Issue 179 - Nirmal Bang

HOPETURNEDSOUR

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HOPETURNEDSOUR

The second wave of the coronavirus pandemic poses a grave threat to

economic recoveryin India

RNI No. MAHENG/2009/28962 | Volume 13 Issue 04 | 16th - 30th Apr ’21Mumbai | Pages 50 | For Pr ivate Circulat ion

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Beyond Market 16th - 30th Apr ’21 It’s simpli�ed...3

DB Corner – Page 5

A Di�cult ChapterThe RBI, which has to raise `12 lakh crore for the government, faces a daunting task amidst rising in�ation, capital out�ows and Covid-19 resurgence, which may lead to a rise in rates – Page 6Hope Turned SourThe second wave of the coronavirus pandemic poses a grave threat to economic recovery in India – Page 10The BeelinersThe IPO pipeline this year looks strong with as many as 28 companies looking to list on the bourses to raise funds – Page 13Same But Di�erentWhile key rates have been left unchanged, the RBI has experimented with a few innovative tools to manage liquidity in the system – Page 16Sore No More The coronavirus pandemic is showing no signs of slowing down, aiding the growth of stocks in the health care space, which till some time back were performing badly – Page 19Trolls On A RollMinor slights are enough for trolls to unleash their wrath on brands, and companies as well as advertisers are growing wary of cyber bullies – Page 22Shaping The Future Of Entertainment New mediums are overtaking the old in unimaginable ways in the media and entertainment industry in a bid to survive the impact of Covid-19 – Page 26Staving O� DebtAvoid allowing debt to get the better of you by following a few crucial steps – Page 29

A Dollop Of PositivityMarch ’21 saw positive �ows into equity mutual funds after 8 months of out�ows – 2Farsighted SecurityIndividuals should buy term insurance plans despite the likely rise in premiums to secure the future of their dependents – Page 34

MF Blackboard – Page 36Technical Outlook – Page 41

A Journey Of Self-discoveryValue investor Guy Spier shares lessons and real-life skills in his best-selling book ‘The Education of a Value Investor’ – Page 42

Important Jargon – Page 47

Editor-in-Chief & Publisher: Rakesh BhandariEditor: Tushita NigamSenior Sub-Editor: Kiran V Uchil

Art Director: Sachin KambleJunior Designer: Orianne Fernandes

Operations: Namrata Sabbani

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Research Team: Sunil Jain, Vikas Salunkhe, Swati Hotkar Shewale, Nirav Chheda, Amit Bhuptani, Ritu Poddar, Aniket Jadhav, Swapnil Ufale

Volume 13 Issue: 04, 16th - 30th Apr ’21

Beyond Thinking

Beyond Basics

Beyond Learning

Beyond Numbers

Beyond Buzz

CONTENTS

India is currently battling the harsh repercussions of the second wave of the deadly coronavirus pandemic. About a month back, the first wave of the virus was calming down. In fact, the country was witnessing green shoots of revival across sectors and the economy on the whole. However, we are now being pushed back and all the gains are being lost to the second wave of the pandemic.

The cover story dwells on revised forecasts by industry experts and other economic parameters that continue to be a cause of concern.

Also, in this issue we have elaborated on how the Reserve Bank of India (RBI) plans to manage the massive borrowing programme of `12 lakh crore, announced by the Indian government, without causing risk to the debt markets as well as the recently announced Monetary Policy Review where the RBI has experimented with new tools to manage liquidity in the system.

You will also find other interesting reads on the resurgence of Initial Public Offerings (IPOs) in the Indian markets, the impetus the current pandemic has given to health care companies, false claims by consumer brands and the backlash they face through digital vigilantism and trolling, the introduction of newer avenues and concepts in the media and entertainment space to keep up with the slump in this segment due to the pandemic and finally simple but concrete ways for an individual to remain debt-free.

In the Beyond Basics section, we have spoken about heavy inflows in the equity mutual fund space last month and the importance of having a term insurance plan in spite of rising premiums being charged by insurance companies.

Do read the article in the Beyond Learning section as it offers interesting takeaways from famed value investor Guy Spier’s book ‘The Education Of A Value Investor: My Transformative Quest For Wealth, Wisdom And EnlightenmenT.’

Beyond Market 16th - 30th Apr ’21 It’s simpli�ed...

DRAB AND DREARYDRAB AND DREARY

Disclaimer It is safe to assume that my clients and I may have an investment interest in the stocks/sectors discussed. Investors are required to take an independent decision before investing. Investment in equity is subject to market risk. Our research should not be considered as an advertisement or advice, professional or otherwise. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and the like and take professional advice before investing.

Coronavirus is racing through India, the second-most populous country in the world, overwhelming its health care systems, which are on the brink of collapse.

The explosive surge in coronavirus cases, dubbed as the second wave of the deadly pandemic, has forced several states across the country to implement new lockdowns, hurting companies. This is likely to impact Q1 FY22 corporate results of India Inc.

The US Federal Reserve is committed to strengthening its economy through supportive economic policy and has indicated that there won’t be any rate increases until at least the end of 2021.

There has been a steady improvement in earnings results of India Inc in Q4 although companies have not outperformed across the board like we saw in Q3 FY21.

In the coming fortnight, the Indian stock markets look good with the Nifty Futures having support at the 14,700 level. On the upper side, it is likely to touch 15,080. If the Nifty Futures crosses this level, then it will touch 15,880.

Market participants are advised to watch out for the rise in cases, which is adding to continued worries about the spread of the coronavirus pandemic in India, and the subsequent lockdowns. They should also keep a close eye on the ongoing Q4 FY21 results as well as the monsoon rains, which are forecasted to be good and normal this yeaR.

If the Nifty Futurescrosses the 15,080 level,then it will touch 15,880.

Nifty: 14,864.55Sensex: 49,733.84

(As on 28th Apr ’21)

5

DB CORNER

Beyond Market 16th - 30th Apr ’21 It’s simpli�ed...

BEYOND THINKING

ADIFFICULTCHAPTER

The RBI, which has to raise `12 lakh crore for the government, faces a daunting task

and Covid-19 resurgence, which may lead to a rise in rates

BEYOND THINKING



basis from the market.

INTEREST COST CHALLENGE

A large increase in the government’s borrowing costs limits its ability to spend elsewhere. But more impor-tantly, it raises the cost of borrowing for private firms and others, hamper-ing economic growth. The rise in government borrowing costs is also due to a jump in the term premium and credit spread in recent years.

Term premium, which is the difference between the repo rate and the government’s borrowing cost, poses a bigger challenge. The repo rate, or the overnight lending rate that the RBI charges banks, is the short-term risk-free rate.

From an average rate of 73 basis points since 2011, and 120 basis points in 2018 and 2019, the 10-year term premium is currently 215 basis points, having risen 35 basis points since the Union Budget presentation, and among the highest in the world.

A credit spread is a difference in yield between a government bond and another debt security of the same maturity but different credit quality. LIQUIDITY MEASURES

The central bank is resorting to measures such as Operation Twist, or simultaneous buying and selling of bonds via Open Market Operations (OMOs) to keep rates down. It conducted `3 lakh crore of bond purchases under OMOs in the last fiscal.

In Operation Twist, the central bank buys longer maturity papers and sells shorter maturity papers to keep liquidity neutral.

However, as corporates raise money at a shorter yield, Operation Twist is

would raise the borrowing costs of the government.

A 1% increase in the borrowing cost could lead to an extra interest burden of more than `1 lakh crore. Hence, as the debt manager of the government, the RBI has to keep the borrowing costs low.

However, the RBI’s main mandate is to keep inflation low. If it spirals, the central bank has to raise interest rates, which conflicts with its mandate of keeping the government’s borrowing costs under a lid.

So how will the RBI Governor Shantikanta Das do the balancing act?

THE BORROWING PLAN

The government plans to borrow `7.24 lakh crore by September, or 60% of the full-year gross borrowing target of `12.05 lakh crore, keeping with its practice of front-loading market borrowing.

The borrowing will be done across the yield curve ranging from two-year bonds to 40 years, includ-ing using Floating Rate Bonds (FRBs).

The borrowing calendar released on the RBI website showed there would be `48,000 crore of such FRBs. The 25 weekly borrowings will be in sizes of `26,000 crore to `32,000 crore ending by September ’24. The frequency of 5, 10, 14, and 20 years would be relatively higher. This segment has a relatively higher demand in the market than that of the ultra-long maturity profile.

In the current quarter ending June, the government is scheduled to borrow `3.48 lakh crore on a gross basis, and `2.43 lakh crore on a net

As Economic Affairs Secretary, Shaktikanta Das oversaw the biggest economic disruption in India. The man behind the plethora of rules and regulations that guided the ban of high-value notes in 2016 has been praised for steering the RBI during the pandemic by going out of the traditional modes of central banking to provide support to the flailing economy while keeping inflation at bay. He faces a bigger challenge now. Das has to steer the economy as the second wave of Covid-19 rages.

Along with the rescue operations, the RBI has to manage huge government borrowings at lower costs this fiscal without letting inflation out of sight. And a fierce Covid-19 resurgence has made the task more difficult. THE CHALLENGE

The government of India plans to borrow a huge sum of `12 lakh crore this fiscal, which will be managed by the RBI. In addition to this, the state governments could borrow another `10 lakh crore. While the borrowing requirement from the private sector is down, but if that picks up it will add to the demand pressure. On the other hand, the deposit growth, or loanable funds, this year is unlikely to be more than `15 lakh crore.

With the shortage of deposits, the interest rates will go up, which


crowding them out of the market. The central bank has also undertaken long-term repo operations and targeted long-term repo operations to infuse liquidity into the system.

THE G-SAP PROGRAMME

Along with the OMOs and direct intervention in the secondary market, the government recently announced Government Securities Acquisition Programme (G-SAP), a definite calendar for open market purchases of bonds. Under G-SAP, the RBI has committed to `1 lakh crore bond buys this quarter and said it will buy more. The RBI programme is a variant of the Quantitative Easing (QE) policy followed by central banks in advanced economies to tide over the global financial crisis of 2008.

Under QE, central banks conduct large-scale purchases of assets, including treasury bills and private sector bonds, to directly influence rates and risk premiums on private debt.

However, the RBI is committing to buying only government securities. G-SAP provides certainty to bond investors that the RBI will step in to buy bonds, infuse liquidity and bring down yields.

SCEPTICAL MARKETS

However, the bond market has given a tepid response to G-SAP. While the G-Sec yields fell after the announce-ment of G-SAP, they are on an upswing following rising inflation and capital outflows from India after the second surge of Covid-19.

The benchmark 10-year yield keeps breaching 6%, a level that’s seen as a line in the sand for the RBI. The central bank has refused to sell bonds

at the yield demanded by bond investors and is forcing underwriters to buy the bonds.

WHY ARE THE BOND MARKETS WARY?

While the central bank has assured that it will do whatever it takes to ensure that the borrowing programme goes through smoothly, the market doesn’t seem to be convinced.

The yardstick for a monetary bazooka is Mario Draghi’s “whatever it takes” moment at the European Central Bank in the summer of 2012, or Haruhiko Kuroda’s bold 2013 campaign at the Bank of Japan to end 15 years of deflation. The RBI’s manoeuvre isn’t in the same league. It’s just a formal announcement of bond buys the authority does on an ad hoc basis anyway. So instead of a QE, the traders see G-SAP as a yield-curve flattener, which should help the central bank manage a bloated government borrowing programme.

Bond markets see the government borrowings staying high for the next few years as the latter has announced it will target a fiscal deficit of 4.5% over the next five years. Even state government borrowings will also rise.

The RBI’s strategy of pursuing multiple objectives such as exchange rate management, inflation control and liquidity management is also leading to distortions and has confused the market.

Also, following huge stimulus unleashed by the western countries, including the US, yields are attrac-tive there, which may lead to capital outflows and slowing down of bond investments in India.

Additionally, bond investors estimate that the RBI is likely to buy securi-ties worth up to `4 lakh crore in the current year, which falls well short of the `6 lakh crore gap between demand and supply of bonds estimated by traders. Consequently, a rise in bond yields is seen as being inevitable.

To assuage the bond market, the RBI has promised to cut the net supply of central government bonds hitting the market in the current quarter by at least 41%.

‘THE YIELD TANDAV’

The RBI said while there is a “restless urgency in the air” in India to return to high growth, the bond market has remained unyielding, despite its efforts.

According to a paper by RBI’s staff, the central bank wants to maintain order in the yield curve and avoid a “tandav.” “As countries rush to inoculate their populations, the global economy should regain lost momentum in July-September. Bond vigilantes could, however, undermine the recovery, unsettle financial markets and trigger capital outflows from emerging markets,” the RBI’s paper noted.

“The Reserve Bank is striving to ensure an orderly evolution of the yield curve, but it takes two to tango and forestall a tandav,” it said.

THE INFLATION FACTOR

The rising global crude and commodity prices are already translating into higher input costs and thus higher broad-based inflation.

The WPI-based inflation has hit an eight-year high. If inflation maintains its upward trajectory and the bond

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street doesn’t relent, the RBI, which has placed bigger priority on reviving growth, would have to change its accommodative stance and consider rate hikes, which could complicate the debt management function of the RBI. As inflation rises, the trade-off between inflation management and debt management could become sharper.

NEW BORROWERS

In the last 15 years, the share of banks in the ownership of outstand-

ing central government bonds has fallen from 53% to 40% now. However, no alternative buyer of the equal size has emerged to fill the space.

Despite improving penetration, the share of pension and insurance inflows in bonds has shrunk over the last 15 years.

The RBI at times buys bonds to inject money into the economy, but it is now using the funds to buy dollars to stop the rupee from appreciating.

It is now looking to tap retail investors for direct bond invest-ments. But that avenue won’t be sizeable for many years. The limit for foreign portfolio holders in bonds has been raised over the years.

However, without Indian bonds being included in the global bond indices, those flows won’t be substantial. The FTSE putting India on a watch-list for “potential future inclusion” in the Emerging Markets Government Bonds Index, has raised hopes of increased FPI flowS.

BEYOND THINKING

HOPETURNED SOUR

HOPETURNED SOUR

HOPETURNED SOUR

The second wave of the coronavirus pandemic poses a

grave threat to economic recovery in India



But as the virus’ second wave lashed the country ferociously, many organizations have reduced their growth projections for this fiscal, though it is still expected in the double-digits, which is the only saving grace. Lockdowns, though partial, have come into effect in many places including in the economically-critical states of Delhi, Maharashtra (which includes Mumbai) and Gujarat. The situation in Delhi and Mumbai, in particular, are reported to be serious. Leading companies from the financial sector have lowered their growth projection for FY22 from their earlier projections.

India’s Reserve Bank of India (RBI), has pegged the country’s growth at 10.5%, while the International Monetary Fund (IMF) at 12.5% and the World Bank (WB) at 10.1%.

Many brokerages are in agreement that India had succeeded in bringing the pandemic under control by end- 2020 and that the country’s economy was rapidly returning to normalcy.

However, the second wave and its virulence and rapid spread seem to have caught the government unawares and the economy has once again been affected. All the good work done in the past to control the pandemic seems to have been undone by the second wave.

Financial services major UBS said that if the government’s efforts to conquer the virus are successful soon, then recovery should gather steam from Q2 FY22. It expects the current mobility restrictions to remain in force till end-May and then be lifted with economic activity largely returning to normalcy by end-June.

If the economic disruptions last

since early-to-mid-April and the virulence with which it has struck the country in what is being called the second wave of attack of the virus. It has the potential to undo all the good that has accrued to the Indian economy in the last three months following the start of the recovery process post the total lockdown imposed in end-March last year, which heavily damaged the economy.

Since mid-April, the second wave has increased in virulence, compel-ling the central government to impose partial lockdowns - these have increased in severity in some places though the government has stopped short of a total lockdown, which, however, could be imposed if the spread of the virus cannot be countered effectively with the present steps.

In FY21 (last fiscal or the 1st Apr ’20 to 31st Mar ’21 period), the country’s economy is expected to contract around 8%. The severity of the economic damage in the last fiscal can be gauged from the fact that in Q1 FY21, the economy contracted by a huge 24.4% while in Q2 the contraction was 7.3%.

After these two consecutive months of contraction, there was a small improvement, signalling that perhaps the worst was behind us. In Q3 (the October to December period), India’s GDP grew by a miniscule 0.4%. Growth projections for FY22 were optimistic given the apparent recovery visible in the economy till early April. The low base was also taken as a factor, which would aid growth in the current fiscal.

Many economists and organizations had projected a double-digit growth this fiscal. For the next fiscal (FY23), however, they had moderated it to around the 6.8% to 7%-mark.

Coronavirus has returned to plague India once again. Just when it appeared that the massive economic turbulence of last year (2020) was behind us forever and the economy was getting back on rails, the virus has struck again, leading to distur-bances, which could derail our economy for some more time.

Economists were beginning to talk about the bright spots in India’s economy till about a month-and-a-half ago such as the falling number of coronavirus-affect-ed patients and the increasing number of vaccinations taking place pan-India.

While the pace of vaccinations was expected to increase in the coming weeks, it was felt that at least about 40% to 45% of India’s population would be vaccinated against the virus by the end of this year (2021).

As a large part of the population got vaccinated, it was felt that the threat presented by the virus would correspondingly dissipate. This, in turn, would lead to the total ‘unlock-ing’ of the economy, which would give a big boost to the country’s economic growth.

The services sector, which has emerged as a successful sector in India in recent years would have got a big boost from the total ‘unlocking’ of the economy.

This, however, is not to be because of the resurgence of the coronavirus


longer, then India’s real GDP growth could slow down by a larger magnitude to 3.5% to 5% in FY22.

The restrictions this time are less severe than last year, but as the pandemic spreads, the severity of the restrictions also increases.

A point that needs highlighting here is that this time the virus’ virulence is centred to a large extent in Delhi, Maharashtra and Gujarat; all three are financially and industrially critical for India’s economy.

The rapid spike and spread of the virus are causing panic and shortages but it also meant that it would be less protracted.

Growth was still weak and this was amplified by the steep slide in key economic activity indicators and anaemic loan growth. It described the surging pandemic cases as worri-some for economic growth.

An important point was made by Fitch Solutions, which called for increased investments in the health care sector in the country. It said that the economy had managed to get over the pandemic by the end of last year but in recent weeks the pandem-ic spread rapidly “partly due to complacency on the social distancing measures and mask-wearing policies.”

Pointing out that India lagged behind in immunisation per capita, it said that the “unprecedented crisis has highlighted the need to increase investment in the health care sector in the country.”

Another challenge not only to India but globally relates to divergences in the speed of recovery, both across and within countries. This is coupled with the potential for persistent economic damage from the crisis.

Gita Gopinath, the Chief Economist at the International Monetary Fund (IMF) said that recoveries are diverging dangerously across and within countries as economies with slower vaccine roll out, more limited policy support and more reliant on tourism do less well.

She, however, said that the IMF was now projecting a stronger recovery for the global economy both this year and the next as compared to its earlier forecast with growth at 6% in 2021 and 4.4% next year. Emphasis should be laid on conquering the pandemic by prioritizing health care spending on vaccinations, treatments and health care infrastructure.

On monetary policy, Gopinath said that it should remain accommodative wherever inflation was well-balanced while financial stability risks should be tackled using macro-prudential tools.

The resilience and the much talked-about strong fundamentals of India’s economy will be tested rigorously over the next two to three-months.

However, one need not be too pessimistic as there are factors that could help India recover more rapidly than other economies globally.

For example, there are some economists who argue that the lockdowns presently are lighter than those imposed last year. According to them and this is very important as both businesses and consumers have by now managed to adjust to the new environment.

India has begun its vaccination programme and it was proceeding smoothly till very recently before news reports of vaccine as well as oxygen shortages started trickling in.

To successfully overcome the pandemic and perk up its economy, India needs to run its vaccination programme, amongst the biggest in the world, successfully. Thankfully, the government is taking several steps to tackle the emerging problems and resolve them promptly so as to keep the vaccination drive running smoothly.

With the vaccination now opened up to all above 18 years of age, it is expected that close to half the country’s population would be vaccinated by the end of this year. An eye needs to be kept on retail inflation, also known as Consumer Price Index (CPI)-based inflation, which has risen to 5.52% in March. This is the fourth consecutive month that retail inflation has come within the RBI’s upper margin of 6%.

The upward movement was influenced primarily by inflation in the food basket. While vegetable prices dipped (minus) 4.83% year-on-year (y-o-y) in March, prices of other items such as oils and fats, meat and fish, eggs, pulses and products and non-alcoholic beverag-es all moved northward.

Economically, India is presently poised on the edge - things can move either way - up or down, improve or deteriorate. After being in a very good position till end-March, things have slid southward precariously in the last one month.

India’s economic progress now hinges upon conquering the pandem-ic as swiftly and effectively as possible. Fortunately, India’s economic fundamentals are still robust. What is needed is for the government is to get its act together and for all citizens to co-operate with the government in suppressing the pandemiC.

BEYOND THINKING

India’s IPO market, which has been weak for the past few years, has seen a sudden resurgence with as many as six IPOs hitting the market in April of 2021 alone. This includes big names such as Macrotech Developers (formerly known as Lodha Develop-ers), Aadhar Housing Finance Ltd and KIMS Hospitals.

The IPO pipeline this year looks strong with 28 companies holding market regulator Securities and Exchange Board of India’s (SEBI's) approval for raising almost `30,000

than the `20,352 crore raised in 2019-20. In 2018-19, companies raised `14,719 crore through IPOs. And in 2017-18, companies mopped up `82,109 crore from initial share sale.

Last year was particularly good for the IPO market. Since July ’20, 13 big companies launched IPOs to raise funds. Three of these were subscribed more than 150 times. The biggest IPOs were Gland Pharma (about `6,480 crore), Indian Railway Finance Corporation (`4,633 crore), CAMS (`2,240 crore) and UTI Asset Management Company (`2,160 crore).

The issue of MTAR Technologies received the best response with a subscription of over 200 times. It was followed by Mrs Bectors Food Specialties at 198 times. Investors showed an appetite for stocks of

crore through the IPO route.

Fundraising through IPOs is at a 13-year high. There is a lot of interest from foreign and retail investors, which has made India one of the hottest IPO markets in the world today.

According to data from Refinitiv, a global provider of financial market data and infrastructure, Indian companies have raised $2.2 billion through IPOs this year. This is the highest amount since the blockbuster IPO year of 2008. And the year has only just begun.

The IPO resurgence started in 2020, with Indian companies raising $9.2 billion through share sale - the third biggest after the United States and China. In fiscal year 2020-21, 30 companies raised `31,277 crore through IPOs, significantly higher

THEBEELINERS

The IPO pipeline this year looks strong with as many as 28 companies looking to list on the bourses to raise funds



might be forced to list in the US because of the strict listing rules in India.

Media reports hint at Flipkart listing in the US in the fourth quarter of this year. Its listing in the US could value the company at more than $35 billion. Flipkart has not yet confirmed this and the company can list in another country as well.

In an attempt to encourage e-com-merce companies to list in India, SEBI has made changes to its Innovators Growth Platform (IGP). In 2019, SEBI created an alternative listing platform called IGP to enable start-ups to list their shares on stock exchanges. But the platform didn’t see any traction, prompting SEBI to make changes to its regulations.

SEBI has reduced the requirement for issuers to have 25% of pre-issue capital held by eligible investors to one year from two years. It has allowed start-ups to allocate up to 60% of the shares to be sold in the IPO to select investors on a discre-tionary basis before the issue opens to all investors. This provision is akin to the anchor allotment rule for companies floating IPOs on the main board of stock exchanges.

Companies looking at listing on IGP can issue shares with differential voting rights (DVRs) to promoters. SEBI has also proposed to increase the open offer trigger to 49% from 25%, giving more flexibility to start-ups.

Also, for loss-making companies, SEBI has reduced the requirement for migration from IGP to the main board from 75% of capital held by Qualified Institutional Buyers (QIBs) on the date of application to 50%.

Analysts say SEBI is trying to replicate the success of the American

The companies that have listed so far this year have done exceptionally well. According to data from Prime Database, 18 of the 23 IPOs this year saw first-day gains – 78% of stock listing in FY21. The number of stocks with first-day gains on debut has been the highest in three years.

Things are about to get even better. There is news of e-commerce giants launching IPOs. Flipkart, PolicyBa-zaar, Zomato, Ola, Freshworks, PepperFry, Nykaa and Delhivery have all declared their intention to go public.

But this may not be possible in India. SEBI has rules that make it difficult for loss-making companies to list on the Indian stock exchanges. The other problem is some of these start-ups are registered in Singapore, which makes it impossible for them to list in India.

India has 34 unicorns (valuation of $1 billion or more) as of February ’21. An HSBC Global Research report estimates that over $60 billion was invested in India’s internet sector in the last five years. Around $12 billion of this was invested in 2020 alone.

Start-ups have been booming in India thanks to the Covid-19 pandemic, which has increased the number of online buyers. In 2020, over 1,600 start-ups were founded, taking the total number of start-ups to over 12,500, according to a report by Nasscom. The trade body estimates that almost 55 of these start-ups are potential unicorns.

While many of these tech start-ups have reached over $1 billion in valuation, almost all of them are loss-making. This includes Walmart Inc-owned online retailer Flipkart Online Services Pvt and food-deliv-ery start-up Zomato Pvt Ltd, which

companies from diverse sectors from ready-to-eat food makers, broking firms to even biotechnology compa-nies.

The stock market’s bull run has improved sentiments among investors, leading to successful IPOs. Excess liquidity among global investors and optimism about the Indian growth story has also helped the IPO market.

Foreign investors have been pumping in huge amounts of money into India. As a response to the economic destruction that followed the Covid-19 outbreak, central banks all over the world released stimulus packages. And some of that money has come into the emerging markets, especially India. In January and February of this year, foreign investors invested $6.1 billion in India, the highest among all countries in Asia.

The IPO market has also received record levels of participation from individual investors. In January, new investors reached 51.5 million, showing an increase of 1 million every month from 39.5 million investors in January ’20. Indian investors have reposed faith in Indian companies, which is a big motivating factor for companies to go public.

This year, the big IPOs to watch out for are LIC, HDB Financial Services, NCDEX and ESAF Small Finance Bank. LIC is expected to raise around `70,000 crore to `1 lakh crore from the markets in October this year.

The other IPOs of interest are that of Nykaa and Bajaj Energy. Nykaa is looking at a stock exchange listing by the end of 2021 or early 2022 at a valuation of $3 billion. Bajaj Energy is expected to raise around `5,450 crore.


Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risks. Investment in Securities/Commodities market are subject to market risks. Read all the related documents carefully before investing. Please read the Do’s and Don’ts prescribed by the Commodity Exchange before trading. We do not offer PMS Service for the Commodity segment .The securities quoted are exemplary and are not recommendatory. NIRMAL BANG SECURITIES PVT LTD – BSE (Member ID- 498): INB011072759, INF011072759, Exchange Registered Member in CDS; NSE MEMEBR ID- 09391): INB230939139, INF230939139, INE230939139; MSEI Member ID-1067) : INB260939138, INF260939138, INE260939139: Single Registration No.INZ000202536,PMS Registration No: INP000002981; Research Analyst Registration No: INH000001766; NSDL/ CDSL: IN-DP-CDSL 37-99. NIRMAL BANG COMMODITIES PVT LTD – MCX (Member ID -16590 /NCDEX Member ID -0362 /ICEX Member ID -1165) : Single Registration No. INZ000043630; NCDEX Spot: 10084; Comtrack Participants: CPID -5040; CDSL Commodity Repository Ltd: 12013300 Nirmal Bang Securities Private Limited CIN:

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Company Overview, Updated Financials, Key Ratios, Shareholding Patterns, Mutual Fund Holdings and

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Exchange - Nasdaq - through these changes. Nasdaq allowed US tech giants such as Google, Facebook, Apple, Amazon and Netflix to list as start-ups. These measures are intended to encourage start-ups to list in India.

It is anybody’s guess whether these measures will encourage start-ups to list in India. Indian start-ups might still prefer foreign markets, with a history of successful tech IPOs. Also, investors in India have a low

exposure to tech stocks. Many Indian companies are looking at listing in the US or Singapore because of their friendlier norms.

Compliance requirements are fewer in these markets, which makes it tempting for start-ups to list there. If the markets regulator SEBI can convince companies to list here, it would be a big win for them as well as the domestic investors.

Analysts expect the IPO market in

India to be strong for the next 2-3 years because of the domestic growth story. With the Sensex performing well, more and more companies are looking to raise money from the market.

Excess liquidity and better-than-ex-pected economic recovery have improved sentiments among foreign and retail investors. The current bullish IPO run might just continue to make money for companies and investors alikE.

BEYOND THINKING

SAME BUTDIFFERENT

While key rates have been left unchanged, the RBI has experimented with a few innovative tools to manage

liquidity in the system



Currently, CPI inflation stands at 5% for February rising from 4.1% in January ‘21.

Importantly, both upside as well as downside pressures on inflation prevail. Inflation may witness an upside pressure due to higher commodity prices and increase in logistics costs for goods and services.

On the other hand, inflation may see a downside due to lower global crude oil prices and normalization of global supply chains.

Better monsoons and higher food production will also limit the upside risks.

ECONOMIC GROWTHOUTLOOK

The RBI has projected India’s GDP growth for FY21-22 at 10.5%, reiterating its outlook from its February meet.

This has surprised many as India has been currently witnessing a surge in Covid-19 cases in recent weeks.

RBI’s outlook on the economy has factored in the impact of the pandemic. The second wave of the pandemic may not hurt economic growth much as the lockdowns are very selective.

Additionally, resilient rural demand and increase in vaccination will help economic growth.

Also, the RBI is optimistic that the

wording gives them more manoeuvrability in altering its stance in the future without any disruption to the markets, while still keeping an eye on inflation.

After all it is the mandate of the MPC to keep inflation measured by consumer price index (retail inflation) at 4% with a tolerance level of two percentage points on either side.

POLICY RATES

To achieve its inflation target of 4%, the MPC uses the repurchase rate (repo) as a tool and tweaks it when needed.

Repo rate is the rate at which banks borrow from the RBI during times of liquidity crunch.

This repo rate acts as a benchmark and influences other interest rates in the economy like banks’ lending and savings interest rates, corporate bonds, government bonds, etc.

Thus by tweaking the repo rate, the Reserve Bank ensures a stable interest rate environment in the financial system. Currently, the MPC has left the repo rate unchanged at 4%.

INFLATION OUTLOOK

The RBI expects CPI inflation to range between 4.1% and 5.2% in FY22. These projections are higher than what were estimated in earlier policy meets.

The Reserve Bank of India’s (RBI’s) six-member monetary policy committee left policy interest rates unchanged in its April meet. All members of the MPC decided unanimously on this. It was the first policy meet for the fiscal year 2021-22.

Importantly, the MPC has maintained its ‘accommodative’ stance. This implies that interest rates are not likely to rise in the near future.

However, the forward guidance on its accommodative stance has been worded differently this time.

Earlier, the MPC had guided to keep its accommodative stance well into fiscal year 2021-22.

Now, the forward guidance simply says that “the stance of monetary policy will remain accommodative till the prospects of sustained recovery are well secured while closely monitoring the evolving outlook for inflation.”

LESS DOVISH

Clearly, the RBI is not committing to any time frame now. The RBI will start increasing key rates once the economy shows signs of recovery. It need not wait for a stretch of period.

Market participants have taken the differently-worded forward guidance to be less dovish.

But from the MPC’s perspective, the

Repo RateReverse Repo RateMSFBank Rate

Key Policy Rates (%)

Feb '205.154.95.45.4

Mar '204.4

44.654.65

May '204

3.754.254.25

Feb '214

3.354.254.25

Apr '214

3.354.254.25

Source: RBI


government’s public capital expenditure programme, the production-linked incentive (PLI) scheme should support the Indian economy.

Having said thus, the Reserve Bank’s growth projections are more realistic than IMFs’, which has forecasted India’s FY22 economic growth at 12.5%.

REGULATORY MOVES

While policy rates remained unchanged, the RBI has announced a number of innovative measures to ensure that there is adequate liquidity in the system and availability of funds to critical sectors of the economy.

Secondary Market G-Sec Acquisition Programme Or G-SAP 1.0:

For the first time, the RBI has committed to purchasing a specific amount of government securities from the market through its open market operations.

Bonds worth `1 trillion are scheduled to be purchased in the April-June quarter of fiscal year 2022.

Earlier depending on the liquidity needs of the financial system, the RBI used to undertake open market operations.

Now, with G-SAP, the RBI will ensure lower volatility in the bond market, efficiently manage borrowing for the government and ensure stable interest rate scenario in the system.

The move has boosted sentiments in the bond market. G-SAP will complement other liquidity management tools.

VRRR (Variable Rate Reverse Repo) Auctions:

VRRR of longer maturity beyond the current 14 days will be conducted to manage liquidity.

This will help absorb surplus liquidity in the system and rein in volatility in the markets. The move kind of offsets G-SAP.

But here the RBI has made it clear that VRRR should not be seen as a liquidity-tightening measure. The amount and tenor of auctions under VRRR will be decided on evolving liquidity and financial conditions in the economy.

On-Tap LTRO Extended:

Given the impact of the Covid-19 pandemic, last year the RBI announced on-tap targeted long-term repo operations scheme as a tool to enhance liquidity and ensure credit availability to certain important sectors of the economy.

Under the scheme, banks and NBFCs can borrow one- to three-year funds from the RBI at the repo rate.

It is called targeted as the money so borrowed has to be mandatorily invested in corporate bonds, commercial papers, and non-convertible debentures or for direct loans to specific sectors. Now, the RBI has extended the scheme by six months till 30th September.

Ways And Means Advances Hiked:

Ways and means advances refers to

the short-term advances facility provided by the RBI to tide over temporary mismatches in the receipts and payments of the central and state governments.

Now, the RBI has increased the limit under WMA. Additionally, an interim limit of `51,560 crore set last year under WMA to help states and union territories in order to tide over the liquidity crunch due to the pandemic has been extended till 30th September.

IN A NUTSHELL

Clearly, the RBI is juggling with multiple objectives. On one side it has to ensure that inflation stays lower, on the other hand it has to support economic growth with ample liquidity.

It also has to manage the government’s borrowing programme without any disruption.

The RBI in its April policy has done well to change its time-based forward guidance to state-based. For now the state-based guidance provides some continuation, ensuring lower policy interest rates. But future course will be data-dependent.

Eventually, the RBI will have to start adjusting the reverse repo rate higher.

The timing will depend on impact of the second wave of the pandemic on the economy, international commodity prices, inflation numbers and global currency markets, among other things. The next meeting of the MPC is scheduled during June ’21.

GDP GrowthCPI Inflation

RBI's Outlook

Q1 FY2226.21

5.2

Q2 FY228.35.2

Q3 FY225.44.4

Q4 FY226.25.1

FY2210.5

Source: RBI

BEYOND THINKING

Covid-19 has changed individual preferences like never before. People

CY18. But in CY19 savvy investors began looking at pharmaceutical and health care companies as value picks. In the time after Covid-19 pandemic, these companies became the top favourite of many investors and the stocks zoomed. From the bottom of 4,597 recorded on 23rd Mar ’20, the Nifty Healthcare TRI zoomed 93.21% till 13th Apr ’21.

Though the returns appear impres

have begun valuing their health over other areas of their lives even since the coronavirus pandemic struck nations around the world and brought economies to their knees, subse-quently benefitting health care and pharmaceuticals companies, which are poised for growth from a long-term perspective.

Not long ago, the valuations of many pharma companies were down in

SORENO

MORE

The coronavirus pandemic is showing no signs of slowing down, aiding the growth of stocks in the health care space, which till some time back were performing badly



There will be large investments in this sector – both public and private. These investments will throw open many opportunities for investors.

The Covid-19 pandemic also underlined the role co-morbidities play in our health and treatment protocols to be followed. Ignorance or the inability to manage health conditions has been an expensive proposition for many.

Going forward, there will be more awareness and many individuals will demand better diagnostic services as ‘prevention’ takes greater importance in the ambit of overall health care services. Hospitals and drug makers will also benefit in the process.

One big beneficiary of the Covid-19 shock has been health insurance companies. Individuals began realizing the need for health insurance. Though there are no standalone health insurers available for investing in, the stocks of non-life insurers would nevertheless benefit from increased demand.

Many pharmaceutical companies have of late invested a lot in the wellness vertical. This is an upcom-ing business. As lifestyle diseases catch up, there will be a huge section of the population that would look forward to wellness products and services.

While offering these products, wellness companies would be able to enjoy better pricing power given the brand premium. Health supplements and similar such products may help these companies enjoy the predicta-bility of demand, and thereby earnings too. Hence, such companies should also benefit from better valuations.

Going forward, expect some initial public offerings (IPOs) from the

caution to the wind. The government and regulatory bodies are monitoring the situation actively. Signs of super-normal profits will attract restrictions and price control at various levels.

For example, the government of Maharashtra has advised measured usage of Remdesivir only when required. The Central government has also banned the exports of the drug after its shortages were reported in the country.

The government had already defined the cost of Covid-19 treatment packages in various parts of the country. This approach should ensure that the companies are not allowed to make outsized profits.

In the medium- to long-term, the Indian pharmaceutical business will be driven by domestic and export demand. Covid-19 pandemic has disturbed many supply chains across the world.

Though multinational companies looked at China as the preferred destination for manufacturing, the search for another country to build manufacturing facilities has begun. India is expected to benefit from this search.

Some of the pharma manufacturing is expected to come to India. And Indian companies may get some opportunities in the ‘contract manufacturing’ space. Exports of ‘Made in India’ drugs can be a growth driver to the sector.

As far as domestic growth is considered, the demand for health care is expected to be strong. The Covid-19 situation has exposed our vulnerabilities. Although India is the world’s second-fastest growing economy in the world, it scores poorly in health infrastructure.

sive, they are not linear, especially if one looks at the recent past. After the economy started to open up, the investors shifted from defensive stocks (such as pharmaceuticals) to cyclical stocks (such as banking) after September ’20.

Nifty Healthcare TRI lost 3.87% and 6.07% in the month of October ’20 and January ’21, respectively. Though the index sprung up and regained lost ground, investors need to take a serious relook at the sector before committing fresh money to it.

In the short term, it is investors’ sentiments that matter. If we are staring at a second wave of Covid-19 infections and further restrictions or lockdown in Maharashtra and various parts of the country, there may be a change in investor prefer-ence.

Some investors may want to cut their exposure to cyclical stocks like banking and capital goods, and shift to defensive stocks such as pharma-ceuticals and information technology (IT) sectors.

When money flows from one sector to another, it supports stock prices. But the earnings of the companies are more reliable factors while making investment decisions.

In the short term, there will be increased demand for diagnostics services, drugs and other health care services. Though there is not much of a vaccine play here in India, barring Dr Reddy’s Laboratories, investors can still expect increased demand for health care services – including health insurance, among other things. Indian pharmaceuticals and health care companies should see some increase in earnings in the second wave of Covid-19.

However, investors should not throw

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Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risks. Investment in Securities/Commodities market are subject to market risks. Read all the related documents carefully before investing. Please read the Do’s and Don’ts prescribed by the Commodity Exchange before trading. We do not offer PMS Service for the Commodity segment .The securities quoted are exemplary and are not recommendatory. NIRMAL BANG SECURITIES PVT LTD – BSE (Member ID- 498): INB011072759, INF011072759, Exchange Registered Member in CDS; NSE MEMEBR ID- 09391): INB230939139, INF230939139, INE230939139; MSEI Member ID-1067) : INB260939138, INF260939138, INE260939139: Single Registration No.INZ000202536,PMS Registration No: INP000002981; Research Analyst Registration No: INH000001766; NSDL/ CDSL: IN-DP-CD-SL 37-99. NIRMAL BANG COMMODITIES PVT LTD – MCX (Member ID -16590 /NCDEX Member ID -0362 /ICEX Member ID -1165) : Single Registration No. INZ000043630; NCDEX Spot: 10084; Comtrack Participants: CPID -5040; CDSL Commodity Repository Ltd: 12013300 Nirmal Bang Securities Private Limited CIN: U99999MH1997PTC110659; Nirmal

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health care sector to help investors further diversify their investments. For example, over the last few years, we have seen notable listings of stocks of companies that are operating in the field of diagnostics.

However, investors are still waiting for listed investment options such as stocks of companies in health care technology, medicine distribution, and health insurance.

Investors will be better off investing in the health care sector after

studying global trends. The global health care system is driven more by technology. There are substantial investments in health care technolo-gy, which has led to economies of scale and better margins at various levels of health care delivery.

Indian investors can take advantage of these by investing in a few of the global names by routing some of their money through dedicated health care mutual fund schemes that are investing overseas or on their own.Though stock-specific investment

opportunities always exist, investors need to understand that valuations are stretched for the health care sector. Investors cannot simply rely on past performance of stocks to commit their money towards such investments.

Typically, sectors take some time to consolidate before making further upmove. Therefore, investors have to look at the health care sector with moderate expectations of returns in the future and with a relatively long-term vieW.

BEYOND THINKING

TROLLS ONA ROLL

Minor slights are enough for trolls to unleash their wrath

on brands, and companies as well as advertisers are

growing wary of cyber bullies



prash, with the power of more than 40 herbs like Ashwagandha, Giloy and Amla has always stood for boosting immunity to fight illnesses. Akshay Kumar is emblematic of health, fitness, and inner strength, the properties of Dabur Chyawanprash.”

In December ’20, Dabur India announced Akshay Kumar as the new face of its flagship health supplements brand Dabur Chyawan-prash.

The irony of the situation was not lost on netizens who trolled the brand and the actor for its Covid-protection claims.

NETIZEN TWEETS

A user said on Twitter ‘#Akshay Kumar tests positive, unfortunately, the #Dabur #Chyawanaprash didn’t help’

Another user tweeted “Don’t fall for #Covid19 immunity ads, masks, and social distancing would keep you safe. #Dabur”

A section of netizens also slammed the actor and the company for being reckless while promoting products with Covid-protection claims.

REPERCUSSIONS

Netizens didn’t spare ad regulator the Advertising Standards Council of India (ASCI) either and dragged it into a controversy and asked whether action will be taken against the company and the actor for making such claims.

Will the advertising council now make the actor announce that he doesn’t consume the product is what needs to be seen.

As soon as the news of Kumar’s Covid positive status and his

Not only companies and brands, even celebrity brand ambassadors have to face criticism from tech-savvy consumers. Dabur India’s advertising campaign promoting its immuni-ty-boosting product Chyawanprash was trolled on social media after its brand ambassador Akshay Kumar announced that he had tested positive for Covid-19.

While other actors and celebrities mostly get sympathy on social media after announcing that they have tested Covid positive, Kumar on the contrary, was trolled heavily.

The advertisement of Chyawanprash had claimed that it offered protection against coronavirus by boosting immunity. In the advertisement, Akshay Kumar is seen holding a bottle of Chyawanprash while claiming that just two teaspoons of chayawanprash daily was enough to ward off the virus as it boosted immunity to fight against the virus. The copy of the ad read: “According to a clinical study conducted across five centres, Dabur Chyawanprash helps in protection against Covid-19.”

After Kumar announced that he had tested positive for coronavirus, netizens asked whether Kumar himself was consuming Dabur Chyawanprash at all or if the product’s efficacy tests were fabricated. Netizens questioned the authenticity of the claims made in Kumar’s advertisement for Dabur Chyawanprash.

Mohit Malhotra, Chief Executive Officer, Dabur India during the launch of the ad had said, “The times we are living in today have under-lined the need for and importance of immunity more than ever before. Strong immunity is the need of the hour with the threat of illnesses looming around us. Dabur Chyawan-

As the reach of the internet has deepened, brands have been struggling to cope with trolling by new-age tech-savvy consumers over the last two years.

Gone are the days when companies could happily get away with tall claims they made while advertising their products through certain punch lines or by highlighting a few benefits that may or may not be true.

With the arrival of social media and alert consumers, things have become difficult for companies. And making tall claims is just not enough to gain customer loyalty.

According to experts, companies are walking on eggshells while deciding their advertising and branding strategies as any slight dissatisfaction will result in trolling by 100s and 1,000s of disgruntled consumers, severely impacting a brand’s reputation.

Even a renowned and an old brand may have to face the wrath of its consumers for misleading them or creating controversial ads.

ADS TROLLED

Tata-owned Tanishq had to endure a backlash in 2020 on social media for its advertisement featuring an interfaith couple. The brand had to face the wrath of netizens who trolled it massively on social media, and the company was forced to finally pull off the ad.


subsequent hospitalization came out, Dabur had to pull off its ad from TV because the advertisement and its product Chyawanprash were both being heavily trolled on social media.

After Kumar’s Covid-19 positive reports, the Advertising Standards Council of India took cognisance of the matter and has asked Dabur to reply to the claim made in its advertisement.

This is not the first time when a celebrity or a brand has been trolled on social media for a similar blunder. A few months ago, Sourav Ganguly suffered a heart attack when his fans started massively trolling Ganguly the Brand Ambassador of Fortune Rice Bran Oil, which later had to be removed from TV commercials.

In the second ad, Ganguly was seen saying that he may have suffered a heart attack due to family history and he used the oil to adopt a healthy lifestyle.

As mentioned earlier, Tata-owned Tanishq had to pull off its ad last year for its advertisement featuring an interfaith couple.

COPING WITH TROLLS

Social media trolling is common and is no longer a marketing depart-ment’s problem alone. With heavy trolling by netizens for misleading ads or claims, companies have had to rethink ways to manage such situations as it can heavily damage brands, impacting sales.

During a crisis, brands have had to lay out a prioritization roadmap for responses from various executive levels going up to the Chief Execu-tive Officer, according to brand guru Harish Bijoor.

As per industry experts, even after

vaccinations people are getting infected with Covid. Hence, tall claims of brands about offering protection or immunity against coronavirus honestly do not stand a chance.

However, legal action is not possible against these brands or companies as these ads are mere claims and are not a guarantee offered by the brands. Legal action is only possible on brands when they offer some kind of guarantee on the product.

When companies say that their ad is 99.99% correct, such percentage also amounts to claims. However, if the research behind the claim is false, a case can be made in the consumer court. The Central Consumer Protection Authority can impose a fine of `10 lakh and jail for two years against advertisers who make false claims, cautioned experts.

The ASCI recently said that lately there has been a surge in misleading ads during the Covid-19 pandemic. Several products have had to change their packaging and labeling after complaints were filed against them.

COUNTERING NEGATIVE PUBLICITY

After Ganguly suffered a heart attack that resulted in an angioplasty, the internet was filled with memes mocking Ganguly’s association with Adani Wilmar’s Fortune Rice Bran Oil, which claimed to strengthen heart health.

Soon after Sourav Ganguly was discharged from hospital following his second angioplasty, Fortune Rice Bran Health Oil was back with a new ad featuring Ganguly.

In the print ad, released on Valentine’s Day, Ganguly assured his fans that his “heart is just fine,” and

urged people to take good care of their heart health.

The ambassador of a brand that positions itself as ‘heart-healthy oil’ suffering a heart attack is nothing short of a nightmare. Will the new ad help control the damage done to the brand’s reputation or could the brand manager have handled the situation any differently?

Ganguly was named as the brand ambassador of Adani Wilmar Ltd’s (AWL) Fortune Rice Bran Health Oil in January 2020. Since 23rd Oct ’19, he has been President of the Board of Control for Cricket in India (BCCI).

Fortune oil positions itself as the healthy oil for the 40-plus age group. This was a keenly contested segment with many competitors including Saffola Oil, a Marico Ltd brand. Fortune came out with an advertise-ment with the tagline “Dada bole (says) welcome to the 40s.”

The company also used the hashtag #WelcomeToThe40s. In the televi-sion commercial, it clearly states that the Fortune Rice Bran Health cooking oil has Gamma Oryzanol, which increases good cholesterol and reduces bad cholesterol, and as a result, keeps the heart healthy. Towards the end, Ganguly says, “Fortune Rice Bran Health is healthier than healthy oils.”

On 7th Apr ’20, Ganguly shared the ad on Twitter: “Yes, you can live your life to the fullest even in your 40s. Just have to play it smart. Make sure you’re taking care of your heart and immunity. It starts with your oil. Switch to an oil that cuts bad cholesterol and increases good cholesterol. An oil that boosts your immunity.”

But as luck would have it, on 2nd Jan ’21, Ganguly complained of chest


pain during his regular workout and doctors said he had suffered a mild heart attack and had to undergo angioplasty. The news came as a shock to cricket fans as he is just 48 years old, and known to maintain a healthy lifestyle.

Following this health scare, the Fortune brand faced a backlash across all social media platforms. Netizens questioned brand endorse-ments and if celebrities even used the products they endorsed. To add the

its woes, soon news surfaced that another angioplasty was performed on 28th Jan ’21, after Ganguly complained of chest pain on 27th January, leading to a crisis for AWL.

Industry observers pointed out that far too many brands have found themselves in similarly sticky situations, and, in most cases, the brand ambassadors were just dropped.

Indian cricketer Yuvraj Singh was the

first brand ambassador for Revital H Capsule but the company replaced him with actor Salman Khan after the cricketer was diagnosed with lung cancer.

In the year 2020, Dabur Chyawan-prash replaced actor Amitabh Bachchan with another actor Akshay Kumar after Bachchan contracted coronavirus. Ironically, Akshay Kumar himself tweeted that he tested positive for Covid after a few monthS.

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Disclaimer: Insurance is a subject matter of solicitation. Mutual Fund investments are subject to market risks. Investment in Securities/Commodities market are subject to market risks. Read all the related

documents carefully before investing. Please read the Do’s and Don’ts prescribed by the Commodity Exchange before trading. We do not offer PMS Service for the Commodity segment .The securities

quoted are exemplary and are not recommendatory. NIRMAL BANG SECURITIES PVT LTD – BSE (Member ID- 498): INB011072759, INF011072759, Exchange Registered Member in CDS; NSE MEMEBR

ID- 09391): INB230939139, INF230939139, INE230939139; MSEI Member ID-1067) : INB260939138, INF260939138, INE260939139: Single Registration No.INZ000202536,PMS Registration No:

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BEYOND THINKING

SHAPING THE FUTUREOF ENTERTAINMENT

New mediums are overtaking the old in unimaginable ways in the media and

entertainment industry in a bid to survive the impact of Covid-19



Another key factor that will have a severe impact on the industry’s revenues is big film stars contracting coronavirus. This means that the industry will not only suffer on the production side but also on the distribution side. TELEVISION India’s television industry was relatively less impacted in 2020 as the coronavirus-induced lockdown resulted in increased viewership for television.

As per the FICCI-EY report, television advertising in 2021 is expected to be close to 2019 levels. It is likely to grow over 20% to reach `30,400 crore on the back of a line up of fresh sports content, regional channel rate increases and continued growth of free television.

The report observes that subscription income would grow 5% to reach `45,600 crore owing to fresh content, several marquee sports events and pending movie releases.

The television segment’s revenues are expected to grow at a compound annual growth rate (CAGR) of 7% to reach `84,700 crore by 2023 driven by increased base of subscribers as households continue to get televised and TV’s price competitiveness as against [OTT + data] alternatives, notes the FICCI-EY report. One of the key changes expected from television in 2021 is that the segment will focus more on mass content, and, hence, mass audience. The report observes that television content - especially paid television content - will continue to grow marginally as states like UP, Bihar, Rajasthan and West Bengal get electrified.

It is estimated that easily available

producers. The FICCI-EY report states that the value of broadcast rights fell 68% due to fewer complet-ed new films and business caution by broadcasters.

Digital rights consequently grew 86% to reach `3,540 crore as films were released directly on to the streaming platforms at rates, which compensated producers (wholly or in part) for lost theatrical revenues. At least 15 Hindi films were released on streaming platforms. It started with the direct release of Gulabo Sitabo on Amazon Prime Video. Besides, films such as Dil Bechara, Sadak 2, Laxmii and Coolie No.1 were also released there.

Netflix, Disney+Hotstar and Amazon Prime Video had the biggest market share in India for the direct release of such movies.

The report notes that industry and internet search data indicate that direct-to-digital releases did result in a spike in viewership on streaming platforms, especially in smaller towns and cities. But this impact was not uniform across platforms.

According to industry experts and analysts, producers will continue to prefer a theatrical release window to optimize the revenue-generating potential of marquee film products. But in 2021 these trends may not transpire. A large number of films released on streaming platforms failed to attract new eyeballs and subscriptions. This is one of the reasons why streaming platforms are cautious about buying new films. Also, prolonged lockdown will make it difficult for producers to release films in theatres in 2021 also.

This means that producers will have to postpone the release of films.

India’s entertainment industry is going through a delicate phase. The long-stretched pandemic has thwarted almost every hope for the industry to return to normalcy.

Year 2021 started on a promising note with many expecting people to throng crowded places like movie theatres following the discovery of the vaccine to treat coronavirus,

But the second wave of the coronavi-rus pandemic seems to have squashed all such hopes. So, how different is 2021 from 2020? The recently released annual report on the media and entertainment industry by FICCI-EY reveals more about the status of the sector.

Let us understand the implication of the coronavirus pandemic on three key segments, namely, films, television and digital media. FILMS Prolonged lockdown has dashed hopes of recovery in business for the film industry. In 2020, around 441 films were released in comparison with 1,833 in 2019. This was due to lockdown and social distancing.

According to the FICCI-EY report, “Filmed entertainment segment saw an 80% decline across domestic and international theatrical revenues.”

In this situation, streaming platforms emerged as the last resort for


broadband services provided either through telecommunications firms or private internet service providers will boost the growth of television sets in areas beyond tier-II cities.

Overall TV connections will keep growing at a healthy pace of over 5% per year to cross 71% of Indian households by 2025.

There is another fundamental factor, which will make content on TV massy and escapist. The report notes that most top-end subscribers opt for smart and connected television sets. This will change the demographics of the universe of TV audience. The socio-economic status of the audience available to watch televi-sion will lower.

It is believed that audiences, which opt for free television bouquet channels, will cross 150 million by 2025. Hence, the report states, “We expect content on television will adapt to become more escapist and mass in nature. This fact can help control the increase in average content costs for television program-ming, though marquee/ tent-pole programmes and reality shows will always have their place.”

Low-budget direct-to-television films as well as low-cost content created by news channels are expected to distinguish one channel from another.

In the coming months, regional television will drive advertising rate growth. It is observed that companies like Zee have already started producing defined offerings for its regional audiences.

This will be driven by the increase in regional content consumption on TV to 60% of total TV consumption improved quality and higher quantity of content on regional channels.

The report notes that for television subscriptions to grow it would need to remain cost-efficient as compared to the price of the streaming platforms. It notes, “The impact of data prices and bundling of popular streaming platform packages will be the benchmark against which television subscription will need to be maintained.” A key segment in which competition is expected to be stiff is sports events. The report highlights that the move of sports events to prime time - through day-night matches and evening scheduling - can impact general entertainment viewership. It emphasizes on the fact that having a sports product in the bouquet will become increasingly important for broadcasters. The report foresees the emergence of an era of “connected consumption.” Connected televisions will change the way people consume content. It will help people interact with each other from their homes while viewing content.

The report states, “We expect to see several innovations around connect-ed TV content: live chats between viewers, live polls and contests, play-along games (specially around sports) with real-time leader boards and challenge-a-friend formats to enable community interactivity, TV content with live interactive elements (singing/ dancing/ quizzing).” Lastly, the report foresees newer ways of monetization of already existing content libraries in the coming months. Television channels are likely to collaborate and produce content not only to appear on channels but also on their own streaming platforms. These channels will also sell content to other streaming platforms and make money.

DIGITAL MEDIA The digital media is expected to record high growth in 2021. It must be noted that the segment became the second largest in 2020, overtaking print. The report expects the segment to grow to `42,450 crore by 2023, growing at a CAGR of 22%.

The report says, “We expect digital media to continue to reduce the gap with television as digital infrastruc-ture (screens, broadband connections, e-commerce, digital payments, etc.) continues to grow. The demand for original content will double by 2023 from 2019 levels to over 3,000 hours per year. Curated short video platforms will garner 25% of the total time spent on online video viewing by 2023.” Besides, the report says the share of regional language consumption on streaming platforms will cross 50% of the total time spent by 2025, easily surpassing Hindi at 45%. Sports will play a key role in growing subscrip-tion revenues, leading to a growth in valuation of digital media rights. Given these facts, it is clear that not all segments of India’s media and entertainment industry will be impacted in 2021. This is not the situation in other industries, which offer non-essential services.

In the coming months, it is quite clear that value growth in subscrip-tions will be more in digital media than in print and television. A key reason for this is: tastes of audiences are changing.

Today, audiences have clear and specific expectations. For content producers to succeed in the coming months, how well they score on meeting audiences’ specific expecta-tions will determine their sustenance and growtH.

BEYOND THINKING

‘Don’t live beyond your means’ is an old adage, which is highly relevant in financial management. This simple statement highlights an important facet of achieving financial freedom, that is, having control over one’s finances to be able to lead a financially responsible life. This in no way deters individuals from

inflows, the total debt should be within acceptable limits.

Furthermore, one should have the repayment discipline, which means that a person should adhere to the payment schedule so that it doesn’t tarnish his/her credit history.

Despite knowing the evils of living beyond one’s means, individuals do often fall into the debt trap at times owing to lack of discipline and indulgences. And in some cases due to an emergency that may have wiped off their savings.

resorting to borrowings or taking on debt.

In fact, in many ways, debt or borrowings if accessed in the right proportion can help individuals achieve their lifetime goals such as buying a house or upgrading their skills by enrolling in an educational programme.

The crux lies in the fact that one should avoid excesses. In other words, it means that borrowings should be contingent on cash inflows. And as a percentage of total

STAVINGOFF DEBT

Avoid allowing debt to get the better of you by following a

few crucial steps



ease the debt burden significantly. However, if you lack the funds to pay it off, approach the credit card company and seek for conversion into a personal loan.

Credit card companies are willing to accommodate in cases where credit card outstanding is large. The balance payment due will be converted into a 6-month to a 12-month personal loan or may be an even longer tenure.

While personal loans are also costly, the interest rate will be half that of the credit card. It is always beneficial for the borrower to completely pay off credit card dues due to the high-cost nature of this debt.

Any savings or investments will earn much lesser returns than the cost of rolling over the balance on the credit card, and, hence, it makes economic sense to liquidate it to pay off the credit card bill.

Curb Expenses

Reduce your outflows by making necessary lifestyle changes so that you have more money at your disposal to pay off the interest and EMIs. The best way to proceed with this is to assess your credit card statement and/or bank statement for the past six months and identify those areas where expenses can be curbed.

Things such as avoiding frequent dining out can lead to substantial savings when calculated over a period of time. The situation may also demand downgrading to a smaller car, stopping subscriptions, which are not really being used, cutting grocery bills, etc.

It will be astounding to see what a noteworthy difference curbing small expenses can make.

only alternative to pay off interest or an EMI, it is a clear sign that this scenario is not sustainable.

In many instances, when the individual identifies the problem early, he is able to initiate corrective action, thus making it relatively less complicated to emerge out of the trap or he may altogether avoid falling into the trap.

Constantly resorting to borrowings will only be a temporary relief but will push the individual further down the debt dungeon making it even more difficult to solve the problem.

So, the first signs of trouble should be the trigger for immediate action. The action required may be unprece-dented. It may involve significant lifestyle changes, including liquidat-ing some assets, among other things.

Options such as borrowing against Public Provident Fund (PPF) (loans are available after the third year) or partial withdrawals after the sixth year is permitted or borrowing against using mutual fund units or bonds as collateral are also options that can be explored.

Initiating early action makes it easier for one to emerge victorious from the debt crisis.

Prioritize Debt Payments

It is imperative to list out all debts and the cost of the debt, from the costliest to the cheapest of debts. Retiring a high-cost debt should be the foremost objective. High-cost debt means significant interest burden and generally credit card loans and personal loans fall in this category.

Interest rate on credit cards rolling balance can be as high as 36% to 40% per annum. Paying it off will

It is, therefore, important to know what a debt trap is and why it is considered to be a path to financial ruin.

WHAT IS A DEBT TRAP?

When an individual finds it difficult or impossible to repay the debt from his/her earnings, and has to resort to additional borrowings to honour the repayment schedule, that individual is said to be in a debt trap.

This is due to the fact that the debt is ballooning when there is no addition-al source of income and there is no way by which this scenario can sustain, thus leading to financial ruin. An individual who finds himself in this situation feels trapped and helpless as interest becomes a significant monthly expense and together with loan repayments it may end up being a significant portion of his/her income.

Coming out of a debt trap requires a lot of efforts and the debt burden can take an emotional toll on individuals. Just as in the case of health manage-ment, prevention is better than cure.

Similarly, in financial management, taking steps to ensure that one does not land in a financial mess is better than undoing the damage as the effects are not only limited to one’s financial world, but there is the emotional cost of stress too.

HOW DOES ONE COME OUT OF THE DEBT TRAP

Identify The Problem Early And Acknowledge It

When the first signs of trouble emerge, the individual should acknowledge the problem rather than be overwhelmed by it, which will enable rational thinking. When the situation demands borrowing as the


BEYOND WORDSSequencing

When in an economy, economic reforms are implemented in the correct or the right order, it is known as sequencing. Sequencing is carried out with the intention to revive a malfunctioning economy. Everyone knows that reforms are needed in an economy. But introducing reforms without thought or sequence is of no use whatsoever. Sequencing is extremely important in developing economies. However, some economists argue about the advantages of sequencing of economic reforms.

Debt Consolidation

Having too many loans to take care of can oftentimes be stressful. If your borrowing profile permits, it may be more practical to take a new loan and pay off all existing debts so as to simplify things.

This may also help to move from high-cost debt to low-cost debt, which is immensely beneficial as the interest outgo will reduce.

If this is not an option, consider restructuring the debt. Negotiate with the lending institution to increase the tenure of the loan so that the EMIs come down, making the repayment more manageable given the current circumstances.

Seek Professional Help

If one is already in a financially messy situation, it requires financial discipline and more importantly for the individual to be emotionally strong. If the situation is overwhelm-ing, the individual is unlikely to make rational decisions and that is where a professional can step in.

The financial professional will help make hard choices and will also offer practical solutions to emerge out of this worrying situation.

Getting out of a debt trap is not easy and the journey may be arduous as tough decisions are needed to be taken.

The best-case scenario is to have check points in place to ensure that one doesn’t land up in this situation.

Some of the must-dos include

• Build An Emergency Fund: Create an emergency corpus as emergencies can lead one into a debt trap. Setting aside 6 to 9 months of monthly expenses, can be greatly beneficial to tide over an unprece-dented situation.

• Use The Auto-Debit Facility: Automate your payment cycle by using the direct debit facility for EMIs. This will be immensely beneficial as it will ensure that there are no delays in repayments.

• Credit Cards May Not Be For You: If you cannot make the full credit card payment every month, then credit cards are not for you. Paying the minimum balance required is an invitation for trouble as the interest rates on the cards are so high that you will be paying a lot more for anything you buy. Give up the credit card and switch to a debit card.

• Live Within Your Means: Indulge in a purchase that you can afford now and not on the basis of what your potential income would be. Having a conservative approach will mean less stress.

• Do Not Maximise Your Borrow-ing Limit: Based on your current

debt profile, financial institutions will tell you the maximum borrowing available on home loans or even car loans. Exercise self-restraint. Buy what you need and do not make that purchase just because credit is easily available to you.

• Monitor Thresholds: Experts have chalked out guidelines for debt management and they suggest that not more than 40% of the income should go towards the payment of EMIs and this includes all loans such as housing loan, car loan, personal loan, credit card outstanding, etc.

This provides headroom for increase in interest rates and more importantly offers enough scope for savings and investment as typically 30% of one’s income goes towards food, rent and other expenses and a small portion towards emergency funds.

Avoiding excesses is crucial for success in financial management. So, borrowings per se do not negatively impact one’s financial well-being as long as it is within the threshold and is done prudently.

Also, what one needs to remember is that borrowings create a trail in your credit history. And in order to have undeterred access to funds in the future, repayment discipline without time lapses is vital.

Adequate self-control along with discipline will ensure that debt doesn’t get the better of yoU.

BEYOND BASICS

In March, net flows into equity mutual funds turned positive after 8 months of continuous outflows, according to data released by the Association of Mutual Funds of India (AMFI) for the month of March ’21. Flows were supported by investors

the Indian markets despite the pandemic-led negative news flow.

The change in the mood of equity investors could be attributed to hopes of strong economic recovery despite the second wave of the Covid-19 pandemic, progress in mass vaccina-tion and policy reforms.

But are the flows sustainable? While flows into equity schemes of domestic mutual funds will largely depend on the performance of the market going ahead and the long-term strategy of investors, there

seeking long-term opportunities in the market and by investors who bought tax-saving equity instruments ahead of March-end.

In March ’21, open-ended equity schemes witnessed net inflows of `9,115 crore against outflows of `7,528 crore in February ’21. On net basis, equity mutual funds have sold Indian equities worth `0.4 trillion in the fiscal year 2020-21.

The return of equity investors through mutual funds is heartening and reflects investors’ confidence in

ADOLLOP

OFPOSITIVITY

March ’21 saw positive flows into equity mutual funds after 8 months of outflows.



inflows in FY20.

The contribution of SIPs, which was around `5,000 crore a few years back, has silently increased to around `8,000 crore on an average now. This continuous flow gives some confidence about sustainability of flows into Equity mutual funds.

IN THE HINTERLAND

Equity schemes have the largest number of folios (unique number for investment in mutual funds) at approximately 6.58 crore, which constitutes nearly 67.2% share of the total number of folios. Unique investors across mutual fund schemes increased in the last one year, by 10% from 2.08 crore as on 31st March ’20 to 2.28 crore as on 31st Mar ’21. Clearly, investors prefer the mutual fund route to participate in the markets.

Also, despite the pandemic, there has been growing acceptance for mutual funds from tier-II and tier-III cities. Mutual Fund AUMs from beyond the Top 30 cities rose 54% to `5.35 trillion as on 31st Mar ’21, as compared to `3.48 trillion as on 31st Mar ’20.

IN A NUTSHELL

While it’s too early to say that Equity mutual fund schemes will witness sustained flows in the near term, small investors have been reinforcing their faith in the Indian markets and participating through MFs in to Indian stock markets. This will ensure a long-term build up of AUM for the mutual fund industry.

Also, despite the second wave of the coronavirus pandemic, the stock markets have been consistently holding up to its gains without any major corrections. This should help bolster investor sentimentS.

the back of loose monetary policy of global central banks and a weak dollar against the Indian rupee.

EQUITY FUNDS

There are some 344 Equity mutual fund schemes and around 139 hybrid schemes that have some equity portion in them. Equity-oriented mutual fund schemes derive 88% of their assets from individual investors (retail plus high net-worth investors).

Out of the net assets of `10 trillion of equity mutual funds, the largest share continues to be that of large-cap funds with a share of 18%, followed by the flexi fund category with a share of 16%; ELSS with a 13% share and mid-cap funds with a share of 12%.

While Debt mutual fund schemes accounted for the largest share of AUMs at 46.2% against 53.2% in March ’20, share of equity schemes is rising and stands at 31.7% against 27.0% in March ’20.

The share of Equity schemes is expected to rise in the future as more and more investors are taking the mutual fund route to participate in the stock markets.

SIPs - RISING CONTRIBUTION

Although volatile, the inflow through SIPs is testimony to the fact that Equity MFs are favoured by retail investors. SIPs are primarily used to invest in equity funds. The contribu-tion through SIPs went up to `9,182 crore in March compared to `7,528 crore in February ’21.

The number of SIP accounts outstanding increased to 3.72 crore in March as compared to 3.62 crore in February. The mutual fund industry witnessed net flows of `96,080 crore in FY21 compared with `1 trillion of

are two aspects that can ensure that participation will not wane sharply - Systematic Investment Plans (SIPs) and increasing penetration of mutual funds in India’s smaller towns and cities. Let us review mutual fund performance in FY21 before we delve into these two aspects.

FY21 – THE YEAR GONE BY

Assets managed by the Indian mutual fund industry have increased from `24.71 trillion in March ’20 to `32.17 trillion in March ’21. According to data from AMFI, industry assets have risen more than four-fold since April ’11.

The Assets Under Management (AUM) of Debt mutual funds, which account for around 46% of the total AUM, have risen to `14.5 trillion in March ’21 from `11.8 trillion in March ’20. The AUM of Equity MFs has risen to `10 trillion in March ’21 from `6 trillion in March ’20.

While the AUM of Equity MFs has risen, it is on the back of the rising price of portfolio stocks and not out of increased participation. There has been an actual outflow of `0.4 trillion during the period as investors booked profits.

In FY21, when benchmark equity indices - Sensex and Nifty - surged around 70%, domestic institutional investors, which include mutual funds and insurance companies, booked profits worth `1.38 trillion.

Foreign portfolio investors have pumped around `2.75 trillion in the same period. The rally in FY21 has also been more broad-based with small- and mid-cap index rising over 100%.

FPI flow is the highest ever in the last two decades. Interest shown by FPIs in Indian equities was mostly on

BEYOND BASICS

There has been a sharp surge in the sales of pure term insurance plans

FARSIGHTEDSECURITY

Individuals should buy term insurance plans despite the likely rise in premiums to secure

the future of their dependents

since the outbreak of Covid-19 in India. However, premiums of term insurance plans have risen since the start of the previous calendar year.

Now, as the second wave of the pandemic continues to batter India, life insurers are again planning to increase the rates of term insurance plans.

The key reason for the increase in

rates of term plans is high mortality rates and increase in prices by reinsurance players.

Last year, premiums for term insurance plans were raised by 10% to 15%. Currently, several insurance players are looking to further increase prices by another 15% to 20%.

Term plan is a simple insurance



opt for a term plan based on his/her age rather than going by the concept of 10x the annual income.

To get the most out of their term plans, policyholders should also buy additional riders with their policies. These riders will give policyholders the much-needed peace of mind. They should buy riders of critical illnesses, accidental deaths or permanent disability as these riders can give them money when they need it the most – in times of crises.

Not only benefits discussed above, but premiums paid for term plans can also be eligible for tax exemptions under section 80C of the Income Tax Act. For working couples, there is the option of buying joint life term insurance plans for the purpose of flexibility.

SHOULD INDIVIDUALS BUY TERM PLANS NOW

A person should buy a term plan before he/she buys any other insurance product. A term plan coupled with investments in mutual funds is more than enough as compared to buying endowment insurance plans.

Even if rates have increased, people should buy term insurance plans.

Don’t just buy a term plan for a lower sum assured. Instead, the term policy you buy should be able to replace your income, pay off your debts and provide financial security to your family in case of your untimely deatH.

charged in term insurance plans on the basis of the current experience of the company. Currently, India has one of the lowest price structures in the world.

Also, there has been an increase in rates by reinsurance players. As policyholders we pay premiums to get the insurance cover, and the insurers, in turn, shell out premiums to reinsurers to cover large risks. With Covid-19 deaths going up, reinsurance players have increased their rates.

WHO SHOULD BUY A TERM PLAN

The term plan should be bought by everyone who is the sole earning member of the family.

The basic concept of the term plan is that if the breadwinner of the family is not alive, then the insurance amount of the term plan can be used to take care of the family members of the policyholder after he/she passes away.

Typically, people tell that a term plan should be 10 times a person’s annual income. But it is ideal that the term plan should be based on his/her age. For example, if a 25-year-old is earnings `10 lakh per annum, in basic term he/she should have a term plan of `1 crore (10 times of his/her annual income).

But it is advised that he/she should have a term plan `3.5 crore as the individual still has to work for another 35 years, then it is better to

product wherein the nominee or the family members get the sum assured in case the policyholder passes away. But on maturity if the policyholder is still alive, then no benefits are given.

Due to the huge surge in coronavirus cases last year, there was a heavy demand for term plans.

In this article we try and explain why insurance premiums have increased and what policyholders must do in such a scenario.

WHY HAVE PREMIUMS OF TERM PLANS RISEN

As said earlier, the surge in premi-ums is owing to the increase in prices of term plans and life insurance policies due to rising mortality rates.

Term insurance is a pure risk cover payable only in case of death of the life assured.

Currently, the cover is priced extremely low as the expected mortality risk or the incidence of loss due to death is low.

But now with reinsurance increasing rates and rising mortality numbers, insurers are forced to increase the price.

The increase in the premium charged in term insurance plans implies that the number of actual deaths is higher than the expected death rate for which the pricing was done earlier.

Life insurance companies may choose to increase the premium

BEYOND WORDSCalculating The Amount Of Term Insurance Cover

The insurance cover must be 10x to 20x the insured’s annual income. One must consider the future expenditure and include additional cover for family expenses to maintain the standard of living, repayment of outstanding debt, meet major future events like child’s education, marriage, etc. Inflation must be factored in when estimating future expenses. A top-up can also be added to cover any risks that may arise by 5% to 10% p.a.

Small Cap Funds

SCHEME NAME NAVHistoric Return (%)

1 Year 10 Years5 Years 7 YearsAUM (Cr)

3 Years

Axis Small Cap Fund - Reg - GrowthDSP Small Cap Fund - Reg - GrowthSBI Small Cap Fund - GrowthNifty Smallcap 100 TRI

44 80 80

10,268

6787.478.7

105.9

15.96

10.80.8

17.313

19.510.7

20.820.925.7

12

-17.420.8

9.2

4,485 6,455 7,570

-

Multicap Funds/Flexicap Funds



3 Years

Aditya Birla Sun Life Flexi Cap Fund - GrowthCanara Robeco Flexi Cap Fund - GrowthMahindra Manulife Multi Cap Badhat Yojana UTI Flexi Cap Fund - GrowthAxis Flexi Cap Fund - Reg - GrowthS&P BSE 500 TRI

931 180

15 210

15 23,409

58.149.2

5968.939.261.1

8.613.111.915.312.610.4

14.215.4

-16.2

-14.4

15.814

-16.2

-13.8

13.312.4

-14

-11.3

13,026 3,716

451 16,717

7,626 -

Large Cap Funds



3 Years

Axis Bluechip Fund - GrowthMirae Asset Large Cap Fund - Reg - GrowthCanara Robeco Bluechip Equity Fund - GrowthIDFC Large Cap Fund - Reg - GrowthNifty 50 TRI

38 64 34 40

20,392

38.450.947.5

4655.5

13.111

14.29

12

14.814.815.312.214.1

14.316

14.110.612.5

12.914.212.4

9.210.7

24,598 23,762

2,156 708

-

BEYOND NUMBERS

Beyond Market 16th - 30th Apr ’21 It’s simplified...36

MUTUAL FUND BLACKBOARDPerformance Of Mutual Fund Schemes From Different Categories

Mid Cap Funds



3 Years

DSP Midcap Fund - Reg - GrowthEdelweiss Mid Cap Fund - GrowthAxis Midcap Fund - GrowthInvesco India Mid Cap Fund - GrowthKotak Emerging Equity Fund - Reg - GrowthNifty Midcap 100 TRI

76 39 54 67 57

30,790

55.575.955.759.476.482.6

9.58.7

15.210.611.4

6.5

15.815.617.3

1516.513.3

18.719.719.3

1821.316.1

15.317.317.916.717.312.3

10,916 1,215

10,432 1,389

10,938 -

Large & Mid Cap Funds



3 Years

Mirae Asset Emerging Bluechip Fund - GrowthCanara Robeco Emerging Equities - GrowthPrincipal Emerging Bluechip Fund - GrowthInvesco India Growth Opportunities Fund - GrowthKotak Equity Opportunities Fund - Reg - GrowthTata Large & Mid Cap Fund - Reg - GrowthNIFTY Large Midcap 250 TRI

77 127 142

42 161 268

9,707

65.858.360.145.955.752.667.5

15.610.1

8.77.9

11.610.710.3

19.916.515.913.714.912.615.3

23.421.419.214.516.214.4

16

21.318.416.812.313.112.612.9

16,190 8,179 2,519 3,651 5,518 2,153

-

Focused Funds



3 Years

Axis Focused 25 Fund - GrowthICICI Prudential Focused Equity Fund - Ret - GrowthSBI Focused Equity Fund - GrowthS&P BSE 500 TRI

37 39

187 23,409

48.154.546.461.1

10.910.210.710.4

16.411.814.714.4

16.211.617.413.8

-10.316.211.3

15,007 1,217

14,253 -

Dynamic Asset Allocation Funds



3 Years

ICICI Pru Balanced Advantage Fund - Reg - GrowthNippon India Balanced Advantage Fund - GrowthEdelweiss Balanced Advantage Fund - GrowthKotak Balanced Advantage Fund - Reg - GrowthNIFTY 50 Hybrid Composite Debt 65:35 Index

44 108

31 13

12,606

35.230.8

3433.137.5

9.28.1

11.3-

12

10.811.211.3

-12.7

11.611.712.2

-11.8

1210.210.7

-10.4

30,281 3,251 3,315 7,670

-

Hybrid Aggressive



3 Years

Canara Robeco Equity Hybrid Fund - GrowthSBI Equity Hybrid Fund - GrowthMirae Asset Hybrid - Equity Fund - Reg - GrowthNIFTY 50 Hybrid Composite Debt 65:35 Index

208 170

19 12,606

36.835.938.737.5

11.710

10.912

13.312

13.112.7

14.613.9

-11.8

12.812.7

-10.4

4,812 37,727

4,829 -

ELSS Schemes (Tax Saving u/s 80-C)



3 Years

Aditya Birla Sun Life Tax Relief 96 - GrowthAxis Long Term Equity Fund - GrowthCanara Robeco Equity Tax Saver Fund - GrowthInvesco India Tax Plan - GrowthMirae Asset Tax Saver Fund - Reg - GrowthS&P BSE 200 TRI

37 60 92 66 25

7,509

39.346.655.650.565.558.9

5.111.7

151015

11.2

11.715

15.713.819.914.5

15.217.315.4

16-

13.8

12.516.813.3

14-

11.4

13,647 27,870

1,961 1,512 6,935

-

Contra/Value Fund



3 Years

Invesco India Contra Fund - GrowthUTI Value Opportunities Fund - GrowthS&P BSE 500 TRI

61 81

23,409

52.357.461.1

8.510.610.4

14.812.714.4

17.212

13.8

1411.311.3

6,477 5,515

-

Solution Oriented



3 Years

HDFC Childrens Gift FundTata Retirement Savings Fund - Moderate Plan - RegTata Retirement Savings Fund - Progressive Plan - RegTata Retirement Savings Fund Conservative PlanS&P BSE 200 TRI

153 37 36 23

7,509

46.935.340.4

1458.9

9.37.17.2

711.2

12.612.6

148.7

14.5

13.515.615.7

9.713.8

13.3---

11.4

4,270 1,361

995 167

-


Sector/Thematic



3 Years

Canara Robeco Consumer Trends Fund - Reg - GrowthMirae Asset Great Consumer Fund - GrowthICICI Prudential Technology Fund - GrowthNippon India Pharma Fund - GrowthBNP Paribas India Consumption Fund - Reg - GrowthICICI Pru Banking and Financial Services FundS&P BSE 500 TRI

54 44

109 273

16 69

23,409

47.946.9

124.851.6

3958.261.1

13.39.6

25.424

-5.7

10.4

17.315.8

2115.2

-14.814.4

17.915.719.817.3

-15.813.8

14.515.519.417.3

-13.511.3

553 1,174 1,818 4,261

699 3,865

-

Gold



3 Year

HDFC Gold Fund - GrowthKotak Gold Fund - Reg - GrowthNippon India Gold Savings Fund - GrowthPrices of Gold

15 20 20

47,569

-2.6-1.9-2.9

-

13.814.413.515.1

8.79.38.8

10.2

5.55.65.36.9

-6.66.4

8

1,062 814

1,240 -

Arbitrage Fund


3 Months 3 Years1 Year 2 YearsAUM (Cr)

6 Months

IDFC Arbitrage Fund - Reg - GrowthKotak Equity Arbitrage Fund - Reg - GrowthTata Arbitrage Fund - Reg - GrowthNippon India Arbitrage Fund - Growth

26 29 11 21

4.24.64.64.5

3.53.93.93.7

3.33.7

43.6

4.54.95.24.8

5.15.4

-5.4

6,756 17,835

4,270 10,211

Index Fund



3 Years

HDFC Index Fund-NIFTY 50 PlanICICI Prudential Nifty Next 50 Index Fund - GrowthUTI Nifty Index Fund - GrowthNifty 50 TRI

131 30 95

20,392

54.745.955.155.5

11.33.9

11.612

13.512.213.714.1

1213.712.112.5

9.911.5

1010.7

2,750 1,036 3,592

-

FoF Overseas



3 Years

PGIM India Global Equity Opportunities Fund 35 63.2 31.3 20.9 11.5 11.1 865

Liquid Fund


2 WeeksYTM

3 Months 1 YearAUM (Cr)

1 Month

Aditya Birla Sun Life Liquid Fund - Reg - GrowthICICI Prudential Liquid Fund - Reg - GrowthKotak Liquid Fund - Reg - GrowthNippon India Liquid Fund - GrowthMahindra Manulife Liquid Fund - Reg - GrowthCRISIL Liquid Fund Index

330 304

4,149 5,007 1,332

-

3.23.13.23.13.23.6

3.33.23.33.33.43.7

3.33.23.23.23.33.7

3.53.43.33.43.53.9

3.393.393.433.353.45

-

27,433 37,777 28,961 23,219

1,728 -



Money Market Funds


3 MonthsYTM

1 Year 3 YearsAUM (Cr)

6 Months

Aditya Birla Sun Life Money Manager Fund SBI Savings Fund - GrowthHDFC Money Market Fund - GrowthTata Money Market Fund - Reg - GrowthCRISIL Liquid Fund Index

286 33

4,430 3,650

-

4.33.84.14.53.7

3.93.43.7

43.5

5.34.75.25.23.9

7.26.5

74.4

-

4.013.843.974.32

-

11,383 19,955 11,249

1,698 -

Ultra Short Term Funds


3 MonthsYTM


6 Months

HDFC Ultra Short Term Fund - Reg - GrowthICICI Prudential Ultra Short Term Fund - GrowthUTI Ultra Short Term Fund - GrowthAditya Birla Sun Life Savings Fund - Reg - GrowthNIFTY Ultra Short Duration Debt Index

12 22

3,266 424

4,272

44.73.64.34.3

3.74.23.7

43.9

5.35.84.56.14.5

-7.14.87.36.7

4.034.924.074.27

-

17,221 8,288 1,909

16,098 -

Short Term Funds


3 MonthsYTM


6 Months

HDFC Short Term Debt Fund - GrowthNippon India Short Term Fund - GrowthICICI Prudential Short Term Fund - Growth

25 41 46

2.74.92.9

3.94.64.1

8.47.48.2

8.77.98.4

5.515.585.39

16,805 7,903

22,158

Low Duration Funds


3 MonthsYTM


6 Months

HDFC Low Duration Fund - GrowthICICI Prudential Savings Fund - Reg - GrowthKotak Low Duration Fund - Std - Growth

45 417

2,636

2.92.13.3

4.34.13.4

6.87.16.6

7.27.77.4

5.095.014.47

19,555 23,971 12,542

Banking & PSU Bond Funds


3 MonthsYTM


6 Months

HDFC Banking and PSU Debt Fund - Reg - GrowthTata Banking & PSU Debt Fund - Reg - GrowthKotak Banking and PSU Debt Fund - Reg - GrowthNippon India Banking & PSU Debt Fund - Reg

18 11 51 16

2.11.30.93.2

3.63.12.83.4

7.98

7.47.6

8.5--

8.89

5.495.555.485.22

9,899 478

9,688 6,636

Corporate Bond Funds


3 MonthsYTM


6 Months

ICICI Prudential Corporate Bond Fund - Reg - GrowthIDFC Corporate Bond Fund - Reg - GrowthHDFC Corporate Bond Fund - GrowthUTI Corporate Bond Fund - Reg - Growth

23 15 25 13

3.23.72.1

3

3.93.83.63.2

8.18.78.27.9

8.58.3

9-

5.015.325.444.92

19,146 22,943 29,880

3,246

Floater Fund


3 MonthsYTM


6 Months

Aditya Birla Sun Life Floating Rate Fund - Reg Nippon India Floating Rate Fund - Growth

267 35

3.93.9

3.74.2

6.88.3

7.88.3

4.895.11

14,250 13,114

Disclaimer : Mutual Fund Investments are subject to market risks. Please read the offer document carefully before investing. Past performance is no guarantee of future performance. Returns are of Growth option of Regular plans. Returns which are below 1 year period are Annualized Returns.

Source: - ICRA MFI, NAV as on 26th Apr' 21*Liquid Fund Exit Load: If redeemed bet. 1 Day to 1 Day; Exit Load is 0.007%, If redeemed bet. 2 Days to 2 Days; Exit Load is 0.0065%, If redeemed bet. 3 Days to 3 Days; Exit Load is 0.006%, If redeemed bet. 4 Days to 4 Days; Exit Load is 0.0055%, If redeemed bet. 5 Days to 5 Days; Exit Load is 0.005%, If

redeemed bet. 6 Days to 6 Days; Exit Load is 0.0045%, If redeemed bet. 7 Days to 7 Days; Exit Load is Nil


Dynamic Bond Fund


3 MonthsYTM


6 Months

ICICI Prudential All Seasons Bond Fund - GrowthIDFC D B F - Reg - GrowthKotak Dynamic Bond Fund - Reg - GrowthCRISIL Corporate Bond Composite Index*

28 27 29

-

3.8-2

-2.1-

4.70.21.6

-

7.84.97.1

-

9.29.89.4

-

6.296.185.46

-

5,536 3,952 3,035

-

Gilt Fund


3 MonthsYTM


6 Months

Nippon India Gilt Securities Fund - GrowthKotak Gilt Fund - GrowthIDFC G Sec Fund - Invt Plan - Reg - Growth

30 76 28

-1.9-4.1-1.8

0.52.20.4

3.84.45.2

109.6

11.1

6.015.436.21

1,525 889

1,591

Credit Risk Fund


3 MonthsYTM


6 Months

ICICI Prudential Credit Risk Fund - Growth HDFC Credit Risk Debt Fund - Reg - Growth SBI Credit Risk Fund - Growth

24 18 34

55.74.1

6.28.55.5

8.710.8

8.4

8.48.47.2

7.827.796.84

7,217 7,253 3,524

Medium to Long Duration Fund


3 MonthsYTM


6 Months

ICICI Prudential Bond Fund - GrowthSBI Magnum Income Fund - Growth

31 55

1.32.2

23.2

7.57.7

8.89.3

6.006.05

3,409 1,711

Medium Duration Fund


3 MonthsYTM


6 Months

ICICI Prudential Medium Term Bond Fund - GrowthHDFC Medium Term Debt Fund - GrowthSBI Magnum Medium Duration Fund - Growth

34 44 40

5.73.51.9

65.23.8

9.27.98.3

8.28.19.4

7.046.9

5.94

6,408 3,031 8,386

Overnight Fund


2 WeeksYTM

3 Months 1 YearAUM (Cr)

1 Month

IDFC Overnight Fund - Reg - GrowthTata Overnight Fund - Reg - GrowthSBI Overnight Fund - GrowthICICI Prudential Overnight Fund - Reg - GrowthNippon India Overnight Fund - Reg - GrowthCRISIL Liquid Fund Index

1,097 1,086 3,326

111 110

-

3.13333

3.6

33

3.133

3.7

33333

3.7

2.933

2.93

3.9

3.373.393.373.413.39

-

1,420 1,872

12,360 9,187 4,567

-

Beyond Market 16th - 31st Mar ’21 It’s simpli�ed...

TECHNICAL OUTLOOK breaks 14,100, then a fall towards 13,700-13,400 levels is certain.

The daily chart indicates the Nifty is well-placed above the 100 DMA, i.e 14,400, which will act as an immedi-ate support level. As long the Nifty respects this support level, the pullback rally may continue towards 15,000-15,100 levels initially, then 15,400-15,600 levels could be seen.

Momentum indicator like RSI on the daily chart indicates an oversold zone and we may witness a positive crossover in the coming trading sessions if the strength of the pullback remains intact.

The short-term trend is cautious, but after forming a short-term support at the 14,100 level from where we had witnessed a reversal, this pullback rally is likely to continue in the coming month. Although the short-term trend is cautious, it is a stock-specific market as sectoral rotation is visible in the markets.

Previously, traders and investors were advised to wait for dips at 14,100-13,800 levels as these are key support levels from where buying could be seen by retail investors. The Nifty had rallied on expected lines.

Based on the technical set-up of the Nifty, it is advisable to go light on long positions and to hold on to them with a strict stop loss.

Market participants should be stock-specific and follow the trend till it reverses.

On the Nifty Options front for the May series, the highest Open Interest (OI) build up is seen near 14,500 and 15,000 Call strikes, whereas on the Put side, it is observed at 14,500 and

14,000 strikes.

April witnessed lower-than-average rollovers compared to the previous expiry, which indicates that the bias for the month ahead is likely to be marginally bullish. Chemical and Metals sectors saw long rollovers, indicating that the stocks from these sectors are likely to see buying support in the near term.

India VIX, which measures the immediate 30-day volatility in the market, remained in the range of 19-24 for most part of April. Going forward, VIX is likely to remain in range and start decreasing slowly.

The Put Call Ratio-Open Interest (PCR-OI) for Nifty Options has been in the range of 0.85-1.50 in April. It is expected to remain in the range of 0.9-1.4 in April.

The markets are believed to remain range-bound with supports placed at 14,200 and 14,000 and bouts of volatility are likely to come from important global events with the index finding resistance at 14,800 and 15,000 levels on upside.

OPTIONS STRATEGYLong Strangle

It can be initiated by ‘Buying 1 lot 06MAY 14800 CE (`115) and Buying 1 lot 06MAY 14400 PE (`110)’. The premium outflow is 225 points, which is also the maximum loss. One should put a stop loss at 170 points (55 point loss).

The maximum gain is unlimited and one should place the Target at 350 points (125 point gain). The index’s likely movement of more than 300 points in either direction would result in decent gains for the strategY.

pril was not a good month for the stock markets as compared to March this year. Bears prevailed over bulls in the tug of war in the April series, clearly demonstrating their strength.

The coming month is highly important for the markets as the Nifty may decide the trend of the market as it is trading near the upper trend line of the downward sloping channel. If it breaks this level, then it may start a new trend, that is, uptrend, which might take the Nifty towards 15,000-15,400. Hence, we need to keep an eye on both news flow and market sentiments.

Technically, as per the Extension Theory (Low-7,511.10, High-11,794.25, Low-10,790.20), the Nifty has almost touched 78% i.e 14,100 level, and has reversed from support levels, suggesting a potential upmove in the near term.

Looking at the Extension, the Nifty appears to have strong resistance at 15,000-15,100 levels. As long as the Nifty trades below the 15,100 level, the short-term view remains cautious.

If the Nifty surpasses 15,100 on closing basis and consolidates for two trading sessions at least, then we may witness a positive momentum, which might take the Nifty towards 15,400-15,600 levels.

On the flip side, the support is placed at the 14,100 level. If the Nifty

BEYOND NUMBERS

A

41

BUY

SELLBEYOND LEARNING

Value investor Guy Spier shares lessons and real-life skills in his best-selling book

‘The Education of a Value Investor’

A Journey OfSelf-Discovery



could often be a mere illusion, pushing one into a toxic environment and a race against others to move ahead, but one where you land nowhere in the end.

“For months, I was focused on the wrong questions, wondering why I was having so much trouble getting deals done and fretting that something must be wrong with me. I didn’t have the experience or the perspective to understand that this whole environment was wrong. This kind of environment is perfectly designed to get people to push the boundaries in order to succeed. It’s a pattern that’s repeated again and again on Wall Street. Through ambition, greed, arrogance, or naïveté, many bright, hard-working people have strayed into gray areas,” mentions Spier.

The single biggest learning, in his own words, was that because of the adversity he faced, he was able to fine-tune what he really wanted. He was able to look within and ask the questions that really mattered - removing the so called tags that were attached because of his background and education.

3. Adversity Could Be Good If We Learn From Our Mistakes

Thanks to adversity, Spier learnt from his mistakes early. The entire episode helped him ponder over important or critical questions and find what he really wanted.

“The unsettling truth is that there are elements of an elite education that are positively a disadvantage. I wasn’t aware of these disadvantages at the time that I finished my formal education or for about a decade afterward. On some level, I had my eyes closed and was cruising on autopilot for quite a while, wasting what should have been some of the

Automatically Make One Successful In The Real World

Immediately after Harvard Business School, Guy Spier joined an investment banking firm with high expectations and a desire to conquer the world. He felt this job would make the best use of his intellectual capacity and high-profile education. But as they say, real world is different.

“Only six months into the job, I was miserable. I had received and continued to receive a series of hard knocks. For a start, I had thought that I’d be the chairman’s sole assistant and that I’d have the opportunity to observe and learn from the master by helping him analyze the multitude of opportunities coming his way. Instead, it turned out that he had two other assistants. All three of us had shiny new MBAs.

“Despite my massive testosterone-fueled determination to succeed in this (getting deals), my first job after graduating with an MBA, I was hopelessly failing. My problem wasn’t just that the best deals got nabbed by the big names like Goldman Sachs and Morgan Stanley, although that was true. There were plenty of other opportunities around. But successfully bringing those deals into D. H. Blair required me to do things with facts that I had never done,” states Spier.

Faced with competition, toxic environment, compromise on ethics, lack of motivation to work and a complete lack of sense about what he was doing, Spier was challenged from almost all the fronts.

2. Remove Your Tags, Ask Right Questions & Choose Right People A high-paying and a high-profile job

Value investor and author of best-selling book ‘The Education of a Value Investor: My informative quest for Wealth, Wisdom and Enlightenment,’ Guy Spier is an inspiration to many aspiring investors.

In his book he talks about how he moved away from the cut-throat, underhand and immoral environment of investment banking at Wall Street and modelled himself on American investor, philanthropist Warren Buffett.

The most fascinating part of Spier’s journey was his US $650,100 bid for a charity lunch with Warren Buffett, which was considered to be biggest breakthrough in his life. The lunch with Buffett changed his perspective and, subsequently, his approach towards life and profession.

In this book, Guy recounts his career struggles, his toxic life at Wall Street and the subsequent transformation into a true value investor.

Guy writes, “This book is about my journey from that dark place toward the Nirvana where I now live.”

Here are few inspiring and thought-provoking ideas and insights offered in his book ‘the Education Of A Value Investor: My Informative Quest For Wealth, Wisdom And Enlightenment,’ and other public conversations.

1. Elite Education Does Not


most productive years of my life. If you had an educational experience that was anything like mine, you - like me - may have to reprogram and rewire yourself in some fundamental ways.

“When I began to understand the principles that Warren Buffett embodied, I realized that there was another way to succeed. This discovery changed my life,” emphasizes Spier.

4. Move On And Stay Out Of Negativity

Self-help guru Anthony Robbins had a great influence on Guy Spier, who once happened to accidentally, attend his seminar.

Guy Spier writes, “Robbins hammered into my head the idea that, if you want to get somewhere, anywhere, and you’re stuck, “Just Do It! Just make a move. Any move!” This might be obvious to many. Hell, it was obvious to me. But my bias toward analysis-paralysis meant that it was easier for me to pontificate in a library than to act. Robbins convinced me that I had to break the patterns of negative thought, push through my fears, and get moving.” Despite the adversity, Guy Spier’s passion for learning and love for value investing kept him moving on and discovering the right path. Rather than surrendering to the environment, Spier kept on improving himself for better.

When things did not work, he kept his focus alive. And driven by the hunger for value investing, Spier started managing money, which was primarily his and that of his family. 5. Develop An Inner Score Card While studying, Spier was part of an elite group which included many

high-profile, smart people who propelled a self-ignited war of intelligence and competition. “I had a burning desire to be accepted and respected within this group of exceptionally smart people. This was fun when I was doing well and winning but not so much fun otherwise. I was driven in large part by what Warren Buffett calls “the outer scorecard” - that need for public approval and recognition, which can so easily lead us in the wrong direction.

“This is a dangerous weakness for an investor, since the crowd is governed by irrational fear and greed rather than by calm analysis. I would argue that this kind of privileged academic environment is largely designed to measure people by an external scorecard: winning other people’s approval was what really counted.” Working through an inner score card, Spier developed a sense wherein other people’s approval did not count. He constantly kept looking inside and setting the right priorities instead of looking at other people for approval or imitating the other person.

6. Value People More Than Anything, Be Kind And Genuinely Interested In People

Like Warren Buffett and other legends, Guy Spier considers himself quite fortunate to have read many of the self-help books, particularly Dale Carnegie’s ‘How to Win Friends.’ Owing to reading, Spier inculcated several good habits.

“Thanks in large part to Mohnish (Pabrai) and Warren, I began to realize that I ought to focus more on what others need from me instead of constantly trying to get them to fulfil my own needs. This might sound obvious, but it’s been a huge psychological shift for me, and it’s

really changed the way that I live my life,” insists Spier. Being genuinely interested in people and appreciating their contribution, Spier developed another important habit of writing personal letters to people he interacted with irrespective of their position and stature in the society.

“Tony Robbins had taught me that small differences in how we behave can, over time, have a profound impact. And this small action of writing hundreds of letters a year was transformational for me,” writes Spier.

Guy Spier stresses on the importance of relationships. He says investing time in people and building relationships is as important as investing in an investment portfolio. One must aim to build a friendship, social network rather than a strict professional network. One must recognize and express gratitude to people who help develop you professionally. You must treat them as someone from whom you can constantly learn and imbibe. At the time Guy Spier started following the value investment approach, he wrote out several “Thank you” cards to people who helped him during his career.

He believed by treating people well, it would help in “top of mind recall”. This, in fact, helped a great deal and he was invited to several conferences and networking events. This immensely helped build his personal goodwill.

It was due to this approach that Spier became best friends with Mohnish Pabrai (author of The Dhando Investor). Monish and Guy co-bid for a charity lunch with Warren Buffett for an astounding US $650,100. This eventually turned out to be a life-changing decision.

For free account opening, call on +91 022 62738000 | www.nirmalbang.comRegd. O�ce: B-2, 301/302, 3rd Floor, Marathon Innova, O� Ganpatrao Kadam Marg, Lower Parel (W), Mumbai - 400013. Tel: 62738000/01; Fax: 62738010


7. Choose The Right Environment

Being with right people and in the right environment was the biggest takeaway from the journey of Guy Spier. He simply learnt and replicated many of the things and time-tested wisdom from industry legends like Warren Buffett. And like Warren Buffett, who left early for his home town away from the noise of Wall Street, Guy Spier too shifted to Zurich.

Giving an anecdotal account, Spier writes, “During our lunch, Buffett showed us his appointment diary, which was mostly empty, and said he manages his schedule himself. By contrast, he said Bill Gates’s calendar is filled with precise entries like “6:47 shower” and “6:57 shave.

“It’s not that one system is better or worse: it’s that Buffett has chosen a system that suits him perfectly, giving him the latitude to think in peace, impervious to the noise that tends to dominate Wall Street. As Buffett taught me, it’s not enough to

rely on one’s intellect to filter out this noise: you need the right processes and environment to do so. For this reason, I decided to move to Zurich just six months after our lunch, knowing that it would be easier for me to remain clearheaded there, far from the New York vortex,” reasons Spier.

8. Be Authentic, True To Yourself And Play Your Own Game In Your Own Way

Guy Spier talks about how one can clone everything that Buffett does except his brain power, which works on different levels altogether. Spier could feel this stark reality while they had charity lunch with Buffett. It was simply impossible to be the next Warren Buffett.

“I couldn’t beat Warren at his own game. But I could certainly follow his example. What impressed me most about him that day was not just his mental firepower, but the fact that he lived in a way that was totally congruent with his own nature.

Nothing seemed to be misaligned. He had evidently spent his life trying to be true to himself. This became my own goal: not to be Warren Buffett, but to become a more authentic version of myself. As he had taught me, the path to true success is through authenticity,” explains Spier.

What Does Success Mean

Finally, the biggest takeaway from Spier’s book is the paragraph where he quotes Warren Buffett as saying… “When you get to my age, you’ll really measure your success in life by how many of the people you want to have loved you actually love you. I know people who have a lot of money, and they get testimonial dinners and they get hospital wings named after them.

“But the truth is that nobody in the world loves them. If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster. That’s the ultimate test of how you have lived your lifE.”


10:5510:55

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Two agencies, the state owned Indian Meteorological Department (IMD) and private weather forecaster Skymet have made their first-stage prediction of normal monsoon for India in 2021.

If these forecasts come true, it will be the third consecutive year of normal- to above-normal monsoon for India. The last time India had three consecutive years of normal monsoon was between 1996 and 1998. Q What Have IMD And Sykmet Predicted? The India Meteorological Department (IMD) has predicted rainfall to be 98% of the long-term average with an error of five percentage points swing on either side of the estimate during the June to September season.

The seasonal rainfall is likely to be 98% of the long period average (LPA) of 880 millimetre for the entire country. LPA is the average rainfall recorded over India between 1961 and 2010. Even Skymet has forecasted annual monsoon rains to be normal this year. Q How Is ‘Normal Monsoon’ Defined? The IMD declares a monsoon season ‘normal’ when rainfall is between 96% and 104% of the LPA. For instance, in the last two years, India recorded excess rainfall of 110% and 109% of the LPA during the monsoon season. So, these were normal monsoons. The IMD has assigned a 40% probability of a normal monsoon, while Skymet has assigned 60% probability to a normal monsoon. Q How Will The Monsoon Be Spread Across India?

The initial forecast shows that barring east and

IMPORTANTJARGON

north-eastern parts of the country, rainfall in all other regions is expected to be normal. However, media reports citing experts hint that below-normal rains in these regions is not always disadvantageous.

Also, the IMD, for the first time will also give details of rainfall across various regions. This will increase the utility of monsoon forecasting among farmers and policymakers. The temporal and spatial distribution of the monsoon rains is crucial for timely sowing and harvesting of crops.

Q How Accurate Are These Forecasts? The track record of these forecasters has been mixed. For instance, IMD’s forecast has been true 7 out of 10 times in the last 10 years. Thanks to better satellite technology, the track record has been improving in recent years. This time around since both the agencies are predicting a normal monsoon, the probability of missing the forecast is lower.

Q Why Is A Normal Monsoon Good News For India? The forecast of a normal monsoon comes as a relief amid an early beginning to summer season, lower water reservoir levels, the fresh wave of Covid-19 pandemic, and the uncertainty about the overall economic outlook in the near term. Q Why Is A Normal Southwest Monsoon Important For India? According to one estimate, only around 50% of the net sown area in India is irrigated. Additionally, India receives 75% of its total rainfall only during the months of June to September. Thus, the volume and dispersion of southwest monsoon rainfall is crucial for India. Q What Is The Status Of The Reservoir Level Of

AGENCIES PREDICT NORMAL MONSOON IN 2021

BEYOND BUZZ


India? According to ratings agency ICRA, reservoir levels stood at 37% of its full capacity as on 15th Apr ’21, 8 percentage points lower than the year-ago level. Barring the southern region, reservoir storage levels were lower in all regions with northern, eastern and central regions worst off. Q Why Is Agriculture Important For The Indian Economy? Agriculture employs more than half of the workforce in India. It makes up about 15% of India’s economic output. A normal monsoon translates into higher farm output and improving sentiment in rural regions.

Normal monsoon indirectly influences rural demand for consumer non-durables, finance, agri-inputs, tractors, bikes, etc. Better agriculture growth also influences the government’s fiscal policies. Additionally, higher crop output means lower food inflation; ensuring that interest rates remain low in the system. Q What Will Be The Agriculture Growth For FY22? The pace of growth in agricultural Gross Value Added (GVA) stood at a healthy 4.3% in FY20. For the nine month period of FY21 (March to December ’20), the agricultural GVA growth slipped a bit, but still saw a healthy rate of 3.5%.

Healthy agriculture growth rate is an outcome of bumper crop production following two years of above average rainfall. But given the higher base, ICRA has estimated growth in GVA in agriculture sub-group to be limited to 2% to 2.5% for FY22.

Q How Will The RBI React To The Normal Monsoon Prediction? The decision of the RBI’s six-member interest rate-setting Monetary Policy Committee (MPC) is influenced by farm production in the country. The policy stance turns dovish in anticipation of a normal monsoon season. A normal monsoon gives leeway to the RBI to cut interest rates. But even the converse is also true.

Take for instance, the MPC has slashed the benchmark policy interest rate (repo) by 115 basis points between March and May last year to the lowest ever, but has now refrained from further rate cuts as inflation remains above its target.

Q But Does Inflation Always Connect To Monsoon Rains?

No. The MPC is well-cognizant of the fact that even if there is a bumper crop production, there could be other reasons like Covid-19-led supply disruptions for higher inflation. Nevertheless, monsoon rain levels and their distribution largely determine the crop output and are among the most important factors in guiding food inflation. The RBI does monitor the progress of monsoon very carefully over the June-September period. Q When Is The Next Update Likely? Any sudden change in the weather pattern over the four-month period can disturb a lot of calculations for farmers and policy makers. Such changes in weather patterns are not uncommon. The IMD will issue updated forecasts on spatial distribution in the last week of May ’21. Hence, a second-stage forecast will be more critical in gauging farm outpuT.



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FLIGHT OFUNICORNSThe number of unicorns is likely to rise this year, but global and domestic slowdown may lower the tempo

RNI No. MAHENG/2009/28962 | Volume 12 Issue 01 | 16th - 31st Jan ’20Mumbai | Pages 56 | For Pr ivate Circulat ion

and reforms, the Finance Minister has

wholesome budget that has something or other for all constituents

RNI No. MAHENG/2009/28962 | Volume 12 Issue 02 | 16th - 29th Feb ’20Mumbai | Pages 52 | For Pr ivate Circulat ion

11:15

RNI Reg. No. MAHENG/2009/28962DISCLAIMERIn the preparation of the content of this magazine, Nirmal Bang Securities Private Limited has used information that is publicly available, including information developed in-house. Such information has not been independently verified and we make no representation or warranty as to its accuracy, completeness or correctness. Any opinions or estimates herein reflect the judgement of Nirmal Bang Securities Private Limited at the date of this publication/ communication and are subject to change at any point without notice. This is not a solicitation or any offer to buy or sell. This publication/ communication is for information purposes only and is not intended to provide professional, investment or any other type of advice or recommendation and does not take into account the particular investment objectives, financial situation or needs of individual recipients. For data reference to any third party in this material no such party will assume any liability for the same. Further, all opinion included in this magazine are as of date and are subject to change without any notice. All recipients of this magazine should seek appropriate professional advice and carefully read the offer document and before dealing and/ or transacting in any of the products referred to in this material make their own investigation. Nirmal Bang Securities Private Limited, its directors, officers, employees and other personnel shall not be liable for any loss (financial or otherwise), damage of any nature, including but not limited to direct, indirect, punitive, special, exemplary and consequential, as also any loss of profit in any way arising from the use of this material in any manner whatsoever. The recipient alone shall be fully responsible/ are liable for any decision taken on the basis of this material. This magazine is prepared for private circulation only. Nirmal Bang Securities Private Limited, its affiliates and their employees may from time to time hold positions in securities referred to herein. Nirmal Bang Securities Private Limited or its affiliates may from time to time solicit from or perform investment banking or other services for any company mentioned in this document.

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Issue 179 - Nirmal Bang

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