Knowledge Vibes Academy
Module 1 – Lecture Notes
BATCH Notes – Module 1
DAY1 Lecture Notes
Concept of Inflation
A Shirt costs Rs. 200
Interest Rate 7 Percent (you can get from Bank FDs)
Inflation 6 % ( 4 to 6 Percent)
A shirt price increases to 206 (Because of Inflation)
Rs.1 (Real Return) ( 1 Percent)
(3 to 6 Percent)
12 Percent- 6 Percent = 6 Percent
To control the inflation
RBI Monetary Policy (Bimonthly Policy) ( Started from February 2023 )
REPO RATE 6.50 increase+++
Banks have to pay more
Banks increase interest rate
Company have to pay more interest
This will reduce the profit
This will be a negative impact of stock market and Vice versa in case of decrease
in Repo rate which is a positive impact for stock Market!
Stock Market Regulator
SEBI
Securities Exchange Board of India
Protection of the Investors
LODR ( Listing Obligation and Disclosure Requirements) in which companies have
to report it to SEBI regarding their stock transactions for every 14 days as a status
update to ensure transparency!
STOCK EXCHANGES
NSE National Stock Exchange
BSE Bombay Stock Exchange
Random Market oriented Activities!
RBI Monetary policy
Repo Rate
Bank receives loan from RBI on basis of repo rate.
What is the prevailing Repo rate (its 6.5 Percent as on June 2023)
Things to follow and Monitor in Stock market
Mutual Funds related news
Geo Political news like US markets FEDERAL Rate Decisions
RBI oriented news important
Govt. Policies do have a significant impact in stock market investment!
With respect to the price stability?
capital market ( Constant Volatility i.e Fluctuation of Prices)
or
Vegetable Market ( Predetermined Price comparatively Stable)
Depository (Your DEMAT A/c Services)
CDSL
NSDL
Central Depository Services Limited
Some of the prominent Brokerages to start your investment Journey
ZERODHA
UPSTOX
Sharekhan
INDMONEY
DAY 2 ( Lecture Notes)
Types of Company
LIC - PUBLIC LIMITED
MADRAS FERTILIZERS
Equity
Primary Market or IPO
Initial Public OFFER IPO
Swiggy
oyo (Boarding Booking APP)
Listing on
NSE National Stock Exchange
BSE Bombay Stock Exchange
Zomato IPO an example! ( refer it from google)
IPO Process Flow
Underwriters - SEBI- Permissions- Prospectus- Subscription- We can participate-
Demat Account- 15000 INR in your Bank Account.
FACE VALUE CONCEPT
100 shares of LIC Rs.800
Dividend of LIC is 20 Percent.
Dividend per share FACE VALUE 10
RS. 2 per share
STOCK SPLIT
TATA STEEL 1200 10 shares 12000
Tata steel 120 100 Shares 12000
2500 qty 10 shares 25000
Stock Split F.V = 10
F.V= 1.
250. qty 100 shares 25000
Tata steel 1200 10 12000
f.v= 10 (Stock Split)
f.v = 1
120 qty 100 12000
Buyback Concept
ril 2514
buyback 2540 Secondary Market
Mutual Funds ( A brief Orientation)
SBI Mutual Funds
HDFC Mutual Funds
Asset Management Company
SEBI (Regulator Of Mutual Funds)
2500++
Market Capitalization
RIL 2480
MCAP 16 lakh crore(Approximately) .
Fund Categories
LARGE CAP FUNDS
MCAP > 20000 cr to Infinity Large Cap Companies
Mid Cap Funds
Mcap 5000cr to 20000 Cr Mid cap Companies
Small Cap Funds
0 to 5000 cr
Mutual Funds ( Analysis)
SBI small cap fund direct Plan Growth
more than 60 % investment will be only with small cap companies.
FPI (Foreign Portfolio Investors)
DII(Domestic Institutional Investors)
FII (Foreign Institutional Investors)
How to enrol Mutual Funds?
Jupiter APP - Federal Bank
INDMONEY APP
Company Names ( Mutual Funds can be one way to ascertain )
DAY 3
Company Analysis
Fundamental Analysis
Value Analysis
ABC 200 (HIGHER Priced ) 210 (5 Percent)
xyz 150 ( Lower Priced) 160 (7 Percent)
Fundamental Analysis ( Detailed Perspective)
FUNDAMENTAL ANALYSIS
TREND
1. Short term Aspect ( Trading) ( CMP)>>>>>> ( To identify whether there
is increase or Decrease)
2. Long Term Aspect ( Investment)
FUNDAMENTAL ANALYSIS
1. Understand the company
2. NIFTY is Your choice ( Index)>>>>>( Representation of companies
across Industries) (50 Stocks)
3. HRITHIKS with Adani and Bajaj Group (BAJAJ FINANCE AND BAJAJ
FINSERV)
4. H- HDFC group R-Reliance Group T- TATA group ( TATA STEEL, TATA
Motors, TCS) I- Infosys , INDUSIND BANK H- HUL I- ICICI BANK K- Kotak
MAHINDRA BANK S- SBIN
5. VALUATION ( EARNINGS capacity and asset quality )
VALUE INVESTMENT
Screener Platform
1. MCAP > 400 crores
2. Z Score
Altman Z Score +3 greater than 3 Relaxation should not be 2.5
3. Piotroski Score
Greater than +5 Relaxation should not be less than 3
4. C Score
Transparency. less than 3 relaxation should not be more than 5.
Valuation Ratio.
5. Price to Earnings Ratio P/E Ratio.
Price = Market price of the share
Earnings= Earnings Per share (EPS)
Operational Performance.
Revenue= EBITDA
EBITDA= 1000 CR
Interest =200
EBTDA= 800
Depriciation = 100
Amortization = 100
EBT= 600
PBT = 500crores
Tax= 100 crores
PAT= 400/ outstanding Shares
Earnings Per Share= Rs.40 ( Almost Constant)
P/E = 0 to 30
0 to 20 = Under valued ( Comparitively Industry )
20 to 30= Over Valued
Above 30 = Risky
Indusrty P/E= 32
P/E = 18
P/E = 25
CURRENT MARKET PRICE (P) EARNINGS ( Earnings Per share) (E)
EPS= Net Profit / Outstanding Shares
P/E ratio ( CMP/ EPS)= UNDERVALUED (0 to 15)
Good value (competitive value) (15 to 30)
Overvalued ( 30 to 60)
INDUSTRY P/E = (compare this with corresponding
script's P/E)
P/E < Industry P/E= UNDERVALUATION CONFIRMATION
P/E > INDUSTRY P/E = Overvaluation Confirmation.
6. Price to Book Value
P/B = o to 4 relax till 5
7. PEG ratio (Risk FACTOR)
P/e Growth percentage / EPS Growth Percentage
40/60 Percent= 0.6
PEG RATIO Should be always less than 2 better less than 1.
8. Return On Equity
9. Return on Capital Employed
Average ROE and ROCE for 3 years to check for profitability
Greater than 10 % ...preferably to have more than 15 %
10. Promoter Holding
Check for the consistency in the shareholding pattern
FII and DII
11. Leverage
ABC Ltd. 500
Intraday 50 Leverage by the debt 10X times .
Debt to Equity.
Total Asset 1000 Crores
Total liabilty 2000 Crores
Debt to Equity ratio should be in the level of 0 to 2.
Debt to Equity shuld be less than 1.
12. Current Ratio
Current Asset to Current Liability.
Liquidity= how fast Asset into cash
Benchmark value should be 1 relaxation can be at the level of 0.90
13. G FACTOR ( Overall Rating)
Benchmark value for GFACTOR = 5 or you can look companies G factor =
3.
14. Graham Number = Intrinsic value of that company. this should be the case.
Graham Number > CMP means there is a good potential.
DAY 4 & DAY 5
Investment Cycle
1. Accumulation Phase
2. Mark up Phase
3. Distribution Phase
4. Mark Down Phase
1. Accumulation Phase
MOVING AVERAGES ( A few basic insights about Trading as a Separate segment
of stock Market)