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Finance through the year

Updated: Jan 7, 2021




The world in general was pretty topsy tervy this year. How could the world of finance be any different? We at Urja made various posts and held various webinars during the year on the subject to increase financial literacy and to help you know the highlights of the financial world.


One such incident was the Ruchi Soya Gold Rush which Urja made a post about on 28th

June, 2020. Ruchi Soya was acquired by Patanajli in December 2019 after a neck to neck bidding war with the Adani group (refer to more Urja pots and articles for further details on Adani during the year) and delisted in November 2019 due to its restructuring process after it filed for bankruptcy. This delisting led to the dilution of the stake held by shareholders I the ratio 100:1 and Patanjali now held 99% stake in Ruchi Soya. The shares were relisted on 27th January, 2020 at Rs17 per share. Due to only 1% of the shares being traded in the market the demand for these shares was high. This led to upper circuits (Increase in the price of a share by 5% in a single day leading to a halt in trading for the time being) and over the course of a few months the share price touched Rs 1,535 on 29th June, a jump of 8,929%!


On 29th June however, after the fourth quarter results of the company were released, the share price started dropping and kept hitting lower circuits for 5 consecutive days. Currently this share is trading at around Rs 688.5! A crazy rollercoaster indeed.


Another such incident was the story of Elcid Investments. Elcid Investments is the promoter of blue chip firm, Asian Paints. It holds over 2.83 crore shares of Asian Paints, a stake worth over Rs 4,900 crore! This basically means that by buying a share of Elcid, which has a market capitalization of around 0.23 crore and a share price of around Rs 11.03, you get a much bigger share of Asian Paints, albeit indirectly. This means that while the price per share is a measly Rs 11,03 the value per share is 2.4 Lakh! Now who wouldn’t want a piece of that. This crazy situation has led the share to become highly illiquid, with buyers willing to buy at 15 times higher prices and yet no sellers. The matter has reached the Bombay High Court in a hope of finding a solution but a conclusion is yet to be seen.


Now, if the technicalities of these stories and the financial markets are too difficult for you to understand, You can watch our webinar on the topic “Envisioning Opportunities and Managing Finances: The Road Ahead.” The webinar covers the basic of the financial word and explains the impact of Covid on business while giving some guidance about personal financial management. A great place to get started really.


So while the world of finance may seem like a scary and confusing place at first, we at Urja will continue to do our best to make it a little more simpler and accessible for everyone. Stay tuned for more such stories.


BY-

Kuwar Singh and Jasleen Kaur

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