Effect on the Industry

This merger is predicted to have multi-dimensional effects on the industry Some companies may use aggressive tactics to pressure producers and distributors on the share of box office revenue and food and advertising vendors at rates that suit them. This might also be a chance for other players like Cinepolis and Miraj to build on their expansion plans and benefit from lower rentals Meanwhile, single-screen owners fear producers may begin to look at limited releases with two chains to reduce costs in the case of niche films Carnival Cinemas has been struggling with debt and has come down from 400 to less than 100 screens in the past months. If the company is unable to get back in the game, the screens it has lost are now up for grabs. There already was a duopolistic market, and this merger will further increase the need for stronger competition Will this merger result in anti-competitive monopolistic practices? Only time shall tell However, some smaller players also see some hope The merged entity will have the power to bargain for lower rentals and higher advertising costs Rentals are the highest cost for this market, and the merger can help reduce real estate costs by 2040%. The combine will have leverage in convenience fee deals with entities like BookMyShow, Paytm and distribution revenues. Administrative and back office costs might also reduce Apart from the bargaining power, the entity will also have huge data on audience tastes and spending patterns

Future Plans

Currently, PVR operates 871 screens across 181 properties in 73 cities, while INOX operates 675 screens across 160 properties in 72 cities. Post the merger, INOX plans to open 40 more screens by the end of March 2023. Beyond FY 2023, it has a strong pipeline of about 900 screens which are already signed The PVR-INOX combine plans to add 3000-4000 screens in the next five years PVR-INOX will be the largest multiplex chain in India with a network of 1500 screens and plan to unlock opportunities in tier three, four and five cities. PVR plans to enter newer cities, especially in the south and east parts of the country. They are looking at opportunities in smaller unserved cities with 'high potential' They do not plan to expand overseas and focus on domestic expansion There is likely to be a significant difference in the Food and beverages revenue per head between the two brands The current revenue was Rs 93 per head for PVR and Rs 75 2 per head for INOX. The merger will help increase the revenue by Rs. 45 crore. Higher convenience fees and advertising revenue can lead to a revenue synergy of Rs. 60 crore.

Introduction

An investor's most important aspects before investing are good returns, generating wealth or saving taxes In the investment market, there are numerous schemes that offer great returns However, they are taxed according to the Income Tax rules This is where Equity Linked Savings Scheme or ELSS funds save the day. They are tax-saving equity mutual funds.

If you invest in ELSS schemes, then you can avail tax exemption of the invested amount up to a limit of Rs. 150,000. Further, the income you earn under this scheme will be considered as Long Term Capital Gain (LTCG) at the end of threeyear tenure and will be taxed at 10% (if the income is above Rs 1 lakh)

What are the tax benefits?

Source : Z Funds

What is ELSS Fund?

The major USP of an ELSS fund is the tax exemption of upto Rs 1,50,000 from the investor's annual taxable income under section 80C of the Income Tax Act In recent years, many taxpayers have turned to ELSS schemes to avail tax benefits

As mentioned above, Section 80C of the Income Tax Act offers tax deduction benefits on the principal invested by you in an ELSS scheme The is a cumulative deduction benefit which means that you can avail a tax deduction of up to Rs 1 5 lakh under the above-mentioned section for investments made in all instruments specified, like ELSS, NSC, PPF, etc

Further, these schemes have a mandatory lock-in period of 3 years. Therefore, on redeeming the units, you receive long-term capital gains or LTCG. These gains are not taxable up to Rs. 1 lakh in one financial year. Any LTCG above this limit is taxed at 10% of the gains exceeding Rs 1 lakh without indexation

Why ELSS Funds ?

ELSS Tax Saving Funds offer a wide range of benefits including:

Diversification – Most ELSS funds invest across a diverse group of companies ranging from small-cap to large-cap and across various sectors. This allows you to add the element of diversification to your investment portfolio.

Low minimum amount – Most ELSS schemes allow investors to start investing with as low as Rs 500 This ensures that you start investing without having to accumulate a reasonable investible corpus which invests in the equity market and offers tax benefits, many investors look at ELSS funds only for tax planning purposes If saving tax is your sole purpose, then there are several options available under Section 80C of the Income Tax Act Before investing in ELSS, you must ensure that you primarily create an investment plan to help you achieve your financial goals. This plan will naturally include tax planning ELSS funds can be used to achieve your long-term goals.

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2. SIP or Lumpsum

SIPs

While you can invest a lump sum amount in an ELSS scheme, most investors prefer the SIP method as it allows them to invest in small amounts and avail tax benefits along with an opportunity to create wealth

Additionally, you can invest as much as you want but can avail tax benefits as limited by Section 80C of the Income Tax Act. Also, you can choose to stay invested after the stipulated lock-in period of 3 years for as long as you want.

Factors to Consider before Investing

You must look at the scheme’s performance over the past decade in addition to the factors mentioned below before investing in ELSS Funds in India:

1 Investment + Tax Planning

Being the only type of mutual fund

In order to avail of tax benefits, many investors turn to ELSS funds at the eleventh hour. Hence, they commit the entire investment to the market in lumpsum. This is because they are in a rush to save taxes, and lump sum investment is the only choice. This can be risky, especially if you happen to invest at a time when the market is high Since ELSS investments are usually linked with long-term financial goals, starting a systematic investment plan (SIP) can help you average your buying cost per unit

3.Recommended Investment Horizon

Many young investors prefer ELSS funds to PPF or NSC due to its short lock-in period of 3 years This can be a counterproductive strategy since equity investments are known to take around 5-7 years to stabilize Being inherently volatile, keeping a short-term investment horizon with ELSS funds should be avoided.

Introduction

The term "Too Big to Fail" was first tested in the 80s, when the world learned that an institution as large as Continental Illinois could also taste the flavour of bankruptcy.

This case is similar to the case of just another risky bank, but this was the first incident that pinched the regulators to form more stringent norms and better governance policies for the country's financial system.

The Rise

Continental Illinois was formed in 1910 through the merger of The Continental National Bank and the Commercial National Bank, which followed a conservative approach towards banking. By the 1970s, it was the 7th largest commercial bank in the US, with a total asset base of $21.44 Billion by 1976. During the mid-70s, the bank started implementing a growth strategy, through which they started giving out loans aggressively By 1981, Continental became the US's largest commercial and industrial lender The bank's share price almost doubled while the other banks remained somewhat constant. The AUM for the bank increased by 110 56% from 1976-81 to touch the mark of more than $45 Billion. This rising growth was also accompanied by a higher return on equity, which was about 14.53% from 1977-81 Although a few questioned the bank's rapid growth and rising risk, most experts lauded praises for its excellent management team and growth strategy. Many articles stating Continental was among the top 5 companies were published, and it was all too rosy for Continental. Continental Illinois gain the title of a firm, which is "Too Big to Fail"

The Fall

The rosy future was only for a short time though Due to specific state rules and regulations, Continental's retail business was restricted to a small fraction Thus in 1977, core deposits formed only 30% of the total deposits. The bank also used to issue shortterm, cheap and highly volatile debt instruments and rollover yearly to finance its long-term assets (Loans). This model will only work when the bank has constant earnings from its assets

In Q2 1981, the bank posted a 12% dip in its PAT, with the management blaming the below market pricing strategy.

Continental had significant exposure in the energy sectors and the growing economies It struck a deal of $ 1 Billion with Penn Square with respect to their highly speculative oil and gas exploration loans Penn Square became insolvent; it became one of the most significant bank payoffs for FDIC Then started the run over the deposits, and the bank could not finance through its short-term instruments as they became more and more expensive. With Latin America defaulting, the bank share price sunk, and its non-performing assets reached a record $2.3 Billion in 1984. There was an immediate need for funds for the bank to stay afloat

The Rescue

Continental borrowed $3 6 Billion from the Fed, only to temporarily finance the run, it also took a $4 6 Billion loan package from 16 banks combined, but all of these funds were insufficient to win the trust of the depositors. It was important for the government to prevent the spillover effect towards other firms. An assistance package of $2 Billion by FDIC and a group of commercial banks was provided to the Continental Further, Continental received $5 3 Billion in unsecured funding from 24 commercial banks Fed searched for a merger partner for two months but couldn't find one Ultimately the Fed fired the board of Directors and owned 80% of the stake in the bank with an option to own the remaining if losses breached a certain threshold, which it exercised later in 1989. This was one of the biggest bailouts the US had ever seen before the 2007-09 crisis. The Fed sold all of its stake in the bank by 1991, and Bank of America finally acquired Continental Illinois in 1994

The Learning

This case was an eye-opener for all the regulatory bodies in the world The Office of the Comptroller of the Currency (OCC) could have raised questions regarding the aggressive growth strategy. The Fed could have intervened earlier to prevent such a run. One got to learn that the priority for an economy's banking system should be to keep the depositor's money safe and then look into profitability. The regulators understood the need for sufficient capital to cushion the losses suffered during the stress period and introduced certain norms and policies A systemic risk is always involved with an institution as big as Continental Illinois, and no economy can afford this risk to materialize. The Basel norms were introduced after various defaults and banks went through a stressful period. These norms were modified and are still being upgraded with innovation in financial instruments and certain learnings It is not that after Continental, such cases never happened; there are still a few ambitious people out there to make quick gains and proliferate on the back of higher-than-normal risk The regulators must keep constant track of the firms and ensure that they implement the learnings from the past.

How to Play?

Below we have 10 chart situations where you have to predict the movement of the stock based on the price chart formations The task is to identify whether the chart will go up, down, or sideways You need to match the following chart patterns with their respective names as mentioned below Do mention the assumptions taken into account while providing those recommendations. You can send your answers via e-mail to niveshak@iimshillong ac in

What is Technical Analysis?

Technical Analysis is essentially the art of pattern recognition It is a trading discipline that uses statistics to identify trading opportunities. These are some of the patterns which you might find in the questions above

Channel breakout

Triple Bottom Bullish Pennant

Triple Top

MATCH THE FOLLOWING WITH GRAPHS ABOVE

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Rising Wedge

Trendline breakout

Bearish Flag

Inverted Head and Shoulders

Inverted Cup and handle

Double Top