Hi friends, and welcome to this podcast by Angel One.
Doston, aapke paas life insurance ho ya na ho, koi na koi vehicle insurance toh zaroor hoga. Have you ever wondered ki ye insurance companies aapse insurance premiums lekar us paise ka kya karte hain?
Achcha let’s forget insurance companies - bank accounts hi le lijiye - ya fir pension funds. In sabhi products ke liye companies buyers se kuch paise leti hain, and in return, koi na koi service ya product provide karti hain.
Pension fund ke example se ek story yaad aa rahi hai. Ravina ki daadi 62 years old hain. Ek din, she was talking to her neighbour, ki her pension funds are never late. Ravina economics padhti hai - she is in 9th grade, but nonetheless, she got curious - after interrogating her grandmother for half an hour about her pension scheme, Ravina ne calculations kiye, and she was surprised - usko surprise is factor se hua, ki is pension scheme mein returns kaafi handsome the.
Ravina ko yeh baat samajh nahi aa rahi thi, ki ye additional funds kahan se generate ho gaye.
Doston, ye toh the ek 9th class student ke thoughts, about the workings of a pension funds company. What are yours?
Aapke according, pension funds, insurance companies, aur banks customers se paise lekar unka kya karti hain?
That’s what we will talk about in today’s podcast. Toh chaliye jaante hain.
Friends, ye sabhi tarah ki companies customers se paise lekar inko invest karti hain. Lekin ye investments aapke aur mere investments se alag hote hain, and they follow a different set of rules and regulations in the process.
When these companies invest in local markets, they invest as institutions - isliye, inko bolte hain domestic institutional investors, ya fir DIIs.
Inke investment volume ko kya aap guess kar sakte ho? Agar nahi, toh let’s shock you with this number - March 2020 mein DIIs ne India ke equity market mein 55,000 crores ka cumulative investment kiya. 55,000 crores.
Is size ke investments toh markets ko apne aap hi move kar sakte hain. So aren’t you curious ki ye investments kahan se aate hain? If yes, toh aapko introduce karwaate hain 4 types of DIIs se. Chaliye dekhte hain.
Number 1 -
Indian Mutual Funds - mutual funds DIIs ka simplest example hain - ye investors se paise pool karwaate hain, on a national level - and then, is paise ko invest karte hain in equity markets. And mutual funds being the choice of new age investors, domestic institutional investments coming from mutual funds have been growing over the last decade.
As of March 2020, mutual funds firms ne indian equity market mein 11 hazaar crore se upar ka cumulative investment kiya. Kya aap is volume mein add karna chahte ho? Mutual funds sabhi tarah ke investors ke liye appeal karte hain, so do check them out!
Dekhte hain second type of DIIs, that is, Insurance companies.
Insurance companies kai tarah ke customers ko cater karti hain. Examples toh aap jaante hi ho - apart from the obvious health, life and vehicle insurance, customers apni factories, company assets properties ke insurance bhi khareedte hain. Aajkal toh gadgets aur rented vehicles par bhi insurance sell hota hai -
No wonder, insurance companies is paise ka sigificant chunk equity market mein bhi invest karti hain. As of march 2020, insurance companies ne, over 20,000 crores indian equity markets mein invest kiye hain.
Ab dekhte hain 3rd type of DIIs, which are local pension fund providers.
Doston pension plans toh almost sabhi employed log buy karte hain. From government employees to freelancers, log savings karen ya nahi, pension plans ko usually sabhi seriously lete hain. And this is also reflected in the amount that DIIs selling pension plans invest in the equity market - 33,000 crores! Ye number insurance providers aur mutual fund companies se bhi zyada hai - this tells us as to how popular pension schemes are as a financial product, compared to mutual funds or insurance. India mein kai popular pension schemes hain, like NPS, PPF, EPF, etc. Now evidently, a big chunk of the money invested in these funds is then invested in the equity market.
Aur doston, last type of domestic institutional investors - and possible the most common ones are banks aur financial institutions.
Banks kai tarah ke financial products provide karte hain, like loans, deposits, accounts, lockers, etc. A part of money that comes through these products is invested in the equity market. Doston, banks ke liye ye investments determine karna itna easy nahi hota. Ye isliye, kyunki inke around kai tarah ke regulations hote hain. Do you know why? Kyunki if banks fail, country ki poori economy can tumble down.
Lekin regardless, banks and financial institutions are the fourth most common domestic institutional investors, aur ye bhi equity markets mein invest karte hain.
Doston DIIs ka economic counterpart hote hain FIIs, ya fir foreign institutional investors. Iske baare mein discuss karenge some other time. Lekin tab tak ke liye, know this - FIIs ki equity holdings ko jab aap DIIs ke equity holdings se divide karoge, toh you get the FII to DII ownership ratio. Isse aap international markets, trading aur currencies ke dynamics ko samajh sakte ho.
Oops we are almost out of time. Alvida bolne ke samay aa gaya hai. Lekin in the meanwhile, markets are still up and running. So keep yourself updated on our website www.angelone.in.
Tab tak ke liye goodbye, and happy investing!