ContentTeam
03
Saumya Nair
Vigneswaran S
Tapan Shah
Jaykaran Mehta
Ishan Khare Siddharth Suman
Samyak Tripathi Ayushi Sharma
Kashish Khanduja
Sakshi Pandya
Manthan Jain
KashishKhanduja|MBA4|2022-24
ManthanJain|MBA7|2022-24
Silicon Valley Bank (SVB) is a commercial bank founded in 1983 and headquartered in Santa Clara, California. The bank provides a range of financial services to clients in the technology, life sciences, venture capital, and private equity industries Some of the services offered by SVB include corporate banking, investment banking, wealth management, and payment solutions
Silicon Valley Bank was presumably the type of business that would never require a government bailout – until its backers spent three days on social media demanding one and immediately received one following the bank's stunning collapse last week.
Eight years ago, the bank's CEO, Greg Becker, personally lobbied Congress to exempt SVB from post-2008 financial reform regulations, citing the institution's "low-risk profile" and role in assisting "job-creating enterprises in the innovation sector "
Almost fifteen years after the global financial crisis, the "too big to fail" reasoning still prevails. The economic distress of student debtors and underwater homeowners is private, whereas the losses incurred by IT and finance titans are an urgent matter of public concern. Moreover, SVB's rapid ascent and fall serve as a warning that many of the safeguards constructed after the last crisis have been removed at the insistence of banks like SVB and with the assistance of lawmakers from both parties subservient to entrenched financial and tech interests
Before becoming the second-largest bank to fail in U.S. history, SVB had become a formidable influence machine, both in northern California, where it became the goto lender for startups and on Capitol Hill, where it spent nearly $1 million over five years lobbying for the deregulatory policies that ultimately led to its demise
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THE SILICON VALLEY BANK COLLAPSE
WHAT CAUSED THIS?
Silicon Valley Bank (SVB), which historically made significant profits by investing in tech start-ups and US Bonds, has now experienced financial difficulties The Federal Reserve began increasing interest rates last year to bring down inflation rates, causing the value of bonds to decline.
Additionally, due to the onset of the COVID19 pandemic, start-up funding began drying up, resulting in many withdrawal requests from SVB's depositors.
The bank was obligated to honour these requests, forcing them to sell bonds at a loss, as their value had decreased in the market SVB announced it had sold $21 billion worth of bond assets, resulting in a loss of $1.8 billion. The bank's share price plummeted as a result, leading to its shutdown by US regulators The US Federal Deposit Insurance Corporation (FDIC) has taken over the bank and now holds nearly $175 billion of customer deposits.
The FDIC has established a new bank, the National Bank of Santa Clara, to manage SVB's assets, and depositors will have access to their insured deposits This is the first FDIC-insured institution to fail this year, with the last being Almena State Bank in Kansas, which closed in October 2020.
IMPACT ACROSS THE GLOBE
The collapse of Silicon Valley Bank has significantly impacted global markets
causing instability in major economies around the world Bank shares have been particularly affected, with many experiencing sharp drops in value Wall Street's top indices have turned red following the collapse of SVB
In the United States, several banks, including First Republic Bank and Comerica, have been hit hard, with their shares slumping significantly Larger banks such as JPMorgan Chase and Bank of America have had mixed performances. Meanwhile, in London, shares of major banking giants like HSBC, Standard Chartered, Barclays, and Lloyds have all seen significant drops in value The situation has been similar in the eurozone, where Deutsche Bank and French lender Societe Generale have also experienced sharp declines in their share prices
The impact of the collapse has also been felt by Indian investors and SaaS startups, who are closely monitoring the situation Many have started moving their deposits out from SVB, while newer lenders like Mercury and Brex have emerged as the preferred platforms for early-stage SaaS startups
TIMELINE OF BANK'S COLLAPSE AND KEY EVENTS
February 24: KPMG, an auditing firm, issued a report stating that SVB Financial, the parent company of Silicon Valley Bank, was financially healthy for the year 2022. However, deposits declined by $25 billion in the following months due to the Federal Reserve's interest rate increases
05 | COVER STORY
March 8: Silicon Valley Bank announced a $1 8 billion loss and plan planned to raise $2 25 billion by selling stocks to cover increasing withdrawals as client cash burn remained high. Moody's downgraded SVB financials credit rating on the same day
March 9: SVB financials’ stock plummeted, and venture capital firms began withdrawing their funds from Silicon Valley Bank, leading to panic among depositors, who attempted to withdraw $42 billion
March 10: Federal regulators took control of Silicon Valley Bank before it could open, making it the secondbiggest bank failure in U S history
March 11-12: Over the weekend, tech startups scrambled to find alternative funding sources for payroll and other daily operations Federal regulators took control of Signature Bank, the thirdlargest bank failure in U S history, and announced a new lending program for banks to stem the fallout from Silicon Valley Bank's failure.
March 13: President Biden sought to restore confidence in the financial system in a televised address.
banks.
March 15: European bank stocks also took a hit, and S&P Global Ratings downgraded First Republic's credit rating to junk status due to its elevated risk of deposit outflows and profitability pressures. Credit Suisse announced it would borrow up to 50 million Swiss francs from the Swiss central bank to shore up its liquidity
March 16: Credit Suisse's shares improved after the loan announcement, and it was reported that the biggest U S banks were discussing a joint rescue of First Republic's liquidity. Federal regulators announced that 11 banks had deposited $30 billion in the First Republic.
3 REASONS WHY THE CRISIS COULD BE A BLESSING IN DISGUISE
The bankruptcy of Silicon Valley Bank (SVB) has wiped out Rs 10 lakh crore from the pockets of Dalal Street investors and reduced the Sensex by roughly 2,500 points in the four days following the news's release.
March 14: Investigations by the Justice Department and Securities and Exchange Commission were reported, and the Federal Reserve began reconsidering its rules for midsize
The ripple effect is evident with FIIs withdrawing more cash from India following the consecutive failure of three U.S. banks, including Signature and Silver gate However, in the aftermath of the Silicon Valley Bank disaster, market insiders have begun to notice a silver lining in the black clouds hanging over the U S financial sector
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These are three of them:
Controlling the Federal Reserve: The financial crisis could compel the U.S. Federal Reserve to terminate its ratehike cycle This is the single most significant effect of the situation Nomura predicts that Powell may decrease the benchmark interest rate by 25 basis points and halt the Fed's balance sheet reduction at its March 2122 meeting. Goldman anticipates that the Fed will maintain its current monetary policy The Federal Reserve needs a signal to stop raising interest rates Even a status quo will rally stock investors as money will flow into equities, particularly in higher-performing markets such as India A more significant FPI inflow will guarantee a broad market surge. As a result of the Fed's decision to suspend its rate hikes, we anticipate a swift and considerable rally A Fed pause will also encourage the Reserve Bank of India to retain the status quo at its April meeting. In addition to monitoring
inflation data, the RBI can pause the rate-hike cycle
Decrease in crude prices: The SVB incident has raised fears of a financial crisis resulting in a decline in the price of crude oil Brent fell to its lowest level since early January, while WTI fell to its lowest level since December. Considering India imports most of its oil needs, a decline in crude oil prices is viewed as beneficial for India. Given the uncertainty around the decision to raise interest rates and the likelihood that inventories will remain elevated, crude prices are anticipated to continue under pressure.
Bond returns: The two-year and ten-year U S bond yields have decreased from their levels before the SVB event. In three days, the U.S. 2-year rates experienced their largest slide since the 1980s, falling more than one percentage point Long-term investors' concerns will be alleviated by a shift from a hawkish to a neutral monetary policy.
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Source: Statista
NATIONAL LOGISTICS POLICY
Ayushi Sharma I MBA 5 | 2022-24
Jaykaran Mehta I MBA 6 | 2022-24
The National Logistics Policy of India was launched on September 17, 2022, by Prime Minister Narendra Modi The policy aims to improve the efficiency and competitiveness of the logistics sector in India by reducing logistics costs from 14% to 9% of GDP, creating a single window e-logistics market, and improving India's ranking in the Logistics Performance Index The ultimate goal is to make Indian goods more competitive in both domestic and international markets
The policy recognizes that logistics is a critical component of the economy and impacts the competitiveness of the manufacturing and agriculture sectors The policy also acknowledges that the logistics sector in India faces challenges such as inadequate infrastructure, high costs, inefficient logistics processes, and a lack of skilled manpower.
The National Logistics Policy proposes a set of measures to address these challenges and promote the growth of the logistics
sector. One of the key initiatives is the development of a National Logistics emarketplace, which aims to bring together all stakeholders in the logistics value chain and facilitate the exchange of information, services, and goods. The e-marketplace will provide a single window platform for logistics service providers, cargo owners, and regulators to interact and transact
The policy also proposes the creation of a National Logistics Council, which will serve as a platform for public-private dialogue and collaboration on logistics-related issues. The council will have representatives from the government, industry, academia, and civil society and will provide recommendations on policy formulation, implementation, and evaluation.
To address the issue of inadequate infrastructure, the policy proposes the development of multimodal logistics parks, which will serve as hubs for the integrated movement of goods across different modes
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of transport such as rail, road, and waterways. The parks will be equipped with state-of-the-art facilities such as warehouses, cold storage, and container yards and will also provide value-added services such as packaging and labelling.
Enhance interoperability, minimize handling risks, undertake process optimization, and improve ease of doing business, through standardization of physical assets and benchmarking of service quality standards in logistics.
Another key initiative proposed by the policy is the establishment of logistics excellence awards to recognize and incentivize logistics service providers who demonstrate excellence in service delivery, innovation, and sustainability The awards will encourage service providers to adopt best practices and improve the quality and efficiency of logistics services
The policy also recognizes the need to promote skill development in the logistics sector and proposes the creation of a National Logistics Skill Development Board The board will facilitate the development of a skilled workforce by identifying skill gaps, designing training programs, and providing certification and accreditation
The Policy will be implemented through the Comprehensive Logistics Action Plan (CLAP) The interventions proposed under CLAP are divided into 8 key action areas:
Integrated Digital Logistics Systems: To link multiple data sources and develop cross-sectoral use cases for logistics stakeholders by creating a system of unified logistics interfaces
Standardization of physical assets & benchmarking service quality standards:
Logistics Human Resources Development and Capacity Building: Line ministries to develop action plans to address skill development-related and internal capacity-building challenges in the respective sector by developing an overarching logistics human resource strategy under its guiding principles
State Engagement: Provide support for setting up an institutional framework to take action at the city/state level, development of state/city level logistics plans, measure and monitor action by states and rank them.
EXIM (Export-Import) Logistics: Creating an efficient and reliable logistics network, and addressing infrastructure and procedural gaps in India’s EXIM connectivity, with transparent and streamlined cross-border trade facilitation, for improved trade competitiveness and greater integration of India with regional and global value chains
Service Improvement framework: Enhancing the regulatory interface to encourage formalization, standardization, and interoperability, decrease fragmentation in documentation, formats,
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and liability regimes, and close architectural gaps in the regulatory framework Sectoral Plan for Efficient Logistics: Sectoral Plans for Efficient Logistics (SPEL) aligned with PM GatiShakti, will be developed for each sector with underlying philosophies of interoperability, resiliency, sustainability, and innovation. Specifically, SPEL would (i) address logistics issues pertaining to infrastructure, processes, digital improvements, policies and regulatory reforms, and capacity building for a better workforce, and (ii) prioritize cross-sectoral cooperation to complement and not duplicate efforts and focus on optimization of the modal mix.
Facilitation of Development of Logistics
Parks: Logistics parks (eg Multi Modal Logistics Parks, Air Freight Stations, Inland Container Depots, Container Freight Stations, cargo terminals, etc ) are hubs for intermediary activities (storage, handling, value addition, inter-modal transfers, etc.) in the supply chain connected by a transportation network It is envisaged to take the following steps to facilitate the development of logistics parks: • Draft framework guidelines to facilitate the development of Logistics Parks in the country with a focus on encouraging private investment • Create a network of logistics parks by mapping them on the PM GatiShakti NMP, for enhanced visibility, improved logistics efficiency, optimum utilization, and connectivity.
Source: Economic Times
IMPACT OF THE POLICY
The National Logistics Policy of India has the potential to transform the logistics sector a make it more efficient, competitive, and sustainable The policy proposes a comprehensive set of measures to address the challenges faced by the logistics sector and promote its growth The implementation of the policy will require close collaboration between the government, industry, and other stakeholders and will require significant investment in infrastructure, technology, and human resources
The policy's emphasis on infrastructure development, including the construction of logistics parks and warehousing zones, can improve supply chain efficiency and reduce transportation costs. The creation of a singlewindow e-marketplace for logistics services can help reduce transaction costs and promote transparency in the logistics sector
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FMCG SECTOR
SamyakTripathi|MBA1|2022-24
SiddhartSuman|MBA3|2022-24
OVERVIEW
With a market size of around US $110 billion in 2020, FMCG is India's fourth-largest sector. By 2025, it is projected to reach around US $ 220 billion at a CAGR of 14 9% Weathering the storms brought on by lockdowns and COVID19, the Indian FMCG sector grew by 16% in 2021, a 9-year high
The FMCG industry is optimistic about at least 20 percent growth in 2023 after an 'exponential growth' in 2022 It accounts for close to 5% of all factory employment in India and employs about 3 million people.
Outside the major companies in the market like HUL (Hindustan Unilever Limited), ITC Limited, Nestle, Dabur, Marico, and more, a number of D2C-focused startups have experienced rapid expansion and are now in direct competition with the big names Examples include Mother Earth, Sugar, PeeSafe, and others.
The FMCG sector is classified into three different categories, with food and beverages having 19%, Healthcare having 31%, and Household and Personal care having 50% of the market share
FOOD AND DRINK
Health beverages, staples/cereals, bakery goods, snacks, chocolates, ice cream, processed foods, and veggies are all included in this category. HUL, which owns brands
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CG C SS C O
EDUCATION
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Sources: IBEF, The Economic Times, Invest India, Groww
including Horlicks, Lipton, Knorr, and Cornetto, and has a 14% market share in this industry, is the leader, with Nestle coming in second with a 5% share
HEALTHCARE
OTC products, including syringes, bandages, plasters, and other items, are included in this sector This industry has seen significant growth as a result of people's heightened attention to health and wellness following the Covid-19 outbreak
PERSONAL AND DOMESTIC CARE
Oral care, hair care, skincare, cosmetics, deodorants, perfumes, paper goods, fabric wash, and domestic cleansers are all included in this category. In this market, Godrej, Dabur, and Marico are the major players
GROWTH DRIVERS
Over the past two decades, the FMCG sector has seen a spectacular transition. The following are some of the key reasons that have significantly contributed to the expansion and development of the industry:
DIGITIZATION
As a result of the coronavirus pandemic's various waves, supply and distribution experienced severe difficulties. With the use of digital technologies, FMCG companies are
Integrating distributor management, inventory management, and suppliers into a single ecosystem. Modern shops can safely make contactless orders with the use of a straightforward ordering app. FMCG firms are increasingly using AI, Big Data, and Predictive Analysis to precisely forecast client behavior, enabling them to understand better what their customers are interested in People in rural areas are also finding it simpler to shop online at different e-commerce websites as the use of smartphones and the Internet rises
Sources: IBEF, The Economic Times, Invest India, Groww
D2C (DIRECT TO CONSUMER)
Brands are more tempted by the profit margin involved with selling directly to consumers.
They have been establishing independent websites and online shops, as well as direct digital sales channels on different internet marketplaces. The majority of FMCG companies have already benefited from the trend by supplying goods right to customers' doorsteps.
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GOVERNMENT INITIATIVES
The government has made important moves to promote more investment in the industry and to open up new prospects for international businesses India's FMCG industry received $18.19 billion in 2020 via foreign direct investment (FDI) The sector has benefited massively from government incentives and FDI funds in building a strong supply chain, bolstering employment and improving visibility for FMCG brands. The government approved the Production Linked Incentive Scheme for the Food Processing Industry (PLISFPI) in FY 2021-22, with an outlay of Rs. 10,900 crores (US$ 1.4 billion) to assist Indian food brands in international markets The government has also revised GST tax slabs for certain products to boost sales. Future development efforts by the government are anticipated to include more enticing investments and activities
KEY PLAYERS
There are multiple significant players in the sector, including Domestic and multinational corporations. To name a few:
A subsidiary of the British-Dutch conglomerate Unilever, HUL is India's oldest FMCG firm which was founded in 1933 and is based in Mumbai HUL has more than 35 brands in 20 different categories, including soaps, detergents, skincare, cosmetics, tea, and toothpaste. Famous brands include Surf, Excel, Dove, Lux, Lifebuoy, Clinic Plus, Wheel, Sunsilk, Knorr, Axe, and others HUL also concluded its Rs 3,045 crore merger with GlaxoSmithKline Consumer Healthcare (GSKCH India) in April 2020. ITC Limited: The company has thrived in Indian markets for over 110 years, providing them with a thorough understanding of the Indian consumer. Its products include Bingo, Sunfeast, Aashirvaad, Fiama Di Wills, Vivel, Savlon soaps, Papercraft, and Classmate, and they have been able to enter even the most rural areas through various retail outlets. ITC has a 77% market share in Indian cigarettes and sells brands such as Wills Navy Cut, Gold Flake, Silk Cut, India Kings, Bristol, Classic Menthol, and others.
Nestle India
Nestle is a Swiss-based multinational food and beverage corporation that has been in operation for more than 150 years worldwide. It began operations in India in 1912. Nestle deals in beverages, bottled water, milkshakes, morning cereals, instant foods, performance, health care nutrition, and so on, with brands like Nescafe, Maggi, Milky Bar, Kit Kat, Bar One, Milkmaid, Nestea, and more
Sources: IBEF, The Economic Times, Invest India, Groww
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Britannia Industries
Britannia was founded in 1892 in Kolkata with an initial investment of Rs. 295. Its products are sold in over 5 million retail locations The FMCG is known as the country's first Zero Trans Fat Company Good Day, Tiger, Milk Bikis, Bourbon, Marie Gold, Cake, Cheese, Milk, and Yogurt are among their products In the organized bread market, the firm is the largest brand
PORTER’S FIVE FORCES MODEL
Bargaining Power of Buyer
The buyer's bargaining power is moderately strong due to a high number of purchasers, availability of close substitutes, and no switching costs. Customers would move to a different brand due to an increase in prices or the availability of cheaper alternatives
Supplier Power
Minimal because large FMCG corporations may control prices by purchasing locally from a small set of key commodity suppliers Backward integration is particularly important in this sector to boost profit margins and enable the selling of goods at competitive costs while minimizing dependency on raw material suppliers.
Threat of Substitutes
The following elements influence the threat of substitution:
1. The presence of close substitutes
2 Switching Cost
3. Substitute's cost and performance
Some brands have a narrow product difference. Businesses that enter a category or fight for market share compete on pricing, which enhances product substitution because switching costs are low. As a result, the FMCG industry faces a high risk of substitution.
Threat of New Entrants
There is very limited room for new companies to enter the industry unless and when they bring something new to the market. Because the distribution network is so crucial in this market, emerging firms find it difficult to spend much in Capex; hence they are typically acquired by larger companies
Competitive Rivalry: The industry is highly fragmented, with both organized and unorganized competitors, as well as various multinational corporations (MNCs) entering the market. Companies compete on the basis of product differentiation and switching costs due to low-involvement products. Additionally, the higher competition is leading to lower company margins Businesses in this industry rarely acquire monopoly status; therefore they focus on specialty items and aim to maximize their market share.
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OUTLOOK
After recovering from the Covid-19 outbreak, the FMCG sector has demonstrated resilience to evolve in ways that produce more value for the entire chain in the future The FMCG sector's revenue growth is predicted to double in the coming fiscal year due to reasons such as recovery in urban demand and discretionary categories, as well as price
areas The Internet has made a significant contribution by providing a less expensive and more convenient means of expanding the sector's reach.
Sources: IBEF, The Economic Times, Invest India
increases implemented to offset the impact of rising raw material prices Rural consumption has increased as a result of rising income and stronger aspirations In rural India, there is a rising demand for branded products On the other hand, with the unorganized market's proportion of the FMCG sector declining, the organized sector's growth is predicted to expand with enhanced brand consciousness, augmented by expansion in modern retail.
Another key driver of demand for food services in India is the expanding youth population, particularly in urban areas. Online portals are projected to be critical for companies looking to expand into rural
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TapanShah|MBA8|2022-24
SakshiPandya|MBA2|2022-24
COMPANY OVERVIEW
Oil India Limited a Mid-Cap, publicly listed oil and gas exploration and production company based in India The company was founded in 1959 and is headquartered in Duliajan, Assam, India. It is a subsidiary of the Oil and Natural Gas Corporation (ONGC), which is India's largest oil and gas exploration and production company
Oil India has diverse exploration and production activities, including crude oil, natural gas, and liquefied petroleum gas (LPG). The company has a significant presence in both onshore and offshore areas of India It also has international exploration and production activities in countries like Libya, Gabon, Iran, and Nigeria. Its strategic partnerships with other companies in the industry, including ONGC and BPCL, have helped it to expand its operations and maintain its competitive edge.
OIL has consistently been at the forefront of embracing new concepts and technologies to open up new vistas and make progress toward the nation's sustainable energy security For the past few years, OIL has diversified into the alternative (renewable) energy sector as part of its strategic objective, focusing particularly on the wind and solar divisions With a total investment of Rs. 1,230 Crore, OIL entered the renewable energy sector in the fiscal year (FY) 2011–12 and has since constructed 188 MW of commercial-scale renewable energy projects, including 174 MW of wind and 14 MW of solar energy. Up until 2021–2022, projects utilizing renewable energy will have brought in a total of Rs 870 Crore
SHAREHOLDING PATTERN
Source: Screener
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OIL INDIA
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As of 31st December 2022, Oil India’s shareholding pattern comprised of promoters holding 56 66% which remains unchanged since December 2021. The holding of FIIs in December 2022 has increased compared to December 2021 but, it has decreased since the last quarter of September 2022. The holding of DIIs in December 2022 has decreased compared to December 2021 but, it has increased since the last quarter of September 2022 There was no government holding in the company till December 2021 but then the government showed confidence in the company and now has a 9 87% holding The holding of the public has been constantly decreasing in the company.
FINANCIAL ANALYSIS
Source: Screener
The revenue for Oil India for December 2022 was INR 9302 crores compared to INR 8259 crores for September 2022 which means there is a 12.62% increase in the total revenue of the company At the same time, the expenses of the company have reduced from 5555 in September 2022 to 5394 in December 2022. The company has been showing growth since its last two quarters as its operating profits have increased by 44.58% and EPS has increased by 3.58. Since the government lowered the windfall profit tax imposed on domestically produced
crude oil as well as on the export of diesel and ATF, shares of the companies ONGC and Oil India recently increased by 5%. Recently, OIL acquired majority shares in Numaligarh Refinery Limited from Bharat Petroleum Corporation Limited, thus making Numaligarh Refinery Limited a subsidiary of OIL.
KEY DRIVERS
Oil India's manufactured or productive capital is the primary source of value. Their objective is to continuously and strategically expand their value through improved operations, a diverse and more extensive portfolio, and a more comprehensive range of products
It drilled 38 wells in FY 2021-2022 Spud-in (the process of beginning to drill a well in the oil and gas industry) 1st well in OLAP block in Rajasthan
There have been two discoveries (1 oil and one gas) in the Dumduma PML area in Assam in FY 2021-2022
The company has an in-house 2D seismic team and a 3D seismic crew. Now, the company uses 19 drilling rigs, 25 workover rigs, and ten logging units to ensure that several operations can be carried out simultaneously on a site.
OIL invested Rs 4,367 crore in FY 2021–2022 to develop upstream and downstream assets and capabilities. They now have eight projects in various phases of development that cost more than Rs 100 crore
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OIL contributed to around 10% of India’s crude oil production during fiscal 2022 and is the second-largest national oil company in the business of Exploration and Production of petroleum and natural gas, transportation of crude oil, and production of LPG.
OUTLOOK
For the past 50 years, OIL has played a crucial role in India's oil, gas, and energy industries The Firm has developed its core competency of operating mature assets in India and abroad while exhibiting technical stewardship. By 2030, OIL hopes to be the world's top operator of Exploration & Production (E&P) mature assets.
During the past ten years, OIL output has consistently remained over 3 0 MMT annually. The company has now established a lofty goal of significant production growth.
This has gained momentum due to numerous policy-level measures by the GOI, including the Enhanced Recovery (ER) policy, the Open Acreage Licensing Policy (OALP), and other Policy Dispensations
As per the above table, we can see that ONGC is a market leader with revenue worth 38583 29 Cr for the latest Qtr OIL follows it with sales worth 5376.16 Cr. We can also see that in terms of net profit, again it is the leader, but OIL is at the top with a net profit margin of 32 48%
FUTURE
In Jorhat, Assam, OIL launched the nation's first pilot facility for the production of green hydrogen, with a 10 kg per day capacity that can be expanded up to 30 kg per day A study on mixing green hydrogen (GH2) and natural gas is being conducted.
The bid for three New Geographical Areas for city gas distribution has been won by the consortium of OIL (49%) and AGCL (51%), one in Assam and two in Tripura
Water injection and other improved oil recovery/enhanced oil recovery technologies are continuously being deployed in the Upper Assam Basin to improve recovery from its mature fields.
Source: IIFL Securities
The company intends to conduct thorough exploration programs in Mahanadi Onland, Andaman Offshore, and Kerala-Konkan Offshore in search of establishing hydrocarbon reserves, in addition to the northeast and Rajasthan, where the company has a significant presence
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RISE AND IMPACT OF RETAIL INVESTORS IN INDIA
LITIGATION FINANCING
Ishan Khare | MBA 10 | 2022-24
Retail investors, who were once considered a small segment of the investing population, have gained prominence in recent years, particularly in India. Retail investors refer to individuals who invest their own money in the stock market, rather than institutional investors like mutual funds, hedge funds, or banks In India, retail investors have experienced a significant rise in numbers over the past few years, and their impact on the country's economy and the stock market has been noteworthy.
The rise of retail investors in India has been a notable trend in recent years. Retail investors are individuals who invest their money in financial markets such as stocks, mutual funds, and bonds, among others, with the aim of generating returns on their investment
Historically, the Indian stock market has been dominated by institutional investors. However, with the growth of the Indian middle class and increased accessibility to the internet, retail investors have emerged as a powerful force in the market. In 2020, the number of retail investors in India
reached 6.8 crore (68 million), a significant increase from 3 5 crores (35 million) in 2015 This surge in retail participation has been facilitated by technological advancements, such as the introduction of online trading platforms, which have made it easier and more convenient for retail investors to participate in the stock market.
The impact of retail investors on the Indian stock market has been profound Firstly, their increasing participation has led to greater liquidity in the market, making it easier for companies to raise capital through the sale of their shares This has also made it easier for retail investors to enter and exit positions in the market. Moreover, retail investors have had a significant impact on the valuation of certain stocks In many cases, stocks that were once undervalued have seen a surge in prices due to increased demand from retail investors
Retail investors have also brought about a change in the investment landscape in
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India Traditionally, Indian investors have favored investing in real estate and gold, considering them as safe investments. However, the rise of retail investors in the stock market has led to a shift in the mindset of Indian investors, with more people opting for equities as an investment option
This has been driven by the high returns that equities have provided over the past few years In fact, in 2020, the Indian stock market witnessed a significant rally, with the benchmark index, the BSE Sensex, increasing by over 15%.
One of the reasons why retail investors have been able to have such a significant impact on the Indian stock market is the low penetration of institutional investors in India According to a report by Edelweiss Securities, institutional investors account for just 10% of the total market capitalization in India, compared to 40-50% in developed markets like the US and Japan This means that retail investors have a larger share of the market, which gives them more power to influence stock prices.
The impact of retail investors on the Indian stock market is not limited to the equity market. In recent years, retail investors have also shown increased interest in other investment avenues like mutual funds, initial public offerings (IPOs), and exchange-traded funds (ETFs). In fact, the mutual fund industry in India has witnessed a surge in retail participation, with assets under management (AUM) growing from Rs. 11.06
lakh crore in February 2020 to Rs 33 04 lakh crore in February 2022. The increase in retail participation in mutual funds has been facilitated by the growth of systematic investment plans (SIPs), which allow investors to invest small amounts of money regularly.
While the rise of retail investors in India has had a positive impact on the stock market, it has also raised concerns about the potential risks associated with increased participation from inexperienced investors. Retail investors often lack the expertise and resources of institutional investors, and may be more prone to making emotional or irrational investment decisions. This can lead to increased volatility in the market and may result in losses for investors
Source: Edelweiss Securities
REASONS FOR RISE
There are several reasons for the rise in retail investors in India:
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Increased awareness: There has been a significant increase in financial literacy and awareness among the general public in India More people are now aware of the benefits of investing and are seeking ways to grow their wealth.
Easy access: With the advent of technology, investing in the stock market has become more accessible to the general public. Online trading platforms and mobile apps have made it easier for retail investors to invest in stocks, mutual funds, and other financial instruments
Growth of the middle class: The rise of the middle class in India has led to an increase in disposable income, which has in turn led to more people investing in the stock market.
Government policies: The Indian government has taken several measures to encourage retail investment, such as tax incentives and the introduction of investment-friendly policies
Demographic dividend: India has a large population of young people who are tech-savvy and have a higher risk appetite. This demographic dividend has played a significant role in the rise of retail investors in the country
in the number of retail investors investing in stocks, mutual funds, and other financial instruments.
CONCLUSION
The rise of retail investors in India has been a significant phenomenon in recent years
The advent of technology and the democratization of information have made it easier for individuals to participate in the stock market, which has traditionally been dominated by institutional investors
The impact of retail investors in India has been both positive and negative. On the positive side, retail investors have increased market liquidity, brought in new capital, and helped to diversify the investor base They have also played a key role in driving up the stock market, which has created wealth for many individuals
However, there have also been some negative consequences. Retail investors, who may not have the same level of experience or access to research as institutional investors, may be more prone to making emotional and irrational investment decisions This can lead to increased volatility in the market and potential losses for individual investors.
Alternative investments: With interest rates on fixed deposits and other traditional investment options declining, more people are looking for alternative investment options. This has led to a rise
Overall, the rise of retail investors in India has been a significant development, and it is likely that their influence will continue to grow. As the Indian economy continues to expand and the middle class grows, more individuals are likely to become interested in investing in the stock market.
21 | INTRIGUING INDEED
Trusple is an international trade and financial service platform powered by AntChain, Ant Group's blockchain-based technology solutions. Ant Group is a provider of open platforms for technologydriven inclusive financial services and the parent company of China's digital payment platform, Alipay. Trusple aims to make it easier and less costly for all participants –especially Small-to-Medium Enterprises (SMEs) – to sell their products and services to customers around the world. It also reduces costs for financial institutions so they can better serve SMEs in need
Trusple was unveiled at the Inclusion Fintech Conference's Blockchain Industry Summit The conference, organized by Ant Group and Alipay, aims to promote a global dialogue on how digital technology can aid in the creation of a more inclusive, environmentally friendly, and sustainably developed world
Trusple has teamed with a number of top
international financial organizations, including BNP Paribas, Citibank, DBS Bank, Deutsche Bank, and Standard Chartered Bank, to help streamline cross-border procedures
The system, which is built on the idea of "Trust Made Simple," creates a smart contract after a buyer and a seller upload a trading order to the site The smart contract is automatically updated as the order is fulfilled with important details like order placements, logistics, and tax refund possibilities Banks for the buyer and seller will automatically handle the payment settlements via the smart contract using AntChain This automated approach not only reduces the laborious and timeconsuming procedures that banks typically use to track and confirm trade orders, but it also makes sure that the data is unaltered Also, by completing transactions successfully on Trusple, Businesses can increase their creditworthiness on AntChain, which makes it simpler for them
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Saumya Ashokkumar Nair | MBA 08 | 2022-2024
TRUSPLE
to get funding from financial institutions
With the launch of Trusple, the company hopes to make cross-border trading safer, more dependable, and more effective for buyers and sellers as well as for the financial institutions that serve them, much like when Alipay was introduced in 2004 as the online escrow payment solution to foster trust between buyers and sellers
It has historically been challenging for many SMEs to conduct business due to a lack of confidence among international trading partners. This lack of confidence between buyers and sellers can cause delays in shipments and payment settlements, which puts pressure on SMEs' financial situation and cash flow. The longstanding difficulty of confirming the validity of orders has driven up the cost of banking for banks that serve SME international trade. Trusple uses AntChain's core technologies, such as AI, the Internet of Things (IoT), and secure computation, to address these issues in international trade by fostering trust between various parties.
BENEFITS
Enhanced security: Trusple leverages
AntChain's blockchain technology to ensure secure and tamper-proof transactions The use of blockchain ensures that all transactions are recorded and verified, reducing the risk of fraud or cyberattacks.
Improved efficiency: Trusple can
enhance efficiency through
the
use of smart contracts and automation The platform can automate many steps of the trade process, such as customs clearance and logistics, which could significantly reduce the time and cost of cross-border transactions.
Increased transparency: The use of AntChain's blockchain technology also ensures transparency throughout the entire trade process. All parties involved in a transaction can access the same information in real-time, which can help improve trust and reduce disputes.
Scalability: AntChain's technologies offer Trusple the potential to scale quickly and handle large volumes of transactions This could make the platform more attractive to businesses looking to expand their international trade.
Customizable solutions: AntChain provides customizable solutions to businesses, which can be integrated with Trusple to meet their specific needs This could help businesses optimize their supply chain management and increase their efficiency.
ABOUT ANTCHAIN
Ant Group's blockchain venture is called AntChain Ant Group has the most published blockchain-related patent
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applications from 2017 to the six months ending June 30, 2020, according to IPR Daily and the patent database IncoPat Since the founding of Ant Group's blockchain division in 2016, the company has led the way in theuse of AntChain in over 50 blockchainrelated business applications and use cases, including supply chain financing, cross-border remittance, charitable giving, and product provenance
The three layers that make up the AntChain platform are the open Blockchain-as-aService foundation, asset digitalization, and asset circulation Over the twelve months ending June 30, 2020, the AntChain platform generated over 100 million daily active items, including patents, vouchers, and warehouse receipts
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VigneswaranS|MBA-03|2022-24
Abhigyan Verma| MBA 3 | 2022-2024
INTRODUCTION
ISLAMIC FINANCE
LTCM CRISIS
Islamic finance is a type of financial activity that must comply with the Sharia (Islamic law) It also refers to the investments that are permissible under sharia. Although the formal practice of Islamic banking and finance started in the 20th century, it has its roots and came into existence along with the foundations of Islam. Islamic finance can be considered a form of socially responsible investment, as it includes deliberately refraining from investing in sin goods and services, say, alcohol or gambling.
Sharia does not permit receipt and payment of interest, betting, gambling, short selling, or any financial activity that it considers harmful to society. These practices are considered haram, which means prohibited, as it is considered usurious and exploitative It says that the parties should share the risks and rewards of a business transaction and that the transaction should have a real economic purpose without undue
speculation and not involve exploiting either party.
Islamic law views lending with interest payments as a relationship favoring the lender, who charges interest at the borrower's expense Islamic law considers money as a measuring tool for value, not an asset. Therefore, it requires one to be unable to receive income from money alone
HOW DO ISLAMIC BANKS MAKE MONEY?
The primary source of revenue for a bank is the interest that it gains when it lends money to its customers, retail, or businesses alike. But since this isn’t possible for Islamic banks, how do they make money?
There are broadly five ways in which they generate profit –
Islamic banks use an equity
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participation system, which is similar to profit sharing Equity participation means if a bank loans money to a business, the business will pay back the loan without interest and instead give the bank a share in its profits If the business defaults or does not profit, the bank also does not benefit. Of equal importance is the concept of ‘Gharar’ It refers to the ambiguity and deception that come from selling items whose existence is uncertain. An example of ‘Gharar’ would be to buy an asset. This asset is then sold after adding a markup to the customer The customer purchases the asset with deferred payments. For example, if I want to buy a phone for ₹ 1 lakh, but I don’t have the cash, the price for the phone would be ₹ 1 2 Lakhs, and I would make the payment in the form of an EMI.
Wakala is used in Islamic finance to describe a contract of agency or delegated authority under which the customer appoints an agent (bank) to carry out a specific task Here, the bank works like an individual agent The bank lends its expertise and manages investments on behalf of the customer for a particular duration to generate an agreed-upon profit
Salam is similar to forward financing. The bank pays the customer a purchase price for an upfront purchase of a commodity that will be delivered on a deferred basis by the customer. The customer will purchase the item to be delivered to the bank through a broker
In conclusion, Islamic banking is a banking system that operates according to Islamic law principles. It is based on fairness, social justice, and ethical conduct and encourages cooperation and risk-sharing Islamic banking is growing in popularity and has several advantages over traditional banking, including focusing on actual economic activity, social responsibility, and access to financial services for marginalized communities. As such, Islamic banking is an important and valuable addition to the global financial system
The bank, in turn, will assign another commodity broker to sell the commodity
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Source: Bank of England
Source: Statista
DE-DOLLARIZATION BY ASIAN COUNTRIES
INTRODUCTION
De-dollarization is the process of reducing a country's dependence on uses of dollars, creating substitute of USD or reduce dollar dominance as a medium of exchange for domestic or international trade, transactions as well as reducing dollar in reserves. The reason behind dedollarization can be reducing risk associated with the US dollar, such as fluctuations in its value or reduce their dependence on the USD.
It can be done in various ways such as diversifying the currencies held in a country's foreign exchange reserves, encouraging the uses of other currencies in international trade or introducing a new currency to compete or replace the US dollar.
REASONS BEHIND DE-DOLLARIZATION
Asian countries that depend on the USD for for transactions, may want to reduce their currency fluctuations risk connected with dollars, which previously negatively impact their economies De-dollarization can help to avoid dollar fluctuation risk and diversifying the currencies used in international trade, and also can help in ignoring US regulation and sanctions
The dominant role of United State Dollar (USD) at global stage allows US to influence
Source: FXC intelligence
Saurabh Chauhan | Deen Dayal Upadhyaya Gorakhpur University, Gorakhpur
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other countries economic growth and political stability and it can be used as a tool for achieving US foreign policy goals.
Countries may de-dollarization their reserve by considering geopolitical tensions, trade disputes or war by promoting or encouraging the use of alternative currencies or creating new regional currencies Countries using local currencies in domestic and international trade, investment can reduce transaction costs and increase economic cooperation and growth
Major Asian countries have been move toward de-dollarization as to promote regional currency and economic integration because a lack of confidence in the local currency may lead investors to prefer using dollars, but this can lead to a drain of national currency value and make it harder for the country to manage its economy
HISTORY OF DOLLAR GROWTH AND DOMINANCE
U.S. dollar's dominance began from World War II, when Bretton Woods Agreement was signed in 1944 Under this agreement, the U S dollar was established as the global reserve currency and which means that other countries have to hold large amounts of dollars in their foreign exchange reserves or could exchange their dollars for gold at a fixed rate for international trade.
growth A deal signed between oil rich countries and U.S. for using Dollar for trading oil and fluctuations in currency exchange rates can also lead to dollar growth
HOW DOLLAR BECAME A VALUABLE CURRENCY?
The United States dollar became the world's most valuable and dominant currency primarily due to its uses as standard currency for international trade, as well as extreme role of the United States in the geopolitics and global economy and international trade.
Dollar has been the continuous reserve currency for many central banks around the world holding large amounts of dollar for protecting their foreign exchange reserves and stability That has created a constant demand for USD and has help to maintain its value over period of time. Dollar is the most common currency use in international trade by countries, most commodities such as oil, gold and other financial securities which priced in dollars. That’s why many countries need to hold more US dollars reserve for purchasing these goods
DE-DOLLARIZATION BY ASIAN COUNTRIES
Overall encouraging more and more bilateral trade agreements and deals with countries for using USD lead to significant dollar
Asian countries want to develop an alternative payment and settlement systems that does not depend on the U.S. dollar or Western financial institutions That’s why India, Russia, China and other Asian countries move toward de-dollarization by
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promoting the use of its own currency in domestic, international trade and investment across borders.
INDIA
India has started de-dollarization by reducing its dependence on the U S dollar in bilateral trade and international trade and by increasing its holdings of other currencies in its foreign exchange reserves. India has been developed an alternative payment and settlement systems that are not depend on the USD such as Reserve Bank of India (RBI) has set up NEFT and UPI to facilitate electronic payments in rupee across countries as well as India has been promoting the uses of its own currency, Indian rupee, in international trade. India has signed currency swap agreements with many countries, which allows for the exchange of rupees with other currencies in trade and investment. Currently RBI has approved 60 Special Rupee Vostro Accounts in domestic and foreign banks in more than 18 countries for trading in Indian rupee. In March 2022, India- Russia started trading in Rupee- Ruble and more countries show their interest in using rupee for international trade In December 2022 Sri Lanka and Mauritius start using rupee in trade.
RUSSIA
De-dollarization has also been a main goal of Russia to reduce its depend on the USD due to impact of U S and western sanction on its economy Russia has started holdings other currencies in its foreign exchange
reserves such as Chinese Yuan, Indian rupee, Japanese yen and gold and promoting use of its own currency ruble in international trade. sia cut down uses of dollar backed assets by 16% in 2021 and also reduce payment of USD in Russia exports to BRICS, by 95% in 2013 to 10% in 2020.
Source: CBR
On 23 march 2022 Russia signed an order with non friendly countries for buying oil and gases in other currency
CHINA
In 2011, China start shifting from USD to Chinese Yuan and IMF has already considered Yuan as its SDR (Special Drawing Rights) in 2016. China aggressively promotes De-dollarization in recent years by the internationalization of its own currency, the Yuan or Renminbi (RMB) China also promoting use of the Yuan in its bilateral trade agreements, especially with countries involved in its Belt and Road Initiative
In conclusion, de-dollarization by Asian countries is a growing trend that shows their growing economic and financial power along with geopolitical importance as well as choice of independence and self dependent.
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