FINLY| Sept 2019 | Finstreet | SIMSR
From the Editor’s Desk
Dear Readers,
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Greetings from the editorial team at Finstreet. For the past several years Finly has been informing, engaging, inspiring and entertaining a diverse readership -- including alumni, faculty, staff, and students at KJ SIMSR by presenting an intimate, timely and honest portrait of the key activities and events in the Indian and Global economy. We are proud to unveil the September edition of our monthly magazine FINLY for the academic year 2019-20. This edition marks the embarkation of the incoming team of juniors in team Finly and we dedicate this edition to them. In this edition, Our Cover Story analyses the impact of the removal of section 370 on the economy of Jammu & Kashmir, how it opens the doors of J&K for several investment opportunities and finally noting how economic development in the region will bring in peace and stability. Next in line, is the Eco Section, which analyses in detail the impact of repo rate cuts on the economy and we also look at an innovative lending rate called repo linked lending rate. In Sector Analysis, the authors inspect the FMCG sector with an in-depth analysis of the market structure, growth drivers and challenges faced by the sector and an Analysis of one top FMCG company of the country, HUL. This month's Fintech Funda covers a combination of Agritech with Fintech, we will look at the need, origins, growth and the future prospects of Agritech. We express our gratitude to Prof. (Dr) Pankaj Trivedi (Course Coordinator, PGDM Core, and Faculty Coordinator, Finstreet) for providing the essential mentoring, support and backing to the Finly team. We thank all our readers and faculty members for their constant love and support. Your reviews and feedback are much appreciated. Each edition of FINLY is the outcome of the tireless efforts and dedication of a group of individuals who call themselves Team Finly. We can't thank them enough for their constant support and initiative. Mohak Shah, MMS - Finance, 2018-2020
Saurav Jain, PGDM Core, 2018-2020
Team Finly- Sept 2019 Faculty Incharge
Editor-in-Chief
Editor- FINLY
Mohak Shah Dr.(Prof) Pankaj Trivedi
Mohak Shah
Saurav Jain
-Conceptualization & DesignAkshita Bahl
Rohan Thakur
Sourav Khuslani
Jugal Daiya
-Content TeamSwikar Gupta
Manya Mohan
Saurabh Patel
Ayush Shah
Sheenu Jain
Vinay Kapri
Shristi Sarda
Nilomee Savla
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FINLY| JULY 2018 | Finstreet | SIMSR
INDEX
Editorial Team Finly
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04 Cover Story 06
Eco Section
Sector & Company Analysis
Fintech Funda
Intern Diaries
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Kashmir without 370
Cover Story
Shristi Sarda | PGDM FS | 2019-21 Manya Mohan | PGDM Core | 2019-21
Article 370 of the Indian Constitution was a "temporary provision" which granted special status to Jammu and Kashmir. Provisions of the Constitution which are prevalent to other states are not applicable in Jammu and Kashmir.
a special announcement at the Parliament declared the removal of Article 370.
Changes brought about by the removal of Article 370:
The provision was drafted in 1947 by Sheikh Abdullah, who had then been appointed as the prime minister of Jammu and Kashmir by Maharaja Hari Singh and Pandit Jawahar Lal Nehru.
路 After the removal of Article 35A of Article 370, any Indian citizen is eligible to buy land and immovable property, scholarships as well as other public welfare projects in Jammu and Kashmir.
According to Article 370, except for defense, foreign affairs, finance, and communications, Parliament needs the state government's permit for applying all other laws. The people of the state live under a different set of laws some of which are related to citizenship, ownership of land and immovable properties.
路 The state of Jammu and Kashmir has now been divided into two Union territories- Jammu & Kashmir and Ladakh. Jammu and Kashmir will have state legislature but Ladakh will be administered without a state legislature.
As a result of this provision, the Centre has no power to declare an emergency under Article 360 except in case of war or external aggression. According to Article 35A under Article 370, only the residents of Kashmir have the privilege to purchase land and immovable property, vote and contest elections, seek government employment and avail other state benefits such as higher education and health care, whereas the nonpermanent residents are not entitled to these privileges.
路 It will no longer have a separate flag. Earlier in any government office there used to be two flags- the Indian flag and Kashmir's flag but now this will change and only one flag- the Indian flag is going to be there. 路
On August 5 2019, Home Minister Amit Shah, in
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The post of the Governor is removed and the police will come under the jurisdiction of the Centre. Jammu and Kashmir will now have MLAs and a
Cover Story
Chief Minister. · Earlier the residents of Kashmir had two citizenships- Indian citizenship and Jammu and Kashmir citizenship. Removal of Article 370 removes the concept of dual citizenship and it is only the Indian citizenship which is now valid. ·
All the laws of the Constitution will now be applicable the same as for the other states of the country. There will not be any separate constitution. Assembly of Jammu and Kashmir will not be in a position to clear any significant bills and the power will rest in the hands of the Union Government.
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Right to Information (RTI) and Controller and Auditor General (CAG) laws will now be applicable there.
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The women who marry NonKashmiris will now have the right to own a property there.
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Non-Kashmiris can get government jobs. Earlier few companies were even forced to hire only locals but this shall not be the case anymore.
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Article 360, which allows the President to declare a Financial emergency if the financial soundness of the country is threatened, can now be imposed in Jammu and Kashmir.
As a result of these changes in the structure of the state of Jammu and Kashmir, it is expected that the doors of the state will open for development and new opportunities. The right to own a property in Jammu and Kashmir will allow the corporate houses to set up businesses in Kashmir. As the option of purchasing land will now be available to outsiders, land allotment for Industrial establishments will be made extremely attractive to woo potential investors from other states, for example the cost of land is around Rs. 16 lakh/acre in Jammu, Samba, Kathua, Udhampur, Srinagar, Budgam, Anantnag and Pulwama Industrial estates while it is meager Rs. 8 lakh/acre in various districts like Rajouri, Reasi,
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FINLY| Sept 2019 | Finstreet | SIMSR Kupwara, Bandipora, Ramban, Doda, etc. Land lease up to 90 years through single window clearance is one step towards ease of doing business. With the introduction of Industrial Policy 2016, the government has fixed targets for creation of a land bank of 20,000 Kanals of land in new industrial estates. Easy and cheaper availability of land in Jammu and Kashmir on long-term lease is at par with many industrially developed states. The volatile situation in parts of the state and its exaggerated representation in a section of media are among many factors responsible for dismal investment from outside the state which now with the removal of the special status of Kashmir will be removed as well. These investment opportunities will help in decreasing the unemployment rate of the state. Increase in employment will, in turn, increase the purchasing power of the people and their demand for different types of products. Increase in demand will again increase the supply of those products and the business activities will grow further. One of the reasons for the increase in terror participation by the youth of K ashmir is considered to be unemployment. With the employment opportunities rising, decrease in joining of terror groups can be expected. Companies like Steelbird, Asia's largest helmet manufacturer has offered to set up a manufacturing plant in Jammu and Kashmir a day after Article 35A was revoked. There will also be an infusion of capital for the development of infrastructure by the government. The various welfare policies of the governments can now be utilized for the benefit of the people living in Kashmir. As a result, more commercialization of the state can be expected which will facilitate the tourism industry which plays a vital role in Jammu and Kashmir's economy. It contributes about 8% to its economy. Though the prospects of Jammu & Kashmir look promising, given the assumption that the sociopolitical stability increases as the government gets a better control over the security, the fear of the people still remains. Only time and implementation of proper developmental schemes will tell what lies in the future of Kashmir.
FINLY| Sept 2019 | Finstreet | SIMSR
REPO RATE CUT : ITS IMPACT ON THE ECONOMY
ECO Section
Sourav Khuslani | PGDM FS | 2019-21 Sheenu Jain | PGDM FS | 2019-21 The Reserve Bank of India's Monetary Policy Committee (MPC) decided to reduce the repo rate by 35 basis points to 5.4%. This was a higher than expected reduction in the repo rate when compared with the usual cut of 25 or 50 bps. The current repo rate of 5.4% is at a 9 year low. This was the fourth straight rate cut so far this year, in an attempt to boost economic growth while the inflation outlook remains benign. Central Bank governor Shaktikanta Das told in an interview that the “standard 25 basis point (cut) might prove to be inadequate in view of the evolving global and domestic macroeconomic developments. On the other hand, reducing the rate by, say, 50 basis points might be excessive, especially after taking into account the actions already undertaken�. Therefore the 35 basis points rate cut seemed balanced.
Meaning Repo rate is the rate at which central bank (i.e. Reserve Bank of India in case of India) lends funds to the commercial banks. Repo rate plays an important role in the supply and circulation of money in the economy. It has its own impacts when it is either increased or decreased by the Central Bank because it acts as a tool to stabilize the economy. Their prime focus is fighting inflation to boost demand. The basic understanding behind this move of the central bank directs us towards the fact that the
highest priority is given to economic growth amidst a benign inflation outlook since India is facing the slowest economic growth in 5 years. Their aim is to boost aggregate demand, especially private investment.
Cyclic Effect Repo rate, in context to all economic indicators possesses some or the other cyclic effect. With the decrease in Repo Rate, the accessibility of funds from the central bank in the hands of commercial banks increases. As a result, the funds forwarded by the commercial banks to the public via loans are easily available which leads to increase in purchasing power in the hands of the consumer. Taking forward its impact, when purchasing power of the consumer increases, it leads to rise in inflation. With the increase in Repo Rate, the cost of raising funds from central bank increases which leads less loans in the hands of consumer with low purchasing power in her hands and less money supply in the economy.
Association with NBFCs The underlying problem is that NBFCs are facing a liquidity squeeze. Also lenders are more reluctant to give consumer loans in the current scenario. Companies like DHFL, India bulls and Piramal
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ECO Section
FINLY| Sept 2019 | Finstreet | SIMSR
Enterprises have cut down on lending to preserve cash. Hence one of the reasons behind this unusual rate cut is that the RBI wants to make sure that sufficient liquidity is there. Hence, in order to ease things for NBFCs, the RBI has decided to enhance the credit limit to individual NBFCs to 20 percent from 15 percent
Passing on the Benifits The basic motive behind this decision of RBI since the beginning of this year has only been to boost 'growth' which is not possible until the banks pass on the benefit to the end consumer. And that is the reason RBI expects immediate action from banks regarding the transmission of policy rates. SBI was one of the first ones to start the trend of linking retail loans to an external benchmark visa-vis the repo rate. This is known as the repo linked lending rate (RLLR). Wherein as and when there will be a change in repo rate, there will also be a change in RLLR and thus the home loan rate. This, therefore, helps in accomplishing the major goal of RBI which is to pass on the benefits of the rate cut to the end consumer. Apart from SBI various other banks like Allahabad Bank, Oriental Bank of Commerce have also come up with new home products which are linked to the repo rate. SBI was also amongst the first ones to announce a 15bps reduction in MCLR across all tenors, hours after RBI's announcement of the rate cut. The basic motive behind the repo rate cut is to revive flagging consumption demand. Overall, reducing repo rate is believed to be an accommodative policy and in tune with the other developed and emerging market trends. This can be correlated with the falling rates of nations like Thailand and New Zealand.
auto sales, home loans, and personal loans, etc.
Link with GDP Talking about the repo rate declination from the other way round, it can be also associated with the GDP i.e. Gross Domestic Product of the nation. Observing it from a current happening, the repo rate was made to be decreased with the reason to increase the purchasing power of the consumer so that production within the geographical boundaries can be increased and can lead to a rise in GDP growth of the nation. Also, the RBI lowered its growth forecast to 6.9 percent for 2019/20 from 7.0 percent previously estimated; and inflation was projected at 3.4-3.7 percent for the second half of fiscal 2019-20.
Impact The effect in short-run can be seen in some parts of the economic sectors like real estate, two wheelers and consumer durable companies ahead of the festive season but the effective cascading effect of the benefits of lower base rate may happen in the near future. Banks already have excess liquidity and will now be compelled to deploy in good assets, for which rate cut benefits need to be passed on in the form of cheaper consumption finance loans linked to
Source: www.tradingeconomics.com The falling and rising of repo rate can create a huge impact on the economy. To avoid and prepare our economy from the external shocks, there are various measures that are on the board to improve. For example: recently the government and RBI have jointly initiated to monitor top fifty Non
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ECO Section
FINLY| Sept 2019 | Finstreet | SIMSR Banking Financial Corporations to avoid collapsing of this sector as a whole. Immediate effect on that can be seen as there has been decent decrease in stressed assets in the economy. One of the core fundamental and ethical rules that Indian banking system has followed and has kept on top of everything is policy priority. Policies that are more channelized towards growth and stabilizing economy.
Conclusion The impacts of repo rate on the economy in short run may seem to be turbulent but can be useful in long run. With the rising power and more stable relations with rest of the world, our country is paving paths for huge opportunities for growing the economy. Also we can expect future rate cuts from the RBI based on the current inflation projections in order to boost economy. This can be justified through growing demand of niche sectors like service sector, low hindrances in distribution of income.
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Sector and Company Analysis
Sector & Company Analysis
Ayush Shah | PGDM RM | 2019-21 Swikar Gupta | PGDM FS | 2019-21 Vinay Kapri | PGDM Core | 2019-21
Sector Analysis
Overview: The FMCG industry is the fourth largest sector of India. Personal care and household account for 50% of the FMCG sales in India, whereas healthcare and food contribute 31% and 19% respectively. Urban areas contribute about 55% of the total market share.
Market share: The revenue generated from the FMCG sector was $ 52.75 billion in FY2018. The sector is expected to cross $100 billion by 2020. The Retail market in India is estimated to grow from $ 840 billion in 2017 to $ 1.1 trillion by 2020, with modern trade expected to grow more than 20% per annum, which is likely to boost revenues of the FMCG sector.
Major players in the market: HUL is the biggest player in the Indian FMCG market with a turnover of Rs 38570 Cr. while ITC, Nestle & Marico are the three other major players with a turnover of Rs. 34,200 Cr, Rs.11,000 Cr and Rs 7,350 Cr respectively.
Growth drivers: High population and rising affluence level: Almost half of India's population is under the age of 25 whereas about two-third are less than 35. India is expected to have the largest workforce in the world by 2027, with a billion people aged between 15 and 64. This indicates the likely growth in the consumer demand for food, personal care, healthcare, and household products. Also, per capita income of India has increased to Rs.1,12,835 in FY18. This implies an increase in affluent people
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Sector Analysis
with greater buying power . Low per capita consumption and penetration level: Despite a huge population India has a low overall per capita consumption of FMCG goods. India's per capita FMCG consumption is $ 29 which is amongst the lowest in the world. Despite India achieving high penetration levels in some of the FMCG categories, consumption levels in such categories are still very low. Better per capita consumption and a higher penetration level is quintessential for the FMCG sector growth. Rural market: About two-third of India's population stays in rural areas and they spend almost 50% of their total spending on FMCG products. They account for about 45% of the overall revenue of FMCG sector. They are mainly dependent on agriculture and allied activities, and thus monsoon and minimum support prices (MSP) of crops are very important for the growth in rural consumption demand. E-commerce and digitization: According to a report by market researcher Nielsen, consumer's trust in online buying has grown which has helped E-commerce platforms to expand their share in India's total FMCG retail sales by as much as three times. Also, according to the report E-commerce's contribution to FMCG sales rose to 1.3% in 2018 from 0.4% in 2016 and is expected to rise to 11% by 2030.
Government initiatives: The Government of India has approved 100% Foreign Direct Investment in the cash and carry segment and in single-brand retail along with 51% FDI in multi-brand retail. A new Consumer Protection Bill has been passed by the government which has a special focus on setting up an extensive mechanism to ensure simple, speedy, economical and timely delivery of justice to consumers. The Goods and Services Tax is promoting the FMCG industry as many of the FMCG personal care products now come under 18% tax bracket against the previous 23-24% rate. Also, rates on food products and hygiene products have been reduced to 0-5% and 1218% respectively. Four successive rate cuts by RBI in 2019 are steps to ensure the economic boost, and FMCG is one of the prominent sectors that are being affected.
Porter’s Analysis: Competitive Rivalry The industry is moving towards consolidation with top 7-8 players holding about 80% of the capacity and market share. Rural market comprises about 45% of overall revenue for the sector. Since the economy has recovered from demonetization, the sector has performed very well and has shown positive numbers consistently. The threat of new entrants The FMCG sector is capital intensive. Top 7-8 companies occupying around 80% capacity, hence holding on to the driver's seat of the sector. Also, recent data shows that online segment for the FMCG sector has shown healthy growth which makes the sector quite stable. Bargaining power of suppliers Prices are generally governed by international commodity markets, making most of the FMCG companies a price taker. Due to the long term relationships with suppliers etc., the FMCG companies negotiate better rates during times of high input cost inflation. Bargaining power of customers With the FMCG e-commerce sector widely spreading its base in India, the power of bargaining has largely been with the customers since online retailers provide heavy discounts which in the end are beneficial for both the retailer as it is increasing revenue and customers get great price benefits. Substitute products The threat of substitute products is very low the items that collectively make the FMCG market are indispensable and used by the entire masses. The threat hence is very insignificant in the case of this sector.
The road ahead for the sector: The FMCG sector in India has grown at a compounded annual growth rate (CAGR) of 9.1% from USD 31.6 bn in 2011 to USD 49 bn in 2016 and is expected to grow at a CAGR of 20.6% to USD 103.7 bn by 2020. The growth momentum in FMCG sector largely depends on its strong structural drivers like high population and rising affluence level, which are key factors contributing to growth of the sector. Nearly half of India's population is under the age of 25 and two-thirds are less than 35. While the young population is likely to provide the steady growth in
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Sector Analysis
revenue for FMCG companies, rising affluence and disposable income level are likely to bring incremental growth for the sector. Although India has very huge population base it lags in overall per capita consumption of FMCG goods. As per Hindustan Unilever's investor presentation, India's per capita FMCG consumption stands close to USD 29 as of March'18 (source: Nielsen as of MAT March'18), while other emerging countries like Indonesia, China, and the Philippines have more than double the per capita FMCG consumption than that of India. In India there are many categories where penetration level itself is very low which provides a huge growth opportunity. Increased focus of the government on improving farmers’ income, digitization, smaller size packets, rising awareness and an expected rise in per capita disposable income is likely to drive growth for FMCG companies in rural India.
Source: FMCG annual report
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Sector Analysis
Company Analysis- Hindustan Unilever Limited Company OverviewHindustan Unilever Limited (HUL) is an AngloDutch Manufacturing company. HUL was formed in year 1993, through the merger of Hindustan Vanaspati Mfg. Co. Ltd, United Traders Ltd & Lever brothers India Limited named as Hindustan Lever Limited(HLL). HUL is a subsidiary of Unilever, one of the world's leading suppliers of Food, Personal Care, Home Care, and Refreshment products. In 2007, HLL was renamed to Hindustan Unilever Limited (HUL). It is India's largest Fast Moving Consumer Goods company, headquartered in Mumbai, India. HUL is a market leader of consumer products. HUL has over 35 brands with 20 different categories such as tea, coffee, packed food items, ice-creams, water purifiers, toothpaste, soaps, shampoo, cosmetics, deodorants, and detergents. Its portfolio includes leading household brands such as Brooke Bond, Bru, Knorr, Kissan, Kwality wall's, Close up, Pepsodent, Dove, Clinic Plus, Sunsilk, Lux, Rin, Wheel, Pond's, Fair & Lovely. HUL is a part of everyday life of millions of consumers. HUL has nearly about 18,000 employees with total sales of INR 37,660 crores.
Company RevenueBeauty and Personal Care products are the major contributors to revenue generation. It contributes about 46% to the total revenue generated. Home care products are the second biggest contributors with 33.89% of the total revenue. Food and Refreshments contribute about 18.77% to total revenue. The chart above will provide better knowledge with regards to total revenue.
Source: Company website
SWOT Analysis Strength Ranging from Soap to Mineral Water, HUL has been shaping the life of 1.3 billion consumers daily. Being in the consumer goods market, with its presence in 20 categories HUL has been successful in occupying large shelf space in departmental and grocery stores which itself explains the acceptance and demand for the brand. Weakness Having a presence across various categories, sometimes lead to confused positioning. The market being highly competitive, poor positioning provides opportunities to the competitors to capture higher market share. E.g Amul captured Kwality wall's market share. Opportunities Penetrating more in the rural markets through its project Shakti AMMA and transition of the unorganized business to organized one will lead to further expansion of the consumer goods market. Threats Due to advancements in technology, lot of brands have come up with different products claiming different sorts of benefits. It is very difficult for consumers to stick to one brand and this results in brand switching. Corporate Governance Cor porate Gover nance at HUL has 3
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Sector Analysis
cornerstones which are Fairness, Accountability, and Transparency. With regards to shareholders, HUL provides timely, regular and reliable information on financial position and situation. For Consumers, HUL is committed to provide branded products and ser vices which consistently offer value in terms of price and value. For Community, HUL strives to be a trusted corporate citizen by fulfilling the responsibilities towards society. HUL follows various principles in regard to its employees. HUL recr uits, employs, and promotes individuals on the sole basis of abilities and skills needed to get the job done.
Share Holding Pattern When it comes to ownership of the company, It can be observed that the promoter group holds 67.18% of the total shares. Individual Investors and FII's, hold 13.82% & 12.86% shares respectively. While the remaining is held by Mutual Funds and other institutions with 2.02% and 4.73% respectively.
Source: eonomictimes.com
Peer to Peer Comparison ITC and Dabur are two major competitors for HUL in the FMCG sector. When it comes to Market Capital, it can be inferred that HUL has the highest market capitalization of Rs.401,922.93 crores. In terms of Operating profit margin HUL has stood next behind ITC at 22.59%. For Net profit margin ITC and Dabur have 27.7% & 20.15% followed by HUL at 15.79%. Two ratios where HUL defeats other competitors are Inventory turnover ratio and ROCE. It can be seen that HUL has higher ROCE of 114.59% as compared to ITC’s and Dabur’s at 31.88% and 37.36% respectively.
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Hence it can be inferred that HUL has employed its capital more efficiently to convert it into profits.
Fintect in Agriculture
Fintech Funda
Saurabh Patel | PGDM FS | 2019-21 Nilomee Savla | PGDM FS | 2019-21 There has been a lot of chatter about “FINTECH” in the past few years all across the globe. Newspapers and magazines are dedicating entire sections, explaining about the latest trends in FinTech. But why is this segment gaining so much noise? What is the buzz all about? FinTech stands for Financial Technologies, and can be briefly described as computer programs and other technology used to support or enable banking and financial services. But with constant development in newer segments that are disrupting traditional financial services, FinTech has expanded to include mobile payments, money transfers, loans, fundraising, and asset management. While FinTech has revolutionised the financial sector, one such segment which has generally remained underrated and often ignored is AgriTech. AgriTech is an abbreviation for Agriculture + Technology. It can be described as the use of technological appliances and
softwares, with the aim of improving yield, efficiency, and profitability. AgriTech can be products, services or applications derived from agriculture that improve various input/output processes. AgriTech in collaboration with FinTech can be a game changer and create a win-win situation for both the agriculture sector and the financial institutions and companies providing these technologies. Some of the areas where AgriTech and FinTech can collaborate and work together are: · Granting working capital to farmers. · Providing insurance products to farmers for their products. · Spreading financial inclusiveness among the farming community. · Providing cheap, quick, non-exploitative and an alternate mode of credit for the agricultural sector. · Provide efficient supply-chain services to farmers, hence removing the middleman,
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Fintech Funda
resulting in higher disposable income directly in the farmers hands
reach out to the experts and other staff for quick and paperless processing of agriculture loans.
Origin of the Agri-FinTech This section focuses on the need of FinTech in the agricultural domain. The following are the points to consider: · Crisis of NPA in public sector banks: The public sector banks are going through the crisis of non-performing assets. The NPAs in India have peaked to Rs.8,95,601 crores in March 2018.This has led the banks to cut lending targets in agriculture sector. And this has paved way for the FinTech sector to fill the gap and provide financial instruments to the farmers at a very competitive price. ·
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Data revolution: As we know data is the new oil, the FinTech would enable the collection of the data with respect to the agricultural domain. The data collected can then be analyzed by the industry experts to give more valuable advice on the changes that can be brought into the farming processes. It can be used in crop selection, irrigation patterns, effective utilization of the land available and predicting revenue and profits of the farmers generated through various crops he has harvested. This will ultimately contribute to the well being of the farmers. Need for an easy to use interface: As majority of the population is illiterate, it is necessary for the FinTech companies to provide a hassle free experience to the farmers in order to connect with them. All they have to do is to open up an application on the phone and they can
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Growth of AgriTech Sector If we look at the global scenario, there has been immense growth in the AgriTech funding in last 10 years. So many new companies and new models have jumped into the AgriTech sector in recent years as it is one of the growing segments in present condition.
Source: Kalaari AgTech Report 2018 If we look at the funding in the AgriTech sector in 2008, total funds received by the AgriTech companies were around $274 mn which has increased to $1400 mn in 2017. So it has become almost 5 times in last 10 years. From the Indian investment perspective, India is one of the top 6 countries globally having most deals in AgriTech sector. Other countries are USA, Canada, UK, Israel and France. Since 2013, India has seen over 350 new AgriTech companies and it has seen its peak between 2015 and 2017.
Source: Kalaari AgTech Report 2018 Here we can see that in 2013 total funding amount of AgriTech companies in India was just $10 mn which reached to $86.5 mn in 2018. So we can see that India has also seen an exceptional growth in the
funding of AgriTech sector in India with parallel to global growth. In 2018, most of funding primarily focused on IoT, precision farming and market linkage platforms.
Future prospects of AgriTech sector
Fintech Funda
The future prospects of AgriTech sector in India are very good and the growth rate is expected to touch double digit by 2021. As Government of India wants to achieve its target of doubling farmers income it is providing various tax rebates, working capital at low interest rates and has allowed 100% FDI in AgriTech sector. In next few years India will be facing twin problem of population rise and decrease in agricultural farm output, also per capital income in India is expected to double in next 5 years. So India is very lucrative market where there is high demand for agri-farm products and consumers are able to pay the price, thus it is an ideal time for entrepreneurs and foreign players to invest, innovate and research in Indian market and deliver India centric agricultural solutions and products.
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FINLY| April 2019 | Finstreet | SIMSR
Internship Diaries
DIARIES
centres that are rapidly expanding in scope and size. The ser vice centre has delivered process innovations that benefit their lines of business and support operations across the world. The main Lines of Business of JP Morgan are: 路 Corporate Investment Bank 路 Consumer and community Banking 路 Commercial banking 路 Asset and wealth Management
Process JP Morgan comes to KJ Somaiya for recruitment in its corporate centre. The initial round of selection is the CV shortlisting subject to the following 2 criteria 1. 0-12 months of education gap 2. 0-24 months of work experience
Sambhabi Chanda PGDM FS | 2018-20
Company Overview JP Morgan is the largest bank in the United states and is the sixth largest bank by term of assets in the world. It is one of the oldest investment banks with a legacy of more than 200 years. It manages assets worth US $2.78 trillion in assets under management. In India JP Morgan has its presence in Mumbai, Bengaluru and Hyderabad. In Mumbai JP Morgan has a front office in Kalina and a few corporate centres or delivery
Students fulfilling these criteria are deemed to be fit for the subsequent rounds. Around 170 applicants were shortlisted for the next round i.e. the group discussion round. Around 35 students were shortlisted for interview. The group discussion topic for my team was the boon of digital wallets in India. Each group was given 2 minutes to think about the topic and jot down some points followed by 8 minutes for the group to discuss on the topic. At the end of 8 minutes a few people were asked specifically by the panel members to summarise. Each group comprised of 8-10 members. The group discussion was followed by technical round of personal interview and the HR round of
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Internship Diaries
FINLY| Sept 2019 | Finstreet | SIMSR
personal interview. For me the technical round lasted for around 15 minutes. Since I come from an engineering background, I was asked questions pertaining to my sudden interest in finance post engineering and the reason behind wanting to join JP Morgan. I was asked to state three recent happening in the world of finance and my inference from the events and also subsequent questions based on the events stated by me. This was done mainly to ascertain my interest in finance and willingness to learn more. Since we had a session on how banks make money by JP Morgan prior to the placement process, I was asked to explain the same in my interview. A few basic questions on derivatives were asked on the usage of derivatives and various types of derivatives along with examples. This was followed by the HR round which was mainly focused to judge my commitment towards joining JP Morgan and staying with the company in the long run. Since I have work ex in TCS, I was also asked questions related to the work I have done in my previous company.
A Piece of Advice Since you will be appearing for your internship interviews, they don't expect a lot from you in terms of core finance. They are interested in judging your willingness to learn. Please be up to date with the current affairs. It will help you immensely both with the interviews and the group discussions. Please read the job description provided by the company so that you don't end up telling something which the company cannot offer. Lastly don't get demotivated if you can't get through this company. If one door closes, there are several others waiting to be unlocked! All the very best.
My Experience I worked with the Reporting, Planning and Analysis team of Banking under CIB. I was a part of team which published reports related to the position of JP Morgan relative to other investment banks in terms of the volume of business done and also on the basis of amount of fees earned. They also worked with calculation of profit and loss statements to calculate the net profitability of each product line in Global Investment Banking, which would ultimately be used to calculate the compensation of the frontend bankers in each product line. My work mainly involved studying the different types of P&Ls, understanding the rationale of the rules governing them and analysing them. Since no team works in isolation, during the course of my internship I got to interact with members from different teams. The most amazing part about JP Morgan is its culture in addition to the huge brand name. I could just walk up to an MD without hesitating. It truly believes in a flat hierarchy. The internship was very structured in terms of the roadmap being laid out well in advance and JP Morgan truly believes in the saying, “All work and no Play makes Jack a dull boy.�!!
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