returns offered by the Sukanya Samriddhi Yojana are a huge source of comfort to families. Currently, its interest rate is 7.6% annually. It is higher than the interest earned on bank deposits and other scheme instruments. This makes it a safe option for families to invest in a girl’s higher education or future marriage. Let’s sum up all the advantages of the SSY scheme. The account can be opened with a deposit of a mere Rs.250, making it affordable for millions of families in India. You can withdraw nearly half of the entire accumulation. This will likely meet the needs in studies and marriage. There is no tax on the annually compounded interest. The same goes for the sum received when the account expires. You are not required to make further investments as soon as the account reaches fifteen years. The collected savings will keep accumulating interest until the owner shuts it down. [B-02] Conclusion: Families often search for an income source for the bright future of their daughters. Sukanya Yojana is highly useful for them. The scheme provides stable financial support to the family. It includes a sovereign guarantee. It is an EEE program that allows parents and daughters to utilize it in many ways. You can check out further details and queries about the Sukanya Samriddhi Yojna on our website Piramal Finance. It’ll be our sincere pleasure to help you out.
08-11-2023
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EPF vs. PPF: Which One Is Better for Saving Money?

A stress-free financial life after retirement is the dream for almost all people. For this, you need to save and invest. There are various schemes in which you can invest, with EPF and PPF being the most popular options for saving for a hassle-free future retirement. Read on to learn the difference between an EPF (Employees Provident Fund) and a PPF (Public Provident Fund). [B-01] What is the Employees Provident Fund (EPF)? EPF has been introduced by a statutory body called the Employees’ Provident Fund Organization (EPFO). EPFO works under the Indian Government’s Ministry of Labour and Employment. An Employees Provident Fund (EPF) is a savings scheme for building a retirement corpus. In EPF, both the employer and employee should contribute 12% on a monthly basis to the EPF account. The return for EPF is slightly higher than the PPF scheme. The amount will be deducted from your salary and sent to the EPF Account directly. What are the benefits of the Employees Provident Fund (EPF)? Here are some of the benefits of EPF: Secure Savings: As the EPF account is under the supervision of the government, it is hence a secure investment. Higher Interest Rate: The interest given for an EPF account is higher than the PPF. Flexible Choice: If there is an emergency or job loss, you can withdraw the amount from an EPF account. Contribution: This is the best benefit that you can reap from the EPF account. The savings will be contributed both by you and the employer. Withdrawal: You can withdraw the amount from the EPF account in case of an emergency. Lock-in period: The lock-in period for the EPF scheme is until your retirement. You can also withdraw in the event of a job loss. Tax Exemption: You can avail of tax exemption from the EPF scheme. As per Section 80C of the Income Tax Act (ITA), EPF is exempt from tax. What is the Public Provident Fund (PPF)? PPF Scheme (Public Provident Fund) is regarded as a secure option for saving and long-term investment in India. The main aim of the PPF scheme is to invest a small amount of money over a long period and create a corpus. The PPF scheme is maintained by the Central Government of India. A PPF account will be opened when you invest in the PPF scheme. You can invest from INR 500 to INR 1,50,000. This account is open only to Indian citizens. PPF accounts can be opened at post offices and other participating institutions. What are the benefits of the Public Provident Fund (PPF)? Here are some of the benefits of PPF: Secure Option: As the government is involved, it is one of the most secure investments. Security is the most sought-after advantage of the PPF scheme. Higher Interest Rate: The interest given for the Public Provident Fund (PPF) is higher than the interest given for fixed deposits. This is because the authority to fix the interest rates lies with the government. Flexible Deposits: The mode of depositing in a PPF account is very flexible. You can deposit via cash, cheque, demand draft (DD), or online mode. Flexible Number of Deposits: The number of deposits that you make for a year into the PPF does not matter. You can deposit as many times as you need. Emergency: During an emergency, you can partially withdraw the principal. However, it is only possible after the seventh year of account opening. Tax Exemption: The greatest benefit is the tax exemption. As per Section 80C of the Income Tax Act (ITA), the PPF is exempt from tax. The returns from PPF are also tax-free. EPF vs. PPF Here is a simple table that gives you the exact difference between EPF and PPF. This will help you compare and invest in the best option of your choice. ParticularsEmployees Provident Fund (EPF)Public Provident Fund (PPF)Providing OrganisationEPFO (Employee Provident Fund Organization) – a statutory body.Post Offices and other participating institutions.Interest Rate8.1%7.1%EligibilityOnly for salaried individuals.Any Indian citizen except NRIs.Investing Amount12% of the salary is mandatory.Can also be increased, optionally.Minimum Investment: INR 500Maximum Investment: INR 1,50,000Lock-in PeriodTill retirement or resignation15 years or 15+5 yearsTax ExemptionApplicableApplicableContributing MemberBoth the employer and the employee.Only by employees. EPF vs. PPF – Which One is Better for Saving Money? Based on the above-mentioned aspects, you can come to the following analysis. Security: When it comes to security, both EPF and PPF schemes are secure. This is because they are guaranteed by the government of India. Interest Rate: When it comes to interest rates, the EPF account is the best since it offers a higher interest rate. Contributors: Under the Employees Provident Fund (EPF), both the employee and the employer will contribute. However, in the PPF scheme, only the employee will contribute. This makes EPF a better option. Withdrawal: When it comes to withdrawal, EPF is the best option, as you can withdraw whenever you need. Because under the PPF scheme, you will be able to partially withdraw only after a certain period. [B-02] Final Takeaway By now, you must have a better understanding of the differences between the EPF and PPF. It is best to choose EPF as the saving scheme for a retirement corpus. This way, you can select the best savings instruments that match your personal financial goals after retirement. If you have any doubts about your finances, feel free to contact Piramal Finance. Piramal Finance works with a pool of financial experts who will help guide you through every doubt and process. To read more about such topics, visit Piramal Finance. I wish you a happy and peaceful life after retirement!
08-11-2023
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