Finly October 2022

CONTENTS

01

EDITORIAL

04

COVER STORY

India The 5th Largest Economy in The World

11

SECTOR ANALYSIS

BFSI

02

TEAM FINLY

08

ECO SECTION

Are Government Subsidies Good or Bad for India?

15

COMPANY ANALYSIS Bajaj Finance Ltd. 19

INTRIGUING INDEED

The Rise of Adani Group

23

ENTREPRENEURSHIP INNOVATION StartEngine

27

READER'S CHOICE

Rise of India Amidst Global Recession

Editor's Note

Dear Readers,

“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 2022 23

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 October 2022 edition's cover story revolves around "India the 5th Largest Economy in the World". The Eco Section discusses "Are Government Subsidies Good or Bad for India?" Further, the Intriguing Indeed section delves into "The Rise of Adani Group"

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

Biswas

Gaurav Bavkar

TEAMFINLY

EditingTeam

Gaurav Bavkar

Faculty in charge

Editor-in-Chief Editor - FINLY

Dr. (Prof) Pankaj Trivedi

Moumita Biswas

TeamCoordinator

Ayushi Sharma

Ayushi Sharma

Ishan Khare

Jaykaran Mehta

ContentTeam

Kashish Khanduja

Manthan Jain

Pankhuri Jaiswal Riya Jain Sakshi Pandya

Tapan Shah

Siddharth SSuman amyak Tripathi Saumya Nair

Trisha Jain Vigneswaran S

TrishaJain|MBA-6|2022-24 SakshiPandya|MBA-2|2022-24

INTRODUCTION

India has emerged as the fifth largest economy in the world in 2022 It has surpassed the United Kingdom to become the world's fifth largest economy, trailing only to the US, China, Japan, and Germany India was the eleventh largest economy a decade ago, while the United Kingdom occupied the fifth position. With record breaking growth in the quarter between April and June, the Indian economy has now surpassed the United Kingdom, which has fallen to sixth place.

Despite being widely anticipated, the development is a significant milestone for the Indian economy given the history of two centuries of colonial rule The last time India's GDP was greater than Britain's was in the early 1700s before British rule began. ame

Source: IMF

The assumption of India overtaking the U K is based on calculations made by Bloomberg utilizing the historical exchange rates on its terminal and the IMF database According to Bloomberg research, the nominal cash value of the Indian economy for the March ending quarter was $854 billion. Similar estimates place the value of the United Kingdom at $813 billion

INDIA - THE 5TH LARGEST ECONOMY IN THE WORLD

It was expected that India won’t surpass the UK again until 2024. However, the Ukraine conflict and COVID's persistent impact on the economy have resulted in a decline in the UK's rankings. The phenomenal economic growth of India over the previous 25 years and declines in the value of the pound over the past 12 months are the main causes of this drastic change in positions. Also since March, the Indian rupee and the UK pound have weakened against the US dollar, a reason why India's and the UK's GDP have shrunk against the dollar.

that appeared optimistic in light of the gloomy global outlook It is expected to be the fastest growing major economy amid the global economic downturn.

ECONOMIC GROWTH IN INDIA

India recently announced the April June quarter GDP numbers. As per the latest numbers, India's nominal GDP is Rs 64 95 lakh crore, which at the June rupee dollar exchange rate comes to around $823 billion. The UK's nominal GDP is $763 billion, which is significantly lower than India's nominal GDP of $823 billion in the same quarter

Source: IMF

When the war broke out, the majority of western economies were in advanced stages of economic recovery amidst the pandemic earlier this year. Economists argued that enormous efforts were made to stimulate demand during the Covid era and throughout the war, but the supply system was unstable and rudimentary, and as a result, inflation skyrocketed. Central banks quickly set in motion their policy tools to mop up the surplus liquidity in the economies and this too threatened a recession. India's economy was the only one

Sources: IMF, SBI Research

India has constantly been forming growth oriented policies It has been the fastest growing nation with annual growth between 6% to 7% in the last decade. Moreover, the World Bank states that India’s real GDP

growth is expected to be 9% in 2023 24 and 7 1% in 2024 25 It is the highest of all the developing nations

Major factors include increased central government tax collection and state support Better infrastructure and policies contributed to the improvement of the nation. The service sector contributed the most to economic growth The service sector currently accounts for around 52% of the total GDP and then comes the secondary and agricultural sectors. The ruling government's increased focus on the manufacturing sector also helped in the economic growth of the country. The success to an extent can also be attributed to the positive results of adopting the appropriate policy perspective and from a realignment in global geopolitics

KEY INITIATIVES IN THE GROWTH PATH

During the pandemic, India focused on life and livelihood Many nations focused on providing subsidies and free cash to their citizens Japan spent around 53% of its GDP as a stimulus, the U S spent 27%, and Australia around 20% On the other hand, India spent around 3.5% of its GDP on supporting the economy, food subsidies, liquidity, and on growth incentives Two years later, all this has worked in India’s favour

There have been some important factors that helped the economy grow at a faster pace, “Make In India” being a crucial one It was the lion’s step in the progress of the Indian economy.

From the extensive evidence, it has been established that the decision to build suitable infrastructure and manufacture in India acted as an extraordinary opportunity for all of the Indian economic variables and supplied the Indian economy with significant benefits In FY22, India received the highest annual FDI inflows of $84.835 billion, which exceeded the previous fiscal year by $2 87 billion The auto component industry's annual turnover is likewise expected to increase by 15 17%. In the index for Ease of Doing business, India climbs 79 places to 63rd place in 2019 from 142nd place in 2014

HURDLES IN THE GROWTH OF THE INDIAN ECONOMY

India is facing low growth in exports and a rise in imports.

The manufacturing sector is facing slow growth at the rate of 4 8% It is a major cause of concern for the nation as the exports will only increase when we can produce in abundance On the other hand, imports being higher than exports exacerbates the situation.

Unpredictable weather across the country is a major concern, there is an uneven monsoon which is likely to weigh upon agriculture growth and rural demand

Inflation is rising currently. India’s numbers are much better compared to the rest of the world but they are still too high for comfort, RBI’s optimum inflation level is 4%, and India’s actual figure is 6 7% It was observed that there has been a continuous rise in inflation of about 6% for seven straight months.

The Indian economy faces headwinds from higher energy and commodity prices that are likely to weigh on consumer demand and the company ’ s investment plans

India's GDP expanded 13.5% in the April June quarter, the quickest pace in a year, to retain the world's fastest growing economy tag but rising interest costs and the looming threat of a recession in major world economies could slow the momentum in the coming quarters

FUTURE PREDICTIONS

Over a long period, India's economy has grown at a much faster rate in both real and nominal terms than the UK's Over the last decade, India's economy has grown at a nominal rate of 5.71% CAGR in dollar terms, while the UK's GDP has grown at a paltry 1 76% As India is likely to maintain a similar gap in GDP growth rate over the United Kingdom, the size disparity between the two countries will only widen, with India reaching a $5 trillion economy well before the United Kingdom.

According to IMF projections, India's economy will likely reach $5 trillion by 2027, while the United Kingdom's economy will stagnate at $4.35 trillion. In terms of economic size, only the United States, China, Japan, and Germany now surpass India

The IMF projects that India will surpass Germany as the fourth largest economy within the next five years Germany's nominal GDP is projected to reach $5 36 trillion by 2027, while India's economy would reach $5.53 trillion. This gives India a commanding advantage over Germany, even if figures are later revised downward

Analysts believe that if India's robust growth continues and no shocks occur, it is not unreasonable to believe that India will also outpace Japan. India could become the third largest economy in the world within a decade However, it would be interesting to observe India's race after reaching third place

ARE GOVERNMENT SUBSIDIES GOOD OR BAD FOR INDIA?

Kashish Khanduja | MBA 4 | 2022 24

Manthan Jain | MBA 7 | 2022 24

WHAT IS A SUBSIDY ?

In simple terms, “A subsidy is something which is the polar opposite of a tax” a tax is when you give money to the government for running a business, and a subsidy is when the government gives you the money to run a business It is financial assistance to public or private entities in the form of discounts, monetary grants, tax rebates, etc. by the central or the state governments In some cases, subsidies also mean grants of money or other financial aid made by the central government to a state government to promote objectives in which the central government has an interest The goal is to make the products offered by these institutions affordable for public consumption These subsidized products are necessary for the greater public good and serve to support the welfare of the community. Sometimes a vague distinction is made between direct/invisible subsidies (for example, farm loan waiver schemes, the PM Kisan scheme, etc.) which are easy to identify and measure, and indirect/concealed

subsidies (irrigation subsidies, power subsidies, credit subsidies, etc.) which are difficult to identify and measure

TYPES OF SUBSIDIES THAT THE GOVERNMENT OFFERS IN INDIA

Subsidies can be broadly classified into two types based on their social and economic impact.

Sources: Indiabudget, DPIIT

ECONOMIES OF SCALE

The high fixed cost of entry is a distinguishing feature of many modern industries Such costs may be incurred as a result of significant R&D investments or the requirement for expensive and highly

specialized capital equipment. The pharmaceutical industry is an example of such an industry (COVID vaccine)

In such a setup, average production costs decrease as each company produces more units The relevant industries are thus referred to as decreasing cost industries or industries with increasing returns to scale. A simple example of economies of scale is when a company must incur a fixed cost to enter an industry but then produces at a constant marginal cost. Demand determines whether or not to produce and how much to produce Demand may be such that consumers are unwilling to pay a price high enough to allow a producer to recoup his initial investment As a result, in the absence of government intervention, no investment or production would occur. However, production would be desirable from the standpoint of society if it occurred While producers are only concerned with their profits, what is good for society is determined by both producer profits and consumer welfare. If a government has reason to believe that consumer welfare that is not reflected in market prices outweighs the losses that producers would face in the absence of a subsidy, the government may want to consider subsidizing the initial investment, thereby encouraging producers to supply the relevant good.

IMPACT OF SUBSIDIES ON AN ECONOMY

A) Implementation of subsidy programs: It is difficult to pinpoint the specific cases in which intervention is socially desirable The

information requirements for appropriate interventions are extremely high, increasing the likelihood of mistimed and mistargeted interventions. These problems with implementation are referred to as "government failures ” As a result, while market failures may necessitate government intervention, government failures may aggravate rather than alleviate the problem Firms may receive the subsidy but not necessarily use it commercially in some cases. At one extreme, instead of using funds to finance output expansion, a firm could use the funds for a variety of investment purposes with medium to long term benefits. At the other end of the spectrum is full "pass through", in which the entire subsidy is used to gain a competitive advantage The extent to which prices change in the subsidizing industry will be determined by several market factors, such as a firm's ability to influence prices

B) The political economy of subsidies: The political economy of subsidies addresses the central question of how the political process interacts with society's heterogeneity of interests to allocate subsidies Several studies have concluded that subsidization is related to the political influence of the beneficiaries (for example, retirees and the elderly in the case of social security or middle and upper class groups in the case of educational subsidies) Much of the discussion of the political economy takes place against the backdrop of a specific political environment that of democracies The "median voter" is the

most basic political model Voters are differentiated along one dimension, such as the economic impact of a subsidy program. If a voter becomes eligible for a subsidy, they can benefit from the program However, a voter will pay a cost because taxes must be raised to cover the subsidy. Those voters who are not eligible for the subsidy will incur a cost and will not support the program, whereas those who are eligible will support it.

C) International consequences of domestic subsidies: In some cases such as export subsidies, the welfare effects on the non subsidizing economy were considered. When a country's exports are displaced by a foreign subsidy, producers suffer, but consumers may benefit depending on the price effects The only time displacement does not occur is when the subsidizing economy is too small to affect global prices Another international aspect of subsidies is the response of one country to another's subsidy through various forms of remedial or offsetting actions. Subsidies, countervailing duties, or legal disputes are all examples of such actions For example, a country that uses import substitution subsidies to offset import competition may face counteraction in the form of export subsidies from an exporting country, which would lower the exporting country's price.

Countervailing duties imposed by an importing country will tend to compensate for the initial subsidy provided by the exporting country

D) Controlling inflation and lowering prices: The government sets the commodity's maximum price to protect the interests of consumers In general, this maximum price is lower than the equilibrium price This is known as the control or ceiling price. The government sets this price because poor people cannot afford to purchase the commodity at its equilibrium price In India, the government controls or caps prices for the goods it considers necessary for the public Some items such as wheat, rice, sugar, kerosene oil, etc have price regulation.

E) Support price: To preserve the interests of producers, particularly farmers, the government will sometimes set a minimum price for a commodity that must be paid to the producers This issue emerges when producers cannot even cover their production costs at the equilibrium price The price set by the government to protect the interests of producers is known as the support price In India, low prices for food grains such as wheat, rice, etc have a negative impact on farmers; they may lose interest in producing grains for human use.

This may result in severe grain scarcity Consequently, the system of support pricing is commonly utilized for agricultural products. This system guarantees that farmers will be able to sell their produce at the support price or higher In the event of an excess supply of the commodity at the support price, the government is willing to purchase any quantity of the commodity to create a buffer stock

SamyakTripathi|MBA 1|2022 24 SiddharthSuman|MBA-3|2022-24

OVERVIEW

BFSI sector comprises Banking, Financial Services and Insurance sector. Banking, Financial Services and Insurance (BFSI) is the industry's umbrella term for companies that provide a range of such financial products or services. The sector is one of the major indicators of how the economy of a country is performing as this sector is often referred to as the backbone of the country

Following the revolutions brought on by the pandemic, the BFSI sector has emerged as one of the highest growing industries Digitization has brought about a massive change in the Indian banking and payments scenario. The use of Artificial Intelligence, Machine Learning, Blockchain and Big Data has completely transformed the way of banking and financial services. In January 2022, Unified Payments Interface (UPI) recorded 5 95 billion transactions worth

Rs. 10.41 trillion. Moreover, the total number of ATMs as of April 2022 in India reached 215,677 out of which 47 5% are in rural and semi urban areas.

BANKING

Banks in India are classified into numerous sections such as public sector banks, private sector banks, small finance banks (SFBs), payments banks (PB), regional rural banks and more Banking sector has remained stable despite global upheavals, thereby retaining public confidence over the years

In June 2022, the number of bank accounts opened under the government’s flagship drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’ reached 456 million and deposits in the Jan Dhan bank accounts aggregated to Rs. 1.68 trillion.

BFSI

FINANCIAL SERVICES

The financial sector comprises banks, insurance companies, NBFCs, co operatives, mutual fund houses and other small financial entities With payment banks being the latest entrant, regulators have eased the entry in the sector. However commercial banks are the major player with 64% of the total assets held

Various measures have been introduced to liberalize, regulate & enhance the industry and to facilitate easy capital access for Micro, Small & Medium enterprises (MSMEs) such as Credit Guarantee Fund Scheme, issuing guidelines to banks regarding collateral requirements and setting up Micro Units Development and Refinance Agency (MUDRA).

As of May 2022, AUM stood at Rs 37 trillion for the mutual fund industry and the total number of accounts stood at 133 3 million Wealth Management has emerged as one of the lucrative fields and is only going to get bigger as the number of HNWI is expected to reach 0 611 million HNWIs by 2025

INSURANCE

Insurance Regulatory and Development Authority (IRDAI) was established in 1999 under the IRDAI Act It is responsible for regulating, promoting & ensuring orderly growth of this sector.

Source: IBEF

With 57 insurance companies including life insurers and non life insurers, LIC stands as the sole public sector co. & General Insurance Company (GIC Re) is the sole national reinsurer. The Life Insurance industry is expected to grow at 5.3% CAGR between 2019 2023 Premiums are expected to reach Rs 24 trillion by FY2031 in India

The market share of private sector companies in the general and health insurance market increased to 49.31% in FY21 (48.03% FY20). The non life insurance market has shown strong growth with an expected ~Rs 2 2 trillion in gross premium in FY22 and 236 2 million policies in FY21

Source: IBEF

GOVERNMENT INITIATIVES

The Ministry of Finance announced that its plans is to infuse Rs. 145 billion as capital infusion in public sector banks in the fourth quarter of FY21

On 29th July, India International Bullion Exchange (IIBX) was launched as a dedicated bullion exchange in the Gujarat International Finance Tec (GIFT) City. The focus here is to facilitate trading and centralize the import market. Jewellers can directly interact with international dealers on the exchange and place their bids. This will help India become a price setter in the coming future

The Reserve Bank of India (RBI) as per announcement by the Nirmala Sitharaman in Budget 2022 is working on launching Central Bank Digital Currency (CBDC) and, thus, is in discussions with fintech firms and four public sector banks for the trial of (CBDC) project

Plans to launch UPI lite are in place and National Payments Corporation India (NPCI) is already working towards the same It will help provide offline UPI services for digital payments It will allow payments of up to Rs. 200 to be made.

In August 2021, Prime Minister Mr Narendra Modi launched e RUPI It is a person and purpose specific digital payment solution which acts as an

e voucher that is sent to the beneficiary’s cell phone Users of this will be able to redeem the voucher at the service provider without the usage of a card, digital payments app, or internet banking access. The government is working on improving this offering even further

National Asset Reconstruction Company (NARCL) will take over non performing loans (NPLs) worth Rs 500 billion from the banks to ease the burden on their books

National Bank for Agriculture & Rural Development (NABARD) to improve infrastructure in villages has sanctioned 204,000 point of sale (PoS) terminals through its Financial Inclusion Fund

RISING TRENDS IN THE INDUSTRY

MOBILE BANKING

While the banks have mastered internet banking, they still face some niggling issues when it comes to mobile banking Therefore, they will have to work towards solving these issues as this is what the customers demand these days More and more banks too are keen on providing these solutions on a virtual platform as it will help them reduce the costs associated with having physical branches

BUY NOW PAY LATER

Buy Now Pay Later is a late entrant into the

financial services space, but it has gained massive popularity among the citizens Banks are understanding that this is how the line of credit space is going to evolve and, thus, are working on creating excellent customer relationships The BNPL market in India is worth ~Rs 0 25 trillion and is expected to grow to Rs. 4 trillion by 2026.

FINTECH REVOLUTION

With digitalization taking centre stage, AI, ML and block chain have been quite instrumental Banks, insurance companies and NBFCs are working towards creating platforms that will allow the firms to display their wide array of services like managing personal finances, investment solutions, settling claims and disputes, getting instant loan disbursements, developing newer channels of payments and much more.

ROAD AHEAD

India has already overtaken the United Kingdom to become the fifth largest economy in the world and on the back of the vibrant BFSI sector, the nation is expected to strengthen its position even further. Continued increment in capital expenditure, technological upgrades, infrastructure projects and government reforms are only going to enhance the growth of this space.

The growing pace of evolution and roll out of new services is inducing a demand that was never seen before. And with the Reserve

Bank of India still cautiously raising the interest rates to promote growth, banks and financial services will keep blooming in the future. The government is at the forefront of providing enough ammunition to the BFSI sector and, therefore, it is expected to reach unprecedented levels as India aims to become one of the biggest world players.

BAJAJ FINANCE LIMITED

SaumyaAshokkumarNair|MBA 8|2022 24 VigneswaranS|MBA-3|2022-24

COMPANY OVERVIEW

Bajaj Finance is the largest deposit taking NBFC in India, catering to more than 50 million customers across the country The company is mainly engaged in the business of lending and has a diversified portfolio across SME, retail commercial loans and consumer finance, among others With a significant presence in both rural and urban India, it is one of the fastest growing non banking finance company in India

Bajaj Finance Ltd has two wholly owned subsidiaries, Bajaj Housing Finance and Bajaj Financial Services Ltd

This year the company is focused on creating model portfolios with minimal downside risk by diversifying across borrowers and has delivered a healthy performance through capital management and a conservative liquidity buffer.

SHAREHOLDING PATTERN

Source: Screener

While reading the shareholding pattern, as published in the company quarterly results of June 2022, it can be observed that Foreign Institutional Investors, except for the Govt of Singapore, are constantly decreasing their holding in the company from 23.64% to 19.98% over the last four quarters

DIIs and the public have absorbed this sale of shares, and their numbers are increasing, but this can be attributed to the large influx of retail participants since the

COVID crash Since September, Rajeev Jain, the Director of Bajaj Finance, has sold shares worth 328 Crores.

FINANCIALS

Source: Company Website

The YoY net slippages were almost flat, with a marginal decrease of 60 basis points, led by the company ’ s diversification plans and shrewd management of auto loans and other unsecured personal loans This reduction in slippages and bad loans has led to an improvement in risk density. The risk weighted average, as a percentage of loans, was reduced to 99% because of lower proportions of high risk unsecured loans.

Source: Motilal Oswal Research Reports

the minimum amount of capital banks must have with the risk associated with the bank’s lending activities. The more risk, the more capital is needed by the bank.

The proportion of the money market in the borrowings mix increased to 50% from 44% last year as the company leveraged the debt capital markets to borrow money at lower interest rates

Bajaj Finance’s books are filled with loans of tenures less than three years The only loans with longer tenures are non LAS mortgages and commercial lending. Because of this, the company can manage its Asset Liability Management without resorting to long term borrowings

CREDIT RATING AND DECIDING FACTORS

Source: India Ratings and Research

Risk weighted asset or RWA is used to link the

Source: India Ratings and Research

KEY RATING DRIVERS

The parent company Bajaj Finserv Ltd (BFIN) is the support system to Bajaj Finance Ltd (BFL) Bajaj Holding holds 39.3% equity in BFIN , which in turn has 52.5% equity in BFL and 33.4% equity in Bajaj Auto Limited (BAL) BAL has a strong business profile and is the primary source of dividend income for BHIL The Bajaj Group is strong enough to finance the liquidity needs of BFL, although that would not be necessary Moreover, BHIL and BFIN do not have any debt obligations

The marketing positioning of BFL in Consumer financing is strong as ever BFL has captured 65% of the market share in consumer durables financing through its 60000 consumer retail stores.As per India Ratings and Research, BFL’s market positioning in consumer durables financing and its operational success have created entry barriers in the segment. The customer base of BFL grew at a CAGR of 23% from FY2017 FY2022.

BFL also has a strong market position in the unsecured personal, business and professional loan segment Moreover, it also offers salaried personal loans and loans to companies and professionals.

BFL offers mortgage products such as home loans, loan against property, lease rental discounting, etc which makes one third of the total AUM. It also caters to higher yielding rural lending, which is 10% of consolidated AUM, and has grown faster than the overall book growth.

OUTLOOK

It has a well diversified funding. 28% of its funding comes from banks The financing through deposits has increased to 19% in the financial year ending 2022 from 6% in the financial year ending 2016 BFL has also been funded through external commercial borrowings, accounting for 3% of the total funding of BFL. It has also been raising funds from banks and the capital market at competitive rates

Liquidity indicator As per Ind Ra, BFL has an 'Adequate' level of liquidity Its asset liability profile is well matched, with approximately 47% of its advances being recovered in the one year bucket as against 44% of borrowings maturing around the same time Even as per the Ind Ra's stress case, which works on the assumption that inflows would delay, the liquidity is found to be reasonable

COMPETITOR ANALYSIS

Source: Money Control

As per the table above, the parent company Bajaj Finserv made the highest quarterly

sales compared to the competitors, which amounts to Rs 15888 26 Cr, followed by Bajaj Finance's quarterly sales amounts to Rs 9280.92 cr.

The YOY Quarterly sales growth is highest in Bajaj Finance at 37.66%, followed by SBI Cards at 31 26% But in terms of Return on Capital Employed, Bajaj Finance falls back compared to its competitors, which is at 10 27%, just above Cholamandalam Investment and Finance Ltd.

OTHERS

The company plans to increase its market share in the used car financing business It has entered into a tie up with Cars24 to provide digital financing for customers using the Cars24 platform.

The rural business arm is growing at almost 11% of AUM in FY22, the same as in FY21. The number of rural locations has increased from 1700 last year and is now at 2140 Urban B2C customer AUM grew by 27% YoY after a decline of 3% in FY21 The consolidated AUM growth was a robust 29% YoY, despite the stable proportion of unsecured loans at 43%.

The company has implemented various initiatives to strengthen its business through partnerships with RBL Bank and DBS Bank

Source: India Ratings and Research

The partnership with RBL Bank has led to Bajaj Finance’s credit card business growing substantially in FY22, which is now being offered at 400+ locations in India The number of credit card users has also grown to 2.8m vs 2.05m YoY.

LITIGATION FINANCING

THE RISE OF ADANI GROUP

We can learn a lot about how successful people have handled and overcame obstacles in their lives when we read their life stories. These teachings aid in life management and future planning for our loved ones One such story can be of Gautam Adani, who is at the pinnacle of the Indian economy.

With a net worth of around US$ 150 8 billion (as of 14th Sept 2022), Adani Group’s chairman is India’s most prosperous, Asia’s wealthiest, and the world’s 4th richest man and was also the 3rd richest man in the world briefly He is the first Asian to accomplish such a feat

BACKGROUND OF ADANI GROUP

The Ahmedabad based Adani Group is a multinational conglomerate in India. Gautam Adani established it as a commodity trading company in 1988, with Adani Enterprises as its flagship Port management, electric power generation, transmission, renewable energy, mining, airport operations, natural gas, food processing, and infrastructure are just a few of the Group's numerous commercial

ventures

The organization operates at 70 locations throughout 50 nations, generating yearly revenues of over 20 billion dollars

EARLY STAGE

Gautam Adani, now 60 years old, was born on 24th June 1962 in a Gujarati Jain family. Like most rich people, Adani didn’t inherit the wealth from his father as his father was a small textile merchant Since the early days of his life, Adani had a keenness toward business and had very little interest in studying, so he dropped out of college in his 2nd year of B COM degree

In 1978, he moved to Mumbai and started working as a diamond sorter for Mahendra Brothers After a few years, he opened his diamond brokerage shop in Mumbai’s Zaveri bazaar, where he earned decent money. In 1981, his elder brother bought a plastic unit in Ahmedabad and asked Gautam to join him From here, Gautam got

introduced to the import and export business as his brother’s firm required 20 tonnes of Polyvinyl Chloride every month, which they used to import. In 1988, he started a company named Adani Exports, now known as Adani Enterprises. In this company, he used to import plastic granules Seeing growth in this business, he also began importing chemicals and petroleum He even started exporting goods and began to be successful. Then comes the historic decision of the LPG policy of 1991, which provided private companies with a vast pool of opportunities. Adani made full use of it and entered the field of infrastructure In 1993 when the Gujarat government came out with the contract of operating Mundra port for private players and seeing this as an ample opportunity, Adani sealed the agreement.

BECOMING A BIG PLAYER

Today Mundra Port is India’s largest private port It can handle 338 MMT (Million Metric tonne) cargo per annum It handled 144 4 MMT cargo in FY 2020 21. There was a reason for which he entered the port business, as his import and export business was growing fast, and many ships were accessing the port, so there was congestion, ultimately affecting his business Initially, he was operating with other’s ships, and seeing this as a problem for the future; he started buying new ships; here, we can see how he has done vertical integration to solve his business problems. Mundra Port has 13 terminals and handles around one fourth of country's cargo

movement

After conquering the port business, the Adani Group entered the power business Adani Power has thermal plants with an operational capacity of 12,450 MW (Mega Watts). In that business, there were some problems like procurement of coal and transporting the same So, he tackled these problems by buying coal mines for coal needed in thermal plants and opening logistics companies for its transportation. Solving all these problems by himself helped in three ways, 1) The final cost of the product he delivered was low, 2) There was more control on the deliverables as there was no dependency on others, and 3) Acquiring all this increased company ’ s assets. He not only bought coal mines in India but also in Australia so that he could reduce his dependency on Indian mines Adani also ventured into different business endeavors and incorporated companies like Adani Gas, Adani Green energy, Adani Transmission, and Adani Wilmar, also ventured into different business endeavors and incorporated companies like Adani Gas, Adani Green energy, Adani Transmission, and Adani Wilmar, also listed on the Indian Stock Market Adani Group has made their presence felt in sectors like aviation. They are also into managing airports and the realty sector, and they have now also developed a data center in Tamil Nadu

THE BIG LEAP

In the last ten years, the Adani Group has

become India’s largest private port operator, largest coal importer, and most significant edible oil importer, it is also one of the biggest coal miners, city gas distributors, private power plant producers, etc Currently, the conglomerate is on a buying spree; in 2018, the group bought Reliance Transmission for ₹12300/ crores, GMR Chhattisgarh for ₹5200/ crore, Kattupalli Port for ₹1950/ crores (share purchase agreement signed). This year they bought Ambuja and ACC cement, and the amount spent for this shopping was an astonishing ₹81,000/ crores And due to such an incredible expansion speed in the past five years, the group’s share prices have shot up at an insane rate For instance, Adani Enterprises has shot by 2388% (as of 15th Sept 2022), and Adani Green has shot up by a mind boggling 7643% (as of 15th Sept 2022, etc But one hidden concern behind this big jump is that the Adani group is not sitting on a mountain of profit but a mountain of debt. The gross debt on the group’s six listed companies has reached ₹2 3 lakh crores as of FY22

Source: Money Control

Source: Finance Yahoo

Much negative buzz around this debt amount exists, and many experts and newspapers say these numbers are hazardous for this group With this aggressive expansion rate, they are in an over leveraging situation, which may create a debt spiral if even a single company fails. This failure can also be detrimental for a country like India, as there is too much contribution from Adani Group to the country’s economy. But here, the surprising thing is that even after such pessimistic buzz, the stocks of Adani are soaring at an exponential rate The possible reasons behind this can be that there is still a positive sentiment among the investors. When there is news about the Adani group buying this company or investing in this project, this creates hype around the company, and retail investors rush to buy these stocks as they want to get associated with this growth. As we all know, the promoter holding in these companies is high, and much lesser shares are available to retail investors, so in the race to become part of this hype, the share prices are hiking as there is much demand for these shares.

By looking at the growth of the Adani Group, this shouldn’t be an issue, but here is a point of attention like Tata Group, which has TCS, and Reliance Group, which has Reliance Industries as their cash cows, Adani group doesn’t have a super profitable business yet on which it can bank in the crises.

THE FUTURE

Adani Group intends to invest $70 billion to make India an exporter of green technology. The Adani Group will significantly aid its efforts to produce green hydrogen, the future fuel, by its dominance in the renewable energy industry. They are at the forefront of the fight to make India less dependent on foreign oil and gas imports and more likely to become a major exporter of renewable energy. This shift will significantly alter India's energy footprint Adani Green Energy plans to spend $20 billion in renewable energy capacity by 2030, with a target of 45 GW (Giga Watt), and create a 2 GW/year solar manufacturing capacity by 2022 23

Following pursing of a 400 MHz spectrum in the 5G airwaves auction, the Adani group announced its entry into the industrial 5G area The group paid ₹212 crores for a millimeter wave (26 GHz) band spectrum. This is the group's first move in integrating its portfolio of digital infrastructure, which consists of data centers, terrestrial fiber, submarine cables, industrial cloud, AI innovation laboratories, cybersecurity, and super applications

Maybe in the future, by offering the services to customers, they will also be able to expand their portfolio into the telecom industry

CONCLUSION

From the points mentioned above, he is a self made man, a true visionary who can gauge the opportunities and make the most out of them. He understood the importance of the port and made the instrumental decision He has a knack for dominating the industry; when the Adani Group entered the cement industry, it bought Ambuja and ACC, and overnight, it became 2nd largest cement manufacturer He likes to be self sufficient and doesn’t like to have dependencies a true business genius who knows how to churn out profits and make successful business companies

STARTENGINE

Pankhuri Jaiswal | MBA 10| 2022 24

INTRODUCTION

StartEngine Crowdfunding, Inc is the largest equity crowdfunding platform in the US and the industry's founder. It was established in 2014 and has its main office in West Hollywood, California, in the United States HOWARD MARKS is StartEngine Co Founder & CEO, KEVIN O'LEARY is the Strategic Advisor and RON MILLER is StartEngine Co Founder & Chairman of the Board

For more than 500 company offerings on its platform to date, StartEngine has raised over $500M via Reg A+ and Reg CF combined through its subsidiaries StartEngine Primary and StartEngine Capital

For all types of investors interested in funding emerging private businesses before they go public, StartEngine is the greatest option For entrepreneurs and firms looking to raise up to $5 million or $75 million, the platform is fantastic.

VALUES

Do the Right Thing The company upholds its reputation and acts ethically with its clients and investors.

Own the Mission It enthusiastically supports founders and shares the objective of StartEngine.

Stay Curious Every day, it questions the status quo and thinks creatively

Care about Others They are sensitive towards one another and each other's feelings

Be a Team Player They are responsible, cooperative, and selfless

Exceed Expectations They put in a lot of effort, stick to their deadlines, and never feel pleased.

WHAT MAKES STARTENGINE UNIQUE?

Account Manager to assist with the Form C and other legal and financial details on your behalf as well as a Campaign Strategist and Creative Lead who will be responsible for the marketing aspects of your raise (full campaign page build, perks, strategy)

Source: StartEngine Website

The leadership has a proven track record: The company ’ s Co Founder and CEO Howard Marks previously co founded the multibillion dollar market cap video gaming firm Activision. Kevin O'Leary, also known as "Mr. Wonderful," is their strategic advisor and a well known businessman and investor

They lead by example: StartEngine has raised more than $60 million from the public, and they allow trading among its more than 30,000 stockholders. They help their clients raise funds by drawing on their personal experience

Seed funding to trading, all in one place: On StartEngine, businesses can raise their initial round of investment and later offer their shareholders the chance to trade

WHAT STARTENGINE OFFERS

1 They send a team to assist with the launch of your offering. They assign an

2. On average, its community will match 65% of your fundraising efforts They help you run advertising efforts during your raise On average, 65% of funds are raised from their investor network of 760,000 potential investors The company ’ s own internal digital ad agency, which utilises a combined approach of Facebook, TV, and other sources with an average ROI of 417% (and up to 1000%+ ROI), is offered to its companies

3. They provide rolling closes on the platform, allowing you to take money from your campaign's proceeds and use it right away for any business expenses or to reinvest in the marketing portion of your raise.

WAYS TO INVEST WITH STARTENGINE

START-UP INVESTING

There are many different start ups in many industries that you can invest in, but each start up has different minimum account size requirements. The minimum might range from $100 to $1,000

A good job has been done by StartEngine in making the platform simple to use. Its start up options can be swiftly filtered by industry, stage of a campaign, and other factors.

A good job has been done by StartEngine in making the platform simple to use Its start up options can be swiftly filtered by industry, stage of a campaign, and other factors.

Currently, you can invest via a personal cash investment account. The platform claims that it will eventually support IRAs, trusts, and joint accounts

The greatest platform for investors interested in actively trading shares of private companies who initially obtained capital through the standard StartEngine platform is Start up Secondary, an alternative to StartEngine. While there are no expenses associated with purchasing shares, there is a 5% transaction fee with selling them.

RAISE CAPITAL

For entrepreneurs who need to raise money, StartEngine is perfect. When it comes to costs, you'll have to pay 7% of the money you obtained plus an additional 2% for equity (StartEngine claims it also deducts an additional $10,000 in deferred revenue at the conclusion of the offering).

StartEngine gives founders and start ups two investment options:

Seed Round: With this strategy, you can raise up to $5 million and start without any cash. StartEngine claims that it is most effective for businesses with annual recurring revenues (ARR) under

$3 million.

Series A (To C): This plan, which is intended for bigger companies, enables you to raise $75 million for your organization Additionally, it grants you access to a qualified broker dealer and additional StartEngine marketing options in addition to everything included in the Seed Round plan

STEPS

Regardless of which regulation you choose, you will take the following steps to raise capital on StartEngine:

Apply : Every business application is examined by StartEngine internally to see if it complies with the company ’ s standards. They proceed if it's a good match!

Craft Your Story: Use your own words to tell your story. Create and design your campaign page with investors in mind It'll help you with your creative needs! For ideas, visit the pages of Teracycle and Knightscope

Set Your Own Terms: On StartEngine, in contrast to venture capital and angel investment, you are in charge and set your terms, including the form of security and its price as well as your company's overall worth They respect that you are aware of your worth.

Prepare Your Legal Documents: Both

| ENTREPRENEURSHIP INNOVATION 25 .

requirements require you to submit information about the company and its top executives as well as fundamental legal papers like your articles of incorporation and board resolutions.

Review Your Financials: In contrast to Regulation Crowdfunding, which does not require a complete financial examination, Regulation A+ offerings do

1. 2

By self certifying your finances to raise up to $107K, you can lower your initial outlay

To raise up to $5M, do a thorough financial audit.

3. 4.

Use one of its low cost, preferred CPA suppliers to obtain a full financial audit to raise up to $5M

Obtain a 2 year independent financial evaluation to start raising up to $1.07M.

IS STARTENGINE RELIABLE?

StartEngine has received a B rating from the BBB BBB ratings range from A+ to F, therefore this demonstrates that the client interactions on the investment platform are above average. StartEngine was given a B grade by the bureau because it failed to respond to any customer complaints However, the BBB's ratings also consider the type of organisation, the amount of time the company has been in operation, as well as applicable laws and licences as well as advertising related issues

But be sure to conduct your own research as well; the conclusions of the bureau does not

guarantee that a company will be dependable or deliver the required the required results In the past year, six complaints against StartEngine have been resolved.

RISE OF INDIA AMIDST GLOBAL RECESSION

RiyaJain|MBA-9|2022-2024

DEFINITION

A “Global Recession” is an extended period of economic decline around the world It involves synchronized recessions across many national economies, as trade relations and international financial systems transmit economic shocks and the impact of recession from one country to another The International Monetary Fund (IMF) is a key player in the global crisis, according to National Bureau of Economic Research According to the National Bureau of Economic Research, the International Monetary Fund (IMF) is a key player in the global crisis, The IMF examines a variety of economic indicators, such as trade, capital flows, industrial production, oil consumption, the unemployment rate, per capita investment, and per capita consumption, in addition to GDP drop with no set time limit for a decline.

Source: Astrotalk

THE RECESSION

Major economies like the United States, Japan, the United Kingdom, South Korea, Canada, Australia, and the Euro zone are expected to enter a recession by the end of 2022 as a result of skyrocketing inflation and increased interest rates However, India has zero chances of slipping into recession due to the rise in domestic prices of key commodities

The economic ramifications of the Covid 19 crisis, the second largest worldwide recession in recent memory, are extensive. The global stock market had its greatest collapse since 1987 as a result of significant daily declines of 12 13% The biggest drop happened on March 16, also referred to as "Black Monday II." The Russia Saudi Arabian oil price war was a major setback for this industry, and by the end of May 2021, the unemployment rate was about 12%, meaning that 1 crore people in India lost their jobs during this time

Bond and commodity markets, such as those for crude and oil, also saw significant price increases A negative supply shock resulted from the COVID 19 pandemic, with manufacturing activity slowing down as a result of premature fatalities, worker absenteeism, and productivity reductions.

As a result of these disruptions, input costs increased, which in turn led to higher consumer prices and inflation. For this reason, the Fed has always argued that supply chain distortions are to blame for the temporary nature of inflation in 2021

THE RISE

India rose in leaps and bounds in the face of recession. Despite three big COVID 19 waves, the Indian economy showed remarkable recovery. Through the middle of 2021, the second wave had a significant negative impact on growth, postponing its economic recovery

In 2021, despite the pandemic, the Indian government continued to support the economy financially. According to official estimates, the overall budget deficit for the fiscal year 2022 will be 6 9 percent of GDP, which is greater than deficits from the years before the pandemic. The Reserve Bank of India maintained its core policy at 4 percent, but beginning in January 2021, it will gradually roll down the extraordinary liquidity measures that were put in place to stimulate growth during the early stages of a recession The import of goods rose particularly sharply in the second half of 2021, leading the imports to increase by 54% while exports also rose to 43%.

Hence, the Indian economy surpassed pre Covid levels in FY22 by growing 8 7% According to the ministry of statistics and programme implementation, the size of the Indian economy at constant prices was ₹147 36 lakh crore in FY22, from ₹135 59 lakh crore in FY21.

India will also face the ripple effects of any global slowdown “Recession in India this fiscal year is certainly a low probability event,” says Crisil principal economist Dipti Deshpande ” He also meant that Global events will inevitably have an influence on India through a decline in export demand, but the country's economy is still mostly driven by internal factors This fiscal year, we anticipate growth in two areas: the contact based services sector's resurgence,

which will give the economy a one time boost as Covid 19 fears fade, and the sustained push for government investment.

The likelihood of a worldwide recession increases along with US inflation, but there will be a lag in how these factors affect US inflation of retail prices. Due to anticipated capital flight to safer locations in response to recession fears and potential Fed rate hikes, which would result in greater returns for capital there, the rupee depreciation will, however, somewhat offset this effect

The pandemic ended up helping the real estate market. First of all, it encouraged Indian households to purchase a property outside in the suburbs in order to obtain a larger house. Second, individuals increasingly view real estate as a source of investment due to rising rental income The IT sector becomes a growth industry by surpassing customary tendencies.

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.