Many retail investors want to invest in penny stocks. But they are also afraid that their claim may backfire. Most retail investors think that penny stocks have a very low price. As of now the share price of Yes Bank is ₹11. So in such a situation, many retail investors believe that the stock which has fallen from 382 to 13 rupees can reach 500 again. But I tell in my every article that there is no work of emotions in the share market. As far as the share price of Yes Bank is concerned, something must have happened that the share of Yes Bank went straight from ₹382 to ₹11.
If you want to become a successful investor then you have to consider all these things. First of all, you do not have to invest by looking at the price of any stock. Most of the retail investors invest in only those stocks which have low prices. The same is the case with mutual funds. Many people do not see the performance of the fund in Mutual Funds. They see which fund has the lowest NAV. So you have to learn that a decrease in the NAV of a fund does not affect the return of the fund.
If the NAV of a mutual fund is low, it means that the fund is still new. And not many people have invested in the fund yet. If a fund is old, then its NAV will also have increased. So it does not matter whether the NAV of the mutual fund is low or high. You have to see how the companies in which the fund is investing are performing.
So now let’s talk about penny stocks. These days both Yes Bank and Vodafone Idea are hot topics. Some retail investors believe that if we invest in these two stocks today, we will get good returns in the future. But he has neither seen the balance sheet of the companies nor has he analyzed the financial data. So let us see the financial reports of both the companies today.
Vodafone Idea Financial report
So first of all let us see, what are the income and expenses of Vodafone Idea in 2021.
So as you must have seen in the screenshot that the income of Vodafone Idea is decreasing every year. If we talk about expenses, then the expenses of the company are increasing every year. And the expenses of the company are more than the income. And Vodafone Idea has incurred a loss of about ₹7319 crores in June 2021. The debt of the company is increasing continuously and the profit is decreasing. In such a situation, the future of the company does not seem right to me.
So do you want to invest in a company that is continuously running at loss? Right now Vodafone Idea is fighting for its existence. What will happen to the company in the future cannot be said.
Total assets of Vodafone Idea in the financial year 2020: ₹2,26,919.60 Cr.
Total Liabilities of Vodafone Idea in the financial year 2020: ₹2,20,939.70 Cr.
You can see how much debt the company has. And this debt of the company has increased even more in 2021. So in such a situation, the good news was also seen in the middle that in July 2021, there has been a slight increase in the number of subscribers of Vodafone Idea. But as you know Jio and Airtel are the two biggest telecom companies. And it is very difficult for Vodafone Idea to compete with these companies. Yes, the company can compete. But right now the company does not have enough funds to make its plans more affordable.
So you can see which banks have given loans to Vodafone Idea. So if the company is unable to repay the loan of these banks, then it may affect the shares of these banks along with the share of Vodafone Idea. And you can also see the name of Yes Bank in the list of banks. So if Vodafone Idea makes a profit and clears Yes Bank’s loan, then there can be a huge jump in the share of Vodafone Idea with Yes Bank. But that doesn’t seem to be happening.
Yes Bank Financial report
Yes Bank has given loans to many such companies which can never be recovered. And most of the companies are about to go bankrupt. And the first name in those companies is Vodafone Idea itself. I have already told you the financial report of Vodafone Idea. Yes Bank has to collect around 4000 crores from Vodafone Idea. And seeing the condition of Vodafone Idea, it does not seem that it can pay Bank’s loan.
Now let’s also look at the balance sheet of Yes Bank.
So a good thing is being seen in the balance sheet of Yes Bank that the number of deposits with the bank is increasing. and this is a good sign. Anyway, the entire management change of the company has taken place. And the management believes that they are also succeeding to a great extent in recovering NPA.
By the way, the figures for June are good. And seeing these results, hope is awakening.
Total Income of Yes Bank in JUNE 2021: ₹5,610.71 Cr.
Profit after Tax: ₹203.76 Cr.
While Yes Bank did a huge loss show in March 2021, the bank has reached profit in June 2021. and this is a good sign. But the fear of one thing is still haunting me that the net NPA of the bank is not decreasing. And Vodafone Idea is largely responsible for this. So in such a situation, if Yes Bank recovers its bad loans, then there may be a jump in Yes Bank’s stock. But right now the share price is seeing a continuous decline and now the share price has fallen to ₹11.
Yes, the bank can give good returns in the long term. But right now it is difficult to tell the future of the bank. In such a situation, I will not ask you to invest in Yes Bank shares. Yes, if you can take risks then you can invest in this stock.
Conclusion: Looks like you should not invest in both companies Vodafone Idea and Yes Bank. Vodafone Idea can close its business in India at any time. But there are still hopes from Yes Bank. And the bank is doing well from its side too. But as you know that Yes Bank has given a loan of about 4000 crores to Vodafone Idea which cannot be recovered. So in such a situation, if Vodafone Idea closes its business from India, then its effect can also be seen on Yes Bank’s stock.