Finly March 2022 by FINLY

FINLY

MARCH 2022 | Issue No. 109

Amrit for Recovery BUDGET 2022-23 Intriguing Indeed

Sector Analysis

Eco Section

Sovereign Green Bonds: A Boost to Green Economy

Pharmaceuticals

Perspectives on a Green Taxonomy: India and the World

CONTENTS 01

EDITO R IAL

TEAM F INL Y

C O VER ST O R Y

EC O SEC TIO N

'Amrit for recovery: Budget 2022-23'

Perspectives on a Green Taxonomy: India and the World

SEC TO R ANAL YSIS

C O MPAN Y AN ALYSIS

Pharmaceuticals Industry

Sun Pharma

INTR IG UIN G IND EED

ENTR EPR EN EU R SHIP INN O VATIO N

Sovereign Green Bonds: A boost to Green Economy

Mamaearth

P ER SO N I N F O C U S

C AL L F O R AR TIC LE: WINN ER

Ashneer Grover

Vishal Negi

34 C ALL F O R AR TIC LE: F IR ST R UNN ER U P

Kalpesh S Khandare

ISSUE NO. 109, MARCH 2022

Dear Readers,

Editor's Note

“Historically, pandemics have forced humans to break with the past and imagine their world anew. This one is no different. It is a portal, a gateway between one world and the next. We can choose to walk through it, dragging the carcasses of our prejudice and hatred, our avarice, our data banks and dead ideas, our dead rivers and smoky skies behind us. Or we can walk through lightly, with little luggage, ready to imagine another world. And ready to fight for it.” - Arundhati Roy This pandemic is an opportunity to expand our knowledge by finding new ways to circumvent the circumstances, invest in the most intuitive ideas that come to our mind and surpass this havoc. As Ben Franklin rightly said, “An investment in knowledge always pays the best interest,” we at Finstreet are back with the next edition of our monthly magazine “Finly” for the academic year 2021-22. Team FINLY has always been a dedicated group of people who put in a lot of time and effort to put this magazine together, and we can't thank them enough for their unwavering support and initiative. The March 2022 edition's cover story tries to explain the most engaging topic of the moment, Budget 2022-23. The Intriguing Indeed section delves into the concept of Sovereign Green Bonds. We are thankful to Prof. (Dr.) Pankaj Trivedi (Course Coordinator, MBA Core and Faculty Coordinator, Finstreet) for providing the much-required mentoring, support and backing to the Finly team. We thank all our readers and faculty members for their valuable reviews and feedback. HAPPY READING!!! STAY HOME STAY SAFE!!! Anusha Nair

Riya Agarwal

|Editor-in-Chief|

|Editor-Finly|

MBA FS

ISSUE NO. 109, March 2022

TEAM FINLY Faculty in-charge

Dr. (Prof) Pankaj Trivedi

Editing Team Editor-in-Chief

Editor - FINLY

Anusha Nair

Riya Agarwal

Team Coordinator

Tuneer Sarkar

Conceptualization & Design

Viram Vora

Tuneer Sarkar

Vidyathmika Shridhar

Content Team

Anshul Sharma

Moumita Biswas

Abhijeet Upadhyay

Jonath Simon

Tanisha Chaudhary

Varun Nagur

Upendra Baliga

Muskan Jain

Priyanka Acharekar

Kartik Anand

Anirudha Kulkarni

Anupreet Lall

| COVER STORY

'AMRIT FOR RECOVERY: BUDGET 2022-23'

On February 1, 2022, Finance Minister Nirmala Sitharaman presented the Union Budget 2022, her fourth budget under Modi 2.0 and the second pandemic budget. In this context, the Union Budget 2022 has signaled that simple recovery will not suffice – India is aspirational, hungry, and eager to take a quantum leap forward. The Budget has laid out a roadmap for the next two and a half decades to help support that jump. In that sense, the Budget is a statement of intent. The focus with which infrastructure and logistics issues were addressed, water and agriculture were prioritized, manufacturing was accelerated, MSMEs were supported, sunrise sectors were identified, clean energy was incentivised, urban spaces were reimagined, and the digital dividend was harnessed, all demonstrated that India's future will be built on twin pillars — strengthening our traditional backbone and building models for the future.

Anshul Sharma | MBA-C | 2021-23 Upendra Baliga | MBA-C | 2021-23 The Finance Minister has presented an investment-focused budget with an emphasis on future readiness. Increased public investment and Capex are predicted to push combined public Capex (the Center plus states) to above 4% of GDP in FY23, up from 3% in recent years. India is the fastestgrowing big economy, with an estimated growth rate of 9.2% for FY22. Increased capital expenditures could assist keep growth at the government's target of 8% in FY23. KEY TAKEAWAYS: Large capital expenditure on infrastructure projects The budget prioritized Gati Shakti, a master plan that builds on the National Infrastructure Pipeline (NIP). With the enhanced Capex allocation, India's infrastructure investment program is now one of the world's largest.

| COVER STORY For instance, the US Infrastructure Investment and Jobs Act call over $1.2 trillion in infrastructure projects over the next five years, including an amount of $550 billion in new investments; India's NIP is a total of $1.5 trillion (Rs 111 trillion) investment pipeline for the following six years, finishing in FY25. This is highlighted by the 25,000-kilometer expansion of national highways planned for this year, as well as the construction of 100 new freight ports with multimodal logistics over the next three years. Fiscal dynamics point to cautious estimates In FY23, the fiscal deficit is expected to be 6.4% of GDP, down from 6.9% in FY22; India is committed to reducing it to 4.5% by FY26. The substantial deficits of the last two years have been covered by market borrowings, in part due to the lack of new or higher taxes, ongoing increasing spending, and the cleaning up of the books. Because of the substantial borrowing programs, the yield on the 10-year paper has risen to 6.85%, up 95 basis points in the last year. The government, on the other hand, is in a good position since it has a large fiscal cushion thanks to strong direct and indirect tax revenues. With an estimated nominal GDP growth of 11% and a tax buoyancy of approximately 1, there looks to be room for revenue collections to beat expectations, perhaps reducing the government's borrowing needs.

Comfortable external front India's goods trade activity has been strong this year, and the country is on track to achieve $1 trillion in FY22. The $400 billionplus in goods exports is a huge increase over previous years when such shipments ranged from $300 to 330 billion. The government has reduced customs taxes on the import of raw materials for top-traded products such as electronics and capital goods as it aims for $500 billion in exports in the coming fiscal year. A new bill to replace the existing Special Economic Zones (SEZ) Act is also being presented, which will undoubtedly boost commercial activity. Foreign exchange reserves of $635 billion provide a buffer against external liabilities. For 'India at 100,' new technologies are being harnessed. This August marks the 75th anniversary of India's independence. The government indicated its willingness and desire to harness new technology in the sunrise industries over the next 25 years—to "India at 100." The Budget mentioned sectors such as drones, electric vehicles, agri-tech, 5G, battery swapping, central bank digital currency, digital education, and the National Digital Health Ecosystem. 5G manufacturing, similar to solar manufacturing, has been included in the government's Production Linked Incentive (PLI), demonstrating the government's atma nirbhar development plank.

| COVER STORY Data centers and energy storage systems have been included in the harmonized list's definition of infrastructure, making it easier for these sectors to obtain finance. Tax breaks for sovereign wealth funds and pension funds investing in infrastructure were included in the previous budget. Using cities as engines of future growth, wealth creation, and prosperity Cities have long been recognised as growth engines. A high-level committee with important stakeholders will assist the government to reimagine this space as it prepares for growing urbanization over the next few decades. A suitable central government mechanism to play a larger facilitatory role for state-level urban infra projects, as well as a clearer and committed devolution of funding to urban local authorities, might assist boost the project pipeline and deepening the public-private partnership. Sovereign green bonds to energize environmentally sustainable investments The government announced the issuing of Sovereign Green Bonds (SGBs) this year, building on Prime Minister Narendra Modi's commitment to a Net Zero economy by 2070 at the COP26 last year. These bonds are expected to raise funds for green infrastructure projects in the public sector. The issuance of SGBs can assist in the development of the green financing ecosystem by assisting in the formalization of a green taxonomy, the development of assurance experts, and the construction of a green benchmark yield, among other things.

MINUTES OF THE BUDGET: In conclusion, the government's commitment to channelling policies and finances to high-growth areas is shown in Budget FY23. In a globe troubled by geopolitical uncertainty, inflation, supply chain concerns, a lingering pandemic, and monetary policy reversals, India provides a stable macroeconomic climate, solid growth, and an optimistic & forward-looking outlook. FIGURES AND STATISTICS: Capex target has been expanded by 35.4% — from Rs 5.54 lakh crore to Rs 7.50 lakh crore. FY23 effective Capex seen at Rs 10.7 lakh crore. Productivity-linked incentive schemes [PLIS] in 14 sectors have received excellent responses and further received investment intentions worth Rs 30 lakh crore. Receipt from disinvestment proceeds in the next financial year has been pegged at Rs 65,000 crore, lower than the current year's mobilization of Rs 78,000 crore. Surcharge on the long-term capital gains capped at 15% The government will be taxing income from digital asset transfers at 30% Import duty on cut and polished

| COVER STORY diamonds and gemstones to be cut by 5% and on the sawn diamond to nil. ECLGS extended till March 2023, 60 lakh jobs eyed in next 5 years Rs 48,000 crore is allotted for Prime Minister Awas Yojana In 2022-23, 80 lakh houses will be completed for identified beneficiaries of Prime Minister Awas Yojana; 60,000 houses will be identified as beneficiaries for Prime Minister Awas Yojana in rural & urban areas Rs. 60,000 crore has been allocated for providing access to tap water to 3.8 crore households

2,000 km of the rail network to be brought under indigenous technology KAWACH for safety and capacity augmentation Railway Ministry to be allocated Rs 140367.13 crore - Rs 20,311 crore more than the revised figures of the previous fiscal year Rs 19,500 crores of additional allocation for PLI for manufacturing high-efficiency solar modules has been made Rs 3062.60 crore allocated under sports budget for the financial year 2022-23, which is an increase of Rs 305.58 crore over last year.

Rs 6,000 crore program to rate MSMEs to be rolled out over 5 years Govt to pay Rs 2.37 lakh crore towards procurement of crops like wheat and paddy under MSP operations Rs 1 lakh crore financial assistance will be provided to states in 2022-23 to catalyze investments A total of 75,000 compliances have been eliminated and 1,486 union laws repealed to make it easier for businesses Approximately 400 new generation Vande Bharat trains to be manufactured in next 3 years

| ECO SECTION

PERSPECTIVE ON A GREEN TAXONOMY: INDIA AND THE WORLD INTRODUCTION The window of opportunity to tackle climate change is rapidly closing, with the COP 26 summit in Glasgow, dubbed a "make or break" event, urging countries to advance climate action that would bend the planet's temperature increase curve to no more than 1.5° Celsius over pre-industrial levels. India, being one of the world's fastest-growing economies, the world's second-most populous country (with a population projected to reach 1.6 billion in 2048), and the world's third-largest carbon emitter, is not only vulnerable to climate change but can also potentially play a significant role in its mitigation. India's willingness for such a role was demonstrated by Prime Minister Narendra Modi's introduction of the 'panchamrit' five-point action plan, balancing mitigation with economic growth. Relative decoupling is foreseen as part of India's panchamrit commitments toward 2030. Still, if we reach peak carbon emissions, absolute decoupling would be required to achieve the economy's net-zero goal by 2070.

Anirudha Dilip Kulkarni | MBA - B | 2021-23 Priyanka Acharekar | MBA - A | 2021-23 Absolute decoupling before India has come a relatively high level of GDP and human development will be economically crippling. WHAT IS GREEN TAXONOMY? An economic taxonomy is essentially a classification system for economic activities like items, businesses, and industries. Some economists argue that a taxonomic/classificatory approach is required when studying economic policy. A green taxonomy concentrates on green activities or activities that are regarded as absolutely green in the sense that they contribute positively to the taxonomy's environmental goals. These taxonomies can have a wide range of granularity, scope, criteria, and environmental goals. A green taxonomy would standardize what counts as "green" and establish green

| ECO SECTION finance qualifying standards. A well-defined taxonomy can eliminate multiple definitions, reduce information asymmetry, and reduce “greenwashing”. The term “greenwashing” indicates consumers are misled into thinking a company's products are environmentally friendly. Implementation of the taxonomy would also boost investor confidence and make green investments easier. Financial institutions, businesses, and industries can refer to this taxonomy to manage their carbon footprint. Regulators can mandate disclosures aligned with it. The governments should use it as a touchstone to assess outcomes and monitor progress on mitigation. Sectors responsible for a majority share of greenhouse gas emissions are to be initially targeted, including: Agriculture Manufacturing Electricity, gas, steam, and air conditioning supply Water, sewage, waste, and remediation Transport Information and communication technologies Buildings In future, the taxonomy will expand to cover more economic sectors. Some basic rules must be followed when creating a green taxonomy. It must not only address climate mitigation and adaptation

strategies, but also other pressing environmental issues such as water and air pollution, water scarcity, and ecosystem and biodiversity loss. The taxonomy should establish technology-neutral screening criteria for commercial activities in highimpact industries including power, manufacturing, and transportation, among others. Technical criteria for greenhouse emissions thresholds must be based on the most recent climate change science and be congruent with the 1.5° C goal. Given the diversity of farms and biophysical circumstances across India, the taxonomy must include sustainable agriculturerelated farming practices whose environmental benefits are supported by trustworthy and rigorous evidence. GREEN TAXONOMY AND GLOBAL EFFORTS Green private capital is plentiful on a worldwide scale. As of April 2021, there were 3,826 signatories to the UN-backed Principles for Responsible Investment, representing US$121.3 trillion in collective assets under management; by the end of the second quarter of 2020, there have been 534 sustainability indexed funds benchmarked to enviro, sociocultural, and governance indices, overseeing a combined US$250 billion; and the current size of the impact investing market is US$715 billion, according to the World Bank. Despite this, international private finance accounted for only 5% of tracked green finance in 2016-17 and 2017-18.

| ECO SECTION European Union

USA:

Other governments have established or are constructing green taxonomies, but the EU Environmental taxonomy appears to be the most advanced and ambitious to date. On June 22, 2020, the Taxonomy Regulation was issued in the Official Gazette Union and took effect on July 12, 2020.

With U.S. regulators increasingly engaging with the European Union and UK regulators on climate change, the taxonomies and China: With respect to sustainable finance, China has enacted a number of legislative frameworks. China's taxonomy refers to the green bond catalog produced by the People's Bank of China in 2015. standards already created by countries taking the lead could be a possible guide to what might emerge in the United States.

Source: sei.org It sets the stage for the EU taxonomy by defining four broad criteria that economic activity must meet in order to be considered environmentally sustainable. Objectives of the EU Taxonomy Regulation: Climate change mitigation Climate change adaptation Sustainable use and protection of water and marine resources Transition to a circular economy Pollution control and prevention Protection and restoration of ecosystems and biodiversity

In 2019, China amended its "Guiding Catalogue for the Green Industry." Green credit criteria, performance metrics, and reporting forms were issued by the China Banking Regulatory Commission for lending. There is no legislative definition in China that falls into the precise category of a "taxonomy" akin to the EU's. China has yet to issue a green sovereign bond. China's green credit standards have some indicators but no thresholds, while the green bond laws are devoid of metrics and thresholds. It's worth noting that the People's Bank of China (PBOC) produced a green bond catalog in 2015, which is commonly referred to as a "taxonomy."

| ECO SECTION India: India's goal of becoming a $5 trillion economy by 2024-25 while also tackling its mounting environmental debt will make it a key player on the global climate-change chessboard. India is expected to emerge as a world leader in climate action for achieving global net-zero emissions by pursuing a 1.5°C compatible development pathway, being the third-largest emitter and one of the fastest-growing economies in the world. Furthermore, India's development experience may inspire comparable action in other countries, making it a model for resolving the trade-off between environmental sustainability and economic growth. In India, the energy industry receives a substantial share of green finance with a focus on renewables and energy efficiency. Other sectors in need of investment that are currently underserved may get exposure as a result of a correct taxonomy. It would enable financial institutions to understand the investment peculiarities of green projects and leverage financial innovations accordingly by identifying the eligible economic activities.

Organic farming, agroforestry, natural farming, the System of Rice Intensification (SRI), and precision agriculture are all key practices of agricultural techniques. Smarter pasture management, improved animal diet and genetics, improved manure management, fertilizer management, and animal health planning are all examples of sustainable livestock farming methods. CONCLUSION The adoption of a green taxonomy could kickstart India's transition from a trickle to a flow. Countries including China, Bangladesh, Malaysia, and Mongolia, and the EU, have already created their own taxonomies in recognition of its transformational ability. We must follow in their tracks. The adoption of a nationwide taxonomy will demonstrate India's desire to contribute more to the global net-zero objective. Green finance in India is still a "cottage business" at the moment. The development of a taxonomy will aid in the "industrialization" of green financing, influencing India's ambitious green transition.

Due to the overall heterogeneity of farms and the difficulty of tracking GHG emissions, air, and water pollutants, and resource consumption at the farm level, the taxonomy could include a pre-specified set of sustainable agricultural and livestock farming practices appropriate for the Indian context, rather than quantitative technical screening criteria.

| SECTOR ANALYSIS

PHARMACEUTICALS INDUSTRY

OVERVIEW The Indian Pharmaceuticals sector has witnessed unprecedented growth during the Covid aftermath and continues to serve global needs till date. The manufacturing prowess and technical expertise of the Indian Pharmaceuticals sector stand out and create a competitive advantage over other countries. The Indian pharmaceuticals sector is projected to grow by 37.6% to have a value of 29.3 billion USD as compared to 2020. Moreover, the Indian pharma sector accounts for 6% of the Asia-Pacific pharmaceuticals market value. The YoY growth rate stands at 6.6% which are consistent over the years. A number of important government programs are also assisting in market expansion. The Indian government launched a Production-Linked Incentive (PLI) scheme in July 2020.

Kartik Anand | MBA - D| 2021 - 23 Varun Nagur | MBA - IB| 2021-23 This was introduced to encourage the domestic production of critical starting materials, pharmacological intermediates, and active pharmaceutical ingredients (APIs). The initiative aspires to minimize the country's reliance on API imports while also attracting international investment in the country's pharmaceutical business, promoting growth. The government also created a 'Promotion of Bulk Drug Parks' initiative in the same month, which will invest in infrastructure development to encourage bulk drug production in the country. All these measures indicate the intention of the Indian government to expand its production capacity in order to meet the ever-growing global demand and to cement its position as a market leader in the respective segment globally.

| SECTOR ANALYSIS Exports increased by 18.7% Year on Year. Every minute, India exports $40,000 worth of Pharmaceuticals. CURRENT MARKET SCENARIO

Source: Pharmaceuticalonine.com In India, there are 60,000 generic products available over 60 therapeutic categories. The API industry is the third-largest in the world, with 57 % of APIs registered with the WHO.

According to the most recent data available from the US Food and Drug Administration (FDA), India is home to 729 of the 3,895 FDA-approved manufacturing plants located outside of US territory. Over 300 Indian institutions specialize in bioinformatics and biological sciences, graduating over 500,000 students each year, demonstrating the country's prowess as a pharmaceutical center. The pharmaceutical sector in India is dominated by generic pharmaceuticals, which account for 71% of the market.

For the Indian pharmaceuticals market, incentives of INR 21,940 crore ($3 million) have been approved. By 2024, it's expected to reach $65 billion, and by 2030, it'll be between $120 and 130 billion. The pharmaceutical sector is expected to increase at a rate of 10% to 12% per year. Manufacturing costs are 33% cheaper than in Western markets.

Source: MarketLine This is expected to increase as generic medicine shipments to the United States increase since branded medications worth $55 billion will become off-patent.

| SECTOR ANALYSIS

Anti-infectives (13.6 percent), Cardiac (12.4 percent), and Gastrointestinal (11.5 percent) had the largest domestic market share in the pharmaceutical sector by sales. Sun Pharmaceuticals Industries Ltd remains the leading player in this sector as it has increased its value share from 3.5% to 6.1%. The specialty pharmaceutical company offers a gamut of products that deal with a wide range of pharmaceutical formulations. Its strong market position is a result of the aggressive expansion in the salesforce that they conducted in order to gain a sizeable share of geographical footprint. In order to bring innovative new products to market and build a strong patent portfolio, players in the industry invest heavily in research and development (R&D). The company's R&D efforts are focused on the creation of both differentiated generics and new specialty products, broadening the range of revenue opportunities. MARKET PROSPECTS The market's growth is likely to slow, with a five-year CAGR of 6.6 percent estimated to push the market to a value of $29.3 billion by the end of 2025. In comparison, over the same time period, the South Korean and Chinese markets will increase at CAGRs of 3.8 percent and 12.2 percent, respectively, to reach respective values of $34.3 billion and $300.9 billion in 2025.

In contrast to many other businesses and industries around the world that have been severely impacted by the COVID-19 pandemic, the pharmaceutical industry in India has fared surprisingly well. Although supply challenges have arisen as a result of state-wide lockdowns and border restrictions, most enterprises have considerable stock reserves to deal with such scenarios.

Source: MarketLine Furthermore, some of the world's largest pharmaceutical companies in India have received significant public and commercial funding to aid in the development of vaccines and ensure an adequate supply to safeguard the country's inhabitants. INDIAN GENERICS ANALYSIS: India accounts for 11.6% of Asia Pacific’s market value. It had a CAGR of 8.2% from 2016 to 2020. It grew by 0.7% to reach a market value of 15.7Bn $.

| SECTOR ANALYSIS Distributors and retailers form intermediates and Over-the-counter buyers are the smallest. With low switching costs, Buyers have strong buying power in this category.

Source: MarketLine Its market volume grew by 0.4% in 2020 to reach 97% and is projected to grow to 99% by 2025 a rise of 2.3% over 2020. Its market value is projected to cross 25 Bn$ by 2025. The Generics market could be analyzed with drug makers as the players, government agencies, and health care facilities as the buyers and suppliers would be the producers of key ingredients. The Indian Generics market has strong rivalry due to the lack of product differentiation and brand loyalty enjoyed by original manufacturers. The major players resort to price wars and high fixed costs and exit costs result in large players with expertise. Government control and low switching costs help buyers enjoy control. Suppliers are the same for many competitors eliminating any advantage on that front. Entry barriers are lower as alternative treatments are available. Buyers constitute small to large corporates and health care chains with strong financial muscle.

The main suppliers are API producers and packaging manufacturers. Suppliers are few and quality standards make new entrants rare. Constant urge to backwards and forward integrate between suppliers and manufacturers keeps tilting the balance of power. Long-term contracts to ensure low costs and adequate stocks make switching costs high. Packagers are independent of cos. Making overall supplier power strong. Although entry barriers for generics are lower, and the well-established businesses enjoy economies of scale, suppliers with the technical know-how can forward integrate into manufacturing medicines posing a stiff challenge. Moreover, wellestablished supply networks and revenue loss due to patent expiry make the threat of entrants high. Alternative medicines that are less invasive, Specific treatments for mental illnesses, physiotherapy, and herbal medicines pose a reasonable threat as substitutes. Similar to the generics space the branded pharmaceuticals category also faces stiff challenges in the above aspects. Overall Buyer power is perceived as strong, owing to government regulations on pricing restricted marketing and the significance of healthcare players.

| SECTOR ANALYSIS

Supplier power is moderate, owing to backward integration, heavy import of specialized ingredients, and numerous suppliers for selected chemicals. The threat of new entrants is moderate, as assets are weightless for R&D firms, and domestic growth and PLI’s support for new entrants is balanced by regulatory guidelines, high setup costs, and expensive skilled labour. The threat of substitutes is strong. Robust Operational and manufacturing base established distribution networks, strong product portfolio and strategic marketing are some of the mantras of the market leaders. Owing to the Covid 19 Pandemic, the digital health care sector has opened up stellar growth and diversification opportunities. Possibilities of newfound complications rooted in the after-effects of the virus have made the growth prospects bright. Collaborations with R&D firms, Universities to support innovation, capitalizing on government schemes to boost domestic production, and acquiring smaller start-ups can help companies grow and solidify their position. KEY PLAYERS Sun Pharmaceutical Industries Ltd. Dr. Reddy’s Laboratories Ltd. Lupin Ltd.

| COMPANY ANALYSIS

SUN PHARMACEUTICAL INDUSTRIES LTD COMPANY'S OVERVIEW Sun pharmaceutical is the largest Indian pharmaceutical company in India and the fourth largest global speciality generic company. The company offers a wide range of pharmaceutical formulations such as branded generics and generic pharmaceuticals. Its businesses include producing generics, branded generics, speciality, over-the-counter (OTC) products, antiretrovirals (ARVs), active pharmaceutical ingredients (APIs), and intermediates in the full range of dosage forms. It also produces speciality APIs. In FY19, US formulations contributed the most to the company’s sales with 37%, followed by India branded formulations at 26%. It was incorporated in the year 1983 and presently has over 43 manufacturing facilities across the globe. Nearly 70% of its revenue is derived from the Indian and US markets. COMPANY HISTORY 1983: Incorporated with a portfolio of five psychiatry products 1989 Introduction of gastroenterology

Jonath Simon | MBA - FS | 2021-23 Anupreet Lall | MBA - C | 2021-23 products in India by the company. 1994 Launched initial public offer (IPO). 1997 First international acquisition with Caraco Pharmaceutical Laboratories, USA. 2000 Company.

Acquired

Pradeep

Drug

2013 Became the world’s fifth-largest speciality generic pharmaceutical company with the acquisition of Ranbaxy. 2017 Agreement signed with National Institute of Virology, India to fight Zika, Chikungunya and Dengue. 2019 Sun Pharma and AstraZeneca entered into a license agreement for novel oncology products in China. 2021 In May 2021, the company entered a royalty-free, non-exclusive licensing agreement with Eli Lilly and Company to

| COMPANY ANALYSIS expand access to the COVID-19 drug, Baricitinib. The company will manufacture and distribute the drug in India.

Integrity, Passion, and Innovation form a base of the Corporate Governance practices of the Company.

VISION

The Company ensures to work by these principles in all its interactions with stakeholders, including shareholders, employees, customers, consumers, suppliers, and statutory authorities.

Reaching People And Touching Lives Globally As A Leading Provider Of Valued Medicines. MISSION At Sun Pharmaceuticals, it believes that its mission is to provide high-quality and innovative medicines to people in the world by leveraging our strengths fully with our vision of “Reaching People. CORPORATE GOVERNANCE The core values of the Company viz Quality, Reliability, Consistency, Trust, Humility,

Sun Pharmaceutical Industries Limited is committed to learning and adopting the best practices of Corporate Governance. BUSINESS SEGMENT Active Pharmaceutical Ingredients The Company started producing Active Pharmaceutical Ingredients (APIs) in 1995. Today, the company’s list of APIs exceeds 300 which are used in the house as well as

| COMPANY ANALYSIS

marketed to customers in over 60 countries. There are 14 manufacturing units where APIs are produced and these plants are located in India, the US, Israel, Australia, and Hungary.

Sun Pharma’s India business has outperformed the average industry growth, driven by the company’s leading presence in chronic segments coupled with strong brand equity with doctors.

Global Consumer Healthcare Business Specialty Medications: Over the years, Sun Pharma has developed a portfolio of patent-protected specialty medicines for global markets. Currently, the company is targeting dermatology, oncology, and ophthalmology segments. Generic Medications: The company provides high-quality generic medicines at affordable costs to patients and doctors in around 100 countries. The therapeutic segments covered by the company’s portfolio of over 2000 molecules include psychiatry, neurology, cardiology, orthopedic, dermatology, diabetology, gastroenterology, antiinfectives, ophthalmology, nephrology, urology, gynecology, respiratory, oncology. Over-the-Counter Medications: Sun pharma provides a range of over-thecounter products which include Faringosept (sore throat), Revital (vitamins), and Volini (topical analgesics). OPERATING PERFORMANCE In FY21, formulation sales in India stood at ₹103 Billion, up by 6.5%, and accounted for about 31% of the total revenue.

Revenues in the US have declined by about 4% to ₹101 Billion and accounted for approximately 30% of the company’s consolidated revenues for FY21. Despite the challenges of the pandemic, the company has witnessed a ramp-up in sales of speciality products for the year. The generics business continued to face price erosion, driven by the competitive intensity amongst manufacturers, buying consortium pressures, and a higher pace of generic approvals from the USFDA. The company grew by 5% in Emerging Markets (EM) for the year. The Y-o-Y depreciation of some EM currencies has reduced their reported growth. The constant currency growth for EM revenues was about 6.4% for the year. Sales in the rest of the world (RoW) markets grew by 6.6% for the year, driven by some key Western European markets, Canada and Australia/ Revenue from the API business increased by 1.8% to ₹19,504 Million. Growth in this segment was muted mainly due to lower sales of opiates products.

| COMPANY ANALYSIS FINANCIAL ANALYSIS Sun Pharma reported gross sales of Rs 331 billion in FY21, up by 2.5% (compared to FY20 figures). Overall sales for the company have grown at a compounded annual growth rate of 22% over a period of 15 years. The company’s EBIDTA stood at Rs 81 billion in FY21 as against Rs 65 billion in F20, registering a growth of 25%. Net profit of the company over the period of 15 years has increased at a CAGR of 17%. In FY21, Net profit was reported as Rs 59 billion against Rs 40 billion in FY20.

Source: Annual Report

in the debt of the company and an increase in net worth in FY21. Net profit margin has declined due to lower profits on account of exceptional items charged against profit. The Interest coverage ratio is higher for the FY21 due to higher profit before interest, tax, and exceptional items and also due to reduction in interest cost compared to last year, driven by debt repayment. FUTURE OUTLOOK

Source: Annual Report The company’s free cash flows have grown consistently over the years, they stood at Rs 50 billion in FY21. The operating cash flow of the firm has grown at a CAGR of 26% in 15 years.

US Market Ramp-up products

prescriptions

for

speciality

RATIO ANALYSIS Return on Net Worth is lower for the year ended March 31, 2021, due to lower net profit. Reduction in net profit is mainly on account of exceptional items. A variance of -56% is seen in the debt-equity ratio because of a reduction

Source: Annual Report

| COMPANY ANALYSIS Continue to focus on complex generics and high-entry barrier products.

Emerging Markets Gain critical mass across key markets

Focus on product robustness and supply-chain efficiencies to ensure high service standards for customers.

Enhance product basket in emerging markets

India Branded Generics Business Focus on productivity enhancement. Maintain leadership position in a fiercely competitive market. Innovate continuously to ensure high brand equity with doctors. Continue to evaluate in-licensing opportunities for latest generation patented products, given the Company’s strong brand equity and extensive distribution network. Rest of the World (RoW) Western Europe, Canada, Japan, Australia, New Zealand (ANZ), and Other Markets: Ramp-up ILUMYA prescriptions in Japan and Australia Evaluate newer markets in RoW for commercializing the speciality portfolio. Launch differentiated generics in key markets

| INTRIGUING INDEED

SOVEREIGN GREEN BONDS LITIGATION FINANCING WHAT ARE SOVEREIGN GREEN BONDS? Companies, nations, and multilateral organizations issue green bonds to fund projects that have positive environmental or climate effects, which provide investors with a guaranteed income. Renewable energy, clean transportation, and green buildings are just a few examples of possible initiatives. Unlike regular bonds, the proceeds of which can be used for a variety of reasons at the issuer's choice, the proceeds from these bonds are used to fund green projects. The Green Bonds issued by the government for raising funds to facilitate infrastructure programs that align with national Climate Targets are called Sovereign Green Bonds. A sovereign green bond can be indicative of a strong signal to a country’s commitment to a low-carbon environment. The year 2017 has been embarked as the ‘year of the sovereign’ in the green bond market, with the inaugural issuances by the government of Poland and France. SIGNIFICANCE OF SOVEREIGN GREEN ISSUE

Moumita Biswas | MBA-A | 2021-2023 Muskan Jain | MBA-FS | 2021-2023 Sovereign green issuance sends a strong message to governments and regulators about climate action and sustainable development. It will spur domestic market development and provide institutional investors with a boost. It will give local issuers benchmark pricing, liquidity, and a demonstration effect, assisting in the growth of a local market. With the IEA's World Energy Outlook 2021 indicating that 70% of the additional USD 4 trillion investment required to reach net-zero is required in emerging nations, sovereign issuance can help launch these significant inflows of money. WHY ISSUE A SOVEREIGN GREEN BOND? Strategic Coordination - The issue of SGB depicts the country’s devotion towards establishing sustainable and

| INTRIGUING INDEED low-carbon growth trends for the economy

in domestic debt markets.

that has a positive effect on the private sector investment for green bonds. New and Diverse Investors - One of the benefits of green transactions, according to

green

bond

issuers,

the

diversification of their client base: the transaction

attracts

new

socially

responsible investors and asset managers with green investment mandates. Pricing advantages - Several gems have reported higher pricing of their green bonds than in previous issuances, owing to robust demand and a growing diverse investor base. According to reports, the French sovereign bond finished at 13 basis points higher than a non-green QAT. Visibility - One of the perks that issuers aim for in a green bond offering is reputational benefits. Green bond issuance can be used as a promotional tool by the government to strengthen its sustainability strategy, as in the case of France, or to signify a policy shift. Nigeria, for example, is working on issuing a sovereign green bond to demonstrate its commitment to a more diverse economy and the future development of low-carbon industries.

Capital mobilization - One way for governments to catalyze private sector investments in low-carbon and climateresilient infrastructure is to support the formation of the green bond market, in addition to offering public funding to lowcarbon and climate-resilient infrastructure projects. International Leadership - Sovereign green bonds offer a unique opportunity for governments to participate in crossborder collaboration and take action on green finance. The G20 Green Finance Study Group, the Financial Stability Board's task force on Climate-Related Financial Disclosures, and the European Commission's High-Level Expert Group on Sustainable Finance are just a few examples of worldwide green finance initiatives.

Green Market creation - Sovereign green bonds can help the market develop further because of its benchmark status

Source: Sovereign Green Bond Briefing

| INTRIGUING INDEED UNION BUDGET 2022-2023: INDIA'S PLANS OF ISSUING SOVEREIGN GREEN BONDS During her Budget Speech, Nirmala Sitharaman announced that the government would issue sovereign green bonds to raise funds for green infrastructure. “As part of the government’s overall market borrowings in 2022-23, sovereign ‘green bonds’ will be issued for mobilizing resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy,” she said in the Budget 2022. The significance of this becomes apparent because the Indian government recently announced that it will have net-zero emissions by 2070 at the 26th Conference of Parties (COP-26) held in Glasgow. The market size of green bonds is expected to have reached an all-time high of $517.4 billion in 2021, according to Climate Bonds Market Intelligence. According to the report, it was an increase of 50% over the market size in 2020. This would facilitate India's access to long-term funds at competitive rates. It will also improve the country's ESG climate. The announcement has been warmly welcomed by industry participants, who believe it will help their businesses facilitate India’s transition to a carbon-neutral economy. Even though there was no mention of India's inclusion in global bond indices in the Budget, green bonds are likely to attract a new investor pool to India's debt market.

UTILIZATION OF GREEN BOND FUNDS The Central Government will inform the public in due course about the projects it plans to use the funds collected via Green Bonds for. But FM's Budget speech mentioned several important initiatives that Green Bonds might be able to finance in the near future. Battery Swapping Policy: To assist the Electrical Mobility sector, FM Nirmala Sitharaman said that the Central Government would notify a new battery swapping policy. Moreover, the government is also developing interoperability standards for EV batteries, which will make electric vehicles more attractive to prospective buyers. PLI Scheme for Solar Panels: Budget 2022 also contained a measure regarding PLI (Production Linked Incentive) scheme for high-efficiency Solar Modules Panels in India. Through this program, various renewable energy projects can be made more efficient. Carbon Trading Bill: Despite not having been listed on the agenda, the Union Government plans to introduce the Carbon Trading Bill to Parliament, which will establish a regulatory framework for the industry.

| INTRIGUING INDEED THE WAY FORWARD Only a few companies have sold green bonds in India since 2015, according to Prime Database, such as Yes Bank and CLP Wind Farms. Additionally, Indian companies raised $9.18 billion through the sale of green bonds (sustainability) abroad. The proposed sovereign green bonds will likely open up a local market for more sales of this type. However, there may be some one-off dispensations offered by the government to entice institutions to subscribe to those securities. There is no dedicated fund for sustainability in India, unlike in overseas markets, and the rate differential is negligible. Green papers must be encouraged during this nascent phase. The last green bond to be sold under the municipal bond category was issued by Ghaziabad Nagar Nigam last March for ₹150 crores. A benchmark yield around that time was 6.18%, while they offered 8.10% annually. Unlike global investors, local investors do not have dedicated funds for sustainable investments. A sovereign issuance of green bonds will set a precedent, but it will need a one-time boost to become popular. A portion of a large institution's corpus may need to be invested in sovereign green bonds offering reasonable rates. For example, EPFO (Employees' Provident Fund Organization) or IRDAI (Insurance Regulatory and Development Authority) may be encouraged to find buyers for sovereign green bonds.

EPFO is the largest institutional debt investor in India, while LIC of India leads the way with billions invested in bonds. Some incentives may also be offered to commercial banks. To date, all domestic onshore green bond borrowings have had a tenor of about 5-10 years. Some dealers believe that borrowing green bonds for a long tenor, i.e., more than ten years, will contribute to tapping the bond market. A greater degree of participation also improves corporate governance and enhances creditworthiness while reducing funding costs. Some recommended strategies for ensuring the success of sovereign green bonds are as follows: The French Model: According to the European Union environmental priorities (climate change mitigation, water management, climate change adaptation, circular economy, biodiversity, and pollution), the French budgeting process assigns a "green coefficient" to each budget line to measure how green the expenditure is. Harmonization of Standards: For the market of green bonds to be robust, International and domestic standards and guidelines must be harmonized. Leveraging Private Sector: To address the institutional barriers to entering this market, it would be beneficial for emerging market issues to conduct appropriate capacitybuilding efforts to spread knowledge of the advantages and processes of green bonds.

| ENTREPRENEURSHIP INNOVATION

MAMAEARTH INTRODUCTION Mamaearth, the most promising startup in the baby care products and cosmetics industry was founded in September 2016 by Ghazal Alagh and Varun Alagh, to make toxin-free personal care and baby care products. Headquartered in Gurugram (India), the objective of Mamaearth is to lessen parental stress while continuously improving and innovating to make the world a safer place for both newborns and their parents. When Varun and Ghazal were expecting their first child, they discovered that the newborn care items they were using contained hazardous chemicals and that there were no safer options available. Mamaearth has attempted to alleviate a prevalent Indian parenting concern through an innovative product range. Mamaearth delivers products that are safe by international standards and infused with the goodness of nature in a country where the majority of infant products available do not meet safety norms.

Tanisha Chaudhary | MBA C | 2021-2023 Mamaearth is often credited with being the first Asian brand to receive the "MADE SAFE" certification. Mamaearth is a 'mum-powered' company that collaborates with a large number of mothers that are involved throughout the process, from creative designing to product launch. More than 200 young women are on board with Mamaearth, helping to envision and develop the company's products. These products are put to the test by the mothers, and only those that receive positive feedback are approved for mass production. BUSINESS MODEL Mamaearth has a simplistic business model. They create products, which are then manufactured by contract manufacturers under the Mamaearth brand's permission.

| ENTREPRENEURSHIP INNOVATION They mostly sell online through direct-toconsumer channels such as Amazon, Flipkart, and other offline channels. Mamaearth's team follows the blue system, which is based on new products that drive growth, with an omnichannel presence. Following are the key features of Mamaearth’s business model: Establishing a relationship with Target Audience: The most crucial thing for any business is to engage with and establish the trust of its target audience. Mamaearth has targeted mothers from the beginning and created commercials that spoke to them. Premium Quality and Innovative Products: Mamaearth focuses on newborns with an exclusive product line that includes over 80 natural products for baby care, hair care, skincare, and more. They created distinctive products that drew a large number of customers. Mamaearth has created some of the most creative products, including India's first bamboo-based baby wipes, an easy stomach roll-on with hing and fennel for colic and digestive relief, and a 100 percent natural plant-based toothpaste for children aged 0 to 10. It also sells skin and hair care products made with natural substances like onion, ubtan, tea tree, vitamin C, argan, coco, and charcoal. It also offers a variety of items for the mothers, ranging from sunscreen to stretch mark removal serum.

Lean Innovation Cycle: Mamaearth focused on increasing efficiency by continuously listening to their customer’s feedback. They used Lean Innovation to better understand and meet the needs of its customers. Experimentation aided them in improving the quality of their products as well as coming up with new product concepts. Using this strategy, they were able to satisfy their clients in a very short period of time. GROWTH Mamaearth became the first unicorn in 2022 after earning $52 million in a Series F fundraising round headed by Sequoia Capital. The company has established itself as a frontrunner in the direct-to-consumer (D2C) beauty and skincare industry and was valued at roughly $1.07 billion in this round. In FY21, Mamaearth generated Rs 461 crore in revenue, rising fourfold from Rs 109.8 crore the previous fiscal year. Mamaearth's local sales accounted for roughly 98 percent of its revenue, while its global sales accounted for 2 percent, which grew by 9.5 times. It also became profitable in FY21, with a profit of Rs 24.6 crore compared to a loss of Rs 5.92 crore in FY20. On a per-unit basis, one can see that the company spent Rs 0.95 to earn a single rupee of operating income in FY21.

| ENTREPRENEURSHIP INNOVATION

To achieve this goal, the company will focus on inorganic expansion, establishing new brands, and expanding its distribution network. Mamaearth also intends to use the funds received to grow its range of direct-to consumer personal care brands. Source: Fintrackr The EBITDA margins have also improved significantly, presently standing at 6.5 percent in FY21, up from roughly -5 percent in FY20.

In addition, the company plans to use influencer marketing and customized digital funnels to build brand awareness in the coming years.

AWARDS AND RECOGNITION At the 2nd edition of The ET Brand Festival in 2019, Mamaearth was named "One of the Best Brands" in India. Mamaearth is the first Asian brand to receive the "MADE SAFE" certification. Ghazal Alagh, the co-founder of Mamaearth won the PWI Next Gen Woman Entrepreneur of the Year Award 2020-21. THE ROAD AHEAD The goal of the firm is to grow Mamaearth into an Rs. 500 crore brand in the next three years by attracting five million new customers. The start-up is also considering developing additional brands under the Honda umbrella that cater to the interests of new-age, younger consumers.

| PERSON IN FOCUS

ASHNEER GROVER Abhijeet Upadhyay | MBA – RM | 2021-2023 Ashneer Grover, born 14 June 1982, is an Indian Entrepreneur and billionaire who is the managing director & Co-Founder of Bharat Pe. Ashneer has built his reputation as a very aggressive angel investor, who has a very diverse investment portfolio. He has invested in at least 23 start-ups and two venture capital funds, amounting to $1.5 million, and with a personal net worth of over Rs 700 crores, at the age of 40, Ashneer is one of India’s youngest Billionaires. PERSONAL LIFE His journey started from Delhi, his father was a chartered accountant, and his mother was a school teacher. All of his family members were doing jobs and no one did business in his family. He was touted as a prodigy since his childhood. After completing his schooling, he realized that he will not be a CA like his father. He wanted to do something different from his father and his family so he completed his Graduation in civil engineering with the

Indian Institute of Technology Delhi, where he was a rank holder of his batch. Ashneer Grover and 5 more students were selected as exchange students by the Indian Institute of Technology Delhi. For the academic year 2002-2003, he went to the Institut National des Sciences Appliquées de Lyon (France) as an exchange student, where he was rewarded with €6000 as a scholarship by the Embassy of France. Ashneer Grover's wife's name is Madhuri Grover. She is also an entrepreneur working in BharatPe where she manages HR, finance, and other internal operations. Before joining BharatPe, she was an Interior designer and worked with people like Satya Paul. PROFESSIONAL LIFE As an Investment Banker After completing his MBA in finance, Ashneer Grover got placement as vice president in Kotak Investment Banking in 2006.

| PERSON IN FOCUS He worked there for almost seven years. He was part of various IPO deals. He left the job in 2013. As an MNC Employee In 2013, Ashneer Grover joined as a director in Amex (American Express), which is a multinational company. He enjoyed working in an MNC, but he always wanted to do something different. He worked there for almost 2 years. As a Chief Financial Officer After leaving Amex in 2015, Ashneer Grover joined Grofers as a Chief financial officer in march 2017, and in August, he left the organization.

Source: Techherald.in

As a Judge in Shark Tank India In 2021, Ashneer Grover appeared as a judge in the popular Indian reality show Shark Tank India. In this show, people come up with their start-up business and ask the judges to invest in their business. CONTROVERSIES

As the Head of PC Jewellers

Pamphlet Distribution Against Paytm

After leaving Grofers Ashneer took a break from work, and he met various investors and tried making more networks. Then, he joined PC Jewellers as business head. He helped them in new business development, new payment options, and strategies.

In 2020, Paytm and other such companies filed a lawsuit against Mr. Grover and his company BharatPe for distributing pamphlets, claiming that Paytm and other companies were not purely India-based companies. They also requested the Reserve Bank of India to take action against BharatPe.

As a Founder of BharatPe In 2018, Ashneer came up with the idea of BharatPe, which went on to become one of the most used payment applications in India, Ashneer Grover along with Shashvat Nakrani and Bhavik Koladiya founded BharatPe in 2018.

Suffix Battle with PhonePe In 2021, PhonePe, after filing a lawsuit against BharatPe claiming trademark rights over the suffix, sought speedy disposal of the main lawsuit.

| PERSON IN FOCUS Viral Abusive Audio Clip In January 2022, an audio clip went viral in which Mr Grover had a huge fight with the Kotak Mahindra Bank. The bank alleged that Mr Grover and his wife had threatened one of their employees. Later Mr Grover took to Twitter and termed the audio clip fake. He said, “Folks. Chill. It's fake audio by some scamster trying to extort funds (USD 240.000 bitcoins). I refused to buckle. I've got more character. And, the internet has got enough scamsters.” AWARDS & ACCOLADES In 2021, Ashneer Grover won Entrepreneur of the year Award.

the

payments to non-existent vendors as well as (incorrect) invoices being produced to substantiate spending in the books of the company. These transactions have placed Grover’s wife and the company’s head of controls Madhuri Jain under the scanner, the report seen by ET showed. A&M is expected to submit a final report based on its probe. In his latest salvo, Grover informed the board that he is withdrawing his nomination of Sameer as a director. "I, now, in the exercise of the power vested in me by Clause 3.7 of the SHA and Clause 91.7 of the AoA do hereby withdraw, my nomination of Suhail Sameer as a Director nominated by me to the Board of Directors of the Company," Grover wrote in a February 2 note.

In January 2021, Ashneer was honored with the young achiever’s award. LATEST DEVELOPMENTS Ashneer Grover, the embattled co-founder and managing director of BharatPe, has written to the company’s board seeking the removal of chief executive officer (CEO) Suhail Sameer from the position of director, in a fresh turn of events at the fintech firm that is currently probing alleged fraudulent transactions by Grover and his family members. On Friday morning, a preliminary investigation by professional services firm Alvarez & Marsal (A&M) — commissioned by BharatPe last month — has found irregularities including

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REVAMPED: SHARPENING THE FUTURE OF DIGITAL ECONOMY Vishal Negi |SIMS| MBA Batch 2020-22 Ten years back, when our feet ached while standing under the scorching heat in long queues outside the bank, didn't we long for a service that could mitigate our pain? Luckily, technology came to our rescue. Especially post-demonetization, money transaction methods have considerably shifted towards online mode than it was before. The rise of apps, websites, and other platforms have reformed the digital economy. These far-reaching platforms are the gateway for accessible payment solutions and banking automation solutions. This made FinTech touch not only the lives of millionaires but, more importantly, of millennials. On the one hand, the consumer experience has been enhanced as the banking processes have become more streamlined due to innovative payment solutions like ATM and CRM, Cash Management services, Transaction

switching services, Digital payment services, POS Machines, Agency banking, and prepaid card. Whereas on the other hand, greater efficiency has been attained owing to currency technology products, self-service terminals, and automated banking systems. Thus, we can say that FinTech has brought ease to people's working ecosystems and personal lives. HOW 'FINTECH' The mainstream emergence of the internet greatly affected our Economy. ICICIspearheaded digitalisation as the bank to offered digital service to its retail clients in the late 1990s. Following the suit, a majority of banks' internal processes, interactions with outsiders, and retail customers became fully digitized. However, the shock of the great recession,

CALL FOR ARTICLE: WINNER and various multi-crore scams coupled with the emergence of new-age technology like Machine Learning, Big Data, and Artificial Intelligence sowed the seeds of a digital economy. The most significant disruptions were brought forth by the COVID-19. Owing to the digitalization of the Indian economy, a steep rise was in digital asset exchanges, payments, savings, and wealth management volumes with increments as high as 13 per cent and 11 per cent.

THE GROWTH-TECH As per Deloitte and CII's vision 2020 report, India is fast becoming a digital economy with over a billion mobile phones, 330 million internet users, and 240 million smartphones. The rise in online activity brought a soaring increase in acceptance and adoption of digital services, as a result, it accelerated what was already trending. It includes FinTech app development companies with genuine differentiators and readiness of services in the digital market in the infrastructure, cashless payments, and Robo-advisory space.

They reaped on big data and data analytics to improve the customer experience and more personalized offerings. They offered data-driven decisions around risk management for robust customer loyalty. An assemblage of various technologies like AI, IoT–enabled contactless payments, cryptocurrency, and blockchain contributed to this futuristic transformation. AI-enabled chatbots guide their clients on improving their transactions and several other forms of trading and commerce. They also enable profiling their customers along with categorizing them. The blockchain system dealing in cryptocurrency is another futuristic trend opening multiple avenues to take the FinTech industry by a boom. Thus, humankind is using the power of technology to transform the way it transacts with businesses or manages its assets efficiently.

PRESENT VIEW India is swiftly moving towards a massive FinTech industry valuation of USD 150-160 billion by 2025, according to a report titled, 'India FinTech: A USD 100 Billion Opportunity', by Boston Consulting Group and FICCI.

| CALL FOR ARTICLE: WINNER This opportunity amounts to USD 100 billion in new value creation potential. The current innovation model in the digital economy is designed to generate the highest possible short-term returns. But investors and entrepreneurs in the digital economy will need to rethink those timelines if they want to be successful in the future. The only way forward in a digital economy is to take a long-term view — planning for a viable business in the next decade, rather than the most profitable one in the next quarter. The digital economy must involve a scaled framework, regulatory intricacy, and organizational inertia that making a substantive change will take time.

Digital Economy also has some roadblocks in its way. The most pressing issue is cyber-attacks. Fending off cyber-attacks is one of the greatest challenges faced by businesses across the world, and given the sensitive nature of the client data they hold, this vulnerability is a severe concern. So, the question is, what can one do to minimize one’s exposure to cyber-attacks and keep client data safe while keeping everspiralling costs down? To this end, it may be time to consider deploying dynamic security solutions such as a ‘Moving Target Defence’ (MTD).

CEOs will need to shift their mindset now if they want to avoid their own "Kodak moment." Embracing innovation requires unconventional capital allocations that won't always yield short-term profit, but that can lead to exponential growth in the long run.

A report by Deloitte mentions 40 per cent of companies pointed out that they have either introduced or are in the process of introducing enhanced fraud or security measures as a response to business conditions under the pandemic.

THE DARK WEB

Another critical area in which the digital economy can fall behind the traditional economy is the absence of ‘human touch’. Their operating models often leave clients to feel like they are dealing with some faceless entity. Being able to pick up the phone and speak to a real person is an essential facility for some consumers, so firms should be prepared to cater to this.

| CALL FOR ARTICLE: WINNER LEADING AVENUES The rise in smartphone using population and Indian government incentives has bolstered the emergence of many onestop financial platforms. The digital economy has overarchingly come to the rescue to meet the needs of those who were underserved by the banking system. The welcoming hands of the digital economy in India are supporting even those who are still unbanked. Digital of the Indian economy is inevitably bringing small but significant changes, paving the way to be a top-notch opportunity for social modernisation and wealth creation since the Industrial Revolution of 1740

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NEOBANKS TO DISRUPT FINANCIAL SERVICES SPACE IN 2022 Kalpesh S Khandare | SIMS| MBA Batch 2021-23 In a world that's transforming faster than ever before, the digital age is reshaping the way we interact with just about everything. For example, in the financial services industry, it has been estimated that neobanks will manage 10% of all U.S. banking by 2022. The fintech industry has made tremendous strides in the past few years. Banks are being forced to adopt innovative technologies, like artificial intelligence and blockchain, to stay competitive in an increasingly competitive market. This trend will continue or accelerate in the next decade, with neobanks taking the financial services space by storm. The steady growth of the gig economy due to emerging trends like freelance work will increase non-traditional banking relationships. These new relationships are called neobanks. Neobanks are digital-only banks that leverage mobile banking apps,

AI chatbots, and other emerging. Neobanks are targeting the unbanked population, which totalled 2.7 billion people and is projected to rise to 3.5 billion by 2022, according to a report from McKinsey Financial. They're also disrupting the global banking industry, which is currently worth an estimated $20 trillion and generates $8 trillion in annual revenue. To achieve their goal of disrupting the financial sector, neobanks will be relying on partnerships with banks and customerfriendly offers that appeal to both young customers who want something new and old customers who can't afford their high fees We've identified three neobanks leading the way into the digital age and disrupting the financial services sector. They're all based in Europe, but they're poised to make their mark on other markets as well.

| CALL FOR ARTICLE: FIRST RUNNER UP The change will be driven by a decisive shift in consumer preferences and behaviour as they trade traditional banking models for a more convenient and affordable alternative through a mobile-first platform. But convenience isn't inexpensive – these platforms have proven to be much less costly to operate due to lower staffing costs and reduced overhead expenses encountered in brick-and-mortar institutions like branches. Already, digital leaders in the finance sector are heavily disrupting their industry. Previously, fintech innovators have been known for disruptive technologies, but today's neobanks are also changing how we interact with our finances. The distinction between traditional banks and neobanks is rapidly dissolving, with many of the latter now offering a full suite of financial services that meet the needs of mobile-first consumers. For example, Goldman Sachs introduces a new online marketplace that lets consumers shop for mortgages online and compare credit cards from different issuers. For most consumers, the shift is seamless. And it's not like we're talking

SUMMARY Traditional banks are losing ground to neobanks, serving customers via apps and online services rather than branches of conventional banks. The neobanks that exist today still have limited features, but over the next five years, neobanks will expand their range of services and introduce new ones. Customers will pay a fee for the service, but each company claims this fee is minimal or even free because they provide more than just basic banking. These fintech upstarts are growing in popularity, and over the next five years, they will continue to become more competitive with traditional banks. IMPLICATION Traditional banks need to change their industry strategy and consider partnering with neobanks or even acquiring them to remain competitive in the marketplace. Banks must make significant investments to offer online services comparable to those of neobanks.

about an entirely new concept. The concept of an online bank offering a complete range of financial services to its customers has been around for a while. But where traditional banks have remained mainly focused on the financial services sector, neobanks are on the cusp of disrupting

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according

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industry.

research

from

fact,

Accenture,

developed markets will account for more than half of all bank assets under

ISSUE NO. 109, MARCH 2022

About Finstreet Finstreet, the finance committee of K J Somaiya Institute of Management aims at bridging the gap between industry and academic curriculum through effective delivery of knowledge-oriented sessions and events through a network of highly motivated members and renowned industry experts. Through the FINLY magazine, we focus on covering crucial topics for each month and giving our members a platform to express their views.