High Influence of Investment Markets Case Study on Reliance and Infosys

8/6/2019 High Influence of Investment Markets Case Study on Reliance and Infosys

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SUBMITTED BY:RITIKA NATHANI-E (18)PRAMOD SINGH E (26)

NIDHI THAPA E (30)


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y Today, all players in business face the interest andthe impact of different people and groupings.Especially larger corporations have to care not only for the needs of their direct owners, but also of various other groups, like employees , public

interest groups like environmental organizations,strategic partners, journalists or public monitoringbodies.

y When it comes to important corporate decisions, it

is necessary to know about the expectations of different stakeholders and to determine, to whatextend they could and would exert an influence.


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y Retail investors would fall in category B. therefore it isadvisable to keep them informed about important

matters.

y Institutional investors and legislative bodies fall incategory C.

y Promoters and owners fall in category D.


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EXPECTATIONS AND INFLUENCE OFRETAIL INVESTORS

RELIANCE GROUP


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About Reliance Textilesy Dhirubhai started his first textile mill at Naroda,

in Ahmedabad in the year 1966.y Dhirubhai started the brand "Vimal - On ly Vimaly In the year 1975, a Technical team from the World

Bank visited the Reliance Textiles' Manufacturingunit.


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Reasons for launching landmarkIPO

y Calculated that further expansion especially into related sectors would

depend on access to a cheap source of capital.

y Cut off from funding from the Indian

government.y In 1977, Ambani launched Reliance Textile

Industries' initial public offering (IPO).


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H ow did it goDhirubhai was able to convince large number of small investors from rural Gujarat.

Managed to convince a large number of first-timeretail investors to invest in Reliance.The IPO was raised with the help of a BillionaireInvestment Banker Yaggi-Bhai Kesarwani.


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Resulty More than 58,000 investors from various parts of India

subscribed to Reliance's IPO in 1977.y The IPO, of 2.8 million shares, raised $1.8 million, and was considered among the largest in India at the time.y Reliance IPO oversubscribed by 72 times its value.


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Resulty Reliance Industries was the first private sector

company whose Annual General Meetings were held

in stadiums.y Ambani's net worth was estimated at about Rs1 billion

by early 1980s.y Dhirubhai Ambani awarded with starting the equity

cult in India.


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Resulty By circumventing the traditional reliance on the state

for capital investment, Ambani sparked a revolution in

India.y Created one of the worlds largest shareholder family.y Credited for setting the stage for the country's

emergence as a major regional industrial center.


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Result..y As of December 2010 Reliance industries has the

highest market capitalization and is known for giving

high returns to it s investors.


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EXPECTATION AND INFLUENCE OFEMPLOYEES

INFOSYS TECNOLOGIES


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About InfosysIT bellwether Infos y s Techno log ies is the first tocome out with its quarterly numbers signalling the

start of the results season and also setting the tone forthe direction of the stock market.It s a tradition that has been followed religiously,quarter after quarter for the past many years.

Is known to set the tone for the earnings season by beating market expectations and its own guidance.


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y However, since last few quarters Infosys has beengiving cautious outlook and guidance for the

forthcoming quarters, as its key markets the US andthe Europe are still reeling under the pressure of slowdown and high sovereign debt concerns that couldimpact the industry growth.

y

The IT bellwether company has posted a consolidatednet profit at Rs.1780 crore, which lagged by 40-45 crorefrom market expectations , while the company logged agrowth of 2.48% on quarter on quarter basis.


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y According to the market analysts the revenues havefallen short by about Rs.100 crore suggesting that the

actual growth rates have below markets expectations.y The stock was trading 3.7 per cent lower on the BSE.y In terms of revenue guidance, the company revised its

revenue upwards for the entire year from Rs. 27,170

crore to Rs. 27,481 crore.y The earnings per share (EPS) for the year was revised

upwards from Rs. 117 to Rs. 118.90.


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y F or the Q4 ending March 31, the company expects therevenues to be in the range of Rs. 7157- Rs. 7,230 crore,

while it anticipates the revenue for the full year endingMarch 31, 2011, in the range of Rs.27,408- Rs.27,481crore.

y The Sensex fell 351 points to 19,183 and the Nifty

declined 111 points to 5,752.y The villain today was IT bellwether Infosys that fell 4.8per cent costing the Sensex a whopping 100 points.


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y Infy emerged as the biggest loser on the Sensex. It alsoaffected other frontline IT stocks. HCL Tech declined 3

per cent, Wipro fell 2.7 per cent and TCS closed 1 percent lower.y Banking stocks tanked 3.5 per cent. SBI and ICICI

Bank fell 3.9 per cent. HD F C Bank fell 2.9 per cent

while HDF

C declined 2 per cent. The four stockstogether contributed close to 150 points on thedownside on the Sensex.


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y All other sectoral indices closed in the red. Somebuying was, however, seen in realty stocks and they

closed half a per cent higher. DLF

rose 0.6 per cent.y Tata Motors, ONGC and Reliance Comm were the only other stocks to end in green out of the Sensex .


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y F or at least a few days capital markets follow the cuesgiven by the financial results

y

Lot of money pumped in the company s stock by theforeign funds if the results are goody Positive or negative results of a bellwether company

foretell the results of the smaller companies of the

sectory F or e.g. less than expected profits for Infosys in the

latest quarter lead to a sharp drop in its share prices

EFFECTS OF FINANCIAL RESULTS


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y F orecasts enable various stakeholders likeshareholders, investors, creditors to gauge the future

performance of the company y Positive forecasts lead to greater amount of long terminvestments

y A negative forecast may scare the markets and trigger a

bear run in the capital markets

EFFECTS OF FORECASTS


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y Investment markets run on the leads given by thefinancial results

y

Positive financial results are the harbinger of higherinvestments for a company and vice versay Persistently poor financials often lead to a company

being shunned by the investors

EFFECTS ON INVESTMENT

MARKETS


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TH ANK YOU

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High Influence of Investment Markets Case Study on Reliance and Infosys

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