Investments

PPFAS AMC: The Journey of Parag Parikh Financial Advisory Services: History, Evolution, and Investment Philosophy

by

Introduction

In the dynamic landscape of India’s financial services industry, few organizations have maintained a steadfast commitment to their founding principles while adapting to changing market conditions as successfully as Parag Parikh Financial Advisory Services (PPFAS). From its humble beginnings as a stock broking firm to its current status as a respected asset management company, PPFAS has carved a distinctive niche in the investment community through its value-oriented approach, transparent practices, and unwavering focus on investor education.

This comprehensive article explores the rich history, evolution, and unique investment philosophy of PPFAS, examining its transition from an advisory service to a full-fledged asset management company. We delve into the visionary leadership of its founder, the late Parag Parikh, whose principles continue to guide the organization, and analyze the distinctive features of its mutual fund offerings that have garnered attention from investors seeking a different approach to wealth creation.

By examining PPFAS’s journey through the lens of its corporate structure, investment strategies, fund performance, and future outlook, we aim to provide a holistic understanding of an organization that has consistently challenged conventional wisdom in the Indian mutual fund industry. Whether you are a seasoned investor familiar with PPFAS’s approach or someone new to the world of value investing, this exploration offers valuable insights into a company that has stayed true to its core beliefs while navigating the complexities of modern financial markets.

The Visionary Founder: Parag Parikh

The story of PPFAS is inextricably linked to the life and philosophy of its founder, Parag Parikh, whose vision and principles continue to influence the organization long after his untimely passing in 2015. Born into a family with business interests, Parag Parikh developed an early fascination with the stock market, leading him to establish his own stock broking firm in 1983 after completing his education.

Parag Parikh was not merely a successful businessman but also a thought leader who challenged the prevailing investment paradigms in India. His intellectual curiosity led him to explore behavioral finance long before it became a mainstream concept in Indian investment circles. Understanding the psychological biases that affect investment decisions became a cornerstone of his investment philosophy and later shaped the distinctive approach of PPFAS.

What set Parag Parikh apart from many of his contemporaries was his emphasis on ethical practices and transparent dealings in an industry often criticized for its opacity. He was a vocal advocate for investor education, believing that informed investors make better decisions. This commitment to education manifested in various forms throughout his career, from authoring books like “Stocks to Riches” and “Value Investing and Behavioral Finance” to conducting numerous workshops and seminars.

Parag Parikh’s investment philosophy was deeply influenced by value investing legends like Benjamin Graham and Warren Buffett, but he adapted these principles to the Indian context. He emphasized fundamental analysis, focusing on businesses with strong moats, capable management, and reasonable valuations. This approach often led him to take contrarian positions, avoiding market favorites and seeking undervalued opportunities that others overlooked.

Perhaps most notably, Parag Parikh practiced what he preached. When PPFAS launched its flagship mutual fund in 2013, he invested a significant portion of his personal wealth in it, aligning his interests with those of other investors. This “skin in the game” approach became a defining characteristic of PPFAS’s corporate culture and helped build trust with clients who appreciated that the company’s leadership shared both the risks and rewards of their investment decisions.

Tragically, Parag Parikh passed away in a car accident in Omaha, Nebraska, in May 2015, where he had gone to attend Berkshire Hathaway’s annual shareholder meeting—a pilgrimage he made regularly to learn from his investment idol, Warren Buffett. His death left a void in India’s investment community, but the principles he established continue to guide PPFAS, ensuring his legacy lives on through the organization he founded.

Origins and Foundation

PPFAS traces its origins to 1983 when Parag Parikh established Parag Parikh Financial Advisory Services Limited as a stock broking firm in Mumbai. The early 1980s marked a transformative period for Indian capital markets, with the gradual liberalization of the economy creating new opportunities for financial services companies. However, the industry was still largely unregulated, with practices that often favored intermediaries over investors.

Against this backdrop, Parag Parikh chose to differentiate his firm by emphasizing ethical business practices and transparent client relationships. From the outset, PPFAS positioned itself not merely as a transaction facilitator but as a trusted advisor committed to helping clients make informed investment decisions. This approach was revolutionary in an era when most broking firms focused primarily on generating commissions through frequent trading rather than guiding clients toward long-term wealth creation.

The foundation of PPFAS was built on several key principles that continue to define the organization today:

  1. Value-oriented investing: Emphasizing fundamental analysis and seeking companies trading below their intrinsic value.
  2. Long-term perspective: Focusing on sustainable wealth creation over extended periods rather than short-term market timing.
  3. Rational decision-making: Recognizing and mitigating behavioral biases that lead to poor investment outcomes.
  4. Ethical business practices: Maintaining transparency in all dealings and avoiding conflicts of interest.
  5. Client education: Empowering investors with knowledge to make informed decisions independently.

During its formative years, PPFAS operated primarily as a stock broking firm while gradually expanding its service offerings to include portfolio management and financial planning. The firm quickly gained recognition for its principled approach and began attracting clients who appreciated its emphasis on fundamental research and value investing principles.

A significant milestone in the early history of PPFAS was the establishment of its Portfolio Management Service (PMS) in 1996, following SEBI’s introduction of formal regulations for this business. The PMS allowed PPFAS to manage discretionary portfolios for high-net-worth individuals, implementing the value investing philosophy that Parag Parikh had been advocating. This service became a testing ground for the investment strategies that would later form the basis of the company’s mutual fund offerings.

Throughout the 1990s and early 2000s, as India’s capital markets evolved rapidly following economic liberalization, PPFAS maintained its distinctive approach, often taking contrarian positions during periods of market euphoria. The firm’s resilience was particularly evident during the dot-com bubble of the late 1990s, when it avoided speculative technology investments despite criticism from clients seeking higher returns. This discipline protected clients from the subsequent market crash and reinforced the firm’s reputation for prudent risk management.

By the early 2000s, PPFAS had established itself as a respected name in India’s financial services landscape, known for its research-driven approach and commitment to client interests. The company’s evolution from a small broking firm to a comprehensive financial services provider set the stage for its eventual entry into the mutual fund industry, marking the beginning of a new chapter in its history.

Evolution from Advisory to Asset Management

The transformation of PPFAS from a financial advisory and portfolio management service to a full-fledged asset management company represents a pivotal phase in the organization’s evolution. This transition was not merely a business diversification but a strategic move to democratize access to the company’s investment philosophy, making it available to a broader spectrum of investors beyond the high-net-worth individuals who primarily utilized its portfolio management services.

The decision to enter the mutual fund industry came after careful deliberation and was influenced by several factors:

  1. Regulatory changes: SEBI’s regulations were evolving to create a more level playing field for smaller, independent asset managers to compete with established players backed by financial conglomerates.
  2. Market maturity: The Indian mutual fund industry had grown significantly, with increasing investor awareness about the benefits of professional money management.
  3. Distribution reach: The mutual fund structure offered potential for wider distribution compared to the more restrictive portfolio management services.
  4. Aligned interests: The mutual fund format allowed for greater transparency and alignment of interests between the fund house and investors.

In 2011, PPFAS began the rigorous process of obtaining necessary approvals from SEBI to establish an asset management company. This process involved meeting stringent capital adequacy requirements, establishing robust risk management systems, and demonstrating capacity for fund management operations. After receiving regulatory approval, PPFAS Asset Management Private Limited was incorporated in 2012 as a wholly-owned subsidiary of PPFAS Limited (the erstwhile Parag Parikh Financial Advisory Services Limited).

In May 2013, PPFAS launched its flagship scheme, initially called PPFAS Long Term Value Fund (later renamed Parag Parikh Flexi Cap Fund), marking its official entry into the mutual fund industry. The launch was notable for its departure from industry norms in several ways:

  1. Single scheme approach: Unlike most new entrants who launch multiple funds across categories, PPFAS chose to focus on a single equity scheme, reflecting its belief in simplicity and specialization.
  2. Flexible mandate: The fund adopted a go-anywhere approach, with the flexibility to invest across market capitalizations and geographies, including international equities—a relatively uncommon feature for Indian mutual funds at that time.
  3. Skin in the game: The company announced that its directors and employees would invest their personal money in the fund, aligning their interests with those of external investors.
  4. Low-key marketing: Instead of a high-decibel launch with aggressive marketing campaigns, PPFAS relied primarily on word-of-mouth and targeted communications with existing clients and like-minded investors.

The evolution to asset management necessitated significant organizational changes. PPFAS expanded its team, bringing in professionals with expertise in fund operations, compliance, and distribution while preserving its research-driven investment culture. The company also invested in technology infrastructure to support mutual fund operations, including systems for NAV calculation, investor servicing, and regulatory reporting.

Throughout this transition, PPFAS maintained its commitment to transparency and investor education. The company continued its tradition of regular investor meets where fund managers explained their investment decisions and answered questions directly from investors—a practice that was uncommon in the industry but consistent with PPFAS’s belief in open communication.

By 2015, the mutual fund had established a track record and begun attracting attention from investors and industry observers who appreciated its distinctive approach. The asset management transition was further solidified when PPFAS decided to focus exclusively on mutual funds, voluntarily surrendering its portfolio management services license to eliminate potential conflicts of interest—another move that underscored the company’s commitment to aligning with investor interests.

The evolution from advisory to asset management represented not just a business transformation but a fulfillment of Parag Parikh’s vision to democratize value investing in India and create an organization that would outlast its founder by adhering to enduring investment principles.

PPFAS as a Sponsor Company

As a sponsor company in the mutual fund industry, PPFAS Limited (formerly Parag Parikh Financial Advisory Services Limited) plays a crucial role in establishing and maintaining the asset management company that operates the actual mutual fund schemes. Understanding the sponsor structure provides important insights into the governance, commitment, and stability of PPFAS Mutual Fund.

In the Indian mutual fund regulatory framework, a sponsor is the entity that establishes the mutual fund and holds a minimum 40% stake in the asset management company. The sponsor must meet SEBI’s fit and proper criteria and demonstrate financial soundness, business reputation, and capacity to support the AMC operations. PPFAS Limited serves as the sponsor for PPFAS Mutual Fund, having established PPFAS Asset Management Private Limited as its wholly-owned subsidiary.

Several distinctive aspects characterize PPFAS’s role as a sponsor:

  1. Ownership structure: Unlike many mutual fund sponsors in India that are part of larger financial conglomerates or have diverse shareholders including foreign entities, PPFAS Limited has maintained a concentrated ownership structure primarily held by the Parikh family and close associates. This stability in ownership has enabled consistent adherence to the founding principles and investment philosophy.
  2. Financial commitment: As a sponsor, PPFAS Limited has consistently demonstrated its financial commitment to the asset management business, infusing capital as needed for growth and maintaining capital adequacy well above regulatory requirements. This financial backing has allowed the AMC to focus on long-term business building rather than short-term profitability.
  3. Strategic direction: The sponsor has provided clear strategic direction to the asset management company, emphasizing sustainable growth through investment performance and client satisfaction rather than aggressive asset gathering. This approach is reflected in the measured pace of new fund launches and the focus on building a distinctive identity in the crowded mutual fund marketplace.
  4. Governance oversight: Through its representation on the board of directors of the asset management company, the sponsor exercises governance oversight that ensures adherence to the founding principles. The sponsor has established robust governance mechanisms, including independent directors with strong credentials who provide objective perspectives on key decisions.
  5. Brand stewardship: As the custodian of the Parag Parikh legacy, the sponsor company has carefully managed the brand to ensure it consistently represents the values of integrity, transparency, and rational investing that were championed by the founder.

Following the passing of Parag Parikh in 2015, the sponsor company faced the challenge of leadership transition. Neil Parikh, son of Parag Parikh, assumed leadership roles both at the sponsor level and within the asset management company, ensuring continuity in vision and values. The transition was managed smoothly, with key team members remaining in place and the investment philosophy continuing unchanged.

In 2018, as part of a corporate restructuring to streamline operations and enhance focus, the sponsor company changed its name from Parag Parikh Financial Advisory Services Limited to PPFAS Limited. This change reflected the evolution of the group’s business focus toward asset management while preserving the PPFAS identity that had built recognition in the investment community.

The sponsor’s commitment to the mutual fund business is also demonstrated through the significant personal investments that its directors and their families maintain in the mutual fund schemes. Regular disclosures of these investments provide transparency and reinforce the “skin in the game” philosophy that distinguishes PPFAS from many competitors.

As a sponsor, PPFAS Limited has demonstrated patience in building the asset management business, allowing it to develop organically rather than pushing for rapid expansion. This approach has enabled the AMC to establish a clear identity in the market and build a loyal investor base that appreciates its distinctive investment approach and client-centric orientation.

Through prudent capital allocation, governance oversight, and strategic guidance, PPFAS Limited has fulfilled its responsibilities as a sponsor while allowing the asset management company operational autonomy to implement its investment strategies and business plans. This balanced approach has contributed significantly to the credibility and success of PPFAS Mutual Fund in an industry dominated by much larger players.

PPFAS Mutual Fund: The AMC Structure

PPFAS Asset Management Private Limited, the asset management company (AMC) of PPFAS Mutual Fund, operates with a structure designed to support its distinctive investment philosophy while meeting regulatory requirements and operational needs. The AMC structure reflects the organization’s commitment to independence, alignment of interests, and focus on investment excellence.

Corporate Structure and Governance

The AMC is incorporated as a private limited company and is a wholly-owned subsidiary of PPFAS Limited, the sponsor. This ownership arrangement ensures stability and consistent adherence to the founding principles. The corporate governance structure includes:

  1. Board of Directors: The board comprises a balanced mix of executive directors, non-executive directors, and independent directors. The independent directors, who include respected professionals with diverse expertise in finance, law, and business management, provide objective oversight and protect investor interests.
  2. Key Management Personnel: The senior management team includes experienced professionals leading various functions such as investments, operations, compliance, sales, and investor relations. Many senior team members have been with the organization for extended periods, ensuring continuity in approach and institutional memory.
  3. Compliance and Risk Management: A robust compliance department works independently to ensure adherence to all regulatory requirements and internal policies. The risk management function operates with clear separation from the investment team to provide objective assessment of portfolio risks.

Organizational Structure

The AMC is organized into several key functional areas:

  1. Investment Team: The heart of the organization, comprising fund managers, research analysts, and investment strategists who implement the value-oriented investment approach. The team structure is relatively flat, encouraging open discussion and collaborative decision-making while still maintaining clear accountability.
  2. Operations: Handles fund accounting, NAV calculation, reconciliations, and other operational aspects of running mutual fund schemes. This team ensures accurate processing of transactions and maintains data integrity.
  3. Investor Services: Manages relationships with existing investors, handles queries and service requests, and provides support through various channels including phone, email, and in-person interactions.
  4. Sales and Distribution: Responsible for building relationships with distribution partners, conducting investor awareness programs, and facilitating access to the funds through various channels.
  5. Compliance and Legal: Ensures adherence to regulatory requirements, monitors changing regulations, and implements appropriate policies and procedures to maintain compliance.
  6. Technology: Supports all business functions through appropriate systems and IT infrastructure, with increasing focus on digital capabilities to enhance investor experience.

Distinctive Features of the AMC Structure

Several aspects of PPFAS’s AMC structure distinguish it from many competitors:

  1. Investment-Centric Culture: The organization is structured to prioritize investment research and portfolio management, with other functions designed to support the investment process rather than drive asset gathering.
  2. Transparency: The AMC maintains unusual transparency about its operations, regularly disclosing not just statutory information but also insights into investment decisions, leadership perspectives, and organizational developments.
  3. Aligned Compensation: The compensation structure for employees, particularly the investment team, includes significant weight to long-term performance and alignment with investor outcomes, rather than focusing primarily on asset growth or short-term results.
  4. Skin in the Game: The AMC requires its directors and employees to invest in the mutual fund schemes, with regular disclosures of these investments. This practice ensures that decision-makers experience the same outcomes as external investors.
  5. Focus and Simplicity: Unlike many AMCs that operate dozens of schemes across multiple categories, PPFAS has maintained a focused approach with a limited number of schemes, each with a clear mandate and purpose.
  6. Cost Consciousness: The AMC operates with a lean structure, focusing resources on core functions that add value to investors rather than expansive facilities or large marketing budgets. This cost consciousness is reflected in the competitive expense ratios of its schemes.
  7. Direct Investor Communication: The organizational structure facilitates direct communication between fund managers and investors through regular meetings, webinars, and interactive sessions – breaking down the typical barriers between investment professionals and end investors.

The AMC has evolved over time, gradually expanding its team and capabilities while maintaining its core principles. From its initial team of around 15 people in 2013, the organization has grown to accommodate increasing assets under management and operational requirements, but has done so thoughtfully to preserve its distinctive culture and approach.

The structure of PPFAS Asset Management reflects a deliberate choice to prioritize investment quality and investor interests over rapid business expansion. This approach has enabled the AMC to build a reputation for integrity and performance that has attracted a loyal investor base seeking an alternative to more commercially oriented fund houses.

Investment Philosophy

The investment philosophy of PPFAS Mutual Fund represents the core of its identity and distinguishes it from most other asset managers in the Indian mutual fund landscape. Deeply rooted in the principles of value investing but adapted to contemporary markets and the Indian context, this philosophy guides all investment decisions across the fund house’s offerings.

Foundations of the Philosophy

PPFAS’s investment philosophy rests on several foundational principles:

  1. Value-oriented approach: At its core, PPFAS adopts a value investing mindset, focusing on the intrinsic worth of businesses rather than short-term market movements. This approach involves detailed fundamental analysis to identify companies trading below their intrinsic value, providing a margin of safety and potential for long-term appreciation.
  2. Business-first thinking: The fund managers view themselves as part-owners of businesses rather than traders of stocks. This perspective leads to deep analysis of business models, competitive advantages, management quality, and long-term prospects rather than focusing merely on price movements or technical factors.
  3. Patience and long-term orientation: PPFAS embraces a multi-year investment horizon, willing to wait for value recognition while businesses compound their intrinsic worth. This patience extends to holding cash when suitable opportunities are scarce and deploying it decisively when market dislocations create attractive entry points.
  4. Contrarian mindset: The firm is willing to take positions that differ from consensus views and avoid popular investments when their valuations appear excessive. This contrarian approach has often led to underweighting overheated sectors and finding value in overlooked areas of the market.
  5. Risk-conscious approach: Rather than defining risk through statistical measures like volatility, PPFAS views risk primarily as the permanent loss of capital. This perspective leads to a focus on business quality, balance sheet strength, and valuation discipline as the primary risk mitigation tools.

Key Elements of Implementation

The implementation of this philosophy involves several distinctive elements:

  1. Bottom-up stock selection: Investment decisions are driven primarily by company-specific analysis rather than top-down sector allocations or macroeconomic forecasts. Each potential investment is evaluated on its individual merits, leading to portfolios that often look markedly different from benchmark indices.
  2. Concentrated portfolios: Rather than excessive diversification, PPFAS maintains relatively concentrated portfolios of businesses it understands well and has high conviction in. This approach reflects the belief that a focused portfolio of well-researched investments offers better long-term results than broad market exposure.
  3. Global opportunity set: Unlike most Indian mutual funds that invest exclusively or predominantly in domestic equities, PPFAS includes international equities as a core component of its strategy. This global approach expands the opportunity set and allows access to business models or sectors not well represented in the Indian markets.
  4. Behavioral awareness: Recognizing that investor psychology often leads to suboptimal decisions, PPFAS incorporates behavioral finance insights into its investment process. This awareness helps the team identify market inefficiencies created by behavioral biases and avoid common psychological traps in their own decision-making.
  5. Independent research: The investment team conducts original research rather than relying primarily on broker reports or consensus views. This independent approach includes company meetings, industry analysis, channel checks, and detailed financial modeling to form proprietary insights.
  6. Valuation discipline: While emphasizing business quality, PPFAS maintains strict valuation discipline, recognizing that even excellent businesses can make poor investments if acquired at excessive prices. The valuation framework incorporates multiple methodologies appropriate to different business types rather than applying a one-size-fits-all approach.
  7. Pragmatic flexibility: Despite its value orientation, PPFAS avoids dogmatic adherence to any single investment style. The approach has evolved to recognize various forms of value, including companies with intangible assets, network effects, or other characteristics that might not be immediately apparent in traditional financial metrics.

Communication and Education

A distinctive aspect of PPFAS’s investment philosophy is the emphasis on transparently communicating it to investors:

  1. The fund house regularly explains its investment decisions, including both successes and mistakes, through investor communications, annual meetings, and fund manager interactions.
  2. Rather than simply marketing products, PPFAS focuses on educating investors about its approach, helping them understand why patience and a long-term perspective are essential for successful investing.
  3. By setting appropriate expectations about both the benefits and limitations of its investment philosophy, PPFAS aims to attract investors whose temperament and time horizon align with its approach.

The investment philosophy of PPFAS has remained remarkably consistent since its inception, even as the organization has grown and market conditions have evolved. This consistency reflects the deeply held convictions of its leadership and investment team about the enduring principles of successful investing.

While the philosophy has roots in classical value investing as articulated by Benjamin Graham and practiced by Warren Buffett, it has been thoughtfully adapted to contemporary markets and the Indian context. This adaptation recognizes the increasing importance of intangible assets, the global nature of business competition, and the unique characteristics of emerging markets like India.

The steadfast adherence to this philosophy, even during periods when it has been out of market favor, has defined PPFAS’s identity in the investment community and attracted a base of like-minded investors who appreciate its distinctive approach to wealth creation.

PPFAS Fund Management Team

Rajeev Thakkar

Chief Investment Officer and Equity Fund Manager

Having commenced his career in 1994, he possesses wide-ranging experience in the field of financial services. These include – Investment banking, managing fixed income portfolios, broking operations and Portfolio Management Services (PMS) operations.

He joined PPFAS Limited in 2001 and besides serving as a Fund Manager for its PMS, also earned the post of Chief Executive Officer, which he held until 2012. He currently serves as Chief Investment Officer of PPFAS Mutual Fund.

Educational Qualifications:

  • B. Com (Bombay University)
  • Chartered Accountant
  • CFA Charter Holder
  • Grad ICWA

Raunak Onkar

Dedicated Fund Manager for Overseas Investments and Co-Fund Manager

Raunak Onkar is a Fund Manager & Research Head at PPFAS Mutual Fund. He started his career with PPFAS in 2008 as an intern in the Research Team.

Educational Qualifications:

  • B.SC (IT) Mumbai University
  • MMS (Masters in Management Studies) in Finance (Mumbai University)

Raj Mehta

Debt Fund Manager

Beginning his career as an intern with PPFAS Mutual Fund in 2012, Raj swiftly moved up the ranks, and is currently part of the Fund Management team.

He is a Fellow Member of Institute of Chartered Accountants of India (ICAI) and a CFA Charter Holder. He is also featured as a regular participant on various TV channels and a columnist in select financial publications.

Educational Qualifications:

  • B.Com, M.Com (Mumbai University)
  • Chartered Accountant
  • CFA Charter Holder

Rukun Tarachandani

Domestic Equity Fund Manager

Rukun is a Fund Manager at PPFAS Mutual Fund. He has more than a decade of experience in Equity Markets. He started his career in 2013 as an Equity Research analyst with Goldman Sachs Global Investment Research.

Prior to joining PPFAS, he worked with Kotak Mahindra Asset Management as an Equity Research analyst focusing on small and midcap stocks and special situations. He is an avid reader of books on Behavioral Finance, Value Investing and Quantitative Investing.

Educational Qualifications:

  • MBA (Finance) from MDI Gurgaon
  • M.S. in Data Science from Northwestern University
  • B.Tech (Information Technology) from Nirma University
  • CFA Charterholder
  • CQF (Certificate in Quantitative Finance) certificate holder

Mansi Kariya

Co-Fund Manager Debt and Credit Research Analyst

Mansi Kariya joined PPFAS Mutual Fund in 2018 as a Debt Dealer. Gradually, she assumed the role of Credit Research Analyst within the Fixed Income Team and then eventually became a Co-Fund Manager Debt. In her previous roles, Mansi has worked as a research associate and senior executive – debt products for 3.5 years.

Educational Qualifications:

  • B.Com Hons (Calcutta University)
  • MS-Finance (ICFAI University)
  • CFA Charter Holder

The fund management team is supported by a research team comprising analysts with specialized sector knowledge and a shared commitment to fundamental research. The team structure is relatively flat, encouraging open debate and collaborative decision-making while maintaining clear accountability.

Key aspects of the fund management approach include:

  1. Collaborative Process: While individual fund managers have primary responsibility for specific schemes, investment decisions involve team discussion and debate to incorporate diverse perspectives.
  2. Continuity and Stability: The core investment team has maintained remarkable stability, providing continuity in approach and institutional memory that benefits long-term investors.
  3. Skin in the Game: All fund managers invest their personal funds in the schemes they manage, aligning their interests with those of external investors.
  4. Research Integration: Fund managers are actively involved in research, maintaining direct contact with portfolio companies rather than relying solely on analyst recommendations.
  5. Continuous Learning: The team maintains a culture of intellectual curiosity and continuous improvement, regularly reviewing both successful and unsuccessful investment decisions to refine their approach.

This combination of experienced fund managers, a stable team structure, and aligned interests has been instrumental in maintaining consistency in PPFAS’s investment approach as the organization has grown.

PPFAS Mutual Funds (Present List)

PPFAS Mutual Fund has maintained a focused product strategy, launching new schemes selectively rather than creating a proliferation of funds across categories. This approach reflects the organization’s philosophy of simplicity and specialization, focusing on areas where it believes it can add value through its distinctive investment approach. Each fund in the lineup has a clear mandate and purpose, addressing specific investor needs while maintaining consistency with the overall investment philosophy.

Parag Parikh Flexi Cap Fund

Fund Overview

  • Type of Scheme: An open-ended dynamic equity scheme investing across large cap, mid cap, small cap stocks
  • Date of Allotment: May 24, 2013
  • NAV (Direct Plan): ₹85.8001 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹88,004.52 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹1,000
    • Additional Purchase: ₹1,000
    • Monthly SIP: ₹1,000
    • Quarterly SIP: ₹3,000

Fund Managers

  • Rajeev Thakkar
  • Raunak Onkar
  • Raj Mehta
  • Rukun Tarachandani
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹450.51 crores (as of Feb. 28, 2025)

Parag Parikh ELSS Tax Saver Fund

Fund Overview

  • Type of Scheme: An open-ended equity linked saving scheme with a statutory lock-in of 3 years and tax benefit
  • Date of Allotment: July 24, 2019
  • NAV (Direct Plan): ₹32.2007 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹4,477.32 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹500
    • Additional Purchase: ₹500
    • Monthly SIP: ₹1,000

Fund Managers

  • Rajeev Thakkar
  • Raunak Onkar
  • Raj Mehta
  • Rukun Tarachandani
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹60.64 crores (as of Feb. 28, 2025)

Parag Parikh Conservative Hybrid Fund

Fund Overview

  • Type of Scheme: An open-ended hybrid scheme investing predominantly in debt instruments
  • Date of Allotment: May 28, 2021
  • NAV (Direct Plan): ₹14.7605 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹2,409.19 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹5,000
    • Additional Purchase: ₹1,000
    • Monthly SIP: ₹1,000

Fund Managers

  • Rajeev Thakkar
  • Raunak Onkar
  • Raj Mehta
  • Rukun Tarachandani
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹9.53 crores (as of Feb. 28, 2025)

Parag Parikh Dynamic Asset Allocation Fund

Fund Overview

  • Type of Scheme: An open-ended dynamic asset allocation fund
  • Date of Allotment: February 27, 2024
  • NAV (Direct Plan): ₹11.0560 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹1,647.82 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹5,000
    • Additional Purchase: ₹500
    • Monthly SIP: ₹1,000

Fund Managers

  • Rajeev Thakkar
  • Raunak Onkar
  • Raj Mehta
  • Rukun Tarachandani
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹9.89 crores (as of Feb. 28, 2025)

Parag Parikh Arbitrage Fund

Fund Overview

  • Type of Scheme: An open-ended scheme investing in arbitrage opportunities
  • Date of Allotment: November 03, 2023
  • NAV (Direct Plan): ₹11.0951 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹1,285.51 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹1,000
    • Additional Purchase: ₹1,000
    • Monthly SIP: ₹1,000

Fund Managers

  • Rajeev Thakkar
  • Raunak Onkar
  • Raj Mehta
  • Rukun Tarachandani
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹52.82 crores (as of Feb. 28, 2025)

Parag Parikh Liquid Fund

Fund Overview

  • Type of Scheme: An open-ended liquid scheme with relatively low interest rate risk and relatively low credit risk
  • Date of Allotment: May 11, 2018
  • NAV (Direct Plan): ₹1,435.9800 (as on 2025-03-31)
  • Assets Under Management (AUM): ₹2,425.86 crores (as of Feb. 28, 2025)

Investment Details

  • Minimum Application Amount:
    • New Purchase: ₹5,000
    • Additional Purchase: ₹1,000
    • Monthly SIP: ₹1,000

Fund Managers

  • Raj Mehta
  • Mansi Kariya

Additional Information

  • Insider Holdings: ₹63.14 crores (as of Feb. 28, 2025)

Each addition to PPFAS’s fund lineup has been deliberate, addressing specific investor needs or portfolio construction requirements rather than following industry trends or filling product matrix gaps for completeness. This measured approach to product proliferation reflects PPFAS’s commitment to launching only funds where it believes it can add distinctive value through its investment approach.

Across all its offerings, PPFAS maintains several common elements:

  • Emphasis on risk management and capital preservation
  • Application of its value-oriented research process
  • Transparent communication about strategy and positioning
  • Alignment of interests through “skin in the game” investments by the fund house personnel
  • Reasonable expense ratios compared to industry averages

This focused product strategy has enabled PPFAS to maintain consistency in its investment approach while gradually addressing a wider range of investor needs and asset allocation requirements.

Investment Approach and Strategy

The investment approach and strategy employed by PPFAS Mutual Fund across its equity offerings represent a practical implementation of its value-oriented philosophy, adapted to specific market conditions and opportunities. This approach combines quantitative analysis with qualitative assessments to identify businesses that offer attractive long-term value propositions.

Core Investment Process

PPFAS follows a structured yet flexible investment process that encompasses several key stages:

  1. Idea Generation: Investment ideas come from various sources, including:
    • Systematic screening of financial databases using value parameters
    • Industry mapping to identify leaders in evolving sectors
    • Analysis of supply chains to find overlooked companies
    • Tracking of significant ownership changes or management actions
    • Study of successful business models in international markets that may have parallels in India
  2. Preliminary Assessment: Ideas that emerge from the screening process undergo initial assessment focused on:
    • Business model sustainability and comprehensibility
    • Market opportunity size and growth potential
    • Competitive landscape and entry barriers
    • Preliminary valuation metrics to gauge attractiveness
  3. Detailed Analysis: Promising candidates proceed to comprehensive analysis involving:
    • Detailed financial statement analysis covering at least 5-10 years of history
    • Assessment of capital allocation decisions and returns on capital
    • Evaluation of management quality through track record and governance practices
    • Competitive positioning analysis using frameworks like Porter’s Five Forces
    • Channel checks with suppliers, customers, and industry experts
    • Scenario analysis considering various growth and profitability outcomes
  4. Valuation: Multiple valuation methodologies are applied depending on business characteristics:
    • Discounted Cash Flow (DCF) for businesses with predictable cash flows
    • Earnings multiple approaches calibrated to historical averages and peer comparisons
    • Sum-of-parts valuation for conglomerates or companies with distinct business segments
    • Asset-based valuation for companies with significant tangible assets
    • Replacement cost analysis where applicable
  5. Portfolio Construction: Investment decisions consider portfolio fit and risk management:
    • Position sizing based on conviction level and risk assessment
    • Sector and thematic exposure monitoring to avoid excessive concentration
    • Liquidity considerations, particularly for smaller companies
    • Cash allocation decisions based on overall market valuation and opportunity set
  6. Monitoring and Review: Continuous evaluation of existing holdings:
    • Regular reassessment of investment thesis validity
    • Tracking of key performance indicators specific to each business
    • Evaluation of capital allocation decisions by management
    • Reassessment of valuation in light of business performance and market conditions

Key Strategic Elements

Several strategic elements distinguish PPFAS’s investment approach:

  1. Global Perspective: The willingness to invest internationally provides several advantages:
    • Access to world-class businesses in sectors underrepresented in India
    • Exposure to companies with global competitive advantages
    • Portfolio diversification benefits through different economic cycles
    • Opportunity to benefit from global trends that may eventually impact Indian markets
  2. Cash as a Strategic Asset: Unlike many equity funds that remain fully invested regardless of market conditions, PPFAS views cash as a strategic asset:
    • Willing to hold significant cash positions when attractive investments are scarce
    • Using cash reserves opportunistically during market corrections
    • Approaching cash allocation as an active decision rather than a default position
  3. Sector-Agnostic, Business-Focused: Rather than making top-down sector allocations, PPFAS focuses on business quality:
    • Willingness to have zero exposure to entire sectors if they don’t meet quality or valuation criteria
    • Potential for significant overweight in sectors with multiple attractive opportunities
    • Focus on business characteristics rather than sector classifications
  4. Ownership Mentality: The investment team approaches analysis with an ownership perspective:
    • Evaluation of businesses as if purchasing the entire company
    • Focus on cash generation ability rather than accounting profits
    • Emphasis on long-term value creation rather than short-term catalysts
  5. Contrarian Positioning: PPFAS is willing to take positions contrary to market consensus:
    • Avoiding “hot” sectors trading at premium valuations
    • Investigating sectors or companies facing temporary challenges
    • Maintaining independence from benchmark weightings
  6. Risk Management Integration: Risk management is embedded throughout the investment process rather than treated as a separate function:
    • Business quality as the primary risk mitigator
    • Valuation discipline providing margin of safety
    • Position sizing reflecting conviction and risk assessment
    • Willingness to hold cash when appropriate opportunities are lacking

Strategy Adaptation Across Market Cycles

PPFAS’s investment strategy has shown adaptability across different market environments while maintaining its core principles:

  1. Bull Market Approach: During periods of broad market optimism and elevated valuations:
    • Increased emphasis on quality and competitive moats
    • Greater selectivity in new purchases
    • Potentially higher cash allocations
    • Gradual trimming of positions approaching full valuation
  2. Bear Market Approach: During market corrections or downturns:
    • Deployment of cash reserves into high-quality businesses at attractive valuations
    • Potential increase in position sizes of existing holdings trading at deeper discounts
    • Exploration of formerly expensive quality businesses that become reasonably valued
    • Focus on financial strength to endure challenging conditions
  3. Sector Rotation Response: While not engaging in tactical sector rotation strategies, PPFAS responds to evolving sector dynamics:
    • Gradual repositioning as structural changes in industries become apparent
    • Avoidance of sectors facing fundamental disruption regardless of apparent valuation
    • Willingness to build positions in emerging sectors as business models mature and demonstrate sustainable economics

Summary

In summary, the investment approach and strategy of PPFAS reflect a disciplined implementation of its value philosophy while incorporating pragmatic adaptations to market realities. By maintaining flexibility within a consistent framework, the fund house seeks to deliver long-term returns while managing downside risks through changing market environments.

Sovereign Gold Bonds- SGB February 2024 [Update]

by
Sovereign Gold Bonds- February 2024; SGB February 2024

Introduction

With the RBI press release on 9th February 2024, the SGB announcement for the February 2024 tranche of the Sovereign Gold Bonds timelines are now out.

Details of the SGB- February 2024

Issue DetailsAmount
Issue Price₹6,213 per gram (if online mode), OR ₹6,263 per gram (if offline mode)
Issue PeriodFebruary 12 to February 16, 2024
Date of Allotment/IssuanceFebruary 21, 2024
EligibilityIndividuals, HUFs, trusts, universities, and charitable institutions
Payment OptionsCash, cheque, demand draft, electronic funds transfer, online banking
Minimum Investment1 gram of gold
Maximum Limit (Individuals)4 kilograms

Links:

Sovereign Gold Bonds- SGB December 2023 [Update]

by

Introduction

With the RBI press release on 15th December 2023, the SGB announcement for the December 2023 tranche of the Sovereign Gold Bonds timelines are now out.

Details of the SGB- December 2023

Issue DetailsAmount
Issue Price₹6,149 per gram (if online mode), OR ₹6,199 per gram (if offline mode)
Issue PeriodDecember 18 to December 22, 2023
Date of Allotment/IssuanceDecember 28, 2023
EligibilityIndividuals, HUFs, trusts, universities, and charitable institutions
Payment OptionsCash, cheque, demand draft, electronic funds transfer, online banking
Minimum Investment1 gram of gold
Maximum Limit (Individuals)4 kilograms

Links:

Sovereign Gold Bond (SGB) June 2023 [2023-24 Series I]

by

Introduction

As per the recent announcement by the Reserve Bank of India (RBI), the Sovereign Gold Bond (SGB) scheme will be open for subscription from June 19th to June 23rd, 2023. This scheme allows investors to invest in gold without actually buying physical gold, which makes it an attractive investment option.

Details of the Sovereign Gold Bond Scheme

The SGB scheme is issued by the RBI on behalf of the Government of India. The bonds are denominated in grams of gold, and the price of one gram of gold is fixed by the government based on the prevailing market rates at the time of issuance. Investors can purchase these bonds from authorised banks and financial institutions or through the stock exchanges. The minimum investment in SGBs is one gram of gold, and the maximum is 4 kilograms for individuals and HUFs (Hindu Undivided Families) and 20 kilograms for trusts and other eligible entities.

SGB (Sovereign Gold Bonds) June 2023 Dates

What dates will the Sovereign Gold Bonds be available for application in June 2023?

The Sovereign Gold Bond Scheme 2023-24 – Series 01 (June 2023 SGB series) will be open for subscription from June 19, 2023 (Monday) to June 23, 2023 (Friday).

The detailed information on the Issue Details are as follows:

Issue Details of SGB June 2023 i.e. 2023-24 Series I Tranche

Issue NameSovereign Gold Bonds Scheme 2023-24 – Series 1 (Series I)
Security SymbolSGB232401
ISININxxxxxxxx
Issue PeriodJune 19, 2023 to June 23, 2023
Issue Price (per gram of gold)Online Mode: ₹5,876 per gram | Offline Mode: ₹ 5,926 per gram
Minimum Quantity (in grams)1 gram
Maximum Quantity (in grams)For Individuals and HUF: 4000g (4kg).
For Trusts, and similar entities: 20,000g (20kg)
Bid Quantity MultiplesYou may apply in multiples of 01 gram, until the specified maximum quantities. 
Rate of InterestThe Government of India has indicated that an interest of 2.50% per annum on the amount of initial investment will be paid to investor. The interest accrual shall commence from the date of issue, and is paid out every 6 months. 
Date of AllotmentJune 27, 2023 (Tuesday)
Date of ListingTBC

Interest Rates and Tenure

The SGB scheme provides an interest rate of 2.5% per annum, payable semi-annually on the invested amount. This rate is significantly higher than the interest rates offered on other gold investments such as gold ETFs (Exchange-Traded Funds) and physical gold. The tenure of Sovereign Gold Bonds is eight years, with an option to exit after the fifth year. Investors can choose to redeem the bonds at any time after the fifth year, and the redemption price will be based on the prevailing market price of gold at the time of redemption.

Allotment Price

The allotment price of Sovereign Gold Bonds is based on the average closing price of gold of 999 purity of the last three business days of the previous week.

For the June 2023 tranche, the allotment price would be for ₹5,876 per gram (online mode), and ₹5,926 per gram (offline mode).

The allotment of bonds is made on a first-come, first-served basis, subject to the availability of bonds. The bonds are issued in a dematerialised form, which means that investors do not receive any physical certificates for their investment. Instead, they receive an electronic certificate in their demat account.

How to Apply for Sovereign Gold Bonds

Investors can apply for the SGB scheme through their banks or financial institutions. They need to fill in the application form and submit it along with the necessary documents and payment. The payment can be made through cash, cheque, demand draft or online transfer. The banks or financial institutions will then submit the application to the RBI on behalf of the investor. Investors can also apply for SGBs through the stock exchanges if they have a demat account.

Benefits of Investing in Sovereign Gold Bonds

Sovereign Gold Bonds offer several benefits to investors.

  • Firstly, they provide an opportunity for investors to invest in gold without actually buying the physical metal. This eliminates the need for storing, insuring, and transporting physical gold, which can be costly and risky.
  • Secondly, the interest rate offered by the government is significantly higher than other gold investments, which makes it an attractive investment option.
  • Thirdly, the exemption of capital gains tax on maturity provides a tax-efficient way of investing in gold.
  • Lastly, Sovereign Gold Bonds can be used as collateral for loans, providing investors with an additional source of funds.

Conclusion

The Sovereign Gold Bond scheme provides an excellent investment opportunity for individuals looking to invest in gold. The interest rate offered by the government, tax benefits, and the option to use the bonds as collateral for loans make them a compelling investment option. The June 2023 subscription window provides an opportunity for investors to invest in these bonds and diversify their portfolio. However, it is essential to consider factors such as market volatility and the prevailing gold prices before investing in SGBs. Overall, Sovereign Gold Bonds are an excellent investment option for individuals looking to invest in gold and diversify their portfolio.

Hopefully, this article helps you with all the details needed to make your investment decision.

Additionally, feel free to check out the 2023 SGB (Sovereign Gold Bonds) Calendar for the details of the other tranches already issued, or planned for 2023.

All the best in your investment journey!

Sources

Demat Account in India: A Guide to Everything You Need to Know

by
Demat Account | FAQs | History | Account Opening | Demat Charges | Pros and Cons of Demat Accounts | Costs associated with demat accounts

Introduction

A Demat Account, short for Dematerialised Account, is an electronic account used to hold and trade securities in India. It is an efficient and secure way to hold shares, bonds, debentures, mutual funds, and other investment instruments in a digital format.

Before the introduction of Demat accounts in India, investors used to hold physical certificates of securities which were cumbersome to store and manage. With the advent of technology, dematerialisation of securities took place, and Demat accounts were introduced to facilitate the buying and selling of shares in a paperless manner.

The purpose of a Demat account is to provide a secure and convenient way to hold and trade securities. With the help of a Demat account, investors can buy and sell securities without any physical paperwork, thus reducing the risk of loss or theft of physical certificates. The transactions are settled in a quick and hassle-free manner, and investors can access their holdings and transaction history online.

Demat accounts have revolutionized the way securities are traded in India, making it easier and more accessible for investors to participate in the stock market. The introduction of Demat accounts has also contributed significantly to the growth and development of the Indian capital market.

History of Demat Accounts in India

The history of Demat accounts in India dates back to the early 1990s. The Securities and Exchange Board of India (SEBI) first introduced the concept of electronic holding of securities in 1996, and the Depository Act was enacted in the same year, which paved the way for the establishment of depositories in India.

National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) were the two depositories that were set up to provide electronic trading in securities. Initially, the use of Demat accounts was voluntary, and investors were allowed to hold securities in both physical and electronic forms.

However, with time, the use of Demat accounts became more prevalent, and the Indian stock market saw a shift towards electronic trading. In 1998, SEBI made it mandatory for certain categories of investors, such as institutional investors, to hold their securities in electronic form.

In 1999, SEBI made it compulsory for all investors to hold their shares in Demat form. This move was aimed at reducing the time and cost associated with the settlement of trades, and it also helped to eliminate issues such as forged certificates and fake securities.

Since then, Demat accounts have become an essential part of the Indian stock market, and their usage has increased exponentially. Today, most transactions in the Indian capital market are settled through Demat accounts, making it a crucial component of the Indian securities market infrastructure.

Types of Securities that can be held in a Demat Account

A Demat account is a digital account that holds securities such as shares, bonds, debentures, mutual funds, exchange-traded funds (ETFs), and government securities in electronic form. Here are some of the types of securities that can be held in a Demat account:

  1. Equity shares: Demat accounts are primarily used to hold equity shares, which are the most commonly traded securities in the Indian stock market. Both listed, as well as unlisted Indian equity shares can be held in the demat account.
  2. Bonds and Debentures: Corporate and government bonds (including Sovereign Gold Bonds i.e. SGB) and debentures can also be held in a Demat account. Holding these securities in Demat form provides a secure and efficient way to manage them.
  3. Mutual Funds: Mutual fund units can be held in Demat form, which eliminates the need for physical documents and makes the process of buying and selling mutual funds much more straightforward.
  4. Exchange-Traded Funds (ETFs): ETFs are securities that track the performance of an underlying index, and they can also be held in a Demat account.
  5. Government Securities: Government securities such as treasury bills, bonds, and securities issued by the RBI can be held in a Demat account.
  6. Corporate Actions: Demat accounts also facilitate corporate actions such as bonus shares, rights issues, dividends, and stock splits.

Demat accounts provide a convenient and secure way to hold a variety of securities in electronic form, making it easier for investors to manage their investments and trade in the Indian stock market.

The Process of opening a Demat Account in India

Opening a Demat account in India is a simple process, and anyone who wishes to invest in the stock market can easily do so. Very often, the stock beroker that you open an account with opens a demat account with their partner depository participant viz. either National Securities Depository Limited (NSDL) or Central Depository Services Limited (CDSL)

Nevertheless, in case you wish to open a demat account (in India) yourself, here’s a brief overview of the process :

Step 1: Choose a Depository Participant (DP) The first step in opening a Demat account is to choose a Depository Participant (DP). A DP is a registered intermediary that acts as an interface between the investor and the depository. Investors can choose a DP based on the services offered and the fees charged.

Step 2: Fill up the Account Opening Form After selecting a DP, the investor must fill up the account opening form, which can be obtained from the DP. The form requires personal information such as name, address, PAN number, and bank account details.

Step 3: Submit Required Documents Along with the account opening form, the investor must submit necessary documents, such as PAN card, Aadhaar card, address proof, and passport size photographs.

Step 4: In-person Verification (IPV) After submitting the account opening form and required documents, the investor must undergo an In-person verification (IPV) process. This can be done by visiting the DP’s office, where the DP will verify the investor’s identity and take a photograph.

Step 5: Activation of the Demat Account After completing the above steps, the DP will process the application and activate the Demat account. Once the account is activated, the investor can start buying and selling securities in the stock market.

In summary, the process of opening a Demat account in India is a simple and straightforward process that can be completed within a few days.

Understanding your Demat Account Number

When you open a Demat Account, you are assigned a unique account number which acts as your identification number in the Depository System. Your Demat Account number is a combination of numbers and alphabets and is usually 16 digits long. It is important to understand your Demat Account number as it is required for all transactions related to your holdings.

The first 8 digits of your Demat Account number represent the DP (Depository Participant) ID. This is the unique identification number of the Depository Participant where you have opened your Demat Account. The next 8 digits represent your unique client ID, which is assigned by the DP at the time of account opening.

It is important to note that your Demat Account number may change if you switch your Depository Participant. In such a case, you will need to update your new Demat Account number with all the companies whose shares you hold in your account.

Your Demat Account number is a confidential piece of information and should not be shared with anyone. Ensure that you keep your Demat Account number and other login credentials safe and secure to avoid any unauthorised access to your account. By understanding your Demat Account number, you can easily track your holdings and carry out transactions in a hassle-free manner.

Documents needed for Account Opening

To open a Demat Account in India, there are certain documents that you need to provide. The list of documents required may vary slightly depending on the broker or depository participant you choose, but in general, you will need the following:

  1. Identity Proof: This could be your PAN Card, Aadhaar Card, Voter ID Card, Passport, or Driving License. Any one of these documents is sufficient as proof of identity.
  2. Address Proof: You can provide any one of the following documents as proof of address – Passport, Voter ID Card, Aadhaar Card, Bank Account Statement, Utility Bills, Rent Agreement, or Driving License.
  3. Passport Size Photograph: You will need to provide a recent passport size photograph of yourself along with the application form.
  4. Income Proof: Some brokers may ask for your income proof, which could be your salary slip, ITR Acknowledgement, or Form 16.

It is important to note that all the documents you provide must be self-attested, and the original copies of the documents should be carried along for verification purposes. The broker or depository participant may also ask for additional documents or information, so it is best to check with them beforehand. Providing accurate and valid documents is essential for a hassle-free and smooth Demat Account opening process.

Holding Shares in Demat Account v/s Holding Physical Shares: Pros and Cons

In India, the two primary ways of holding shares are in physical form or in dematerialized form (Demat Account). A Demat Account is an account that holds securities such as shares, bonds, and mutual funds in electronic form. On the other hand, holding physical shares means owning the share certificates of the company.

Pros of holding shares in a Demat Account:

  1. Convenience: Holding shares in a Demat Account is more convenient than holding physical shares as there is no need to worry about handling the physical share certificates or the risk of loss or damage. Demat Account holders can easily buy, sell, or transfer securities with a few clicks on their computers or smartphones.
  2. Cost-effective: Holding shares in Demat form is generally more cost-effective than holding physical shares. Physical shares involve printing, couriering, and storage costs, which are eliminated when shares are held in Demat form.
  3. Reduced paperwork: Holding shares in a Demat Account reduces the paperwork involved in handling physical shares. For instance, share certificates require signature verification, which can be a time-consuming process, while Demat shares can be traded electronically with ease.
  4. Lower risks: Holding shares in a Demat Account reduces the risks associated with holding physical shares. Physical shares can be stolen, lost, or damaged, and their replacement can be a complicated process. Demat shares eliminate these risks, providing a more secure way of holding securities.

Cons of holding shares in a Demat Account:

  1. Dependence on technology: Holding shares in a Demat Account is entirely dependent on technology. If there is a technical glitch, it can result in the loss of access to the account or even the loss of shares. However, this risk can be mitigated by taking appropriate security measures and maintaining backup records.
  2. Risk of fraud: Holding shares in a Demat Account can expose investors to the risk of fraud. If the account is not adequately secured, unauthorized transactions or hacking can lead to the loss of shares.
  3. Additional charges: Demat Account holders are charged fees for account opening, maintenance, and transactions. These charges can be relatively small, but they do add up over time, and investors must be aware of them.

Pros of holding physical shares:

  1. No dependence on technology: Holding physical shares eliminates the dependence on technology, making it a safer option for investors who are not tech-savvy.
  2. No additional charges: Holding physical shares does not involve any additional charges other than the cost of handling physical shares.

Cons of holding physical shares:

  1. Inconvenience: Holding physical shares can be inconvenient as they require physical storage and handling. This can be particularly challenging for investors who own a large number of shares.
  2. High-risk factor: Holding physical shares can be riskier as they are prone to theft, loss, and damage.

In summary, both holding shares in a Demat Account and holding physical shares have their pros and cons. However, holding shares in a Demat Account is generally more convenient, cost-effective, and secure, making it a preferred option for most investors. Holding physical shares, on the other hand, has its advantages for investors who are not comfortable with technology or who prefer the traditional approach of owning physical assets.

Advantages of Holding Securities in Demat Form

Holding securities in Demat form has become increasingly popular among investors in India due to the numerous advantages it offers over traditional physical securities. Here are some of the key benefits of holding securities in Demat form:

  1. Safe and Secure: One of the biggest advantages of holding securities in Demat form is that it offers a high level of safety and security. With Demat accounts, investors don’t have to worry about the risk of loss, theft, or damage of physical securities. The shares are held electronically in a secure and centralized system, which eliminates the risk of physical damage or loss.
  2. Convenient: Another significant advantage of Demat accounts is that they are convenient to manage. Investors can easily track their holdings, monitor stock prices, and make trades online through their Demat account. This eliminates the need to visit a physical broker or transfer physical securities, which can be time-consuming and inconvenient.
  3. Cost-Effective: Holding securities in Demat form can also be more cost-effective than traditional physical securities. With physical securities, investors have to pay for printing and stamping charges, handling charges, and courier fees, which can add up to significant costs. On the other hand, Demat accounts typically have lower fees and charges associated with them.
  4. Faster Settlement: Demat accounts also offer faster settlement times, which can be a significant advantage for investors. With physical securities, settlement times can take several days, and the process can be time-consuming and complicated. With Demat accounts, settlement times are typically much faster, as transactions are processed electronically and settled in just a few hours.
  5. Loans Against Securities: Investors who hold securities in Demat form can also avail of loans against their holdings. This can be a significant advantage for investors who need funds for emergencies or other purposes. Banks and financial institutions are more likely to offer loans against Demat securities, as they are easier to verify and have lower risk.
  6. No Worries About Corporate Actions: Holding securities in Demat form can also eliminate worries about corporate actions. Investors with physical securities have to worry about keeping track of dividend payments, bonus issues, and other corporate actions. With Demat accounts, these actions are automatically credited to the investor’s account, making it easier to manage and track.
  7. Better Record Keeping: Finally, holding securities in Demat form offers better record-keeping. With physical securities, investors have to maintain a physical record of their holdings, which can be time-consuming and prone to errors. With Demat accounts, all transactions and holdings are stored electronically, making it easier to manage and track investments.

In summary, holding securities in demat form offers several significant advantages over traditional physical securities. From safety and security to cost-effectiveness and convenience, demat accounts are an excellent option for investors looking to simplify their investments and manage them more efficiently.

Costs associated with demat account

The charges associated with a demat account can be broadly classified into three categories: account opening charges, annual maintenance charges, and transaction charges.

Account Opening Charges:

Most demat account service providers charge a one-time fee for opening a new account. The account opening charges may vary depending on the service provider and the type of account you choose. For example, some service providers may offer a basic account at a lower cost, while others may charge a premium for a premium account with additional features.

Annual Maintenance Charges:

Demat account holders are required to pay an annual maintenance charge (AMC) for the maintenance of their account. The AMC is charged to cover the costs associated with maintaining the account and the securities held in the account. The AMC may vary depending on the service provider and the type of account you hold. Typically, basic accounts have lower AMC, while premium accounts have a higher AMC.

Transaction Charges:

Transaction charges are the fees charged for buying or selling securities through the demat account. These charges are usually a percentage of the transaction value and are subject to a minimum and maximum limit. The transaction charges may vary depending on the service provider, the type of security, and the transaction value.

Additional Charges

In addition to the above charges, some service providers may also levy additional fees for value-added services such as SMS alerts, email statements, online trading, and other value-added services.

It is essential to note that the charges associated with the demat account may vary depending on the service provider and the type of account you hold. Therefore, it is essential to compare the charges and services offered by different service providers before choosing one.

Moreover, investors should also be aware of the tax implications of the charges associated with the demat account. The AMC and transaction charges are subject to Goods and Services Tax (GST) at the rate of 18%. Therefore, it is essential to factor in the GST charges while calculating the overall cost of holding securities in the demat account.

In summary, the charges associated with the demat account are an important aspect to consider while choosing a service provider. The account opening charges, annual maintenance charges, and transaction charges are the primary fees associated with the demat account. It is essential to compare the charges and services offered by different service providers and factor in the GST charges while calculating the overall cost of holding securities in the demat account. By being aware of the charges associated with the demat account, investors can make an informed decision while choosing a service provider and optimize their investment returns.

Tax Implications of transactions in the Demat Account

There are certain tax implications associated with Demat Accounts that investors should be aware of.

  • Firstly, the transfer of securities from one Demat Account to another is considered a taxable event. This means that any gains or losses incurred during the transfer will be subject to capital gains tax. If the securities are held for more than one year, they will be subject to long-term capital gains tax, which is currently at 10%. On the other hand, if the securities are held for less than a year, they will be subject to short-term capital gains tax, which is currently at 15%. It is important to note that capital gains tax is only applicable if there is a profit or gain made during the transfer.
  • Secondly, dividend income earned from securities held in a Demat Account is also taxable. As per the earlier taxation system, the dividend that was received received from an Indian company was exempt from further taxation, since the company would be paying the Dividend Distribution Tax (DDT) before paying the investor. However, the Finance Act, 2020 changed the taxation of dividends received by the shareholder. With effect from 01st April 2020, any dividend received is taxable in the hands of the investor/shareholder. The Act also imposes a TDS (Tax Deductible at Source) of 10% on dividend income paid in excess of Rs 5,000 from a company or mutual fund.
  • Thirdly, if an investor sells securities held in a Demat Account and incurs a loss, they can set off the loss against any capital gains made during the same financial year. This is known as capital gains set-off, and it can help investors reduce their overall tax liability. However, if the investor is unable to set off the entire loss amount, they can carry forward the remaining loss for the next eight financial years and set it off against future capital gains.
  • Lastly, investors are also required to pay Securities Transaction Tax (STT) on every transaction made through a Demat Account. STT is currently at 0.1% for delivery-based equity transactions (for the buyer and seller). STT is also applicable on the sale of equity-oriented mutual funds, and it is currently at 0.001% for redemption of units. It is important to note that STT paid on transactions is not eligible for any deduction or set-off against capital gains tax.

In conclusion, there are certain tax implications associated with holding securities in a Demat Account in India. Investors must be aware of these tax implications to ensure that they comply with the tax laws and regulations in India. It is recommended that investors consult with a tax advisor or a financial expert to understand the tax implications of holding securities in a Demat Account and to plan their investments accordingly.

FAQs (Frequently Asked Questions) about Demat Accounts in India

What is a Demat Account?

Demat Account stands for Dematerialised Account. It is an electronic account that holds securities in electronic form. It is similar to a bank account where you deposit and withdraw money, but in a Demat Account, you hold and trade securities such as shares, bonds, and mutual funds.
Alternatively, think of a demat account like a bank locker for your shares, debentures, and other securities.

Who can open a Demat Account?

Any individual or company can open a Demat Account in India. You can open a Demat Account with a Depository Participant (DP) who is registered with the Depository i.e. either CDSL or NSDL.

What are the documents required to open a Demat Account?

The documents required to open a Demat Account are PAN Card, Aadhar Card, address proof, and a passport-sized photograph. The address proof can be any valid document such as a driving license, Voter ID card, electricity bill, or telephone bill.

What are the charges associated with a Demat Account?

The charges associated with a Demat Account include account opening charges, annual maintenance charges, transaction charges, and other miscellaneous charges. These charges may vary from one Depository Participant to another.

Can I have more than one Demat Account?

Yes, you can have more than one Demat Account. However, it is not advisable to have multiple Demat Accounts unless you have a specific reason for doing so.

How can I access my Demat Account?

You can access your Demat Account through your Depository Participant’s website or mobile application. You can view your holdings, check your transaction history, and make transactions using these platforms.
Alternatively, you may also access the holdings in the demat account through your brokerage account.

What are the advantages of having a Demat Account?

The advantages of having a Demat Account are numerous. It eliminates the need for physical share certificates, reduces the risk of loss or theft, makes trading faster and more efficient, and provides easy access to your holdings and transaction history.

Can I convert my physical shares to electronic form?

Yes, you can convert your physical shares to electronic form by opening a Demat Account and submitting a Dematerialisation Request Form (DRF) to your Depository Participant.

What happens if my Depository Participant OR broker goes bankrupt?

In case your Depository Participant goes bankrupt, your securities are safe as they are held in the electronic form with the Depository. You can transfer your holdings to another Depository Participant by following the transfer process.

Can I hold any type of security in a Demat Account?

No, not all securities can be held in a Demat Account. Only securities that are eligible for dematerialisation as per the guidelines of the Securities and Exchange Board of India (SEBI) can be held in a Demat Account. This includes shares, bonds, debentures, and mutual funds.

Can I transfer securities from one Demat Account to another?

Yes, you can transfer securities from one Demat Account to another through a process called ‘Off-Market Transfer’. You need to fill up a Delivery Instruction Slip (DIS) and submit it to your Depository Participant.

How long does it take to open a Demat Account?

The time taken to open a Demat Account varies depending on the Depository Participant. However, it usually takes around 5-7 working days to open a Demat Account.

Can I close my Demat Account?

Yes, you can close your Demat Account by submitting a written request to your Depository Participant. However, you need to ensure that all your securities are transferred to another Demat Account or converted to physical form before closing the account.

What is a Demat transaction?

A Demat transaction is a transaction where securities are transferred from one Demat Account to another. It can be a buy or a sell transaction, or a transfer of securities from one account to another.

Can I buy or sell securities directly from my Demat Account?

No, you cannot buy or sell securities directly from your Demat Account. You need to place an order with a stockbroker or through an online trading platform, and the transaction will be settled in your Demat Account.

What is a Beneficiary Owner Identification (BOID)?

A Beneficiary Owner Identification (BOID) is a unique identification number assigned to each Demat Account holder by the Depository. It is used to identify the Demat Account holder in all transactions.

What is an Electronic Power of Attorney (E-POA)?

An Electronic Power of Attorney (E-POA) is a digital authorisation that allows a person to act on behalf of the Demat Account holder. It is required for certain transactions such as pledging of securities or opening of a new Demat Account.

Is it mandatory to have a Demat Account for investing in the stock market?

Yes, it is mandatory to have a Demat Account to invest in the stock market in India. All transactions in the stock market are settled through the Demat Account, and physical share certificates are no longer issued.

What are the charges associated with a Demat Account?

The charges associated with a Demat Account vary depending on the Depository Participant. Some common charges include account opening fees, annual maintenance charges, transaction fees, and charges for additional services like SMS alerts and statements.

Can I hold multiple Demat Accounts?

Yes, you can hold multiple Demat Accounts with different Depository Participants. However, it is important to keep track of all your securities and ensure that you do not hold duplicate securities in different accounts.

What happens if my Demat Account becomes inactive?

If your Demat Account becomes inactive due to non-usage, your Depository Participant may charge an account reactivation fee. It is important to keep your account active and transact regularly to avoid these charges.

What is a Demat Request Form (DRF)?

A Demat Request Form (DRF) is used to transfer physical shares into a Demat Account. The DRF needs to be filled and submitted to the Depository Participant along with the physical share certificates.

What is a Corporate Action?

A Corporate Action is an event initiated by a company that affects its securities. Examples of Corporate Actions include stock splits, bonus issues, and rights issues. Demat Account holders are notified of these events and are required to take appropriate action as per their holding.

Can I pledge my securities held in a Demat Account?

Yes, you can pledge your securities held in a Demat Account as collateral for loans or other transactions. However, you need to provide an Electronic Power of Attorney (E-POA) to authorise the pledge.

Conclusion

In conclusion, Demat Accounts have transformed the Indian stock market and made it more accessible and secure for investors. They offer numerous benefits such as convenience, security, ease of trading, and better liquidity. However, they also come with certain drawbacks such as high costs and cyber threats. Therefore, investors must weigh the pros and cons of Demat Accounts and make an informed decision based on their investment goals, risk appetite, and financial situation.

Overall, Demat Accounts are an essential tool for investing in the Indian stock market. They provide a reliable and efficient way of holding and trading securities.

2023 Sovereign Gold Bonds (SGB) Calendar: Everything You Need to Know

by
Sovereign Gold Bonds (SGB) 2023 | SGB 2023 Calendar | SGB 2023 | SGB Issue Dates Details for 2023 | SGB Issuance Price Details for 2023

Introduction

The Sovereign Gold Bond (SGB) is a popular investment option for those looking to invest in gold. These bonds are issued by the Reserve Bank of India (RBI) on behalf of the government and are denominated in grams of gold. The SGB scheme was first introduced in 2015 and has been gaining popularity ever since.

For 2023, the government has announced that it will issue multiple tranches of Sovereign Gold Bonds throughout the year. These tranches will allow investors to invest in gold in a systematic manner, rather than investing a large sum of money all at once.

Benefits of investing in SGBs in 2023

One of the key benefits of investing in SGBs is that they offer the same benefits as physical gold, but without the hassle of storing or securing the gold. The bonds can be easily traded on stock exchanges, and investors can also choose to redeem them for cash at the prevailing market price.

SGBs also offer an annual interest rate of 2.5% on the initial investment amount. This interest is paid out semi-annually, making SGBs a good investment option for those looking to earn a steady income.

Furthermore, SGBs are considered a safe investment option, as they are backed by the government of India. This means that investors do not have to worry about the creditworthiness of the issuer.

Sovereign Gold Bonds (SGB) Calendar for 2023

Sr. NoSecurity SymbolApplication Starts OnApplication Ends OnSGB Issuance DateOffline Issue Price (₹ per gm)Online/Digital Issue Price (₹ per gm)Tranche
01SGB222304March 06, 2023March 10, 2023March 14, 2023₹ 5,611 per gram₹ 5,561 per gram2022-23 Series IV
02SGB232401March 19, 2023March 23, 2023June 27, 2023₹ 5,926 per gram₹5,876 per gram2023-24 Series I
03SGB232402September 11, 2023September 15, 2023September 20, 2023₹5,923/- per gram₹5,873/- per gram2023-24 Series II
04SGB232403December 18, 2023December 22, 2023December 28, 2023₹6,199 per gram₹6,149 per gram2023-24 Series III

Sovereign Gold Bonds Application Process

Investors who wish to invest in SGBs can do so through banks, post offices, stock exchanges, and other designated channels. The application process is simple and can be done online or offline.

Investors must provide their basic details, such as name, address, and PAN number, along with their investment amount. Once the application is processed, the bonds are credited to the investor’s demat account.

Investors who do not have a demat account can also invest in SGBs through physical certificates. These certificates are issued by the RBI and can be redeemed for cash at the end of the bond’s maturity period.

Important Disclaimer

Investing in SGBs involves risk, and investors are advised to conduct their own due diligence before investing. The value of the bonds can fluctuate depending on market conditions. Also, since the redemption price will be dependent on the spot price at the time of the redemption, there is a possibility that the investors may not be able to redeem the bonds for the full investment amount. It is important to carefully read the prospectus and other documents provided by the RBI before investing in SGBs.

Conclusion

Sovereign Gold Bonds are an excellent investment option for those looking to invest in gold. The bonds offer all the benefits of physical gold, without the hassle of storing or securing the gold. The annual interest rate of 2.5% makes SGBs a good investment option for those looking to earn a steady income.

In 2023, the government will issue multiple tranches of SGBs throughout the year. Investors can invest in these tranches in a systematic manner, rather than investing a large sum of money all at once. The application process is simple, and investors can invest in SGBs through online or offline channels.

Overall, the Sovereign Gold Bond is a safe and attractive investment option for those looking to invest in gold. The government’s commitment to issuing multiple tranches in 2023 provides investors with an excellent opportunity to invest in gold in a systematic and safe manner. However, it is important to conduct due diligence before investing in SGBs.

So, feel free to bookmark the dates for the application dates and issuance dates of the Sovereign Gold Bonds for 2023. The detailed SGB tranches dates calendar for 2021, 2022 have previously been updated, and webnotes.in will continue to update for 2023 as well.

Sources:

Sovereign Gold Bond (SGB) March 2023 [2022-23 Series IV]

by

Introduction

As per the recent announcement by the Reserve Bank of India (RBI), the Sovereign Gold Bond (SGB) scheme will be open for subscription from March 6th to March 10th, 2023. This scheme allows investors to invest in gold without actually buying physical gold, which makes it an attractive investment option.

Details of the Sovereign Gold Bond Scheme

The SGB scheme is issued by the RBI on behalf of the Government of India. The bonds are denominated in grams of gold, and the price of one gram of gold is fixed by the government based on the prevailing market rates at the time of issuance. Investors can purchase these bonds from authorised banks and financial institutions or through the stock exchanges. The minimum investment in SGBs is one gram of gold, and the maximum is 4 kilograms for individuals and HUFs (Hindu Undivided Families) and 20 kilograms for trusts and other eligible entities.

SGB (Sovereign Gold Bonds) March 2023 Dates

What dates will the Sovereign Gold Bonds be available for application in March 2023?

The Sovereign Gold Bond Scheme 2022-23 – Series 04 (March 2023 SGB series) will be open for subscription from March 06, 2023 (Monday) to March 10, 2023 (Friday).

The detailed information on the Issue Details are as follows:

Issue Details of SGB March 2023 i.e. 2022-23 Series IV Tranche

Issue NameSovereign Gold Bonds Scheme 2022-23 – Series 4 (Series IV)
Security SymbolSGB222304
ISININxxxxxxxx
Issue PeriodMarch 06, 2023 to March 10, 2023
Issue Price (per gram of gold)Online Mode: ₹ 5,561 per gram | Offline Mode: ₹ 5,611 per gram
Minimum Quantity (in grams)1 gram
Maximum Quantity (in grams)For Individuals and HUF: 4000g (4kg).
For Trusts, and similar entities: 20,000g (20kg)
Bid Quantity MultiplesYou may apply in multiples of 01 gram, until the specified maximum quantities. 
Rate of InterestThe Government of India has indicated that an interest of 2.50% per annum on the amount of initial investment will be paid to investor. The interest accrual shall commence from the date of issue, and is paid out every 6 months. 
Date of AllotmentMarch 14, 2023 (Tuesday)
Date of ListingTBC

Interest Rates and Tenure

The SGB scheme provides an interest rate of 2.5% per annum, payable semi-annually on the invested amount. This rate is significantly higher than the interest rates offered on other gold investments such as gold ETFs (Exchange-Traded Funds) and physical gold. The tenure of Sovereign Gold Bonds is eight years, with an option to exit after the fifth year. Investors can choose to redeem the bonds at any time after the fifth year, and the redemption price will be based on the prevailing market price of gold at the time of redemption.

Allotment Price

The allotment price of Sovereign Gold Bonds is based on the average closing price of gold of 999 purity of the last three business days of the previous week.

For the March 2023 tranche, the allotment price would be for ₹ 5,561 per gram (online mode), and ₹ 5,611 per gram (offline mode).

The allotment of bonds is made on a first-come, first-served basis, subject to the availability of bonds. The bonds are issued in a dematerialised form, which means that investors do not receive any physical certificates for their investment. Instead, they receive an electronic certificate in their demat account.

How to Apply for Sovereign Gold Bonds

Investors can apply for the SGB scheme through their banks or financial institutions. They need to fill in the application form and submit it along with the necessary documents and payment. The payment can be made through cash, cheque, demand draft or online transfer. The banks or financial institutions will then submit the application to the RBI on behalf of the investor. Investors can also apply for SGBs through the stock exchanges if they have a demat account.

Benefits of Investing in Sovereign Gold Bonds

Sovereign Gold Bonds offer several benefits to investors.

  • Firstly, they provide an opportunity for investors to invest in gold without actually buying the physical metal. This eliminates the need for storing, insuring, and transporting physical gold, which can be costly and risky.
  • Secondly, the interest rate offered by the government is significantly higher than other gold investments, which makes it an attractive investment option.
  • Thirdly, the exemption of capital gains tax on maturity provides a tax-efficient way of investing in gold.
  • Lastly, Sovereign Gold Bonds can be used as collateral for loans, providing investors with an additional source of funds.

Conclusion

The Sovereign Gold Bond scheme provides an excellent investment opportunity for individuals looking to invest in gold. The interest rate offered by the government, tax benefits, and the option to use the bonds as collateral for loans make them a compelling investment option. The March 2023 subscription window provides an opportunity for investors to invest in these bonds and diversify their portfolio. However, it is essential to consider factors such as market volatility and the prevailing gold prices before investing in SGBs. Overall, Sovereign Gold Bonds are an excellent investment option for individuals looking to invest in gold and diversify their portfolio.

Hopefully, this article helps you with all the details needed to make your investment decision.

Additionally, feel free to check out the 2023 SGB (Sovereign Gold Bonds) Calendar for the details of the other tranches already issued, or planned for 2023.

All the best in your investment journey!

Sources

Sovereign Gold Bond (SGB) December 2022 [2022-23 Series III]

by

Introduction

Via a press release dated 16th December 2022, the Government of India has announced the details of the third tranche of the Sovereign Gold Bonds for the Financial Year 2022-23 i.e. the issue dates and issue price details for the December 2022 tranche for the Financial Year 2022-23.

SGB (Sovereign Gold Bonds) December 2022 Dates

What dates will the Sovereign Gold Bonds be available for application in December 2022?

The Sovereign Gold Bond Scheme 2022-23 – Series 03 (2022 December SGB series) will be open for subscription from December 19, 2022 (Monday) to December 23, 2022 (Friday). The details information on the Issue Details are as follows:

Issue Details of SGB December 2022 i.e. 2022-23 Series III Tranche

Issue NameSovereign Gold Bonds Scheme 2022-23 – Series 3 (Series III)
Security SymbolSGB222303
ISININxxxxxxxx
Issue PeriodDecember 19, 2022 to December 23, 2022
Issue Price (per gram of gold)Online Mode: ₹ 5,359 per gram | Offline Mode: ₹ 5,409 per gram
Minimum Quantity (in grams)1 gram
Maximum Quantity (in grams)For Individuals and HUF: 4000g (4kg).
For Trusts, and similar entities: 20,000g (20kg)
Bid Quantity MultiplesYou may apply in multiples of 01 gram, until the specified maximum quantities. 
Rate of InterestThe Government of India has indicated that an interest of 2.50% per annum on the amount of initial investment will be paid to investor. The interest accrual shall commence from the date of issue, and is paid out every 6 months. 
Date of AllotmentDecember 27, 2022 (Tuesday)
Date of ListingTBC

Conclusion

Hopefully, this article helps you with all the details needed to make your investment decision.

Additionally, feel free to check out the 2022 SGB (Sovereign Gold Bonds) Calendar for the details of the other tranches already issued, or planned for 2022.

All the best in your investment journey!

Sources

Diwali Muhurat Trading [Everything you wanted to know: 2023 Edition]

by
Diwali Muhurat Trading

Introduction

Hello there. You may have chanced upon this article in case you may have wanted to know about the special trading day called “Diwali Muhurat Trading” day, and/or had one of the following doubts viz.

  • What is Muhurat Trading?
  • What is the origin story for this special day of trading, which is not seen in any other country’s stock exchanges
  • What date/time can I carry out Muhurat trading this year.

This article hopefully will answer your question. So, let’s begin…

What is Diwali Muhurat Trading?

Diwali Muhurat Trading is a special day during the festival of Diwali, when the Indian stock exchanges (viz. the NSE, and the BSE) have a special one (01) hour symbolic trading session, in the evening (during the non-working hours).

On this day, it is generally considered auspicious to buy stocks, as a tribute to the Hindu Goddess Lakshmi.

What date is Diwali Muhurat Trading this year?

This year, the trading session will be on 12th November 2023 (TBC).

  • Start of Muhurat trading Session: TBC
  • End of Muhurat trading session: TBC

However, do note that there is no trading during the usual 0915-1530 hours on the day of the Muhurat trading.

History of the practice

There is no documented history of the origin of the Muhurat Trading. But, the speculation is that this may have started eons ago, when the traders, and brokers (who were mainly Marwari, and Gujarati) would make symbolic purchases of the companies they wished to hold for a long time. Also, word-of-mouth accounts indicate that Diwali was considered auspicious to start new trading accounts for prospective clients as well. Hence, this could also be the origin story. However, no documented records indicate the actual story.

Conclusion:

Hopefully, this article answers any of the questions that you (the reader) may have had about this unique practice of Muhurat trading. If interested, feel free to check out the other wiki articles, or how-to guides on our website.

Thank you, and all the best in your investment journey!

Links/Sources:

Sovereign Gold Bond (SGB) August 2022 [2022-23 Series II]

by
SGB August 2022 | Sovereign Gold Bonds | 2022-23 Series 02 | 2022-23 Series II | SGB222302

Introduction

Via a press release dated 19th August 2022, the Government of India has announced the details of the second tranche of the Sovereign Gold Bonds for the Financial Year 2022-23 i.e. the issue dates and issue price details for the August 2022 tranche for the Financial Year 2022-23.

SGB (Sovereign Gold Bonds) August 2022 Dates

What dates will the Sovereign Gold Bonds be available for application in August 2022?

The Sovereign Gold Bond Scheme 2022-23 – Series 02 (2022 August SGB series) will be open for subscription from August 22, 2022 (Monday) to August 26, 2022 (Friday). The details information on the Issue Details are as follows:

Issue Details of SGB August 2022 i.e. 2022-23 Series II Tranche

Issue NameSovereign Gold Bonds Scheme 2022-23 – Series 2 (Series II)
Security SymbolSGB222302
ISININxxxxxxxx
Issue PeriodAugust 22, 2022 to August 26, 2022
Issue Price (per gram of gold)Online Mode: ₹ 5,147 per gram | Offline Mode: ₹ 5,197 per gram
Minimum Quantity (in grams)1 gram
Maximum Quantity (in grams)For Individuals and HUF: 4000g (4kg).
For Trusts, and similar entities: 20,000g (20kg)
Bid Quantity MultiplesYou may apply in multiples of 01 gram, until the specified maximum quantities. 
Rate of InterestThe Government of India has indicated that an interest of 2.50% per annum on the amount of initial investment will be paid to investor. The interest accrual shall commence from the date of issue, and is paid out every 6 months. 
Date of AllotmentAugust 30, 2022 (Friday)
Date of ListingTBC

Conclusion

Hopefully, this article helps you with all the details needed to make your investment decision.

Additionally, feel free to check out the 2022 SGB (Sovereign Gold Bonds) Calendar for the details of the other tranches already issued, or planned for 2022.

All the best in your investment journey!

Sources