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What are SME IPO’s? Explained

What are SME IPO’s? Explained in detail.

SME IPO’s

An SME IPO (Small and Medium Enterprises Initial Public Offering) is a process through which small and medium-sized enterprises (SMEs) raise capital by offering shares to the public for the first time. This allows SMEs to access public funds, enhance their visibility, and gain credibility in the market. Here are the key aspects of an SME IPO:

Key Aspects of SME IPO

  1. Purpose:
    • Raise capital for expansion, working capital, debt repayment, or other business needs.
    • Increase visibility and credibility in the market.
    • Provide an exit route for early investors.
  2. Eligibility Criteria:
    • SMEs must meet specific criteria set by the stock exchanges and regulatory authorities.
    • For NSE-An issuer, whose post issue face value capital is upto twenty-five crore rupees is eligible to get its securities listed on the SME platform
    • For BSE-The post-issue paid up capital of the company shall be at least Rs. 1 crore.
  • It is mandatory for a company to have a website.
  • It is mandatory for the company to facilitate trading in demat securities and enter into an agreement with both the depositories.
  • Requirements often include a minimum net worth, profitability, and operating history.

  • Regulatory Framework:
    • Governed by the regulations of the respective country’s securities market regulator. In India, for example, it’s regulated by the Securities and Exchange Board of India (SEBI).
    • SMEs must comply with disclosure and reporting requirements.
  • Listing Platforms:
    • In India, SMEs can list on platforms like the BSE SME or NSE Emerge, which are dedicated to SMEs.
  • Process:
    • Appointment of Advisors: SMEs typically appoint merchant bankers, legal advisors, and auditors to assist with the IPO process.
    • Preparation of Prospectus: A detailed document that provides information about the company’s business, financials, and the purpose of the IPO.
    • Regulatory Approval: The prospectus is submitted to the regulatory authorities for approval.
    • Marketing the IPO: Roadshows and advertising to generate interest among potential investors.
    • Book Building: Investors bid for shares, and the final price is determined based on demand.
    • Allotment and Listing: Shares are allotted to investors, and the company gets listed on the stock exchange.
  • Benefits:
    • Capital Raising: Access to a broader investor base and substantial capital.
    • Market Visibility: Increased visibility and credibility with customers, suppliers, and financial institutions.
    • Valuation: Market-based valuation of the company.
    • Liquidity: Shares become tradable, providing liquidity to investors.

  • Challenges:
    • Compliance: Ongoing compliance with regulatory requirements and disclosure norms.
    • Market Volatility: Exposure to market risks and price fluctuations.
    • Costs: Significant costs involved in the IPO process, including fees for advisors and compliance.

Conclusion

An SME IPO is a strategic step for small and medium-sized enterprises to access capital markets, enhance their profile, and support their growth ambitions. However, it requires careful planning, compliance with regulatory standards, and a clear understanding of the associated benefits and risks.

                                                                                                                        -by

                                                                                                      Vishal Kumar K R

08/07/2024 /0 Comments/by
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Effwa Infra and Research IPO

Effwa Infra & Research Limited IPO is open for subscription

Application start- 05/07/2024.

Application end- 09/07/2024.

Allotment begins- 10/07/2024.

Refund Initiation- 11/07/2024.

Allotment date- 11/07/2024.

Listing on exchange- 12/07/2024.

Min. quantity- 1600 shares.

Price range- ₹78 – ₹82.

IPO Size- ₹51.27 Cr

About Effwa Infra & Research Limited

Effwa Infra & Research Limited (EIRL), founded in 2014, specializes in various environmental services such as treating wastewater and solid waste, recycling water, and managing hazardous waste. They provide complete project management solutions, ensuring environmentally friendly practices across multiple industries, including textile, leather, food processing, chemicals, steel, and pharmaceuticals.

EIRL follows the 4R concept: Reducing, Recycling, Reusing, and Rehabilitation. Their goal is to help industries achieve Zero Liquid Discharge, meaning no wastewater is released into the environment by recycling and reusing water.

Their services cover the entire project lifecycle, from initial concept to final commissioning. This includes preparing project reports, selecting technologies, managing projects, designing processes, procuring materials, managing supply chains, obtaining regulatory approvals, and overseeing construction and commissioning. They also provide ongoing support, such as equipment design, environmental engineering, maintenance, plant operation, and safety services.

EIRL bids for projects through a competitive process managed by government and private institutions. They handle everything from designing and constructing water management systems to laying pipelines and installing pumps. After completing a project, they also offer operation and maintenance services for a few years.

As EIRL plans to go public with an Initial Public Offering (IPO), the money raised will be used for:

  1. Funding their working capital needs (daily business expenses).
  2. Purchasing new office equipment.
  3. General corporate purposes (various business needs).

Effwa Infra and Research IPO Lot Size

Effwa Infra and Research IPO Reservation

Effwa Infra and Research IPO Promoter Holding

Effwa Infra & Research Limited Financial Information

Key Performance Indicator(KPI)

The Effwa Infra and Research IPO is subscribed 17.37 times on July 5, 2024 7:02:05 PM. The public issue subscribed 30.03 times in the retail category, 0.00 times in the QIB category, and 10.66 times in the NII category.

07/07/2024 /0 Comments/by

Fin-influencers v/s financial advisors

Fin-influencers v/s financial advisors

According to Investopedia fin-influencer is – “A Personal finance influencer are people who use social media platforms and websites to offer tips about money. In terms of success, they’re typically gauged by the size of their following and the visibility of their brand. Some of the top influencers have audiences that number in the millions.”

The rise of the personal finance influencer can be partly attributed to the growing use of social media to access money advice. For example, here’s where Gen Z and millennial investors look for money tips, according
to Morning Consult:1

  • Facebook—33%
  • Instagram—32%
  • Reddit—29%
  • X platform (formerly Twitter)—27%

The
the expertise of finfluencers can vary widely. Some have formal financial education
or professional experience, while others might base their content on personal
experience and self-taught knowledge.

Regulation: Finfluencers are generally not regulated by financial authorities, meaning there is no guarantee of their qualifications or the accuracy of their advice.

They often earn money through sponsorships, affiliate marketing, and ad revenue, which can sometimes influence the advice they give.

financial advisor

A financial advisor is a professional who provides expert advice and services to clients regarding financial matters. Their goal is to help clients achieve their financial objectives, such as saving for retirement, investing wisely, managing debt, and planning for major life events.

Financial advisors typically have formal education in finance, economics, or related fields. Many also hold professional certifications, such as:

  • Certified Financial Planner (CFP)
  • Chartered Financial Analyst (CFA)
  • Certified Public Accountant (CPA)
  • Personal Financial Specialist (PFS)

Financial advisors are regulated by financial authorities to ensure they adhere to ethical standards and provide accurate, unbiased advice. In India financial advisors are regulated by SEBI.

Conclusion:

When looking for a financial advisor, it’s important to consider their qualifications, experience, and compensation structure. It’s also beneficial to seek referrals and read reviews to ensure the advisor has a good track record and can meet your specific financial needs.

07/07/2024 /0 Comments/by
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DERIVATIVE SEGMENT-3

DERIVATIVE SEGMENT -3

Factors influencing the growth of derivative market globally

Over the last decades, the derivative market has seen phenomenal growth. many derivative contracts were launched at exchanged across the world. some of the factors driving the growth of financial derivatives are :

  1. Increased fluctuation in underlying asset prices in financial markets.
  2. Integration of financial markets globally.
  3. The use of the latest technology in communication has helped In the reduction of transaction costs.
  4. Enhanced understanding of market participants on sophisticated risk management tools to manage risk.
  5. Frequent innovations in the derivative market and newer applications of products.

In the modern world , there is a huge variety of derivative products available . they are either traded on organised exchanges or agreed directly between the contracting counterparties over the telephone or through electronic media  . over the counter market is not a physical marketplace but collection of brokers dealers scattered across the country. The OTC derivative markets have banks , financial institution and sophisticated market participants like hedge funds, corporation and high net worth individuals .

OTC market – The following features compared to exchange-traded derivatives :

1. Contracts are tailor-made to fit in specific requirements of dealing counterparties.

2. The management of counterparty risk is decentralized and located within individual institutions.

3.There are no formal rules or mechanisms for risk management to ensure market stability and integrity and to safeguard the collective interest of market participants.

4. Transactions are private with little or no disclosure to the entire market.

                 On the contrary, exchange-traded contracts are standardized and traded on organized exchanges with auction platforms. A clearing house/clearing corporation guarantees contract performance.

                                                                                   -By

                                                                         A Gowrish R Bhat

07/07/2024 /0 Comments/by
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Interesting facts about the Union Budget

Interesting facts about the Union Budget-2024

The Union Budget of India has a rich history filled with intriguing facts that showcase the evolution of the country’s financial planning and presentation. Here are ten fascinating details about the Union Budget:

  • First Budget Presentation in India: The very first budget of India was presented on April 7, 1860, by Scottish economist James Wilson from the East India Company. This budget introduced the income tax, which remains a major source of revenue for the Indian government today.

  • Post-Independence First Budget: After gaining independence, India’s first budget was presented on November 26, 1947, by R K Shanmukham Chetty, who served as the finance minister at that time.

  • Longest Budget Speech by Duration: Finance Minister Nirmala Sitharaman holds the record for the longest budget speech in India’s history. On February 1, 2020, while presenting the Union Budget for 2020-21, she spoke for two hours and 42 minutes. Her speech, which began at 11 am, had to be concluded with two pages left as she wasn’t feeling well. She requested the Speaker to consider the rest of her speech as read. This broke her previous record of a two-hour and 17-minute speech delivered in July 2019 during her first budget presentation.

  • Longest Budget Speech by Word Count: In terms of word count, Manmohan Singh holds the record with 18,650 words used during his budget speech in 1991, under the Narasimha Rao government. Arun Jaitley follows closely with a speech comprising 18,604 words in 2018, which lasted for one hour and 49 minutes.

  • Shortest Budget Speech: The shortest budget speech was given by Hirubhai Mulljibhai Patel, the finance minister during the Morarji Desai government in 1977. His speech was notably brief, consisting of only 800 words.

  • Most Budget Presentations by a Single Minister: Former Prime Minister Morarji Desai holds the record for presenting the most budget proposals in India’s history. As finance minister from 1962 to 1969, he presented ten budgets. He is followed by P Chidambaram (9), Pranab Mukherjee (8), and Yashwant Sinha (8).

  1. Change in Budget Presentation Timing: Traditionally, the Union Budget was presented at 5 pm on the last working day of February. This practice continued until 1999 when Finance Minister Yashwant Sinha of the Atal Bihari Vajpayee government changed the timing to 11 am. Later, in 2017, Arun Jaitley moved the budget presentation date from February 28 to February 1.

  2. Bilingual Budget Documents: Until 1955, the Union Budget was presented only in English. The Congress government decided to print the budget documents in both Hindi and English from that year onward, reflecting India’s linguistic diversity.

  3. Digital Budget: Due to the COVID-19 pandemic, the budget for the fiscal year 2021-22 was entirely digital. This marked a first for independent India, showcasing a shift towards modern and accessible presentation methods.

  4. Women Finance Ministers: After Indira Gandhi, who presented the budget for the fiscal year 1970-1971, Nirmala Sitharaman became the second woman to present the Union Budget in 2019. Her role as finance minister marks a significant milestone in the representation of women in India’s financial governance.

These facts illustrate the dynamic nature of India’s budgetary process and highlight significant milestones that have shaped the nation’s economic landscape over the years.

07/07/2024 /0 Comments/by

Gambling, Game or Business

Gambling, Game or Business

Many of us doubt what we are doing in the market? whether we are gambling, playing games for fun, or doing business. It completely depends on how we define it.

Running a successful business requires much market study, consistency, plan execution, financial management, and other business development skills. A person who wants to start a business, studies a lot about the market in and out thoroughly. In this process, they calculate the budget, scope of business, marketing, production, profit margin, risk appetite, competitor Etc.

No entrepreneur wants their business to fail. In the same way, Indian parents don’t permit their children to fail even a single exam in school. All they say is to study well, you will crack it. Likewise studying the market is the basic step in taking good investment or trade.

Even after studying for exams many of us fail in exams, it’s not because we don’t study, it’s because our study is not enough to crack it. In the case of competitive exams, everyone studies hard, and many are thrown out of the race by the cut-off. From this we can realize that not only studying help us to reach goals but, our study has to be realistic, accurate, and unbiased also.

The market is all about 50% study & 50% psychology. In the present market scenario (based on the SEBI data) it looks like people are coming to the market to check their luck. They think the market works on 90% luck and 10% by the operator. There are some hard realities that we have to accept in the market.

                                                                                         -by

                                                                                Vishal Kumar K R

06/07/2024 /2 Comments/by
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Finance Minister Nirmala Sitharaman is set to present the Union Budget

Finance Minister Nirmala Sitharaman will present the Union Budget on July 23.

Finance Minister Nirmala Sitharaman is set to present the Union Budget on July 23, 2024. This announcement comes ahead of the Budget session of Parliament, which is scheduled to begin on July 22 and conclude on August 12. The schedule for the session and the Budget presentation was confirmed by Parliamentary Affairs Minister Kiren Rijiju.

Rijiju took to X, formerly known as Twitter, to inform the public that the Hon’ble President of India has approved the proposal from the Government of India to summon both Houses of Parliament for the Budget Session 2024. He mentioned that the session will run from July 22 to August 12, but noted that this is subject to any urgent parliamentary business that might arise

Parliamentary Affairs Minister- Kiren Rijiju

The Union Budget is a critical financial statement that outlines the government’s revenue and expenditure for the upcoming fiscal year. It includes detailed allocations for various sectors such as health, education, defense, and infrastructure, as well as tax proposals and other financial measures. The Budget session is a key event in the parliamentary calendar, involving extensive debates and discussions on the proposed financial policies.

This year’s Budget session is particularly significant as it sets the financial direction for the country amidst various economic challenges. Stakeholders from different sectors, including businesses, investors, and the general public, keenly await the announcements to understand the government’s economic priorities and strategies.

The Union Budget presentation and the ensuing parliamentary session are expected to be closely watched events, as they will provide insights into the government’s plans for economic growth, fiscal discipline, and overall development for the year ahead.

06/07/2024 /0 Comments/by
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DERIVATIVE SEGMENT – 2

DERIVATIVE SEGMENT – 2

PRODUCTS IN DERIVATIVES

1 . FORWARDS – It is a contract agreement between two parties to buy /sell an underlying asset at a certain future date for a particular price that is pre-decided on the contract date. both contracting parties are committed and are obliged to honor the transaction irrespective of the underlying asset’s price at the time of delivery.

  1. FUTURES- A future contract similar to forwards, expects that the deal is made through an organized and regulated exchange rather than being negotiated directly between two parties.

  1. OPTIONS – An option is a contract that gives the right, but not the obligation, to buy or sell the underlying on or before a stated date or at the stated price while the buyer of the option pays the premium and the seller receives the premium.
  1. SWAPS – It is an agreement made between two parties to exchange cash flows in the future according to a prearranged formula. it helps market Participants manage risk associated with the volatile interest rates.

MARKET PARTICIPANTS

  1. HEDGERS – They face risk associated with the prices of underlying assets and use derivatives to reduce their risk. corporations, investing institutions, and Banks all use derivatives products to hedge or reduce risk.

   2 . SPECULATORS / TRADERS– They try to predict the future movement of the market and take a position in derivatives derivatives are preferred over the underlying asset for trading purposes.

 3 . ARBITRAGEURS– IT is a deal in a product profits by exploiting a price difference in a product in two different markets This type of person purchases an asset Cheaply in one location and simultaneously arranges to sell it at a higher price in another location.

VARIOUS RISKS FACED BY THE PARTICIPANTS IN DERIVATIVE

 Market participants must understand that derivatives, being leveraged instruments, have risks like counterparty risk, price risk, liquidity risk, legal or regulatory risk, and operational risk. A market participant should therefore consider whether such trading is suitable for him/her based on these parameters

                                                                                                               -By

                                                                                                   A Gowrish R Bhat

05/07/2024 /0 Comments/by

Why people are scared to invest or trade in stock market?

Why people are scared to invest or trade in stock market?

Before finding an answer to the above question think first, when do we get scared?

And the answer is “When we don’t know what we are doing?” And “when we feel unsecured about our future”.

“If we have full knowledge about, what we are doing? Then there is no need to worry about path. When we are on the right path no need to worry about the future.”

Vishal Kumar K R

Vishal Kumar K RStock market investor

Know your risk appetite, mindset, limitations, desires, strengths, and weaknesses. First, know about yourself. Trading or investing is not only about making wealth, it is a meditation. It is a continuous process of learning about many things in the universe.

Most people don’t have much knowledge about the stock market. The stock market is not a swimming pool, it’s a Deep Sea. Whales & sharks are waiting in front of their plate for meals. So, if you don’t want to become their meal then, we need to build/learn that soft skill to earn good profit.

Other reasons for people don’t encourage investing in markets, are market volatility, negative past experiences, media influence, mistrust of financial institutions, emotional investing Etc.

Above mentioned reasons are also present in other business modules, you can’t earn more by skipping the above factors of business. The word business itself talks about uncertainty, risk, and other characteristics. Doing something different from others is not an easy task, it requires time, concentration, dedication, discipline, motivation, hard work…

People who talk negatively about the market are influenced by their experience & their perspective. A study should be conducted to examine their backtesting methods and the percentage of effort they put into their work.

Every business/start-up cannot become tycoon. Only a well-planned, dedicated, innovative business survives in the globe. What about other business, which are not recognised and bankrupted?

                                                                                                                  -by

                                                                                                      Vishal Kumar K R

05/07/2024 /0 Comments/by