About me

CA Tharendra Lunia is independent writer. He has completed his chartered accountancy in November 2011 and has enrolled for CFA® Level III 2017 Exam after passing Level II in 2014. He is presently working as Financial Analyst in Amazon India. He has also worked at Renault Nissan Automotive and Aditya Birla Group. He has been regularly sharing his work in his blog www.researchwings.in. He also co-founded Discussion Café, a forum for various streams and Research Wings, independent financial content provider.

The Beginning

In the beginning of 2011, during the classes of strategic financial management of Chartered Accountant Finals, we were given live demonstration of stock markets in addition to what was there in our text books. During that session, I came to see that State Bank of India Futures was trading below State Bank of India cash market price, just after few minutes futures were trading above cash markets. Looking at this scenario, my curiosity started growing towards understanding the dynamics of Indian Capital Markets.

In addition to all this, I was also inclined towards learning about new trends in business, investment and deal space. During that time I started reading articles on venture capital, start-ups, private equity etc. Fortunately, in my Articleship under CA Arvind Sanghvi, I got opportunity to create business plan and business financial models for term loans and working capital loans. I learnt to create model from existing work of my mentor. I learnt using Excel for creating financial models in order to arrive at project feasibility.

In January 2011, there was Rediff Virtual Trading Game under the banner of MarketWiz, powered by Edelweiss. In this website, one could have explore and use the platform to harness the skills of live trading with real-time update of prices of instruments trading in Indian Capital Market. In this game, I had created a group named “Chartered Investors” which was in 2nd Position for few days. During this time, I learnt how prices used to be volatile and realized that game was different from live markets. There was huge variance in the live market.

In November 2011, during preparation of my chartered accountant final exams, I came across a problem in revision test paper where value of options was to be calculated and value of futures was also provided in the same. That problem was based on Call Put Parity and Futures Pricing based on traditional methods. I was able to solve that problem, however that day I thought if we can have a concept of Call Put Future Parity where risk free rate and time was not need to solve the parity problem and use the futures prices to conclude the values of call and put. I tried to work further on the same and created automated model for the same by end of 2012. In 2013, while studying for CFA® Level II Exam, I found the same was part of the study curriculum. However, the model which was created by me adjusted the bid ask spread of the options which have significant impact in options trading in India.

I gave my chartered accountant final exam in November 2011 and after that I used to spend time in reading more and more about the financial trends in Indian Markets. I came across a news about one foreign institution buying shares of Su-Raj Diamonds in a qualified institutional placements in the month December 2011. Using the normal corporate finance concept, I tried to calculate the price of security post the transaction keeping in mind the current market capitalization of the company and capital infusion by the new investor. I shared my analysis with my elder brother, CA Rajnish Luniya, who is all India rank holder chartered accountant. He thought of doing a trade based on the analysis and since we had no demat or trading account, so he called his friend to buy the share in his account and I still remember that the stock was trading at INR 46 per share and as per analysis price should be minimum INR 48 per share. His friend bought 100 shares on our behalf and we were watching the price of the stock moving up. The stock was trading at INR 54 per share in next few hours and since it was above the estimated price, I requested my elder brother to tell his friend to sell the shares, however the stock closed with upper circuit that day at INR 56 per share. This was my first encounter with stock market live. That day my elder brother told me what if we could have trade of 1000 shares instead of 100 shares (greed factor). I told him that I don’t want to expand my risk until I have ability to handle the same.

My next reading was about Numeric Power System which sold its universal power supply (UPS) business to Legrand at a valuation which 2.5 times of company’s current market capitalization. In this trade again, we bought 100 shares at INR 354 per share, now this was 7 times my previous trade. We were not successful in this trade despite of holding stock for a long period we ended up closing the position around INR 280 per shares and booking loss of 25% of the capital invested however later the stock traded above INR 450 per share with an announcement of special dividend. So this trade gave me learning of not going beyond your capacity.

Now after this trade, there was a break in executing trades until I got my first job with Grasim Industries Limited. In June 2012, I opened my own account with HDFC Securities. Now the real journey starts about investing Indian Equity Markets. Here I started doing research about the companies. I started using the knowledge which was given in books like price to earnings ratio, price to book value ratio etc. I selected following companies based on the information available in stock broker websites like edelweiss.in:
1.       Jupiter Bioscience @ 6
2.       Kiri Industries @ 10
3.       Spanco Limited @ 12
4.       Glodyne Technoserve @ 31 (I still hold this delisted share)
5.       S Kumars Nationwide @ 8 (I still hold this delisted share)

This were trading at price to book value ratio of less than 0.25 and also had price to earnings ratio below 10. I exited first two shares incurring loss of more than 50% and Kiri Industries which I sold for INR 16 (High after that INR 404.75 per share). This was the time when I realized only price to earnings and price to book value ratios were not enough for successful investing. I started reading more about how to evaluate companies.

This was the beginning of my endless journey.


  1. Very nice article..indepth as your posts on quora..i like the way you analyse stocks...i just wanted to know how can I find out if its a right price to enter a stock and exit a stock.i know they say that you cannot time the market..however is it possible using technical analysis to know if the entry price is apt

    1. Everyone want to chase perfection but sometimes, just doing the right thing is enough. Time and Price can match themselves.


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