16 August Market opens above 11,000. We, investors, come to the market hoping to make profits this week again. But it doesn’t happen, again. Market is going down again. Even, something happened on Thursday that made the market go down by more than 1.7% but on Friday, market closes at 10, 800. I, Jagdeep Singh welcome you to Groww Weekly News Update Today we will discuss those news that impact our business. directly or indirectly I will try to explain the news in simple terms So that you know the real reason behind your shares rising or falling. Come on, let’s discuss the first news. The first news is about CG Power You may have heard that CG Power has understated their liabilities by 2000 crores. If you do not understand what that means, Then friends, let me tell you first of all what liabilities are. After every quarter every company informs its investors how much money it owes to third parties. either by means of borrowing or by pending transactions that are due. So these we call liabilities. And each quarter a company discloses its liabilities. So, what CG Power said, was less 2000 crores less than the actual amount which was quite huge. The result turned out to be shares falling. In three days, shares toppled by over 50%. This news about CG Powers directly impacted the shares of Yes Bank because Yes Bank owns about 12% of this company. So shares of Yes bank came down from 80 to 55-58. There are other big names that have investments in this company like HDFC Mutual Fund, Aditya Birla Mutual Fund Franklin Mutual Fund and so on who had investments in this company. So, now I’ll tell you what lesson we can learn from this news. From this news, I would like for you, investors, to learn two simple things. First, what are pledge shares? How important are they? Pledge shares are those when a promoter pawns their shares in a company to get money from a bank. So, CG Power’s promoters had pawned their shares at Yes bank to borrow money. When they couldn’t pay back Yes bank invoked their pledge shares and gained ownership of 12% of the company. You should watch out for companies that have pledge shares Try to keep watch on every quarter if the percentage of pledge shares are not increasing. If it is increasing, that means danger. If it is decreasing, and sometimes companies pledge their shares for the right reasons. So, it is not necessary all companies that have pledged shares are dangerous. But, yes, if the pledge shares keep on increasing and the bank has to invoke them for debt repayment, then you should avoid such companies. Another thing that I would like to talk to you about is promoter holding. It says how much shares the promoter or the owners have. In case of CG Power, until a while ago the promoter holding was more than 30% But when they sold some of their business they removed their shares gradually. On 30 June 2019, if we look at the share holding, Avanta Group, which was the promoter group of CG Power, their promoter holding was reduced to 0%. We can evidently see the red flag here that the promoter sold off its shares and took out their money and left the company in control of lenders. Real Estate Sector. Until two years ago, the real estate sector was the top sector if you wanted to make investments. Our second news is from the real estate sector. And it is related to DLF. The Supreme Court recently said that there was a non-disclosure of some information while raising funds via QIP. Friends, recently, DLF raised around 5000 crores through QIP. Where they hid some key information while raising the money. Friends, I have made a video on QIP, and explained in it that whenever a company raises money through QIP they are obligated to give out information to lenders and investors. The Supreme Court said that DLF withheld some information from its lenders. So, the Surpeme Court has ordered that the 5000 crore rupees which DLF had raised through QIP will have to be returned. This is a matter of concern for investors if DLF will be able to return all the money and how it will be done and if all the money is returned, how it is going to impact its business. Now let’s talk about the third business. The third news is related to Amazon and Future retail Future retail is the company that owns Big Bazaar. They have a smaller venture called Future Coupons Future Coupons have a 7.34% stake in Future Retail Amazon has bought 49% of stake from Future Coupons. So indirectly Amazon has bought three and a half percentage stake in Future Retail. The investors who have investments in Future Retail or are thinking about investing, they should be aware by now that with Amazon’s arrival Future Retail now has a very good tech enabled platform to support it. In addition to that, Amazon’s expertise in supply chain and technology Future Retail will directly benefit from these. So investors may get benefits from this development in the future if the company utilizes Amazon’s resources well Let’s talk about the next news. As you may know, in the budget announcement, the Finance Minister had imposed additional surcharge on foreign portfolio investors. Because of which we saw these days that FPIs sold almost 30,000 crores worth of equities in the Indian market. So Nifty had fallen from 12000 to almost 10, 800. So, friends, on 23rd August the finance minister has said in a press conference that the extra surcharge will be removed. So we may hope to see more positivity in the Indian equity market. A lot of our viewers comment to let us know what they want us to talk about in our videos So I’ll give you an IPO update. In the upcoming days IRCTC’s IPO is going to be launched. So I’ll mention a few interesting facts about IRCTC that will help you decide whether you should subscribe to IPO or not. IRCTC gets more than 7 million log-ins in a day. In a day, over 8 lakh tickets are sold on it. If you think that IRCTC’s main business is ticket, you are wrong. Because 55% of IRCTC’s business comes from catering business. You can do more research to decide whether you should subscribe to its IPO. So, friends, these were the main news pieces of this week which directly or indirectly impacted investors. The coming week, I’ll be back with this week’s news and will try to explain them in simple words. and help you become a better investor. If you find this a good initiative, if you enjoyed this video, and got the news, then please like this video, comment about what we missed in this video. You can also let us know in the comments a stock or a topic that you want us to cover. Subscribe to Groww channel for upcoming finance videos.