How to calculate actual SHARE PRICE?

As mine endevour  is always to write the blog is that, in a very easy language, one could understand the topic. Today i am discussing that How to calculate the Share price?, everybody heard that HDFC bank is @ 2000, TCS @ 1800 RELIANCE @ 1000. But we do not calculate their actual price , we just see the Share price.
Let us see with two prominent aspects:
:
To calculate with SPLIT SHARES

Suppose X company has issued fresh equity shares of 1 lakh @ 100 for 10 rupees face value on  01 July 2004

On July 2008 Company decided to split the face value from 10 to 5 rupees, and that time Share price is @ 150

Now what will be happened?

A Quantity of Shares would be from 1 lakh to 2 lakh and share price would be 75 from 150.

Now as a Layman enters in a Market, He only sees the Price @ 75 but do not see the Face value.

Actual price  of Share is 150 not 75, So while accessing the Price of Equity shares, You should have consider the face value utmost.

To calculate with BONUS SHARES

Suppose X company paid up equity shares of 1 lakh and Share Price is @ 100 on 1 JULY 2004

On July 2008 Company decided to issue bonus shares of 1:1 and that time Share price is @ 150 

Now what will be happened?

A Quantity of Shares would be from 1 lakh to 2 lakh and share price would be 75 from 150.


It is same process as we have been discussed in split shares, just you have to see that how many times company has issued bonus shares, split shares to calculate the actual share price.

If you have liked my blog so do share with others also.

What is buyback of shares?

Hello everyone, Today i want to tell you that what is buyback of shares in a very  simple language.As name suggests "BUYBACK" means when some Company wants to buy their shares back from their Shareholders is called BUYBACK.


Q:Why companies do this practice?

Ans:
A:To create trust in shareholders that Company has full conviction about their Business that is why They are buying back their Shares.

B: To increase Promoter Shareholding because they think that there is a lot of value in Company.

C. To stabilize the Market price of share in bad conditions

D. To utilize Company cash by buying their own shares

Q: At which price Companies offer BUYBACK?

ANS:  It is very important question, usually companies give BUYBACK offer to their Shareholders at Premium Price, Recent example, Yesterday on 15 06 2018, TCS has announced the BUYBACK offer at 15% premium from Market price

TCS current Market price @ 1830
 Buyback offer price @          2100


So as i mentioned earlier, why TCS is buying their shares @ 15% premium from Market, because:

It has conviction about its business.

It has surplus cash

They want to reward their Shareholders by giving this option to exit at premium.

They want to increase their Shareholding.

Q: What is the impact of BUYBACK on Company?

ANS: Usually Market takes it in Positive way, So it creates trust among in Shareholders, Bankers, Public and even Their Clients.


Q: Should retail investors tender their shares in BUYBACK offer?

ANS: It depends on perception of Shareholders that if they are long term investors or short term.Long term investors Must hold the shares, because it has a value that is why Company is buying back the shares, eg: In 2013 HUL  announced the buy back offer @ 600. at that time Market price was @ 490.
Those who are holding the Shares getting reward more than short term benefits, because now a days HUL share price is quoting @ 1600 


Hope by explaining  in a common language, you will get understand the same very easily.


                                                                                               With best Regards
                                                                                               Mohit jagga
                                                                                               Financial Adviser
                                                                                               9466787277
                                                                      

NEVER DEPEND ON SINGLE INCOME.

As our legend Investor Mr Warren Buffet  says that we should never depend on single income source, because in this world of  uncertainty, we don't know when our single source of income like job, business etc, stop giving income. So in our good time, when we are earning, we should start investing in good asset class from where we could get income in our bad time.

Mr Buffet says that he started investment in the age of 11, and he thinks that he got late. Because we should always start investment in our early age, as only Money is our best friend in our middle and old age, why should i mentioned  middle age, because now a days, risk of job lost in middle age persists more , and in that age, it is very difficult to get a new job, as no employer wants to give  a job to that age of person who is not so energetic and also new employer cannot  afford the previous salary structure, and not everybody is capable to do some  business, so only our investment which we have done in our early age can help us.

So to save money, we will have to control our expenses also.As Mr Buffet says

We should save minimum 30% of our income on regular basis, and it would be better if could be 40%.As our spend thrift habit makes us in problem when our income is reduced.

And we should have also some goals in our mind like Retirement, Dream Home, Children education etc and should stick with them till they are completed. Because without goals set up, there is a probability of breaking the investment.


So only investment can save us in case of job, business lost.So we should always start investment as early as possible.

DOS AND DON"TS IF YOU WANT TO BE SUCCESSFUL BUSINESSMAN OR INVESTOR

Today I would like to share some of my views that what should we do and do not if we want to be successful businessman or investor.

Q: What should we always Maintain?

Ans: Integrity, it always become us successful 

Example: Do you know what is the reason behind the dispute between Mr Ratan Tata and Mr Cyrus Mistri?

When Docomo and Tata associated, Tata promised Docomo that whenever they want to leave Tata, Docomo can take X amount immediately. As after some time Docomo wants to go back< they told Tata to find some good buyer, but Tata was unable to find the same. So Docomo decided to take back their money, but at that time Mr Cyrus was on seat and he told that there are some issues to give back their money, So Docomo had to go to court and filled a court case against Tata. This incidence gave a setback to Tata and Mr Ratan Tata only asked to Mr Mistry that had we promised to give their money back or not?But Mistry did not agree, then Ratan Tata dismissed him from all of his Companies and in a single day Docomo"s dispute was settled out of court. It is called integrity.

Q.What should we always Value?

Ans: Our company Brand value.

Example: Spice jet was founded by two partners, but after some time  one partner left the company and was running by single one, after some years, company was in very bad condition and in bankruptcy.Then Mr Ajay kumar who left the company told his partner that i would again run this company but you would  have to go out. He had again set good standards and  today all knows how Spicejet is growing.

Same as Mr Narayan Murti always says Infosys is my child.Both of them given great value to their Brands.

Q:What should not we do?

Ans: Bad intention

Example: Promoter of Kingfisher Airlines deliberately did all bad things like funds transfer to other subsidiaries and given loss to company. Due to this Kingfisher Airlines got finished as well as its good branded companies like United Spirits had to face bad time and their Management decided to get out to Mr Malya. And also many willful defaulter like Promoter of Skumar nationwide, Gitanjali jems.

I have written a short blog with practical example  so that you could read easily. 

Equity is a wealth creator not destroyer

I always hear from people that equity is a wealth destroyer,not creator at all,but in real sense Equity has been always a wealth creator in the past and beaten all asset classes like Real estate, Gold ,Silver Bank FD. Sensex has grown 360 times in last 39 years.As in 1979 Sensex was at only 100 and now it is quoting 35000-36000.No magic has been done in equities, it was just power of compounding growth in Sensex of appx 16%. This has been done due to Growth in Our Indian GDP, which has been growing@ 7% since last two decades.That is why India is the bright spot in all our the world. But to create wealth in Equities, we should have long term horizon.

 we are at now 2.5 trillion dollar economy and it is expected to double in next five years by many research reports.So if our GDP is going to be doubled,why Equities would have not been grown.As equities are always replica to Economic growth in long term.Equity has always followed the Nominal GDP- GDP@ 7%+ Inflation @ 6% = 13%.After creating Alpha Equities has given 16% on CAGR basis. In  a layman language, 1 lakh invested in 1979 has become more than 35000000 now. So actually it is wealth creator but it wants time to hold, it tests our patience in every bear cycle.

By following proper financial planning, discipline we can create our big wealth in equities. As to make real return, we have to invest in equities, there is no other option. And we should always think Equity as asset class, which i have already told in my video.You can also see in y video.So Equity was,is and will be wealth creator not destroyer.