FINLY September 2020 by FINLY

FINLY September 2020 | Issue No. 93

Indian Edtech: Bloom amidst the Corona Gloom Eco Section

Green Finance

Sector Analysis

What is RBI's Restructuring 2.0?

Income with Impact: Green bonds

Automobile SectorÂ

CONTENTS 01

EDITORIAL

TEAM FINLY

COVER STORY

ECO SECTION

Indian Edtech: Bloom amidst the corona gloom

RBI's Restructuring 2.0?

SECTOR ANALYSIS

COMPANY ANALYSIS

Automobile Sector

Maruti Suzuki

INTRIGUING INDEED

GREEN FINANCE

Country Analysis â&#x20AC;&#x201C; Vietnam

Green Bonds

CALL FOR ARTICLES - WINNER

CALL FOR ARTICLES - RUNNER UP

Uprising Sovereign Debt to GDP ratios Globally

EV's and its Impact on traditional Supply Chain

29 ALUMNI SECTION

Pasan Choksi MMS | 16-18

ISSUE NO. 93, SEPTEMBER 2020

Editor's Note

Dear Readers,

“If money is your hope for independence, you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience and ability.” – Henry Ford. Going with the times, this quote of a revolutionary industrialist holds. The world is going through a crisis, let’s make and not break ourselves through this pandemic. Let’s revel through the havoc of this unprecedented situation mankind is facing by leveraging the curiosity within us. It’s an opportunity to expand our knowledge by finding new ways to circumvent the circumstances, invest into the most intuitive ideas that come to our mind and surpass this havoc. Team FINLY has always been a strong set of focused individuals who put in a lot of efforts and dedication to stitch together this magazine and we can’t thank them enough for their constant support and initiative. This month’s cover story explores the Indian Ed Tech industry. It analyses the current boom of the sector amidst the Covid-19 pandemic, the recent rise in FDI seen in this space and the future outlook of the industry. We have received an overwhelming response for this month’s “call for article” competition, with some high-quality content from some of the best management colleges of the country. We thank all the participants for their sincere efforts. This month’s winner and runner-up articles are a recommended read. We are thankful to Prof. (Dr.) Pankaj Trivedi (Course Coordinator, PGDM 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!!!

Akshitaa Bahl |Editor-in-Chief| PGDM FS

Nilomee Savla |Editor -Finly| PGDM FS

ISSUE NO. 93, SEPTEMBER 2020

TEAM FINLY Faculty in-charge

Editor-in-chief

Editor - FINLY

Dr. (Prof) Pankaj Trivedi

Akshitaa Bahl

Nilomee Savla

Conceptualization & Design

Sheenu Jain

Akshitaa Bahl

Rashmi Sharma

Content Team

Joel Johnson

Viren Palan

Shristi Sarda

Prachi Agrawal

Rohan Thakur

Pranit Sawant

| COVER STORY

INDIAN EDTECH – BOOM AMIDST THE CORONA GLOOM Viren Palan | MMS | 2019-21 Joel Johnson | PGDM Finance | 2019-21

Introduction India has the world’s third-largest start-up ecosystem with start-ups across sectors receiving a funding of $20.44 billion in 2019 which is the highest since 2014. However, Covid-19 is all set to spoil the party for the start-ups. A NASSCOM survey reported that 40% of Indian start-ups have either temporarily shut down operations or are on the verge of shutting down due to the pandemic. But there’s one sector which has beat all the odds and is rising like a ‘Phoenix’ – the ‘Edtech’ sector. The Edtech start-ups in India have witnessed stupendous success aided by a strong growth during the pandemic. Corona has proved to be a boon, helping it to emerge as the hottest sector for investments by venture capital firms. The early years Edtech began its journey in India with satellite-based education in 2004. The first Indian Edtech startup to gain prominence was TutorVista, founded by Krishnan Ganesh and Meera Ganesh in 2005. The

platform was not built for students in India but to help students in the US who couldn’t afford local tutoring. There was a reason why it wasn’t meant for India – poor internet penetration. Back in 2005, less than 5% of the Indian population had access to the internet. Another startup, called EduComp tried to revolutionize India's education with the launch of its product called the smartclass. E-learning gathered pace in India by 2008.

The initial hurdles Accessibility of affordable and quality education in India was a major concern. To solve this problem, the government launched initiatives such as Operation Blackboard and the Mid-day meal program but didn’t incorporate technology in its efforts. The education system gave importance to marks and rote learning instead of focusing on improving the understanding of the students. Tutoring and coaching classes mushroomed in every nook and corner of the country. By 2015, India’s digital penetration increased and t 3

| COVER STORY he e-commerce sector grew by multi-folds. The big players in the coaching industry thought of leveraging this digital wave and a few among them such as Akash Institute, MT Educare, FIITJEE, etc. launched online classes. However, these online classes had very few takers. The main reasons were preference for brick and mortar classes, poor internet connectivity in smaller towns and cities, and lack of teacher-student interaction. Lack of personalization hurt digital education which meant that the Indians were not ready to accept digital education. The rise The past 5 years have witnessed the meteoric rise of various Edtechs in India such as Byju’’s, Toppr, Unacademy, Upgrad, Meritnation, etc. A few of them were founded long back but have gained prominence after 2015. They tried to tackle the problems in digital education through innovation and customization. Most of these Edtechs focused on a niche segment instead of the entire market. These startups have slowly revolutionized education in India. Memorybased learning has become a thing of the past. These startups have focused on helping students to gain conceptual clarity. Personalized learning programs, free counseling, feedback, highly trained teachers, interactive learning modules, and the use of data science have helped these Edtechs to negate the earlier shortcomings. Despite the innovation and personalization, they faced a major roadblock in the form of accessibility. Access to the internet continued to be poor and was a costly affair. The success of these Edtechs would have been limited had India not witnessed a ‘data’

revolution. The launch of Jio in 2016 paved the way for a ‘Digital India’. Post Jio’s entry, India saw a dramatic increase in data consumption, thanks to cheaper data.

There was also an increase in smartphone penetration with the entry of Chinese companies which launched affordable smartphones. Thus, the increasing data consumption and smartphone penetration helped these startups to tap the smaller towns and cities, which were once inaccessible. India is now home to over 4450 Edtechs and is the world’s second-largest Edtech ecosystem with a net worth of $14 billion as of March 2020. The Edtech industry in India can be divided into two major segments K12 (kindergarten to 12th) and Post K12. The Post K12 segment is further divided into higher education, technical skilling, test preparation, and reskilling & online certifications. 4

| COVER STORY by 80 percent over the previous month, achieving the highest growth over the last 2.5 years.

Fundings galore

Covid-19 fuels the boom The Edtech sector is seeing a great number of investments and huge expenditures by the government, schools, and students. Due to the ongoing pandemic, the need to constantly adapt and evolve has become imperative leading to an increase in the popularity of online learning in India. The nationwide lockdown has given this sector a boost, unlike the others.

The sector is expected to grow at a CAGR of 52% to become a USD 2 Billion industry by 2021. Amidst the pandemic, the Edtech sector has seen a great shift and spike in its customer base. Many startups have leveraged this situation to become better. Since March, Byju’s has seen a massive increase in its customer base with six million new students accessing various courses on their platform. Toppr saw a huge spike of 100% growth in their free user engagement in May while Vedantu’s collection and revenue in May grew

Covid has given the Edtechs a golden opportunity to raise funds and they have grabbed it with both hands. The Edtech startups in India have raised over $714 million in the first half of this year, a 4.5x increase from last year. Byju’s has become the secondhighest valued startup after securing an undisclosed amount from BOND Capital in June. It is also in talks with DST Global to raise $400 million, which has seen its valuation rise to $10.5 billion. Vedantu, a Bengaluru based online Edtech startup has raised around $100 million from Coatue in July while Unacademy has raised $110 million this year. Other Edtechs which have attracted big investments this year are Doubtnut, WhiteHat JR (now acquired by Byju’s), Classplus, Testbook, and Toddle.

Challenges Though the sector has seen great growth, it still has to adapt and create solutions to sustain after the current pandemic. 5

| COVER STORY In India, various boards provide different levels of education and have a different syllabus. Edtechs have to provide education to students of all the boards and these boards have different guidelines. Also, they have to focus more on small cities and villages if they wish to continue the growth. They also need to find out solutions to the infrastructure problem which is preventing them from unleashing their full potential in smaller towns and villages.

customizable, and less expensive, but might not be able to do justice to the in-person classroom experience. Despite this, we believe that Edtech is here to stay. Itâ&#x20AC;&#x2122;s the future of education. We also foresee an intense battle in the Edtech sector spurred by the NEP, which has focused on integrating education with technology. The battle for glory will lead to price-war, smaller players will be knocked off and consolidations will become the new norm. It will be a case of the survival of the fittest!!

Edtech beyond Covid-19 The biggest question is will the Edtech sector be able to continue the boom once the covid-19 pandemic is over? As things become normal, educational institutes will reopen and classrooms will once again be full. Â These Edtech companies will surely find it difficult to retain their client base. If the vaccine is delayed, various rules like wearing a face mask, maintaining social distance, and compulsory use of hand sanitizers will make it difficult for the educational institutes to get back to the usual normal. Thus, a prolonged pandemic will help Edtechs. They are also transforming the education system, something which the government authorities have failed to do. Online learning has its own set of advantages of being convenient, 6

| ECO SECTION

RBI’S RESTRUCTURING 2.0 Rohan Thakur | PGDM FS | 2019- 21 In the Monetary Policy Committee (MPC) meeting that was held on the 5th of August, the committee unanimously voted to keep the policy rates unchanged while maintaining an accommodative stance. This decision was taken by the Reserve Bank of India (RBI) in the backdrop of the headline inflation moving above its tolerance band of 6%. The RBI has kept room to reduce rates when the inflation moves towards its target of 4%, which may happen as soon as November as per the current trajectory. With the moratorium on loans ending on the 31st of August, RBI believed that a restructuring package was necessary for businesses and households going forward. There has been a sizeable reduction in the moratorium in June from that in April and as the economic activity normalizes further, the need for

restructuring will be even lower in the future. So in a bid to ease the pressure on asset quality for banks and provide relief to borrowers, the RBI has allowed a one-time restructuring of loans. What is Restructuring? The RBI has a framework for revitalising the distressed assets of the bank in the economy. The framework is a corrective action plan that incentivises early identification of problem accounts, timely restructuring of accounts that are considered to be viable, and suggests prompt steps that must be taken by the lenders for recovery or sale of unviable accounts. As proposed in the Framework, before a loan account turns into an NPA, banks are required to identify incipient stress in the account by creating three sub-categories under the Special Mention Account (SMA) category as given in the table below:

| ECO SECTION

Source-: RBI Website

The Reserve Bank of India (RBI) has set up a Central Repository of Information on Large Credits (CRILC) to collect, store, and disseminate credit data to lenders. Banks are required to report credit information, including classification of an account as SMA to CRILC on all their borrowers having aggregate fund-based and non-fund based exposure of Rs.50 million and above with them. As soon as an account is reported by any of the lenders to CRILC as SMA2, banks are mandatorily required to form a committee to be called Joint Lenders’ Forum (JLF). The JLF may explore various options to resolve the stress in the account. The JLF may propose restructuring the account that normally involves modification of terms of the advances, which generally includes a change of repayment period / repayable amount / the number of instalments/rate of interest. The intention is to arrive at an early and feasible solution to preserve the economic value of the underlying assets as well as the lenders’ loans. RBI’s Restructuring 2.0 The banks have granted a six-month moratorium to borrowers but the ongoing pandemic crisis suggests that the pain for businesses and borrowers will continue to persist for a longer time. Hence a one-time restructuring was imperative for both borrowers and banks. This was necessary to ensure that banks continue to provide support to businesses hit by Covid-19 which would otherwise have been classified as NPAs.

But RBI needed to strike a delicate balance and look for an innovative solution that not only ensured timely resolution of stressed assets but also didn’t give a lot of leeway for banks to engage into evergreening of loans. Hence, the RBI announced that only those borrowers that were classified as ‘standard’, and not in default for more than 30 days with any bank as on March 1, 2020, will be eligible for restructuring. This move expels any chronic defaulters or highly stressed accounts. As of March 2020, 93.9 per cent of banks’ performing portfolios consisted of accounts that have either zero dpd (days past due) or were SMA-0 (overdue 1-30 days), according to RBI’s FSR report. Of this, 47.4 percent were rated AA and above and 26 per cent are investment grade (till A rating). This mitigates the risk of shocks going ahead and ensures that banks’ stability is not compromised in the process. Although one major area of concern is the fact that restructuring of personal loans like auto, credit card, housing, personal loans, education, etc. is also allowed this time which was not allowed in the past. A clearer picture will emerge going forward when the additional details come in. In the earlier restructuring processes of the RBI, the banks were allowed to make lower provisioning of 5 per cent for standard loans against the 15 per cent required for bad loans. This tool was misused by banks to a large extent and led to evergreening of loans.

| ECO SECTION Realising that banks must maintain adequate provisioning, the RBI under restructuring 2.0 has stated that while the accounts will remain ‘standard’, they will require a minimum 10 per cent provisioning. This will ensure prudent provisioning and also leave enough incentive for banks to do restructuring. With a view of offering relief to only those businesses which are hit by Covid19 and to ensure a time-bound window, the RBI has also mandated that the restructuring cannot be invoked later than December 31, 2020. In case of personal loans, the resolution has to be implemented within 90 days from the date of invocation, in other cases by 180 days. There is also a limit on the extension of the tenure of the loan under the restructuring. Banks can extend the residual tenor of the loan with or without payment moratorium, by a period not more than two years. This will ensure that banks do not end up kicking the can down the road indefinitely. Getting everyone on board for resolution has been a key issue with a resolution in the past. Under restructuring 2.0 the RBI has mandated consent of 75 percent of lenders by value. This is in line with the existing framework on the resolution of stressed assets though higher than 66 per cent under IBC. The leeway to keep the account as ‘standard’ and the unprecedented challenges faced by all lenders may lead to better consensus this time around.

| SECTOR ANALYSIS

AUTOMOBILE SECTOR Rashmi Sharma | PGDM - FS | 2019-21 Shristi Sarda | PGDM - FS | 2019-21 Overview The automotive industry includes a good range of companies and organizations which are involved within the business of designing, developing manufacturing, marketing, and selling of automobiles. This industry is one of the world's largest economic sectors by revenue. The industry constitutes majorly four categoriesPassenger Vehicles, Commercial Vehicles, Three Wheelers, and Two Wheelers. The auto industry contributes around 7.5 percent of India's GDP. The industry attracted Foreign Direct Investment (FDI) worth US$ 24.21 billion during April 2000 to March 2020 according to the data released by Department for Promotion of Industry and Internal Trade (DPIIT). Domestic automobile production increased at 2.36 percent CAGR between FY16-FY20 with 26.36 million vehicles being manufactured in the country in FY20. Overall, domestic automobiles sales increased at 1.29 percent CAGR between FY16FY20 with 21.55 million vehicles being sold in FY20. Electric vehicle sales, excluding erickshaws, in India witnessed a growth of 20

percent to succeed in 1.56 lakh units in 201920 driven by two-wheelers. However, due to the Covid-19 pandemic, the retail sales of automobiles decline 42 percent in June due to tepid demand. With the ease in lockdown restrictions the vehicle registrations, which is an indication for retail sales, improved as compared to May when registrations had dropped 88.9 percent to about 200,000 units. Looking at the exports’ data of FY20, the contribution of Two Wheelers is highest with around 73.94%, passenger vehicles stood second with 14.22% contribution, followed by Three Wheelers and Commercial Vehicles with 10.55% and 1.26% respectively. Porter’s 5 Forces Model: The Threat of New Entrants Indeed, the average person cannot come along and start manufacturing automobiles. The involvement of foreign players with the capital, required technologies, and management skills began to undermine the market share of many Indian automobile companies. 10

| SECTOR ANALYSIS Automobiles depend heavily on consumer trends and tastes. While car companies do sell an outsized proportion of vehicles to businesses and car rental companies (fleet sales), consumer sales are the most important source of revenue. For this reason, considering consumer and business confidence should be a higher priority than considering the regular factors like earnings growth and debt load. The Threat of New Substitutes Rather than looking at the threat of someone buying a different car, it is also needed to look at the likelihood of people taking buses, trains, or airplanes to their destination. The higher the value of operating a vehicle, the more likely people will seek alternative transportation options. The price of gasoline features a large effect on consumers’ decisions to shop for vehicles. Trucks and sport utility vehicle vehicles have higher profit margins, but they also guzzle gas compared to smaller sedans and lightweight trucks. When determining the availability of substitutes, consideration of time, money, personal preference, and convenience in the auto travel industry is important Competitive Rivalry The auto industry is an oligopoly that helps to minimize the effects of price-based competition. The automakers do realize that price-based competition does not necessarily lead to increase in the size of the marketplace and hence historically they have tried to avoid price-based competition, but recently the competition has been intensified as rebates, preferred financing, and long-term warranties have helped to lure in customers, but they also put pressure on the profit margins for

vehicle sales. Every year, car companies update their cars, and this is part of their normal operations, but there can be a problem when a company decides to significantly change the design of a car. These changes can lead to massive delays and glitches, which result in increased costs and slower revenue growth. While a new design may pay off significantly in the long run, it is always a risky proposition. Bargaining Power of Suppliers The bargaining power of automakers is unchallenged. Many suppliers rely on one or two automakers to buy most of their products. It could be devastating to the previous supplier’s business if an automaker decided to switch suppliers and hence suppliers are extremely susceptible to the demands and requirements of the automobile manufacturer and hold little power. For parts suppliers, the lifespan of an automobile is especially important. Generally, the longer a car stays operational, the greater the need for replacement parts during its lifetime. On the other hand, new parts are lasting longer, which is great for consumers, but it is not such good news for parts makers though. For example, when most car makers moved from using rolled steel to stainless steel, this change extended the life of parts by several years. Bargaining Power of Buyers The bargaining power of buyers is unchallenged. Consumers may become dissatisfied with many of the products being offered by certain automakers and begin looking for alternatives, namely foreign cars.

| SECTOR ANALYSIS Major Players in Indian Automobile Industry Maruti Suzuki India Limited is India’s biggest carmaker with around 50% market share in the passenger vehicles segment and has around 33,180 employees. Tata Motors is another leading player with around 40% market share, but it has witnessed around 82% fall in sales in June quarter due to pandemic. It is present in segments like cars and utility vehicles, trucks and buses, and Defense. The company has extended its presence internationally through entering joint ventures (JV) like the strategic alliance with Fiat and Marco Polo. Tata Motors is present in about 175 countries with research and development (R&D) centers in the UK, Italy, India, and South Korea. Hero MotoCorp Limited is one of the world’s largest manufacturers of two-wheelers. It is present in South Asia, Africa, Middle East, and Latin America. Its key products include two-wheelers up to 350cc and spare parts. The company has an objective to reach 50 global markets by 2021. The company plans to invest Rs 10,000 crore (US$ 1.43 billion) over the next 5-7 years.

Source: Indiancompanies.in

Government Policies The Government aims to develop India as a global manufacturing and research and development (R&D) hub.

National Automotive Testing and R&D Infrastructure Project (NATRiP) centers as well as the National Automotive Board has been set up by NATRiP to act as facilitators between the Government and the industry. Its proposal for "Grant-In-Aid for test facility infrastructure for Electric Vehicle (EV) performance Certification from NATRIP Implementation Society” under FAME (Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles in India) scheme was approved by Project Implementation and Sanctioning Committee (PISC) on January 03, 2019. The Indian Government has also set up an ambitious target of having only EVs being sold in the country. The Ministry of Heavy Industries, Government of India, has shortlisted around 11 cities in the country for including EVs as part of their public transport system under the FAME scheme. The first phase of the scheme was extended to March 2019 while in February 2019, the Government approved the FAME-II scheme with a fund requirement of Rs 10,000 crore (US$ 1.39 billion) for FY20-22. Under Union Budget 201920, the Government announced an additional income tax deduction of Rs 1.5 lakh (US$ 2146) on the interest paid on the loans taken to purchase EVs. Outlook Indian automotive industry is expected to reach around Rs 16.16-18.18 trillion (US$ 251.4282.8 billion) by 2026. FY 2020-21 is expected to be a crucial year for the automobile industry as on account of Covid-19 lockdown, slow economic growth, negative consumer sentiment, BS-VI transition, changes to the axle load norms, liquidity crunch, low capacity utilization and potential bankruptcies. . The Government of India expects the 12

| SECTOR ANALYSIS automobile sector to attract US$ 8-10 billion in local and foreign investments by 2023. India is expected to become "Global Automotive Triumvirate '' - the global BIG 3 in the coming 20 years and will also exceed the Indian automotive sales from the US market by the mid-2030s. Post Covid-19 Consumer preference will be more towards individual health, hygiene, and cleanliness during travel and hence consumers might switch towards personal mobility, and shared mobility will take a backseat in the medium term. But with subdued sentiments and an aversion to higher discretionary spending like buying new vehicles, there is expected to be increased demand for used vehicles in the next 3 â&#x20AC;&#x201C; 6 months. Service-based models such as pay-asyou-go and lease rentals may also see uptake from Indian consumers. Nowadays, many OEMs launched online sales channels to digitally connect with consumers indicating new ways of doing business. On the other side of the value chain, suppliers are expected to face significant financial and operational burdens. Amid Pandemic Indian automotive suppliers will face multifold challenges due to domestic as well as global exposure. Lower domestic sales will lead to reduced revenues and lower capacity utilization. Lockdowns in North America and Europe will lead to both import and export limitations. Electric Vehicles Manufacturing Project-Uttarakhand, Agricultural & Earth Moving Vehicle Manufacturing ProjectUttarakhand, Automotive Manufacturing unit in LucknowUttar Pradesh are the major upcoming projects in this industry.

| COMPANY ANALYSIS

MARUTI SUZUKI Business Overview: Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation, Japan, is India’s largest passenger car maker. The Company’s business includes the manufacturing and sale of passenger vehicles in India. It made a small beginning with the iconic Maruti 800 car, and currently has a vast portfolio of 16 car models with over 150 variants. Maruti Suzuki’s product range extends from entry-level small cars like Alto 800, Alto K10 to the luxury sedan Ciaz. The company also engages in the facilitation of pre-owned car sales fleet management, car financing. The company has nine subsidiary companies, namely Maruti Insurance Business Agency Ltd, Maruti Insurance Distribution Services Ltd, Maruti Insurance Agency Solutions Ltd, Maruti Insurance Agency Network Ltd, Maruti Insurance Agency Services Ltd, Maruti Insurance Agency Logistics Ltd, True Value Solutions Ltd, Maruti Insurance Broker Ltd and JJ Impex (Delhi) Pvt Ltd. Its service offerings include Maruti Finance, True Value, Maruti Genuine Parts, Maruti Genuine Accessories, Maruti Suzuki Auto Card, and Maruti Driving School. It has approximately five plants, located in Palam

Gurgaon Road, Gurgaon, Haryana, and at Manesar Industrial Town, Gurgaon, Haryana, with an installed capacity of over 1.5 million vehicles per year. The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint venture between the Government of India and Suzuki Motor Corporation, Japan in February 1981. Presently, Suzuki Motor Corporation owns equity of 56.2%. The Company’s shares are traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Corporate Governance:

Source: Equitymaster.com

The major stake in Maruti Suzuki India limited is held by its foreign promoter Suzuki Motor Corporation and foreign institutions, which make up 77% of the shareholders. 14

| COMPANY ANALYSIS

The company follows a multi-tier management style, with the Board of Directors being at the top. The company’s business is divided into five verticals: Quality Assurance, Production, Engineering, Supply Chain, and Marketing & Sales. The top-level management of these verticals consists of a Japanese manager and an Indian manager. Mr. R C Bhargava is the chairman of the company. Mr. K Ayukawa is the Managing Director and CEO. Mr. Ajay Seth is the Chief Financial Officer, Member of the Executive Board - Finance, Corporate Planning, Company Secretarial, Legal, Internal Audit. Mr. T Suzuki, Mr. K Saito, Mr. O Suzuki, Mr. Hisashi Takeuchi are Directors of the company. The independent Directors of the company are Ms. Pallavi Shroff, Mr. R P Singh, Ms. P Shroff, and Mr. D S Brar. For the year ending March 2020, Maruti Suzuki India had declared an equity dividend of 1200.00% amounting to Rs 60 per share, at the current share price of Rs 6893.10 this results in a dividend yield of 0.87%.

Financial Analysis Statement of Profit and Loss

(₹ in Crores)

These two combined indicate a decline in the business activity of Maruti Suzuki. Ratio Analysis:

Source: ibef.org

Inventory Turnover Ratio: Inventory turnover is a ratio that shows how many times a company has sold and replaced its inventory in a given period. The inventory turnover ratio has been 23.54, lower for the year ending March 2020 as compared to last year’s figure of 25.90. This indicated a decrease in the sale of vehicles. Return on Equity: The return on equity is a measure of the profitability of a business with respect to its equity. The higher the return, the better it is. Maruti Suzuki’s return on equity has declined from 16.24% to 11.48%. Current Ratio: The current ratio measures a company’s ability to pay its short-term obligations. The current ratio for the company has also declined from 0.87 to 0.75, indicating a decrease in its liquid assets to cover up its short-term liabilities.

Source: Hindustan Times

There has been a decline in the revenue from operations in the year ended March 2020 from the previous year’s revenue. This is due to decline in the sale of vehicles. The total expenses have also decreased due to decline in raw materials consumed.

Impact of Covid-19 The revenue from operations has decreased by 77.43% from Rs. 182,077 crores to Rs. 41,106 crores. Profit before tax has been negative for the quarter ended June 2020 decreasing by 122.84%. 15

| COMPANY ANALYSIS

Source: Indiancompanies.in

This has resulted from the outbreak of global pandemic Covid-19 and the nationwide lockdown announced by the government, due to which the operations were suspended for a major part of the quarter and gradually resumed with required precautions. Future Outlook: Maruti Suzuki witnessed an increase in the share of first-time-buyers by 5.5% in the June 2020 quarter. The vehicle sales improved in July. The company is still skeptical about the festive season sales since it depends on the span of the effect of the COVID-19 pandemic. The use of personal vehicles for mobility is expected to increase which will in turn improve the sales of the company. Additional car buying has also improved. The company has also seen inquiry levels reach 85% to 90% of pre-COVID levels with higher share in mini and compact segments at around 65% against around 55% earlier. Maruti Suzuki is expected to recover the fastest post the COVID-19 because of its strong brand equity and strength in entry-level and middle segment private vehicles.

| INTRIGUING INDEED

COUNTRY ANALYSIS: VIETNAM Prachi Agrawal | MMS Finance |2019-21 Background Officially recognized as the Socialist Republic of Vietnam is a country in Southeast Asia. The national capital of the country is Ha Noi, the official currency is the Dong (VND) and the national language is Vietnamese. With an estimated population of 97.3 million, it is the 15th most populous country in the world. It has a land area of 331, 689 square kilometers and is bordered by China in the North, Cambodia and Laos in the West and the East Sea in the East. Remaining a Communist dictatorship even today, it is one of the fastest growing economies in the Asia-Pacific region. The country is a prominent agricultural exporter and has the potential to become a high-end tourist country. A reduction in demand due to the COVID-19 pandemic is not expected to have a longterm effect on the country’s exports. Since 1986, Vietnam has been carrying out economic reforms under the 'Doi Moi' to move from a centrally planned to a marketoriented economy. It joined the World Trade Organisation (WTO) in January 2007 and helped them make their way to the global market. Unfortunately, a vast majority of the country still remains poor.

Economic Indicators Vietnam witnessed the slowest expansion in the gross domestic product (GDP), 0.36% YoY in the second quarter of 2020, since 2000. This was due to the coronavirus pandemic and a slump in global demand. The GDP from agriculture witnessed a sharp increase and the GDP from manufacturing showed some upward movement for the same quarter. A hike in the prices for housing necessities such as food, water and electricity contributed to the increase in the inflation rate to 3.39% in July 2020. The unemployment rate increased from 2.22% to 2.73%. In an effort to abate the impact of COVID-19, the central bank of Vietnam lowered the refinancing rate by 0.5%, bringing it down to 4.5%. The personal income tax rate in Vietnam is 35% and the corporate tax rate is 20% Political Factors Vietnam is a socialist country but is led by the Communist Party of Vietnam (CPV). The president is the head of the state and the prime minister is the head of the government. The country’s human rights are 17

| INTRIGUING INDEED in a poor state with freedom of expression being curtailed. Like many countries in the world, corruption is a hindrance to the development of this country. Due to this there is immense public dissatisfaction among the population here. Vietnam is a member of the United Nations even though there exists a bitter history between the two. It is also a member of other organisations like the Association of Southeast Asian Nations (ASEAN) and the Non-Aligned Movement (NAM). Economic Factors Vietnam is the 46th largest economy in the world and the economy is developing at a rapid rate. It is an export reliant economy. The government is taking steps to move toward economic liberalization and international integration. High inflation has been troubling the economy for over a decade now. One of the biggest risks to the economy is the high amount of debt and the high rate of unemployment. But since labor costs remain competitive, it is an incentive for foreign investment in the country. Social Factors The ageing population of the country poses a threat to Vietnam but around half of the population is of working age. Despite this, productivity remains extremely low. The life expectancy is high in the country at 71.7 years for men and 79.9 years for women. There is a wide gap in the wealth distribution of the country and the rich keep getting richer while the poor keep getting poorer. Brain drain is another problem in the country as young scholars dream of building a life abroad. Technological Factors Vietnam is the eighth largest provider of IT

services in the world and many countries are moving their manufacturing operations here. This is both good and bad as it could lead to a growth in the economy but the country lacks skilled labor. A huge power shortage problem plagues the citizens. The Internet is easily accessible at affordable prices. Environmental Factors Famous as one of the most beautiful countries in the world, tourism is an important contributor to the economy. It is also very vulnerable to natural disasters and climate change due to the presence of a long coastline. COVID-19 has had an impact on the tourism industry and the health of the population. This is not a good sign since the country receives millions of tourists every year. One of the major issues of the country is air and water pollution. Businesses in Vietnam take this very seriously and plan their business processes and operations accordingly. They do not allow business practices that are detrimental to the environment. Legal Factors On-going progress is being made on the improvement of the working and implementation of the legal framework for the development of a market economy and also to create an investable environment for foreign as well as domestic investors.There exists a two-tier court system, although the independence of the courts remains in question. Judgements made are not available to the public and past judgements are not easily accessible. Impact of COVID-19 Vietnam has been able to limit the exposure 18

| INTRIGUING INDEED of the COVID-19 epidemic so far but that does not mean its economy escaped the consequences of the virus. The decline in demand has reduced trade, both domestic and international, but the efficient containment strategy will support a swift recovery. The country was one of the first to lift all imposed lockdowns. In April 2020, the IMF estimated the Vietnamese economy to grow at 2.7% which was revised to 7% for the year 2021. This means that the country is expected to recover from the impact of the Coronavirus in 2020 itself. Countries across the world that were extremely dependent on China for its supply chain are planning to shift these operations to other countries, and Vietnam could be the beneficiary to such a move. In order to fuel foreign direct investment into the country, the government has improved the legal aspects and created a healthier business environment. Availability of cheap labor will only increase this further. Vietnam is likely to bounce back from the effects of the Coronavirus owing to the quick decision making with respect to change in reforms. It has the potential to inspire world governments by becoming an example from the South.

| GREEN FINANCE

GREEN BONDS Hiral Mody | MMS Finance | 2019-21 Pranit Sawant | PGDM FS | 2019-21 A Green Bond is a type of fixed income instrument that is used especially to raise funds for climate and environmental projects. Green Bonds are typically linked to the assets and are backed by the balance sheet of the entity that issues it. Hence, these bonds have a credit rating which is like issuers other debt obligations. Green Bonds are also famously known as climate Bonds. With growing issues of climate change and the amount of investment that would be required to fund the adaptation and mitigation strategies, sourcing the funds through issuing fixed-income securities became one of the best viable options. These bonds are playing an important role in transition of the global economy towards a greener future. Background: Two multilateral development banks namely the World Bank and European Investment Bank issued the first green bond in 2007.

Since then the green bond market has grown exponentially and is currently pegged at over $180 billion in cumulative issuance. In 2012, green bond issuance amounted only to $2.6 billion. However, 2015 has been a groundbreaking year in green bonds, when currency green bonds were seen in the global market and innovative structuring along with maiden green bond issuance in several countries. The green bond market doubled to $81 billion in 2016 from $42 billion in 2015. Chinese borrowers played a big role in these, who accounted for $32.9 billion of the total, or more than a third of all issuances. However, the interest is seen globally, with the European Union and the USA among the leaders too.

| GREEN FINANCE

Green Bond issuance slowed down in 2018 with a marginal increase of 9 Billion Dollars in 2018 but picked up again in 2019 with issuance reaching 200 Billion Dollars. Income for Investors: For investors, Green Bonds are an opportunity to invest in climate solutions through a AAA-rated fixed income product. Repayment of the Green bond is not linked to the credit or performance of the projects in which they are invested, and investors do not assume the specific project risk. Investors benefit from the good credit rating AAA/Aaa credit, as well as from the due diligence process of the World Bank for its activities. For example, Green bonds issued by the World Bank are just like regular World Bank bonds, except that the proceeds from these bonds are dedicated specifically to support World Bankfunded projects addressing climate change solutions in different countries. Benefits of Green Bonds: Companies involve themselves more into green innovations (Green Innovations:

Number of Green patents filed/Number of Total patents filed in a year) after issuing Green Bonds which ultimately help in long term sustainability and increasing their Environmental Score and at the same time reducing emissions. Green Bonds are relatively safe investments as Governments around the world are reviewing and increasing the popularity of the same for the better future of the countries. World Economic Forum suggests that around $700 billion per year should be invested in Green Bonds which will provide liquidity to the investors and mitigate the risk. Green bonds provide an opportunity to invest in a sustainable environment and make commitments to better and greener Earth. Current Happenings in Green Bonds: According to the Economic Survey 201920, India has become the second-largest market globally with $10.3 billion worth of transactions in the first half of 2019 itself. The parent company of Google which is Alphabet issued a $5.75 billion in Green Bonds/Sustainability Bonds on 04th August 2020. It is considered to be the largest issuance carried out by any company. West Berkshire Council launched the UK’s first local Government Bond to raise around 1 million Euros to fund the solar panel installations. The money has been raised from residents on 15th July 2020. Moody’s has expected Green Bond market to have a massive jump of around 24% to reach a record high of $400 billion in 2020 21

| GREEN FINANCE India’s Contribution to Green bond market: Indian green bond market also witnessed several critical milestones following the first green infrastructure bonds issued by India in February 2015. India’s private sector and its financial institutions have leveraged this new innovative mechanism to raise capital, attracting new foreign investments, and inducing new momentum in the market. International Financial Corporation, a sister organization of the World Bank and member of the World Bank Group along with India introduced First Green Masala Bond which are rupee-denominated bonds to fund infrastructure projects in India. Green bonds issuance in India witnessed a 30% year-on-year increase in 2016, making India the seventh-largest green bond market globally. These green bonds have been crucial in increasing financing for sustainable initiatives in India and help achieve INDC’s (Intended Nationally Determined contributions) by providing resources to sunrise sectors like renewable energy, thus contributing to India’s sustainable growth. The Climate Bond Initiative, on its update on the green bond initiative in India, have indicated that 62% of the green bond proceeds have been allocated to renewable energy projects like Solar Power plants, Wind Energy Projects, Biofuel Energy plants followed by the low carbon transport sector and low carbon building accounting for 17.5% and 14% of the proceeds, respectively.

Green Bond Principles (GBP): The Green Bond Principles were established in 2014 by a group of Investment banks which include CitiBank, JP Morgan Chase, Deutsche Bank, Goldman Sachs among others. 1. Use of proceeds: The proceeds obtained from the Green Bonds should be strictly used for the Green projects related to the betterment of the society and environment. The benefits gained from the project should be quantified, wherever possible by the issuer 2. Process for Project Evaluation and Selection: The objectives laid down should be met and the projects specified in the GBP should be undertaken for better project selection 3. Management of Proceeds: The net proceeds obtained from the issue should be credited to a sub-account or to sub-portfolio or any other manner deemed to be appropriate and mentioned. 4. Reporting: Transparency should be maintained and reporting should be done in a timely manner regarding the use of funds raised from the issue.

| CALL FOR ARTICLES -WINNER

UPRISING SOVEREIGN DEBT TO GDP RATIOS GLOBALLY, AN ALARMING ISSUE? Kapil Deshpande | 2019-21 Chetana’s R.K. Institute Of Management The national debt is the public and intergovernmental debt owed by the central government of a country. It is also referred to as sovereign debt, country debt, or government debt. The debt has two components. First component is debt held by the public which the government needs to pay off to the buyer of its bonds. The buyers include international investors, foreign governments and country’s citizens. Second component is the intergovernmental debt. The central government owes it to other governmental agencies. These agencies provide fund to meet government expenditure. When expenditure is more than tax revenue collected the debt increases. For each year with a budget deficit some value gets added to the debt and vice versa in case of budget surplus. Reasons for increase in Debt Public representatives often resort to deficit financing to keep the voters happy, this is called expansionary fiscal policy. The government inflates the money supply in the economy. Budgetary tools are used

to increase spending or cut taxes. The consumers and businesses spend more due to increased money at their disposal leading to a short-term growth. The government expenditure includes defense equipment, health care, construction etc. It provides contracts to private firms who hire new employees. They spend their subsidised earnings on gasoline, groceries, and new clothes which boosts the economy. Same phenomenon can be observed among government employees. Ways to Pay Off the Debt. There are two instruments of contractionary fiscal policy to control debt. First is Cutting spending but it has drawbacks. Government expenditure is a component of GDP. When the government cuts the expenditure by large margin economic growth decelerates, leading to a larger deficit and lower revenues. The best scenario would be to reduce spending in areas which don’t generate demand. Second instrument is Raising Taxes but according to the Laffer curve, if tax increases 23

| CALL FOR ARTICLES -WINNER beyond the 50% bracket it can deter growth.The individuals and industries paying higher taxes will be downhearted. Sometimes such situations result in the end of a politician's career. Government can finance the debt instead of balancing it, using treasury bonds. Since government bonds are attractive than riskier corporate bonds and as long as the debt is below tipping point, creditors have faith in the government which allows it to run a deficit for years. An effective way to reduce the debt is Growing the economy faster than the debt. This implies reducing theÂ debt-to-GDP ratioÂ by increasing GDP which is possible by increasing consumer expenditure via increased disposable income. But the balance between debt and expenditure has to be prudently maintained. Another way is Shift spending which is rarely discussed. The government should shift spending to areas which create the maximum jobs. The defence expenditure forms a big portion of budget and a slice must be channeled towards education and public infrastructure. This shifting of expenditure will create jobs, generate demand and reduce the debt. Impact on Economy Moderate increases in the debt provides a boost to economic growth, but rapid increase in debt can accelerate growth leading to a boom, which governed by an economic cycle will lead to a bust. An ever-increasing sovereign debt gradually dampens growth over the long term. As the growth dampens creditors demand larger interest payments for compensation against increasing risk that they won't be repaid. If the government

borrows more it slows the economy because businesses borrow less.They face a shortfall of funds to expand business and hire workers which in turn reduces demand. As consumer spending decreases firms slash prices. As they make less money, they retrench workers. And if the interest rates continue to rise the economy enters into recession. The national debt turns into a sovereign debt crisis when the country cannot pay its bills. The first indication is when the country cannot find lenders offering low interest rate. Banks fear that the country will default and not pay the bonds. They demand higher yields to offset their risk which costs the country more to refinance its debt. Investors study the debt-to-GDP ratio to understand a company's ability to pay off its debt. Investors worry about default when the debt-to-GDP ratio is more than 77% (for developing countries 64%), which is the tipping point, according to a study by the World Bank. Study establishes that if the debt-to-GDP ratio exceeds 77% for an extended period of time, it slows economic growth. Every percentage point of debt above this level costs the country 1.7% (for developing countries 2%) in economic growth. The country cannot keep rolling over the debt as it shows signs of default after a while which creates economic catastrophe like debt crisis in Greece, Eurozone, U.S. and Iceland. Bottom Line The debt-to-GDP ratio is an equation reflecting a country's gross debt in the numerator and its gross domestic product (GDP) in the denominator. Countries can enter into problems with debt-to-GDP ratios in numerous ways. Unexpected economic slowdowns, demographic changes or 24

| CALL FOR ARTICLES -WINNER disproportionate expenditure will all affect this ratio. Until the sovereign debt stays within a reasonable level, creditors feel anodyne that this expanded growth means they will be repaid with interest. Government leaders keep spending because an uprising economy means happy voters who will reelect them. There are various ways to deal with a higher debt-to-GDP ratio. Governments should decrease spending, and boost growth through production and exportation, or increase tax revenues. Implementing contractionary fiscal policies such as raising taxes or cutting spending might sacrifice economic growth. But tightening the national belt will be beneficial in paying off obligations and safeguarding future economic stability. The most effortless time to lessen the debt is when the economy is expanding. It will thwart a boom and subsequent bust. A high debt-to-GDP ratio isn't necessarily bad, as long as the country's economy is expanding. It is like equity financing for businesses, which can be a means to leverage debt to augment long-term growth.

| CALL FOR ARTICLES -RUNNER UP

ELECTRIC VEHICLE AND ITS IMPACT ON TRADITIONAL SUPPLY CHAIN Garima Bisht KIET Group Of Institutions, Ghaziabad We are living in the world which is constantly changing. And these changes have left no sphere of life untouched. From healthcare to agriculture, from education to entertainment, we are the citizens of a global community which encounters rapid changes and overloaded information daily. Back then in the 1980’s when the seeds of Indian Telecommunication Industry were being sown, keeping in touch with a distant relative was quite a task. We are now in the era of 5G technology. We have smart systems which are capable of independent and autonomous communication. Internal combustion engines which pose a grave threat to the environment are being actively replaced by electric alternatives. The world today is defined as a VUCA world. It's full of Volatility, Uncertainty, Complexity and ambiguity. It supports ‘survival of the fittest’, that simply implies, if you need to survive this demanding scenario, you need to embrace and incorporate these dynamic changes in technologies. What is the Traditional Supply Chain? The traditional supply chain is a global

network used to deliver products and services from raw materials to customers, through an engineered flow of information, physical distribution and cash. In other words, supply chain management comprises the design, planning implementation, control and monitoring of supply activities with the objective of creating net value, leveraging worldwide logistics, building a competitive infrastructure, synchronising supply with demand, and measuring performance worldwide. A supply chain is a network between a company and its suppliers to produce and distribute a specific product to the end buyer. This network includes different people, entities, activities, information, and resources. The supply chain also represents the steps it takes to get the product or service from its original state to the consumer. A supply chain involves a cascade of steps involved to get a product or service to the customer. The steps include moving and transforming raw materials into finished products, transporting those products, and delivering them to the end-user. 26

| CALL FOR ARTICLES -RUNNER UP The entities involved in the supply chain include producers, vendors, transportation companies, warehouses, distribution centers, and retailers. Advancement in the EV sector Electric cars are taking over the market. They seem to be everywhere and are easily one of the biggest up-and-coming parts of the car industry today. With electric car technology advancements, there are plenty of things you can talk about. We are going to focus on some of the main things that you want to look out for in the upcoming months and years as more electric cars become available.Changes are constantly being made to what is available in new vehicles as they are realised, and electric options are no different. In 2018, electric cars started to become much more popular. People want this type of product and makes, and models are coming out to demand. For instance, the Hyundai manufacturers were overwhelmed by the demand for the Kona Electric vehicle. Just like with most things that are groundbreaking, electric cars have taken the world by storm. It is cheaper to buy and use an electric vehicle more than a conventional one. Technology in these vehicles is an entirely separate revenue stream for the people designing and selling these cars. Plenty of opportunities exist for consumer relationships and interaction with these technological advances. Not only in transportation, but also the electric mobility is spreading its wings in the domains of supply chain management.

It is predicted that electric vehicle technology is going to outsell traditional vehicles by 2030. Clearly, the future of electric mobility is quite bright. And these vehicles are going to be around until the next best thing is invented. Impact of Electric Vehicle on traditional Supply Chain The rise of EVs poses a particular risk for auto suppliers. Major systems that are essential to vehicles with internal combustion engines are absent from EVs. Makers of exhaust systems, fuel systems, and transmissions face the prospect of disruption as EVs become more mainstream. Those lacking financial flexibility and digital wherewithal are likely to struggle the most.Although it is expected that adoption will grow at a modest pace for now, EVsâ&#x20AC;&#x2122; share of the automobile market will likely begin to expand more rapidly in the medium term. OEMs and suppliers alike should start preparing for that future today. Europe and China will lead the way on EV adoption. The United Kingdom and France both intend to ban the sale of fossil fuel-powered vehicles by 2040, and Germany is offering sizeable financial incentives to prod consumers to purchase EVs.For its part, China, the worldâ&#x20AC;&#x2122;s largest automobile market, will begin requiring at least 10 percent of new car sales be fully electric or plug-in hybrid starting in 2019. To help encourage adoption, the Chinese government offers generous subsidies that averaged $15,000 per vehicle in 2016. Notwithstanding these incentives, our view is the main drivers of sustainable EV 27

| CALL FOR ARTICLES -RUNNER UP adoption will be economic rather than regulatory, and only when parity in total cost of ownership is achieved will EVs begin to make up a significant share of new vehicle sales. Because we expect this to occur later in the U.S. than Europe and China, we forecast that adoption there will lag behind somewhat. But due to the global nature of the automotive supply chain, OEMs and their suppliers should prepare for the shift toward EVs and away from ICE vehicles regardless of where they are based.

of vehicles. The ease of usage and reliability they provide is absolutely impressive with the cost they incur. They have changed the entire supply chain biosphere around the globe. The coming times will be a witness to what extent has this gift of technology benefited the human race.

Conclusion Though autonomous vehicles may pose the ultimate test of automakers and their suppliersâ&#x20AC;&#x2122; adaptability, truly driverless cars are still many years away. The transition toward electric vehicles (EVs) and away from those with an internal combustion engine (ICE) is a nearer-term, if no less significant, challenge. Auto companies will need to remain nimble to thrive amid this shift. EVs are radically simpler in mechanical terms. The electric motors that power EVs comprise far fewer components than a traditional ICE. Electric vehicle batteries are becoming less expensive while at the same time becoming more affordable. Production costs are down, and the use of lithium-ion batteries has increased. In addition to this, the smart technology that comes in many of todayâ&#x20AC;&#x2122;s electric vehicles is unparalleled. The features that used to come with vehicles as extra additions are now staples. As time continues to pass, even more advancements are to come with these types

| ALUMNI INSIGHTS

ALUMNI INSIGHTS Pasan Choksi | MMS Finance | 2016-2018 It’s good to be back here at Finly. I have been a part of the Finstreet team and was Co-convenor and always loved to write for Finly. Writing as an Alumni feels great. I currently work at STCI Primary Dealer Ltd as a Fixed Income trader, prior to that I was working as an Equity trader here. I will talk about the Fixed Income (focussing on the Government Securities) segment first and how that works and its broader view and later will move on to technical analysis and trading as a career. Fixed income market is relatively untapped and still majorly traded by institutions, banks, mutual funds, etc. Retail individuals don’t really have a direct exposure to it. However, via debt MFs there is some exposure. Lately, the regulatory bodies however are taking measures to improve retail participation.

Earlier, a large part of the Government bonds traded through OTC, but the G-Secs market has witnessed significant changes during the past decade. Introduction of an electronic screen-based trading system, dematerialized holding, straight through processing,

establishment of the Clearing Corporation of India Ltd. (CCIL) as the Central Counter Party (CCP) for guaranteed settlement, new instruments, and changes in the legal environment are some of the major aspects that have contributed to the rapid development of the G-Sec market. Major participants in the G-Secs market historically have been large institutional investors. With the various measures for development, the market has also witnessed the entry of smaller entities such as cooperative banks, small pension, provident and other funds etc. Also, lately there is increasing interest coming from corporates who invest their excess funds in hand in these assets (usually short term products like Treasury Bills). A Government Security (G-Sec) is a tradable instrument issued by the Central Government or the State Governments. It acknowledges the Government’s debt obligation. G-Secs carry practically no risk of default and, hence, are called risk-free giltedged instruments. 29

| ALUMNI INSIGHTS Broad categories are 1. Central Government Securities, 2. State Government Securities and 3. Treasury Bills. These are typically auctioned on Fridays, Tuesdays and Wednesdays respectively. There is an active secondary market in GSecs. The securities can be bought / sold in the secondary market either through (i) Negotiated Dealing System-Order Matching (NDS-OM) (anonymous online trading) or through (ii) Over the Counter (OTC) and reported on NDS-OM Now NDS-OM is a system similar to something in Equity trading what we call as BOLT/NEST/ODIN terminal. Stock exchanges also have a dedicated Platform for the debt segment, which is seeing increasing traction. Important aspects to consider while dealing in G-secs are 1. The security to invest in, 2. Where and whom to buy from and 3. Pricing The reason as to which security to invest in is an important point as there are many auctions which keep on happening week-toweek over the year, so to be in the right security is important. In equities we usually see price movements because of various reasons like company specific news like quarterly results, corporate actions, etc., or macro/micro economic view, or general market trends and external factors like geopolitical concerns. Ultimately it is about demand and supply and various reasons which influence demand and supply.

When it comes to Government securities, its price, like various other financial instruments, keeps fluctuating in the secondary market. The price is determined by demand and supply of the securities. Specifically, the prices of G-Secs are influenced by the level and changes in interest rates in the economy and other macroeconomic factors, such as, expected rate of inflation, liquidity in the market, etc. Developments in other markets like money, foreign exchange, credit, commodity (majorly crude oil prices) and capital markets also affect the price of the GSecs. It also takes cues from global yield levels and their outlook. Domestically, we take a lot of inputs from the US10Y (US 10-year treasury benchmark), and participants closely watch the US FED, ECB and BOJ’s outlook on their rates. Policy actions by RBI (e.g., announcements regarding changes in policy interest rates like Repo Rate, Cash Reserve Ratio, Open Market Operations, etc.) also affect the prices of G-Secs. Majorly it’s about the impact and outlook on the future interest rates. Now the question is where should one track the G-sec prices, so broadly tracking the government bond, they are usually quoted in yield levels. And it is usually compared on the 10-year benchmark. The yield levels can be checked on “investing.com” however if someone wants to check security wise and in price terms, the counter-party CCIL, publishes prices and it’s available on its website “https://www.ccilindia.com/OMHome.aspx”

Studying the fixed income markets, the broad macroeconomic view of the persons gets clear, there is a lot of learning about the global economy. The participant needs to track everything from Turkish Lira to Crude Oil inventories to the GST tax collection here. Bond markets are way too dynamic, interesting and challenging than any other asset class. It’s a

| ALUMNI INSIGHTS growing field in India, the bond markets is in its developing phase, for students who are starting their careers, one should look at giving Bond Markets (Fixed Income) a try. Technical Analysis I will move to Technical Analysis as a field of study and which it should be one of the important aspects for trading/investing decisions. I cleared my CMT while working, and it has been an important factor in helping me improve my trading decisions. When I was at SIMSR, there was little but increasing exposure towards Technical Analysis, and it feels great that the recent Tie-up with the CMT Association is great to have and is worth exploring. While studying technical analysis emphasis is put on historical data, majorly price and volume. And various other indicators and patterns which are ultimately derived from price help in trading decisions. The benefit of studying Technical Analysis is that we can run through various asset classes at the glance of a chart without going much into intricacies of the asset class. It helps us gauge the view of the asset class going forward. Not that other aspects are not important but it indicates as to the expected direction of move of the security. You wouldn’t want to be stuck with a position if the EPS grows constantly but price is in a major downtrend. Technical Analysis works across asset classes and is fractal in nature. It works on various timeframes and gives similar expected

outcomes. One myth about TA is that it is useful only in trading, however this is not true. Being fractal in nature it works equally well for longer term positioning and helps reduce noise. One will still hear the phrase, “Technical Analysis is a Voodoo Science” but there's a more fundamental approach in technical analysis than it’s portrayed. Especially with the advent of System trading, there’s more recognition of discipline and professional trading.

Trading as a career? Trading is not as fancy as always portrayed in the Wolf of Wall Street, there’s much more to it.Professional trading for an organisation is a bit different than trading for oneself either full-time or part-time, though the broader idea still remains the same. Is trading stressful? Yes. Can we manage the stress? Yes. Traders who can manage stress are more profitable. Stress usually comes from 2 major reasons. The first being that the person doesn’t know the product which s/he trades in, or the position size is too big to give the person a good night’s sleep. In either of the two cases, one should exit the trade or reduce the positions. Discipline This is of utmost importance if one intends to look at trading as a long term profitable career. Not following rules and not respecting the stop losses will save you four out of five times, the fifth time however it all goes away. If I simply put, a stitch in time saves nine. 31

| ALUMNI INSIGHTS Cutting ego is very important Most of the traders have lost fortunes by not accepting that they’re against the market and that they’re wrong. In our subconscious mind we think that we cannot fail. Failure isn’t considered great in society and not cheered. We all are programmed to be right or to die proving ourselves right. But the market doesn’t care who you are, if you’re wrong, it’s done. Letting go of that trade and not holding it egotistically is good in the long run. Avoid emotions/don’t love your stocks Fall for people not for stocks, don’t be too emotionally attached to any trade. Follow a trading plan Avoid deviation, stick to the plan. If I have a Geography exam, I don’t deviate by studying history. Compounding in the 8th wonder We all have read this but don’t let losses compound, have a tolerance for loss. Avoid revenge trading. It leads you nowhere. Have an exit plan It’s easy to start a car and drive at 80kmph, but it’s not so easy to park it. Have a proper exit plan, be it while booking profits or while booking losses. Trading is a lot about psychology, it's “You” v/s “the market”. Following discipline along with efforts in the right direction leads to a successful and a profitable career.