ISM Institute of Stock Market Delhi

What happened here in this chart? Is it a Stock Crash? Payout? Read More

What happened here in this chart? Is it a Stock Crash? Payout? Read More

By looking at the chart, what seems in the first look that there has been a major crash. The portfolio is down by almost 70%.

Now, what could possibly cause this in just one day?

This usually happens when there is a crash, payout or the holdings have been converted into cash. However, this is altogether different.

As an Individual investor or a trader, this could be shocking or if not at least a little complicated at first. Let us explain, what just happened here.

Let’s simplify now, A great proportion of the fund was allocated to nifty bees. Let’s have a look at the notes.


i.                     The Below Mutual Funds Units will be Traded with new Face Value of Re.1/- w.e.f. December 19, 2019 (DR -178/2019-2020)

ii.                    The new ISIN number as given above shall be effective for all trades done on and from the Ex-Date i.e. December 19, 2019

Let’s understand first

What are Nifty Bees?

Nifty BeES (Benchmark Exchange Traded Scheme)—the first exchange-traded fund (ETF) in India—seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. … Nifty BeES is a no-load scheme.

NIPPON INDIA ETF GOLD BEES(Scrip Code 590095)INF732E0110220/12/2019Split of each unit of Rs.100/- to Re.1/-INF204KB17I5 
NIPPON INDIA ETF NIFTY BEES(Scrip Code 590103)INF732E0101120/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB14I2 
NIPPON INDIA ETF BANK BEES (Scrip Code 590106)INF732E0107820/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB15I9
NIPPON INDIA ETF PSU BANK BEES(Scrip Code 590108)INF732E0111020/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB16I7
NIPPON INDIA ETF HANG SENG BEES(Scrip Code 590113)INF732E0122720/12/2019Split of each unit of Rs.10/- to Re.1/-INF204KB19I1

What is a stock split?

All publicly-traded corporations have a fixed number of stocks that are extremely good. A stock split is a decision with the aid of a company’s board of administrators to growth the variety of shares that are first rate through issuing more stocks to cutting-edge shareholders.

Why Do Stocks Split?

stock break up is typically finished by agencies that have seen their share price boom to tiers which might be both too excessive or are past the charge tiers of similar agencies of their sector. The number one purpose is to make shares seem more affordable to small investors despite the fact that the underlying value of the enterprise has now not changed.

This has the practical effect of growing liquidity within the stock. When a stock splits, it could also bring about a share fee growth following a decrease immediately after the breakup. Since many small investors think the stock is now less costly and buy the stock, they come to be boosting demand and force up prices. Another cause for the price boom is that a stock break up gives a sign to the marketplace that the agency‘s share charge has been growing and people count on this increase will continue within the future, and again, lift call for and prices.