[author title=”भरत साळोखे, संचालक, अक्षय प्रॉफिट अँड वेल्थ प्रा.लि.” image=”http://”][/author]
India's stock market closes on Monday, May 20 due to voting in Mumbai. d. On May 21 and 22, the market showed a minor boom on Thursday. On May 23rd there was an extremely strong boom. And this was due to the news that the Reserve Bank had declared a record dividend of Rs 2.11 lakh crore to the government for the financial year ended after the market closed on Wednesday! This dividend is not only a record; But the government expected a dividend of Rs. 1 lakh crore, which is more than double the expected figure, was paid by RBI. It would be surprising if the market had not boomed with this development!
In the interim budget presented by this government for the year 2025, it was determined to reduce the fiscal deficit from 5.8 to 5.1. The amount of this dividend will help the government in a big way to reduce this deficit.
Now let's see another unprecedented phenomenon in the case of Indian stock market. India's Mcap to GDP ratio is the highest in the history of the last fifteen years and is 140.2 percent. India's GDP figure for the year 2023-24 is Rs 296.6 trillion and the combined market cap of total companies traded on BSE is Rs. 414.4 trillion rupees in 2007, this ratio was 149.4 percent. Given the current boom and bust of IPOs in the Indian stock market, there is no doubt that the record of 2007 will be broken soon. Because $4 trillion M-Cap figure was reached by BSE on November 29, 2023. 1 trillion has been added to this in just 117 days. This speed is astonishing.
As we saw in the previous article, Foreign Investment Institutions (FIIs) started selling in the Indian market from the beginning of May. Uncertainty of the election results and the opportunity to invest in shares that have become cheaper due to the slowdown in China were two reasons behind this. But this continuous selling spree of Rikhkhi was interrupted by a bullish burst on 23rd and they traded Rs. 4671 crore net purchase. It is called sone pe suhaga!
In this frenzy, Nifty crossed the 23000 mark (23026.40) and Sensex closed the week at 75000 (75636.50) with railways, shipping and land construction companies ruling the week. RVNL, Mazgaon Dock with over 30 percent shares; While the shares of Hindustan Zinc, Bharat Electronics, BEML gave almost 25 percent returns; But this week's star of the week ( GRSE ) and ( BDL ) both rose 47 percent.
Among them GRSE stands for Garden Reach Shipbuilders and Engineers which works under Ministry of Defense Government of India. It manufactures ships for the Indian Navy and Indian Coast Guard. Moreover, it is the first Indian company to export warships. Shares of the company rose this week on the back of a 104 percent increase in net profit. We have discussed BDL stands for Bharat Dynamics many times. This share increased as the company split its share in the ratio of 1:2.
Real estate company B sets year high (Rs. 1300) South Indian company is now slowly spreading its foot all over the place.
Election results are on Tuesday of last week. Investors should wait for results for long term investments and traders should also avoid heavy trading this week. There is a saying in Hindi that says 'Sar Salamat to Pagdi Pachas'. Like that in the stock market, Capital is safe, it's fifty chances!
Reserve Bank Governor Shaktikanta Das demonstrated this maxim. Even when the central banks of some advanced nations are showing losses! A lion's share of RBI's income comes from its investments in Risk Free Sovereign Securities in developed nations! More than half of that investment was in US Treasury bills. Short-term financing under repo agreements to commercial banks increased significantly in the past year. Reserve Bank got a lot of interest income on it. And finally the Reserve Bank sold the previously purchased dollars (at Rs. 78) to control the dollar-rupee exchange rate. (at the rate of Rs. 83) in the year 2023-24 RBI purchased 41 billion dollars. This should give an idea of the huge income received from it.
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