Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

New Delhi: Nine of the top-10 most valued firms together added Rs 2,01,552.69 crore in market valuation last week, with <keyword id="19951944" type="General" weightage="100" keywordseo="Bharti-Airtel" source="keywords" meta.keywordsubtype="org" meta.entityname="Bharti Airtel" meta.hostid="153" meta.entityid="Bharti Airtel">Bharti Airtel</keyword> stealing the show, amid bullish investors' sentiment in equities. Last week, the BSE benchmark jumped 1,707.01 points or 2.10 per cent. The 30-share BSE Sensex hit its lifetime high of 83,116.19 on Thursday. Bharti Airtel's valuation jumped Rs 54,282.62 crore to Rs 9,30,490.20 crore, becoming the biggest gainer among the top-10 firms. The market capitalisation (mcap) of <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="153" meta.entityid="ICICI Bank">ICICI Bank</keyword> surged Rs 29,662.44 crore to Rs 8,80,867.09 crore. <keyword id="19950119" type="General" weightage="20" keywordseo="Tata-Consultancy-Services" source="keywords" meta.keywordsubtype="org" meta.entityname="Tata Consultancy Services" meta.hostid="153" meta.entityid="Tata Consultancy Services">Tata Consultancy Services</keyword> (TCS) added Rs 23,427.12 crore taking its valuation to Rs 16,36,189.63 crore. The mcap of Hindustan Unilever soared Rs 22,438.6 crore to Rs 6,89,358.33 crore and that of <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="153" meta.entityid="HDFC Bank">HDFC Bank</keyword> zoomed Rs 22,093.99 crore to Rs 12,70,035.77 crore. The market valuation of Infosys climbed Rs 17,480.49 crore to Rs 8,07,299.55 crore and that of ITC rallied Rs 15,194.17 crore to Rs 6,42,531.82 crore. The valuation of <keyword id="19896380" type="General" weightage="20" keywordseo="Reliance-Industries" source="keywords" meta.keywordsubtype="org" meta.entityname="Reliance Industries" meta.hostid="153" meta.entityid="Reliance Industries">Reliance Industries</keyword> jumped Rs 9,878.19 crore to Rs 19,92,160.61 crore and that of State Bank of India went up by Rs 7,095.07 crore to Rs 7,05,535.20 crore. However, the mcap of Life Insurance Corporation of India (LIC) declined by Rs 3,004.38 crore to Rs 6,54,004.76 crore. Reliance Industries was leading the chart of the top-10 most valued firms followed by TCS, HDFC Bank, Bharti Airtel, ICICI Bank, Infosys, State Bank of India, Hindustan Unilever, LIC and ITC.

Mcap of nine of top-10 most valued firms jump Rs 2 lakh crore, Bharti Airtel leads the surge

<keyword id="20599258" type="General" weightage="20" keywordseo="Indian-consumers" source="keywords">Indian consumers</keyword> demonstrated a significant increase in their <keyword id="21084888" type="General" weightage="100" keywordseo="credit-card-spending" source="keywords">credit card spending</keyword> in July this year, marking a 19% increase compared to the same month last year. According to a report released by <keyword id="19945737" type="General" weightage="20" keywordseo="SBI-Securities" source="keywords" meta.keywordsubtype="org" meta.entityname="SBI Securities" meta.hostid="261" meta.entityid="SBI Securities">SBI Securities</keyword>, the total expenditure by credit card users across the country reached an impressive Rs 1.7 trillion. This substantial uptick highlights the growing reliance on credit cards for transactions, reflecting broader economic trends and <keyword id="20740758" type="General" weightage="20" keywordseo="consumer-confidence" source="keywords">consumer confidence</keyword>. The report also highlighted a considerable increase in <keyword id="21118324" type="General" weightage="20" keywordseo="transaction-volumes" source="keywords">transaction volumes</keyword>, which surged by 39% year-on-year, reaching a total of 38.4 crore transactions in July 2024. This increase in the number of transactions underscores the widespread adoption and usage of credit cards as a preferred <keyword id="20632158" type="General" weightage="20" keywordseo="payment-method" source="keywords">payment method</keyword> among Indian consumers. "Credit card spending in India increased 19% YoY to Rs 1.7 trillion in Jul'24. The transaction volume during the month was 38.4 crore, up 39% YoY" said the report. The report also noted that among the banks, <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC Bank</keyword> emerged as the leader in terms of transaction volumes, with its credit cards facilitating 9.9 crore transactions during the month. <keyword id="19900482" type="General" weightage="20" keywordseo="ICICI-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="ICICI Bank" meta.hostid="261" meta.entityid="ICICI Bank">ICICI Bank</keyword> followed closely with 7.1 crore transactions, while SBI secured the third position with 6.3 crore transactions. In terms of transaction value, HDFC Bank again led the way, with a total spend of Rs 44,369 crore through its credit cards in July. ICICI Bank and SBI followed with Rs 34,566 crore and Rs 26,878 crore, respectively. The report said "In Jul'24, transaction volumes was led by cards issued by HDFC Bank (9.9 crore) followed by ICICI Bank (7.1 crore) and SBI (6.3 crore)". Additionally, the <keyword id="22988051" type="General" weightage="20" keywordseo="average-transaction-value" source="keywords">average transaction value</keyword> (ATV) also saw a marginal increase of 1.4% month-on-month in July 2024. This marks the first increase in ATV in ten months, suggesting a shift in consumer behaviour towards higher-value transactions after a period of stagnation. Overall, these figures reflect the growth of credit card usage in India, driven by increased consumer confidence and the convenience offered by credit card transactions.

Indians credit card spending increases 19% YoY to Rs 1.7 trillion in July 2024

The one-hour <keyword id="23618998" type="General" weightage="100" keywordseo="Muhurat-trading" source="keywords">muhurat trading</keyword> session, which marks <keyword id="20963892" type="General" weightage="20" keywordseo="Diwali-2024" source="keywords">Diwali 2024</keyword> and the onset of Hindu Samvat 2081 on both NSE and BSE, is set to commence at 6 pm today and will conclude at 7 pm. Generally, investors and traders make symbolic stock buys during this hour-long session, since it is believed that purchases made during this time herald wealth and prosperity for one’s investments for the year to come. If you are looking for <keyword id="19910146" type="General" weightage="20" keywordseo="stock-recommendations" source="keywords">stock recommendations</keyword> to add to your portfolio, here are a few value picks by SAMCO and Kotak Securities you can consider: <keyword id="19895995" type="General" weightage="20" keywordseo="HDFC-Bank" source="keywords" meta.keywordsubtype="org" meta.entityname="HDFC Bank" meta.hostid="261" meta.entityid="HDFC Bank">HDFC Bank</keyword> Ltd Holding period: 1 year Last Traded Price: Rs 1,734.30 Per the firm, “The bank has maintained a robust 10-year profit CAGR of 21.74%, operating with a NIM (net interest margin) of 3.5% and a low net NPA (non-performing assets) of 0.3%. Advances and deposits have shown steady growth. Currently, the stock trades below its 10-year average price-to-book value and at a price-to-earnings ratio of 19, offering a favorable risk-reward profile with a substantial downside buffer”. <keyword id="22086440" type="General" weightage="20" keywordseo="Vindhya-Telelinks" source="keywords" meta.keywordsubtype="org" meta.entityname="Vindhya Telelinks" meta.hostid="261" meta.entityid="Vindhya Telelinks">Vindhya Telelinks</keyword> Ltd Holding Period: 1 year Last Traded Price: Rs 1,992.55 SAMCO notes that this key cable manufacturing, which is a joint venture between Universal Cables Limited and Madhya Pradesh State Industrial Development Corporation, has shown robust growth over the last 5 years, nearly doubling revenues with a 14.3% CAGR. The company holds significant investments in Birla Cable Ltd, Birla Corporation Ltd, and Universal Cable Ltd, totaling Rs 3,618 crore—surpassing its market capitalization of Rs 2,545 crore. This solid investment base underscores Vindhya Telelinks’ strong fundamentals and financial potential. <keyword id="23763358" type="General" weightage="20" keywordseo="Ramco-Industries" source="keywords" meta.keywordsubtype="org" meta.entityname="Ramco Industries" meta.hostid="261" meta.entityid="Ramco Industries">Ramco Industries</keyword> Ltd Holding Period: 1 year Last Traded Price: Rs 244.89 SAMCO observes that over the past decade, sales grew at a 7% CAGR, while the share price rose at a 14% CAGR. Known for its financial stability, Ramco Industries boasts a low debt-equity ratio of 0.07 and has consistently paid dividends since FY17, currently yielding 0.31%. The stock’s attractive price-to-book multiple of 0.5 offers a solid margin of safety, highlighting its investment appeal. <keyword id="22786675" type="General" weightage="20" keywordseo="Gravita-India" source="keywords" meta.keywordsubtype="org" meta.entityname="Gravita India" meta.hostid="261" meta.entityid="Gravita India">Gravita India</keyword> Holding Period: 12 months Last Traded Price: Rs 2,119 Kotak explains that Gravita India is the market leader in India’s emerging recycling industry with a focus on lead recycling. Gravita India is increasing its recycling capacity by a massive 72% to 500 ktpa by FY27E. “We expect the company’s earnings per share to grow by 31.8% in FY25E &amp; 31.6% in FY26E. We also expect an upside of 15% or more on this stock over the next 12 months”, adds Kotak’s note. <keyword id="23763359" type="General" weightage="20" keywordseo="S-H-Kelkar" source="keywords" meta.keywordsubtype="org" meta.entityname="S H Kelkar" meta.hostid="261" meta.entityid="S H Kelkar">S H Kelkar</keyword> and Company (SHKL) Holding Period: 12 months Last Traded Price: Rs 289.90 The company is a flavors &amp; fragrances (F&amp;F) supplier and has started to make inroads into the global market. SHK is well-placed to drive double-digit revenue growth. The company is a small but emerging contender in the vast F&amp;F market, with potential for margin expansion—higher-margin geographies &amp; operating leverage—allowing for over 15% return upside in the next 12 months. Kotak Securities further notes that FY25 will likely see more broad-based growth across sectors. However, the OMCs (oil marketing companies) may likely drag down overall profits. Most sectors and stocks are quite overvalued, with the degree of overvaluation ranging from: (1) low for most large-cap consumers, IT services, and pharmaceuticals (2) medium in the investment space (3) high in the case of several low-quality companies. "As the broader market valuations are rich, opportunities arising from market correction can be used to add quality stocks (with attractive valuations) from a long-term investment perspective," explains the research firm's note. SAMCO further advises adding a little glitter to your portfolio using GoldBees and SilverBees ETFs since there are recessionary fears in the US and geopolitical tensions across the world. Even central bankers like RBI have been adding gold to their vaults like never before. At present, markets are looking to secure their return on capital rather than seeking a return on capital. "Thus all of these make a strong case to add gold and silver to the portfolio. They will give stability to your portfolio this Samvat," adds SAMCO's note.

Muhurat trading 2024: 5 stock picks you can consider this time around

“Ye le beta, humare khaandani sone ke gehne. Ise girvi rakhva de, shayad kuch paise aa jaye ghar main.” How many times have we seen similar dialogues repeat itself in Bollywood films of the 70s and 80s—abject poverty and a frail-looking old mother pleading to her son to pawn the family’s heirloom gold ornaments to a jeweller, all to get a few bucks? Well, if you’d ask that son in 2024, he’d rather hit the loan button on his <keyword id="105386" type="General" weightage="20" keywordseo="Demat-account" source="Orion">Demat account</keyword> than pawn his mother’s gold jewellery. Given how Indians are rapidly resorting to taking loans against their investments in shares and mutual funds, these might as well be a cherished family heirloom in today’s time. Fair warning though; it's not as if gold and loans against it are going down in India’s lending scene. It's very much the opposite, shining brighter than ever! The secured loan category is having its time in the spotlight, and people are certainly looking beyond land and property to get their hands on some extra monies! But what is funding the steep rise behind these loans? And are they as failsafe and secure as they’re made out to be? We decode for you in this week’s Simply Put. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">The great Indian pawning party</h2>Pawning one’s gold has been, by far, the OG Indian financial move to get a loan. That continues well into 2024, and apparently, more so when India decides to wed and celebrate! Data from <keyword id="30067" type="General" weightage="20" keywordseo="RBI" source="Orion">RBI</keyword> suggests that the outstanding amount on gold loans has swelled from Rs 85,009 crore in September 2022 to Rs 1,47,081 crore in September 2024. It looks like Gold took the motto of rise and shine too seriously! Table 1: Growth in gold loans <table class="redcator-table-advance" style="border-width: initial; border-style: none; background-color: rgb(255, 255, 255); font-size: 16px; line-height: 1.6em; box-shadow: none; width: 468pt; font-family: Merriweather; table-layout: fixed; padding-bottom: 10px !important; background-image: inherit !important; background-position: inherit !important; background-size: inherit !important; background-repeat: inherit !important; background-attachment: inherit !important; background-origin: inherit !important; background-clip: inherit !important;"></colgroup><tbody><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Year </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">Amount (In Rs crore) </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2022 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">85,009 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">89,370 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2023 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">97,426 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">March 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,02,562 </td></tr><tr><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">September 2024 </td><td style="border-width: 1pt; border-style: solid; border-color: rgb(0, 0, 0); padding: 5pt; font-size: 16px; vertical-align: top; overflow: hidden; overflow-wrap: break-word;">1,47,081 </td></tr></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody><tbody></tbody></table> Source: RBI data While the world continues to be riled up in multiple geopolitical crises in 2024, gold has been making merry of these tough times. Thus far this year, <keyword id="3886593" type="General" weightage="20" keywordseo="domestic-gold" source="Orion">domestic gold</keyword> prices have grown by 23%, outperforming benchmark indices like Nifty and Sensex by a mile, which have gone up by 9.85% and 8.86%, respectively. The growth in gold loan disbursal rates month on month this year could also put Nifty and Sensex’s growth to shame. In just September 2024, gold loans grew an astounding 51%, up from 40.9% in August, 30.5% in June, and just 14.8% in March. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Hey, wait up for me, says LAS</h2>In lockstep with the elder, gold loan sibling, advances against shares and bonds have also been inching up since 2022. Data from RBI (Reserve Bank of India) notes that as of September 2022, the outstanding quantum of loans that were taken against shares (LAS) and bonds stood at Rs 7,397.94 crores. This inched up to Rs 7,764 crore in September 2023. Come 2024, and it looked like this was LAS’ time to shine. Loans swiftly skyrocketed, with outstanding loans in this category going up from Rs 8,492 crore in March 2022 to a staggering Rs 9,546 crore at the end of September 2024. Naturally, the smoke of LAS has its fire in the record inflows that Indians are pouring into the stock market and mutual funds month on month. Per AMFI (<keyword id="134904" type="General" weightage="20" keywordseo="Association-of-Mutual-Funds-in-India" source="Orion">Association of Mutual Funds in India</keyword>), the net AUM (assets under management) of India’s mutual fund industry grew to Rs 67,25,614.61 crores in October 2024, up from Rs 67,09,259.24 crores in September 2024. Even the number of retail mutual fund folios, which include equity, hybrid, and solution-oriented mutual funds, burgeoned to 17,23,52,296 in October, as compared to 16,81,61,366 in September. The same goes for stock investments in India, where the number of new demat accounts that are added every month just simply refuses to climb down. As of last month, total demat accounts in the country stood at 17.9 crore, which is more than the entire population of full-fledged nations like Japan (12.45 crore), Russia (14.38 crore), and Bangladesh (17.3 crore). In fact, since February this year, the monthly growth of LAS has been hitting double digits. From 11.3% in March to 21.6% in May to 26.8% in August, growth in LAS has been exceptional, hitting 22.9% in September this year. For context, monthly growth in the LAS segment was at a mere 5% in September 2023. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">What's driving the growth?</h2>It's a win-win for both the bank and the customer. Customers love them because LAS is available at a lower interest rate compared to unsecured personal loans. You can get a loan at an interest rate of anywhere between 9 and 12% by pledging your gold, MF units, or shares. Compare this to over 10-28% rates, which is the range where unsecured personal loans charge interest. Banks love <keyword id="827883" type="General" weightage="100" keywordseo="Secured-Loans" source="Orion">secured loans</keyword> since they are well-secured. In case you default on paying back, the bank can sell off your gold, shares, or mutual fund units to recover the amount. This takes a lot of stress off the banks, which are already dealing with secured loans’ riskier sibling-<keyword id="947940" type="General" weightage="20" keywordseo="unsecured-lending" source="Orion">unsecured lending</keyword>. High NPAs (non-performing assets) and non-payments in the unsecured borrowing space have already put RBI on red alert, which is why the apex bank is tightening the screws on unsecured lending, which was well on its way to becoming a ticking time bomb. As a result, credit growth has moderated to 12.8% YoY in October, as against the 19.3% rise recorded in the year-ago period. Yet it's not like the banks won't feel the heat. Analysts at Nomura note that <keyword id="23954457" type="General" weightage="20" keywordseo="personal-loan-delinquencies" source="Orion">personal loan delinquencies</keyword> in India that have been overdue by over 90 days rose to 5.1% in the last financial year, as opposed to just 3.9% in the year prior. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">How does it work?</h2>Both these loans work on a similar principle: Your <keyword id="857141" type="General" weightage="20" keywordseo="loan-amount" source="Orion">loan amount</keyword> is equal to a certain percentage of the actual market value of your asset. This is known as the LTV (loan-to-value ratio). In the case of gold and debt mutual funds, RBI mandates that this LTV be about 75-80%. So, for every Rs 100 of gold or debt mutual fund unit you pledge, your maximum loan amount cannot exceed Rs 80. If you pledge gold, which has a market value of Rs 10 lakh, you can take a loan of up to Rs 8,00,000. In the case of shares and mutual fund units, this limit is set at 50%. So, your shares worth Rs 5,00,000 can only get you a loan worth Rs 2,50,000. But the bright side? You can continue earning returns on your investments and pay interest only on the amount you use, since this loan works as an overdraft facility. <h2 style="margin-bottom: 0.7em; line-height: 1.3; color: rgb(0, 0, 0); font-size: 24px; background: 0px 0px; text-rendering: optimizelegibility;">Super safe, you say?</h2>Interest rates on both of these loans are very much dependent on the market value of the asset, which wildly fluctuates on a day-to-day basis. So, in case the value of your asset falls, you’ll have to keep a margin or more of the same asset in order to continue with the loan and maintain the LTV balance. Failure to do so could mean the bank can even sell off your asset. Says financial planner Nema Chaya Buch. “Yes, LAS offers easy availability of funds since these loans come with a lower interest rate as compared to personal loans. Also, you continue to earn average returns of 10–13% on your equity investments. But the downside is, in case of emergency, those pledged securities cannot be sold. Also, if the equity market goes down, then the bank may ask for additional collateral. Raghvendra Nath, MD, Ladderup Wealth Management notes that taking a LAS is best when the value of your securities has appreciated significantly. “This allows you to maximize the loan amount based on your collateral while also addressing financial needs without having to liquidate your investment portfolio. However, there are notable disadvantages to consider. The market risk is significant; a substantial decline in market value could lead to margin calls, which may incur fees and charges if there are delays or prepayments, ultimately increasing the effective cost of borrowing. Furthermore, failure to make timely payments could result in the loss of your assets.”. Umesh Mohanan, ED &amp; CEO, of Indel Money, cautions that one should have a sufficient quantity of gold to get the loan amount one wants. "According to the current RBI rules, the loan applicant/borrower can draw up to 75% of the total market value of the collateral/gold jewellery. So, always carry a sufficient quantity of gold based on one’s loan requirement. “The most important thing is that the valuation of the gold depends on the purity of the gold. If the borrower pledges gold with higher purity, such as 24 carats or 22 carats, he will get the maximum loan amount," he adds.

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

<ul class="summary-list"><li>Goldman Sachs and Morgan Stanley have reportedly been tapped on a valuation of OpenAI.</li><li>The transformative AI startup is evaluating what it could take to become a for-profit company.</li></ul>As <a target="_blank" class="" href="https://www.businessinsider.com/goldman-sachs-3q-results-dealmaking-trading-resurgence-david-solomon-2024-10">third-quarter earnings demonstrated</a>, Wall Street dealmaking appears to be bouncing back after three years of lackluster activity.For bank bosses, it signals a return to vying for the <a target="_blank" class="" href="https://www.businessinsider.com/megamergers-deals-m-a-wall-street-comeback-2024-9">biggest M&amp;As</a>, IPOs, and debt-capital raises in hopes of the largest paydays for themselves and their firms. Yet, one of the most coveted projects on the Street right now is unlikely to mint much money for the investment banks involved — at least in the short term.Last week, the <a target="_blank" href="https://www.wsj.com/tech/ai/the-14-billion-question-dividing-openai-and-microsoft-71cf7d37">Wall Street Journal reported</a> that OpenAI and its longtime backer, Microsoft, have begun talks to determine how much money Microsoft stands to receive if OpenAI converted to a for-profit institution. The Journal reported that OpenAI tapped advisors at <a target="_blank" class="" href="https://www.businessinsider.com/goldman-sachs-2q-earnings-david-solomon-investment-banking-forecast-2024-7">Goldman Sachs</a>, and Microsoft, which has poured some $14 billion into the AI startup as a nonprofit, is relying on Morgan Stanley to facilitate the negotiations. Spokespersons for both Goldman Sachs and Morgan Stanley declined to comment or confirm their reported participation in the project.BI called up two Wall Street dealmakers who specialize in tech banking to walk us through what the process could look like, as well as a valuation expert on the faculty of the <a target="_blank" class="" href="https://www.businessinsider.com/wharton-data-science-class-upenn-madoff-diamonds-airbnb-finance-jobs-2022-3">Wharton School at the University of Pennsylvania</a>. They also shared a look at what it could mean for the banks that won this business, both in terms of pay and reputation. The two investment bankers – neither of whom are affiliated with Goldman, Morgan Stanley, OpenAI, or Microsoft — requested anonymity to preserve industry relationships.The experts said the OpenAI valuation process stands to be stressful and drawn out — potentially taking up to six months — and could come with little to no financial reward for the banks involved. That said, the job still represents a huge win for Goldman and Morgan Stanley's tech teams since they now stand at the front of the line for whatever comes next for OpenAI.Thanks to ChatGPT, San Francisco-based OpenAI stands at the forefront of the artificial-intelligence revolution, which is <a target="_blank" href="https://www.pwc.com/gx/en/issues/artificial-intelligence/publications/artificial-intelligence-study.html">projected</a> to contribute nearly $16 trillion to the world economy by 2030, according to consulting firm PwC. <a target="_blank" href="https://www.wsj.com/tech/ai/openai-nearly-doubles-valuation-to-157-billion-in-funding-round-ee220607?mod=article_inline">A recent fundraise</a> valued the company at more than $150 billion. After it converts to a for-profit company, it could seek to raise money through the stock market or make acquisitions — all of which could prove lucrative for its Wall Street partners.Even the banks that are not part of this process stand to win if the final valuation is high enough, said Michael Roberts, the finance professor at Wharton. "If it comes at a really high multiple, what does that mean? It means you can raise an enormous amount of money if you are an AI company," he said, adding: "If I go back 15 years, the place to be as an investment banker was in Silicon Valley. But this could be sort of the next Silicon Valley 3.0."Here's a look inside the process and what it means for the Wall Street dealmakers who won this business, according to the tech bankers and the finance professor.<h2 id="277fe458-53dd-471b-bcca-880ebd8043d7">The banks have different goals: 'You're going to do battle'</h2>Morgan Stanley's objective will be to secure the greatest equity for its client, Microsoft, while Goldman's goal may be the opposite — pitting the two sides against one another."You're going to do battle," said one of the sources — a senior tech banker at a midsize investment bank — about the bankers on either side of the negotiating table.The valuation could take as much as six months, depending on what legal snags crop up, these people said. Since there's no obvious precedent for valuing this company, the bankers will want to get creative, which could open the door to lots of debate.The tech banker at the midsize firm said the goal will be to find comparisons in the real world that would make a compelling case for what OpenAI could be worth. "You might look at some of the early days of the last couple of generations of very disruptive technologies," he said, citing Apple in its early iPhone era and Google "back in the early days of disrupting the search market."The second banker, a former executive at a large-cap investment bank who now handles some tech deals at a small, independent firm, said that the banks will do a "landscape analysis" and ask questions about whether OpenAI could one day take Google's place.Roberts, the Wharton professor, proffered the name of another disruptive tech company: Uber. As it redefined the ride-hailing industry, there were "enormous" variations in its valuation projections. For OpenAI, though, the situation could be even more complex since its impact on the economy stands to be more dramatic.<h2 id="f2400755-f31e-489f-891d-876291a5211f">Risks and rewards</h2>Two of the experts BI spoke to estimated that the banks' fees for their work on the valuation could be low, at under $25 million each, with one suggesting it could even be gratis due to the competitive nature of the business. A third expert estimated the fees would likely be greater than $25 million but under $100 million.For context, advising on an actual merger or big-ticket public offering can <a target="_blank" class="" href="https://www.cnbc.com/2021/07/04/banks-earn-650-million-in-fees-and-stock-gains-from-ipo-flurry.html">generate many multiples of that</a> for investment-banking advisors — to the tune of hundreds of millions.The fees, however, are not likely the focus. "The goal is to lock the relationship up," said the senior technology dealmaker at the midsize firm, noting that OpenAI and Microsoft are companies that bankers would kill to have as clients.This banker said <a target="_blank" class="" href="https://www.businessinsider.com/sam-altman-chatgpt-openai-ceo-career-net-worth-ycombinator-prepper-2023-1">Sam Altman</a>, the founder of OpenAI, appears to put a premium on trust and interpersonal relationships, which could be to Goldman's benefit. He has a reputation for being "loyalty-driven," said the banker, who has met Altman and knows his reputation through conversations with the tech community.Morgan Stanley, for its part, has enjoyed a relationship with Microsoft that stretches back years. In 2016, the firm was the <a target="_blank" href="https://www.businessinsider.com/microsoft-and-linkedin-bankers-2016-6">only advisor to Microsoft</a> on its $26 billion acquisition of social-networking-giant LinkedIn.This wouldn't be the first time banks have shown a willingness to play the long game in exchange for future potential gains.In 2022, a syndicate of banks led by Morgan Stanley <a target="_blank" href="https://www.businessinsider.com/how-elon-musk-was-able-to-buy-twitter-despite-risks-2022-4">assembled $25 billion in capital</a> to lend to Tesla founder Elon Musk to finance his acquisition of X, the social-media platform formerly known as Twitter. X's lackluster financial performance prevented some banks <a target="_blank" href="https://www.businessinsider.com/elon-musk-x-twitter-debt-financing-banks-2008-financial-crisis-2024-8">from offloading the debt</a>, leading to losses. However, the goal, as one banker said at the time, was to "get a foot in the door with the man and his business."The investment banker who formerly worked at a large-cap bank said potential drawbacks could include some banks being excluded from other AI deals for competitive reasons."The likelihood that Google would take a very stance and be less willing to work with them is probably high because whenever you're involved in something like this, you're 'under the tent,' and you're seeing a lot of very sensitive things about where something is going and not going," this person explained.Largely speaking, however, Wall Street is poised to win, Roberts said."Given how much money's at stake here, even the loser isn't really going to lose, are they?" he said, adding, "It's all relative."Are you an investment-banking insider? Get in touch with this reporter. Reed Alexander can be reached via email at ralexander@businessinsider.com, and SMS/the encrypted app Signal at (561) 247-5758.

You Searched For "hdfc bank share value" and got 5 results

Mcap of nine of top-10 most valued firms jump Rs 2 lakh crore, Bharti Airtel leads the surge

PTI

Indians credit card spending increases 19% YoY to Rs 1.7 trillion in July 2024

ANI

Muhurat trading 2024: 5 stock picks you can consider this time around

Ira Alok Puranik

Secured Loans 2.0 — why more and more Indians are turning to gold, shares and mutual funds to get loans

Ira Alok Puranik

Inside Wall Street's efforts to value OpenAI: Who's involved, how it could work, and what's at stake for the banks

Reed Alexander

Popular Keywords

Buying Guides