Sequity Capital is engaged in financial investments, mainly in debt instruments (bonds), to generate a steady cash flow, preferably higher than bank deposit rates. These cash flows are either reinvested or withdrawn at the proprietor’s discretion.
The market investments are structured into Principal Protected Notes (PPNs) to enable investment in equities (shares) without risking company capital during the tenure of investment. Our equity decisions follow three investment philosophies: value investing, contrarian strategy, and focused equity approach.
Performance Report – February 2025
The business started operating on 20th February 2025, with an investment of ₹1,01,001 made during the period.
This monthly performance report aims to communicate the following:
- Key Developments
- Security Holdings
- Financial Statements
- Explaining the Financial Statements
- Manager’s Report
By understanding their businesses, owners (shareholders) can make more informed decisions and exercise higher control over the management of their business.
Key Developments
- Investments were made in government securities (₹57,320), corporate bonds (₹20,370), and equities (₹20,258.35).
- Principal protection is accomplished with returns being secured at a rate of 7.18% CAGR until 30th September 2030.
- Operational account opened with Kotak Mahindra Bank and Zerodha Broking Services.
- At present, the Indian share market is performing poorly due to increased global competition caused by lenient import policies.
Security Holdings
At present, we own the following securities listed in the stock exchanges (NSE & BSE):
Holdings as on 28th February 2025
| Instrument | Type | Quantity Held | Last Traded Price | Market Value |
| 92GS2030-GS | Govt. Bond | 500 | ₹114.40 | ₹57,200.00 |
| 82HUDCO27 | Corporate Bond | 10 | ₹1,043.00 | ₹10,430.00 |
| 960ISFL25 | Corporate Bond | 10 | ₹990.00 | ₹9,990.00 |
| SBIN | Share | 15 | ₹689.80 | ₹10,347.00 |
| ITC | Share | 10 | ₹395.50 | ₹3,955.00 |
| TATAMOTORS | Share | 5 | ₹621.20 | ₹3,106.00 |
| SMCGLOBAL | Share | 10 | ₹113.95 | ₹1,139.50 |
| PNB | Share | 10 | ₹87.38 | ₹873.80 |
| Total Market Value | ₹96,951.30 | |||
Financial Statements
Income Statement for February 2025
| ACCOUNT | TOTAL (₹) |
| Operating Income | |
| Realized P&L | -213.25 |
| Unrealized P&L | -997.05 |
| Total for Operating Income | -1,210.30 |
| Gross Profit | -1,210.30 |
| Operating Expense | |
| Bank Fees and Charges | 588.82 |
| Trading Charges | 70.56 |
| Total for Operating Expense | 659.38 |
| Operating Profit | -1,869.68 |
| Total for Non Operating Expense | 0.00 |
| Net Profit/Loss | -1,869.68 |
Balance Sheet as on 28th February 2025 (in INR)
| ACCOUNT | TOTAL |
| Assets | |
| Bank | |
| Bank Account | 412.18 |
| Total for Bank | 412.18 |
| Other current assets | |
| Trading Account | 1,767.84 |
| Total for Other current assets | 1,767.84 |
| Total for Current Assets | 2,180.02 |
| Fixed Assets | |
| Securities | |
| Debt | 77,530.00 |
| Equity | 19,421.30 |
| Total for Securities | 96,951.30 |
| Total for Fixed Assets | 96,951.30 |
| Total for Assets | 99,131.32 |
| Liabilities & Equities | |
| Total for Liabilities | 0.00 |
| Equities | |
| Owner’s Equity | 1,01,001.00 |
| Current Year Earnings | -1,869.68 |
| Total for Equities | 99,131.32 |
| Total for Liabilities & Equities | 99,131.32 |
Explaining the Financial Statements
The key observations from the financial figures are as follows:
- Unrealized Loss of ₹997.05
We would incur a loss of ₹837.05 if we sold our equities at present market rates and a loss of ₹120 if we sold our bonds at the present market rate.
The Indian share market benchmark (Nifty 50) reached an all-time high of 26,277.35 on 27th September 2024. The share prices became too high, incidentally overvalued. Because of expensive valuations, investors booked their profits by selling their stocks. This started a price correction (downfall), also fuelled by global tensions and a fall in the Indian rupee.
Since we invest using accounting valuations, we use market prices to gauge only investor confidence and not to make an investment decision. With the Nifty 50 at 22,124.70, the index is down by 15.8% (4,152.65 points)- providing us a healthy valuation range for most equities.
We are not worried about bonds, as they are fixed-income instruments with pre-determined rates. Market price fluctuations in bonds do not impact its performance.
- Realized Loss of ₹213.25
We are in the process of developing an intraday trading system that protects our holdings against bear markets. Through hedging (short positions against our holdings), we are looking to nullify losses by simultaneously buying (held shares) and selling (traded short positions) the asset.
The loss realized is a trading loss on SBIN share, as we held the share throughout the day but ultimately did not decide to buy the share as the downwards volatility remained unstable.
Manager’s Report
Business
The first month of the business was mostly filled with account opening processes and planning out required return rates and securities that fit our investment objectives such as holding period and payment frequency.
We have been successful in acquisition of bonds with more than 10% yield. Even if we do not reinvest the interest, our returns will stay equal to bank FD of 7.18% with interest being reinvested.
Sequity management is confident about comfortably outperforming any fixed-deposit scheme, as we will also be reinvesting the income from interest into other high yield bonds to further enhance returns. This should result in our baseline expected return of 7.18% CAGR to improve further.
Suggestions
In order to improve the returns and cashflow, the management is looking to allocate more assets into medium and short duration bonds. This is because, most of our capital is invested in Government Bonds which do not generate as much return as Corporate Bonds, and these bonds are long-duration bonds maturing after more than 5 years.
Through the purchase of bonds with separate interest payment months, we can expect stable cashflow throughout the year without having to compromise on the rate of interest. Allocating investments in bonds of different durations also allow us to diversify between locking high rates at long duration and high liquidity for short duration.
The suggestion to diversify bond investments can be done either through further investment to acquire more bonds to create a balanced portfolio, or it can be also achieved by partially selling Government Bonds (“92GS2030”) in the exchange and reallocating the same in favour of diversified mix of Corporate Bonds.
Needless to say, our outlook on the company performance is highly optimistic.
Tuhin Subhro Sardar
(Manager)
Sequity Capital
Sequity Capital 