The Finapolis November 16 by The Finapolis

What to do if youâ&#x20AC;&#x2122;ve been mis-sold insurance?

Why India canâ&#x20AC;&#x2122;t boycott Chinese goods

Mutual fund reviews

Why a Plan B approach can backfire

Finapolis The

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1st November 2016 `60

Your Personal Finance Advisor

Rs 510,000,000,000 wealth is lying idle. Some of it may be yours

The

Volume 10

Issue 08

November 2016

Editor Mandar M Bakre editor@thefinapolis.com Associate Editor S Vijaykrishnan Editorial Board Phani Sekhar K P Jeewan Jagannadham T Design & Production Vijayendra Kumar Ch Kerthi Saikumar Narsingh Thakur Advertising & Circulation Shabna R Iyer Vijayendra Kumar Ch For Ad Sales Queries subscriptions@thefinapolis.com Printed & Published by Mubashir Ansari on behalf of Karvy Consultants Limited. Karvy House, 46 Avenue 4, Street 1, Banjara Hills Hyderabad - 500 034. AP. Printed at Kala Jyothi Process Pvt. Ltd Regd.Office: 1-1-60/5 RTC Cross Roads, Musheerabad, Hyderabad - 500 020. AP. SVPCL Limited Regd.Office: 206/A, Concourse 7-1-58, Greenlands, Ameerpet Hyderabad - 500 016. AP.

Published for the month of November 2016 Printed on November 1, 2016 Total No. of pages 68 All charts and tables are sourced from Bloomberg, unless otherwise indicated.

For Editorial Queries Please contact The Finapolis Karvy Centre, 8-2-609/K, Avenue 4, Street No.1, Banjara Hills, Hyderabad-500 034 Tel: +91 40 66072560 Copyright The Finapolis. All rights reserved throughout the world. Reproduction in any manner is prohibited. The Finapolis does not accept responsibility for returning unsolicited manuscripts and photographs. All unsolicited material should be accompanied by self addressed envelopes and sufficient postage.

Hello Dear Readers! We are delighted to present our new design this month. Diwali is the festival of lights; we hope our revamp helps illuminate your month that little bit. The November issue highlights idle wealth in all its forms: we look at all the sources in which such wealth can languish, how such wealth becomes idle, and, most important, how you can claim back idle monies. Our columnists look at tax norms on home loans and good habits for Diwali. We also present several new features: Mutual Funds get a separate news section, and the Commodity data has been repackaged to make it extremely accessible. We hope you find our redesign favourable. Send your feedback to editor@thefinapolis.com

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We Are Digital Buy on

With the proliferation of smartphones and tablet devices, reading habits are slowly but surely changing. We understand the importance of giving readers a cross-platform choice to access the magazine. The Finapolis is now available in a digital avatar as well via a global publishing platform such as Magzter and Indiamags. Besides allowing you to read on the go, the digital version offers an enhanced reading experience. It also eliminates delivery delays. You can download the digital magazine on the first day of every month. Go to www.magzter.com, Indiamags.com or Rockstand mobile app, search for ‘The Finapolis’, sample some pages of the digital magazine, and buy a subscription through your netbanking or credit card account. A one-year subscription for The Finapolis digital costs only Rs 540. You need to have a device that runs on Apple’s iOs, Android or Windows 8 operating system. Do let us know what you think of the digital experience by writing in to feedback@thefinapolis.com november 2016 l The Finapolis

CONTENTS | Nov 2016 Cover Story

onwards

Out of sight â&#x20AC;&#x201C; out of mind

Unlocking Invisible Coffers

Planning your taxes can 26 unlock hidden wealth

News Scan International Relations

Prime Minister Modi calls on BRICS to double inter-group trade to $500bn

Oil& Gas

HELP bidding extended to Nov 21

Corporate

India Inc to leverage psychometrics as employee selection tool

Banking & Finance

Monetary policy panel meet debuts with 25 bps rate cut

Government

Retail inflation nears 4% safe band as food prices ease

Statistics 7

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Transportation

Mumbai to get two more Metro Rails

Energy

Odisha govt plans roof- top solar projects in all major cities

Banking

CRISIL warns banks could face trouble servicing AT1 bonds

Public Health

Delhi worldâ&#x20AC;&#x2122;s most polluted megacity

Banking

Diwali mood marred by card scare

Equity Correlation

Top Gainers and Losers

Monthly Market Review

Indian Indices Performance

Global Indices Performance

Stock Analysis (Fundamental)

Stock Analysis (Technical)

Mutual Funds 10

News

Net Asset Values

Fund Reviews

Commodities Gainers and Losers

Economy & Monetary Data

Stories 29

Columns Save capital gains using Sections 54 & Sec. 54F

The Shanbhag Column

Regulatory Reform

GST: One name, but different numbers

Smart insurance moves to protect yourself this Diwali

Telecommunications

Spectrum auction fails, raises just 11.6% of target

Adhil Shetty’s Column The megaphone’s fallen into the wrong hands

Wisecrack

Know Your Country The Dragon’s Embrace

INterview

Trade Relations

London Comes Calling

‘Correction would be timely, but our economy is on firm footing’

Deven Choksey

ASK THE FINAPOLIS Career Scope

Sometimes, the Safety Net is a Bad Idea

etcetera

Bookmark

TV18: Baby to Behemoth

14 Col. Sanjeev Govila

Triumph of an Autograph Hunter

Every month, the Finapolis connects you with Col. Sanjiv Govila (retd), a personal finance expert who answers your queries related to the world of investments, taxation and financial management. The advisor will diagnose the health of your portfolio and offer advice to improve your finances or solve your problems. Write in to feedback@thefinapolis.com november 2016 l The Finapolis

feedback@thefinapolis Start-up trouble

I believe that old is gold. Though these start ups got a lot of attention at the beginning, the true story is happening now. They should adopt the time-tested ways of running business, where every penny earned was put back into the business diligently. Relying on external funds weakens these new start-ups from within and then they stop business or are swallowed by a big player. Narasimhulu Reddy, Secunderabad

Disclaimer: The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/ selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

The Finapolis l november 2016

With everybody from students to office clerks to your grocery-wala having a smartphone today, it is easy to say that an app will help e-commerce companies. However, they must understand that for an audience of all ages, shopping without a usual website will be difficult, at a time that online shopping itself has only found its feet. Navin Kumar, New Delhi

Right cover

Mr Rao’s article on insurance was an eye-opener, at a time when people are assuming insurance to be a dead product that only offers security. Insurance has helped me strike a balance in my investments rather than heavily put all my money into the stock market and mutual funds. To be adequately insured is staying safe in times of trouble. Sudhir Shah, Ahmedabad

UPI’s impact

Your article on the Unified Payments Interface (UPI) gets it right by saying that the product must be sold properly by banks. After reading it, I quickly installed my bank’s UPI app and got my friends to download it as well. However, I feel that it will be some time before the UPI gets into everybody’s smartphone. Percy Pinto, Mumbai

NEWS SCAN international relations

transportation

Prime Minister Modi calls on BRICS to double inter-group trade to $500bn

Mumbai to get two more Metro Rails

The 8th BRICS Summit concluded on October 16 with Prime Minister Narendra Modi calling upon leaders of the group of emerging economies to double the size of intra-grouping trade to $500 billion by next five years. “In 2015, intra-BRICS trade stood at about $250 billion. We should set ourselves a target to double this number to $500 billion by 2020,” Modi said addressing the BRICS (Brazil, Russia, India, China, South Africa) leaders plenary. “This requires businesses and industry in all five countries to scale up their engagement. And, for governments to facilitate this process to the fullest,” he said. “Our agreement on a tax and custom cooperation framework is a good start,” he added, referring to an outcome of the summit here. At a meeting earlier in the day,

The Maharashtra government has cleared two metro rail projects costing around Rs 25,000 crore. The two approved projects are Metro 2B corridor running from DN Nagar-Bandr a -Ma nkhurd c os ti ng a round Rs 10,986 crore and Metro 4 connecting Wadala-Ghatkopar-Thane-Kasarvadavli, estimated at around Rs 14,549 crore. Nitin Karir, Principal Secretary, Urban Development, said this will be the first time that a metro project will link Mumbai with Thane and Navi Mumbai. The Metro 2B will be 23.5 km long with 22 stations and Metro 4 around 32 km long with 32 stations en route. Both projects are likely to be completed by 2021. The other upcoming Metro Rail projects include Metro 2A DahisarDN Nagar (18.5 km), Metro-3 Colaba-Bandra-SEEPZ (33.5 km) and Metro-7 Dahisar East to Andheri East (16.5 km).

Modi exhorted the BRICS Business Council to work with member countries for strengthening mutual trade and said events like the first BRICS Trade Fair help to generate greater business awareness and commercial exchanges. IANS

international relations

Independent BRICS agency might change ratings game BRICS leaders have agreed to set up an independent rating agency based on market-oriented principles, saying it would further strengthen global governance architecture. “We welcome experts exploring the possibility of setting up an independent BRICS Rating Agency based on market-oriented principles, in order to further strengthen the global governance architecture,” said the joint declaration issued after the 8th BRICS Summit here. “In order to further bridge the gap in the global financial architecture, we agreed to fast track the setting up

of a BRICS Rating Agency,” Prime Minister Narendra Modi said in a statement at the conclusion of the BRICS leaders’ summit.

The BRICS Business Council had in its annual report recommended that member countries continue the dialogue for a new rating agency for emerging economies. “Among key recommendations of various working groups of Brazil, Russia, India, China, South Africa Business Council is the continued dialogue on BRICS rating agency,” Onkar Kanwar, Chairman, BRICS Business Council — India Chapter, said. Earlier, BRICS New Development Bank President K.V. Kamath had expressed concerns over methodologies employed by US rating agencies. IANS november 2016 l The Finapolis

energy

Odisha govt plans roof-top solar projects in all major cities The Odisha government has planned to implement roof-top solar projects across all major cities in the state. The Green Energy Development Corporation of Odisha Limited (GEDCOL) would implement the project in urban areas of the state, Energy minister Pranab Prakash Das told the state assembly. GEDCOL and the Central Electricity Supply Utility have signed a 25-year project implementation agreement with Azure Power Mercury Private Limited to develop a grid-connected rooftop solar project in Bhubaneswar and Cuttack. The project, with a minimum installed capacity of four MW, will be set up on government buildings in the twin cities, said the minister. “Further, GEDCOL is also looking forward to replicate this scheme in other towns/urban areas in the state. In the first phase, Berhampur, Sambalpur, and Rourkela towns are proposed for taking up roof-top solar photo voltaic projects on the government buildings in the ensuing years,” said the minister, adding the project is scheduled to be completed by September 2017. IANS

The Finapolis l november 2016

oil& gas

HELP bidding extended to Nov 21 The bid round for 67 small discovered oil and gas fields across the country had been extended from October 31 to November 21 at the behest of investors and vendors, Petroleum and Natural Gas Minister Dharmendra Pradhan said. “We have extended the last date for submission of bids to November 21 at the request of investors and other stakeholders due to Dusshera and Diwali festival holidays,” he added. The fields are owned by the staterun Oil and Natural Gas Commission (ONGC) and Oil India Ltd (OIL). The response to our road shows for the bids has been overwhelming, as about 500 firms participated in the interactive meetings we conducted the world over, including Mumbai, Guwahati, Houston (US), Calgary (Canada), Dubai, Singapore and London in the last three months,” said Pradhan. The online auction, being held under the new Hydrocarbon

Exploration and Licensing Policy (HELP), has offered 46 contract areas consisting of the 67 fields, which are estimated to have 86 million tonne oil and gas reserves, with recoverable quantity of 30 million tonne on revenue sharing model. “The bids are a part our thrust to increase domestic production of oil and gas and reduce the energy import dependence by 10% by 2022 from about 80% currently,” added Pradhan. IANS

automotive

foods

Tata Motors enters Bolivian CV market Automobile major Tata Motors announced its foray into the Bolivian commercial vehicle market by entering into a distribution agreement with Bolivian Auto Motors. Tata Motors said it has launched three commercial vehicles in the Bolivian market -- Tata SuperAce Petrol, Tata Xenon Petrol and Tata LPT 613 truck. Tata Motors commercial vehicles are also sold in other South American markets like Chile and Ecuador. “We at Tata Motors... have introduced class-leading products, suitable for varied terrains, with each of these built for better load carrying capability,” Rudrarup Maitra, Head (International Business), Commercial Vehicles, Tata Motors, said in a statement. IANS

PepsiCo to go in healthier direction Global food and beverages giant PepsiCo announced a major initiative to cut calories across its product range. The company has chalked out various goals till 2025. These include: at least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12 ounce serving and at least three-quarters of its global foods portfolio volume will not exceed 1.1 grams of saturated fat per 100 calories. “To succeed in today’s volatile and changing world, corporations must do three things exceedingly well: focus on delivering strong financial performance, do it in a way that is sustainable over time, and be responsive to the needs of society,” Chairman and CEO Indra Nooyi said.

corporate

banking

India Inc to leverage psychometrics as employee selection tool As India Inc is keen to leverage advanced psychometrics as its benefits in selecting employees have been unrealised among top organisations in India, said a study released in October. The findings of “The State of Psychometric Assessments in India” study conducted by global advisory, broking and solutions company Willis Towers Watson showed that “recognised benefits of psychometrics largely remain unrealised as almost half the companies acknowledge not using it”. The study polled over 100 of India’s top organisations and human resource (HR) leaders to understand why companies in India lagged their mature market counterparts in realising the benefits of psychometrics, also said, “As many as one in three have never explored it.” “Only, 9% of companies are unwilling to explore a new tool indicates a keenness among the vast majority to leverage advanced psychometrics and signals a need for improved awareness and access to superior tools,” the study said. Psychometric assessment is the science of applied psychology which

is intended to identify specific personality traits that could highlight the suitability for specific roles. Currently, the tool is primarily used for recruitment and selection in India. Interestingly, more Indian domestic organisations use psychometrics as compared to MNCs. The study said that despite succession planning being a key stated challenge for companies in India, the application of psychometrics in addressing this was low with only 28% using it at senior management and 13% for middle management. “Imagine how valuable it would be to hire only those employees likely to be engaged? Psychometrics, as a science, is yet to be fully explored and leveraged in India. In an increasingly competitive world, only traditional methods such as interviews or aptitude tests may not be enough,” aid advisory company’s Director (Rewards, Talent and Communication) Shatrunjay Krishna. “Identifying, retaining and developing the right talent requires a precision that psychometric assessments can provide,” he said. IANS

CRISIL warns banks could face trouble servicing at1 bonds

A sharp decline in profitability and mounting losses could wipe out the revenue reserves of some Indian public sector banks and hamper their near-term ability to service coupon on Additional Tier 1 (AT1) bonds issued under Basel III capital regulations, ratings agency Crisil said. As on date, 14 PSBs have Rs 226 billion of AT1 bonds outstanding. Though the Union government committed capital support to PSBs to sustain their capital ratios above regulatory minimum, the coupon on AT1 bonds can only be serviced through current year’s profit or from revenue reserves and hence any capital infusion by government alone cannot improve the bank’s ability to service coupon on these bonds, the agency said. “Apart from high probability of posting losses this fiscal, negative or low revenue reserves are likely to make six PSBs vulnerable. Of these, four have AT1 bonds outstanding, where continued losses could wipe out their revenue reserves and pose a challenge when it comes to coupon servicing. The other two have not issued any AT1 bonds so far,” said Crisil’s Senior Director (Financial Sector and Structured Finance Ratings) Krishnan Sitaraman. According to the agency, four other PSBs are also expected to post losses in the near term, but they have adequate revenue reserves (after adjusting for expected losses) to service coupon on AT1 bonds outstanding. “However, their ability to continue to do so over the medium term will depend on a return to profitability,” a statement said. On the other hand, 11 banks are expected to report a profit in the near term (or have sizeable revenue reserves despite weaker profitability), which would help them service coupon obligations on AT1 bonds over the medium term. IANS

november 2016 l The Finapolis

banking & finance

Monetary policy panel meet debuts with 25 bps rate cut The Monetary Policy Committee of the Reserve Bank of India (RBI) cut the repo rate by 25 bps to 6.25%, bringing much relief to commercial banks and India Inc. The reverse repo rate also automatically stands lowered to 5.75%. The RBI’s monetary policy committee said its decision was consistent with an accommodative stance, with the objective of achieving the inflation target. The repo rate was last cut in April. The MPC also felt the rate cut was consistent with an accommodative policy stance to keep retail inflation within a band of 4%, while supporting growth. “The committee expects the strong improvement in sowing, along with supply management measures, will improve food inflation outlook,” stated the MPC’s minutes released on October 18.“It notes that the sharp drop in inflation reflects a downward shift in the momentum of food inflation — which holds the key to future inflation outcomes — rather than merely the statistical effects of a favourable base effect,” it said. IANS

public health

Delhi world’s most polluted megacity Delhi’s air is the worst among world megacities, the World Health Organisation (WHO) confirmed recently, even as IndiaSpend‘s #breathe network of air-quality sensors reported fine-particulatematter (PM2.5) levels were almost four times above daily safe levels, on average, for the seven-day period from September 22 to 28, 2016. For long-term exposure, these 24hour levels are nearly 11 times above the WHO health standards. In December 2015, week-long analysis of data from #breathe devices showed Delhi’s air pollution was one-and-a-half times worse than in Beijing. In 2012, with one million deaths, China reported the highest toll from PM2.5 and PM10 pollution. At the time, India followed, reporting 621,138 deaths, nearly 10% of the global toll associated with outdoor and indoor air pollution. However, between 2011 and 2015, in a comparison of megacities with population above 14 million, Delhi’s ambient air-pollution levels were worse than Beijing and Shanghai, an analysis of WHO’s 2016 data of global ambient air pollution showed. Delhi recorded a PM10 level of 229

µg/m³, followed by Cairo with 179 µg/m³ and Dhaka with 158 µg/m³ -the top three megacities with the most polluted air globally. Beijing and Shanghai were sixth and seventh on that list. Even Kolkata and Mumbai — recording PM10 levels of 135 µg/m³ and 117 µg/m³ respectively — had air worse than the biggest Chinese cities. Within India, Gwalior and Allahabad measured had the worst ambient air pollution at PM2.5 levels of 176 µg/m³ and 170 µg/m³ respectively. A significant portion of northern India falls in a zone with “critical” air pollution-reporting PM2.5 levels of over 70 µg/m³ in the WHO’s mapping. IANS

rainfall

Monsoon retreats after delivering normal rains this year With India receiving 97% rainfall between June and September, the monsoon was “normal” this year, the India Meteorological Department (IMD) has said. Experts believe the monsoon would end entirely by mid-October. “This year, rainfall has been very constructive and very good both in terms of time-frame and area. Especially from the agriculture point of view, distribution of rain was as required,” a senior IMD official said. As per the IMD report, the rainfall during the monsoon season over the country as a whole was 97% of its

The Finapolis l november 2016

long period average (LPA). The average seasonal rainfall over northwest India was 95%, in central India 106%, in southern peninsula

92% and in northeast India 89%. Monsoon is considered normal between 96% and 104%. The IMD official reported that 72% of the total area of the country received normal rainfall, 13% area received excess rainfall and 15% received deficient seasonal rainfall. Regions that received deficient rainfall include Assam, Meghalaya, Haryana, Chandigarh, Delhi, Punjab, Himachal Pradesh, parts of Gujarat, coastal and southern Karnataka, Kerala and Lakshadweep. The deficiency ranged between 25% and 30%. IANS

Government

Retail inflation nears 4% safe band as food prices ease India’s annual retail inflation eased last month to 4.31% from 5.05% in August and 4.41% reported during in the same month last year. The fall was led largely by a rather sharp drop in the annual food inflation — from 5.91% in August to 3.88% in September. While in rural areas, retail inflation came in at 4.96%, while it was much lower at 3.64% in urban conclaves. Annual food inflation was 4.43% in rural areas and 2.88% in the urban conclaves. Vegetable prices plunged by (-) 7.21% year-on-year, whereas cost of pulses rose by 14.33%. Prices of milk

and milk-based products surged by 4.27%. Meat and fish became dearer by 5.83%. Besides, eggs became

black money

Rs 65,250 cr declarations received Assets worth Rs 65,250 crore have been declared by 64,275 people under the latest Income Disclosure Scheme, finance minister Arun Jaitley said. Given the tax rate and penalty of 45%, this can potentially fetch the government a little under Rs 30,000 crore. Jaitley said the tax authorities were still tabulating the declarations, both in physical and electronic forms, which once completed, offers scope for some more collections.

Jaitley added that the money collected would go into the Consolidated Fund of India and will be used for social security purposes. “Roughly, the declarations work out to Rs 1 crore per declarant. Some will be higher, some will be lower,” he said, but ruled out any revelation of the names of the people who have availed of the scheme. “We won’t give any specific information on tax declarants.” IANS

transportation

Railways eyes fully solar-powered trains Union Minister Suresh Prabhu said the Indian Railways is working to run fully solar-powered trains. He added that powering fans and lights in the newly-developed guards van through solar panel-produced power will help in reducing the carbon footprint of the railways. According to the Railways, the new guards van has been designed to address shortcomings in brake vans by providing facilities like lighting and fans,

which comes as a relief for the guards of the goods trains. "The facilities are powered by solar energy making the guard van environment-friendly. We care for our environment," the Railway Minister tweeted. "Indian Railways committed to providing good working conditions for its employees and customers," Prabhu tweeted. "The new guard van has light, fans, charging point, biotoilet." IANS

expensive by 9.94%, and the cost of spices rose by 8.10%. Among states, retail inflation was lowest in Assam, at 2.31%, followed by Bihar at 2.52%, and Madhya Pradesh at 3.21%. On the flipside, it was as high as 5.63% in Rajasthan, 5.56% in Andhra Pradesh and 5.52% in Odisha. This is the second month when annual retail inflation has come below the upper tolerance level of 6%, even though it is still above the base rate of 4%. Meanwhile, wholesale inflation eased to 3.57% in September from a two-year high of 3.74% in August, official data showed. IANS

Banking

Diwali mood marred by card scare

In a pre-Diwali panic, over three million debit cards of various banks are believed to be ‘tainted’ following a suspected security breach, and investigations have begun as to the causes. Several banks, especially SBI, blocked more than 600,000 debit cards while assuring that the malware-related security breach was reportedly detected in the non-SBI ATM network. Official figures indicate that the SBI has over 20 crore active debit cards, besides 4.75 crore others of its associate banks. However, SBI emphasised that its own systems have absolutely not been compromised. Among card network companies, MasterCard said that its “own systems have not been breached”. “We are working on the investigations with the regulators, issuers, acquirers, global and local law enforcement agencies and third party payment networks to assess the current situation,” a MasterCard spokesperson said. It has advised the consumers to review their account statements and activity, and if any unusual or fraudulent transactions are suspected, they should contact the concerned bank for more assistance. IANS

november 2016 l The Finapolis

NEWS MAKER

HEAR ME ROAR! The Sacking of Cyrus Ratan Tata, Tata Sons and Cyrus Mistry. What seemed to be, wasn’t. And on Monday, October 24, 2016, Tata Sons shocked India with the news that Cyrus Mistry had been removed as chairman of Tata Sons. Ratan Tata would return as interim chairman, and lead a search panel with had four months to come up with a replacement candidate. Mistry’s contract called for 15 days’ notice period. He didn’t get it. His father Shapoorji Pallonji Mistry owns over 18% in the Tata Sons, yet the note announcing Mistry’s departure said nothing of his contributions as Chairman, nor did it offer him best wishes for the future. The truth about how Cyrus was sacked, and the events that led up to it, is unlikely to be prosaic. Expect it to be buried, rather than uncovered. 12

The Finapolis l november 2016

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ASK THE FINAPOLIS Every month, the Finapolis connects you with Col. Sanjiv Govila (retd), a personal finance expert who answers your queries related to the world of investments, taxation and financial management. The advisor will diagnose the health of your portfolio and offer advice to improve your finances or solve your problems. Write in to feedback@thefinapolis.com

Col. Sanjeev Govila (retd) The expert is a Certified Financial Planner and a SEBI Registered Investment Advisor. He is CEO, Hum Fauji Initiatives

I never bought ULIPs till now because I bought once and never got the good returns. But now my friend is selling some products and he said that these are now very good products because some new rules are put in place to stop advisors from cheating people. Is this true and should I buy ULIPs from him? - LaxmanSitarmayya, Madhurai The only change that has taken place in ULIPs is that the exorbitant commissions of the past years are more reasonable now. But that itself is no reason for you to buy ULIPs. ULIPs combine insurancewith market related equity and/or debt products. But in the bargain, you neither get good insurance cover nor the flexibility associated with investment products like mutual funds. In ULIPs, you have to take a long term combined call for insurance and investment with one single company and even your investments are locked in for minimum 5 years. We would recommend you to avoid ULIPs. For life insurance, go in for a term insurance plan

and for investments, go for a portfolio of mutual funds as per your risk profile and future requirements. I recently heard about UTI ULIP. Can you explain the fund? How good is it to buy for long term purpose? - Rajesh Bhal, Gurgaon UTI ULIP is actually a fixed-premium mutual fund that also gives insurance. Unlike a regular ULIP, its main aim is investment with low expense ratio like a mutual fund. It is a 45 year old scheme which has debt component of minimum 60% and equity component of maximum 40%, with the investments qualifying for tax benefits under section 80C. The scheme generally invests in large cap companies, has a tenure of 10/15 years and has generated fairly good returns in the past. The scheme is also quite flexible in payment of ‘premiums’ with facility of ‘top-up’ premiums too. There are many more intricate details which can be found at the UTI Mutual Fund website.Basically it is meant for people who are looking to pay a fixed premium, low charges, some insurance cover, flexibility of investments and good returns. I am going to sell my father’s flat soon. We will get around Rs 45 lakh for it. I do not need this money for next twoand-half years. Please guide on how to invest the same for maximum benefit. - K Gopalan, Ooty For a period of 2½ years, I do not recommend you to take much risks with the money and not to go in for equity products. You could look at bank FDs, or debt

The Finapolis l november 2016

What to do if you’VE been mis-sold insurance

mutual funds. Taxation is an issue here since the gains would be fully taxable in both cases. Gifting provisions of Income Tax Act can be taken advantage of to lower the tax burden. However, such a tactic should be resorted to for tax optimisation and not tax avoidance. What is the process for complaining against mis-selling of insurance products? I have been sold two bad policies by my brother-in-law who is not giving money back. Whom to contact for this? - Vishal Taneja, Nagur Your brother-in-law might have sold the policies to you but he does not have the money you paid as premium. It is with the respective insurance companies. Hence you need to contact your Insurance company customer care centre and make an official compliant of mis-selling. Remember to get the complaint number. If the complaint does not get addressed within a reasonable time, approach their Grievance Redressal Officer

– details are available on insurance companies’ websites. You can also get it from IRDA website. Provide your insurance complaint to GRO in writing along with all necessary support documents and also get an acknowledgement of your complaint with date. All Insurance companies should respond to your complaint within 15 days. If you are still not happy with the response from GRO, contact Grievance Redressal Cell of IRDA(Insurance Regulatory and Development Authority of India). You can directly contact them on toll-free 155255/18004254732 or email to complaints@irda.gov.in. Is there any way to buy government bonds? I always wanted to buy a very long bond, now I can do this, but I see that only the government is issuing such long term bond. How can I buy one? - Naren Sinha, Ranchi

there is currently no way for you to buy them directly from the Government except when once in a while, tax-free bonds are issued by Government agencies.There are many corporates which offer long term bonds. But then the credit risk of such corporates has to be considered over long time frames. You may not be able to sell corporate bonds in a hurry since the retail bond markets are nascent in India. Hence, the best way for you actually to buy bonds is to take the mutual fund route – Gilt Funds for Government Bonds and Corporate Bond Funds for the companies. The maturities and yields of the funds are managed by the MFs efficiently so as to give you good returns. And if you hold such MFs long enough, it could be quite tax-efficient too. f

You have two ways of buying Government bonds – through the banks and primary dealers (PDs) or through mutual fund route. Thus, november 2016 l The Finapolis

cover story Out of sight – Out of mind

O Arvind Rao The author is proprietor at Arvind Rao & Associates, a Mumbai-based Chartered Accountancy firm

ut of sight – Out of mind is one adage that cannot be overemphasised in terms of relevance in today’s fast-paced digital world. Work occupies so much time in one’s life that it really makes it difficult to keep pace with friends and family, so much so that if you are out of sight of some near and dear one for a while, you can definitely count to be out of their mind too. Well, things are not different when it comes to this adage and one’s personal finances. Yes, you read it right. There is that little component of wealth in almost everyone’s life that has gone out of sight and thus out of their mind. Unfortunately, money has yet to get its digital avatar to send that occasional ‘hi’ to people who have lost sight of it. The list of sources where an individual can lose track of his / her money / wealth can be quite huge and unique. This article attempts to highlight some of the most commonly encountered sources where an individual could hunt and explore some hidden wealth within his / her own financial realm. Readers will be pleasantly surprised to unravel these sources from the simplest of financial instruments.

The Finapolis l november 2016

Banks

Banks are regarded as the custodians of your money, so as a corollary it should not be surprising to know that most missing sources can be traced here. It turns out that in this age of Internet banking, where an account holder hardly makes any trips to the bank branch, it is easier for accounts to get out of sight real soon. Take the example of salary accounts. Every salaried individual most often is required to hold his/ her salary account with the bank that their company banks with. So, with every job change, a new salary account is added to the person’s financial portfolio. With the new job salary landing in the new account, where most of the expenses and EMIs would now get switched to, it is very convenient for the old account to get out of sight. Very rarely does an individual make it a point to add “closure of the previous salary account” in his/her job transition list. The balance in the salary account keeps accruing interest as per the savings account rates which are on average approx. 4% p.a. The average number of accounts that can be managed by a family is around four, so due care should be taken to ensure that salary accounts do not go beyond this limit. In the writer’s view, a salary account should never be designated as the principal account of an individual. This will help transfer any balance funds from the salary account to the principal account on leaving the company and its closure. The bigger threat to keeping multiple accounts is deduction of non-maintenance charges in cases where the minimum threshold balance as prescribed by the bank is not maintained in such accounts. The charges could be as high as Rs 750 per quarter and has the potential to deplete the available balance if left unattended to. Some relief had been

provided by RBI in this regard vide its circular dated May 6, 2014, wherein it had not permitted banks to levy penal charges for non-maintenance of minimum balances in an inoperative account.

Dormant accounts: As per the

results of a survey done by the Reserve Bank of India (RBI) in the year 2013, more than ‘Rs 3,652 crore lay stagnant in unclaimed accounts in banks spread across the country in more than 1.33 crore inoperable accounts of all types. The State Bank of India and its associate financial institutions seem to be the largest holder of such unclaimed funds amounting to Rs 714 crore. Readers should note that an account is generally categorised as inoperative if no transaction takes place in the account for a period of two years. General financial ignorance and inattention are the two main drivers for accumulation of funds in such accounts. So, as a first step, readers wanting to check this item off their list should first make an inventory of all bank accounts that they have / still holding accounts in and then review the same to check how many of the unused / unutilised accounts are still operative. Dormant accounts can be activated by submitting simple ‘Know Your Client’ documents with the bank and procedures for closure of the accounts can be completed accordingly. As a second step, readers should also perform the same exercise for their family – especially for dead parents / grandparents. It should be checked if the demise of the account holder is duly reported to the bank and account balance should be claimed by the nominees / legal heirs. In case nominations have been duly made, claim for the account balance is relatively simpler. But in case of absence of nominations, additional paperwork may be required to resolve the same.

Fixed Deposits: Fixed Deposits with banks are yet another domain where wealth lies unattended to.

Whenever investors reach a much matured phase of investments, they typically tend to ignore the smaller ticket investments Matured but not renewed / unclaimed fixed deposits form part of the unclaimed amounts as per the figures released by RBI. Readers should make an inventory of their deposits and can seek help of their bank in doing so. As per RBI guidelines, for a matured FD where the proceeds remain unpaid, the amount left unclaimed with the bank will attract interest as per the savings bank rates.

Lockers: Keeping track of unused lockers and getting rid of them can help an individual save some money on the annual rents paid for the same. Likewise, every locker also entails a fixed deposit demarcated as a security deposit towards it. These FDs are usually placed against lien with the bank and cannot be

encashed as long as the locker facility is utilised. Giving up on the locker will help individuals realise the FD money and divert it to better return yielding instruments.

Insurance Policies

Insurance policies, especially investment-linked policies, are regarded as one of the best avenues for investments by investors as it combines the elements of ease, forced savings and simplicity of understanding. Most investors ensure that they pay premiums without fail to keep the policy active. Insurance thus has emerged as one of the biggest investment avenues of in the country over the last few decades. However, not every individual manages to keep the discipline going all through the term of the polnovember 2016 l The Finapolis

icy and this result in few policies getting lapsed. In such cases, the policy holder may submit the necessary paperwork to claim the residual value of the policy after all applicable charges are duly paid. It is not strange to know that most such undisciplined investors fail to complete this last leg and that’s how one chunk of their unattended wealth accumulates. Under the existing life insurance norms, if a policyholder wishes to stop paying premiums before the mandatory period of five years, he / she may choose to discontinue paying the premiums with an instruction to the company to transfer the balance money into the Discontinuance fund. This money grows at 4% p.a. for the remainder of the mandatory five-year period, at the end of which the fund is paid out to the policyholder. Readers should keep a tab on this period and take due care to keep track of these dates and claim their money. Further to this, there are policies which require policyholders to pay premiums for a limited period of time while the maturity benefit payout is deferred to a later date. As

majority of unclaimed amounts occur because dependents are not aware of the existence of a life insurance policy time elapses, such individuals lose sight of such policies and even fail to update change in their addresses with the company, due to which reminders regarding maturity dates do not reach the policyholders and such maturity claims remain unencashed. It was reported some time back that approximately Rs 6,700 crore was lying unclaimed with Indian private and public insurance companies at the end of March 2014. A circular issued by IRDA in the same year also noted that a major portion of the unclaimed amounts is largely because of dependents not being aware of existence of a life insurance policy by the deceased. Readers should take note of this and ensure that their life insurance policies should get a spe-

cial mention in their wills or any other estate-specific documents.

Unclaimed Dividends

A dividend received on equity shares and / or mutual fund units held by investors always brings a smile on the investor’s face. However, there are a whole lot of investors who have yet to smile as their dividends have remained unencashed. Typically, companies and fund houses would credit the dividends directly to the investor’s bank accounts provided the same are updated with them and are valid as on the date of distribution. In the absence of this data, the company / fund house would dispatch cheques to the last available address of the investor. At the investor’s end, there are a whole lot of reasons why they fail to encash these dividends, which are rightfully theirs. Failure to update their correct bank account and recent address with the institutions

As of March 2014, insurance companies are estimated to have unclaimed money totaLing Rs 6,700 crore

are the foremost reasons. Instances where the cheques have reached the investors residence, but sheer ignorance and lack of time to encash it within the time period of the cheque validity period are also not unknown. Materiality or otherwise of the amount involved prevents the investor from going about revalidating the cheque, thereby adding to his/her unattended wealth. But, it is never late. Investors have to just approach the fund house/ company with the details of the shares / funds and an application for claiming the unclaimed dividends. A little effort on this part will definitely make a lot of investors in

The Finapolis l november 2016

the country richer by few thousand rupees, to say the least.

Income Tax Refunds

E-filing of tax returns has definitely made life easier for tax payers who have claimed refunds in their annual returns. The average time span for the processing of refund has been brought down to almost four weeks in certain cases where refunds have been claimed and returns e-filed. Not only is it faster, but if opted for, the refunds are directly credited to the tax payers designated bank account. But, in the cases of returns that pertain to older years where returns were filed offline, refunds continue to be the sore point. In many cases, taxpayers may have just ignored these refunds as they find it cumbersome to tackle this issue. However, with / without professional help, taxpayers can write to their tax officer seeking details of pending refunds for previous years by giving proper refer-

The post office does not auto-renew time deposits, recurring deposits or the monthly income schemes that are not withdrawn on maturity ences for each year to which the refund belongs to. Similarly, even for returns e-filed, where refunds are in excess of Rs 1 lakh, the refund cheques are dispatched to taxpayer’s address with the bank account details as provided in the returns filed. Sometimes, the refund cheque doesn’t reach the taxpayer owing to change in address or error with the bank details provided. Taxpayers can look to realise these refunds by following the prescribed procedures for requesting reissue of refunds — this request has to be placed online. Taxpayers should note that the interest payable by the Income Tax Department on the refund payable

is only till the date on which the cheque is issued, so if there are delays on account of any of the reasons listed above, he/ she will not earn any interest for the same.

Post Office Investments

Post office investments are a hit amongst investors because of the sovereign guarantee that they offer, but at the same time, most investments are smaller ticket sizes and that’s where the threat of losing attention arises. Another issue with the post office investments is that any claim to be made has to be done with the same office from where it was issued. Investors usually get the investment done through some innovember 2016 l The Finapolis

termediary and may not be aware of the branch at all. It’s only during maturity that they realise that it may not be the local branch, which becomes yet another reason for the waning attention of the investor to claim the maturity proceeds. In terms of the rules applicable for matured investments, the post office does not pay interest on interest earned on the time deposits, recurring deposits or the monthly income schemes not withdrawn on time. More so, the maturity amount will accrue interest only for a period of two years, and that too at a rate which might not be more than the savings account rate. Investors holding such investments will need to approach the designated post office branch with the original certificates/ passbooks to claim the proceeds. If the investment records produced are correct, the maturity proceeds are usually paid out by the post office on the spot.

Mutual Funds

Typically, first time investors in mutual funds start with smaller ticket sizes ranging from Rs 1,500 to Rs 5,000 per folio. Further, in their bid to diversify their investments,

ELSS funds bought for tax saving are typically forgotten because of their lockin period they would invest in multiple funds with smaller amounts. As the portfolio size grows and the investor’s confidence increases, they would gradually increase their exposure to mutual funds. When investors reach a much matured phase of their investments, they typically tend to ignore the smaller ticket size funds. In this digital age, where investors get monthly statements/ reports for their mutual fund holding from NSDL/ CDSL and CAMS, investments done five-six years back with ticket sizes ranging anywhere below Rs 50,000 might not be shown in these statements as these funds may not have the PAN and / or the email ID of the investor. In such cases, as the investor would track their investments based on the monthly statements, the older and smaller

funds would eventually be lost sight of. ELSS funds done for the purpose of tax savings are one of the best examples for such investments. Readers should note that time and compounding effect would actually make these smaller ticket investments look modestly big, especially after six-seven years of staying invested in the funds. A little attention paid to these funds by investors would easily help their portfolio look bigger. The only way to trace such funds is to track down the folio numbers of these funds and update the folio with the investor’s PAN and current email ID. Alternatively, if the investor deems necessary, the funds can be redeemed or reinvested in their existing basket of funds.

Provident Funds

A salary account and a provident fund (PF) account go hand-in-hand with every job an individual takes up. Likewise, when the employee leaves a particular job, a decision regarding the PF with the company has to be taken – either to encash the same or to transfer the available balance to the PF account with the new company. With increased responsibilities at the new job, this

First-time mutual fund investments are usually small size and spread out across multiple funds. However, time and compounding effect would actually make these look modestly big, especially after six-seven years of having staying invested

20 The Finapolis l november 2016

Four steps to minimise idle money

ter Prepare a Mas D) (M t Documen , ts en m st inve of , rs be m nu with folio , ils ta de branch c et , nominations

Discuss your MD with family members and ensure that it is easily accessible

one aspect related to the transition has high potential of being sidelined, especially in the early stages of one’s career. In these cases, the PF amount involved is also not very large, thereby allowing the attention span of the investor very low. Further, the investors believe that not acting upon either of these two options will cause little harm to their wealth as the balance will keep accruing interest. As on March 31, 2016, Rs 40,866.14 crore lies unclaimed with the EPFO. However, in a recent move that brought immense relief to PF subscribers, the EPFO has reversed a decision made in 2011 on interest paid to dormant accounts. This means that the amount (employee + employer’s contribution) amassed in your PF account(s) will continue to earn interest for ever, until you claim your entire EPF corpus at the time you retire.

Physical Equity Shares

The difficult part about these investments is that investors who may have lost track of the physical share certificates may never be able to know of such investments. Things could get complicated when there have been changes in their address which might not have got updated with the company. Any communication, including dividend warrants and / or company reports will thus never reach the investor, which oth-

Surrender unused and unnecessary accounts and investments in a timely manner

erwise would have reminded them of their past investments. In modern times, one cannot think of any ways to have bought equity shares in a non-demat mode, but this is the most common situation for inherited shares. Many investors are sitting on piles of physical shares that they have inherited from parents/ grandparents, which are yet to find their way into the nominees’ portfolio. Over a long period of time, these shares might have gained substantial value and investors should take some time out to inculcate the same into their demat accounts.

Reward Points on Credit Cards

Typically, every credit card offers reward points on spends and keep accruing every month. Such points can be redeemed for a host of articles and / or even electronic items that may be listed by the card issuing bank in their redemption cata-

e an an Undertak r u o w of y nual revie n e nts to investme e r MD sure the to date mains up

logue. Regular users of cards can have loads of points accumulated and all it requires is some time to be spent to follow the applicable procedures for its redemption. This element is not among the traditional factors of unattended wealth but can easily be counted among the emerging ones in the fast-growing cashless economy.

Conclusion

To conclude, all of these above elements require one single solution – timely attention of the investors! It is important that investors maintain a detailed inventory of their investments, including finer aspects like folio numbers, branch details, location of the original document, nominations, etc. This master document should also be discussed and made easily accessible for family members. Unused and unnecessary accounts and investments should be given up in a timely manner – an annual review would be the perfect idea. f

november 2016 l The Finapolis

cover story Unlocking Invisible Coffers S Vijaykrishnan & Mandar M Bakre

here’s a lot of dormant money in the Indian system. Team Finapolis spoke to experts to understand how this money accumulates and how its owners can get access to the same. Here’s what we discovered: EPF All unclaimed amounts stay with the Employee Provident Fund Organisation’s (EPFO’s) corpus and cannot be confiscated or diverted. The government has no legal claim on this unclaimed corpus and cannot divert it for any other purpose as it has tried to do in the past few months. Raman Pandey, member of the EPFO’s Central Board of Trustees (CBT), told the Finapolis, “There is no question of any unclaimed PF amount. PF money is exclusively the employee’s. The government has no control over the money that lies with the EPFO corpus.” He also added that as on March 31, 2016, Rs 40,866.14 crore lies unclaimed with the EPFO. The body has also paid dues of up to Rs 5,000-6,000 crore from inoperative accounts, as per EPFO data. However, things have been made easier by the EPFO board’s move to reverse a decision

The Finapolis l november 2016

made in 2011 and pay interest on all dormant EPF accounts, which means that the amount (employee + employer’s contribution) amassed in your PF account(s) will continue to earn interest for ever, until you claim your entire EPF corpus at the time you retire. In case an employee dies, his nominees, or the legal heir can claim the amount by submitting Form 20 attested by the employer or any authorised person (Bank manager, gazetted officers, any member of the CBT or regional committees of the EPFO or a magistrate/ postmaster/ sub postmaster/ president of village panchayat). The universal account number (UAN) promises to change things radically. Earlier, people often forgot to withdraw/ transfer their PF amounts for a long time (2-3 years or more) between jobs, after which initiating the claim process was cumbersome and often took even years. Tracing the employer was another issue, especially as the PF account number changed with each establishment one was e m p l oye d i n . Ad h i l S h e tt y, C EO, Bankbazaar.com believes that the UAN will enable PF number portability. “With every EPF account being now tied to the UAN, identifying employees without intermediation of the employers will become easier. Every person will have their EPF account cross-referred by the UAN, so that there are no multiple accounts to be transferred each time there is change in the employment.” Withdrawals, though are another issue. As a rule, you cannot withdraw any amount from your EPF account before you retire at the age of 58, or if you have been unemployed for at least two months since your previous job. You can also transfer the accumulated amount using the EPFO’s online transfer claim portal (see graphic).

Claming your EPF Money Process For Withdrawal

Process for Transfer Log on to www.epfindia.gov.in online transfer claim portal and register yourself as a member

Fill up the transfer form and give it to your current employer, who will process the transfer

In case online transfer is not possible, you will need to take the process offline

EPFO will then process the transfer claim

Equity and related investments

Confirm whether your employer has registered its digital signature

Get it verified online by the employer

Demat accounts have made access and perusal of securities easy. However, for those who do not have a demat account, there are two scenarios: if you lay a claim within seven years for your monies — shares, unclaimed dividend, matured deposits, matured debentures, application money due for refund, or interest thereon, sale proceeds of fractional shares, redemption proceeds of preference shares, etc —all you have to do is contact the respective company’s registrar or share transfer agent and provide them with your KYC proofs, bank account details and the stock folio numbers. If seven years pass, you have to ap-

Fill up transfer claim form on the website

ply to the Investor Education and Protection Fund (IEPF) through the Ministry Of Corporate Affairs. The IEPF is where all your unclaimed monies land after the grace period of seven years be it shares, dividends, matured deposits or debentures and share application money. While legal provisions regarding IEPF claims have been streamlined under the Companies’ Act, 2013, a little perspective is in order. The IEPF was first set up on October, 1, 2001, to educate and safeguard investors against frauds while stopping companies from misusing the unclaimed funds. Until 2009, investors could not claim back dividends that got transferred to the IEPF, as they were

Fill up Form 19

Submit it to your previous employer

You can also get the form attested by your bank manager

deemed ‘uninterested’ in getting it back. However, the then new Companies Bill proposed to allow investors to gain their monies even after the seven-year deadline. Since then, several changes have b e e n m a d e to co m p a ny l aw regarding the IEPF. Samrish Bhanja, Managing Partner at B Samrish & Co, told the Finapolis, “As per the latest rules notified on September 7, 2016, (Sections 123-125) in the Companies’ Act 2013 allow investors to claim back all types of unclaimed monies by applying to the IEPF Authority in the prescribed format.” He also notes that in case of dividend even the related shares are transferred to the fund for security purposes. The rules also enjoin companies to deposit such unclaimed monies regularly with the fund. november 2016 l The Finapolis

What must companies do?

Claiming your Securities To claim back securities, all you have to do is log on to http:// www.iepf.gov.in/IEPFA/refund. html and download and fill up Form-5. Then, do as below: 1. Save the filled form on your computer and upload it on the IEPF portal, post which you will receive an acknowledgement with a service request number. 2. Print both the form and acknowledgement. 3. Submit indemnity bond in original, copy of acknowledgement and self-attested copy of the form along with the other documents —original share/ debenture certificate, copy of Aadhaar Card; certificate of share/interest warrant application no. etc.); cancelled cheque leaf; copy of Passport (OCI and PIO card in case of foreigners and NRIs). 4. All complete claim forms w i l l b e ve r i f i e d by t h e concerned company, post which the refund will be released by the IEPF Authority. In case the original shareholder is dead, his/ her legal heirs; nominees can place a claim with the IEPF, after producing a copy of the death certificate along with the aforementioned KYC proofs and bank documents. Also, the legal heirs/ nominees must ensure that the securities/ FDs are transmitted in their name before placing a claim.

24 The Finapolis l november 2016

In order to safeguard unclaimed share monies from being misappropriated by companies over time, the Companies’ Act mandates them to annually identify unclaimed amounts within 90 days of the Annual General Meeting until the seven years are complete and furnish such details on the website of the IEPF as well as its own or any other website as may specified by the government. Such shares shall be credited to an IEPF ‘suspense account’ within 30 days of such shares becoming due to be transferred to the Fund. Companies are also required to maintain records of investors in respect of whom monies are unclaimed for over seven years.

Mutual Fund Money

Unclaimed mutual funds amounts are mainly created when redemption or dividend cheques that are sent to investors are no encashed during their validity period. One estimate, by Amol Joshi, founder of PlanRupee Investment Services, puts the unclaimed mutual fund money at around Rs 430 crore. The good news is, this money can be claimed without much hassle. Vide a circular dated February 25, 2016, the Securities and Exchange Board of India has asked mutual fund houses to provide details on their website of investors having unclaimed amounts in their folio, caused either by way of redemption or dividend. Furthermore, fund houses have been asked to provide on their websites information explaining the process for claiming unclaimed amounts. So, how does unclaimed money accumulate in mutual funds? J.S. Solanki, a SEBI-registered investment advisor who runs JS Financial Advisor in Delhi, says, “Generally, over the course of time, we invest smaller amounts and we tend to forget about these amounts.” He cites the example of grandparents investing a small amount for the long term in the name of their grandchildren. After a few years, he says, this amount can be forgotten,

particularly in case the grandparents pass away. Solanki also lists incomplete form fill-ups, change in address or even closure of bank accounts for the reason unclaimed money accumulates. These days, however, thanks to KYC norms, cases are on the downtrend. Says Solanki: “New technology has made it easier to claim you money. Thanks to stringent KYC norms, “forgetting” your money is now harder to do. Earlier, submission of PAN was not mandatory for investments less than Rs 50,000. Now, is not the case, so people who invest and still be reminded of them, if they have done proper KYC.” Gajendra Kothari of Mumbai-based Etica Wealth Advisors, also a SEBI-registered advisory, says AMCs have taken great efforts towards eliminating unclaimed money. “Besides sending regular communication to investors with such money, they also communicate with the distributor tagged with the investor. This allows the distributor to inform the client about unclaimed money,” Kothari told the Finapolis. He added that the common account statement (CAS) can also list unclaimed money, which allows investors to claim back their amounts. However, just because you can claim the money doesn’t mean you won’t lose any. Once you have unclaimed money, the AMC is required to place this in qualified interest bearing securities. Investors are entitled to claim unpaid money and the interest

Fund houses have been asked to list unclaimed money and explain the process for claiming it on their websites

How to claim money lying in banks In case your FD receipt is lost or you feel there is unclaimed money lying with the bank, you can approach the bank requesting it to check its records. According to the procedure laid down by the RBI, the bank will request you yo submit KYC documents — PAN card and address proof — and will also verify your signature. Once it is satisfied that your application is genuine, the bank will issue a new FD receipt or allow you to take follow-on action on the money, such as withdrawal, reinvestment, etc.

thereon for up to three years. Any interest generated from the fourth year onwards is transferred to the Investor Education and Protection Fund, and cannot be claimed.

Money in banks

An RBI sur vey revealed that banks had an estimated Rs 3,600 crore lying in unclaimed deposits as of December 31, 2012. Bank accounts or fixed deposits which have been inactive or dormant for two years or more are required to be treated as unclaimed. In case of bank fixed deposits, unclaimed deposits can continue to earn interest, thanks to the auto renew function. However, there will be loss of income if this function has not been enabled: As per RBI rules, a bank is bound only to pay savings interest rate on fixed deposits that have matured but remain unclaimed. The biggest reason for unclaimed fixed deposits, says Solanki of JS Fi-

nancial Advisors, is that people lose the FD receipt and forget about it, especially in case of longterm FDs such as the fiveyear tax-saving fixed deposit. Also, in many cases, if the bank follows auto renew function, the FD money might not be credited to your bank but continue to be auto-extended. Sometimes, a change of location can also cause FD money to be forgotten. “The procedure for change of address is easier with AMCs than with

banks,” says Solanki. Because of this, a change in location can lead to some matured deposits lying unclaimed for an extended period of time. Gajendra Kothari, with Etica Wealth Advisors, a Mumbai-based advisory firm, says that unlike mutual funds, which have a common account statement, or e-insurance, bank FDs do not have a common platform, making it difficult to trace an FD. f

november 2016 l The Finapolis

cover story Planning your taxes can unlock hidden wealth

Does your tax-saving plan start in December and end with last-minute investments? You could be losing out on higher deductions and better returns S Vijaykrishnan

his article is not so much about prudent investment options as it is about getting your tax-saving plans right. Let us try to understand the problem, through the example of Mr X, who landed a job at an IT firm as a business analyst in FY14-15. Mr X has a cost-to-company (CTC) of Rs 4,50,000, but is not aware about his tax liabilities and therefore, has not planned any tax-saving investments beyond the relief offered u/s 10 of the Income-Tax Act (transport allowance, medical allowance and LTA deductions) and his employee provident fund deductions. Prima facie, Mr X’s approach might seem reasonable and his above deductions sufficient. Considering that his gross taxable income (after deductions) is below Rs 5 lakh,

he is allowed a further rebate of Rs 2,000 u/s 87(a), which brings the final tax liability to Rs 4,819 (See Table 2), or a little over Rs 400 as monthly TDS. Naturally, he is unperturbed and fails to plan his investments. If we consider other factors such as performance bonuses, increments and others, the above math may fall flat, indicating that tax liability alone is not a prod for investment planning. If, for instance, Mr X also gets 10% of is CTC as a goodwill bonus in 2014-15 itself (it is taxable the same year), the tax liability could almost double to Rs 9,454 — and that’s after his Rs 2,000 rebate! One increment later… As FY14-15 draws to close, Mr X performs reasonably well and gets a 20% increment for FY 2015-16. A month later, in May, as he has to state his probable investment declarations, Mr X is still clueless and believes that

Table 1 | Tax Rates

26 The Finapolis l november 2016

Income Tax Slab

Income Tax Rate

Upto Rs 2.5 lakh

Nil

Rs 2.5 lakhRs 5 lakh

10% of Income exceeding Rs 2,50,000

Rs 5 lakhRs 10 lakh

20% of Income exceeding Rs 5,00,000

Above Rs 10 lakh

30% of Income exceeding Rs 10,00,000

the usual deductions will save the day. But will they? Let us see. For one, the tax slabs remained unchanged over FY14-15 to FY15-16. The government just doubled the monthly transport allowance to Rs 1,600. But this does not shore up the deductions amount significantly. Also, assuming that Mr X receives a performance bonus of 15% on the new CTC (or Rs 81,102), the taxable income (post EPF and deductions u/s 10) will rise to Rs 4,18,142, whereby, even after the tax rebate of Rs 2,000, Mr X will run up a tax bill of Rs 14,330 (See Table 3). Assuming that Mr X stays put until December, refusing to make tax-saving investments, he is in for a huge shocker, when the call for the final investment declarations arrives in December. The payroll department asks him to make investments of at least Rs 1 lakh to reduce his tax bill if he wants to. Clueless, Mr X rushes to his nearest bank to open a PPF account, wherein he parks Rs 30,000 and invests another Rs 25,000 in national savings certificates (NSCs) via the neighbourhood post office. Still not closer to his goal, he purchases three term life insurance policies that entail an annual premium of Rs 50,000. He also puts in Rs 10,000 in a dividend-based ELSS MF scheme for good measure, taking his total ‘investments’ under Section 80 C to Rs

1,32,280. Even after the above deductions, Mr X still has to pay tax of Rs 4,485 for FY15-16. Has Mr X really parked his hardearned money in investment prod-

ucts? Not really. For one, he has not looked at capital market-linked options beyond his paltry investment in an ELSS product. So, what could have been better?

Table 2 | Mr X’s tax computation in the base year No

Monthly Salary

Amount

Basic

10000

HRA

9500

Consolidated Allowance

Transport Allowance

11800 800

Per Month Salary

32100

Annualised

385200

Reimbursements Limit per annum 5

Medical Allowance

15000

Leave Travel Allowance

30000

Annual benefit 7

Value of APS Scheme Total Annual Salary

0 430200

Terminal benefits 8

Provident Fund

Gratuity Total Fixed Base Compensation

Tax payable

14400 5400 450000

4819 november 2016 l The Finapolis

Tax Savers, Read This!

Table 3 | Mr X’s tax computation after increment No

Monthly Salary

Amount

Basic

12000

HRA

11400

Consolidated Allowance

14160

Transport Allowance

1600

Per Month Salary

39160

Annualised

469920

Reimbursements Limit per annum 5

Medical Allowance

15000

Leave Travel Allowance

32000

Annual benefit 7

Value of APS Scheme

Total Annual Salary

516920

Terminal benefits 8

Provident Fund

Gratuity

17280 6480

Total Fixed Base Compensation

540680

Tax payable

14330

Where Mr X went wrong As seen above, over 90% of Mr X’s investments are in long-term products such as insurance, PPF and NSCs. Of these, insurance is only a cover and does not give returns. Money parked in NSCs is locked in for five years, while the lock-in period for PPF is 15 years. The interest rates on these products have hovered at 7-8.5% in the past few years. In comparison, Mr X’s investments in ELSS, have a lockin of three years and their returns have averaged 15-20% over three-year and five-year horizons. Given that he is a first-time investor, Mr X could have saved up to Rs 50,000 u/s 80 CCG through the Rajiv Gandhi Equity Savings Scheme (RGESS), in lieu of just dumping a paltry Rs 10,000 in an ELSS scheme. By replacing the ELSS with RGESS, Mr X’s total investment-based tax savings would have amounted to well over Rs 1.7 lakh. This

28 The Finapolis l november 2016

would have brought down the tax bill to Rs 2,665. Mediclaim is yet another ignored option. To start off, Mr X can at least claim an additional tax deduction of Rs 25,000 per year by investing in health insurance products. Want to avoid being in Mr X’s shoes? Then, develop a financial plan, rather than follow Mr X’s last-minute binge buying just to save tax. f

If you have exhausted your investment capacity, it is time to look at some ‘unconventional’ options: 1. HRA is not just for tenants: Others less-known fact is that HRA is not for those staying on rent alone. Even if you stay with your parents, you can claim your HRA deduction by paying rent to them. Indian laws define parents as ‘separate legal entities, unlike your spouse and children. This deduction is allowed even if you own a separate property. This option offers multiple benefits: one it may aid your aged parents who do not have substantial income, while giving you the tax benefit. While you may be eligible to claim your entire HRA as rent paid, also keep the math in mind. Going by the numbers in table 3, Mr X receives a monthly HRA of 11,400, the amount deductible will be the lowest of the following three, with the excess being chargeable to tax. For people staying in metros, 50% of basic salary can be considered. 2. Save without an HRA: If your company does not give you an HRA, you can avail of a tax exemption of up to Rs 2,000 under Section 80GG. 3. Gifts to blood relatives: Besides paying rent, you can also gift money to your parents (through a gift deed) and save tax on the same. However, the same money would not be taxed in their hands as they are blood relatives. f

regulatory reform GST: One name, but different numbers

IANS

he GST Council has almost reached a consensus on compensating states for the revenue loss under the new revenue collection regime, which will facilitate a decision on the new tax structure at its next meeting, Union Finance Minister Arun Jaitley said. “The Goods and Services Tax (GST) Council discussed the issue relating to different rates of tax. Rates also depend on source of funds, on the basis of which compensation to losing states will be funded. Decision on a rate structure is possible once this is decided,” Jaitley said. “We have virtually converged on a consensus. The technical issues will be sorted out and a formal decision announced at the next meeting.” After the GST Council meeting, the Centre has proposed a four-slab rate structure ranging from zero to 26%. The structure proposes GST at 0% on a variety of goods and services. On ultra-luxury items and “demerit” goods, such as big cars and tobacco products, it proposes a cess over and above the 26% GST rate. On

The GST council will meet next on Nov 3-4, FOR division of authority between the Centre and States for tax assessments

the remaining goods and services, the GST is proposed to be levied at 6%, 12% or 18%. “The question is whether the compensation will be funded from the rate structure itself, or some other sources, or some cess. Once this becomes clear, it will be possible to decide on the rate structure,” he added. Jaitley said the council will meet next on November 3-4, when the other major issue of the division of authority between the Centre and states, for tax assessments would also be decided. “If these two issues (compensation funding and dual control) are settled, then a fifth meeting of the council on November 9-10 will take up the issue of draft legislations,” Jaitley said. Kerala Finance Minister Thomas Isaac said the states could not agree on the fourslab structure proposed by the Centre. Union Revenue Secretary Hasmukh Adhia said the issue of funding the compensation to the states will be discussed afresh in the November meeting. Sources said the Centre’s proposal of a cess, over and above the GST, on ultra-luxuries to fund the compensations, was not found acceptable by the states. f november 2016 l The Finapolis

telecommunications Spectrum auction fails, raises just 11.6% of target IANS

hat was touted as India’s telecom spectrum auction —given the 2,354 MHz on the block — ended in virtual failure, closing within five days with a total commitment of only Rs 65,789 crore ($9.8 billion), or about 11.6% of the expected Rs 5.66 lakh crore ($8.5 billion). The auction would also fail to help in fully realising the revenue target of Rs 98,994.93 crore provided for in this year’s budget. Of the spectrum auctioned, only 965 MHz were sold. The money raised on the first day, of around Rs 53,000 crore, was an early portent that not everyone was enthusiastic about bidding for the airwaves. Even the earnest money deposit was low. The failure has been attributed to the high reserve price decided by the regulator and approved by the government. The Cellular Operators’ Association of India (COAI) said in a statement that the lack of enthusiasm on the operators’ part was majorly due to its unrealistic pricing, high debt and

30 The Finapolis l november 2016

single-digit growth that the industry is currently reeling under. “We are hopeful the government and the Department of Telecommunications will take cognizance of the role a high reserve price had on bidding, as far as the 700 MHz is concerned, and will re-calibrate the price so that spectrum in the band could be put up for auction, maybe two years from now,” said its Director General Rajan S Mathews. “The largest chunk of spectrum didn’t find any buyers because of serious miscalculation by the regulator and the central government on the current market value of 700 MHz spectrum. They overpriced it and the players decided to wait till the price becomes more realistic,” said Mahesh Uppal, Director of telecom consultancy Com First. The auction went through 31 rounds for seven bands —700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. There were no takers for 700 MHz and 900 MHz — as had been warned by experts and the industry alike. But Communications Minister Manoj Sinha tried to put a positive spin on the money to be raised. “The total upfront payment due to the government is around Rs 32,000 crore. This is the highest in the last five years. It’s a big achievement that we could sell 965 MHz,” he said. Top investment banker Goldman Sachs had predicted that the total proceeds from the auction will be around $7 billion — less than half of $16 billion obtained in the 2015 auction, and sharply below $85 billion if all spectrum was sold at the reserve price. Among those who bid, Bharti Airtel acquired 173.8 Mhz of spectrum across 1,800

The auction went through 31 rounds for seven bands —700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. There were no takers for 700 MHz and 900 MHz — as had been warned by experts and the industry alike

MHz, 2,100 MHz and 2,300 MHz bands for a total consideration of Rs 14,244 crore. Reliance Jio acquired 269.2 MHz spectrum for Rs 13,672 crore. Another key player, Idea Cellular, said it has acquired 349.20 MHz of spectrum for Rs 12,798 crore. “We have expanded our spectrum footprint thereby significantly enhancing capacity of our all-IP data strong network and ensuring world class services for all Indians. Jio is committed to taking India to global digital leadership by bringing the power of data to all Indians,” said Reliance Industries Chairman Mukesh D. Ambani.

Band (MHz)

Quantity put to auction (MHz)

Quantity sold (MHz)

700

770

800

73.75

900

9.4

1800

221.6

174.8

2100

360

2300

320

2500

600

370

Other companies participating in the auction were Vodafone India, Reliance Communications, Aircel and Tata Tele, all together furnishing a total earnest money of Rs 14,653 crore. The total amount of money committed through the auction will not immediately come to the government as operators have been given the option of both upfront and deferred payment. IANS f

Internet speeds might still go up Though the spectrum auction did not garner much interest from operators, it will benefit customers by providing better service, feel industry experts. “The appetite for data consumption of the Indian consumers is increasing; so operators need more spectrum. Latest addition will help operators give quality broadband with better speed,” Rajan S. Mathews, Director General, Cellular Operators’ Association of India said. According to him, each customer India consumes around 10 GB data on an average per month and this is growing 20-30% year-onyear. “The spectrum auction has enabled most players to fill gaps in their network, which means users will be able to choose among several players for mobile broadband services. Further, the additional spectrum will help improve quality of services,” Mahesh Uppal, Director of consultancy firm, Com First, said. Broadband subscriptions worldwide are growing at around 20% each year, according to the Ericsson Mobility Report. It adds that global broadband subscriptions would reach 7.7 billion by 2021, accounting for 85% of all subscriptions. IANS f november 2016 l The Finapolis

the shanbHag column Save capital gains using Sections 54 & 54F

axpayers would know that Section 54 gives exemption to an individual or Hindu Undivided Family (HUF) on long-term capital gains (LTCG) arising from transfer of a long term asset, being buildings and lands appurtenant thereto, and being a residential house, self-occupied or not, provided the assessee has purchased within one year before or two years after the date of sale or has constructed within three years after that date, a residential house. If only a part of the capital gain is used, the exemption would be pro-rata. In the current scenario, this requirement of construction being completed within three years has become too tight. Recognising this fact, the recent Finance Act 2016, by amending Section 24, has

The Finapolis l november 2016

raised the requirement of the construction being completed within three years to five years, only for the exemption on interest payable on housing finance. Corresponding amendments have not been inserted for Section 54 and Section 54F. Hopefully, the corrective action will be taken by the next Budget. Three points are worthy of careful note: 1. There is no time limit for commencement of construction though for completion, the limit is before expiry of three years from the transfer date of the original asset â&#x20AC;&#x201D; 165ITR571 (Kar.) CIT v J. R. Subramanya Bhat, (1987). Hence, all costs incurred on the construction, irrespective of when, can be claimed as acquisition cost.

2. Exemption is available on purchase of new property made within one year before the sale of the old house. But for construction, the exemption is not available if the construction is completed even by a day before the sale of the old house. Illogical! 3. The assessee need not apply the amount from the sale proceeds for purchasing another residential house â&#x20AC;&#x201D; Lalit Marda v ACIT [2008] 23SOT250 (Kol). For instance, he can take a loan to purchase or construct and use the sale proceeds any which way. Though the stipulations of Section 54F are similar to those of Section 54, there are three differences: 1. It requires reinvestment of the net consideration (sale value less expenses) whereas Section 54

is content with reinvestment of only the amount of capital gains. 2. It is applicable if the assessee is not an owner of more than one residential house, other than the new asset, on the date when he earns LTCG. Section 54 has no such stipulation. 3. The third difference, though crucial, is not comprehended by many. In the case of Section 54, the assessee is required not to sell the newly-acquired property within three years from the date of its purchase or construction. If this condition is not satisfied, the cost of the new asset is to be reduced by the amount of LTCG exempted from tax on the original asset and the difference between its sale price and such reduced cost will be chargeable as short-term capital gains of the year in which the new asset is sold. In the case of Section 54F, the assessee is also required not to sell the new property within three years. Additionally, he should not purchase within one year or construct within three years another residential house. We strongly feel that the period ‘one year’ is a mistake and should read as ‘two years’ for consistency of Provision a(ii) of Sub-section (1) with Sub-section (2) and also with Section 54. Where the new asset is transferred within three years from the date of its purchase or its construction, the amount of capital gain not charged u/s 45 shall be deemed to be LTCG of the previous year in which such new asset is transferred. Where the assessee purchases, within two years or constructs, within three years after the date of the transfer of the original asset, any residential house other than the new asset, the amount of capital gain arising from the transfer of the original asset not charged u/s 45 shall be deemed to be the LTCG of the previous year in which such residential house is purchased or constructed.

Make note: In the case of Section 54, the assessee is required not to sell the newly-acquired property within three years from the date of its purchase or construction

Quite confusing! The wisdom of imposing different punishments for the same offence is not comprehensible. This creates confusion galore. The different figures of ‘one year’ and ‘two years’ appearing in these provisions are possibly a result of this confusion. Crossing Time Limit The concession gets withdrawn if the period of two or three years crosses even marginally. There are many decisions which condones delays under various situations — Kishore H Galaiya v ITO[2012] 24taxmann.com11 (Mum Trib). As long as the assessee has invested the requisite amount in construction of new residential house within three years from the date of transfer, but the taking of the possession was delayed because of default of the builder and other factors not under the control of the assessee the exemption cannot be denied. This very case has also dealt with two other important issues: a) Assessee had not deposited the required amount in GCAS due to ignorance of law. He had kept the amount in the SB account which was utilised towards the construction of flat. This being only a technical default, the exemption cannot be denied. b) Tax return is required to be filed before July 31, but it can be extended to March 31 of the FY in some certain situations. The exemption cannot be denied if the amount has been deposited in CGAS within the extended period u/s 139(4). Shashi Verma v CIT 152 CTR227 (NB) 1999 — At present it is not

easy to construct a house within this stipulated period, especially under government schemes. Therefore, if substantial investment is made in the construction, then it should be deemed that sufficient steps have been taken to satisfy the requirements of Section 54. 16taxmann.com210 (Chd - ITAT) [2011] — Section 54F does not prescribe completion of construction and its thrust is on investment of net consideration received on sale of original asset and start of construction of a new residential house.V. A. Tharabai v DCIT [2012]19taxman.com276 (Che-Trib) — Assessee could not construct residential house within three years because owners of the land filed a petition for injunction on which civil court ordered status quo. It was held that the amount spent by assessee in purchasing land be allowed for deduction. f

The authors, A.N. and Sandeep Shanbhag, are leading financial advisors. Write to them at wonderlandconsultants@yahoo.com november 2016 l The Finapolis

know your country The Dragon’s Embrace

Abhishek Waghmare

ndian politicians are leading a campaign to boycott Chinese goods. But an IndiaSpend analysis shows why this will fail: China is India’s largest trade partner, a sixth of India’s imports are Chinese, up from a tenth in 2011-12, while India’s exports to its rival have halved over the same period. Imports from China grew at 20% over two years and 5% over five years, to $61 billion. These goods range from power plants and set-top boxes to Ganesh idols. This is despite the fact that India’s imports have generally fallen over the last five years — from $490 billion (Rs 23 lakh crore) to $380 billion (Rs 25 lakh crore) — because of a fall in global oil prices. India’s exports to China have fallen from $18 billion (Rs 86,000 crore) in 2011-12 to $9 billion (Rs 58,000 crore) in 2015-16. Apart from cotton, copper, petroleum and industrial machinery, India does not export much to China. This means that India buys six times the merchandise it sells to China. Cellphones, laptops, solar cells, fertilisers, keyboards, displays and communication equipment — including earphones —

34 The Finapolis l november 2016

China accounts for one sixth of our imports up from a tenth in 2011-12. Over the same period, India’s exports to China have halved these are India’s chief imports from China, according to our analysis of Ministry of Commerce data. Other major imports from China include tuberculosis and leprosy drugs, antibiotics, children’s toys, industrial springs, ball bearings, LCD and LED displays, routers, TV remote controllers and set top boxes. Despite this, political leaders, including Sharad Yadav of Janata Dal (United) from Bihar, Himanta Biswa Sarma, the newlyinducted Finance Minister of Assam, and Anil Vij, Health Minister of Haryana, are appealing for a boycott of “Made in China” goods. Yadav, for instance, recently said: “Balance of trade between our country and China has become imbalanced which will be very harmful and dangerous for our domestic industry.” “People should not buy Chinese goods. Instead, Indian goods should be used. Trade with China is affecting our country. China is not our friend nation. China can buy weapons with whatever money it earns. There is a possibility that the weapons are given to enemy countries… We should focus on Make in India,” Vij was quoted as saying by the Indian Express. China was referred to as the “world’s

manufacturing powerhouse” by former Reserve Bank of India Governor Raghuram Rajan and Chief Economic Advisor Arvind Subramanian in a February 2006 research paper. India, however, “failed to match its neighbour in this process”, asserted the paper, published by the US-based National Bureau of Economic Research. Stagnating indices for the manufacturing sector show that India is still struggling to compete with China. Despite a record foreign direct investment of $55 billion in 2015-16, private investment in manufacturing is still sluggish. IndiaSpend visited Manish market, the hub of imported Chinese goods in Mumbai’s heart. Chinese products here are cheaper, available in bulk, neatly packaged and easy to buy. “If the 50 different types of LED lamps that I sell were available from say, Surat, at a cheaper rate and at my doorstep, why would I go for Chinese lamps?” asked a lamp distributor and retailer, requesting anonymity. “If I had to buy these in India, this collection would cost me double.”

our major imports from China: cellphones, laptops, solar cells, fertilisers, tuberculosis and leprosy drugs, children’s toys, industrial springs and TV components China moved forward with rapid market reforms from the 1980s, propelled by the establishment of special economic zones. Land and labour reforms helped it ramp up its production capacity. The result is that India’s iron, steel and fertiliser production is a tenth of China’s. China’s export story is also driven by ease of market access. Take the example of Sumant Kasliwal, who runs an apparel e-commerce startup in Mumbai. After two years of shopping for merchandise in India, he switched to China two years ago. His sales have tripled since. Customers rarely have to waste time in China searching for markets and products, said Kasliwal. It took him less than a week to buy a threemonth consignment that ranged from jewellery to fabric.

“Even small market-towns like Yiwu — comparable to Varanasi in terms of population — have a one-stop, dedicated market for all consumer durables, from fashion to home accessories, with cost and quality options,” he said. “In India, it would take us weeks.” IANS f

november 2016 l The Finapolis

EQUITY

CORRELATION 8800

28340

1 2

8750

28175 4

28010

8650

27845 3

8600

27680

NIFTY SENSEX

8550

SENSEX

NIFTY

8700

27515

8500

27350 3

OCTOBER

TOP GAINERS AND LOSERS SENSEX Top 5 Gainers

NIFTY Top 5 Gainers Company

Oct 24, 2016

Sept 30, 2016

(%) Change

Company

Oct 24, 2016

Sept 30, 2016

Gail India

444.05

Vedanta

374.65

18.52

Gail India

443.85

374.05

18.66

202.35

172.05

17.61

ONGC

292.90

256.70

14.10

Cairn India

231.45

200.05

15.70

Tata Steel

426.20

374.40

13.84

NMDC

122.40

105.80

15.69

ICICI Bank

284.55

252.30

12.78

ONGC

292.35

256.65

13.91

Adani Ports

285.65

256.75

11.26

Company

Oct 24, 2016

Sept 30, 2016

(%) Change

1339.45

1405.95

-4.73

NIFTY Top 5 Losers Company

(%) Change

SENSEX Top 5 Losers Oct 24, 2016

Sept 30, 2016

(%) Change

Zee Entertainment

512.05

546.75

-6.35

Mahindra & Mahindra

Bank Of Baroda

158.40

167.40

-5.38

Axis Bank

521.30

541.85

-3.79

1339.25

1405.70

-4.73

Asian Paints

1127.55

1162.10

-2.97

521.55

541.35

-3.66

HDFC

1351.65

1393.05

-2.97

1344.00

1393.45

-3.55

Bharti Airtel

306.50

314.05

-2.40

Mahindra & Mahindra Axis Bank HDFC

36 The Finapolis l november 2016

KEY MARKET DRIVERS Markets climbed up during the first trading week of October, after the newly-constituted Monetary Policy Committee (MPC) headed by Reserve Bank of India Governor Urjit Patel reduced the repo rate by 25 basis points and global cues remained supportive. The second trading week saw a decline on heightened chances of a rate hike in the US and disappointing factory output data domestically. Besides, lower earnings’ guidance from TCS and Infosys and massive outflows of foreign funds too dragged key indices lower (provisional figures an outflow of Rs 2,405.21 crore in foreign funds for the week). However, short covering, value buying and positive inflation macro-data points supported the equity markets at lower levels. The government’s efforts to build consensus on the key contours of the Goods and Services Tax (GST) regime took centre stage in the third week. Healthy quarterly earnings, active participation by domestic institutional investors (DIIs), and expectations of more stimulus measures from the European Central Bank (ECB) and healthy Chinese macroeconomic data buoyed investors’ sentiments, as the market closed the week higher. Date

Event

October 4

The Monetary Policy Committee headed by RBI Governor Urjit Patel reduces the repo rate by 25 basis points

October 4

IMF revises India’s growth forecast slightly upwards to 7.6%, citing the economy’s resilience and strong growth momentum

October 15

Provisional figures show an outflow of Rs 2,405.21 crore in foreign funds for the week

October 19

GST meet ends on inconclusive note as key rate remains undecided

October 24

Tata Sons announces the exit of Cyrus Mistry; Ratan Tata returns as interim chairman

Index Performance Indian Indices

Close Oct 24, 2016

Close Sept 30, 2016

28179.08

27865.96

1.12

MSCI World Index

1706.24

1725.67

-1.13

Nifty

8708.95

8611.15

1.14

MSCI Asia Pacific Ex Japan

451.77

450.90

0.19

BSE 500

11952.74

11700.65

2.15

BSE Auto

22431.93

22231.66

0.90

Hang Seng

23604.08

23297.15

1.32

BSE Bankex

22721.87

22045.62

3.07

2856.68

2869.47

-0.45

15000.46

14581.77

2.87

Singapore Straits Times (STI) S. Korea

2047.74

2043.63

0.20

18789.69

16449.84

14.22

18223.03

18308.15

-0.46

S&P 500

2151.33

2168.27

-0.78

NASDAQ

5309.83

5312.00

-0.04

64059.89

58367.05

9.75

6986.40

6058.54

15.31

Sensex

BSE Capital Goods

Return (%)

Global Indices

Close Oct 24, 2016

Close Sept 30, 2016

Return (%)

Asia

BSE Consumer Durables

12724.98

12548.56

1.41

Nikkei 225

BSE Healthcare

16343.12

16181.12

1.00

America

BSE Metal

10334.88

9763.66

5.85

BSE Oil & Gas

12440.58

11377.55

9.34

1551.47

1512.19

2.60

BSE PSU

7943.73

7462.44

6.45

BSE Power

2028.59

1989.59

1.96

BSE Tech

5615.66

5630.81

-0.27

DAX 30

10761.17

10511.02

2.38

BSE Telecom

1180.03

1175.63

0.37

CAC 40

4552.58

4448.26

2.35

BSE Realty

Dow Jones

Brazil Bovespa Europe FTSE-100

november 2016 l The Finapolis

STOCK FUNDAMENTALS

Team Finapolis

We take a look at some companies’ performance and results to figure out what impact they will have on the share prices

UltraTech Cement

led by usage of low cost fuel inventory, improvement in efficiencies, raw mix optiUltraTech’s Q2FY17 opermisation and reduction in lead distance. Thus, highational performance was lower than estimates with er margins led to 31% YoY CMP Rs 4,009 revenues/EBITDA at Rs increase in net profit to Rs 53.9bn/10.9bn, against esti6.01 bn (vs. estimate of Rs Target Price Rs 4,530 6.05 bn). mates of Rs 56.5bn/11.7bn. Upside (%) 13% We increase our EBITDA Blended cement volume estimates by 9.4%/ 1.7% grew marginally by ~1% YoY, 52-week 4,130 for FY17E/ 18E (despite lower than our estimate of High/Low (Rs) 2,579 factoring in cut in revenue 6% YoY growth. EBITDA/ estimates due to reductonne improved ~18% YoY to Rs 978/t (vs. estimate of Rs 990/t) prition in volume assumptions) on account of sustainability of better margins in marily on account of ~9% YoY fall in total H2FY17E. We expect ~10% blended sales variable cost/tonne. Going ahead, better volume CAGR during FY16-18E (higher volume growth to continue (led by rampthan the industry) led by improvement up of new capacity additions) with imin demand and ramp-up of recent exprovement in operating margin implies ~24% EBITDA CAGR during FY16-18E. pansions. We expect EBITDA/ tonne of Variable cost saving continues; EBITDA/ Rs 1,144/t by FY18E from Rs 894/t in FY16 tonne improved by 18% YoY. Net sales at Rs (led by improvement in realisation, cost 53.98 bn (‑2.3% YoY) came 4% lower than moderation & operating leverage benour estimate. Net realisation improved efits) with EBITDA CAGR of 24% over ~3% QoQ (down 3% YoY) to Rs 4,828/t as FY16-18E. Though the stock has run up prices increased during Q2FY17 in North/ ~23% in the last 6 months, valuation at Central/ Western markets. EBITDA grew 15.4x FY18E EV/EBITDA looks attractive by ~19% YoY to Rs 10.9 bn as margins imconsidering the growth potential going ahead. Our revised TP of Rs 4,530 (based proved by 360 bps YoY (decline in variable on 17.5x FY18E EV/EBITDA offers invescosts offsets lower realisations). EBITDA/ tonne improved ~18% YoY to Rs 978/t. Totors 13% upside). tal cost/ tonne declined 7% YoY, primarily Karvy Stock Broking

Dewan Housing Finance Cholamandalam Securities

DHFL’s AUM grew (20%YoY, 4.5%QoQ) to Rs 752 bn in 2QFY17, due to robust growth in disbursements (32%YoY) to Rs 66 bn. The disbursement growth was majorly concentrated in Tier II and Tier III cities as metros contributed only ~2% of the growth. Average ticket size for the quarter was noted at Rs 1.34 mn vs Rs 1.29 mn in 1QFY17. Off balance sheet AUM stands at 13% of total AUM as of 2QFY17. Management hinted AUM to grow at a sustainable growth rate of ~17%. Growth in loan portfolio was largely led by Project Loans (126%YoY, 17%QoQ) and SME (95%YoY)

38 The Finapolis l november 2016

whereas segments like Home Loans (12%YoY) and LAP (9%YoY) showed a steady growth. Consequently, their share in the overall portfolio was noted at Home Loans — 70.2%, Project Loans — 11.5%, LAP — 15.7% and SME — 2.6%. Borrowing increased by (39%YoY, 23%QoQ) to Rs 782 bn. The company is on track to reduce its share of high cost bank borrowings while correspondingly increase the share of NCDs (~43%). The company reduced its dependence on bank borrowing (from 68% in FY13 to 44% in 2QFY17) and has tapped into the lower cost bond borrowings (from 20% in FY13 to 43% in 2QFY17). Management has highlighted its intention to reduce its share of borrowings from bank to ~30% and Debt Capital Markets to ~40% and the balance from NHB, FDs etc. DHFL’s NII showed healthy growth at 18%YoY to Rs 5.4bn for the quarter. Interest income increased by

CMP

Rs 332

Target Price

Rs 370

Upside (%)

11%

52-week High/Low (Rs)

335 141

19.7%YoY whereas interest expense increased by 20.1%YoY reflecting the increased competition in the home loan segment. NIM increased by 16bps to 3.05% which was majorly driven by reduction in the cost of funds as the company borrowed around Rs 140 bn via NCDs during the quarter to reduce its reliance on bank borrowings. Cost of funds reduced by 57bps YoY to 9.33%. Asset Quality broadly continued to remain stable with GNPAs decreasing marginally by 2bps QoQ to 0.96% and nil NNPAs with PCR of

99.6%. Segment wise GNPA: Home Loans — ~0.85%, LAP — ~1.2%, Project Loans — ~1.3%. DHFL reported a strong growth of 29% YoY on account of improving the cost efficiency. The cost to income ratio continues to show its improving trend as it decreased by 3pps YoY to 26%. Cost reduction was majorly contributed by well contained Advertisement and Legal expenses.

DHFL’s AUM grew to Rs 752 bn in 2QFY17, supported by robust growth in disbursements, mainly in Tier II and Tier III cities

Sharda Cropchem Motilal Oswal Sharda Cropchem (SCC) is a generics agrochemical company, and follows a differentiated asset-light business model focussing on product registrations and outsourced manufacturing. It operates in formulations and active ingredients solely based on generic (off-patent) molecules. This differentiates it from an innovator company which expends capital, time and resources primarily towards R&D. The business in which SCC operates requires huge capital deployment and long gestation period to get the registrations and dossiers done. Time delay and funds tied for a long period makes this an unattractive opportunity for new generic agrochemical players. The capital investment required for registrations is usually 3-5 million euros while the time required to receive one approval ranges from 3-5 years depending on the type of registration and the region in which it is applied for. SCC has clocked 29% revenue CAGR over FY11-16 and is estimated to achieve revenue CAGR of 18% over FY16-18. We believe the following potent triggers will continue its high growth trajectory: i) Rising wallet share in existing products: SCC has a minuscule market share in individual products category. The company has been aggressively filing registrations across geographies. In its top 10 products, SCC’s market share is in the 0.5-7.0% range. According

to the company, these products have market potential of Rs 350 bn (~10% of global agrochemical market). ii) Geographic expansion: The Company has an established track of securing registrations in the ‘toughest’ markets such as Europe. The company has secured around 903 registrations in Europe out of 1,830 total registration so far across geographies. iii) New product launches: Currently, SCC has a portfolio of 68 products, of which 38 are present in all geographies while balance 30 products penetration to all geographies is expected going forward. Further, it has a launch pipeline of 12-14 new products over the next 3?4 years. Based on management estimates, these products have opportunity size of >USD1bn globally. We believe management’s guidance of 18% revenue growth over FY16- 18 with stable margins is achievable. We value the company with a PEG ratio of 1 implying 19xFY18 EPS for a per share target price of Rs 500. f

CMP

Rs 390

Target Price

Rs 500

Upside (%)

28%

52-week High/Low (Rs)

417 203

november 2016 l The Finapolis

STOCK TECHNICALS

Team Finapolis

Our team of analysts pore through technical charts to offer some smart trading tips for the next couple of months

Capital First Ltd

apital First Ltd is a leading financial institution in India focused on providing debt financing to MSMEs and Retail consumers. Capital First has financed over 2.25 million customers including more than 1.5 million self-employed individuals and MSMEs and built loan assets of Rs. 160.41 billion (USD 2.4 bn) (March 31st, 2016). The company provides financing for various purposes like business expansion, loans for Plant and Machinery, Office furniture, display panels, office automation like PCs, laptops and printers. Within a short time, Capital First has built a large network and provides financing in 222 locations across the length and breadth of the country. On the stock price performance front, it has been rallying from the lows of sub 150 in the month of February 2014 to the current market price of sub-

40 The Finapolis l november 2016

775 700 625 550 475 400 325 Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

the target of 880-900 and beyond it towards the all time highs. CMP

Rs 767

Rs 580

TP 1, 2

Rs 880, Rs 950

800, thereby moving more than 500% over last two years which explain the participant’s interest into the counter. The above said rally also explains the long term secular uptrend in the stock. Going forward, we expect the stock to continue its current uptrend and move towards

Points of Observation

• The stock has given

breakout from “BULLISH FLAG PATTERN “ on monthly chart near 472 levels and closed above the said pattern and made its 52 week high of 791 levels with more than average volume confirmed the pattern significance. The stock has seen strong buying interest from past consecutive six to eight months and outperformed some of its peer group significantly suggest strength in the counter. • The stock has also taken support from its 61.8% Fibonacci retracement support levels of 631 levels on closing basis drawn from low of 528.50 levels to high of 797.40 levels which indicates long term players are still bullish in the stock and likely to move higher in coming months.

• The stock is also trading well

above its 100/200 day and weekly moving averages, indicating its uptrend on all time frames, and any dip towards the moving averages can be utilized to add more. The advance variable moving averages like Variable index dynamic average (VIDYA) is also showing strength and price is still trading above the said average and still there is no sign of any reversal in the counter suggest the strength in the counter. • On weekly chart both the indicator Stochastic (Fast averages have crossed slow average on daily chart and which suggest that the stock has still potential to go further higher) and William %R (-15.48) is also trading in a bullish zone and there is still no sign of any reversal. • Considering all the above data points, we recommend investors to enter the stock at the current levels for targets of 882 levels in next 9-12 months. We therefore recommend investors with a time frame of 9 to 12 months to buy the stock in the range of 750770, and average on dips towards 610-630 for the targets of 900 levels and much higher with a strict stop loss placed below 580.

Rs 443

Rs 356

TP 1, 2

Rs 545, Rs 589

ty Energy generated 4.60 returns so far. The stock witnessed breakout from a sideways range of 360-400 levels on monthly chart and moved higher. The stock has also surpassed and closed above its approx 61.8 % Fibonacci retracement resistance level (439.85) drawn from high of 551.9 levels to low of 260.05 levels on weekly chart which confirms that the stock has still a lot of room for upside . In last two weeks, the stock has given breakout from 420 levels and gained more than 6%, which indicates an overall strength in the counter and the rally in the counter has just started. The stock is also trading above from its all major moving averages which increase the bullishness of the stock. Points of observation

• Historically, the stock witnessed

GAIL

AIL has outperformed Nifty Energy last month generated more than 18 % return whereas Nif450

CMP

sharp vertical downfall to 260.05 levels after making its life time high of 551.9 levels in the month of Oct ’14. Among the technical indicators, like oscillator indicator 14-week RSI is trading above

GAIL

420

GSPL

390

360 330 300 270 Oct-15

its signal line pointing northward also taken support around 48-50 levels and currently trading around 60.54 levels this means the stock has potential to go further upside. • Trend following indicator like moving average convergence and divergence (MACD) is also trading above its centre line which increases the pattern significance and Parabolic SAR (Stop & Reverse) on weekly charts is trading below the price, suggesting buying will remain intact with the counter in near term. • From above observation we suggest you to remain long in the counter and any dip towards 400 levels can be used for accumulate the stock with a stop loss of 356 levels end of the day basis with the projected target of 545 and 589 levels in next 8-10 months.

Jan-16

Apr-16

Jul-16

Oct-16

SPL, a GSPC Group company is a pioneer in developing energy transportation infrastructure and connecting natural gas supply sources including LNG terminals to growing markets. GSPL is continuously expanding its pipeline network currently in Gujarat to reach the demand centers by laying gas pipeline network. november 2016 l The Finapolis

166

GSPL

157 148 139 130 121 112 Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

stock has been relentlessly rallying from its July, 2016 low of Rs.125.07 and is currently trading at its life time highs. CMP

Rs 163

Points of observation

Rs 121

• On the weekly charts, the stock is

Rs 285

The chart structure of this fundamentally strong stock, suggests formation of cycles of higher highs and higher lows, supported by consolidation break out in the past few week, clearly indicating there is a lot of demand for the stock in corrective phases which is a positive sign in itself. GSPL is in a structural uptrend and looks well set to march steadily towards the Rs.285 mark over the next 9-12 months. The

trading above its short and long term moving averages, indicating the bullishness in the counter. • On monthly charts the stock has given up side volatility expansion on Bollinger band (20, 2, S) as the price closed above it. On weekly charts the stock is trading above its middle Bollinger band and currently flirting with its upper Bollinger band on daily charts. • Among oscillators, the MACD is in buy mode in daily and weekly time frame indicating bullish bias. • We therefore recommend long term investors to go long in the stock around Rs.163, and average the long position on dips, if any, around the level of Rs.145 for the above mentioned target levels with a strict stop loss placed below the level of Rs. 121 on a weekly closing basis.

mentum from the lows of 140, since then price remained in secular bull trend without any intermittent price correction or consolidation up till Aug’15 when stock cloaked an all time high of 1149; post which uninterrupted rally took minor pause, on account of profit booking, prices corrected a bit made a swing low of 706 and eventually entered into a consolidation mode. After an elongated price consolidation in earlier months stock formed an excellent base in last few months and gradually moving higher, gives an opportunity to accumulate stock for medium to long term perspective. Points of observation

• Technically speaking after stu-

pendous rally from the lows 140 to an high of 1149 prices retraced nearly 38.2% of the said move and subsequently in last one year time frame managed to hold and sustain without violating swing low of 706, prices entered into a consolidation mode. • In the recent price consolidation prices found firm support near its 50-weekly EMA and holding well above its 200-weekly EMA which is currently placed near 615 levels and notably said average is not being violated once since the inception of rally. • On the weekly technical setup 14-period RSI managed to hold above 40-levels the phase of price correction which happens to be bulls controlled territory, perhaps which clearly indicates that longterm bulls were in total control of the counter and in recent past with recovery in price oscillator

AMBIKCO

MBIKCO made its dream run from the low of 140 to it’s an all time high of 1149, gains of more than seven times in less than four years time frame. In the start of year 2012 stock price gained mo-

42 The Finapolis l november 2016

CMP SL TP 1, 2

Rs 1025.95 Rs 840 Rs 1190, Rs 1300

1035

AMBIKCO

985 935 885 835 785 735 Oct-15

Jan-16

Apr-16

moved towards overbought territory reaffirming the fact. • Technically stock is well poised to reclaim its all time high and surge further in an uncharted territory in the months to come. On the downside area of 800-825 should work as an immediate support for the counter, followed by area 750-775 where prices likely to find support from its major weekly moving average. • Hence, one may buy stock near 1000 levels and average the stock price on any dip towards 930 levels keeping a stop loss below 840 levels, for an upside target of 1190 and 1300 levels over next 9-12 months time frame.

Oct-16

in Indian News and Entertainment channels. The stock has resumed its up move after making low of 16 levels and given the Double Bottom breakout at 36 levels and has been making higher highs and higher lows with Volumes supporting the uptrend in the stock. Prior to that, the stock on the weekly charts has fallen from the highs of 120 levels (Aug 2010) toward 16 levels (May 2012) and has been on downward spiraling trend and has bottomed out around 16 levels.

TV18

V18 Broadcast is the one amongst the Largest Broadcasters in India with its presence 52

Jul-16

CMP

Rs 44.40

Rs 29.50

Rs 70

TV18

48 44 40 36 32 28 Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

On daily charts the stock has been forming a “Ascending Triangle” a bullish continuous Pattern with the stock facing resistance around 50 levels with Good Volumes supporting the pattern. We believe that the stock will break the resistance around 50 levels and continue its uptrend in the near future with 70 as near term target from 6- 9 months perspective. Points of observation

• On the Technical setup, the 14

Period RSI is trading at equilibrium levels and pointing northward which suggest strength in the stock. The MACD is pointing northward and trading well above the central line in buy territory reflecting strength in the up move. • On the weekly charts, the stock is above its short and long term moving averages, indicating the bullishness in the counter. • On daily charts the stock is finding support on the trend line drawn from lows of 16 levels and has been constantly bouncing from the support levels indicating uptrend is in intact. • Hence, we recommend investors to buy the stock around 43.50 levels and average the long position on dips, if any, around the level of 39.50 for the above mentioned target levels of 70 with a strict stop loss placed below the level of 29.50. f november 2016 l The Finapolis

interview

‘Correction would be timely, but our economy is on firm footing’

even Choksey is Managing Director of KRChoksey Investment Managers Private Limited. Deven received a distinction in Commerce and Accountancy, and has also undergone the Advanced Management Development Program at IIM-A, with specialisation in Management of Funds and Portfolio Investments. He served BSE as director post the bourse’s demutualisation, and was also board member of the Governing Council of the Derivative Stock Exchange, Mumbai. KRChoksey manages and advices equity AUM of more than Rs 1,500 crore, besides offering portfolio management services to high net worth individuals and corporate family offices. The stock markets have had a handsome run in recent months. Is this a return to the pre-financial crisis bull market? I don’t see much problem in the market, all the bad news are [known] in the market, whether it is fears of a rate hike by the US Fed, Brexit, the problems in Japan or the ECB issue. We can see some correction in the market but in my opinion it could be a timely correction as the market has run ahead of fundamentals. Any key triggers that you feel will further strengthen this rally? The Indian economy is standing on a firm footing and moving at a slower pace. Thus, we see lot of opportunity available in the market. The immediate game changer would

44 The Finapolis l november 2016

What do you make of a possible rate hike by the US Fed? Will it have any impact on domestic stock valuations? A possible rate hike of 25 basis points by the Fed is expected this December after the US elections. It would trigger volatility in the market. What picks would you recommend for conservative investors? For the short term, I would recommend Reliance, Solar Industries, Infibeam, Sterlite Tech, UPL, Sun Pharma, Bajaj Auto. From an individual perspective, investors should align themselves with knowledgeable advisors who could give them right directions for investments. be implementation of the Goods & Services Tax (GST). With improving liquidity in the system, the repo rate cut, 7th Pay Commission payouts and a good monsoon, we can witness a good rise in consumer demand. This would lead to a recovery in earnings, which would improve market fundamentals.

Any negatives that investors should watch out for? Investors should be cautious on negatives such as a war situation; meltdown in developing countries especially China; a more-than-anticipated US Fed rate hike, rupee depreciation and a reduction in earnings visibility. f

for the short term, I recommend investors look at Reliance, Solar Industries, Infibeam, Sterlite Tech, UPL, Sun Pharma and Bajaj Auto

adhil shetty’s column Smart insurance moves to protect yourself this Diwali

iwali is a time for celebrations, meeting and greeting, indulging oneself, and enjoying fireworks in the company of our loved ones. But these festivities also bring plenty of hazards. With widespread use of firecrackers, lamps, and lights, there are fire and electrical hazards all around us during Diwali. It’s important to take safety measures such as having a fire extinguisher close by to prevent a fire from spreading, and water supply and first aid to quickly treat burns. It’s also advisable to procure insurance products that would minimise your losses should your damages – to home, vehicle, or person – be extensive.

Home Insurance

You don’t need to own a home to insure it. You can buy insurance even if you live in a rented accommodation. If your property is in a housing society, your society could buy a group insurance plan to cover all houses under its ambit. Fire damage, the gravest Diwali threat, is covered by all home insurance products. A typical basic cover protects you against fire, storms, earthquakes, lightning strikes, and landslides. The cover could be extended to include man-made causes of damage, such as terrorism, riots, aircraft implosion, etc. To shortlist an insurance product best suited to you, you must go online to compare various options before shortlisting the one best matching your risk profile.

Comprehensive Auto Insurance

Just as your home and property could be damaged by fire, so could your vehicles. It’s important to have comprehensive vehicle insurance as opposed to a third-party cover which, while mandatory by law, merely covers damage or injury caused by the policy holder to another person or property. A comprehensive cover, on the other hand, covers damages and losses caused in circumstances other than road accidents. These circumstances could be theft, vandalism, damage to glass, floods, fire, storms, as well as damage to third party. Vehicle owners who park in uncovered and unsecured spaces are at risk during Diwali, and it would be wise for them to get a comprehensive cover.

Gold Insurance

Diwali is the time Indians prefer to buy gold. They pray to Lakshmi, the goddess of wealth, and it’s not unusual for them to hold their valuables at home during Diwali. Holding valuables at home brings the risk of theft. You have two options to protect yourself from theft of your valuables. One — you can go for a home insurance that also protects your home’s contents. Your

valuables such as gold and jewellery would be covered up to a sub-limit within the total home cover. However, such a cover may require your precious items to be either worn or be under lock as suggested by your policy. Two — you could get a standalone cover for your precious items. It’s usual for connoisseurs to insure valuables such as art. Gold and jewellery could be similarly covered. Like other insurance products, gold insurance will not cover willful damage, or damage from natural wear and tear, war, riots, etc.

Health Insurance

This should be a no-brainer. During Diwali, thousands of people get burn injuries. A fraction of these injuries turn critical or fatal. Severe burns would require extensive hospitalisation and treatment. Children are particularly at risk here, since they play with firecrackers a lot more than adults. But ill fortune could befall anyone, no matter how old and wise they are. Make sure you have all members of your family covered under a health plan. A typical mediclaim policy from your employer would cover you and your dependents. But it’s advisable to buy a retail policy — personal or family floater plan — that you could continue independent of your employment status. If you’re a 35-year-old married male with one minor child, you could obtain a floater cover of Rs 5,00,000 for an annual premium ranging around Rs 11,000. f Adhil Shetty is the CEO of BankBazaar.com november 2016 l The Finapolis

MUTUAL FUND NEWS

Team Finapolis

We track the mutual fund sector and bring you the latest announcements from AMCs

Mirae Asset Mutual Fund has announced name change of Mirae Asset Ultra Short Term Bond Fundto Mirae Asset Savings Fund effective October 18.

UTI Mutual Fund has announced changes in the exit load structures of its UTI Wealth Builder Fund, UTI Balanced Fund and UTI Income Opportunities Fund, effective October 3. Redemptions or switch-outs with 12 months of allotment will attract nil load for up to 10% of units, and 1% for units thereafter. Redemptions/ switch-outs after 12 months from allotment will not attract exit load. Axis Mutual Fund announced changes in the minimum application amount for subscription/ redemption/ switch in the case of Axis Liquid Fund, effective October 3. The minimum amount for purchase or switch-in is Rs 500 for the Growth Option and Rs 5,000 for all other options. Additional purchases will require Rs 500 for Growth Option and Rs 1,000 otherwise; whereas redemptions and switch-outs will require applications of Rs 500 and Rs 1,000, respectively. Birla Sun Life Mutual Fund has announced change in name of Birla Sun Life Dynamic Asset Allocation Fund to Birla Sun Life Balanced Advantage Fund, effective September 30. Tata Mutual Fund announced a new exit load structure for the Tata Regular Savings Equity Fund, effective October 1.

Redemptions within 90 days of allotment will attract exit load of 0.25% of NAV. IDFC Mutual Fund announced that exit load structure of the IDFC Super Saver Income Fund - Medium Term Plan would become nil from September 29. Tata Mutual Fund announced that D Ramanathan has been appointed as HeadNew Business Development of Tata Asset Management Ltd. The appointment is effective September 14. Invesco Mutual Fund announced that the benchmark index of Invesco India Bank Debt Fund will change to CRISIL 1 Year CD Index from effect from September 27. Further, the fund house said its Invesco India Gilt Fund - Long Duration Plan had been renamed as Invesco India Gilt Fund effective October 1. IDBI Mutual Fund announced that Anshul Mishra has been appointed Fund Manager of IDBI India Top 100 Equity Fund in place of V Balasubramaniam, effective October 3. Mishra will report to V Balasubramanian who is the AMC’s Head Equity & Fund Manager. HSBC Mutual Fund announced changes in its leadership from October 1. The fund house stated that Chief Compliance Officer Denny Thomas has been appointed Chief Operating Officer. Nisha Sanjeev, Vice President - Compliance, will be the Compliance Officer of the AMC. IDBI Mutual Fund has announced a change in the name and asset allocation pattern of the IDBI Debt Opportunities Fund, effective October 28. The scheme will be renamed as IDBI Corporate Debt Opportunities Fund; it will invest 80%-100% in debt instruments with low to medium risk profile and up to 20% in money market instruments and liquid schemes with low risk profile. HDFC Mutual Fund has changed the name of HDFC Small & Midcap Fund to HDFC Small Cap Fund, effective November 9, 2016. The scheme will invest 80%-100% of corpus in equity and related instruments of small-

46 The Finapolis l november 2016

cap and mid-cap companies, of which up to 20% can be invested in mid-cap companies with high risk profile, up to 20% can be invested in equity and related instruments outside target universe with medium to high risk and up to 20% can be invested in debt and money market instruments having low to medium risk. Existing investors can exit the fund without payment of exit load between October 10, 2016 and November 8, 2016. Kotak Mutual Fund revised the benchmark of Kotak Equity Arbitrage Scheme to the Nifty 50 Arbitrage Index, , effective October 1, 2016. Birla Sun Life Mutual Fund announced that Satyabrata Mohanty shall be the designated fund manager for Birla Sun Life Special Situations Fund, effective October 5, 2016. BNP Paribas Mutual Fund announced that the BNP Paribas Bond Fund, effective November 9, 2016, will invest 80%-100% of assets in corporate bonds / securitised debt and up to 20% in other debt instruments such as limited to money market instruments, government securities, T-Bills, etc. Existing investors can exit the scheme without payment of exit load between October 10, 2016 and November 8, 2016. ICICI Prudential Mutual Fund announced a change in the exit load structure for ICICI Prudential Regular Savings Fund, effective October 5, 2016. Investors can redeem or switch-out up to 10% of units within a year from allotment at nil load, while redemptions or switch-outs in excess of 10% will attract 1% exit load. There is no exit load for redemptions or switch-outs after a year of allotment. Canara Robeco Mutual Fund announced a new exit load structure for the Canara Robeco F.O.R.C.E Fund, effective October 3, 2016. Redeemed or switch-outs within a year from allotment will attract 1% exit

load. Transactions after a year of allotment attract nil load. ICICI Prudential Mutual Fund announced that Ihab Dalwai has been appointed fund manager of ICICI Prudential US Bluechip Equity Fund — US portion, ICICI Prudential Global Stable Equity Fund — Overseas investments and ICICI Prudential Indo Asia Equity Fund — Asia Portion. L&T Mutual Fund announced that Vihang Naik will be the new fund manager of L&T Long Term Advantage Fund - I and the L&T Tax Saver Fund, effective October 5, 2016. Rajesh Pherwani has resigned and ceased to be fund manager.

M i ra e A s s e t Mu t u a l Fu n d announced appointment of Ankit Jain as Associate Fund Manager for Mirae Asset Great Consumer Fund, effective October 5. Jain and Neelesh Surana will jointly manage the domestic portion of the scheme, while Bharti Sawant will handle the overseas portion. Taurus Mutual Fund announced changes to Taurus Short Term Income Fund, effective November 16, 2016. The scheme will invest 80%-100% of assets in money market securities and/ or debt securities having residiual maturity of 3 years of less with low to medium risk and invest up to 20% of assets in debt securities with residual maturity greater than 3 years with medium risk profile. Existing investors can exit without payment of exit load between October 17, 2016 and November 15, 2016.

Taurus Mutual Fund announced that redemptions from Taurus Infrastructure Fund, Taurus Banking & Financial Services Fund and Taurus Bonanza Fund will attract nil exit load effective October 10. BNP Paribas Mutual Fund announced that Karthikraj Lakshmanan has been appointed Senior Fund Manager (Equity) effective October 7. Abhijeet Dey shall be Senior Fund Manager - Equities and Saumil Mehta shall be the dedicated fund manager for the AMC’s overseas investments. BNP Paribas Mutual Fund announced that effective October 7, 2016, BNP Paribas Equity Fund & BNP Paribas Long Term Equity Fund will be managed jointly by Karthikraj Lakshmanan and Shreyas Devalkar, while the BNP Paribas Dividend Yield Fund and BNP Paribas Mid Cap Fund will be managed jointly by Shreyas Devalkar and Abhijeet Day. The BNP Paribas Monthly Income Plan and BNP Paribas Dual Advantage Fund Series 1 will be managed jointly by Karthikraj Laksmanan and Shreyash Devalkar (for equity portfolio) and Puneet Pal (for debt portfolio). Birla Sun Life Mutual Fund announced change in exit loads. In case of Birla Sun Life MIP II - Wealth 25 Plan, Birla Sun Life Medium Term Plan, Birla Sun Life Balanced Advantage Fund, Birla Sun Life Balanced 95 Fund and Birla Sun Life Dividend Yield Plus, redemptions or switch-outs on or before 365 days from allotment will attract exit load of 1% of NAV. For Birla Sun Life Dynamic Bond Fund and Birla Sun Life Short Term Opportunities Fund, redemptions or switch-outs on or before 90 days from the date of allotment and 180 days from allotment (respectively) will attract 0.50% of NAV. IDFC Mutual Fund announced the appointment of Daylynn Pinto and Sumit Agarwal as Fund Managers effective October 20. f november 2016 l The Finapolis

NET ASSET VALUE NAV

Scheme

Axis Mutual Fund Axis Banking Debt Fund(G)

1447.82

Axis Children‘s Gift Fund-Compulsory Lock in-Reg(G)

10.92

Axis Children‘s Gift Fund-No Lock in-Reg(G)

10.92

Axis Constant Maturity 10 Year Fund(G)

14.44

Axis Dynamic Bond Fund(G)

16.43

Axis Enhanced Arbitrage Fund-Reg(G)

11.59

Axis Equity Fund(G)

20.44

Axis Equity Saver Reg(G)

10.60

Axis Fixed Income Opp Fund-Reg(G)

12.44

Axis Focused 25 Fund(G)

20.26

Axis Gold ETF

2807.94

Axis Gold Fund(G)

10.27

Axis Income Fund(G)

15.31

Axis Income Saver Fund(G) Axis Liquid Fund(G)

16.93 1746.85

Axis LT Equity Fund(G)

33.47

Axis Midcap Fund(G)

27.39

Axis Short Term Fund(G)

17.25

Axis Treasury Advantage (G) 1762.29

Birla Sunlife Mutual Fund Birla SL Active Debt Multi-Mgr FoF(G)

22.00

Birla SL Advantage Fund(G)

357.73

Birla SL Asset Allocator Multi FoF(G)

24.41

Birla SL Balanced '95 (G)

653.54

Birla SL Balanced Advantage Fund(G)

45.09

Birla SL Banking & Financial Services Fund-Reg(G)

22.52

Birla SL Cash Mgr Fund(G)

380.85

Birla SL Cash Plus(G)

253.21

Birla SL CEF-Global AgriReg(G)

20.79

Birla SL Constant Maturity 10 Year Gilt Fund-Reg(G)

48.23

Scheme

NAV

Birla SL Corp Bond Reg(G) 11.57 Birla SL Dividend Yield 149.84 Plus(G) Birla SL Dynamic Bond 19.99 Fund-DAP(G) Birla SL Dynamic Bond 28.89 Fund-Ret(G) Birla SL Enhanced Arbitrage 16.46 Fund(G) Birla SL Equity Fund(G) 602.16 Birla SL Equity Savings 11.92 Fund-Reg(G) Birla SL Financial Planning 18.95 FOF Aggressive Plan(G) Birla SL Financial Planning 15.99 FOF Conservative Plan(G) Birla SL Financial Planning 17.15 FOF Prudent Plan(G) Birla SL FRF-Long Term 192.77 Plan(G) Birla SL FRF-Short Term 210.12 Plan(G) Birla SL Frontline Equity 184.01 (Trigger Facility)(G) Birla SL Frontline Equity (G) 184.01 Birla SL Gilt Plus-PF(G) 45.05 Birla SL Gilt Plus-PF(G)-In45.05 stant Gain Birla SL Global Commodities 11.80 Fund(G) Birla SL Global Real Estate 17.78 Fund(G) Birla SL Gold ETF 2885.08 Birla SL Gold Fund(G) 9.92 Birla SL G-Sec-LT(G) 48.25 Birla SL Income Plus(G) 72.54 Birla SL Index Fund(G) 85.41 Birla SL India GenNext (G) 65.24 Birla SL India Opportunities 119.74 Fund(G) Birla SL India Reforms (G) 16.54 Birla SL Infrastructure (G) 28.87 Birla SL Intl. Equity A(G) 15.38 Birla SL Intl. Equity B(G) 15.48 Birla SL Medium Term (G) 19.88

Source: karvyvalue.com; NAVs as on October 21, 2016

48 The Finapolis l november 2016

Scheme Birla SL Mfg. Equity Reg(G) Birla SL Midcap Fund(G) Birla SL MIP II-Savings 5(G) Birla SL MIP II-Wealth 25(G) Birla SL MIP(G) Birla SL MNC Fund(G) Birla SL Monthly Income(G) Birla SL New Millennium (G) Birla SL Nifty ETF Birla SL Pure Value Fund(G) Birla SL Savings Fund(DAP) Birla SL Savings Fund(G) Birla SL Sensex ETF Birla SL Short Term Fund(G) Birla SL Small & Midcap (G) Birla SL Special Situations(G) Birla SL ST Opportunities (G) Birla SL Tax Plan(G) Birla SL Tax Relief '96(G) Birla SL Tax Relief'96 Fund(ELSS U/S 80C of IT ACT)-(G)

NAV 12.01 263.09 31.04 34.99 43.38 618.05 61.49 35.17 91.71 48.28 176.81 308.92 281.25 60.43 32.42 21.31 26.55 31.14 24.79 24.79

BOI AXA Mutual Fund

Scheme Canara Rob Equity Diver Fund-Reg(G)

NAV 100.64

Canara Rob Equity Tax Saver Fund-Reg(G)

49.83

Canara Rob F.O.R.C.E. Reg(G)

29.62

Canara Rob Gilt PGS-Reg(G)

44.70

Canara Rob Gold ETF

2871.01

Canara Rob Gold Saving Fund-Reg(G)

9.36

Canara Rob Income-Reg(G)

33.73

Canara Rob InDiGo Reg(G)

14.74

Canara Rob Infrastructure Fund-Reg(G)

41.38

Canara Rob Large Cap+ Fund-Reg(G)

19.22

Canara Rob Liquid Fund(G)

1912.01

Canara Rob Medium Term Opp Fund-Reg(G)

12.89

Canara Rob MIP-Reg(G)

49.35

Canara Rob Savings Plus Fund-Reg(G)

24.73

Canara Rob Short Term Fund-Reg(G)

17.90

BOI AXA Equity Debt Rebalancer Fund-Reg(G)

13.58

Canara Rob Treasury Adv Fund-Reg(G)

BOI AXA Equity Fund-Reg(G)

30.24

Canara Rob Yield Adv Fund-Reg(G)

2395.10 14.93

BOI AXA Liquid Fund-Reg(G) 1813.23

DHFL Pramerica Mutual Fund

BOI AXA Mfg & Infra Fund(G)

13.00

11.64

BOI AXA Mid Cap Equity & Debt Fund-Reg(G)

10.84

DHFL Pramerica Arbitrage Fund-Reg(G)

60.04

BOI AXA Regular Return Fund-Reg(G)

18.65

DHFL Pramerica Balanced Advantage Fund(G) DHFL Pramerica Banking & PSU Debt Fund(G)

13.80

DHFL Pramerica Credit Opp Fund-Reg(G)

12.47

DHFL Pramerica Diversified Equity Fund-Reg(G)

11.08

BOI AXA ST Income Reg(G)

17.29

BOI AXA Tax Adv Reg(G)

41.97

BOI AXA Treasury Adv Fund-Reg(G)

1881.52

Canara Robeco Mutual Fund Canara Rob Balance Scheme-Reg(G)

127.68

DHFL Pramerica Dynamic Bond Fund(G)

1498.06

18.26

DHFL Pramerica Equity Income Fund(G)

27.26

Canara Rob Dynamic Bond Fund-Reg(G)

DHFL Pramerica Gilt Fund(G)

17.84

Canara Rob Emerg Equities Fund-Reg(G)

72.88

DHFL Pramerica Global Agribusiness Offshore Fund(G)

13.30

Scheme

NAV

Scheme

DHFL Pramerica Income Advantage Fund(G)

19.41

DHFL Pramerica Inflation Indexed Bond Fund-Reg(G)

12.09

DHFL Pramerica Insta Cash Plus Fund(G)

204.76

DHFL Pramerica Large Cap(G)

135.59

DHFL Pramerica Low Duration Fund(G)

21.47

DHFL Pramerica Medium Term Income Fund-Reg(G)

13.53

DHFL Pramerica Midcap Opp Fund-Reg(G)

17.30

DHFL Pramerica Premier Bond Fund(G)

25.51

DHFL Pramerica Short Maturity Fund(G)

28.86

DHFL Pramerica ST FRF(G)

17.46

DHFL Pramerica Tax Plan(G)

25.09

DHFL Pramerica Tax Savings Fund-Reg(G)

11.53

DHFL Pramerica Top Euroland Offshore Fund(G)

11.47

DSPBR Natural Res & New 25.98 Energy Fund-Reg(G) DSPBR Opportunities Reg(G) 180.07 DSPBR Short Term Reg(G) 27.20 DSPBR Small & Mid Cap 45.95 Fund-Reg(G) DSPBR Strategic Bond (G) 1930.55 DSPBR Tax Saver Reg(G) 39.08 DSPBR Technology.com 51.08 Fund-Reg(G) DSPBR Top 100 Equity Fund- 177.45 Reg(G) DSPBR Treasury Bill Reg(G) 31.29 DSPBR Ultra Short Term 11.47 Fund-Reg(G) DSPBR US Flexible Equity 17.60 Fund-Reg(G) DSPBR World Agriculture 13.98 Fund-Reg(G) DSPBR World Energy Reg(G) 12.48 DSPBR World Gold Reg(G) 13.82 DSPBR World Mining Reg(G) 6.51

DHFL Pramerica Ultra ST(G)

19.10

DSP Black Rock Mutual Fund DSPBR Balanced Reg(G)

128.81

DSPBR Banking & PSU Debt Fund(G)

13.48

DSPBR Bond Fund(G)

50.60

DSPBR Constant Maturity 10 Yr G-Sec Fund(G)

12.71

DSPBR Dynamic Asset Allocation Fund-Reg(G)

13.28

DSPBR Equity Fund-Reg(G)

31.57

DSPBR Equity Savings Fund-Reg(G)

11.16

DSPBR Focus 25 Reg(G)

NAV

Edelweiss Mutual Fund Edelweiss Absolute Return Fund(G)

19.26

Edelweiss Arbitrage Reg(G)

11.88

Edelweiss Bond Fund(G)

1886.14

Edelweiss EDGE Top 100 Fund-A(G)

27.66

Edelweiss ELSS Fund(G)

39.25

Edelweiss Emerging Leaders Fund(G)

25.90

Edelweiss Equity Savings Advantage Fund(G)

16.99

Edelweiss ETF - Nifty 50

8945.98

Edelweiss ETF - Nifty Bank

1983.34

19.83

Edelweiss Liquid Fund(G)

1515.38

DSPBR G Sec Fund-Reg(G)

52.02

21.28

DSPBR Global Allocation Fund-Reg(G)

10.74

Edelweiss Prudent Advantage Fund-A(G)

DSPBR Income Opportunities Fund-Reg(G)

26.08

DSPBR India T.I.G.E.R Reg(G)

77.94

Edelweiss Prudent Advantage Fund-C(G)

Escorts Mutual Fund Escorts Balanced Fund(G) Escorts Gilt(G)

113.89 33.13

DSPBR Liquidity Fund(G)

2253.22

DSPBR Micro-Cap Reg(G)

54.26

Escorts Growth(G)

DSPBR MIP Fund-Reg(G)

33.67

Escorts High Yield Eq(G)

32.19

2122.54

Escorts Income Bond(G)

47.93

Escorts Income Plan(G)

53.20

DSPBR Money Manager Fund-Reg(G)

143.03

Scheme Escorts Infrastructure (G)

NAV 7.38

Escorts Leading Sectors (G)

26.64

Escorts Liquid Plan(G)

24.67

Escorts Opportunities (G)

46.63

Escorts Power & Energy (G)

21.10

Escorts Short Term Debt(G)

24.55

Escorts Tax(G)

75.38

Franklin Templeton MF Franklin Asian Equity (G)

17.80

Franklin Build India Fund(G)

33.57

Franklin India Balanced (G)

101.89

Franklin India Banking & PSU Debt Fund(G)

12.49

Franklin India Bluechip (G)

389.98

Scheme

NAV

Franklin India Low Duration Fund(G)

17.77

Franklin India MIP(G) Franklin India Multi-Asset Solution Fund(G)

49.36 11.18

Franklin India Opportunities Fund(G)

62.95

Franklin India Pension Plan(G)

111.47

Franklin India Prima Fund(G) 810.47 Franklin India Prima Plus (G) 495.70 Franklin India Savings Plus Fund(G)

28.77

Franklin India Smaller Cos Fund(G)

49.11

23.98

Franklin India ST Income Plan(G)

3253.47

Franklin India CMA(G) Franklin India Corporate Bond Opportunities Fund(G)

16.07

Franklin India Taxshield(G)

473.07

54.51

Franklin India TMA-Unclaimed Div(G)

10.08

Franklin India Dynamic Accrual Fund(G)

68.40

Franklin India TMA-Unclaimed Redemption(G)

10.08

Franklin India Dynamic PE Ratio FOFs(G)

Franklin Infotech Fund(G)

113.52

Franklin India Feeder Franklin European Growth Fund(G)

8.79

Franklin India Feeder Franklin U.S. Opportunities Fund(G)

20.54

Franklin India Flexi Cap (G)

67.43

Franklin India G-SecComp(G)

54.54

Franklin India G-Sec-LTP(G)

38.35

Franklin India G-Sec-PF(G)

23.95

Franklin India High Growth Cos Fund(G)

HDFC Mutual Fund HDFC Arbitrage-WP(G)

19.20

HDFC Balanced Fund(G)

125.01

HDFC Banking and PSU Debt Fund-Reg(G)

12.85

HDFC Capital Builder (G)

231.24

HDFC Cash Mgmt-Call(G)

2437.77

HDFC Cash Mgmt-Savings(G) 3286.48 HDFC Cash Mgmt-TA Plan(G)

33.38

32.56

HDFC Children's Gift Fund-Investment

96.15

Franklin India IBA-A(G)

54.81

96.15

Franklin India Income Opportunities Fund(G)

18.32

HDFC Children's Gift Fund-Investment(Lock in)

41.29

Franklin India Index FundNSE Nifty(G)

68.98

HDFC Children's Gift Fund-Savings

41.29

Franklin India Life Stage FOFs-20(G)

70.50

HDFC Children's Gift Fund-Savings(Lock In) HDFC Core & Satellite (G)

66.45

Franklin India Life Stage FOFs-30(G)

50.69

HDFC Corporate Debt Opportunities Fund-(G)

13.13

Franklin India Life Stage FOFs-40(G)

40.70

HDFC Dynamic PE Ratio FOF-Reg(G)

15.66

Franklin India Life Stage FOFs-50(G)

30.39

Franklin India Life Stage FOFs-50s +FR(G)

31.86

HDFC Equity Fund(G)

515.08

HDFC Equity Savings (G)

30.64

HDFC FRIF-Long Term Plan(G)

27.96

Source: karvyvalue.com; NAVs as on October 21, 2016

november 2016 l The Finapolis

Scheme

NAV

Scheme

NAV

HDFC FRIF-Short Term Plan(G)

27.40

ICICI Mutual Fund

HDFC Gilt-Long Term Plan(G)

33.62

ICICI Pru Advisor Series-Dynamic Accrual Plan(G)

24.91

HDFC Gilt-Short Term Plan(G)

26.57

ICICI Pru Balanced Advantage Fund(G)

29.18

2809.43

ICICI Pru Balanced Fund(G)

107.20

HDFC Gold Fund(G)

10.20

46.98

HDFC Growth Fund(G)

150.71

ICICI Pru Banking & Fin Serv Fund(G)

HDFC High Interest Fund-Dynamic Plan(G)

56.03

ICICI Pru Banking & PSU Debt Fund(G)

18.20

HDFC High Interest Fund-Dynamic Plan(G)54EA

56.03

ICICI Pru Cautious(G)

29.33

56.03

ICICI Pru Child Care Plan-Gift Plan

118.20

HDFC High Interest Fund-Dynamic Plan(G)54EB

31.83

ICICI Pru Child Care PlanStudy Plan

62.47

HDFC High Interest-STP(G) HDFC Income Fund(G)

37.22

13.00

HDFC Index Fund-Nifty(G)

77.37

ICICI Pru Constant Maturity Gilt Fund(G)

HDFC Index Fund-Nifty(G) (Post Addendum)

77.37

ICICI Pru Corporate Bond Fund(G)

24.60

HDFC Index Fund-Sensex Plus(G)

379.41

ICICI Pru Dividend Yield Equity Fund(G)

14.26

HDFC Index Fund-Sensex Plus(G)(Post Addendum)

379.41

ICICI Pru Dynamic Bond Fund(G)

18.35

HDFC Index Fund-Sensex(G)

244.21

HDFC Index Fund-Sensex(G) (Post Addendum)

244.21

HDFC Infrastructure Fund(G)

17.20

HDFC Large Cap FundReg(G)

92.98

HDFC Liquid Fund(G)

3110.37

HDFC Long Term Adv (G)

Scheme

NAV

Scheme

NAV

52.78

IDBI Nifty Index Fund(G) IDBI Nifty Junior Index (G) IDBI Prudence Fund(G) IDBI ST Bond(G) IDBI Ultra ST(G)

16.26 18.11

ICICI Pru Exports & Other Services Fund(G)

49.49

275.26

ICICI Pru Flexible Income Plan(G)

301.06

HDFC Medium Term Opportunities Fund(G)

17.60

ICICI Pru FMCG Fund(G)

176.45

HDFC Mid-Cap Opp Fund(G)

46.81

ICICI Pru Focused BlueChip Equity Fund(G)

32.51

HDFC MIP-LTP(G)

40.29

ICICI Pru Gilt-Invest-PF(G)

32.43

ICICI Pru Long Term Savings Plan(G) ICICI Pru LT Equity Fund (Tax Saving)(G) ICICI Pru Midcap Fund(G) ICICI Pru Midcap Select iWIN ETF ICICI Pru MIP 25(G) ICICI Pru MIP(G) ICICI Pru Moderate(G) ICICI Pru Money Market (G) ICICI Pru Multicap Fund(G) ICICI Pru Nifty 100 iWIN ETF ICICI Pru Nifty Index Fund(G) ICICI Pru Nifty iWIN ETF ICICI Pru Nifty Next 50 Index Fund(G) ICICI Pru NV20 iWIN ETF ICICI Pru Regular Gold Savings Fund(G) ICICI Pru Regular Income (G) ICICI Pru Regular Savings(G) ICICI Pru Savings Fund(G) ICICI Pru Select Large Cap (G) ICICI Pru Sensex iWIN ETF ICICI Pru Short Term Gilt (G) ICICI Pru Short Term Plan(G) ICICI Pru Technology Fund(G) ICICI Pru Top 100 Fund(G) ICICI Pru Ultra Short Term Plan(G) ICICI Pru US Bluechip Equity Fund(G) ICICI Pru Value Discovery (G) ICICI Pru Very Aggressive(G)

HDFC MIP-STP(G)

27.58

ICICI Pru Gilt-Treasury-PF(G)

23.36

IDBI Mutual Fund

HDFC Multiple Yield Fund 2005(G)

28.19

ICICI Pru Global Stable Equity Fund(G)

12.80

HDFC Nifty ETF

878.51

ICICI Pru Gold iWIN ETF

285.03

46.32

ICICI Pru Income Opportunities Fund(G)

22.48

IDBI Debt Opp Fund(G) 12.72 IDBI Diversified Equity (G) 18.26 IDBI Dynamic Bond(G) 13.97 IDBI Equity Advantage 22.63 Fund-Reg(G) IDBI Gilt Fund(G) 13.97 IDBI Gold ETF 2887.72 IDBI Gold Fund(G) 9.13 IDBI India Top 100 Equity (G) 20.89 IDBI Liquid Fund(G) 1685.76 IDBI MIP(G) 15.30

HDFC Gold ETF

HDFC Premier Multi-Cap (G)

ICICI Pru Dynamic Plan(G)

210.37

ICICI Pru Equity Income (G)

11.67

ICICI Pru Equity Income Fund-Reg(AEP) ICICI Pru Equity-Arbitrage(G)

21.19

HDFC Prudence Fund(G)

432.36

HDFC Retirement Savings Fund-Equity Plan-Reg(G)

13.66

ICICI Pru Income(G)

51.01

11.35

ICICI Pru Indo Asia Equity Fund(G)

23.07

HDFC Retirement Savings Fund-Hybrid-Debt PlanReg(G)

ICICI Pru Infrastructure (G)

41.95

HDFC Retirement Savings Fund-Hybrid-Equity PlanReg(G)

13.23

ICICI Pru Liquid Plan(G)

233.36

ICICI Pru Long Term Gilt (G)

55.87

ICICI Pru Long Term Plan(G)

19.73

Source: karvyvalue.com; NAVs as on October 21, 2016

50 The Finapolis l november 2016

309.49 81.04 58.39 35.23 43.56 43.18 218.03 240.39 93.43 83.44 88.29 20.76 38.01 10.43 15.85 16.83 236.35 25.63 289.75 40.70 33.06 39.46 270.60 16.22 18.73 126.86 58.61

15.94 1671.17

Kotak Mutual Fund Kotak 50(G) Kotak Asset Allocator (G) Kotak Balance(G) Kotak Banking and PSU Debt Fund(G) Kotak Banking ETF Kotak Bond Fund - Plan A(G) Kotak Bond-STP(G) Kotak Classic Equity Scheme(G) Kotak Corporate Bond (G) Kotak Emerging Equity Scheme(G) Kotak Equity Arbitrage Scheme(G) Kotak Equity Savings (G) Kotak Flexi Debt Plan A(G) Kotak Floater-ST(G) Kotak Gilt-InvestPF&Trust(G) Kotak Gilt-Invest-Reg(G) Kotak Global Emerging Mkt Fund(G) Kotak GOLD ETF Kotak Gold Fund(G) Kotak Income Opp Fund(G) Kotak Infra & Eco Reform (G) Kotak Liquid Fund - Plan (G) Kotak Low Duration Fund(G) Kotak Medium Term Fund(G) Kotak Midcap Scheme(G) Kotak MIP(G) Kotak Multi Asset Allocation Fund(G) Kotak Nifty ETF Kotak Opportunities Fund(G) Kotak PSU Bank ETF Kotak Select Focus Fund(G) Kotak Sensex ETF Kotak Tax Saver Scheme(G) Kotak Treasury Adv Fund(G)

189.21 67.29 21.37 35.80 200.23 46.05 29.92 38.63 2068.67 32.46 22.84 11.78 20.51 2588.02 57.00 55.71 13.75 275.20 13.27 17.41 17.83 3197.88 1918.66 13.15 65.03 27.48 15.98 879.09 95.81 327.09 26.91 288.43 35.11 25.27

Scheme

NAV

Scheme

Kotak US Equity Fund(G) Kotak World Gold Fund(G)

12.23 10.51

LIC MF ETF-Nifty 50 87.66 LIC MF ETF-Sensex 284.60 LIC MF Growth Fund(G) 21.82 LIC MF G-Sec LT ETF-(G) 16.30 LIC MF G-Sec-PF(G) 20.31 LIC MF G-Sec-Reg(G) 35.16 LIC MF Income Plus(G) 19.94 LIC MF Index Fund-Nifty (G) 48.21 LIC MF Index Fund-Sensex 52.44 plan(G) LIC MF Infra Fund(G) 12.10 LIC MF Liquid(G) 2856.03 LIC MF Midcap Fund-Reg(G) 11.94 LIC MF MIP(G) 48.96 LIC MF Savings Plus(G) 24.19 LIC MF Tax Plan(G) 52.96

L&T Mutual Fund L&T Arbitrage Opp Reg(G)

11.76

L&T Banking and PSU Debt Fund-Reg(G)

14.07

L&T Business Cycle FundReg(G)

13.62

L&T Cash Fund-Reg(G)

1248.66

L&T Dynamic Equity FundReg(G)

20.73

L&T Emerging Businesses Fund-Reg(G)

19.10

L&T Equity Fund-Reg(G)

67.66

L&T Equity Savings Reg(G)

15.51

L&T Flexi Bond Fund-Reg(G)

17.43

L&T FRF-Reg(G)

15.47

L&T Gilt Fund-Reg(G)

41.02

L&T Income Opportunities Fund(G)

18.04

L&T India Large Cap Reg(G)

22.17

L&T India Prudence Reg(G)

21.95

L&T India Spl.Situations Fund-Reg(G)

38.86

L&T India Value Fund-Reg(G)

29.91

L&T Infrastructure Reg(G)

12.69

L&T Liquid Fund(G)

2161.83

L&T Midcap Fund-Reg(G)

107.93

L&T MIP-Reg(G)

30.68

L&T Resurgent India Corp Bond Fund-Reg(G)

11.90

L&T Short Term Opportunities Fund-Reg(G)

15.24

L&T ST Income Fund-Reg(G)

16.75

L&T Tax Advt Fund-Reg(G)

43.43

L&T Tax Saver Fund(G)

31.20

L&T Triple Ace Bond Reg(G)

41.32

L&T Ultra Short Term (G)

25.76

LIC Nomura Mutual Fund

NAV

Mirae Asset Management Mirae Asset Cash Manage- 1653.86 ment-Reg(G) Mirae Asset China Advan14.63 tage-Reg(G) Mirae Asset Emerging 39.42 BlueChip-Reg(G) Mirae Asset Great Consumer 24.73 Fund(G) Mirae Asset India Opportuni- 37.58 ties Fund-Reg(G) Mirae Asset Prudence Fund- 11.36 Reg(G) Mirae Asset Savings Fund- 1376.08 Reg Savings Plan(G) Mirae Asset Tax Saver Fund- 12.51 Reg(G)

Motilal Oswal Mutual Fund

Scheme

NAV

Principal Mutual Fund

Scheme

NAV

Reliance Diver Power Sector Fund(G)

81.68

Reliance Dynamic Bond(G)

21.95

Reliance Equity Opp Fund(G)

76.24

Principal Arbitrage Fund(G)

10.32

Principal Asset Alloc FOF Scheme-Aggr(G)

11.53

Principal Asset Alloc FOF Scheme-Cons(G)

10.95

Reliance Equity Savings (G)

10.97

Principal Asset Alloc FOF Scheme-Mod(G)

11.03

Reliance Focused Large Cap Fund(G)

25.72

Principal Balanced Fund(G)

59.53

Reliance FRF ST(G)

25.10

Reliance Gilt Securities (G)

21.19

Reliance Gilt Securities-PF-ACAPO(G)

21.19

Principal Bank CD(G)

2020.81

Principal Cash Management 1533.47 Fund(G) Principal Credit Opp Fund(G) 2452.79

Reliance Gold Savings (G)

13.18

Reliance Growth Fund(G)

935.26

Reliance Income(G)

52.40

Principal Debt Savings Fund(G)

27.87

Principal Debt Savings Fund(G-AEMP)

27.87

Reliance Index Fund - Nifty Plan(G)

14.50

Principal Debt Savings Fund(G-AEQP)

27.87

Reliance Index Fund Sensex Plan(G)

13.79

Principal Dividend Yield (G)

40.41

Reliance Japan Equity (G)

10.60

Reliance Liquid-Cash(G)

2482.08 2373.54

Principal Dynamic Bond (G)

27.55

Principal Emerging Bluechip Fund(G)

84.38

Reliance Liquidity(G)

Principal Equity Savings (G)

31.27 22.97

Reliance Media & Entertainment Fund(G)

62.83

Principal Global Opportunities Fund(G)

Reliance Medium Term(G)

33.10

Principal Govt Sec Fund(G)

32.51

40.25

Principal Growth Fund(G)

112.40

Reliance Mid & Small Cap Fund(G)

Principal Index Fund-Midcap-Reg(G)

17.63

Reliance MIP(G)

37.66

Principal Index Fund-Nifty(G)

60.13

Reliance NRI Equity Fund(G)

Principal Large Cap Fund(G)

51.72

Principal Low Duration (G)

2502.49

Reliance Liquid-Treasury (G) 3842.10

Reliance Money Manager(G) 2175.89 73.61

Reliance Pharma Fund(G)

146.55

Reliance Quant Plus Fund(G)

20.82

MOSt Focused 25 FundReg(G)

17.57

Principal Personal Tax saver Fund

170.48

Reliance Reg Savings Fund-Balanced Plan(G)

45.35

MOSt Focused Dynamic Equity Fund-Reg(G)

10.09

Principal Retail Money Mgr(G)

1792.11

Reliance Reg Savings FundDebt Plan(G)

21.96

MOSt Focused Long Term Fund-Reg(G)

13.66

Principal Smart Equity (G)

Reliance Reg Savings Fund-Equity Plan(G)

59.00

MOSt Focused Midcap 30 Fund-Reg(G)

24.01

MOSt Focused Multicap 35 Fund-Reg(G)

20.72

Reliance Mutual Fund

83.86

Reliance Arbitrage Advantage Fund(G)

16.35

MOSt Shares M50 MOSt Shares Midcap 100 ETF

16.75

Reliance Banking & PSU Debt Fund(G)

11.47

LIC MF Balanced Fund(G)

89.35

LIC MF Banking & Financial Services Fund-Reg(G)

10.41

LIC MF Bond(G)

43.85

LIC MF Children(G)

16.42

LIC MF Equity Fund(G)

40.65

MOSt Shares NASDAQ-100 ETF

LIC MF ETF-Nifty 100

90.15

MOSt Ultra ST Bond Fund(G)

320.57 12.39

18.05

Principal ST Income Fund(G)

27.99

Principal Tax Saving Fund

165.88

Reliance Banking Fund(G) 204.10 Reliance Corporate Bond (G) 12.74

Reliance Retirement Fund-Income Generation(G)

11.47

Reliance Retirement FundWealth Creation(G)

10.91

Reliance Small Cap Fund(G)

31.91

Reliance STF(G)

30.03

Reliance Tax Saver (ELSS) (G)

51.71

Reliance Top 200 Fund(G)

26.18

Reliance US Equity Opp (G)

10.31

Source: karvyvalue.com; NAVs as on October 21, 2016

november 2016 l The Finapolis

Scheme Reliance Vision Fund(G)

NAV 469.54

Sahara Mutual Fund Sahara Banking & Financial Services Fund(G)

49.31

Sahara Growth Fund(G)

126.06

Sahara Infra Fund-Fixed Pricing(G)

22.54

Sahara Infra Fund-Variable Pricing(G)

25.03

Sahara Liquid-Fixed Pricing(G)

2741.97

Sahara Liquid-Variable Pricing(G)

2787.96

Sahara Midcap Fund(G)

68.22

Sahara Power & Natural Resources Fund(G)

17.36

Sahara R.E.A.L Fund(G)

17.80

Sahara Star Value Fund(G)

21.55

Sahara Super 20 Fund(G)

17.67

Sahara Tax Gain Fund(G)

65.09

Sahara Wealth Plus FundFixed Pricing(G)

41.09

Sahara Wealth Plus Fund-Variable Pricing(G)

45.82

SBI Mutual Fund SBI Arbitrage Opp Reg(G) SBI Banking & Financial Services Fund-Reg(G) SBI BlueChip Fund-Reg(G) SBI Contra Fund-Reg(G) SBI Corporate Bond Reg(G) SBI Dynamic Asset Allocation Fund-Reg(G) SBI Dynamic Bond(G) SBI Emerging Businesses Fund-Reg(G) SBI Equity Savings Fund(G) SBI ETF 10 Year Gilt SBI ETF BSE 100 SBI FMCG Fund-Reg(G) SBI Gold-Reg(G) SBI Infrastructure Reg(G) SBI IT Fund-Reg(G) SBI Magnum Balanced Fund-Reg(G) SBI Magnum Children Benefit Plan

20.90 12.15 32.57 97.93 25.33 10.88 19.80 106.34 11.36 155.52 92.03 85.13 9.80 13.21 45.76 108.44 44.66

Scheme

NAV

Scheme

NAV

Scheme

NAV

SBI Magnum Comma Reg(G) SBI Magnum Equity Reg(G) SBI Magnum Gilt-LTP-Reg(G) SBI Magnum Gilt-STP(G) SBI Magnum Global Fund 94-Reg(G) SBI Magnum Income(G) SBI Magnum InstaCash-Cash(G) SBI Magnum InstaCash-Liquid Floater(G) SBI Magnum MidCap Reg(G) SBI Magnum MIP(G) SBI Magnum MIP-Floater Plan(G) SBI Magnum Multicap FundReg(G) SBI Magnum Multiplier Fund-Reg(G) SBI Magnum TaxGain'93-Reg(G) SBI Nifty Index Fund-Reg(G) SBI Pharma Fund-Reg(G) SBI Premier Liquid Fund(G) SBI PSU Fund-Reg(G) SBI Regular Savings Fund(G) SBI Savings Fund-Reg(G) SBI Short Term Debt Fund(G) SBI Small & Midcap Reg(G) SBI Treasury Advantage Fund-Reg(G) SBI Ultra Short Term Debt Fund(G) SBI-ETF Gold SBI-ETF Nifty 50 SBI-ETF Nifty Bank SBI-ETF Nifty Next 50 SBI-ETF Sensex

31.49 84.47 35.32 33.26 148.61

Sundaram Flexible-STP(G)

24.90

UTI Banking Sector Fund(G)

78.07

Sundaram Gilt Fund(G)

26.54

UTI Bluechip Flexicap (G)

26.82

Sundaram Global Advt(G)

14.21

UTI Bond Fund(G)

47.95

Sundaram Income Plus(G)

23.14

UTI CC Balanced Plan

20.28

Sundaram Infra Advantage Fund(G)

27.69

UTI CC Balanced PlanScholarship

20.28

Sundaram MIP-Aggr Plan(G)

17.55

UTI CCP Advantage Fund(G)

29.67

Sundaram MIP-Cons Plan(G)

15.18

UTI CRTS 1981(G)

317.69

Sundaram Money Reg(G)

33.23

UTI Dividend Yield Fund(G)

52.50

Sundaram Rural India (G)

35.32

UTI Dynamic Bond Reg(G)

18.27

72.17 35.24 23.45

Sundaram S.M.I.L.E Fund(G)

83.65

UTI Equity Fund(G)

111.17

Sundaram Select Debt-STAP(G)

27.37

UTI FRF-STP(G)

Sundaram Select Focus(G)

129.61

38.71

Sundaram Select Midcap(G) 429.64

2660.79

180.10 122.62 73.78 143.90 2475.07 10.47 26.92 24.61 18.33 38.46 1754.95

21.62

14.36

UTI India LifeStyle Fund(G)

21.25

32.55

UTI Infrastructure Fund(G)

46.54

UTI LT Equity Fund (Tax Saving)(G)

71.50

UTI Mahila Unit(G)

33.29

UTI Mastershare(G)

97.18

UTI Medium Term FundReg(G)

11.58

UTI Mid Cap Fund(G)

94.57

UTI MIS Adv Plan(G)

35.23

UTI MIS(G)

32.38

UTI MNC Fund(G)

159.38

Sundaram Ultra Short Term Fund-Reg(G) Sundaram-Select Thematic Funds-Fin Serv Opp(G)

Taurus Mutual Fund

Sundaram Banking & PSU Debt Fund-Reg(G)

11.36

Sundaram Bond Saver(G)

45.12

Sundaram Equity Multiplier(G)

25.74

UTI Mutual Fund

Sundaram Equity Plus(G)

13.95

Sundaram Flexible-FIP(G)

22.58

UTI Balanced Fund(G) UTI Banking & PSU Debt Fund-Reg(G)

Sundaram Mutual Fund

The Finapolis l november 2016

2766.00 22.49

73.01

2829.57 88.32 200.25 240.93 296.60

UTI Gold ETF

34.80

UTI Income Opp Fund(G)

86.45

Sundaram Balanced Fund(G)

2036.32

UTI Gilt Adv-LTP(G)

2571.58

UTI G-Sec-STP(G)

Sundaram Tax Saver(G)

Taurus Banking & Fin Serv 18.11 Fund-Reg(G) Taurus Bonanza Reg(G) 65.32 Taurus Discovery Reg(G) 35.67 Taurus Dynamic Income 15.35 Fund-Reg(G) Taurus Ethical Fund-Reg(G) 42.39 Taurus Infrastructure Reg(G) 19.77 Taurus Investor Education 10.00 Pool - Unclaimed Div(G) Taurus Investor Education 10.00 Pool - Unclaimed Redemption(G) Taurus Liquid Fund(G) 1709.50 Taurus Nifty Index Reg(G) 16.18 Taurus ST Income-Reg(G) 2781.02 Taurus Star Share Reg(G) 97.17 Taurus Tax Shield Reg(G) 59.51 Taurus Ultra ST Bond (G) 1909.14 Taurus Unclaimed Div(G) 11.17 Taurus Unclaimed 11.17 Redemption(G)

Source: karvyvalue.com; NAVs as on October 21, 2016

38.68 3484.88

145.03 12.86

UTI Multi Cap Fund(G)

11.67

UTI Nifty Index Fund(G)

55.39

UTI Opportunities Fund(G)

50.80

UTI Pharma & Healthcare Fund(G)

94.48

UTI Retirement Benefit Pension

22.77

UTI SPrEAD(G)

21.57

UTI ST Income Fund(G)

19.28

UTI Top 100 Fund(G)

53.27

UTI Transportation & Logistics Fund(G)

101.31

UTI ULIP(G)

21.77

UTI Wealth Builder Fund(G)

30.00

UTI-Nifty ETF

884.68

UTI-Sensex ETF

285.19

MUTUAL FUND ANALYSIS DSP BlackRock Small and Mid Cap Fund Growth Category: Small/Mid-Cap

lthough portfolio manager Vinit Sambre comanaged this fund since July 2012, he took its independent charge in July 2015 after its erstwhile manager Apoorva Shah relinquished its management responsibility and moved to the fund house’s offshore division. Shah is a seasoned manager, and the fund built an impressive track record under him (March 2008 to June 2015). Sambre is a competent analyst and also the dedicated small/ mid-cap specialist with the fund house. He has reasonable portfolio management experience under his belt, too. Thus, the change is not as sharp a break as it seems. The fund’s strategy allows Sambre to play to his strength, which makes him an

Rating: Silver

Analyst: Himanshu Srivastava

apt replacement for Shah, in our opinion. He is backed by a highcalibre team, and which boosts our conviction. NAV 45.94

Return (%) 1 Year

2 Years

3 Years

23.8

23.3

37.8

While the fund’s broader investment strategy remains intact, Sambre has a different investment style than Shah. For instance, factors such as market sentiment, news flow, and momentum formed the crux of Shah’s investment approach, which often led to aboveaverage turnover. Sambre, on the other hand, plies his signature style of buying into growth-oriented quality stocks and staying invested for the long

haul. This we believe will result in the fund’s turnover ratio coming down. Sambre focusses on longterm strength of the company, which reduces issue-specific risks associated with small/ mid-cap funds. His relatively pure take on small/mid-caps versus the category norm is a positive, in our opinion. Expectedly, while the fund is likely to gain more than a typical peer in up markets, it also runs the risk of faring worse in down markets. Sambre is a capable manager and his experience in running similar strategies is noteworthy. Under him, the fund has the wherewithal to outperform its benchmark index and category peers over the long term. Hence, we retain Morningstar Analyst Rating of Silver.

UTI Dynamic Bond Growth Category: Intermediate Bond

he fund’s appeal hinges heavily on the experience of its lead manager and the team’s consistent application of the investment process. Amandeep Singh Chopra has over 22 years of experience with UTI, and has worked across various functions within the AMC. He heads the fixed-income desk at UTI and has been managing this fund since 2012. Chopra is supported by two other portfolio managers with an average experience of around eight years at UTI. The three decision-makers are supported by a team of two credit analysts and an economist. We have conviction on the manager and the expertise that he brings, but are wary about the lack of experience on the analyst team. The investment strategy is based primarily on a top-down macro ap-

Rating: Neutral

Analyst: Kavitha Krishnan

proach, wherein duration views are based on interest-rate directional movements. NAV 18.27

Return (%) 1 Year

2 Years

3 Years

10.6

11.2

Allocation towards government securities, corporate bonds, and SDLs, on the other hand, are based on their relative spreads. The manager aims to invest in the most liquid papers with a view to minimize portfolio risks. The fund is run with a slightly conservative stance compared with peers. The process includes risk-management procedures that dissuade managers from chasing momentum or taking aggressive duration calls. The risk team is involved at every stage of the process, including the approval of new issuers and

setting counterparty limits. While this approach could lead to a slowdown in the overall execution, we think that it helps the fund navigate trickier markets and post consistent returns across market cycles. The success of the fund depends largely on the team’s ability to allocate between duration and credits, take the right macro calls, and position themselves across yield curves. The execution of the strategy is reflected in the positive showing in performance. We think that strategy will continue to be run as-is, with a neutral stance in terms of duration. While the team works well, the lack of an experienced analyst team and a key-man risk in the person of Chopra lead us to initiate coverage with a Morningstar Analyst Rating of Neutral on this strategy.

november 2016 l The Finapolis

commodities LME Aluminium 3 Month ($/t) Close October 24, 2016

1634.50

Close September 30, 2016

1673.00

% Change

-2.30%

LME Copper 3 Month ($/t) Close October 24, 2016

4643.50

Close September 30, 2016

4877.50

% Change

-4.80%

LME Lead 3 Month ($/t) Close October 24, 2016

2031.50

Close September 30, 2016

2130.00

% Change

-4.62%

Aluminium

Cardamom MCX : 6.50%

MCX : -5.28%

Cotton

Crude Oil

Gold

MCX : -1.93%

Copper

MCX : -7.51%

MCX : 4.45%

MCX : -3.18%

Lead

Mentha Oil

Natural Gas

LME Nickel 3 Month ($/t) Close October 24, 2016 Close September 30, 2016

10160.00 10515.00

% Change

MCX : -4.55%

MCX : 2.67%

MCX : -1.39%

-3.38%

LME Zinc 3 Month ($/t) Close October 24, 2016

2321.00

Close September 30, 2016

2377.00

% Change

-2.35%

54 The Finapolis l november 2016

Nickel

MCX : -3.65%

Silver

MCX : -8.02%

Zinc

MCX : -2.06%

Commodities, at a glance

The commodities are branched into non-agricultural and agricultural, and listed in alphabetical order. Positive movement over the previous monthly close is highlighed in green, while red denotes the reverse. Additional details â&#x20AC;&#x201D; the percentage of the movement and the market concerned â&#x20AC;&#x201D; are listed below. The colour scheme carries over to data from international markets: Green for positive and red for negative movement.

Nymex Crude Oil (S/bbl)

Barley

NCDEX: 6.72%

Cotton Oil Cake NCDEX: -2.94%

Close October 24, 2016

50.49

Close September 30, 2016

48.05

% Change

5.8%

Dhaniya

NCDEX: -4.67% Nymex Natural Gas ($/mmbtu) Close October 24, 2016

2.85

Close September 30, 2016

2.90

% Change

Guar Gum

NCDEX: -0.77%

Guar Seed

NCDEX: -2.73%

Jeera

NCDEX: 0.64%

-1.79%

CBOT Corn (cents/bushel) Close October 24, 2016

348.75

Close September 30, 2016

336.25

% Change

3.72%

CBOT Soybean (cents/bushel)

Maize

NCDEX: -18.01%

Soya Oil

NCDEX: 2.69%

Soya Been

NCDEX: -3.49%

Close October 24, 2016

1001.25

Close September 30, 2016

953.5

% Change

5.10%

CBOT Wheat (cents/bushel)

Sugar

NCDEX: -0.09%

Turmeric

NCDEX: 0.53%

Wheat

NCDEX: 6.74%

Close October 24, 2016

403.50

Close September 30, 2016

402.00

% Change

0.37%

november 2016 l The Finapolis

ECONOMY & MONETARY Inflation (%)

IIP (%)

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Mar-16

Jan-16

Feb-16

Jun-16

Jul-16

Aug-16

Sep-16

-99.8

-95.1

-93.3

May-16 -107.9

-105.2

Apr-16 -111.9

Feb-16 -125.4

Mar-16

Jan-16 -125.6

7.1

Mar-16

Jun-16

FII (Rs Cr)

-118.4

Dec-15

Sep-15

-125.7

Jun-15

7.2

Nov-15

7.4

7.0

-123.4

7.9

Oct-15

tRADE balance (US$ Billion)

-129.4

Real GDP Growth (%)

Dec-15

Sep-16

Aug-16

Jul-16

Jun-16

Apr-16

May-16

Mar-16

Feb-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-15

-4.50

Nov-15

-1.50

Oct-15

1.50

Sep-15

9.82 7.60 5.38 3.16 0.94 -1.28 -3.50

Aug-15

4.50

DII (Rs cr)

22500

7500 4000 500 -3000 -6500 -10000

14500 6500 -1500

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16

-9500

rbi mONETARY dATA (%) 7.00 6.75 6.50 6.25 6.00 5.75 5.50 Sep-15

Repo

Dec-15

Mar-16

56 The Finapolis l november 2016

10-Year Bond yield (%)

Reverse Repo

Jun-16

Sep-16

7.874 7.675 7.476 7.277 7.078 6.879 6.680 Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Manufacturing PMI

Services PMI 55 54

53.2 52.5 51.8 51.1 50.4 49.7 49.0

53 52 51

rUPEE mOVEMENT (Rs/US$)

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Feb-16

Mar-16

Jan-16

Dec-15

Nov-15

Oct-15

Sep-16

Aug-16

Jul-16

Jun-16

May-16

Apr-16

Feb-16 Mar-16

Jan-16

Oct-15

Nov-15 Dec-15

bRENT cRUDE ($/bbl)

68.8 68.0 67.2 66.4 65.6 64.8 64.0

60.0 55.5 51.0 46.5 42.0 37.5 33.0

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Oct-15

Gold ($/oz)

Apr-16

Jul-16

Oct-16

Silver ($/oz) 20.7 19.5 18.3 17.1 15.9 14.7 13.5

1372 1315 1258 1201 1144 1087 1030 Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Oct-15

Jan-16

Apr-16

Jul-16

Oct-16

Subscribe to

Indiaâ&#x20AC;&#x2122;s highly respected personal finance magazine!

Call-07331101367 The Finapolis is just a click away. Visit http://www.thefinapolis.com/subscription.aspx For clarification, write to subscriptions@thefinapolis.com

november 2016 l The Finapolis

TRADE RELATIONS London Comes Calling British PM Theresa May arrives in India in November, her first major official visit outside Europe

Anasudhin Azeez

eeking to create jobs at home and stabilise the economy following the Brexit vote, British Prime Minister Theresa May will be leading a trade mission to India next month in her first major official visit outside Europe. May will be taking along some of the best of British business to India during her three-day visit beginning November 6, aimed at boosting India-UK bilateral ties. Her visit is significant because of the ripple effect created by the Brexit referendum vote. As the pound falls, the country is looking for long-term trade deals and business associations to stabilise the economy. “As we leave the European Union we have the chance to forge a new global role for the UK — to look beyond our continent and towards the economic and diplomatic opportunities in the wider world,” May said in a statement prior to the visit. The British Prime Minister will hold discussions with her Indian counterpart

58 The Finapolis l november 2016

Last year, India created 7,105 new jobs in Britain through 140 projects. Indian companies currently employ over 100,000 people in the UK. Narendra Modi during her visit on developing the strategic partnership between the UK and India, “building on the deep links and cooperation we already share”. “In the past, the focus of trade delegations has been big businesses, but I want to take a new approach that recognises the full range of British business,” she added. “So this time we will be focussing on small and medium sized businesses — and, importantly, the delegation will include representation from every region of the UK. I want to create an economy that truly works for everyone — and this new approach to international trade missions will help achieve just that. May will visit two cities in India, starting with the capital New Delhi, where she will inaugurate the India-UK TECH Summit, South Asia’s largest technology conference, alongside Modi. TECH will provide a platform for promoting technologyintensive trade between the two countries. The visit will mark the British Prime Minister’s first trade mission. IANS f

the Chartist Who will become the next president of America? Hillary Clinton

Chances of victory

85.4%

Donald Trump

14.5%

How the forecast had changed 100% 75 50 25

July

Aug

Sept

Oct

Nov

How America will vote

Source: fivethirtyeight.com

0 June 8

november 2016 l The Finapolis

career scope Sometimes, the Safety Net is a Bad Idea Barry Libert, Megan Beck & Jerry Wind

lways take backup. We hear it all the time. In everyday life, it translates to something like, “It pays to have a Plan B” or allusions to the Robert Burns poem about “the best laid plans” often going awry. But new Wharton research shows that there is an important downside to making a backup plan – merely thinking through a backup plan may actually cause people to exert less effort toward their primary goal, and consequently be less likely to achieve that goal they were striving for. Jihae Shin, a former Wharton Ph.D. student who is now a professor at the University of Wisconsin, and Katherine Milkman, a Wharton professor of operations, information and decisions, detail their findings in the paper, “How Backup Plans Can Harm Goal Pursuit: The Unexpected Downside of Being Prepared for Failure,” which was published in the journal, Organizational Behavior and Human Decision Processes. The paper was inspired by a conversation

that Shin and Milkman had when Shin was working to get an academic faculty job while completing the Ph.D. programme at Wharton. While some of her peers were thinking about backup options in case they didn’t find a job in academia, Shin found herself not wanting to because she worried that, “if I make a backup plan, it could make me work less hard to achieve my goal, and ultimately lower my chances of success.” Shin and Milkman agreed that they should test Shin’s idea. In a series of experiments, they found that thinking through backup plans did quash people’s motivation to achieve their primary goal. For example, after all participants in one experiment were told that performing well on a task would earn them a free snack, or the privilege of leaving the study early, some were prompted to think about “another way they could have an extra 10 minutes or another way they could get a free snack,” Milkman notes. “When people were prompted to think about another way to achieve the same high-level outcome in case they failed in their primary goal, they worked less hard and did less well.” The researchers add that the effect wasn’t about putting a concrete backup plan in place. “Just thinking about it — you haven’t invented a backup plan, you haven’t created a safety net, you’ve just contemplated the existence of one” — causes people to lose focus on their goal, Milkman says.

Outsourcing Plan B

But can you really get through life without contemplating backup plans? Milkman says no – and nor should you. “There are

60 The Finapolis l november 2016

huge benefits to making a backup plan,” Milkman points out. “If you don’t have one in life, sometimes it can be really disastrous.” What you can do, the researchers say, is to become more strategic about when and how to make a backup plan. “You might want to delay making a backup plan until after you have done everything you can to achieve your primary goal,” Shin says. Or you can outsource it. Milkman notes that while Shin was focussing on her goal of landing a faculty job in academia, Milkman and Shin’s other mentors were thinking about what she could do if it didn’t work out. “In a work environment, if an employee is given a task, you can tell him or her not to think about failure; just put all your eggs in one basket and know that it’s not your job to think about a backup plan,” Milkman says. “That’s the boss’s job, and the boss doesn’t have to tell the employee that he or she is worrying about it.” Alternately, Shin adds, companies can give one group of employees the job of pursuing a goal, and another group the responsibility of coming up with backup plans. The researchers note that the effect is only relevant to goals that are dependent on effort, rather than luck. In addition, while it’s often impossible for the most cautious among us not to think about what happens if our goals don’t fall into place, Shin says people can avoid making specific, detailed backup plans. “The more specific and detailed your backup plans, the more potent their negative effects will likely be,” Shin notes.

“My dad told me when I was coming to the US to do a Ph.D. that, ‘Nothing valuable in life is achieved easily,’” adds Shin, “I believe that persistence and grit toward a goal, which can be affected by making a backup plan, could make a difference in deciding who

The more specific and detailed your backup plans, the more potent their negative effects will likely be. — Jihae Shin, professor, University of Wisconsin

succeeds and who doesn’t in that goal.” Shin says one next direction for the research would be to examine whether the attractiveness of the backup plan impacts people’s level of motivation to achieve their primary goal — whether making an unattractive backup plan would hurt motivation less than making an attractive backup plan. That said, after their conversation about her job prospects, Shin suspected that Milkman might have been thinking about a backup plan for her. “For this I am thoroughly grateful,” Shin says. f Barry Libert is CEO of OpenMatters, Megan Beck, the chief insights officer, and Jerry (Yoram) Wind a Wharton marketing professor november 2016 l The Finapolis

etcetera Chinmaya Dehuri

Triumph of an Autograph Hunter P riyabrat Biswal lives in a small village in Odisha, but that hasn’t stopped him from building up a treasure trove of autographed images and letters from the Who’s Who of the world — 600 and counting. How did this 47-year-old, who lives in Olihan, some 60 km from state capital Bhubaneswar, do it? By writing simple, yet touching letters over the last three decades to celebrities from different walks of life. “Out of curiosity, I started writing letters to eminent personalities of the world, hardly realising that it is a hobby to collect autographs. It was like seeking an answer to the question: Do celebrities actually respond to the letters of common men? The answer has put me on the journey of autograph collection through letters,” Biswal said. Lady Diana, Michael Jackson, Bill Clinton, Jimmy Carter and Mohammad Ali are just some of the famous people who have replied to his letters. He also has signed photographs of sporting icons like Pele, Florence Griffith-Joyner, Michael Jordan, Martina Navratilova, Chris Evert, Steffi Graff, Richard Hadlee, Michael Phelps and Usain Bolt, and their Indian

62 The Finapolis l november 2016

counterparts like Ramanathan Krishnan, Ramesh Krishnan, Prakash Padukone, Sunil Gavaskar, Kapil Dev, Sachin Tendulkar, P.T. Usha, Vishwanathan Anand — not to speak of Bollywood stars like Amitabh Bachchan, Nandita Das and many more. Celebrated writers like Manoj Das, Vikram Seth, Dominique Lappierre and Nobel laureates like Nelson Mandela, Mother Teresa, Neil Armstrong and Edmund Hillary also hold a special place in the albums. “The most prized one in the collection is that of Mother Teresa. It was such a magnanimous gesture from her side to respond,” Biswal said. He’s also received responses from US Presidents such as Ronald Reagan, George Bush (senior) and Bill Clinton — as well as incumbent Barack Obama. The 1999 super cyclone dealt him a body blow and almost wiped out his collection but his never-say-die resolve saw him painstakingly re-build it to its present state. Biswal feels the public relations skills he has built up over the years have greatly helped him in his endeavour. And, with life becoming more fast-track in an internet and social-networking age, he still prefers writing letters, justifying it as a more personal way of communication. “The probability of response (of late) is very low. I cannot help but keep writing,” an optimistic Biswal said. He also aims at sensitising the public, especially the youth, on the dying art of writing letters and promoting autograph collection as a hobby. “An autograph collectors’ club in the state would be a good option for helping newcomers start this hobby. It will not only bring them closer to their favourite heroes but also help others to know about them from close quarters,” he concluded. IANS

Finapolis Follows Up Tell us a little about your processâ&#x20AC;Ś

I write letters in my own handwriting, preferably using fountain pen, to give them a personal touch. I send my request letters by India Post. I never use e-mail and phone call.

Did anyone send you a letter along with the photo? Yes, some autographed-photographs come with forwarding letters. Some celebrities like Florence Griffith Joyner, Rod Laver, Ramanathan Kr-

ishnan, Shabana Azmi, and others have obliged me with personalised letters. Some have praised my handwriting!

Any memorable incident related to this hobby that you can share?

Yes, I would like to mention Mrs Priyanka Gandhiâ&#x20AC;&#x2122;s name here. As the Super Cyclone in 1999 devastated my village and almost all families (except those few having pucca houses) went homeless. I wrote a letter to Mrs Gandhi describing the plight of the people of my village and she was kind enough to send a truck load of blankets and tarpaulins for the entire village. That day I was so happy that my hobby could help bring smiles in the faces of my villagers at their hour of need. f

(Clockwise from top) Donald Trump, FM Sam Maneckshaw, John McEnroe, Lynn Johnston, Margaret Thatcher, Usain Bolt, Edmund Hillary, Mother Teresa, Florence Griffith Joyner, Nelson Mandela, Neil Armstrong, Vint Cerf and Pele. november 2016 l The Finapolis

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I Network18 - The Audacious Story of a Start-up that Became a Media Empire Author: : Indira Kannan Price: ` 699

64 The Finapolis l november 2016

t was a start-up, even before the word was coined, and perhaps the best example of the creative achievements spurred by India’s path-breaking economic reforms since 1991. But the journey of Raghav Bahl from heading a small production company to a media conglomerate also demonstrates the moral and economic choices necessary in such a venture, which may not always mean a happy ending. The story of TV18’s transformation into Network 18, before it changed hands, is also a tale of inspired vision, of audacious risk-taking, of alternating crises and opportunities, of last-minute negotiations reversing agreed outcomes, struggles with obdurate bureaucrats, which could not envisage or ignored the media’s special circumstances, and above all, the inexorable laws of the market. And Indira Kannan, who was on board for most of the journey, tells it like a cliff-hanger. Kannan, who joined TV18 in 1995, when it was still a production company, saw it become a channel itself in 1999 and diversify immensely through the first decade of the new millennium, and was with it till 2011. She starts her story in May 1995 with one of the first major controversies it faced. There would be few now who would remember the bold and sassy “The Nikki Show” hosted by British-Indian actress and Kabir Bedi’s then wife on Star Plus, as it went off air after a few episodes. However, one notorious edition was enough to threaten to land

the host, guest and prominent gay rights activist Ashok Row Kavi, as well as Bahl and his partner Sanjay Ray Chaudhri, (or RayC as he was known) and Star TV owner Rupert Murdoch behind bars for denigrating the Mahatma. From there, Kannan takes us back to the circumstances in which TV18 was started in 1991. With short but pertinent biographies of the main protagonists and a string of telling anecdotes, she writes of the full advantage they took of opportunities offered by the advent of cable TV and the arrival of BBC, Murdoch’s Star, and later Zee, to slowly become a well-recognised brand. There are also the forays with Business TV and its television arm, and later with ABN in association with the Hindujas, both of which had less than the desired outcomes, and ended on a messy note. Another key episode is the background of the “sting” of the alleged bribery of MPs ahead of the 2008 trust vote in the Manmohan Singh government and the consequences that ensued. On the other hand, Kannan makes no attempt to hide the miscalculations and the mistakes, in particular, a point of hubris, which began the road towards eventual change of ownership. But while telling the story of Bahl and his ambitious venture, the account also offers an incisive look at the development of TV programming and the media business over the last three decades and more, particularly in the post-liberalisation phase. It serves as a valuable read for both businessmen and media persons. IANS f

Leisure ANSWER BACK # 9

the finapolis salutes

It’s only a few questions long, but the Finapolis quiz will still test the mettle of the best: we ask anything on everything. This month, we ask you about US presidents

Readers scanning the list of Answer Back winners would have become familiar by now with one: B S R Murthy. Mr Murthy (61) has been a continual winner of the Answer Back quiz. Often, his replies are the first to arrive in our inbox. Fond of reading books, magazines and newspapers; as well as stock market activities and cricket, he retired as Assistant General Manager with Canara Bank after a stint that took him to Madhya Pradesh, Chhattisgarh, Odisha, Tamil Nadu, Karnataka and Maharashtra. He lives in Raipur and is Guest Faculty at Canara Bank’s Staff Training Centre.

1) Legend has it that when a diner told this president of a bet to extract three words out of him, he replied, ‘You lose’

A) Calvin Coolidge

B) Harry S Truman

C) Franklin Pierce

D) Ronald Reagan

2) How many US presidents have had the name ‘James’?

A) Three

B) Two

C) Four

D) Five

3) Name this US President , winner of the Nobel Peace Prize and author of acclaimed books, who was also a war hero and a naturalist

A) Barack Obama

B) Jimmy Carter

C) Theodore Roosevelt

D) John F Kennedy

See and smile

4) This US president has a foreign capital named after him

A) Abraham Lincoln

B) James Monroe

C) Herbert Hoover

D) G Washington

5) This US President once got a speeding ticket for riding his horse too fast

A) Thomas Jefferson

B) John Adams

C) Grover Cleveland

D) Ulysses

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Send your answers to feedback@thefinapolis.com latest by November 25, 2016. Winners will be acknowledged in the quiz section of the subsequent month’s issue.

Answers to Answer Back #8 1A|2C|3B|4D|5C|6C Winners: B S R Murthy; Harish K

quotable

Money is always eager and ready to work for anyone who is ready to employ it — Idowu Koyenikan november 2016 l The Finapolis

wisecrack Mubaashir Ansari

The megaphoneâ&#x20AC;&#x2122;s fallen into the wrong hands

uddenly the world seems confronted by a crop of world leaders diametrically opposed to our sense of proprietary. In the early 1960s, the American presidency was held by John F. Kennedy, a suave, articulate man who was venerated across America and much of the free world for his very endearing yet down-toearth virtuosity and world view. And within a span of 50 odd years, we are staring down the barrel of madness at a presumptive presidential candidate in the form of Donald Trump. God forbid if he ever became the next US President; the world will become ever more insular and polarised. American folly, as recent history tells us, can be monumental. What this will do is foist upon the world a leader who seems to gloat at the fact

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that he has avoided paying tax for several years even if Middle America struggles doing so. The dissonance between his mind and his mouth is frightening. The question that will always haunt the world, if this comes to pass is how has such a powerful nation hit such a nadir. Look around the world today and you will find more examples of world leaders who are holding highly controversial world views and shooting off bizarre utterances that are sending shivers down several spines. Take the example of this somewhat gauche-looking president of the Philippines, Rodrigo Duterte, who has made not just inappropriate but downright crude remarks on the variety of subjects. Again, one wonders how a country like the Philippines has elected such

a president when they had more illustrious predecessors like Ramon Magsaysay a few decades ago. The story in Europe is not much better. France is among the worldâ&#x20AC;&#x2122;s most liberated and open societies and yet, it has a Marine Le Pen, a right wing politician notably intolerant towards any bearded skull cap wearing individual or a burkini-clad lady. Contrast Le Pen with a former French statesman, like say, Charles de Gaulle, and one can see what the world has come to. So what has led to this very abysmal state of affairs? Is the entire humanity going through a menopause, a kind of mid-life crisis, or are we becoming an unfortunate consequence of a highly over-communicated, self-centered world where most individuals suffer from foot-in-the-mouth disease? f

Published on 1st November 2016 Total No. of pages 68, including cover pages

Karvy The Finapolis

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