Bajaj IPO, Understand How the Redemption Value Calculated

                

Market ka Capsule

Bajaj IPO, Understand How the Redemption Value of Mutual Funds is calculated, & more

Thursday, 06-June-2024

Sensex 73,961.31  0.1%  Nifty 22,530.70  0.19%


This is a summary of news that happened relating to finance on 26-04-24


Pointers:

  • Nifty 50 opened higher than yesterday's closing point.
  • Nifty 50 climbed and at around 11:09 AM highest point was made.
  • The Realty and media stocks rose the most.
  • Some FMCG stocks fell the most.
  • Global Update: European Central Bank reduced interest rates for the first time in 5 years. The deposit rate has been reduced by 0.25% to 3.75%.
  • The US markets were up.
  • European markets were up.
  • And Asian Markets were up too.
    
TOP GAINERS:     (Nifty 50)

HCL Tech               Rs. 1,397.50  4.00%

Tech Mahindra       Rs. 1,317.45  3.99%
 
SBI Life                  Rs. 1,442.85  3.79%

Shriram Finance    Rs. 2,474.80  3.66%

SBI                         Rs. 816.95  3.44%


TOP LOSERS:        (Nifty 50)

Hindalco                 Rs. 677.50  2.55%

Hero Moto Corp     Rs. 5,534.25  2.20%

HUL                        Rs. 2,549.60   2.04%

Asian Paints           Rs. 2,904.80  1.92%

Nestle                    Rs. 2,471.40  1.53%



News:

  • Bajaj Housing Finance, a subsidiary of Bajaj Finance, is planning for an IPO. It will have a fresh issue of up to Rs. 4,000 crores and an offer for sale.
  • India's domestic air passenger traffic rose 5.1% year-on-year to 13.89 crore in May: ICRA.
  • Overall trade volume of the Indian Energy Exchange (IEX) rose almost 29% year-on-year to 10,633 million units in May.
  • The number of High Networth Individuals (HNI) in India increased by 12.2% year-on-year in 2023 (to 35.89 lakh). Their wealth increased 12.4% to $1,445.7 billion.


Stock Updates:
  • ITC: the shareholders of the company have approved the demerger of ITC's hotel business.
  • Uno Minda: signed an agreement with China-based Suzhou to manufacture high-voltage EV products.
  • Wiprothe company got a $500 million deal from a US communication service provider.
  • ZEE: the board approved raising Rs. 2,000 crores by issuing shares.
  • RVNL: the company got a Rs. 390 crore order from Eastern Railways to construct a bypass line.
  • BHELthe company received over Rs. 3,500 crores of orders from Adani Power to set up 2 thermal power plants in Chattisgarh. It also received an order from Mirzapur Thermal Energy (UP) for another thermal power project worth over Rs. 3,500 crores.
  • Maruti Suzukithe company launched limited edition cars for its smaller hatchback models (Alto, Celerio, and S-presso). This edition will only be available in June 2024.
  • NBCCthe company got 13 orders worth Rs. 491 crores from various government bodies.


Stock Updates:
  • Bajaj Housing Finance: a subsidiary of Bajaj Finance, is planning for an IPO. It will have a fresh issue of up to Rs. 4,000 crores and an offer for sale.
  • Kronox IPO: IPO allotment status is out.


1-Day Change

Gold             72,610.00  1.01%
Silver             91,390.00  2.10%
Dow Jones    38,807.33  0.25% 
Nasdaq         17,187.90  1.96%


Featured Question:

“How the value of redemption amount calculated in mutual fund in case of partial withdrawal?”

In mutual funds, you have the option to withdraw partial amounts.

To understand how the value is calculated, you need to think in terms of units.

Say, you invested Rs 10,000 in a mutual fund.

Let’s say, at this point, one unit of the mutual fund costs Rs 50.

By investing Rs 10,000, you get 200 units of the mutual fund.

So:

-You invested Rs 10,000

-Price of 1 unit Rs 50

-You got 200 units

After 2 years, the unit price increased to Rs 70.

Therefore:

-You have 200 units

-Current price of 1 unit is Rs 70

-So, your invested amount is now Rs 14,000

Let’s say at this point, you want to take out Rs 7,000.

How many units of the mutual fund do you need to sell to get Rs 7,000?

Amount divided by the current price of one unit = 7,000 / 70

= 100 units.

So, if you sell 100 units, you will get Rs 7,000.

In short:

-You had 200 units initially.

-You sold 100 units in between — you partially withdrew some amount

-100 units are still left invested in the same mutual fund.

(Note: price of unit of mutual fund is also called NAV).





Long-Term Returns

Last 20 Years

Sensex                14.70% p.a.
Nifty                   14.56% p.a.
Dow Jones            6.82% p.a.
Nasdaq                11.24%  p.a. 

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