EDITORIAL SOUMYA RUP CHANDA As India turns 71 this Independence Day, garbing itself in bridal finery to celebrate the ideals of freedom, democracy, secularism and pluralism, it is the words from
Nehru’s midnight speech ‘Tryst with Destiny’, on the eve
of Independence Day that rings out through the sands of time, as clear as the day it was uttered to herald the birth of a free India. “Long years ago, we made a tryst with destiny, and now the time comes when we shall redeem our pledge, not wholly or in full measure, but very substantially. At the stroke of the midnight hour, when the world sleeps, India will awake to life and freedom. A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds
utterance. It
is fitting that at this solemn moment we take the pledge of dedication to the service of India and her people and to the still larger cause of humanity.” But have we truly achieved the vision of Independence that our founders dreamt of, an India where every citizen can live freely as he chooses, follow a religion that he wants and is equal in the eyes of the law. An India where no individual can be discriminated against on the basis of caste, creed, religion, race, ethnicity, religion, language or social status. A modern India that is a hub of innovation, an India that takes care of its minorities, that stands by its commitments to its neighbours, that can provide primary education to all its children and where no one goes to bed on an empty stomach. Have we achieved such an India? In this fortnight’s edition, we take you down the memory lane, looking for an answer to the above question, through our cover story article tracing the gradual establishment of the India Inc. We also look into the inspiring story of Jeff Bezos, the man behind the Amazon empire, through our Wizards series and at Zebpay, India’s first Bitcoin exchange, through Startup Tracker.
Contents 1) Cover Story 3 2) Finshorts 5 3) National 7 4) International 9 5) Market 10 6) Finhumour 12 7) Class Talks 13 8) Scams, Scandals, Stories 15 9) By-A-Pic 17 10)Wizard s 18 11)Startup Tracker 20 12)Instrumentally Speaking 21 13) Lock the Stock 23 14) FinQuiz 28 15) Intel-Inside 30
As for life at IMT, it goes on at its usual surreal pace, fests and sports providing a brief respite from the unending cycle of assignments, projects and quizzes, teaching life lessons, making managers out of common folk.
Meanwhile do feel free to share your bouquets or brickbats. Happy Reading! To all our beloved readers, we wish a very Happy Independence Day!
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2
COVER STORY
- SNIGDHA RAO
INDIA INC. estb 1947 When I started out this article, I knew I wanted to write about the milestones, the turning points, the plot twists in Indian Economy in the past 70 years (Yes, 70…that’s how many years it’s been since we attained freedom) but when I got down to research, it was enormous. The reforms were innumerable. They were undertaken every year, with every change in government, with every financial scandal and with every change in social structure. I know that we as general public, voting population like to always blame the government for their “apparent” inefficiency in running the country but I believe that running a country like India is not easy, even thinking of managing an economy like India requires guts and immense courage. All this goes to say that while every reform cannot possibly be condensed into one article, I have tried to narrow it down to the following major events which in my opinion gave the Indian Economy the structure it has today. From liberalization to demonetization, there were many reforms, some bigger than the others, some more impactful than the others. These below are just a few. 1950 – We naturally would have to start with the year when India became a republic. The Constitution of India was drafted and Part XII of the constitution constituted the articles on Finance, Property, Suits and contracts. Part XII contained 4 Chapters which had from article 264
1975-77 – Emergency, more infamous for the forceful sterilization and suspension for civil rights also had a major effect on the economy. A 20-point economy programme was announced by Mrs. Gandhi barely a week into the emergency which concentrated on seeking remedies for the price rise and production slump, then short term problems. The more long-term problems like agricultural production and effective distribution of essential commodities was also dealt with in this programme. Although most reforms resulted in positive change in the market and in the production, they could not be sustained for a long time. The intention in this case although was positive, the implementation could not yield good results. The consumer and investment sentiment was badly hit because of the forceful implementation.
to 300A. All these articles contained various directives
1988- This year is significant for economy and financial
and regulations on the imposition of taxes, distribution of
market as the governing body of the securities market in
revenue between the state and central, borrowings by
India, SEBI (Securities Exchange Board of India) was es-
states, right to property and many other important
tablished which regularized the functioning of the stock
financial subjects.
exchange and governed the participants of the market. . Indian markets today are one of the largest economies in terms of nominal GDP as well as Purchasing power parity.
3
1991- A budget that changed the nation. A renowned and now an Ex-Prime Minister of the country had presented a budget which ushered in a radical transformation of Indian enterprise and opened a completely new world for Indian entrepreneurs. Economic liberalization, the term which would later become a part of school syllabus on economic history of India, got initiated this year. The goal was to make the country more market and service-oriented by increasing the role of private and foreign investors. Point changes such as a reduction in import tariffs, deregulation of markets, tax reduction and increase in foreign investment were implemented. In a way, the economy as it is seen today, attained its skeletal structure that year. A man who would in later years would be ridiculed for his silence, had silenced the nation with his knowledge. 2016- 8 November 2016 – When the world at large was hooked onto the US presidential elections, waiting with bated breath to know the winner, hoping against hope that it wouldn’t be “the other one”, India’s Prime Minister Narendra Modi sent out a message to the country that a very important announcement would be made at 7:30 PM. By 8:00 PM, the social media went into a frenzy, the country came to a standstill, while some people hailed Modi as the best thing to have ever happened, others went into an absolute panic mode. Reason: Rs.500 and Rs.1000 currency notes were to be banned from midnight. A specific time window would be given in which to exchange your existing notes with the new Rs.500 and Rs.2000 notes but only after declaring the source of Income. What followed next was the stuff history books are written about. Black money was recovered from its every hiding place, people rushed to get their currencies
what is. 2017- 1 July 2017 – The most awaited GST bill was made applicable throughout the country. It is governed by the GST council with the Finance Minister as its chairman. GST bill intends to eliminate the cascading effect of the indirect taxes which implies that it would remove the multiple levels of taxation and would levy tax only at one single point. The implications are expected to include a higher ease of doing business, lower tax burden on the public and easier implementation of uniform tax laws. Under GST, the goods and services are taxed at 0%, 5%, 12%, 18% and 28%. Every entity was required to be registered under GST law and a transitional period of 6 months was allowed. Businesses having turnover of more than 20 lakhs were mandatorily required to register whereas the businesses with under 20 crores could opt for a composition scheme or get registered under GST. Keep an eye out for our upcoming editions for more information on GST. So, these are the events which according to me were the game changers in Indian Economy. I humbly admit that I have not been able to document everything in this article and there are many more laws, regulations and events which have a part to play in the development of the economy. I have only made an effort to share with my readers a few decisions of policy makers which gave our economy its present anatomy. On a parting note, I would only like to make a one request This Independence Day, let’s give the country another chance, let’s take pride in our achievements, let’s trust our leaders once again, let’s reassure our motherland. Be proud and say, “India, I’ve got your back!” Jai Hind!!!
changed, ATMs constantly ran out of cash, PAYTMs became the new wallets, a guilty few even took their own lives. Was it a good strategy or not is an answer that only an economist can give, I can only say if that is not a milestone in Indian economy, I don’t know
4
FINSHORTS -
CHETANYA SINGH
AADHAAR AS GATEKEEPER TO FINANCIAL MARKET
Securities and Exchange Board of India (SEBI) and Govt. are about to mandate Adhaar Card to buy shares and mutual funds. This step to link Adhaar to financial market transactions is done to curb sharp practices such as conversion of black money to white money through stock market. The timing of implementation of this major step is still not clear. It is also not clear whether Adhaar will replace PAN as sole identification number for financial market transactions. Recently government made linking of Adhaar card to PAN, bank accounts and cell phones compulsory.
PROXY VOTING FOR NRIs
Union Cabinet has cleared a proposal to allow proxy voting for NRIs. The government will soon pass a bill to ament People’s Representation Act to make proxy voting by NRIs a reality. Nearly 16 million NRIs will be able to contribute in Indian Elections. In a country with 1.324 billion people, a few votes would hardly matter. This step is taken to make small but influential NRIs feel connected with the country.
GENESIS ENERGY AQUIRE TRONOX; BEATS NIRMA IN RACE
US based Genesis Energy succeeded in buying Tronox Alkali ( world’s largest producer for natural soda ) for $ 1.3 billion, beating Indian firm Nirma ( one of the world’s biggest soda ash producers ). Nirma’s bid was higher but antitrust concerns decreased its chances to make its largest cross border acquisition. This is the second time Nirma would be unlucky since it lost a similar opportunity in 2015 to acquire the same asset.
SNAPDEAL REVERSES MERGER WITH FLIPKART; READY TO SACK 80% OF ITS TALENT POOL
Ecommerce major Snapdeal is set to lay off 1000 employees , which is 80% of its current workforce of 1200 , and continue with the remaining. This step will be realized with the money received from the sale of Freecharge. In July 2016, company had over 9000 employees and it cut down to 1200 employees without any notice. Snapdeal has cancelled much talked merger with Flipkart.
AUGUST 22: ALL INDIA BANKS’ STRIKE
According to All India Bank Employee’s Association (AIEBA), the United Forum of Bank Union (UFBU) has given a notice of nationwide banking sector strike on 22 nd of August. The aim of this strike is to protest against reforms in banking sector and to accelerate wage revision and other issues.
EUROPE TO DEFEND ITS ECONOMIC INTEREST, PLANS TAX CRACKDOWN ON INTERNATIONAL TECH FIRMS
Till now US tech giants like Alphabet Inc. , Google, Apple Inc. , Facebook Inc. and Amazon.com Inc. were exploiting loopholes to minimize taxes and increase market share in France and Europe. They were not paying taxes that continent’s own companies are paying. As a result of frustration among government regulators and voters; France is working with Germany and other partners to propose “simpler rules” with “real taxation” of tech giants at a meeting of European Union officials in mid- September. A similar move was taken last year when European Commission ordered Apple to pay 13 billion euros.
5
TRAI’s CONSULTATION PROCESS TO BEGIN WITHIN A WEEK
Amid a series of allegations around data breaches in the country, Telecom Regulatory Authority of India has decided to start a consultation process. It will address issues of security, privacy and ownership of data which flows through telecom sector. Since TRAI regulates telecom licensees, so only telecom sector. TRAI launched Do Not Disturb (DND) app in June to have a control over unwanted calls and messages. Google has supported this app but Apple is yet to allow this app to be listed on its App Store.
NEW APPOINTEE: CGI OF INDIA
Justice Deepak Misra will be 45th CGI of India after Justice JS Khehar, who will demit office on 27 th of August. Deepak Misra will hold office till 2nd of October, 2018. He is a freethinker and advocates women’s liberal causes. He was a part of the bench which ordered playing of National Anthem before screening of films in theatres.
6
NATIONAL - PARV SURANA
Snapdeal – Flipkart merger: The mystery behind the collapse
On 31st July 2017, Gurgaon-headquartered e-commerce
unit Vulcan alongside all the warehouses it currently
firm Snapdeal terminated all the talks with potential
runs and outsourcing it to a third party.
buyer Flipkart deciding on to pursue an independent path to re-establish Snapdeal as Snapdeal 2.0. After long talks of about 5 months, the statement came from Kunal Bahl and Rohit Bansal (6.5% stake at Snapdeal). This rejection was totally out of surprise as they were initially offered a deal of USD 800 million which was raised to USD 950 million. Major time lines associated with the merger: The talks started on 22nd March 2017, when Softbank (Biggest investor in Snapdeal) proposed the idea of selling Snapdeal to Flipkart or Paytm. The offer was rejected by Paytm on 29th March 2017. This led to anxiety among the employees of Snapdeal about the layoffs. Flipkart’s management was largely interested in the merger and soft wanted to hold a share of at least 20% in the merger while offering a buyout offer of USD 50 million to Kunal Bahl and Rohit Bansal.
On 17th July 2017, Flipkart made a final offer of USD 950 million to Snapdeal. On 28th July 2017, Snapdeal took a call from all the stake holders about the merger and also Axis Bank buys Freecharge from Snapdeal for 385 crores. On 31st July, 2017, Snapdeal – Flipkart merger was called off with the plan to go for Plan-B. The withdrawing of the merger made many of the Investors of Snapdeal unhappy. Vani Kolar, MD at Kalaari Capital and one of the earliest venture capitalists to back Snapdeal, was not happy with the decision made by the founders of Snapdeal. Her company owns around 8% stake in Snapdeal. This merger was also questioned by one of the domestic
investors in Snapdeal like
Premji Invest who had sought a stake in Flipkart’s Singapore registered parent entity, which would have violated Foreign Exchange Management Act (FEMA)
On 11 May 2017, a Letter of Intent (LoI) was signed
rules. One of the clause in the agreement which was
between the two parties.
also responsible for this call off had asked all the
th
On 24th May 2017, Japanese investor Softbank buys out a stake of Kalaari capital in Snapdeal. On 13th June 2017, Snapdeal started a talk of Plan-B which involved another layoff round of around i.e. 75% of the employees at Snapdeal if the deal doesn’t strike. This layoff was done in order to shut down the logistics
shareholders of Snapdeal to remain liable for any issue for next 18-24 months. This particular clause was questioned by every of the stake holders. Apart from this, there were many minority stake holders including Ratan Tata, Foxconn, Alibaba group, Ontario Teachers’ Pension Plan, eBay, Temasek and Hong Kong based Hedge funds who owns about 40% of the company.
7
Source: http://www.emarketer.com/Chart/Retail-Ecommerce-Sales-Share-India-by-Platform-2016-2019-of-total/206694 A report further added that the deal will be carried out in 3 phases:
Softbank will first buyout stakes from Snapdeal and its investors – Nexus and Kalaari Capital
from the market apart from Amazon. The road ahead: After the announcement made by the founders of Snapdeal, The key stake holder, Softbank said that it
The capital will then be put into the Bengaluru based
supported the
e-commerce company by Softbank.
merger and will surely look for new opportunities from
Finally, Flipkart will merge with Snapdeal
The current e-commerce in India is about $10 billion which is expected to grow ten-fold in next five years to reach $100 billion mark because of the increasing penetration of internet, smart phones and spread of digital network in rural areas. Currently, China is leading the industry with $450 billion e-commerce market Why Flipkart was interested in buying Snapdeal: Though Flipkart is the biggest e-commerce player in the industry, the fastest delivery was provided by its peer Snapdeal outpacing Amazon as well. The report published by PwC in April claimed that Snapdeal’s commits for delivery in 5 days in Metro and Tier 1 cities as opposed to Amazon and Flipkart’s commitment of nearly 6.5 days. The report also said that Snapdeal had the fastest average delivery time of around 3.9 days as compared to Amazons 4.1 days and Flipkart’s 5.1 days in all the 3 tiers. This was one of the main reasons why Flipkart was very much into buying Snapdeal to improve its Logistics services apart from post delivery service. By this, Flipkart will also be able to remove all its competitors
company decision to not to go for the
Snapdeal 2.0. Once inspired by China’s Alibaba model, Snapdeal is now moving to a “Taobao” model with a consumer-to-consumer e-commerce market place which allows customers to interact with each other. As per the founder, the company is already profitable at gross profit level and targets Rs150 crores in gross profit in next 12 months. There is also a speculation of initiation of Plan-B which includes laying off around 75% of its manpower which is currently having around 1000-1100 employees. In order to capture Indian e-commerce market, Japan’s Softbank which is apparently the biggest stake holder in Snapdeal has invested around $2.5 billion in Flipkart as on 10th August 2017. As a result, Softbank will now become the largest stake holder in Flipkart. After this investment, Flipkart claimed to have in excess $4 billion of cash on balance sheet. The biggest takeaway from this deal in future can be – A consortium of Alibaba-SoftbankFlipkart-eBay-Paytm could join hands in order to wash away Amazon from the market by capturing the entire Indian market.
8
INTERNATIONAL - GAURAV SHARMA
A placid US economy sees no change in interest rates by Federal Reserve
The aftermath of a recent meeting held by the Federal
the February report. An increase in economic growth
Reserve officials concluded that the interest rates of
can only been seen if the work force of a country
lending by the Feds be kept unchanged for the time
increase or their productivity increase. With both these
being. The US Central Bank kept its benchmark rate
cards in favour of US, a lower interest rate will only
constant and well within the range of 1% to 1.25%.
drive up inflation.
With confidence in the US economy, the Federal Chair
As a repercussion of future increase in interest rates
Janet Yellen said that the current rates won’t see any
two big questions arise, one is whether the buying
alteration, however the year ending will see an increase
tendency of the consumer will increase pre increase of
in the interest rates. The reason to increase the interest
rates and second whether the banks will start paying
rate is that the Feds need to curb the money it had
low interests on the savings account. When we
shelled out during the 2008-2009 economic crises. The
analyse the first one, the trend shows that the short
ripples of the 2008 crises can be felt in the current
term interest rates on loans are not in the hands of the
balance sheet of Federal Reserve but the normalization
Central Bank and will increase or decrease as per
process has started with a greater confidence in the US
convenience of the NBC’s, private banks etc. however
economy. It is expected that the Feds will start winding
in the long run it becomes a mandate for every bank to
down the massive holdings of bonds which was
increase the rates in order to be in tandem with the
triggered after the recession and had pumped $3trillion
Central Bank. In the second case, no set pattern is
into the system in order to stabilize the economy.
followed by the banks to increase or decrease the
The inflation rate of 1.8% in February has dropped down to 1.4% as per the current data. This situation of inflation rate being below 2% has concerned the Federal officials, questioning the moderate growth of
return rate on savings account. The tendency of the change in loan interest rates is high as compared to the return rates of savings account because more accounts play in the advantage of banks itself.
US economy which has dropped down from 2.6% growth rate in 2015 to 1.6% in 2016. However, a sanguine economy has had solid jobs gains and the labour market tends to harden itself dropping the unemployment rate from 5% last year to 4.7% shown in
9
MARKET
- ATUL RANJAN
9,710.80 -109.45
-1.11%
31213.59 -317.74
-1.01%
*As on 12th August, change on a daily basis After reaching record high levels in the end of July, the markets experienced a sharp fall in the August month till now. The BSE SENSEX has shed 4.18 percent while the NIFTY50 has shown a decline of close to 4percent since the beginning of the month. At end of trading on 11th August the BSE closed at 31213.59 pts. whereas NIFTY ended at 9710.80 pts.
With the goodwill generated by GST implementation fading away, even the modest rate cut by the RBI (the MPC decided to cut the benchmark rate by 25basis pts from 6.25 to 6) did not energize the markets. Experts link this downfall to an expected correction in the market which had already soared about 20 percent in the year 2017. Going by the predictions a 3-4 percent correction may result in further downfall of the markets.
10
Other major factor influencing the market behavior currently is the rising tensions between the US and North Korea over the latter’s missile testing programme. Wary investors have pulled out their money from markets world over which has shown its effect on Indian markets also.
WEEKLY TOP GAINERS NIFTY50 PREV. CURRENT COMPANY CLOSE CHANGE PRICE (4thAug) TATA STEEL
596.75
575.85
3.63%
INFOSYS
987.7
983.75
0.40%
WIPRO
289.7
289.4
0.10%
WEEKLY TOP LOSERS NIFTY50 PREV. CURRENT COMPANY CLOSE PRICE (4thAug) TATA MO374.5 435.6 TORS SUN PHAR450 506.4 MA BANK OF 142.25 158.95 BARODA
CHANG E -14.03% -11.14% -10.51%
Disappointing performance data of several companies in June quarter has also impacted the investor confidence. More localized factors include a SEBI order banning trade of shares of 331 companies on account of them being “shell companies”. As these shares were mostly in the small cap segment, the shares received a severe credibility loss from the investors. The mid cap and the small cap segments were the most affected ones in this downfall of indices.
Source :BSE India Active Stocks : Cochin Shipyard making its debut on last day of the trade, its shares jumped 20 percent to close at INR 522. The IPO for Cochin shipyard which was issued on August 01 to 03 was 76 percent oversubscribed. The banking stocks declined after poor earning performance in june quarter. SBI( BSE 280.65) plummeted 5percent on the last trading day of the week. The slide resulted in various stocks reaching their new 52 week low on BSE as on 11 th of August. Major stocks in this category were Dr. Reddy’s, Sun Pharma, Glenmark, Coal India among others.
Scrip Name
LTP
BLUEDART DRREDDY CRISIL ORISSAMINE NIPPOBATRY GLENMARK NOVARTIND WOCKPHARMA SUNPHARMA TATAMOTORS COALINDIA SINTEXPLAST
3931.05 2011.35 1831.25 1678.45 848.15 616.9 581.3 556.3 451.3 374.4 235.85 105.95
52 Weeks Low 3830.65 1901.65 1784.85 1616.45 825 592.6 579 538.05 445.05 357.95 234 105.95
Previous 52 Weeks Low 3840 1935.05 1819.3 1690 828.55 600 590.2 554 451 376 237.4 111.5
Previous 52 Weeks Low Date 10-Aug-17 10-Aug-17 10-Aug-17 10-Aug-17 10-Aug-17 29-May-17 10-Aug-17 10-Aug-17 10-Aug-17 10-Aug-17 10-Aug-17 10-Aug-17 Source : BSE India 11
FINHUMOUR
- ANIRUDH MITTAL
12
CLASS TALKS Hola IMTians!
- ANANYA NATH A cup of coffee has a burden of Rs.10/- on our meagre
Last edition we spoke about types of costing: variable
student pocket money.
and absorption. We are fairly confident that we were able
Suppose the Nescafe outlet sells 30,000 cups of coffee in
to get the point across. Today we will discuss about Cost
a month, thus making a revenue of Rs.300,000/-. But has
Volume Profit Analysis (CVP) or Break Even Point (BEP).
it managed covering all its costs and making a profit?
A cup of hot coffee or tea from the Nescafe outlet is a saviour for our ever tired souls. But have you ever thought how the Nescafe outlet covers its fixed costs? For this example we are assuming that the Nescafe outlet sells only coffee. Let us divide the cost of running Nescafe outlet into two parts: Variable costs and Fixed costs. Variable costs will include Direct Materials like coffee powder, milk, sugar and water. Also the cost of the paper cups and other such items would be the Variable overheads.
How many cups does it need to sell to cover its costs? For answering these questions first let’s introduce you to new concepts before we continue. Contribution per Unit (CPU): This represents the portion of sales that is not consumed by variable costs and so contributes to the coverage of fixed costs. CPU = Sales price per Unit – Variable cost per Unit Cost Volume Profit Analysis (CVP): It is used to determine how changes in cost and volume affect a company’s operating income and net income. Break-even point is that
Fixed costs cover rent which the owner has to pay IMT
volume of sales at which the Nescafe outlet would just
for the outlet. Direct Labour is the wages paid to the
cover all its costs, but neither make a profit nor incur a
staffs who is serving you the cup of coffee. What about
loss.
the cost of the coffee vending machines? The answer to this is “Depreciation”. The cost of the coffee machine is
BEP = Fixed cost / CPU
spread out throughout its useful life by depreciation.
Variable cost per Unit: Direct Materials Variable Overheads Total Variable Cost
Rs. 3.25 2.50 5.00
Fixed Cost for the month: Lease/Rent Depreciation Direct Labor Total Fixed cost
Rs. 70000 1000 10000 81000
Price of one cup of coffee Less: Variable cost per unit Contribution Margin per Unit
Rs. 10.00 5.00 5.00
Fixed Costs divided by Contribution Margin per Unit
81000 / 5
BEP
16200
13
What does BEP = 16200 signify? This means that the Nescafe outlet needs to sell at least 16200 cups to cover all its costs. Every addition cup of coffee will now add Rs. 5/- (CPU) to the outlet’s piggy bank. This
the profit it has earned: Profit= (30,000-16,200) x Rs.5 Profit= Rs.69,000/-
month the Nescafe outlet has sold 30000 cups. So,
We hope you managed to get an idea of how much coffee we need to drink to keep the Nescafe outlet profitable. Happy sleep deprivation!
14
SCAMS, SCANDALS, STORIES - ARUSHI BHAMBRI
The Rise and Fall Of ENRON October 2001, Enron Corporation, an American energy company based in Houston, Texas valued at 70 billion dollars, was declared bankrupt, owing its fate to a company called Arthur Anderson – an accounting firm. Further, what was witnessed by America was a gigantic audit failure, a story of poor financial account reporting which is one of the first of its kind.
Enron Corporation was formed in 1985 with the merger of two companies- Texas based Houston natural gas and Nebraska based InterNorth Gas Company. After a few initial years of gas providing, in 1989 Enron started natural gas trading and in 1994, electricity trading. This came in a time when energy market was changing drastically, opening doors for new traders and suppliers. Effectively a nationwide (and ultimately global) energy trading network was created.
Key Individuals Jeffery Skilling
convicted with 35 counts of fraud, insider trading and other crimes related to Enron and is presently serving 14 years of his 24 years of prison in Federal Prison Camp. was convicted with a 65 page indictment, and 11 counts of security fraud, wire fraud and making false and misleading statements. He died while on a vacation, before his trial was supposed to take place in 2006.
Ken Lay
Nancy Temple David Duncan
responsible managers in the scandal as the as they had given the order to shed relevant documents.
Enron took 16 years to go from $10bn assets to $65bn assets and only 24 days to go bankrupt. But, WHAT HAPPENED?
lost was highly questionable. Legit this business could
Ken Lay a PHD in eco, Laid down the foundation to free the
natural
gas
industry
from
the
shackles
of
Government restrictions. Therefore in 1985 Lay started the company, Enron, so as to take advantage of new regulations- floating prices of Gas in the market. Then, in 1987 Enron oil scandal, Vahala Scandal happened.
Arthur
Anderson
was
questioned
for
misappropriation of funds by two oil traders who put bets for Enron whether the price of oil will fall or rise.
not have earned this money. Here’s what was wrong : there were offshore accounts that led a trail from Enron’ s accounts to a mysterious Lebanese speculator account called M-Yass ( My Ass). The traders weren’t fired or even warned. Instead they were told to make more
millions”.
Soon
the
traders
gambled
all
companies’ reserve by bluffing in the market. This led to them being fired and Len Lay lost one of a crucial money maker.
The fact that Enron always won in the bet and never
15
That’s when he found Jeffery Skiling. Jeff Skilling's’ idea was to change the way to deliver energy – transform energy into tradable instruments like stocks and bonds. Enron will therefore become the stock market of natural gas! It instantly started making money. All this happened under Skilling’s one condition, i.e. the company followed the mark-to-market accounting in which future profits of any kind were measured on present market price and not historical cost. This helped the company introduce forward market in natural gas. Enron’s profits were now very subjective and open to manipulation. On the stock markets, the CXO’s would push the stock price up, then cash in the profits from it. While Enron’s Stocks were rising, its business was losing money. Seeing this all the
spread in the market. Adding to that, the company
top executives- Lay, Fastow(30 million from Enron and
posted a loss of $638mn in third quarter and also a
33 million from side deals) and Skillings (66 million
reduction in shareholder equity to the extent of $1.2bn.
dollars) withdrew their own cash from the company,
The last blow to the organisation came when managers
ending up earning millions of profits.
at Arthurs Anderson began shredding documents related
Arthur Anderson LLP was the company that audited
to Enron audits.
accounts for Enron. Enron had posted a 57% increase in
Thus started Securities and Exchange Commission's
sales between 1996 and 2000 having a share price of
Investigation
$84.87 ( 52 week high ) therefore becoming the most
acknowledged that in the past 5 years it had $586mn loss
successful companies of the century. However, in the
instead of profits. And with this news, Enron stocks went
backdrop, Arthur was smuggling the company’s debt
haywire, down to below $1 per share, and ultimately
obligation into offshore partnerships (with Fastow).
delisting of the company.
During the same period, the company was
reporting
on
Enron.
On
November
8,
Enron
The world saw a classical case of greed in the industry.
inaccurate revenues, which the analyst noticed. Their
What was fatal for the company was not the numbers but
question was- how exactly did Enron Make money? Was
its – pride, arrogance and intolerance. People were only
Enron share overpriced?
asked to make money and there was a cut-throat survival
This was followed by a top management abrupt switching, where in, Jeffery Skilling first took over as the CEO of Enron, Ken Lay being the Chairman. Skilling
of the fittest culture which led them to break the law. Enron’s top management were blinded by money and therefore sank in their own white boat, leading to America’s largest corporate bankruptcy.
abruptly resigned from the post and Ken Lay resumed as the CEO. He was sent a warning memo about their partnership with Fastow and its related consequences on company’s
accounting
scandals.
But, the rumours of Enron’s trouble had already been
16
BY-A-PIC
- SUNIL - SUNIL KUMAR KUMAR BEHRA BEHERA
17
WIZARDS
- AKSHIT GOYAL
JEFF BEZOS Amazon, perhaps every one of us has heard about this. Most of us have visited it. Amazon is the eighth-largest private employer in the Unites States. The person behind such a huge company is Jeff Bezos. Early Life Jeff
Bezos
was
born
on
January
12,
1964
in
Albuquerque, New Mexico, USA to Jacklyn and Ted Jorgensen. His step father changed his surname to Bezos. He is an American. Jeff displayed scientific and technological interest in his childhood. He had various awards like silver knight award, national merit scholar right in his childhood. Bezos graduated Phi Beta Kappa from Princeton University. He holds Bachelor of Science (B.S.) degrees in electrical engineering and computer science. He was also selected to Tau Beta Pi
making it the largest amount of money he had ever raised in a sale of his Amazon holdings .Market value of Amazon was evaluated at $83.9 billion.
in Princeton. For Princeton chapter of the Students for
Blue Origin: Blue Origin was founded in year 2000 by
the Exploration and Development of Space he served as
Jeff which was a startup company based on human
a president.
spaceflight. Bezos found this company due to increase
Early career: After graduating Jeff worked on Wall Street. He also worked in company named Fitel on building international trade. Later he worked at Bankers Trust and D .E Shaw & co.
in space flight fascination.as in case of amazon, Blue Origin was also kept a secret for many years. In 2006 company purchased a huge land for testing facility in Texas due to which it became famous.in 2011 Bezos said that the motive of setting up a space company is
Amazon .Com: Can u believe that business plan of such
to decrease the cost of space travel so that anyone
a huge company was written in a cross country. Yes! Jeff
could go into space. In September 2011 company lost
wrote the business plan for amazon .com in a drive from
its prototype vehicle during launch. In 2015 Bezos
New York to Seattle. Jeff left his well-paying job at New
announced launch of new orbital launch vehicle. Blue
York City hedge fund and set up amazon in a garage in
Origin's New Shepard space vehicle successfully flew
1994.
order
to space on November 23, 2015. It reached its planned
companies from collecting sales taxes in states where
test altitude of 329,839 feet (100.5 kilometers) and
they lack a physical presence. Jeff is very attentive to
executed a vertical landing back at the launch site in
business details and took up this opportunity.
West Texas. Recently Bezos declared that he was
In May 2016, Bezos sold slightly more than one million
selling almost $1billion in amazon each year to finance
U.S
Supreme
Court
exempted
shares of his holdings in the company for $671 million,
Blue Dart
18
The Washington Post
2012 Fortune named Jeff as business person of the
Bezos announced purchase of The Washington Post in year 2013.The deal was worth $250 million in cash. On October 1, 2013 Bezos's Nash Holdings LLC took control.
year. He is also a member of the Bilderberg Group and attended the Bilderberg conference in St. Moritz Switzerland in year 2011, and the conference in Watford, Hertfordshire, England in year 2013. He was a member of the Executive Committee of The Business
Non Profit Projects
Council for 2011 and 2012.In 2016 The Harvard
Bezos is actively involved in social work .His works
Business Review named him as the best CEO in the
include:
world. He also topped the fortunes list of fifty great
He donated $2.5 million to support same sex marriage referendum.
He has setup center for innovation at Seattle museum of history and industry
World’s Richest Man On July 27, 2017 Jeff became the world’s richest man leaving Bill Gates behind. This happened due to increase
He recovered two first stage engines from Atlantic
in stock valuation as per Bloomberg Stock Index. But by
ocean which were part of Apollo 11 Mission’s S-1C
the end of regular trading Jeff slipped back to second
stage
position. According to NYU’s Scott Galloway Jeff would
He donated $800000 to Word reader, which was founded by an amazon employee
leaders for 3 consecutive years.
His
foundation
donated
$30
million to
Fred
Hutchinson Cancer Research Center
become world’s first trillionaire by 2042 leaving Google and Microsoft behind. Criticism In
May
20 14
I nte rnat io na l
Tr ad e
U n ion
Confederation (ITUC), at their World Congress, named Awards
Jeff as world’s worst boss. ITUC said that Jeff has
Bezos has quite a lot of awards and recognitions. He
inhuman attitude representing North American corporate
was named as person of the year in Times Magazine in
model. The New York Times also described working with
year 1999.In 2008 he was selected as one of the beast
Amazon as in human experience. In amazon employees
leaders of America by U.S news and world report. In
are regularly terminated.
19
STARTUP TRACKER
- SUSWETA BANIK
Founded in: 2014 Headquarters: Ahmedabad, Gujarat Founders: Mahin Gupta, Saurabh Agrawal, Sandeep Goenka
Originally
founded
Buysellbitco.in,
by
India’s
Mahin first
Gupta
Bitcoin
in
2012
exchange,
as was
rebranded in 2014 as Zebpay with two more partners as founders. The main aim of Zebpay is to make Bitcoin exchanges simple in India. There are a lot of misconceptions around Bitcoin being illegal in India and also non-techy people do not understand
the
complexities
of
bitcoin
addresses,
network confirmation time and backing up wallets. Zebpay offers buying, selling, storing and spending Bitcoins to top up airtime, data card or DTH bills using mobile number and a 4-digit pin. As it is a comparatively newer concept, Zebpay aims at covering the basic facts and updates about Bitcoins in its app and website. Zebpay mainly targets regular people who want to use
Unocoin,
Bitcoins to transact among their friends and family. But
transactions of Zebpay has increased from ₹100 crores
the major challenge here is for the average Indian, the
per year in 2016 to ₹200 crores per month in 2017 as
advantages offered by bitcoins does not mean much to
reported by Mr. Sandeep Goenka. He also claims that
them. Hence, for bitcoins to come into regular usage in
Bitcoin
India, it has to offer some substantial benefits over
self-regulatory body.
traditional currency to the average Indian.
Coinsecure
and
Bitxoxo.
The
Bitcoin
economy should be allowed to form a
Zebpay is planning to expand internationally starting
Currently, it has a user base of around 500,000 and
with Singapore. They are among the top 30 exchanges
accounts for 70% of Bitcoin market in India. It reported a
in the world presently, and they aim to break into the
Gross Merchandise Volume (GMV) of ₹1,200 crores in
top 10 in the next two years.
FY16-17 and a revenue 1-2% of total GMV. Others apps dealing with Bitcoin exchange are
20
INSTRUMENTALLY SPEAKING
- ARCHIT BASER
What does it take for any organisation to run a
Unlike the share-holders debenture-holders do not have a
business? The very obvious answer is money. And
right to vote in the general meetings of a company.
where does it get this money from? Well there are many sources. It can issue equity shares, preference shares, approach a bank or an NBFC for credit or it can issue debentures.
If a company goes into liquidation, debenture-holders get the first priority at the time of repayment. Debentures reduce the burden of Income-Tax since the interest paid is chargeable to Statement of Profit & Loss
DEBENTURES?
and is an allowable expenditure.
You must have seen this term ‘debentures’ during your Foundation Module in FASA and I am sure you must have pondered over it for once or more.
Debentures can be issued at three different prices: At Par Value: In this case the issue price of the debenture is same as the face value.
Got some insights?
For e.g. Company XYZ is in need of Rs.1.2 crore for 3
Yes? Let’s revise them.
years. It can choose to issue 1.2 lakh debentures having
No? Let’s build the concepts then.
Face Value of Rs.100 each and offer an interest rate of
A Debenture is a written acknowledgement of debt by a
10% redeemable at par after 3 years.
company under its seal. It contains the face value of the
At Premium: Here the issue price is higher than the face
debenture,
value of the debenture.
rate
of
interest,
redemption
date
&
redemption value along with other terms and conditions,
Let’s say the Company XYZ (continuing from the previous
if any.
example) carries a good reputation in the market and
Some other characteristics attached to debentures are: Debentures are a form of long term borrowed capital. They are also known as ‘fixed cost bearing capital’ since the debenture-holder enjoys a fixed rate of interest. Debentures are redeemable after a fixed time period.
wants to capitalise upon it. It can choose to issue debentures having a face value of Rs.100 each at a premium of 20%. The money raised per debenture now would be Rs.120 and number of debentures issued would be 1 lakh.
21
At Discount: The issue price in this case would be lower than the face value.
What factors affect the prices of debentures?
Now suppose the Company XYZ’s performance has not been that great in the recent past. Here it can issue the debentures at a discount of 20%. The
secured against any property of the company.
money raised
per debenture would be Rs.80 and the number of debentures issued would be 1.5 lakh. Similar to issuance, redemption can also be at three prices:
Interest
Rates: The prices of debentures have an inverse
relationship with the market interest rates. The simple reason is one being more attractive in terms of returns compared to the other, depending upon the current interest rates decided by the RBI. Inflation:
Inflation is a nemesis of debenture’s prices.
Simply said, a rise in inflation makes the prices of
At Par: Redemption price is equal to the face value. At Premium: Redemption price is higher than the face value. At Discount: Redemption price is lower than the face value. Types of Debentures Redeemable
Debentures: Debentures which are to be
redeemed at a certain point of time. In India, maximum time period
allowed to redeem debentures is 20
years. Irredeemable
Debentures: These debentures are
issued for a perpetual time period. They are redeemed when the company goes into liquidation. In India, issuance of irredeemable debentures is not permitted.
debentures fall and vice versa. The reason being inflation takes away the purchasing power of the interest payments making the debentures unattractive. Credit
Ratings: The prices of debentures depend a lot on
the ratings given by the credit agencies too. This is so because a credit rating gives a hint about the company’s ability to make payments of interest and principal. Higher credit rating pushes the prices up and vice-versa. How debentures are different from preference shares? A common confusion that has been observed amongst the
non-commerce
debentures
and
background
preference
students
shares.
Here
is
about is
the
explanation! The interest payment of debenture is mandatory even if the company makes losses whereas the dividend payment for preference shares is not compulsory even if
Debentures: The holders of this type of
the company is making profits. However, non-payment of
debentures have the right to convert these debentures
preference dividend for two consecutive years gives
into the shares of the issuing company at the time of
voting rights to the preference shareholders which the
redemption or if the company wishes to do so earlier
debenture holders don’t get.
Convertible
upon fulfilment of certain terms and conditions. Non-Convertible
Debentures: There is no such right
attached to this type of debentures. Secured
Debentures: Also referred to as ‘Mortgage
I hope I have kept my word of helping you build the concepts on another financial instrument. P.S.
–
Debentures
market
can
be
tracked
www.nsdl.co.in
Debentures’, these are secured by a charge on the property of the company. It gives the debenture holders a right to recover their Principal amount along with interest due, if any, from the assets on which the charge has been created. Unsecured
Debentures: These debentures are not
22
on
LOCK THE STOCK
- ASHWIN BANSAL
Eicher Motors Limited. Royal Enfield is the oldest motorcycle brand in the world . Every Man dreams of being a proud owner of a “Royal Enfield” bullet. Thundering sound of its engines helps in execution of it’s tagline “Bullet Chale toh Duniya Raasta de”. Let us now talk about the company behind this historical and legendary motorcycle –
Eicher Motors Limited. About The Company: Eicher Motors Limited (EML) incorporated in 1982 is a leading player in the Indian automotive space. It operates in three distinct business verticals - motorcycles, commercial vehicles and personal utility vehicles. Eicher Motors has 1.05% weightage in NIFTY 50 Index with a free floating market capitalization (value of shares available for public) of INR 401.07 billion. Chairman: S Sandilya Managing Director & CEO: Siddhartha Lal NSE Scrip Code: EICHERMOT CMP: Rs.30,111.70(As on 10Th August)
Share Performance
Note: - Investment of Rs.1,00,000/-On 13 August ,2007 at a price of Rs.373 per share in Eicher Motors would have fetched Rs.79.84,390/-
If we compare Eicher Motors performance with that of the performance of Indian stock markets, Eicher motors has outperformed both prime index by a substantial margin. One year returns of BSE Sensex and Nifty has been approximately 12% while that of Eicher Motors has been 35%
23
Business unit of Eicher Motors Ltd . Royal Enfield (RE) [100% ownership] -Oldest motorcycle brand in the world in continuous production . RE is the jewel of the Eicher group with many successful brands like Bullet, Thunderbird , Classic , Himalayan. It focuses on mid-size and leisure motorcycling and captures 95% market share in 250cc to 750 cc in India . Last year itself sales of motorcycles stood at 6,66,493 units inspite of demonetization, regulatory hurdels(BS-2 phase out) and loss of production due to Chennai floods . Volvo Eicher Commercial vehicle (VECV) – Joint venture with Volvo Motors in the commercial vehicle segment to design and manufacture reliable, fuel efficient trucks and buses .It captures 33.35% of the market in domestic light and medium duty (trucks and buses) . 58,604 units of commercial vehicles were sold in the financial year ending 31st march, 2017.
Eicher Polaris Pvt. Ltd (EPPL) - Joint venture with Polaris Industries Inc. to develop India’s first personal utility vehicle brand MULTIX
The company is currently in its growth phase and has been expanding its operations exponentially both in domestic and global space. It has expanded its production from 60,000 bikes annually in 2010 to 6,75,000 in 2017. The company is promoter driven and has been completely debt free for the past 4-5 years. Retained earnings are used finance its major capital expenditures.
24
RE now rolls out to 568 dealerships present in 45 countries, along with 25 exclusive stores in 13 countries. EML has two
subsidiar-
ies in North America and Brazil. Royal Enfield exclusive stores are located in nodal cities which include London, Berlin, Madrid, Paris. Company has focused their efforts in developing lifestyle motorcycle ecosystem in Jakarta to leverage leisure
riding culture in the
country. RE sold 15,838 units of motorbike internationally. It has rated Latin America and SE Asia as
potentially bigger market
than that of the developed nations, with low penetration levels these markets are very similar to India.
News: Eicher Motors has become the third most-valued
Royal Enfield reported a 20.75 per cent increase
automobile company in the country after Maruti Suzuki
in total sales at 64,459 units in July. The company
and Tata Motors. Eicher’s market capitalization has also
had sold 53,378 units in the same month last
surpassed sports utility vehicle (SUV) major Mahindra
year, Exports during the month grew 4.16 per cent
and Mahindra’s (M&M)’s.
to 1,302 units as compared to 1,250 units in July 2016.
25
Business Performance: The company has been continuously showing growth with an EBIT margin of more than 20% which is the highest for any two-wheeler brand globally.
*EML annual reports 2016-17
*EML annual reports 2016-17
Upside
Company is virtually debt free
Downside
is more than the industry average.
Good quarter performance is expected . The PAT of Eicher Motors has been increasing by 41%
dividends inspite of reporting profits year after year.
Return On Equity (ROE) stands at 36.48% for the past 3 years .
The stakes of the promoters has decreased in the recent years and the company is not paying out any
year-on-year for the past 5 years
Stock is trading at 13.89 times of its book value which
The company has reported poor sales growth of 4.35% for the past 5 years.
Future Forecast
*Thomson Reuters report
26
*Thomson Reuters report
DISCLAIMER: This research report is a written or electronic communication that includes research analysis, research recommendation or an opinion concerning securities or public offer, providing a basis for investment decisions. The views expressed therein are based solely on information available publicly/internal data/other reliable sources believed to be true. The information is provided merely as a complementary service and does not
constitute an offer, solicitation for the purchase or sale of any financial
instruments, inducement, promise, guarantee, warranty, or as an official confirmation of any transactions or contract of any kind.
27
FINQUIZ
- SHUBHENDU MAHAJAN
1) A belated return can be filed by an individual if he fails to file the income tax return by the due date as per section A. 139(4) B. 131(1A) C. 132(8A) D. 132(3) 2) Who will be replacing Irene Rosenfeld as the CEO of Mondelez International? A. Warren Buffet B. Dirk Van de Put C. Bernard Hees D. Michael McCain 3) The founder, a Hollywood drama film, is a biopic of which entrepreneur and his company? A. Steve Jobs, Apple B. Bill Gates, Microsoft C. Mark Zuckerberg, Facebook D. Ray Kroc, McDonalds 4) Name the brand associated with the below advertisement
A. L’Oreal B. Tanishq C. Vero Moda D. Listerine mouthwash 5) Shoe Dog written by Phil Knight is a book that describes the history and strategy of which famous company? A. Adidas B. Nike C. Puma D. Reebook
28
6) Identify the Indian businessman whose company made it to the Fortune Global 500 list A. Rajesh Mehta B. Bhavin Turakhia C. Yusuff Ali M.A. D. Naveen Tiwari
7.) Identify the logo of the bank which started operations recently
A. Airtel Payments Bank B. FINO Payments Bank C. Paytm Payments Bank D. India Post Payments Bank 8) For which country, the income of its entire citizens is available online A. Australia B. Sweden C. Finland D. Norway 9) Which auto major has announced to make only electric or hybrid cars from 2019? A. Tesla B. Volkswagen C. Volvo D. Honda 10) Which is the first Indian state government to adopt January to December fiscal year? A. Kerala B. Maharashtra C. Punjab D. Madhya Pradesh
Answer Key: 1. A
2. B
3. D
4. D
5. B
6. A
7. B
8. D
9. C
10. D
29
INSIDE INTEL
- SAHIL GAUBA division there is Group Finance,
finding all the out of the limits
Product Control, Finance Change
trades and these were called
department. In CRO there is Risk
“inc idents�.
Management, Credit Risk Office,
incidents
CRO
adjustment and were required to
Change
department
and
Market Risk department.
be
I was in Product Control so I can explain it better. But very briefly,
many of them.
CS.
Control
has
Equity
Oh yes. They are called the financial guardians of the company. In fact, Product Control is known as Second Line of Defence. So, this was an 8-week long intern-
I was part of the Equity Valuation Control department. So, in my department there were a lot of financial models and software that have already been established by the
CS
which
ensure
the
supervision of the trades that have already been executed at Let us start by understanding the
the front-end office. So, the trades
company first. Tell us about Credit
are actually controlled here. And
Suisse.
that is how it is a control division.
So, I interned in the Pune office
In my department pricing was
which is the biggest among the 4
done. So, one part of my work
offices they have in India. And they
was related to checking whether
plan to expand it even further with
the
some of the services moving to the
according
Pune BDC very soon.
requirements and also whether it
Chief Risk Office. Under CFO
statements, we cannot have too
of all the CS group entities.
So, what was your work like?
divisions, Chief Finance Office and
f in anc ial
helps in protecting the image of
etc.
a way that we have two broad
in
reporting of financial statements
Valuation control, Line Control
Now the Pune office is organised in
dis c los ed
loss/profit
So, in a way your department
Valuation Control, Fixed Income
Telang CA Final, B.Com
entailed
such
Group finance is related to the
Product
Munmun
Because
pricing
adheres
of to
to
established
the the
the CS
trade
is
regulatory internally regulatory
framework. So, we were responsible for
ship. What was the timeline like? Ok, so we had one full day of orientation. It was an induction program common to all the interns. Apart from this every department had its own induction session. Over the course of two months, the best part was the networking sessions they had scheduled for the interns. All the major leaders in Credit Suisse in Mumbai, in Poland, and across other countries would talk to us over video calls. Now, this was the official networking session. We also had lateral networking session. We were told that we had to interact with at least with 1 MD, 2 Directors and 2 VPs. We can decide, we can book an appointment with their PAs or even directly in their calendar and we could talk to them informally.
30
People are so nice and they make
Yes, that’s some wisdom! Now
you feel so comfortable that I ended
how does one get to have such
up talking about my career goals
cool colleagues? How does one
and my future with them. It seems that CS emphasises a lot on interaction. So, what was one particular conversation that really touched you?
crack the CS process?
They
had
shortlisted candidates based on CV. One thing I could make out
Yes, CS has a very cool culture. The
was that, those who had high IT
whole internship program was de-
work ex were not there in the
signed in such a way that you get to
shortlist. So, probably that was
know about all the processes in your
one criteria.
department and you get the chance
Sounds great! And if you could just tell us more about your technical interview…
So, the CS process was pretty straightforward.
fit you are with CS.
Surely. So, in the technical interview they asked me questions about my previous academic background. There were some questions on some financial concepts which frankly I am not able to recall right now. But it wasn’t like any stress interview. They were very cool. And the questions were not
After the shortlist, there was either
very difficult. But yes, the interview
a GD or a case discussion de-
went for around 20-25 mins. But again,
pending upon the panel. Then
they were asking me about my arti-
So, I was reporting to the Director of
there were 2 interview rounds,
cleship and about my background.
the Equity control and once he gave
technical and HR. Since, I had
me this amazing life advice. He said,
chosen Product Control as my first
“At the end of the day it does not
preference, my technical round
matter how much you are earning
was taken by the manager from
but it is very important to always be
Product Control.
to interact with the senior managers both formally and informally.
very nice to people. You could be great in your work but to be successful you should be great to the people around you too.”
Also, they asked about the role. Like, why Product Control and where do you see yourself as in the career goals etc. It has been great pleasure talking to you, Munmun You have provided
And after interviews, we had an
amazing insights. I am sure now all the
informal networking session. But
juniors will feel more confident about
that was just to see how culturally
nailing the CS interview like you did! Thanks a lot.
31
GLOSSARY
Shell companies- These are often listed companies which are used as a vehicle for business transaction without having significant assets of themselves. These may be kept dormant for a long period of time for some future use.
LTP- Last Traded Price. It is the latest buy/ sell value of the share and also called the current market price.
IPO- Initial Public Offering. It is the very first sale of stock offered by a company. After issuing an IPO the company is said to have gone public, since its shares are issued to the public.
MPC- The Monetary Policy Committee has been formed through the Finance Act 2016, and has been mandated to keep inflation 4%( with 2% tolerance level). The MPC review happens at least 4 times in a year. The MPC is a six membered body comprising of three from the RBI and three external members.
ETF (exchange traded fund): an investment fund traded on stock exchanges, much like basket of different stocks, mirroring an index and its performance. It is a smart, effective way for the government to help meet its disinvestment targets.Bharat-22 ETF is the second ETF from Govt. of India after CPSE ETF
Passive Fund: Passive portfolio management involves the creation of a portfolio allocation that is the same as a specific index. The purpose of passive portfolio management is to generate a return that is the same as the chosen index instead of outperforming it.
EPFO: Employees' Provident Fund Organization
Mergers and Acquisitions: Mergers and acquisitions (M&A) are defined as consolidation of companies. Differentiating the two terms, Mergers is the combination of two companies to form one, while Acquisitions is one company taken over by the other. M&A is one of the major aspects of corporate finance world. The reasoning behind M&A generally given is that two separate companies together create more value compared to being on an individual stand. With the objective of wealth maximization, companies keep evaluating different opportunities through the route of merger or acquisition.
Publishing Team : RITU RAJAN , SRITAM SAMAN TARAY Designed By : SHASHANK MALLA
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