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THE ECONOMIC TIMES

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BENNETT, COLEMAN & CO. LTD.

MUMBAI | 26 + 4 PAGES OF ET PANACHE| .` 3.00 OR .` 7.00 ALONG WITH THE TIMES OF INDIA

No fare hike, a
semi-high-speed
train called
Gatimaan, and
rationalisation of
concessions may
be the features in
the Rly budget to
be presented on
MONDAY, 15 FEBRUARY 2016 Feb 25 P 1

 Budget May Focus on Structural Reforms, Rural Growth  Suspense on Over Sebi Chief Appointment  Infosys to Revive ESOPs for Top Staff: P 1

THE ECONOMIC TIMES


WWW.ECONOMICTIMES.COM

BENNETT, COLEMAN & CO. LTD.

Co-Working Grows Amid


Search for New Lifestyle

Windies Under-19 Win is


Just What the Doc Ordered

BUSINESS OF BRANDS8

WORLD VIEW21

SPORT24

Maharashtra may
Get Investment
Proposals Worth
`. 4.6 Lakh Crore
Maha Beginning
Total MoUs ` 4.60 lakh cr
MOUs

AMOUNT*

324

2,50,530

61

1,49,825

38

54,080

6,000

424

4,60,435

MAHAGENCo
MEDA
Maritime
Total

MONDAY, 15 FEBRUARY 2016

Future Rolls out Mentorship


Programme Ban Jao Biyani

MAKE IN INDIA WEEK

Industries

MUMBAI | 26 + 4 PAGES OF ET PANACHE | *.` 3.00 OR .` 7.00 ALONG WITH THE TIMES OF INDIA

*in `cr

Krishna.Kumar@timesgroup.com

Mumbai: Maharashtra is set to sign


investment proposals worth `4.6
lakh crore during the Make in India
event, which on Sunday saw highdecibel pitches to businesses by various states and the Centre, and showing of interest by companies for
multibillion-dollar investments.
Maharashtra chief minister Devendra Fadnavis has kept things
under wraps so far,
only hinting that
MORE
the state was expecREPORTS ON
14 & 15
ted to sign a very
good number of
investment proposals. State industry department officials, speaking
to ET on condition of anonymity,
threw more light on the proposed
deals, saying there were 424 memoranda of understanding lined up
for signing during the week-long
event that started on Saturday. These proposals have potential to create 2.89 lakh new jobs. By Monday
night, they expect the host state to
have mopped up `40,000 crore of investments.
.

Merc, China Machine may Invest23

Massive Fire at
Cultural Event
A massive fire broke out on
Sunday evening during a
cultural function organised
as part of the Make In India event,
report Krishna Kumar and Anirban
Choudhary. The fire completely
gutted the stage, but there were no
casualties. Chief minister Devendra
Fadnavis, Governor Vidyasagar Rao
and Shiv Sena president Uddhav
Thackeray were in audience when the
fire broke out.  15

TWIN FOCUS Jaitleys agenda involves pushing reforms to lift growth while
tackling rural stress via social security measures and changes in agri policy

Budget to Pivot Around


Reforms & Rural Uplift
Deepshikha Sikarwar
& Vinay Pandey

Balancing Act

New Delhi: The government is


working on a two-pronged Budget that will further structural
reform to lift growth while putting in place a package that will
seek to address rural stress
through broader social security
measures and changes in agricultural policy.
The Budget, which will be presented by Finance Minister
Arun Jaitley on February 29, will
also focus on credit issues and
greater access to equity funds.
The Budget is going to provide a momentum to the market side of the economy and also focus
on the pro-poor side of the economy, said a senior finance ministry official, outlining the
twin thrust areas.
Emphasis on Irrigation22

Govt Readying a
Two-pronged Budget...
It would
seek to
address
rural stress

Look to
broaden
social
security
framework

Give
Boost savings
boost to
investment- flow to
led growth equities

....To Empower Bharat


Steps to
boost rural
household
incomes

A health
insurance
on cards

Measures to
boost rural
Leverage
productivity
Jan-Dhan
through
platform to
emphasis on
broaden
social security infrastructure

....& Incentivise Savings


Overhaul
or phase
out
RGESS

Encourage
systematic
investment
plans

Telecom Ministry Seeks Tax Sops


The telecom ministry has proposed a 10-year tax holiday for
mega projects in the sector as part of its recommendations for
the upcoming Union Budget, reports Gulveen Aulakh. 18

Prabhus Budget to focus on innovative means for generating revenue


BhavnaVij.Aurora
@timesgroup.com

Bringing Railways on Track

New Delhi: No fare hike, a new


semi-high-speed train called Gatimaan, rationalisation of concessions and monetisation of railway property are likely to be some of the highlights of the Railway Budget to be presented on
February 25 by Suresh Prabhu.
The ministers focus is likely to
be on innovative cash generation.

Monetisation
of railway
resources,
branding of
coaches etc.

Semi-highspeed
premium
train
Gatimaan

More Suvidha
trains with
demanddriven
dynamic fares

Strengthening Rail Network2

Govt considers reappointing UK Sinha for one year


Reena.Zachariah@timesgroup.com

Mumbai: The race for the chairmanship of


market regulator Securities and Exchange
Board of India (Sebi) is going down to the wire. On Satuday, February 13, the government
held a special meeting to consider a proposal
by the finance ministry to reappoint the current chairman, UK Sinha, for a period of one
year, said people aware of the
unexpected development.
Ramesh
This comes after one conAbhishek
tender for the post left the fiand Thomas
eld and a second may also exMathew
it. Ramesh Abhishek has bewere learnt
en named secretary at the Deto have been
partment
of
Industrial
the top two
Policy & Promotion and Thocontenders
mas Mathew is being tipped
to take over as the head of the
National Investment and Infrastructure
Fund (NIIF). They had got the highest grades
during the selection process, said the people
cited above.
Reappointment may Require a Change in Rules22

FTIL, NSEL Merger: Who Stands to Gain?


Financial Technologies (FTIL) will challenge the constitutional validity of
the govt order on merger with fraud-hit subsidiary National Spot Exchange (NSEL) in the Bombay High Court. But if the courts dont rule in its
favour, FTIL will be forced to absorb the outstanding liability of NSEL. Ashutosh
Shyam explains why minority shareholders of FTIL will be better off supporting
the governments stance rather than the managements view. PAGE 10

Stock Options Sequel to Play Out at Infy


Co to offer incentive to select executives in a bid to attract and retain top talent

Working with Compensation Experts2

THE GREAT INDIAN

ECOMMERCE
LIFTOFF
Biswarup Gooptu
& Madhav Chanchani

New Delhi | Bengaluru: Ontario Teachers Pension Plan, one


of the worlds largest pension
funds and a new technology focused venture capital firm Iron
Pillar, are leading a $200-million
(.`1,367.6 crore) funding round in
Jasper Infotech, which owns
and operates online marketplace Snapdeal.com.
The round, which has a mix of
primary and secondary components, values it between $6.5 billion and $7 billion, making it the
second-highest valued startup
in the country, after Flipkart, Indias largest ecommerce company. This marks a significant upside in valuation for Snapdeal,
which in its $500-million funding round in August last year,
was valued at about $5 billion.
$2-b Funds Raised23

Building Warchest
SNAPDEAL HAS RAISED

$200 MILLION

from Ontario Teachers


Pension Plan, Iron Pillar
& other investors

Key shareholders in
Snapdeal are SoftBank,
Foxconn, Alibaba, Nexus
Ventures, Kalaari Capital
and eBay

Deal values
company between

$6.5 BILLION &


$7 BILLION,
over 30% premium
to its last round in
August 2015

Capital will
come in handy
as it competes
with market
leader Flipkart,
US-based
Amazon and
Alibaba-backed
Paytm

Snapdeal has
been betting
on diversication in areas
like payments,
services and
hyper-local to
differentiate
itself from peers

Paytms Make-in-India Push


Paytm said it will spend about `. 10 crore to market Make in
India products ranging from phones to clothes and home
furnishings on its platform , reports Aditi Shrivastava.6

Ratan Tata
Invests in
SnapBizz

Fabled ESOPs
INFOSYS COO Pravin Rao
says company nalising a
stock option plan for top and
mid-level management
MOVE part of broader strategy
to attract top-level talent from
outside and to retain key existing executives
INFOSYS was one of the rst
Indian companies to offer ESOPs
to employees in the 90s
IT HAD discontinued ESOPs in
the early 2000s, since the
model was difcult to scale up
with increased headcount
BUT THE IT company
created a stock option plan
for CEO Vishal Sikka when
he joined the company in
August 2014

Only those projects


to be announced
in which states
are JV
partners

New chief chalks out plan for Flipkart to take on global ecomm giants
Madhav Chanchani &
Aditi Shrivastava

Bengaluru: For Flipkarts new


chief executive Binny Bansal,
its not enough that the electronic
marketplace is the countrys largest. He wants to build an Internet powerhouse out of India that
can match the might of Chinese
ecommerce giants such as Alibaba and Baidu that have been able
to thwart Amazons efforts to dominate in their home turf.
Focus on Two Areas23

Suspense on Over Sebi


Chief s Appointment

Minister of Road Transport and Highways Nitin


Gadkari will address a
special ET Markets prebudget event on February 19. Dont
miss your copy of ET on February 22 for
a comprehensive coverage of Indias
biggest pre-budget markets meet.9

Bengaluru: Infosys, one of the first


Indian companies to offer stocks to its
employees in the 1990s, has initiated moves to roll out a new stock incentive plan
for top and mid-level executives as part of
a strategy to attract and retain top talent.
In an exclusive interview with ET, Infosys Chief Operating Officer Pravin Rao
said the countrys second largest software
exporter was in the process of finalising
the new stock option plan and is looking to
allot 1-1.5% of the companys equity to
create a stock pool for top executives.
Infosys will seek shareholder approval for
the same in the coming weeks, he said.
Despite setting new standards for employee benefits with its original employee
stock option plan (ESOPs), Infosys had to
discontinue it in the early 2000s as it added
thousands of employees every year at the
peak of outsourcing boom.

Chinese high net-worth individuals among new investors

Rail Ticket will Cost the Same Binny Wants to do an Alibaba

Gadkari at ET
Markets Meet

Anirban.Sen@timesgroup.com

$200-million Fundraise
Values Snapdeal at $7B

In 2011, Infosys
founder NR Narayana Murthy had
said the company
had given away

`50,000 crore

of stock options to
employees since
its inception

Retail tech
startup SnapBizz has raised
an undisclosed amount of
funding from Ratan Tata,
chairman emeritus of Tata
Sons, reports Shashwati
Shankar. The company
aims to change the face of
the small-scale retail
sector in the country,
empowering kirana stores
to have a competitive edge
by making them "virutal
super markets".  6

BINNY BANSAL
CEO, Flipkart

We are focused on
two areas, commerce
through Myntra and
(Flipkart), and supply
chain...We are taking
abig bet on externalising eKart

2  Pure Politics

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

SRINAGAR: Two villagers, including a woman,


were killed and 10 others injured in clashes
with security forces on
Sunday in Jammu and
Kashmirs Pulwama district. Police said the
clashes erupted in Astan
Mohalla (Kakapora) area
of Pulwama in the afternoon as a mob hurled
stones at the security
forces even as a gunfight was raging on between guerrillas and security personnel in the
area. Two people
Shaista, 25, and Danish
Rashid Mir, 24, died of
gunshot injuries. PTI

Singhs Saeed
Remark Sparks
Controversy
On such occasions,
the entire country should
be speaking in one voice. I
would also appeal all
political parties not to
view such episodes
through the prism of
political gains and losses
RAJNATH SINGH Home Minister

We have arrested
only one person and he is
being questioned regarding
the role of others involved
BS BASSI, Delhi Police Commissioner
POLICE SUSPECT
that nearly a
dozen students
and outsiders were
involved in raising
anti-India slogans

A Group of
Youths Attacks
CPM HQ

BASSI TOLD ET that


the FIR invoking
sedition charges
was registered on
information generated by the police

Our Political Bureau

NEW DELHI: A group of

youths tried to vandalise


the CPM headquarters as
the police detained one of
them. The attack came in
the backdrop of the raging row over an event at
the JNU campus against
the hanging of Parliament
attack convict Afzal Guru.
While the CPM said the
attackers were RSS-BJP
workers who also hurled
stones, the police said the
detainee claimed to be
member of the Aam
Aadmi Sena. PTI

Working
with
RJD Suspends
Compensation
MLA on Rape
Charges
Experts
From Page 1

Today if you look at global


technology companies, especially at a senior level, stock compensation is very big element
of their strategy. And at times,
when were trying to recruit
some key people from outside,
we run into a challenge since
weve discontinued the options
PATNA: Taking a serious
plan, said Rao.
note
of rapeveteran
chargesatlevRao,
a 30-year
Infosyselled
who isagainst
also onits
its MLA,
board of disaidsuspended
the company
rectors,
RJD has
Rajwas
currently
working
Ballabh
Yadav with
fromconsulthe
tants
and compensation
experts
party
with immediate
efto flesh out the new stock option
fect.
The
party
has
takplan that will be restricted to a
enpercentage
a serious note
the
and
midsmall
of topof
rape
chargesand
levelled
level
executives,
not for all
its against
193,000-odd
MLAemployees.
Raj BallabhIt
willYadav.
be given
a setsuspendof people,
Wetohave
and not be broad-based, he said.
ed him from the party
Were looking at the best
with immediate
effect,
practices
of compensation
RJD state
Ram
president
were working
structures
with
consultants
Chandra
Purbewho
toldare
PTI.experts
inparty
this space
we want
The
alsoand
served
a
to make
that
our compenshowsure
cause
notice
to the
sation practices are in line
legislator
to explain
with
the industry,
saidhis
Rao.
Purbeplan,
added.
Onposition,
the incentive
we had
announced in our quarterly results that we had set aside 1%
or 1.5% of our equity to give options. The plan is getting fleshed out. In the next two weeks,
before the end of this quarter,
we will give a postal ballot for
shareholder approval for that
scheme, he added.
In 2011, Infosys founder NR Narayana Murthy had famously
said that the company had given
away Rs 50,000 crore (at then
stock prices) of stock options to
its employees since inception.
Rao also clarified that Infosys
made an exception for its CEO
Vishal Sikka when he joined
the company in August 2014. At
that time Infosys had granted
the former SAP product chief
22,794 restricted stock units as
part of his annual pay package
that included stock options
worth $2 million a year.

THIRD

ZAHID

EYE

New Delhi: Rajnath Singhs comment that the Jawaharlal Nehru


University stir received support
from Lashkar-e-Taiba founder Hafiz
Saeed drew sharp reactions from
Opposition party leaders, who asked
the home minister to share the evidence. National Conference leader
Omar Abdullah said it was a very
serious charge to level against the
students and that the evidence must
be shared with all.
Singh said that the incident at JNU
had received support from Saeed.
This is a truth that the nation
needs to understand. What has happened is very unfortunate. Never
should have something been done
which puts a question mark over the
countrys sovereignty and integrity, he said, adding: On such occasions, the entire country should be
speaking in one voice. I would also
appeal all political parties not to
view such episodes through the
prism of political gains and losses.
CPM general secretary Sitaram
Yechury and CPI leader D Raja also
demanded the minister to share the
evidence he has with the country to
back up the allegation.
A home ministry spokesperson

MALEGAON BLAST CASE Rasal, NIAs special public prosecutor, says


agency never consulted him before proposing to drop charges

Mcoca Applicable
on Sadhvi, Purohit
Rahul.Tripathi@timesgroup.com

Campus Crackdown

BJP MP from East Delhi Mahesh Giri was the


rst to make a written
complaint, asking the
police to act against
the JNU protesters

later said the ministers statement


was based on consolidated inputs
from security agencies.
The Delhi Police meanwhile issued
an alert through the official twitter
handle of the commissioners office.
This is to alert and sensitize the student community in JNU and across
the country. Do not get carried away
by such seditious anti-national
rhetoric. Abetment of any kind of
anti-national activity is a punishable offence, the tweet read.
In the alert, the police pinned a tweet
by the handle named
HafeezSaeedJUD,
Rajnath has
which says: We remade a serious allegation quest our Pakistani
about terror- brothers to trend
ists backing #SupportJNU for
JNU protests: our pro-Pakistani
JNUite brothers.
Yechury
This account was unverified and later blocked.
In a series of tweets, Abdullah, a
former Union minister who was the
chief minister of Jammu and
Kashmir from 2009 to 2015, said the
home minister must go public with the
evidence collected that enabled him to
level the charge against the JNU students. Yechury said Rajnath has made
a very serious allegation about terrorists backing JNU protests, adding:
We hope that he has concrete proof.

TC Gehlot Union Minister for Social Justice

New Delhi: Avinash Rasal, special


public prosecutor of the National
Investigation Agency (NIA) in the
2008 Malegaon blast case, said the
provisions of the Maharashtra
Control of Organised Crime Act
(Mcoca) are applicable on the 10
accused, including Lt Colonel SP
Purohit and Sadhvi Pragya Singh
Thakur. The agency never consulted him before proposing to drop the
charges, Rasal told ET, a statement
that may not be comfortable for the
NIA, which was accused by previous
prosecutor Rohini Salian of asking
her to go slow in the case.
The case may come up on Monday
for hearing before the special NIA
court. The NIA is likely to seek more
time to file the response, a top government official said. As first reported by ET on February 1, the agency
has sought an opinion from
Attorney General Mukul Rohatgi on
the applicability of MCOCA against
Purohit, Sadhvi and others.
Speaking to ET, Rasal said: I have

A Strong Case?
CASE MAY
come up for
hearing before
the special NIA
court today

NIA WAS accused


by previous prosecutor Rohini Salian
of asking her to go
slow in the case

I strongly said those arrested conspired to revolt


against the government. They wanted to have a Hindu
Rashtra and they were trying to overthrow this government
and that is why the provision of MCOCA is applicable
AVINASH RASAL NIA Special Public Prosecutor

SEEKING EXTENSION

Agency will
seek extension of time
from court to file opinion of AG on the applicability of MCOCA: Rasal

been arguing on behalf of the NIA


during which I showed it to the court
that MCOCA is applicable. As many
as 24 applications of bail have been
rejected by the court between
September...and January 22 this year
... In my court appearances, I strongly said those arrested conspired to
revolt against the government. They
wanted to have a Hindu Rashtra and
they were trying to overthrow this
government and that is why the provision of MCOCA is applicable.

ABVP is Common Thread in


Controversies at Universities
CENTRE OF ATTRACTION

Anubhuti Vishnoi & Ravish Tiwari

New Delhi: The Akhil Bharatiya


Vidyarthi Parishad (ABVP) is the
one common thread in the spate of
controversies dominating headlines from university campuses, be
it Delhi, Hyderabad or the JNU.
Its growing clout and assertiveness about its version of anti-national activities, often met with
equal opposition, is becoming a
major headache for universities,
especially where the BJP government has appointed new vice-chancellors. Bigger problem, university
administrators say, arises when
one version of anti-national activity is backed by government. The
ABVP has a different take.
Such is the misfortune of the
country that Rahul Gandhi, vicepresident of the party that led freedom struggle, has lent its support to
the supporters of Yakub Memon
(1993 Mumbai terror convict) and
Afzal Guru (convict of 2001
Parliament attack case), Sunil
Ambekar, national organising secretary of the ABVP, told ET.

In the JNU and Hyderabad Central


University incidents flared up after
the appointment of new V-Cs. JNU
VC Jagadesh Kumar was appointed
just last month, while AR Podile was
made Hyderabad University V-C in
mid-2015. Both have had to contend
with an assertive ABVP, requiring
law-enforcement authorities to enter the scene after matters spiralled
out of control. Everything from appointments to procurements to ad-

ministrative/academic discussions
comes under doubt, a prominent
V-C told ET when asked about deteriorating situation on campuses.
What happened in Hyderabad or
elsewhere shows the kind of pressure that can be mounted by ruling
dispensation on university administrations. But one has to give in at
times otherwise universities can
suffer terribly, a former Central
University V-C told ET.

FILE PHOTO

JAWAHARLAL NEHRU UNIVERSITY STIR

JNU INCIDENT

NC Condemns
Police Action,
Questions
PDP Silence
HakeemIrfan.Rashid
@timesgroup.com

Srinagar: Former J&K chief


minister Omar Abdullah has
criticised the police crackdown
on Jawaharlal Nehru University
(JNU) students and questioned
the silence of Peoples
Democratic Party president
Mehbooba Mufti over the issue.
Abdullah urged home minister
Rajnath Singh to go public with
evidence that prove that the JNU
students were backed by Hafiz
Saeed. He also took a dig at
Mehbooba, saying this is the
same BJP Mehbooba is negotiating with to form a government in
J&K, which is under Governors
rule since January 8 this year. No
wonder she is completely silent
and hasnt said a word about the
JNU crackdown, he said in
Hurriyat &
a string of tweets
JKLF have
on Sunday.
termed the
The pro-freepolice action
as an assault dom leadership,
on freedom of i n c l u d i n g
Hur riyat and
expression
JKLF, has condemned the police action terming
it as an assault on the freedom of
expression. Kashmir University
Students Union, which is officially banned, also issued a statement
in solidarity with the JNU students. Few non-violent slogans
by JNU students shook entire
India, and now Rajnath Singh and
Simriti Irani are issuing threats
to the poor students of an educational institution. This can have
dangerous consequences for minorities across India, Syed Ali
Geelani-led Hurriyat Conference
said in a statement.
Similarly, JKLF chairman Yasin
Malik said that for the past few
years, anim osity a g ainst
Kashmir and intolerance is increasing across India. However,
the state BJP in line with its New
Delhi leadership has maintained
that students found guilty of anti-national activities and sloganeering should be punished.

IN THE DOCK Document, which is being scrutinised by the prosecution branch of Delhi Police prior to its filing,

concludes that climate scientist misused his office as DG of Teri and there is enough evidence to prosecute him

Pachauri Guilty of Outraging Modesty: Chargesheet


Raghav.Ohri@timesgroup.com

New Delhi: Delhi Police has prepared a chargesheet holding climate


scientist RK Pachauri guilty of outraging the modesty of a woman, sexual harassment, stalking and criminal intimidation after a year-long
investigation during which witnesses were questioned and phone communication details were examined.
The 500-page document, which ET
has seen, is being scrutinised by the
prosecution branch of Delhi Police
prior to its filing. It concludes that
Pachauri misused his office as director general of The Energy and
Resources Institute (Teri) and that
there is enough evidence to prosecute him. Pachauri, 75, is set to be
charged under all four sections of the
Indian Penal Code (IPC) he was
booked under by Delhi Police almost
exactly a year back, as first reported
by ET on February 18, 2015. This followed the complaint of a woman researcher at Teri, who has since quit
the organisation. The relevant sec-

tions are 354, 354A, 354D and 506.


The document said Pachauri made
34 calls to the complainant from his
mobile phone between February 2014
and March 2015, while the complainant called him 26 times. The document also gave details of more than
6,000 SMSes and WhatsApp messages
exchanged between Pachauri and the
complainant between September
2013 and February 2015. The police
were only able to access Pachauris
phone records for the preceding year
February 2014 to March 2015.
The police investigation has rejected

Who is Responsible?

Pachauri is set
to be
charged
under
all four sections
of the IPC he was
booked under by
Delhi Police

Police probe
rejects
Pachauris
contention
that his electronic devices were
hacked, but an FSL
report in this regard is
awaited

Pachauri
made 34 calls
to complainant from his
mobile phone
between Feb 2014 and
March 2015, while the
complainant called him
26 times: Document

WITHOUT FSL REPORT

The police may


not wait for the
Forensic Science Laboratory report
to file the chargesheet,
top officials told ET

FILE PHOTO

ARINDAM

J&K: Two Killed


in Clashes with
Security Men

Differently-abled are integral


part of human resource. They
have right to lead a good life.
There is a need for public
participation in govts efforts

cannot practice intolerance. Here, so many secularists protested against intolerance, that is a
good sign, she said. Killing people for eating
beef is not intolerance but a heinous crime. It
needs to be stopped, Taslima told a Malayalam
television channel. Pakistan should not have
denied visa to actor Anupam Kher, she said.
However, after Pakistans U-turn, Kher should
have gone there, she said. PTI

HIERONYMUS BOSCH , The Seven Deadly


Sins and the Four Last Things

Killing People for


Eating Beef Heinous
Crime, Says Taslima

THIRUVANANTHAPURAM: Renowned
Bangladeshi author Taslima Nasreen feels killing people for eating beef is not intolerance but
a heinous crime and it should be stopped. It
is not that suddenly intolerance has started
here... India as a country is not intolerant as
India has Constitution and laws which do not
support intolerance. But some people are intolerant everywhere...because of strict laws you

DOCUMENT GIVES DETAILS OF OVER 6,000 SMSES AND WHATSAPP MESSAGES EXCHANGED BETWEEN PACHAURI AND THE
COMPLAINANT BETWEEN SEPT 2013 AND FEB 2015

Pachauris contention that his electronic devices had been hacked by


unidentified persons but a Forensic
Science Laboratory (FSL) report in
this regard is awaited. The police may
not wait for the report to file the
chargesheet, top officials told ET. The
FSL report may be filed in a supplementary chargesheet when its received. The phone submitted by
Pachauri for examination was opened
up by lab experts in November, said
the people cited above.
The statement given by the complainant to the police under Section 161 of
the Criminal Procedure Code states
that a day before she was to officially
join Pachauris office, she allegedly received an SMS from him (on September
3, 2013) that read: From now onwards
I shall call you LIFE: Lovely Inspiration
of Excessive Fondness.
Shortly after that, she started receiving sexually loaded jokes and poems
from Pachauri on a daily basis.
Her statement added: I feel completely used at the hands of Dr.
Pachauri. I feel as though he has used
me as a means of amusement to him

THE COMPLAINANT

I do not wish
any other woman...to be inflicted with what I have been
subjected to at the hands
of Dr. Pachauri
and only an object of his desire. He assaulted and violated my modesty and
body, on multiple occasions, through
unwanted acts of grabbing, hugging,
groping, touching and forcefully kissing me within and outside the workplace despite my fervent pleas and requests not to indulge in such
behaviour with me despite my clear
and unambiguous refusals.
She went on to say: I do not wish
any other woman or even a human
being to be inflicted with what I
have been subjected to at the hands
of Dr. Pachauri.

Emphasis to Remain
on Strengthening
RailWar
Network This Year
Pachauri
Enjoys
Poster
Luncheon at

Difference of
Opinion
on ISIS
From Page 1

Issues
relatingfares
to the
ISIS
threat
However,
are
likely
to be kept
are the
latest hot
between
unchanged
inspot
the Budget
for the secondand
year
in aRSS
row.affiliates.
The emphasis
the BJP
other
will remain on strengthening the
Rajnaths
initial contention that
rail network, rather than announIndian
youth
would not be lured
cing
new projects.
was a hike
Though
there earned
by the
terror outfit
him in freight
in the
last Budget, the
the ire
ofcharges
VHP, which
demanded
railways is not considering it this
thattime,
as home
minister
Singh have gone
since
diesel prices
should
take
ISIScross-subsidising
seriously. Some pasdown
and
sengers
is not
seen as that
good econoministers
have
suggested
mics. The prevalent view in the mithe group
be referred to as Daenistry is that even a 10% hike in fash, ares
term
used
byin
France,
US Rs 4,500
will
bring
just about
additional
revenue, which
andcrore
someof
European
countries.

Support at Teri

is not worth the effort. Sources told vel have increased by more than
ET that even the Prime Ministers 4% due to the levy of service tax
Aof
day
before
Teri
governing
Office was not in favour
a fare
hi- the
and
Swachh
Bharat cess, but procecouncil tweawas to decide
Pachauris
ke. The railways had already
eds from
these wont add to railwaked certain concessions,
and director
ys revenue.
fate, the new
general Ajay
changed refund and Tatkal rules
To generate more funds, the focus
Mathur
held
a
meeting
with instiwill continue to be on rationalising
outside the Budget.
tutes senior
What struck
While cancellation charges
wereofficials.
269 categories
of concessions, a
doubled, seats under him
Tatkal
new catering
policy with stress on
waswere
the support
Pachauri
increased to 30% from
10% in all
e-catering
under
continues
to have
at Teri. One
of the Indian Railtrains, bringing in more revenue. way Catering and Tourism Corpothe
official
said
since
Teri
and
The Tatkal changes alone will me- ration subsidiary, monetising railwere synonymous
an an across the boardPachauri
hike of over
way propertywith
by encouraging ad5%. There is no need toeach
announce
a vertisements
and branding of traother, Pachauri
should be
hike in the budget, an official in ins, and attracting investments in
backed. Another suggested a
the traffic directorate of the rail- building private freight terminals
constituted
to
way board explained.group
Also,should
since be
and
sidings. Coaches
of the trains
class
traor even the name of the trains could
November, fares for upper
handle
the
media.

in Delhi

Again, like the last years budget,


be up for branding. The minister
could also announce the final poli- the emphasis would remain on
The Valentines
Day was witcy for redevelopment
of stations.
strengthening the network and
ness toof
anvarious
acrimonious
beIn rationalisation
con- war
completing
the ongoing and longcessions, fortween
example,
theCM
railways
Delhi
Kejriwalpending
and his projects rather than annohas changed the policy towards uncing new ones. Sources familiar
opponents played out in a postchildren. So far, children between with the budget-making exercise
war
the first
and
12on
years
wereanniversary
en- told ET that only those projects and
the ages of 5er
titled to a proper
berth
on payment
lines are likely to be announced
of AAP
government
in office.
of half the regular
fare.
However, went
which
While the
government
all will be constructed under jobeginning April 21, children will be int venture companies with the reout
on
a
PR
drive,
giving
out
lavgiven a berth only on payment of spective states. These will mainly
ish, full-page
intranewspapers
they canads
still
be the ones that increase connectifull fare, though
vel by paying
half. Advance
boo- the
vity
detailing
its initiatives,
op-with ports and the coal sector.
kings as per the changed policy had
The railways has recently formed
position put up posters with
the
already started. Concession had al- JVs with 17 states. Under these, the
title,
Har
roj
naya
bawal,
pehla
so been withdrawn for senior citi- states will help with financing the
project and also speedy land acquizens travelling
inKejriwal.
first AC.
saal

sition. Projects
in the northeasGreen
House
tern states may be put on the fast

Paryavaran
Bhawan
witnessed
track for strategic
reasons.
some
interesting
activityfinancial
last
Even
as the railways
sito be bleak with
tuation continues
Thursday
when environment
min-a
decline in both passenger and freister
Prakash Javadekar hosted a
ight earnings, topped with a Rs
lunch
for a group
of ministers
at his
32,000-crore
burden
from the
7th
Pay Commission,
is likely
office.
The ministersPrabhu
were interesttoinannounce
the
semi-high-speed
ed
viewing the
green
building
Gatimaan train as a feel-good facthat
boasts
of
an
automated
multitor. Certified to run at a speed
of 160
level
parking,
lighting
kmph
fastersensor-based
than the existing
Shatabdi trains
the trial
runs
of the
systems,
provisions
to tap
in natufirst Gatimaan between Delhi and
ral
light in work areas and so on.
Agra are in the final stages. These
Among
who attended
includwould those
be premium
trains with
rakes
built minister
by Linke Piyush
Hofmann
Busch.
ed
power
Goyal.

Pure Politics

WWW.ECONOMICTIMES.COM

CRACKDOWN ON TERROR The Modi govt is giving final touches


to a fresh dossier on JeM chief Masood Azhar as it may move
1267 committee seeking ban on him

In a First, India May Name


Official to Key UNSC Panel
Dipanjan Roy Chaudhury
& Rahul Tripathi

New Delhi: After missing the


initial deadline to nominate an
expert to the UN Security Council (UNSC) 1267 sanctions
committee that has the authority to ban Jaish-e-Mohammed
(JeM) chief and mastermind
of Pathankot attacks Maulana
Masood Azhar, Delhi has zeroed down on a retired directorlevel officer for the post and expects to send the nomination
shortly to the global body.
The Modi government simultaneously is giving final
touches to a fresh dossier on
Masood Azhar as it hopes to
move 1267 committee in future seeking a ban on the JeM
chief. If the selection goes
through, it will be the first time that an Indian will be appointed as an official on the
UN terror sanctions body.
The latest dossier on Azhar
does not include the details of
his involvement in Pathankot

attack since the probe is in the


initial stage. However, it provides details of his anti-India
activities after his release in
1999. According to top sources, India has given the details of Azhars involvement in
hijacking of IC-814 borne out
of the CBIs investigations
and subsequent red-corner
notice pending against him.
In January, the UN had given
a fortnight to send Indian nominees name to 1267 committee. Authorities, however, claimed India follows a lengthy
procedure to make such a nomination and needs more time.
ET was the first to report last
week that India had missed the
initial deadline to select an expert to the UN body and attempts are being made to pick a
retired officer. The idea to nominate an expert to the 1267
committee was to get a sense of
proceedings of this key body
that has banned the JeM but
ironically not its chief, sources
pointed out. JeM was banned
in 2001by the UN.

Info Sought from


Babus on Guj Defeat
DP.Bhattacharya
@timesgroup.com

Gandhinagar: In the high


voltage political climate of
Gujarat, a letter issued from
Junagadh Collectors office
in January has now surfaced
that will certainly add fuel to
the acrimony between the
ruling BJP and opposition.
In the letter written to the administration officers of the
district, the District Election
Officer and Collectors office of
Junagadh had sought specific
information on the reasons for
BJPs loss in local body elections in January. The letter
(copy of which is with ET) cites
Chief Ministers Offices query on the same and asked the officials to reply on the same day.
The letter includes queries
on number of BJP candidates

CM Anandiben Patel

defeated in the area, number of


constituencies where they
were defeated and the detailed
reasons for their drubbing.
Urgent details have been
sought by CMO in connection
with the results declared for
the general election of last district and taluka panchayat
2015. Kindly send in the detailed info of your work area as
per the questionnaire by fax
within 1500 hours today without fail, reads the letter.

4  Pure Politics

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

NSG Withdraws 600 Commandos from


VVIP Duties for Terror Operations

BJP Faces Dissension Over Proposed


Alliance with Asom Gana Parishad

NEW DELHI: Taking the first step towards gradually reverting


to its original role of undertaking counter-terror operations,
the NSG has pulled out over 600 commandos from its VVIP
security unit and used them for the first time during the recent Pathankot attack. The plan has been in the making since the last
over two years and the terrorist attack on the forward IAF base in
Pathankot became the first operation where these black cat commandos made their assault.-PTI

GUWAHATI: BJP is Assam is facing dissension from a section


of workers on proposed tieup with Asom Gana Parishad
(AGP). On Sunday, hundreds of BJP workers stormed the
partys office at Ulubari in Guwahati in protest against the
alliance talks with AGP. Miffed workers from Bongaigaon, Barpeta,
Hajo, Amguri argued that alliance with AGP will effect BJPs poll prospect. The workers had threatened that they will resort to non- cooperation in the event the party agrees to alliance with AGP.-OPB

Alleging Jungle Raj II: NDA leaders in Patna after meeting Bihar Governor-K M Sharma

INVITING THE BEST US pitched Lockheed Martins F 16; last top level discussion held in
November. India considering 3 more proposals to make fighter jets in India

Q&A

Amid Pak Row, F 16 Being


Weighed for Make in India
Deals On
The Table

Manu.Pubby@timesgroup.com

New Delhi: Even as controversy has erupted on the transfer of eight F 16s to Pakistan by the
US, Delhi has been considering a
proposal to manufacture the
fighter jets under the Make in
India initiative.
In several recent meetings, including a high-level interaction in
November last year in
Washington, the aircraft have
been offered for local production
both to meet Indian requirements and for exports.
The Lockheed Martin (LM) manufactured F 16 is one of the several
fighters that has been proposed to
be manufactured in India and is being actively pushed by Washington,
senior officials told ET. It is also understood that LM had even raised
the possibility of local manufacture during the meeting of one of

LOCKHEED
MARTIN RAISED
the possibility of
local manufacture during the
meeting of one of
its top executives
with PM Narendra
Modi last year

BOEING HAS ALSO shown


keen interest in building F/A
18 Super Hornet ghters
under the Make in India plan
SWEDENS SAAB offered to
transfer the Gripen ghter
line to India

ADVANCED VERSION

The offer to
make the F 16 in
India was for advanced F 16 IN Super Viper

AIRBUS PROPOSED TO
create a Euroghter City
in India that would produce its jet and generate
thousands of jobs

its top executives with Prime


Minister Narendra Modi last year.
India has showed its displeasure
a t t h e r e c e n t d e c i s i o n by
Washington to transfer eight of the
Block 52 variants of the fighter to
Pakistan. It is still unclear on what
impact this would have on proposals to manufacture US origin jets in

India defence giant Boeing has


also shown keen interest in building F/A 18 Super Hornet fighters
under the Make in India plan.
The offer to make the F 16 in
India was for a more advanced
variant of the fighter that is being
sold to Pakistan and was termed
as the F 16 IN Super Viper. The aircraft was in contention of the now
scrapped medium multirole combat aircraft contract for the Indian
air force but was disqualified on
technical grounds.
Besides the F/A 18 Super Hornet
and the F 16IN Super Viper, the
Indian government is considering
at least two more proposals to make
fighter jets in India. One offer on
the table is from Swedens SAAB to
transfer the Gripen fighter line to
India. Another is a proposal by
Airbus to create a Eurofighter
City in India that would produce
its Eurofighter jet and generate
thousands of jobs.

Sarma, who quit Cong due to differences with Assam CM, speaks with
Rakesh Mohan Chaturvedi on AGP alliance and other issues. Excerpts:
BJPs campaign focuses on 15
years of Congress rule under Tarun
Gogoi and seems to lack a positive
agenda. Your comments?
No, BJP has nothing against Tarun
Gogoi as an individual. We have a
positive agenda and that is to fight
for the identity of Assam. In 33 assembly seats, the migrants constitute
90% of the populationthey are
Bangladeshis. Indian origin people
cannot think of contesting here.
Why did you leave the Congress
and join BJP?
Congress is depending on the votes
of the migrants (those who came
from Bangladesh). Badrudin Ajmal
(AIUDF) and Congress wanted to
share power in 2006 and 2011. I prevented that. Now Congress and Ajmal
have a tacit and secret alliance (in
these polls). They are not announcing
it for fear of losing votes of people
of Indian origin. That is why they are
not making it transparent. But it has
already been done.

New Delhi: The US has finalised a


proposal to sell M777 ultra-light howitzers to India under a direct government-to-government deal, with
Washington expected to send a formal Letter of Acceptance this week.
The light artillery gun deal, worth
over $ 700 million, will also involve a

LONG-PENDING DEAL

First discussed
in 2008, PM
Modi revived
the deal last year with a
Make in India clause

week. This would be followed by an


acceptance from the Indian side and
subsequently transfer of an advance
after which deliveries of 145 guns
would commence.
At least two M777 light howitzers
are expected to be delivered to India
this year as part of the deal so that the
army can generate its range tables
a calibration for the various types of
Indian made ammunition that the
guns would fire once in service.
The deal for M777 howitzers under
the FMS route has been in process
since 2008 and has seen several ups
and downs, including the possibility
of being scrapped. The contract was
revived last year by the Modi government under a new deal that included
a Make in India component.

SYMBOL OF STRENGTH

ANDY WARHOL, Gun

Manu.Pubby@timesgroup.com

significant Make in India component with Mahindra expected to bag


a major share of the work contract.
Sources have told ET that the LOA,
which is the final step from the US in
a Foreign Military Sales (FMS) contract like this, has been finalised and
is to be presented to South Block this

BJP CAMPAIGN PANEL CHIEF IN ASSAM

BJP Wants Assam for


Indian-Origin People

US Okay for M777 Howitzers Sale to India


Decision to assemble
light guns in India;
Mahindra likely to be
offset partner

HIMANTA BISWA SARMA

How much is BJP banking on antiincumbency against Congress?


Anti-incumbency will help, but this
time people are going to vote for
BJP for a very positive agenda. Let
us secure Assam for Indian origin
people. We want Clause 6 of the Assam Accord, as a counter-balancing
clause, to be implemented. We can
share economic and social opportunities with others but let political
power be with the Indian origin As-

Likely Allies?
We consider AGP and
others as comrades in
the fight against
Congress and AIUDF

samese. We will be benefited from


anti-incumbency and non-functioning of Congress government. But
we have a positive agenda for our
Asmita, our identity.

So BJP is ready to share economic


opportunities, but not political
power with migrants?
They have come to India and Assam
Accord has regularised them. We
have no problems. People of Assam
have by and large accepted the
accord. But they should not take our
political rights. They should not be
aggressive enough to capture power.
They have formed their own party
with Ajmal to capture power. That is
not acceptable.

BJP chief had recently said in


Assam that if his party comes to
power it will stop infiltration of
Bangladeshi. What is the BJP plan?
Amit Shah has said that we will detect
foreigners and stop infiltration. Since
Modi government took over at the
Centre, 60,000 foreigners have been
detected, but they have disappeared
as state police have failed to take
them into custody and deport them.
AGP leader Prafulla Mahanta has
said that if BJP makes an offer
for an alliance, his party will consider. What is the BJP view?
We consider Congress and AIUDF on
one side and rest on the other side.
With Bodo people, AGP and tribals we
have no issue. BJP wants a greater
or broader rainbow alliance of Indianorigin Assamese people against those
who want to destroy our culture and
political power. We consider AGP
and others as comrades in this fight
against Congress and AIUDF.

6  Disruption: Startups & Tech

Tweet OF THE DAY

New Target is
to Insource
Tech Projects

HSBC to be First Global Victim of


Digital, Deutsche will Follow

While some work would be insourced, co would


continue to work with tech vendors like TCS
ROBIN KLEIN
@robinklein

We believe strongly in
capital efficiency and
strong unit economics. Right now its imperative. Not always.
Eg when capital is
free and easy

Tech Buzz

Right on Target?
ANNUAL
TECH SPEND

1 billion Target
$1 billion Lowes
$

Target has
multi-milliondollar outsourcing
contracts with TCS
and Infosys

Well still do a huge amount


of work with third-party service
providers both here in India and
elsewhere

160 billion Value

Play Old Win


Games in
Your Browser

of Indian IT industry

IT industry is expected
to record its slowest
growth since the
recession of 2008-09

MIKE McNAMARA, CIO, TargetTechnopak

Anirban.Sen@timesgroup.com

Loved playing games in


the 90s? Well now you
can play them right in
your browser. The Internet Archive has
brought back more than
1,000 games from Windows 3.x to life. On the
menu is Ski Free, Monopoly & Missile Attack!

Quick Byte

ANIRBAN BORA

200,000
iMessages handled by
Apple per second,
according to the co.

An App to
Fetch! Your
Dogs Breed

Mumbai: American Retail giant


Target, a marquee client of large Indian IT services providers, has joined the likes of AstraZeneca and Lowes in deciding to insource and
bring back some back-office software projects to their own centres.
In an exclusive interview with ET
during the Nasscom leadership
summit in Mumbai, Targets new
CIO Mike McNamara said that while some work would be insourced,
the Minneapolis-based retailer would still continue to work with technology vendors such as TCS. Absolutely. Unequivocally yes, said
McNamara, when asked about whether the company plans to insource
any software projects. However,
well still do a huge amount of work
with third-party service providers
both here in India and elsewhere.
McNamara said that Target, which
currently spends well over $1 billion
on technology annually and has
multi-million-dollar outsourcing
contracts with TCS and Infosys,
wanted to build up its own engineering capabilities internally and not
rely solely on third party vendors.
You have to have your own software engineering capability, you have
to have your own data science capability in-house because thats how
youre going to create a huge amount of value going forward. And
thats why I want to do it I want to
build up our own engineering, said
McNamara, who was previously
CIO at Tesco. I dont see the outsourcing model being fundamentally
challenged. But I think itll change
in nature slightly. And those things
that can make a difference to our business, we will develop ourselves inhouse, he added.
Executives at Indias largest software firms would be nervously
tracking the outsourcing agenda of
large customers such as Targets
McNamara, in a year when the $160
billion Indian IT industry is expected to record its slowest growth since the recession of 2008-09.
To be sure, their top customers

The future of
banking is digital,
says Brett King,
the founder of Moven, a downloadable bank that gives customers
real-time updates on spending partners. In an exclusive interview with
ETs Anirban Sen, he talks about
Movens plans and says HSBC will be
the first global victim of the technological disruption. Edited excerpts:

banking will look like?


In 2008-09, we saw branches max
out. 2015 was the year in the developed world when we saw the fastest
ever decline in branch activity historically. Thats only going to speed up
from this point forward. What weve
also seen is that we have now got
hard numbers that show millennials
dont engage in branches, particularly
in markets like the US and UK.

How did the concept of Moven


come about?
The first book I launched in 2010 was
called Bank 2.0. It became a bestseller in a dozen languages. I was on
the book tour in the US in LA at a
breakfast where I met these VCs and
film-makers. And they asked me:
What does the future bank account
look like? So, I described it to them
you download it on your phone and
all that. And they said, but banks
arent going to do that. So, in that book
launch, the penny dropped and that
afternoon I went back and registered
the domain name for Moven. That
was in August 2010. Essentially, the
premise behind Moven was very
simple when a millennial opens a
bank account, they arent going to a
branch and sign a piece of paper.
Theyll download it on the phone.

Are we looking at a future where


branches will cease to exist?
Youll still have some legacy customers who like to come to the banks.
But the question will be: Is there
enough activity from those legacy
customers to justify the economics of
the branch? Probably not at the
current scale. So, youll have
smaller branches, smaller number
of branches I dont think branches
will disappear entirely.

Q&A

such as Citigroups, General Electric


and Bank of America are still spending hundreds of millions of dollars
on outsourcing to India. And that demand will not evaporate overnight,
experts say. But Target is not the only customer that is rethinking its
outsourcing strategy.
Rival retailers such as Tesco, in
fact, plan to stay away from outsourcing majorly to third-party service
providers.
Tesco hasnt believed in outsourcing in the classical sense of hiring
third-party contractors. We do that,
but on a much smaller scale than
other companies. We want the people that work on our problems to feel
ownership on those problems, ownership in the company our presence in Bengaluru is an example of

LOOK ON THE INSIDE

Its a much
stronger model
to build that core
capability as a Lowes
employee than an outsourced one
PAUL RAMSAY
Chief Information Officer, Lowes

that. They are employees in Tesco,


they are not contractors, not outsourced, said Tesco Chief Technology Officer Edmond Mesrobian in an
interview on Wednesday.
Others such as Lowes, which
spends about $1 billion on technology annually, have candidly spoken
about how they want to insource heavily, given the relative lack of success with the outsourcing models
a worrying development for top Indian software firms.
Its a much stronger model to build that core capability as a Lowes
employee than an outsourced one,
said Lowes Chief Information Officer Paul Ramsay in an interview in
January.

What do you think the future of

Jargon Buster

Granular Data
Data thats detailed in the
lowest level possible to
form a target set is called
granular data. Just like
grains of sand can fill any
container, granular data
can be compiled by data
scientists and analysts in
the way they want, to
meet their needs.

What has been Movens progress


so far?
Weve raised $24 million today. In the
US, were now working on some really
interesting distribution partnerships.
Were partnering with the Freelancers Union there are about 350,000
members there. Weve partnered
with Common Bond and Payoff and
youll soon hear about a lending
partnership. Were partnering with
other fin-tech organisations to
create this. Its a competitive
ecosystem for banking.

FUTURE OF BANKING

Premise behind Moven


was very simple when a millennial opens a bank
account, they arent going to a branch
BRETT KING Founder, Moven

`. 10 cr Out of Paytm Wallet


for Make-in-India Products

Globe Trotter

Women Coders
have it Tough,
says Research

SPINNING PROFITS

Aditi.Shrivastava1
@timesgroup.com

Bengaluru: Commerce platform Paytm said it will spend


about `. 10 crore to market Makein-India products on its platform covering products ranging from phones to clothes and
home furnishings.
The startup will launch a new
section on its app and website
for Indian-origin products with
greater visibility, targeting at
least 5,000 merchants by the end
of the year. PM Modis Make in
India initiative is aimed at turning the country into a manufacturing hub to generate jobs
and lift incomes.
We see the abundance of talent and capability in manufacturing and handicrafts in our
country and aim to create a special platform where such indigenous creators can sell across
the country, said Sudhanshu
Gupta, VP, business. Gupta said
he expects these sellers to reach
about `. 100 crore monthly gross
merchandise sales in the next
few months.
The move comes a week after
Amazon said it had set up dedicated Make in India stores on its
India and US websites.
Gupta said Paytm has a multistage verification and qualitycontrol process. This helps us

Time to Loosen Purse Strings


Paytm plans to cover
products ranging from
phones to clothes and
home furnishings

5,000

Merchants
its targeting
by the end of
the year

100 crore

Monthly gross
merchandise sales co
expects sellers to reach
in the next few months

Payment co to launch
a new section on its
app and website

in identifying quality sellers


and products, he said.
Last month, Paytm said it expects to triple gross merchandi-

COLORADO A new
research report by Cal
Poly and North Carolina State University shows
how women programmers are
treated on GitHub, the main
place where open source projects are stored and worked on.
They found that when a woman
programmer made a contribution to an open source project,
that work was more likely to be
accepted by their programming
peers than contributions by men
as long as those judging the
work didnt know the programmer was a woman. If they did
know the programmer was a
woman, the work was more
likely to be rejected. BI

10 billion

GMV target by
December 2016

se value (GMV) to $10 billion by


December 2016 on the back of
strong growth in transactions
on its marketplace.

Viva AI! Global


Brain for your
Chores Soon

Young Give Great Advice To Others But Cant Take it


Its true. People are more enthusiastic about giving advice than taking them. Around 58% of 25-34s are product reviewers. However, the number
of 25-34s reviewing products is 24-points ahead of the numbers using them for brand research. Everybody loves giving gyan.
POSTING REVIEWS ONLINE % of internet users who posted a review online last month

Microsoft introduced a
new app that anyone
with a dog should play
with because its a lot of
fun. Its called Fetch!
and is available for
iPhones and on the web.
It uses AI techniques to
classify images of realworld dogs into breeds.
On the web, users can
upload a photo of a dog,
or you can take a picture of your pet using
your phones camera. If
you upload a picture of,
say, a Rhodesian ridgeback, Microsoft should
be able to confirm the
dogs breed. Its the latest in a line of fun, silly
apps released by Microsoft Gargage. BI

Do you think traditional


banks can cope with the tech
disruptions taking place in the
world of financial services?
There are maybe a dozen banks
around the world that can cope with
this and embrace it culturally as a
bank. But there are not heaps. The
rest are really struggling with this
Ive said this before in the press and
Ill say it again, I think HSBC will be the

first global victim of digital. And I


think their retail bank will fail because they still arent committed to
digital... Deutsche Bank is another one
that is in trouble.

VINCENT VAN GOGH, Weaver, Seen from the Front

For comprehensive and


insightful stories about all
things startups and technology,
log on to www.ettech.com

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

USING REVIEWS FOR RESEARCH % of users who use online reviews for product research

54%

58%

46%

37%

33%

32%

34%

34%

36%

35%

16-24

25-34

35-44

45-54

55-64

16-24

25-34

35-44

45-54

55-64

Source: Global Web Index Q4 2015; Base: Internet Users aged 16-64

Piggybank

A roundup of top funding deals of the day from the startup world

`. 35 crore from Investors?


Aasaan says this Job Portal
Biswarup.Gooptu
@ timesgroup.com

New Delhi: Mumbai-based AasaanJobs, which owns and operates online jobs portal AasaanJobs.com, has raised about
`. 35 crore from a consortium of
new and existing investors, including George Soros-backed
Aspada Investments and IDG
Venture Capital India.
The startup, which had raised
about $1.5 million from IDG
Ventures India and Kanwal
Rekhi-backed Inventus Capital
Partners in January 2015, will
use the proceeds from the Series-A round of funding to automate its online recruitment
marketplace and expand to
new cities, across the country.
Were looking to build our
technology platform further,
and expand to Bengaluru later
this year. Were also looking at
Kolkata, Hyderabad and Chennai, said Dinesh Goel, chief
executive of AasaanJobs.

Seeking Out
1.5

million Amount
AasaanJobs raised in
January 2015

4.2

$
billion Indias
recruitment market

18%-25% Annual

compounded growth
rate

160,000 Job

seekers co claims to have


on its platform

2 million Job seekers it

hopes to have on the platform


over the next 12 months

Founded in November 2014 by


IIT Bombay alums Goel, Gaurav Toshniwal and Kunal Jadhav, AasaanJobs competes
with the likes of Bengaluru-based BabaJobs Service, which
owns BabaJobs.com and Info

Edge-backed Naukri.
It will be exciting to see how
the team manages to mould a
workplace of the future by leveraging technology.
The unstructured nature of
recruitment as a space means
there is an opportunity for disruption, said Kartik Srivatsa,
managing partner of Aspada
Investments.
According to official figures,
Indias recruitment market is
estimated at $4.2 billion (about
`. 28,700 crore), and growing annually at a compounded rate of
between 18%-25%.
Recent government-led initiatives, such as Make In India
and skill development missions have been created to generate much-required employment and jobs generation.
AasaanJobs caters to both,
blue collar and white collar
candidates, as well as employers and recruitment agencies,
and claims to have about
160,000 job seekers currently on
its platform.

Ratan Tatas Latest


Pick is SnapBizz
Shashwati.Shankar
@timesgroup.com

Bengaluru: SnapBizz has raised


an undisclosed amount of funding
from Ratan Tata, chairman emeritus of Tata Sons.
Our aim is to focus on reverse
marginalisation of small and medium businesses (SMBs), driving
digital inclusion in the large consumer goods industry, said Prem
Kumar, founder of
SnapBizz.
A visionary
of Tatas stature
showing confidence
in
SnapBizz is
a big boost
for our business idea
and will

PREM KUMAR
Founder, SnapBizz

Avisionary of Tatas stature showing confidence


in SnapBizz is a big boost
for our business idea
continue to accelerate the digital
revolution in Indias kirana stores. SnapBizz aims to change the
face of the small-scale retail sector
in the country, empowering kirana
stores to have a competitive edge by
making them virtual super markets. It focuses on creating a virtual shelf space, to attract additional
income for retailers from companies that want to merchandise and
contextually engage customers in
and out of the store.
The startups functions involve
enabling smart-store management
and creating a digital connection
to consumers, FMCG companies and distributors.
SnapBizz currently works
with over 1,000 kirana stores.

CALIFORNIA In a blocky office

building in San Joses downtown, Viv, an artificial intelligence company, is working on


what CEO Kittlaus describes as a
global brain a new form of
voice-controlled virtual personal assistant. With the odd flashes
of personality, Viv will be able to
perform thousands of tasks, and
it wont just be stuck in a phone
but integrated into everything
from fridges to cars. BI

This Site will


Get you a Real
Follower
NEW YORK The feeling

of eyes on your back, a


glimpse of somebody
ducking behind a corner these
unsettling experiences could be
yours, if you join the new social
network(ing) site Follower. The
service assigns a stranger to surreptitiously observe you all day
long. Heres how it works: Explain why you want and deserve
to be tailed. If accepted, youll
download an iPhone app and
send a headshot to a Follower.
The individual will then use your
phones GPS to track you around
New York while you attend to
your day. At some point the
Follower will notify you the
hunts off, sending you a voyeuristic photo of yourself. BI

Business of Brands  7

WWW.ECONOMICTIMES.COM

Hotels Make Room for Two Brands Under One Roof

Chains like AccorHotels, Marriott and Lemon Tree aim for savings on development and running costs and offer greater choice to guests by launching dual-branded properties
Divya.Sathyanarayanan
@timesgroup.com

Mumbai: A growing number of


dual-branded hotels two brands
under one property are cropping
up across the country, with developers and brands trying to double
the offerings at a single property.
With land prices rising, availability of cheap land parcel at a good
location is a challenge for developers, particularly in urban markets. This is where the dual-branded strategy comes in handy, maximising the value of land and minimising
construction
and
operational costs.
While AccorHotels opened its
dual-branded Pullman-Novotel
property in Delhis Aerocity re-

cently, Marriott International


launched its first dual brand property housing Fairfield and Courtyard brand in India in Bengaluru
last month. Lemon Tree Hotels
and AccorHotels will open a dualbranded property in the next six
months in Gurgaon and Chennai,
respectively.
Putting large inventory of the
same category in one big land parcel is a big challenge. So, once you
map the market and look at the potential customers and business feasibility, you need to split the risk in
two different brands and different
positioning, said Jean-Michel
Casse, senior vice president-operations India, AccorHotels.
Industry experts and hoteliers
say the strategy helps in reducing
project cost by almost 15-20%.

Ola, Shuttl Try


to Bridge Gap in
Getting Around
the Capital City
Disruptive Transport
The National
SHUTTL
Capital Region is
500
becoming a
buses
laboratory for
100
on-demand bus
routes
transporters Ola
and Shuttl, who
OLA
aim to ease
500 buses
the problem
10,000
of poor
commuters
connectivity
ride daily

The frequency and


duration of services
is determined
by demand. Rides
start at `20
Both aggregators
have been threatened
by autorickshaw
drivers who see a
threat to their business

If successful,
the model can
be replicated
in other cities
and similar
emerging markets

Rasul.Bailay
@timesgroup.com

New Delhi: Until recently,


Yudhvir Singh, an HR executive at NTPC, had to
haggle with the legions of
auto rickshaw drivers to
take him about 3 km from
his home in Sector 77 in
Noida to reach Noida City
Centre, from where he took the metro to his office in
Sector 16.
Now, Singh hops into an
air-conditioned mini-bus
operated by Ola Cabs, a startup valued at $5 billion,
which raised $500 million in
November from marquee
investors. All he has to do is
open an app on his smartphone and with a few taps on
the screen, hes good to go.
The National Capital Region is becoming a laboratory for on-demand bus
transporters
Ola
and
Shuttl, which are trying to
ease the problem of poor
connectivity for daily commuters a major, India-specific urban transportation
issue. If successful, the model can be replicated in
other cities in the country
and also in similar emerging markets.
Over the past several
months, Shuttl and Ola
Shuttle have deployed about 1,000 buses to ferry thousands of passengers daily
from their homes to offices
and the nearest metro stations in the NCR and viceversa. The service providers say office-goers in cities such as New Delhi and
Bengaluru are forced to
drive due to the lack of reliable and adequate public
transportation.
There is huge chunk of
people in the middle of the
pyramid in the city who
cannot afford a cab or a car
and do not want to compromise and do not want to
settle for crowded public
transport, said Amit
Singh, cofounder of Shuttl,
which raised $20 million in
funding in December from
Lightspeed Ventures, and
investors including Times
Internet a digital products company that is part
of the Times Group, publis-

her of The Economic Times and existing investor Sequoia Capital.


Sometimes it is not only
about affordability. It is
about what you want to do.
We give the 60 minutes
back to you because you
get an assured seat and in
an air-conditioned environment you can work on
your laptop, browse your
phone.
Started in April, Shuttl
currently has 500 buses
and operates about 17,000
rides on 100 routes in the
NCR. Ola, which rolled out
its bus shuttle service in
September, also covers 100
routes in the capital region
with 500 buses and more
than 10,000 daily riders.
The
frequency
and
duration of their services

AMIT SINGH

Co-founder, Shuttl

There is huge chunk


of people in the
middle of the pyramid who cannot
afford a cab or a car
and do not want to
compromise and
settle for crowded
public transport
is determined by demand.
Office-goers, college students and business owners
all constitute the ridership for Ola Shuttle, said
Anand Subramanian, senior director for marketing communications at
Ola. There has been a lot
of uptake for Olas Shuttle
services in the office districts located in Noida as
well as Gurgaon.
The services are app-based and consumers can
check the timings and reserve their seats a luxury not offered by any urban transportation system in India.
At the end of the day, everyone needs one seat and
not two seats. We all look
for seats that take us from
point A to point B, said
Singh of Shuttl.

Increasingly, developers and operators are looking for ways to rationalise cost and create strong loyalty by appealing to a greater number of demand segments.
The
concept
helps to reduce
risk by reaching
The only
out to a broad
challenge
range of potential
with the
guests. Moreover,
dual-brand
it helps in saving
strategy is to
common costs like
keep the two
security, finance,
brands
administrative
distincive
costs, human reand remain
sources
and
true to their
brings in staff symarket
nergies, said Pasegments
tu Keswani, chairman of Lemon Tree Hotels, adding that it helps in bringing

down labour costs by anywhere


between 10% and 30%.
Lemon Tree Hotels already
owns two dual-branded properties at Delhi and Hyderabad. Hilton
Worldwide and Starwood Hotels,
who globally manage scores of
dual-branded properties, are also
keen to explore the strategy in
the country.
A development with two hotels
positioned at different levels of
the market enables the hotel company to target demand at different
price points and cater to customer
segments with varied needs,
said Kaushik Vardharajan, vice
president, development - India at
Hilton Worldwide.
The dual-branded properties
contain separate entrances, front
desks, and elevators for each

Better Synergy
DUAL-BRANDED properties
contain separate entrances for
each brand but share backof-the-house operations and
amenities like pools
THIS ALSO creates strong loyalty by appealing to a greater
number of demand segments

brand but share back-of-the-house


operations and guest amenities
such as meeting space and pools.
The two hotels share construction
and operational expenses as well
as facilities, resulting in attractive cost savings for developers.
As a strategy, dual-branding should be adopted in a market which
has multiple segments of demand
and the dynamics of the market
should be considered while deciding the combo, said Dilip Puri,
managing director India and regional vice president south Asia for
Starwood Hotels and Resorts.
Abhijeet Umathe, associate director for hospitality and leisure at
property consultancy Knight
Frank India, said developers and
brands get a more flexible business
operation that is more adaptable to

changing market conditions.


By having just one brand, hoteliers cannot focus on other market
segments. Through dual branding, hotels keep attracting customers from different segments all
the time, irrespective of the business environment.
Umathe added that the concept
works well in markets which have
strong MICE (Meetings, Incentive,
Conference, Exhibition) business.
With close to 45% revenues coming from food and beverage and
MICE, experts say hotels will increasingly adopt concepts such as
dual-branding to maximise revenue and footfalls.
However, the only challenge in dual-branding is to keep the two
brands distinctive and remain true
to their market segment.

8  Business of Brands

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

Future Grooms Entrepreneur Leaders


Under the Ban Jao Biyani programme, employees who show promise for entrepreneurship will be given charge of businesses

Creating a Startup Culture


Future Group
asked employees
to bid for nearly 30
brands including
Sunkist, Clean Mate
and Tasty Treat

The shortlisted
candidates were
sent on a five-day
boot camp to
learn the basics of
entrepreneurship

At the boot camp,


each of these
entrepreneurs
were entrusted with
two members of the
governing council to
guide them and help
them with execution

The initiative is
part of Future
Groups larger
strategy to
resemble a startup
and reinvent itself

We are empowering them to run these


business, build business plans around it and
draw upon resources from everywhere in
the organisation
KISHORE BIYANI, Founder, Future Group

Sagar.Malviya
@timesgroup.com

Mumbai: Retail baron Kishore Biyanis Future Group has


launched a programme christened Ban Jao Biyani whereby some of its employees will
be mentored to think and act
like an entrepreneur, and take
charge of a business unit of
the company.
To begin with, the country's
largest retailer recently asked
employees to bid for nearly 30
brands including Sunkist,
Clean Mate and Tasty Treat,
and the shortlisted candidates
were sent on a five-day boot
camp to learn the basics of
entrepreneurship.
We are empowering them to
run these business, build business plans around it and draw
upon resources from everywhere in the organisation, said Kishore Biyani, founder and

CEO of Future Group.


We will be giving them all the
freedom to do the business and
offer them wisdom and mentorship from the senior management of our company and
outside, he said.
At the boot camp, each of these entrepreneurs though
they are not given any equity
stake in the brand they manage was entrusted with two
members of the governing council, which includes Biyani
and company president Devendra Chawla, to guide them,
review their execution plans,
delve on product nuances and
collectively help brands grow.
The new leaders were given
charge of their respective businesses through a karta ceremony last week and brands
from Future Consumer Enterprise portfolio were given to
their new owners.
Karta is a Sanskrit word for
manager; in traditional Hin-

du joint families karta is the


head of the family and enjoys
absolute power in managing
the familys affairs and properties.
The initiative
is part of Future
Groups
larger strategy
to resemble a
startup and reinvent itself.
The company
The company
is working
has been rewitowards
ring itself for Vimeeting its
2021 by
Vision 2021, sion
where it aims when it targets to
more than treble
to treble
revenues to
its revenues to
`. 75,000 -.`1
`. 75,000-1,00,000
lakh crore
crore, up from
levels
`. 22,000 crore at
present.
While the new initiative has
been rolled out in its consumer business, the company
said its fashion business will
also be included to cover

another 40 brands.
We want to create a startup
entrepreneurial culture in the
organisation and most of the
selected employees are between 22 to 27 years old, which
brings in lot of energy into the
brands, said Kaustubh Sonalkar, chief people officer at Future Group.
Late last year, Biyani made
whistle-stop tours across most
of the 110 cities where the retail
chain has a presence, meeting
store managers and employees, encouraging them to bring
in fresh energy to complement
the new design and merchandise within the stores.
The renewed aggression has
been reflecting in numbers too,
with Future Consumers reporting 40% sales growth at `. 519
crore and Future Lifestyle posting 18% increase in net sales at
`. 857 crore, with a four-year
high recorded for same-store
sales growth.

SMELLS GOOD Co to launch premium


offerings after its success with Engage

ITC Aiming for


Pole Position in
Fragrance Biz
A Nose for Margins
MAIN PLAYERS

The size of Indias


fragrance market is

2,300 crore

16%

ITCS GROWTH in
fragrances was 25%
even as consumer
spending declined 5%

Vini Cosmetics
(Fogg)

6.5%
10%
ITC

Park
Avenue

MARGINS IN this business are


high at 18%-20%, can also help
the company achieve breakeven
in personal care business faster

Writankar.Mukherjee
@timesgroup.com

Kolkata: ITC plans to expand its presence in fragrance business by foraying into
newer categories and premiumising its portfolio this year, buoyed by its rise to becoming the second largest player in the deodorant and body spray market.
The tobacco-to-hospitality
conglomerate has just forayed into perfume spray segment, having established its
presence in deodorant and
cologne spray segments
with its Engage brand.
We think fragrance is a category where there is huge
potential for consumption to
increase through adoption
by new consumers, said
Sandeep Kaul, chief executive (personal care business)
at ITC. The fragrance business, where margins are
high at 18%-20%, can also
help the company achieve
breakeven in its personal care business faster.
As per market tracker Nielsen, while the overall growth
in consumer spending on deodorants and body sprays declined to 5% in 2015, it went
up by 25% for ITC.
ITC has around 10% share
in deodorants as per Nielsen report for December,
with market leader Vini
Cosmetics Fogg at 16% and
No. 3 with Park Avenue at
6.5%. The overall market is
`. 2,300 crore.
Kaul said the slowdown in

fragrance market is due to


consumers limiting their
purchase to not more than
three bottles a year, which is
expected to improve. This
is an opportunity for us and
we are widening our portfolio, he said.
ITC plans aggressive digital marketing push for its latest launch Engage perfume spray. The company has
tied up with Google to roll
out a consumer campaign
whereby couples can send
customised and exclusive video notes to each other on a
real time basis. Kaul said
this campaign will help the

DIGITAL PUSH

ITC is rolling out a


digital campaign for
Engage with Google
brand overcome advertisement clutter and increase
engagement.
He said the company is aiming for market leadership
in fragrance business.
The focus on fragrance business comes at a time when
ITC is pushing its other businesses hard to reduce dependence on cigarettes with legal cigarette consumption
down due to recurrent price
increases triggered by higher taxation. ITC is chasing
a goal of achieving `. 1 lakh
crore revenue from non-cigarette FMCG business. Its
packaged food business has
already become profitable.

ETMarkets
Beating Volatility

WWW.ETMARKETS.COM

MONEY
MATTERS

Uncertaintys
Behind Us,
Expect Stability
Bank of Barodas MD
PS Jayakumar on cleaning
up NPA mess XX PAGE 11

MUMBAI, MONDAY, 15 FEBRUARY 2016

THE DELAY in delivery sparked a tumble in airlines stock with its market cap falling 45% from a high of `50,297 cr

Anirban.Chowdhury@timesgroup.com

Mumbai: IndiGo is likely to get the


first of the 430 Airbus A320Neo
planes it has ordered in less than two
months, which could assuage investor concern over delayed deliveries
thats key among the reasons why
45% has been knocked off the market value from its high of `50,297
crore. It closed at `783.75 on Friday,
below the `855.80 it debuted at in
November and its high of `1,341.
Investors have gone cold on the
stock after reports of Airbus being
unable to meet the delivery schedule
for the planes following various delays. IndiGo had been slated to get
the first plane in January.
Gradually, the production

Nitin Gadkari, Union minister


of road transport, highways &
shipping, will be the chief guest of
a special ET Markets pre-Budget
meet on February 19, Friday, in
Mumbai. Mr Gadkari will address
a select gathering of top fund
managers, strategists and CEOs
of brokerages and financial services firms. Mr Gadkari will speak
about the government reforms,
the pace of economic growth, initiatives taken by the roads and
highways ministry to increase investment and create jobs just
ahead of the Budget.
The topic for the evenings discussion, which will also include a
high-powered roundtable of the
countrys top fund managers, strategists and CEOs, will be Making
India a Tiger Economy.
The event, to be telecast live on ET
NOW, will be the biggest gathering
of people connected with financial
markets this year, is a must-attend
event if you are a fund manager or
a strategist or if your job involves
dealing with FII or domestic institutional money.
Four of the countrys biggest
fund managers and two of its topstrategists will participate in a
panel discussion on the governments choices in the Budget and
how it can step up growth from the
current 7.5-8% a year.
Prashant Jain of HDFC Asset
Management, S Naren of ICICI
Prudential, Nilesh Shah of Kotak
Mahindra Asset Management, S
Naganath of DSP BlackRock will
be joined by Neelkanth Mishra of
Credit Suisse and Ridham Desai of
Morgan Stanley in the panel discussion. Howard Marks of
Oaktree Capital Management, famous for his insightful memos on
investing and capital markets, will
speak exclusively to the conference
on why 2016 is not like 2008. Dont
miss the event if you are an investor, fund manager or a strategist
and book your copy of ET on
Monday, February 22, for comprehensive coverage of what happened in Indias biggest pre-Budget markets meet.

Nagaraj Shetti

TECHNICAL RESEARCH
ANALYST, HDFC
SECURITIES

What is in store :The formation


of important bottom reversal
pattern with other positive
technical evidence in Nifty as
per larger time-frame chart is
indicating that the recent swing
low of 7,241 could be an

important bottom for the


market. Any decline in coming

weeks is unlikely to break sharply


below 7241 levels, and there is
a possibility of emergence

of strong buying interest

from the lower levels. We expect


Nifty to move up from here and
the potential upside targets for
the Nifty is around 7800 and
next 8000 levels, which could be
achieved in the next 4-6 weeks.
What to Do: One may look to
initiate long trade in Nifty and
also in banking, realty, oil & gas,
automobile & metals sectors for
the reasonable upside targets.
Any intraweek dips could be used
for a buy on dips strategy.

STREET AHEAD
Dia.Rekhi@timesgroup.com

Mumbai: Investors are bracing


for a turbulent period in the
short term with the Chinese markets set to open after a week-long
holiday on Monday. Sentiment is
likely to be nervous as investors
will look for signs of further devaluation of the Yuan with
China looking to revive exports.
But, further weakening of the
Yuan may accentuate foreign investor selloff in emerging markets. Bank shares may continue

PRE-BUDGET QUIZ
Participate in the quiz from
February 11 to 17 to win daily
vouchers worth `1,000
Two lucky winners will receive
an invite each to the
ET Markets Pre-Budget Meet on
February 19, Friday

Nikhil Zachariah

878.5

777.5

1000
800
600

NOV 10, 2015

FEB 12, 2016

schedule and deliveries will also


come on track, said a person
aware of the matter who didnt
want to be identified.
The Neo (new engine option) is
the upgraded version of the A320,
the most popular narrow-bodied

Chandan
Taparia

DERIVATIVES &
TECHNICAL ANALYST,
ANANDRATHI

What is in store: Now the Budget


is the only trigger which may
give a hope for stability to this
falling market. But if that is not
supportive and if it fails to hold

immediate support of 6,868


then it may even fall down
towards next support of
6,666 and lower levels which
is 61.80% retracement of entire
upswing of 5,119 (August 2014)
to 9,119 (March 2015) levels.

What to Do: Few stocks which


are comparatively holding the
supports or having the nature to
outperform the broader market
are Bhartiartl, M&M, Asian Paint,
PidilitInd, Eicher Motor, HUL, Hind
Zinc, JSW Steel, Lupin, Marico,
Sun Pharma, Titan, TVS Motor
and Yes Bank. While stocks which
are having a weak structure and
trading at multiple year low levels
are ONGC, Oil India, Hindalco, DLF,
BHEL, REC, Tata Steel and most of
the PSU banks.

Ashu Bagri

AVP - TECHNICAL,
SBICAP SECURITIES

What is in Store: The Nifty future


may find resistance around 7,305
and 7468 on the upside. It may
find support around 6,776 on
the downside. The nifty future
has closed at the lower level
of the weekly charts showing
downtrend for the next week.
If it remains below 7,133, then
immediately on the downside
it will find support at 6,732.
A close below 6,732 can take
Nifty to 6,474. Selling at higher
levels is advisable in the band
mentioned below. We assume

- 450 and stop loss - 417.

to be under pressure on Monday


after Bank of Baroda posted a
whopping `3,300 crore loss for
the December quarter.
China will see a
huge selloff beOne factor that
cause we have
may come as
seen an almost
a relief is the
8-10% decline
rebound in oil
across global marprices, which
kets, said Pankaj
sparked a rally
Shama, executive
on Wall Street
director and head
on Friday
of equities at
Equirus Capital. If it is down by
anything less than 5- 6%, I am okay.
But if it down more than 8-10%, it
will trigger a fresh selloff in

emerging markets.
Last week, the benchmark indices posted their biggest weekly fall
of over 6% in over six years following foreign institutional selling to
the tune of almost `2,400 crore.
Uncertainty about US Feds policy
stance prompted FIIs to step up selling. So far in February, these investors have net sold shares worth
`3,000 crore. They sold close to
`11,400 crore in January. The negative news flow refuses to die
down, said Vivek Mahajan, head
of research at Aditya Birla Money.
Investors have already taken big
hits and as a result there will be a
cautious flair in the market.

Aviation, the Indian regulator. The


person cited above said that will
happen in parallel and shouldnt
further delay deliveries.
IndiGo declined to comment on
the development. A senior Airbus
executive couldnt be reached
and there was no response to an
email sent to a Pratt & Whitney
spokesperson.
The delay sparked a tumble in the
airlines shares after president
Aditya Ghosh had said in an earnings call with analysts that Neo deliveries were uncertain. The stock fell
the next day despite a 24% rise in
third-quarter profit.
The news will hearten Go Air, the
other customer for the plane in
India, which had ordered 72 of
them in 2011.

LIGHTING UP

SIGNS OF RECOVERY

Large Caps
Look Cheap,
but Further
Fall Possible

Sun Pharmas Woes


may be Over, Show
Dec Quarter Results

Biswajit.Baruah@timesgroup.com

Mumbai: The selloff in the


market since January has resulted in valuations of benchmark indices falling to their 10year average. Nifty is currently
trading at 13.55 times its oneyear forward price to earnings
(P/E) multiple, and is close to its
long-term 10-year average of
13.46 times. Fund managers
said the decline in the PE ratio
of Nifty suggests large caps are
cheap but recommend caution
as further declines cannot be
ruled out.
Niftys P/E has fallen from
16.45 times, when the index was
trading around 9,000 levels during March 2015. The benchmark index has declined over
22% during this period. So far
in 2016, Nifty has dropped 12%.

a downward trading for


thenext week.
What to Do: Broader trading
range for the week: 67327391.Immediate probable
trading range: 6474-7792. Buy
UPL; target- 409; stop loss 365.
Buy Nilkamal; target- 1110; stop
loss - 1018. Buy Timken; target

Investors Have Much to Worry,


Banks may Continue to Decline

ET MARKETS

FRIDAYS WINNER

Price on BSE (`)

If the Nifty fails to hold immediate support of 6,868, then it may even fall down towards
the next support of 6,666 say technical analysts. However, shorting around the current
levels may not be a good idea and a short-term reversal may be in the offing, they say.

What does the Union Budget hold


in store for the financial markets?
This and other questions will form
part of an exclusive gathering of
big minds from the industry. The
list of invitees includes the whos
who of top mutual fund chiefs, chief
investment officers, fund managers
and heads of research.

Company likely to
approach the US FDA
for a re-inspection of
its Halol site by the
first quarter of FY 17
Our Bureau

Mumbai: Sun Pharma, Indias largest drug maker, is showing signs of


slow recovery with the benefits of
operational integration with
Ranbaxy and an expansion in margins led by a strong operating performance by its US subsidiary Taro,
according to market experts.
For the third quarter ended
December 2015, the drug maker, that
draws close to half its earnings
from the US market, announced a
27% jump in net profit at `1,417
crore, but its sales grew marginally
by 3% at `7,082 crore versus `6,932
crore in the comparative quarter of
the previous year.
The Sun Pharma management,
over a call with investors on Friday,
indicated that the company expects
to approach the US FDA for a re-inspection of its Halol site by the first
quarter of financial year 2017.
Analysts see it as a move in the
positive direction given the prolonged issues faced by the Halol site
culminating in the warning letter
from the regulatory agency in
December. Sun had disclosed it has
taken additional measures to get the
manufacturing site back into a stage
of full compliance.
Also, the launch of generic copies
of Gleevec, the key anti-cancer
drug, in the US may boost its shortto medium-term earnings. Sun
grew its revenue from India market
by 8% at `1,890 crore. The management noted a gradual recovery post
the soft performance in India in
the September 2015 quarter.
However, we continue to witness
the adverse impact of withdrawal

We have become about 20%


cheaper than six months ago,
said Nilesh Shah, managing
director, Kotak Mutual Fund.
Sensex on a trailing basis is
almost trading at its historical
average level and at lower-end
of fair value. However, investors need to remain careful regarding the global market volatility. Recently, Marc Faber,
author of The Gloom, Boom &
Doom report, said Indian
stocks are coming into buying
range because they are now
more reasonably priced than
they were about nine months
ago. I think export-oriented
sectors such as technology and
pharma have great longerterm potential, he said.
Mid-cap shares too have fallen, but their valuations remain
expensive vis-a-vis blue-chips
and small-caps. The BSE
Midcap index is trading at a
P/E of around 15.22 times,
while the BSE Smallcap index
is trading relatively cheaper at
12.25 times.

Sun Pharma
1250

914.5

Price on BSE (`)

1050

848.4

850

650

FEB 16, 2015

FEB 12, 2016

of bonus offers on certain acute


care products, which we believe is
temporary, top company officials
told investors.
Another significant point that will
be in focus in the coming few months
is the expected topline Phase III data
for the psoriasis drug tildrakizumab
(MK-3222) that Sun licensed from US
drug maker Merck.
Sun Pharma managing director
Dilip Shanghvi informed over the
call that the topline should be available by April or May of this year.
That will give us greater clarity. But
if I see the overall performance of
tildrakizumab in terms of its efficacy both at PASI 75 and PASI 90, then
they are decent numbers, he responded to a question.

TURNING AROUND

Operational
integration
with Ranbaxy,
expansion of margins
led by Taro hint at
recovery taking shape
Sharing further insight on the
same compound, he noted, I think
we expect a fairly benign side effect
profile if what weve seen in Phase II
also is reproduced in Phase III and a
once every three-month dosing. So, I
believe that if I see the overall package that we will be able to submit and
also with doctors, we should be able
to aspire to get a sensible market
share, Shanghvi added.

We would love to hear from you on what you think about our
new Markets pages. Share your feedback on ET Markets at
et.markets@timesgroup.com

Chinas Central Bank Says No Basis for Continued Yuan Decline


Bloomberg

Beijing: Chinas central bank governor said theres no basis for continued depreciation of the yuan because the balance of payments is
good, capital outflows are normal
and the exchange rate is basically
stable against a basket of currencies, according to an interview published Saturday in Caixin magazine.
Zhou Xiaochuan dismissed speculation that China plans to tighten
capital controls and said theres no
need to worry about a short-term decline in foreign-exchange reserves,
adding that the country has ample
holdings for payments and to defend

stability. The comments come as


Chinese financial markets prepare
to reopen Monday after the weeklong Lunar New Year holiday. The
countrys foreign-exchange reserves
shrank in January to their lowest level since 2012, signaling that the central bank sold dollars to prop up the
yuan as it fell to a five-year low. The
weakening exchange rate and declining share markets in China have
fueled global turmoil and helped
send world stocks to their lowest level
in more than two years.
Zhous remarks are timely, filling a
void in the markets understanding
of Chinas strategy on the exchange
rate at a critical moment, said Tom
Orlik, Bloomberg Intelligences

ANIRBAN BORA

GOVERNORS ASSURANCE No need to worry about short-term decline in forex reserves, country has ample holdings for payments and to defend stability
For T&C refer to http://bit.ly/1Rl7yJG

SMS ETM<space>
A/B/C/D<space> Your name
to 58888 before 5 PM today
to stand a chance to win your
invite to the exclusive evening.

1200

Use Intra-Week Dips


as Buying Opportunity

PRE-BUDGET MEET

HOW TO PLAY

1400

aircraft in the world. The engine


upgrade is said to cut fuel consumption by 15%.
Airbus had informed customers
including IndiGo that there would
be a delay in deliveries in
December. The main glitch is said
to be related to the Pratt & Whitney
geared turbofan engine taking
time to cool before it restarts.
Sources said launch customers including Qatar Airways which was
supposed to get the first plane had
to wait as the start time needed to be
cut to 90 seconds from 180 seconds.
Pratt & Whitney president Robert
Ludec said on Saturday that most of
the problems with the engine would
be resolved by April.
The Neo is yet to be certified by the
Directorate General of Civil

TECHNICAL CALLS

ET MARKETS

QUESTION
How many new smart
cities were proposed in
the 2014-15 Budget?
A) 700
B) 100
C) 50
D) 200

InterGlobe Aviation

ANIRBAN BORA

Gadkari to
Showcase
Reforms,
Jobs Push

FRANCESCO GUARDI, Nighttime Procession in Piazza San Marco

IndiGo to Start Getting Airbus A320Neos Soon

Chief Asia Economist. Zhou appears to signal that a shift to a more


flexible exchange rate may go on hold

through the current period of market stress.


China is committed to making

progress with exchange-rate reform


during its 13th Five-Year Plan, relying more on the market to determine prices, Zhou said in the interview. Combating Speculation
The draw-down of Chinas reserves has continued since the devaluation of the currency in
August, with holdings falling by
$99.5 billion in January to $3.23 trillion, the central bank said Feb. 7.
The stockpile slumped by more than
a half-trillion dollars in 2015.
Zhou has effectively ruled out any
devaluation, said Shen Jianguang,
chief Asia economist at Mizuho
Securities Asia Ltd. in Hong Kong.
If they do, its effectively acceding
to speculators who want the yuan to

weaken further.
Shen said Zhous reference to the
13th Five-Year plan, which starts
this year and ends in 2020, points to
the time horizon for China to move
toward exchange-rate policy reforms. China has no incentive to depreciate the currency to boost net
exports, and theres no direct link
between the nations gross domestic
product and its exchange rate, Zhou
said in the interview.
Capital outflows need not be capital flight, and tighter controls would
be hard to implement because of the
size of global trade, the movement
of people and the number of
Chinese living abroad, Caixin quoted him as saying.

10 Smart Investing


HOPE FLOATS Merger can kick-start partial payment to aggrieved investors and as
the recovery process picks up, it may lead to lowering of liability burden for FTIL

What
Britannia Industries
Share Price on BSE (`)

3200
2700

2568.9

2033.7

CALCULUS

2200
1700

FEB 16, 2015

Kolkata: Investors fear of Financial


Technologies (FTIL) having to bear the
brunt of liability from its fraud-hit subsidiary National Spot Exchange
(NSEL) proved right with the government passing a final merger order on
Friday. FTIL will challenge the constitutional validity of the order in the
Bombay High Court. But if the courts
dont rule in its favour, against the order, it will be forced to absorb the outstanding liability of NSEL. The companys stock has lost 92% of its market
value in the past three years.
Here are a few reasons why minority
shareholders of FTIL will be better off
supporting the governments stance
rather than the managements view.
If one breaks down each of the 63,000
shareholders of FTIL individually,
that alone will provide an inkling
about the real beneficiaries from this
dissent on the merger proposal.
According to the companys annual
report in 2015, out of the total 63,000
shareholders, 60,623 are small shareholders who hold anywhere between 1
and 500 shares. Small shareholders
constitute 9.07% of the equity and do
not have much influence on the knowhow of the business management.
Among these, the minority shareholders, both old and new, held on to
the companys shares by betting on a

JM Financial has maintained


its buy rating on Oracle
Financial with a target price
of `4,600 citing that the
company has a robust pipeline with multiple mid-sized
deals. The brokerage said the
sharp correction in the stock
over the last 3-months, inline with the broader market,
provides a good entry to
play the structural positives,
ahead of the seasonally
strong fourth quarter. Oracle
Financial gained 3.72% to
`3,432.00 on Friday.

ings-on that led to the scam in July 2013.


FTIL says its personnel were present in
a non-executive capacity on NSEL
board and blamed the former management under disgraced NSEL MD
Anjani Sinha for perpetrating the scam
in collusion with 24 defaulters. The
MCA subsequently satisfied itself with
causes to merge the defunct bourse.
But investors should keep in mind
that a merger does not mean liquidation of FTIL reserves to pay NSEL investors. Nevertheless, the merger can
kick-start partial payment to the aggrieved investors, and as the recovery
process picks up, it may lead to the risk
of liability burden easing. Besides, if
the Company Law Board gives a verdict to supersede existing management, the pace of recovery and turnaround will be much faster.
The value of total assets after deducting the debt at the end of September
quarter in 2015 stood at `2,837 crore
while the outstanding liability of
CLAUDE MONET, Tulip fields in Holland (Muse dOrsay) NSEL amounts to `5,269 crore. This
turnaround. This signifies that they a r i e s. T h i s i s t h e f i r s t - t i m e means that the turnaround of FTIL
have already factored in the risk of li- government is forcing two private en- will depend upon how the gap is
ability emerging from the companys tities to merge in the public interest. bridged between the total liability and
subsidiary. Hence, FTIL manageOne needs to understand the reason FTILs value of assets. It can be either
ments opposition to the merger serves why the government has taken such a be done by speeding up the process of
to benefit the rest of 3,149 sharehold- recourse. Then regulator FMC in its recovering NSELs dues or via reveers, of which 137 shareholders com- recommendation for the merger to the nue growth of FTIL. However, it may
prise 80.56% of the total equity.
government said having common key be a long-drawn journey before one
The company has been saying that management personnel, being on the sees any tangible signs of a turnathe merger will destroy the concept board of FTIL, receiving sizeable prof- round. Hence, any minority shareof limited liability. The parent com- its from its subsidiary, email trails from holders who have pinned their hopes
pany should not be ideally responsi- NSEL officials to FTIL, the parent on short- to medium-term recovery
ble for the liabilities of their subsidi- could not claim ignorance of the go- are advised to exit the stock position.

REAPING BENEFITS

Ashutosh.Shyam@timesgroup.com

FEB 12, 2016

Religare Institutional
Research has maintained
its buy rating on Britannia
Industries with a target
price of`3,650 citing the
companys steady results
for the quarter ended
December. The brokerage
said it remained optimistic
about the companys ability
to deliver industry-leading
earnings growth. It said
valuations at 30.6x/24.1x
FY17E/FY18E EPS were attractive. Britannia Industries
declined 2.49% to `2,571.00
on Friday.

DRIVING GROWTH FOR PARENT

Anand Rathi has reiterated its buy rating on NRB


Bearings with target price of
`140. The brokerage said the
companys focus on increasing export revenue, longterm benefits are expected.
Further, the expected
revival in auto-sector demand and the brighter outlook for the economy, makes
NRBs prospects promising.
It assigned an estimated
price earnings of 17x to
FY18 earnings. NRB Bearings
remained flat and ended at
`115 on Friday.

Tata Motors arm is on


the recovery path in
China and has posted
robust growth in
Western markets, too

In Drivers Seat
JLRs Volume Growth

Ashutosh.Shyam@timesgroup.com

ET Intelligence Group: A number


of positive triggers in the Decemberquarter earnings and attractive valuation may rekindle investor interest in Tata Motors. Most of these are
related to Jaguar Land Rover, the
marque that is the money-spinner
for the company.
The biggest surprise has come from
China concerning volumes as well as
profit. It is JLRs biggest market that
has been a drag on the parents earnings in the past couple of quarters.
Also, an uncertainty had squeezed
the stocks price-earnings multiple
considerably. JLRs China joint venture with Chery has resulted in equity income of 22 million, despite the

Smallcap Mantra
Sanghvi Movers
296
-17.17
408/221
9.5/2.65

Improving the demand scenario in the user industry,


especially in wind mill (57% of
revenue), refinery (16%) and
power (14%) segments, is likely
to drive business momentum
for Sanghvi Movers (SML).
Considering demand improvement, SML is undergoing a fleet
expansion especially in the
high-tonnage crane segment.
For FY16, the management has
increased its capex guidance
to `500 crore. The stock price
was steady despite the market
volatility. However, in the last
one week, it has come down
owing to market pressure.
Centrum has maintained its
buy recommendation on the
stock on the back of improving
capex cycle and better management guidance. But the brokerage has lowered their target
multiple to 5.0 on September
17 EV/EBITDA, in line with the
overall fall in market valuation
and subsequently revised their
target price to `427.
Centrum Broking

FY16

FY17

Jaguar

27

73

Land Rover

0.1

-1

JLR Total

14

China JV
(units)

38000

66000

JLR Total
with
China JV

11

18

(Figures in %)

plant running at only 39% utilization.


Besides, volume growth in China is
gradually stabilising, and the new
Discovery Sport has received good
response. The Street is factoring in
38,000 and 66,000 units of sales by the
China JV in the current and next fiscal years, respectively. This implies
that nearly 7-10% of JLRs volume
will originate from the China JV.
Not only that the semblance of stability in volume is building in China,
but JLRs growth has been robust in
the western markets. Volume sharehas expanded more than 20% in the
past four months, mainly led by in-

Ram.Sahgal@timesgroup.com

Tech Picks

SHUBHAM AGARWAL
Head - Quantitative Research

LT
LT broke down from a formation of a Flag and remains weak with long-term support far away.
LAST CLOSE X `1,050

IGL
IGL has been a relative out-performer and not
correlated with the ongoing downtrend of Nifty.
STOP LOSS X ` 498

HINDALCO

ET Intelligence Group: For investors with a horizon of two to three


years, the current valuation of
Orient Cement may appear to be attractive considering factors such
as cost efficiency, capacity addition
and expectations of improvement
in cement utilisation.
The mid-sized Hyderabad-based cement company has a capacity of 8 MT
including the recently commissioned
capacity in Karnataka. It sells 60% of
its cement production in Maharashtra
and close to 40% in Telangana. Nearly
80% of its sales are in the trade segment with a focus on rural housing.
With slowdown in rural construction
activities due to low growth in rural
income, the companys cement volume fell by 2.4% in a year-to-date. It
operates at 75% utilisation rate
against 80-82% in FY15. Once the demand picks up, there is room for enhancement in its utilisation.

Blended realisations

VOLUME GROWTH

Cos new plant


in Karnataka
would enhance
its volume growth, which in
FY15-18, will be close to
17% annually
prove rural income. It is estimated
that the companys new plant in
Karnataka would enhance its volume
growth. According to Karvy Research,
the volume growth in FY15-18 will be
close to 17% annually.

3QFY16

3QFY16

YoY (%)

3,349

3,734

-10.3

Power & Fuel costs

979

965

1.5

Raw Material costs

490

597

-17.9

Freight costs

713

783

-9

Other costs

745

627

18.9

Cement EBITDA

199

591

-66.3

3,150

3,143

0.2

Cement costs

Note: Figures in ` per tonne Source: Company, HDFC Sec Inst Research

575

50

PIDILITIND
LAST CLOSE X ` 583

BUY

LONG & SHORT

TARGET
`

STOP LOSS X ` 560

650

R PRASAD

F&O Strategy

BHAVIN
B
H AV
HA
VIIN
N DE
D
DESAI
ES
SA
A
AI
Head
H
He
Hea
ad
d ooff De
D
Derivative
eriivva
atiive R
Research
eseearch

NIFTY ( CALL RATIO SPREAD)


z Heavy Put congestion in 7000 despite the index level around
the same indicates expectation of halt in the fall
z Over pessimistic OIPCR supports argument of possible halt in fall
z In case of a move-up inated Implied Volatility could fall
z On the higher side meaningful Call writing is as distant as 7500
z Considering risk-reward and set-up Call Ratio is recommended

TARGET ` 5500

STOP LOSS `2,100

Fx Technical

KISHORE NARNE
Head Currency & Commodities

USD/INR STATUS: Recent up-move looks unsustainable and


downside could resume as the pair is facing stiff resistance!

CMP

68.38

TARGET

68.00

STOP LOSS

With slowdown in
rural construction
activities due
to low growth
in rural income,
the companys
cement volume
fell by 2.4% in a
year-to-date
It operates at 75%
utilisation rate as
against
80-82%
in FY15

68.82

TRADE: The pair faces stiff resistance at 68.56 68.65 zone and failure
to breach the same could result in short-term correction. Selling the pair
near 68.55 is advised.

RESISTANCE
SUPPORT

68.56
68.00

68.65
67.75

68.80
67.50

EUR/USD STATUS: The pair looks to continue its northward move for
the fourth straight week!

CMP

1.1242

TARGET

1.1410

STOP LOSS

1.1035

TRADE: Initial weakness could be seen after three straight weeks of


positive move, but downside looks limited and dip towards 1.1160 could
be a good buying opportunity.

Orient Cement Has a Lot to Build On


Long Haul Play

TARGET
`

TARGET

Breakout from a consolidation with rising volumes indicates strong directional move.

Commodity Calls

Rajesh.Naidu@timesgroup.com

BUY

STOP LOSS X ` 67.50

RESISTANCE
SUPPORT

Maharashtra has capacity of close


to 32 MT and it consumes close to
13% of Indias cement consumption.
The state governments measures
such as the hybrid business model
where the government will fund 40%
of project costs and extension of period of premium payment are expected to speed up construction. If
the 2016 monsoon is good, it will im-

900

SELL

Metal as a sector remains weak and Hindalco


has been a consistent under-performer.
LAST CLOSE X ` 61

TARGET
`

STOP LOSS X `1,130

LAST CLOSE X ` 524

SELL

OPTION STRATEGY:

Mumbai: A couple of interesting


events played out on Friday, a day before Bank of Baroda (BoB) posted the
worst quarterly loss by any bank so
far. Traders bought a huge number
of put options, expiring on February
25, at the 90 strike. A good quantity of
shares were up for borrowing on the
stock lending and borrowing window of NSE, as BoB futures traded at
a 1.62% discount to the spot shares.
Huge outstanding positions or open
interest build-up has happened at the
130 strike call as its price has been
falling successively, implying shorting by traders on expectations the
share price wont jump to that level
anytime soon. At the 90 put, 2.3 lakh
shares were added over night
through Friday taking OI to 2.9 lakh
shares. The OI jump was accompanied by an overnight 46% spurt in
option price to `1.9. If BoB falls to `90,
the option price could jump 5 times
from `1.9, a rough calculation shows.
On the SLB window, where 25.9 lakh
BoB shares were up for lending, borrowers will sell the shares while buying BoB futures to capture the `1.85
spread between spot and futures. Once
that happens they will buy back shares
at a cheaper rate and return them to
lenders, who earn interest on lending.

cremental volumes of the Jaguar XE


and Discovery Sport. The Street is
factoring in volume growth of 11%
and 18% for the current and next fiscal years. JLR is entering a phase
where year-over-year volume growth
is set to accelerate on a combination
of the strong product cycle (leading
to growth in China and further expansion in other markets) and a
small base (as China and Russia issues are now in the base).
The operating margin of JLR rose
2.2 percentage points to 14.2% on a
sequential basis. Adjusted for forex
loss, this becomes 15.9%. This may
reinforce confidence among analysts
on the company meeting its margin
guidance of 14-16% for the next two
years. This may also reduce fear
among investors that there could be
a slippage in the margin guidance.
JLR has trimmed its capital expenditure guidance by 400 million
and the debt-equity ratio has been
relatively stable. This may assuage
investors concern on cash flow.
The current stock price implies a
stress-case scenario for the stock.
The stock price indicates there is a
possibility of more than 40% earnings downgrade on the FY17 and
FY18 projected earnings growth.

Motilal Oswal Securities

Nifty is placed at the edge of the lower band of the


prolonged one year channel. Momentum indicator
suggests a negative extreme for the short term
trend and expectation of pullback remains high.
Inside Bar on the daily scale indicates a halt but
confirmation of buy only on sustenance above
7050.

STRONG OUTLOOK Hyderabad cos valuation looks attractive over a 2-3 year time
frame given cost efficiencies, capacity addition & hopes of higher cement usage

MIDCAP MANTRA

1.132

1.137

1.1410

1.160

1.104

1.060

AMIT SAJEJA,
AVP Commodities

COMMODITY

EXCHANGE

TRADE

Gold (April)

MCX

Buy around 29100 SL 28650


Target 29850

Silver (March)

MCX

Buy around 37200, SL


36500, Target 38600

Copper (Feb)

MCX

Buy around 304, SL 297,


Target 313.50

RM Seed (Apr)

NCDEX

Buy around 3875, SL 3790 ,


Target 4080

Street Signs
Top 10 Cos Lose `1.83 lakh crore in M-cap

FINANCIALS

VALUATION

In the December 2015 quarter, the


companys net sales declined by 8.6%
to `350 crore year-on-year. It recorded
a loss of `13 crore as against net profit
of `31.1 crore a year ago. Due to weak
cement prices in Maharashtra, realisations fell by 10% to `3,340 per tonne.
Low utilisation of its new plant in
Karnataka impacted its sales volumes
which showed muted growth of 1.9%.

On the valuation front, considering


FY17 earnings estimates, the cement
producers enterprise value works out
to be $83 per tonne.
In the mid-sized cement space, this
is attractive given the companys
size, geographical presence, capacity and, more impor tantly, its
light balance sheet with net debt-equity ratio of 1.3.

NEW DELHI The heavy selloff last week took a toll on the countrys top
10 most valued companies as they shaved off over `1.83 lakh crore from
their combined market valuation. TCS market capitalisation went down by
`39,280.4 crore to `4,38,715.7 crore, taking the hardest hit. The valuation
of ONGC nosedived `22,586.5 crore to `1,65,591.5 crore and that of RIL
tumbled `21,381.6 crore to `2,93,608.7 crore. Infosys plunged `21,005.5
crore to `2,48,873.9 crore and HDFC Bank took a hit of `20,979.2 crore at
`2,45,877.27 crore. Last week, markets saw massive selling, with both the
key indices recording their biggest weekly fall since July 2009. Sensex fell
1,631 points, or 6.62%, and Nifty was down 508.15 points, or 6.78%.

National Pension System (NPS) helps you to save tax in several ways. There are only seven NPS fund managers at present and the
table below compares their performance. The data has been provided exclusively to ET.

NPS Scorecard
TIER I: Equity Plans

TIER I: Government Bond Plans


Returns(%)

Assets
(` cr)

Assets
(` cr)

NAV

HDFC Pension

12.76

-0.56

2.33

3.56

54.6

ICICI Prudential Pension

17.17

-0.87

2.22

3.49

154.4

35.2

Kotak Pension

16.95

-0.86

2.15

3.92

-19.04

82.8

LIC Pension

13.15

-0.85

2.19

-17.90

31.6

Reliance Capital Pension

16.60

-0.98

2.07

-15.86

-18.51

437.1

SBI Pension Fund

18.45

-0.81

2.26

3.45

653.6

-15.55

-17.18

42.8

UTI Retirement Solutions

16.96

-0.42

2.63

4.16

44.5

-16.39

-19.87

CCIL All Sovereign Bond - TRI

-0.23

2.79

4.69

NAV

HDFC Pension

12.77

-10.82

-16.59

-19.16

73.0

ICICI Prudential Pension

17.83

-10.82

-16.28

-18.88

181.7

Kotak Pension

16.55

-9.58

-15.15

-17.55

LIC Pension

11.92

-10.88

-16.41

Reliance Capital Pension

16.97

-9.78

-15.32

SBI Pension

15.17

-10.28

UTI Retirement Solutions

17.57

-10.24

-10.79

3-Month

TIER I: Corporate Debt Plans


Returns(%)

Fund

Fund

Nifty 50 Index

BoB May Fall


Another 20%
After Q3 Show

JLR Rebound may Revive


Investor Interest in TaMo

Reliance Securities has maintained its hold recommendation on Wipro with a target
price of `575. The brokerage
said the HealthPlan Services
acquisition is expected to
augment Wipros healthcare
capabilities. It expects the
acquisition to be earnings
dilutive by 3.7% for the fiscal
year 2017 and 2.1% for fiscal
year 2018. It expects
Wipros EPS togrow at 4%.
Wipro rose 0.47% to
` 518.55 on Friday.

CMP (`)
1-M Return (%)
52-week H/L
FY17E PE 5Y AVG

Day Trading Guide

Minority Investors may Gain


from NSEL Merger with FTIL

to Buy, Sell
and Hold
3700

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

6-Month

1-Year

ANIRBAN

3-Month

6-Month

1-Year

Fund

Returns(%)

NAV

3-Month

6-Month

1-Year

Assets
(` cr)

HDFC Pension

13.18

0.73

3.78

8.18

51.7

ICICI Prudential Pension

20.23

0.69

3.84

9.00

138.8

38.4

Kotak Pension

20.12

0.71

3.69

8.04

29.7

3.45

46.3

LIC Pension

13.26

0.72

3.83

8.76

55.7

3.43

32.8

Reliance Capital Pension

18.23

0.61

3.78

7.68

24.1

SBI Pension Fund

20.33

0.65

3.56

7.50

345.9

UTI Retirement Solutions

18.45

0.79

3.75

7.79

30.4

1.15

4.03

5.87

CCIL Bond Broad - TRI

Returns as on Feb 12, 2016. Assets as on Dec 31, 2015 Source: Value Research

Money Matters  11

WWW.ECONOMICTIMES.COM

PS JAYAKUMAR

Off the Beat

Managing Director, Bank of Baroda

Major events and stock moves


that can affect your holdings

(Indexed to 100)

97.8

100

89.8
NOV 13, 2015

FEB 12, 2016

Ferro Alloys reported a


loss at the operating level
for the December quarter
since its cost of operation
exceeded its revenues.
Its has posted a net loss
of `10 crore compared to
the profit of `1 crore in
the December quarter of
the previous year. Both
of its major divisions
including ferro alloys and
chrome ore posted operating loss. The companys
stock fell 4.4% on Friday
after the results.

Wockhardt Tanks
on Poor Q3 Show
Wockhardts third quarter results disappointed
investors since higher research and development
expenditure and falling
business in the US market
pulled down profits compared with the previous
years December quarter.
The stock lost 13% on
Friday widening the fall
for the month further.
The company continued
to report a strong momentum in filing of patents and receiving drug
approvals. It was granted
20 patents during the
quarter taking the total
count to 431.

DROP IN THE STOCK


OF WOCKHARDT IN
ONE MONTH

Jubilant Skids 9% as
Profit, Margin Hit
Jubilant FoodWorks
Jubilant FoodWorks (Indexed to 100)
S&P BSE Sensex

89.8
100
71.2
NOV 13, 2015

FEB 12, 2016

The stock of Jubilant


FoodWorks tanked 9%
on Friday following a
drop in its net profit for
the December quarter.
Net profit fell 9.4% to
`31.7 crore even though
revenues rose 14.3%
from the year ago period.
Due to higher increase in
expenses compared with
revenue growth, operating margin shrank by 150
basis points to 7%. The
companys stock has lost
over 27% in a month following growing concerns
over its high valuation
amid subdued financial
performance.

Uncertaintys Behind Us,


Expect Stability Ahead
ven as Bank of Baroda
(BoB) reported a
historic loss of `3,342
crore in the December
quarter, its new chief
PS Jayakumar is
confident that it will not impact the
banks ability to give fresh credit,
and a lot of assets will start yielding
returns in the next fiscal year. On
Saturday, the bank provided for all
its bad loans in one go, instead of
spreading it over two quarters. In
an interaction with Pratik Bhakta &
Sangita Mehta, Jayakumar underplayed his role in the clean-up, and
instead emphasised what lies ahead.
Edited excerpts:

53%

You have reported a historic loss


with a huge share of bad loans. Why
are you taking the hit in one go?
Whether you take the hit in one quarter or spread it over two, the outcome
is the same. In this way, we have put
the uncertainty behind us. As far as we
can see, we have taken whatever was
required as provisions.
What does one expect from the
bank in the next quarter?
Going ahead, we only expect normal

Babar.Zaidi@timesgroup.com

New Delhi: When we ranked equity


linked savings scheme (ELSS) as the
best tax-saving investment earlier
this year, we cautioned that these
funds work best if you take the SIP
route. ELSS funds are equity
schemes and carry the same risk, so
investing a large sum at one go could
prove risky, especially if you cant
withdraw before three years. On the
other hand, SIPs help beat volatility
by reducing the average cost of pur-

How to Trade Volatile Re?


The spot price of rupee has declined by $3.1 against
the greenback in the year to date period. Those having
a view on rupee can actually wager whether it would
rise or fall against the USD, pound, euro or yen through
a trading account via an equity market broker.

1. What are currency


derivatives (CD)?
Currency futures are instruments that allow a
holder to buy or sell a currency at a preset rate for
delivery on a future date.

Dollar, pound, euro and


yen against the rupee.
Apart from futures in these
four pairs, USD-Re options
are also allowed.

3. Where can a client


invest in CDs?
NSE and BSE have currency derivatives segment,
where one can trade. NSE
offers the most liquid platform for currency trades.

4. Who are the


counterparties?
Banks, foreign institutional investors and small corporates who find it hard to
get favourable rates on the
over-the-counter currency
market, dominated by
banks and big corporates.

talking about is real assets, which


are stuck there and a lot of money
has already been invested. We know
whats right for our customers will also
be right for us. We have an extremely
granular exposure not more than
`2,000 crore in any one company.

slippages, which are not going to be


significant, and we expect a fair degree of stability.

Whats the fresh capital requirement now?


We are telling our shareholders not
to worry about unlimited dilution.
As far as we are concerned, the bank
does not need any fresh capital. We
have even told the government that
it can be taken off any list that discusses fresh capital infusion. As an
institution, we are very comfortable
and quite capable of supporting the
growth of our customers. Tomorrow, if
the price goes up twice or 3 times our
book value, then we will raise capital.
Our analysis shows that part of the
reason why stocks of public sector
banks have suffered is the fear of unlimited dilution.
What kind of credit growth would
you be able to support?
I am visualising a 20% growth rate,
which I think is fairly a strong position
to take. I can support a 20% growth
rate without taking into account any
profit that may come from the next
quarter or the next whole year, and
selling only part of the financial assets

SEEKING APPROVAL

We have asked
the govt for
long-term
compensation with respect to stock option
plans for senior employees. The board approved it on Saturday.
that we own.
How would you go ahead with funding projects with so much stress in
the economy?
The decision to fund is not related to
a projects NPA status. What we are

Since you are not seeking capital,


are there any specific demands you
are making to the government?
We have asked the government for
long-term compensation with respect
to stock option plans for senior employees. The board has approved it
today (Saturday) and we will submit it
in a weeks time.
Should the bold move to clean up
books, even if it means a historic
loss, be credited to the fact that you
have worked with Citibank earlier?
I am not saying that Im a hero, and
I have come from the private sector and have fixed everything, and
should now get a Padma Shri. We
should bear in mind that theres a
change in the technology environment and what we are trying to do
is connect things so that we remain
contemporary, and at the same time,
leapfrog and go ahead.

By now some state-owned banks


would have had long queues of
anxious depositors outside
their branches if their ownership was in private hands. But
savers even after glancing
through headlines on PSU bank
losses are unruffled because
of their implicit trust on the
governments power and promise to bail out.
Its the same government that
has asked RBI governor
Raghuram Rajan to go ahead
with Operation Clean up
where bank managements were
told (verbally) to make extra
provisions on loans to companies that look shaky or dubious.
Its a tough accounting drill
with devastating impact on
banks bottom lines: since provisions are made out of profits,
and even on loan accounts
which are well-behaved today
but could turn bad tomorrow,
public sector banks are declaring losses, which are unheard of.
CEOs of some of Indias largest institutions made several
trips to the finance ministry to
soften the blow perhaps trying to convince New Delhi that
Mr Rajans decision is not only
ill-timed but impractical. So
far, their pleas have fallen on
deaf ears, leaving most to conclude that Mint Street has the
PMOs clearance.
Few would challenge the necessity to tidy up banks books.
Also, some of the loans identified for special provisioning are
to companies with shoddy corporate governance. This was evident when a private sector
bank palmed off loans to a large
steel company (with not exact
impeccable reputation) just before the account became a nonperforming asset (NPA).
But there are companies that
will need credit to tide over a difficult business cycle. Banks typically dont sanction fresh funds
to companies categorised as
NPAs. Today, under harsh media
glare and with the RBI breathing
down their neck, most PSU
banks would refrain from giving
a new loan to a company labelled
as NPA. Even if Mr Rajan and
deputy governor SS Mundra

the former chairman of Bank of


Baroda, which last week announced the highest-ever loss recorded by an Indian bank have
no problem if banks lend to these
NPA clients for genuine business
needs, few would; unless the regulator spells it out in black and
white. No bank chief would like
the CBI and Central Vigilance officials to hound him for the rest
of his life for lending to a company that has been blacklisted.
If the RBI indeed has the PMOs
sanction, it should ensure certain protection to bankers and allow them to prioritise clients
while stepping up provisions.
Else, the mission to sanitise asset
books could severely restrict
banks ability to lend when companies need it the most.
In 2000, when steel prices
crashed, banks were allowed to
handle the situation more realistically. Even then, there were
some bad apples and some fund-

ing took place to dress-up balance sheets. But lenders were


able to salvage most loans when
the commodity cycle turned
in some cases by selling pledged
shares whose value had soared
with the commodity prices.
But as things unfold, it appears
RBI will force the finance ministry to make hard choices. Either
Mr Jaitley has to earmark a
mountain of money for PSU
banks or consider more radical
ideas. Though the minister has
promised capital to back the
clean-up drive, he may not have
all the money to keep afloat all
loss making banks. If the government is forced to pick and
choose, it would capitalise the
large banks and later nudge
weaker ones to merge themselves with stronger lenders a
plan that was opposed by trade
unions as well as managements.
Mr Jaitleys budget and banks
balance sheets on March 31 will
hint whether this is more than a
conspiracy theory.

ELSS Investors are Taking a Big Risk by Not Taking the SIP Route

ET in the Classroom

2. What currency pairs


are allowed to be
traded in India?

SUGATA GHOSH

FILE PHOTO

Ferro Alloys Corp


Ferro Alloys Corp
S&P BSE Sensex

RBI Pushes
Jaitley Towards
Hard Choices

We are telling our


shareholders not
to worry about
unlimited dilution.
As far as we are
concerned, the
bank does not
need any fresh
capital...As an
institution, we are
very comfortable
and quite capable
of supporting the
growth of our
customers.

Ferro Alloys Net


Loss at `10 crore

ANIRBAN BORA

EXCLUSIVE Q&A

Power Play

5. Is there a delivery?
There is no delivery, only
the difference in price is
exchanged in rupees.

6. How does it work?


If you have a view that dollar will strengthen against
rupee in the current
monthly series that expires on Feb 25, you can
buy the dollar (sell the rupee) at, say, Fridays closing rate of 68.37. Minimum
lot is $1,000, so contract
value is `68,370. Margin to
trade is around 5% (`3,418
in this case). If the dollar
closes at `68.50 you make
`130 (0.13 Re X $1,000). On
the other hand, if rupee
rises to 68, you make a
mark-to-market loss of
`370 on one lot. On 10,000
lots, the profit would be `13
lakh and loss `37 lakh.

TEXT: Ram Sahgal

chase and instill investing discipline.


They are especially beneficial when
markets go down. But most ELSS investors forego these benefits.
According to data from Computer
Age Management Services (CAMS),
barely 15% of the total inflows into
ELSS come through SIPs. In 2014-15,
SIPs accounted for only `578 crore of
the total inflows into the ELSS
schemes of the 15 fund houses serviced by CAMS. If extrapolated to the
entire industry, this means roughly
`1,200 crore came in as SIP during a
year when the total inflow into the

Rush of March
Year

Total
Inflows
(`cr)

Jan-Mar
Inflows
(`cr)

% of
Total
Inflows#

2012-13

2,626

1,311

49.93

2013-14

2,661

1,382

51.94

2014-15

8,343

3,932

47.13

2015-16*

6,613

1,040

15.73

*Till Jan 2016; #Jan-Mar Qtr share in total inflows

ELSS category was `8,343 crore.


More than 85% of the inflows were
one-time or lump sum investments.
Figures from the Association of
Mutual Funds in India are more disturbing. Nearly 50% of the total inflows into the ELSS category happen
in the last three months of a financial
year. The month of March alone accounts for 22-25% of the total inflows.
This can be disastrous if markets
recede. If a taxpayer started a SIP of
`5,000 per month in the Axis LongTerm Equity Fund in FY15, the
`60,000 he invested for the full year

would now be worth `67,950, a return


of 9.2%. However, if he waited till the
last month and invested `60,000 in
March 2015, his investment would be
worth `52,980, a loss of 12.2%.
Investors also tend to redeem funds
as soon as the three-year lock in period is over. The ICICI Prudential
Long-Term Equity (Tax Savings) has
given spectacular returns of over
21% since it was launched in August
1999. `10,000 invested in the NFO is
now worth `2.42 lakh. But despite robust inflows every year, the average
folio size in the fund is `61,220.

12  Commodities Plus
VIKAS KHEMANI

AGRI COMMODITIES INDEX UP 0.07%

CEO, EDELWEISS SECURITIES

FII Outflows will Continue


Fuelling Market Volatility

Quarts & Ounces

19 Million

INDIAS ESTIMATED
EXPORT OF ROSE STEMS
IN FEBRUARY, 2016

Did You Know?

Ethanol Eating
into Corn Meant
for Humans
Ethanol is traditionally used to reduce
greenhouse gas
emissions by 4050% compared to gasoline.
Emissions of particulate matter,
carbon monoxide, air toxic and
volatile organic compounds are
reduced when ethanol is blended with gasoline. In 1982, only a
handful of small ethanol plants
produced 350 million gallons of
ethanol. Now, 274 million bushels of Illinois corn are used each
year to produce more ethanol.
That means, nearly, a billion
people may go hungry as thats
enough food to feed 412 million
people for an entire year. This is
to meet the ethanol target set
by the state. Last year, India
doubled its target of blending
ethanol with gasoline to 10% as
the government tries to promote cleaner-burning fuel to
check pollution.

Brazils Sugar
Producers Benefit
from Weak Real
RIO DE JANEIRO Brazils

sugarcane millers are


emerging from a
slump, reporting the
best quarterly performance in more than two years
after a depreciation of the nations
currency and higher sugar and ethanol prices boosted export revenues.
Biosev posted net income of $41m in
the three months ended Dec after
eight consecutive quarterly losses.

ICE Cotton Sees


Biggest Weekly
Loss in 5 Months
NEW YORK Cotton

futures ended slightly


lower on Friday, easing
to their biggest weekly
loss since September
2015 after days of selling pressure of
weak commodities markets and a
bearish US government report. The
second-month contract traded within
a tight range throughout the session,
ending the week down over 3% and
touching the lowest prices since
January 2015. A weekly US government report showed speculators
switched to a bearish stance in cotton
for the first time in a year.

FED RATE CUT

How long will the stock market


turmoil continue?
The fear factor is now dominating the
mood of the global markets. Any
measure to restore confidence in
some of the large European banks
solvency is very essential. I think
Fed indicating a pause from further
rate hikes is perhaps quite critical in
stabilising the global markets.
Certainly, the expectations of pace
of the Fed rate hike have tapered off
in last few weeks, but they have not
vanished.The Fed is unlikely to
reverse the rate cut cycle in a hurry
but looks it is inevitable over the
longer term. I think this process can
take another 3-6 months.

How long will FII outflows


continue? Will DII flow continue in
this market situation?
Foreign investors, especially EM
funds and sovereign funds, have
been overweight on India but they
are facing redemptions. This has
naturally created outflows from all
markets including India. The good
news is that domestic investors have
been fairly resilient so far. However,
negative returns and panic mood in
markets is slowing domestic flows.
FII outflows can continue for some
more time. This might make markets
volatile over next 3-6 months.

ON BUDGET

There is a good case to


be made for boosting
development spending and having some
temporary relaxation
in the fiscal consolidation roadmap

Will Indias economy stay resilient


to the global economic slowdown?
If global slowdown intensifies we
cannot remain immune from the
same. Global growth slowdown
impacts us in two ways. First, it
causes a slowdown in global trade
thus hurting Indias exports. While
exports account for only 20% of the
GDP, their multiplier is far higher

given they are labour intensive. The


second channel is through global
flows, which dry up owing to risk
aversion. This tightens domestic
liquidity and thus hurts domestic
investment activity. Both these
factors might slow down the
economic recovery, which otherwise
would have been quicker.

PSU banks have been beaten


badly. Even many private sector
banks seem to be caught in the bad
debt muddle. Are there more
downsides to these stocks?
Asset quality review initiated by RBI
has led to a sharp drop in
profitability and sentiment around

banks, especially public sector


banks. However, I think this clean up
would lay a strong foundation for
further credit growth and eventually
support economic growth. Most
banks with exposure to corporate
lending, especially towards stressed
sectors,are now trading between 0.5
times to 1.0 times price to book,
which are close to crisis valuations.
Given the global uncertainty these
stocks could have more downside,
but look attractive from a long term
perspective. These very stocks will
deliver superior returns when the
environment improves. And this is
not first time this has happened. We
have seen this before.

What do you expect from the


forthcoming union budget?
The Union Budget this time is being
presented against a very challenging
global backdrop. There is a good case
to be made for boosting
development spending and having
some temporary relaxation in the
fiscal consolidation roadmap. Apart
from that, the service tax is likely go
up while corporate tax rates might be
reduced as promised in the previous
Budget. I would also be keen to watch
how government generates fresh
sources of revenues outside the
Budget to finance development
spending.

Economists Ditch Calls for Fed Rate Hike


PATIENCE PAYS

Bloomberg

Economists are pushing back


their calls for the next Federal
Reserve interest-rate hike in
droves. Trouble overseas and
uncertain economic conditions
at home have helped move the
median forecast to June from
March.
Nearly 68% of economists say
the Fed will next raise rates in
June, according to a Bloomberg
analysis of 53 firms that contribute forecasts. That compares
with 30% in January, when a majority estimated the next increase
would come at the March meeting. Economists at Deutsche
Bank Securities had the biggest
revision in the Bloomberg survey,
moving their call for the nearest
hike to December after previously seeing an increase next month.
Forget about March, forget
about June, said Brett Ryan, a
US economist at Deutsche Bank
in New York.

Delivering the semiannual testimony to Congress on Thursday,


Chair Janet Yellen made it clear
that its going to take some time
for the Fed to be comfortable that
this most recent bout of volatility
isnt going to materially impact
the economy, he said.
Standard Chartered Bankwhich previously called for one
rate hike in March followed by a
cut in Decemberhas removed

its rate rise forecast entirely.


While a lot has happened
since the Fed in December
raised its benchmark federal
funds rate for the first time in
nearly a decade, Yellen told the
Senate Banking Committee
that she hasn't yet seen enough
of a downturn to prompt the
central bank to cut interest
rates. Fed officials have said
that economic data will guide
future decisions. Growth in the
US decelerated to a 0.7% annualised rate last quarter.

on
Banks Stand
Standard Chartered Bank
which previously called
for one rate hike in March
followed by a cut in Decemberhas removed its
rate rise forecast entirely

Yens Best 2-Week


Run Since 1998
Japans currency may
extend its biggest two-week
rally since 1998 as investors
continue to seek out refuge
assets amid market turmoil,
says Citigroup. State Street
Global Advisors, which
oversees about $2.4 trillion,
says its buying yen and
selling dollars as the tumult
gripping financial markets
bolsters the Japanese currencys appeal. Were not
counting on market mood
shifting any time soon, said
Steven Englander, Citigroups
global head of Group-of-10
currency strategy.

TOUCHING 2008 HIGHS

An Ounce of
Gold can Buy
79 oz of Silver
Golds surge to the highest in a year
means an ounce of the metal buys 79
ounces of silver, near the high of 84.5
ounces in 2008 during the global financial crisis. As investors fret about
financial market turmoil, a potential recession and the health of bank balance
sheets, they have turned to gold as a
haven. Silver has not performed so well
as about half of the demand comes
from industrial fabrication, which is
threatened by a slowing economy.

Gold-Silver Ratio Nears 2008 High


Silver less of a haven asset compared with gold

80
70

40

Gold-Silver Ratio
2008

2009

2010

Equinomics

Which Stocks to Invest in


and Which to Hold On to
I bought 1,000 shares of Bank of
India at `266. Kindly advise what
I should do to recover my losses.
Can I sell and invest in any other
stock to recover my money?
B Manohar

The priority of the Reserve


Bank of India to recognise

2014

2015

Apr

Jan

Oct

Apr

90

July

WPI (2014-100)

2016

Investors Bet
on Edible Oil
as Prices Soar
Production fall in Malaysia pushing up rates

Costlier Edible OIl


PRICES
Palm Oil: Up 15%
Sunflower oil: 4%
Soya oil: 3%
(IN LAST FEW MONTHS)

REASONS

GLOBAL PRODUCTION

Top soya exporter Argentina not releasing soyabeans as quickly as investors


expected. This is pushing up prices
Sunflower oil production in
Ukraine declined

Production fall in Malaysia pushing up palm oil prices


Palm oil prices up due to El Nino effect
Rupee depreciation will make palm oil costlier

Madhvi Sally &


Sutanuka Ghosal

New Delhi| Kolkata: Investors


are looking at taking positions
in edible oils as prices are moving northward with palm oil
leading the pack. As Holi approaches and demand rises, the
trend is likely to persist, analysts said.
Palm oil prices have moved up
15.09% to a 21-month high while
sunflower oil price has inched
up by 4% and soya oil by 3% in
the last three weeks.
A production shortage in Malaysia is pushing up palm oil
prices, which is affecting the edible oil complex.
Going ahead, edible oil prices
can move up, said Adani Wilmar COO Angshu Mallick.
Palm oil prices have already
gone up due to the El Nino effect.
Rupee depreciation will further
make palm oil, the most common
oil used in India, costlier. Adani
Wilmar sells edible oil under the
brand name Fortune. It increased prices of its packaged
oil by 2% in January.
Another upside movement
could be seen in next one-two
months due to lower production
of palm oil, said Tushar Rathod,
analyst at ADMISI Commodities. We know the production is
hit. But we also have yet to see
how El Nino will impact palm
production in 2015. There could
be an increase in pressure on
output, he said. The rupee has
been weakening alongside other
global currencies.
Since January, the rupee depreciated by more than 3%, as a
result of which the import cost
will go higher impacting import
of the much needed edible oil,
said Subhranil Dey, analyst at
SMC Comtrade. With demand
slated to rise as the festival of Ho-

li approaches, we see a trend of


firming edible oil prices next 15
days to one month.
Meanwhile, refined soya oil
prices rose 0.55% to `. 616.45 per 10
kg in the futures market on
Thursday, supported by a pickup
in domestic demand and restricted supplies from growing
regions as traders built up fresh
positions. At the National Commodity and Derivatives Exchange (NCDEX), refined soya
oil for delivery in far-month
March rose `. 3.40 or 0.55% to
`. 616.45 per 10 kg with an open interest of 65,120 lots. On similar
lines, oil for delivery in February contract traded higher by

SOYA RATES

Farmers in
Argentina
have not been releasing soyabeans as
quickly as investors
had expected, which
pushed up oil prices
`. 2.45 or 0.40% to `. 610.70 per 10 kg
in 11,650 lots.
Analysts said that farmers in
Argentina, the top soya oil exporter in the world, has not been
releasing soybeans as quickly as
investors had expected, which
has pushed up prices of the oil.
Sunflower oil production in
Ukraine has declined, which has
pushed up prices of the oil in
global markets. According to
media reports, in 2015-16, large
and medium-sized enterprises
of the Russian Federation produced 1.47 million tonnes of sunflower oil.

Biggest US Gas Glut in Four Years


Steamrolls Bullish Traders

50

G CHOKKALINGAM

ABU DHABI Egypt, the

Agriwatch Index
95

60

2011

2012

2013

2014

NEW YORK Bullish US natural gas traders are getting


crushed under the weight of the biggest supply surplus
since 2012. Hedge funds cut their net-short position by
almost half in the week ended February 9, just before
prices slid to a six-week low. Long bets gained 4.2%, while bearish
wagers slipped 2.4%, according to US Commodity Futures Trading
Commission data. Bloomberg

30
2015

Bloomberg

Stock Queries

100

Jan

Foreign fund outflows will remain for


some more time and this may keep
the markets volatile for some more
time, said Vikas Khemani, CEO,
Edelweiss Securities, which is
holding its investor conference
themeddisruptive
innovationsthis week. In an
interview with Rajesh
Mascarenhas, he said tighter
domestic liquidity and delay in
investment activity may delay
Indias recovery. Edited excerpts:

Oct

The Fed is unlikely to


reverse the rate cut cycle in a hurry but looks
(like) it is inevitable over
the longer term

DISRUPTIVE INNOVATIONS

No Takers for
Egypt GASC
Wheat Tender
worlds largest wheat
importer, received
only four offers at an
international tender to
buy the grain on Saturday as suppliers remained reluctant to sell to the
state grain buyer GASC following
concern about limits on imports of
wheat containing the ergot fungus.

105

July

Conference 2016

Apr

EDELWEISS INVESTOR

The Agriwatch Agri Commodities Index edged marginally higher by


0.07% to 100.31 during the week ended Feb 13, 2016 from 101.22 during the previous week. The base for the Index is 2014 (= 100). The Edible
Oils Index increased 2.23% during the week while the Pulses Index increased by 1.69%. These gains offset weekly declines of 1.44% in the Cereals Index and 7.50% in the Vegetables Index. Other commodity group
indices which gained during the week were the Condiments & Spices
Index (+2.94%), Oilseeds Index (+1.10%) and Other Non-Food Articles
Index (+0.21%). The other weekly decliners were the Sugar, Gur& Khandsari (Sweeteners) Index (-0.04%) and the Fibres Index (-2.31%). The charts
showing the Indices of each commodity group that constitute Agri Commodities Index can be viewed on the ET website and on Agriwatch.com.

Jan

Hailey Heng Qiao Yi


@HaileyqiaoYi
The first major change that
we need is to move away
our dependency on commodities like Oil& Gas and
mining. @Khairykj

Tighter domestic liquidity and delay in investment activity may delay Indias recovery

SI CHEN YUAN Fishing

Tweet of the Day

High Edible Oil Rates Help

INDEX

Q&A

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

rather than find remedial


measures, apart from the
slowdown in the industrial
economy, has led to a stressful
time for PSU banks. These
banks will recover from the
adverse economic environment within a year or so.
Hence, I suggest shifting to Vijaya Bank, which is better than
Bank of India in terms of profitability, asset quality and
prospects of dividend yields.
I have been holding 500 shares of
Tata Elxsi for a long time. Now that
the stock is trading at record high,
is it time to sell it off and invest the
amount elsewhere? P Bhaskar

Please book your profit as it is

Is it the right time to hold on to bank stocks at a time when PSU banks are under a lot
of stress because of economic slowdown? Our expert chalks out next course of action
trading at over 27 times its
FY17 estimated earnings. It
grew its profits at a very high
impressive rate in the last
three years, but it would be
difficult to maintain growth in
future due to base effect and
economic slowdown.

ed earnings which is quite attractive for a technology company with a strong balance
sheet. Hold Premier Explosives for the long term as it has
significant growth potential in
explosives business as the coal
mining activities are expected
to double in the next 4 years.

What is your take on APL Apollo


and NIIT Tech bought at `500 and
Premier Explosives bought at `200.
Can I hold them or sell them?
Chitralekha Venkatraman

I have purchased a few Adani Port


shares a few months ago at the price
it is trading now at. Looking at the
government push to infra, is Adani
Port a good investment for 2-3
years? Siddharth Trivedi

Considering the steep price


corrections, the companys
ability to make decent profits
despite Indias external trade
contracting and opportunities
for the port-based business in
the long term, you may hold it.
I have 390 shares of Parsvnath
Developers at `100 and 270 shares
of PunjLoyd at `150. Please advise
me what to do? Deepak S

Sell APL Apollo at around `700,


considering its valuation. Hold
NIIT Tech as it has already corrected substantially and trades
at around 11x FY2017 estimatANIMISHA

Loss-making Parsvnath Developer is going through a difficult

balance sheet stress while the


debt is around five times, receivables and inventories over
six times the current annualised sales. Having lost 85% of
invested capital, just hold on to
Punj Lloyd for any remote possibility of a turnaround in the
long term. Recovery of oil prices could improve its business in
the long term as it has substantial exposure to the oil & gas
sector.
Please send your queries on Stocks to
et.stocks@timesgroup.com; Mutual
Funds to et.mfs@timesgrouwp.com;
Tax to et.tax@timesgroup.com; Insurance to et.insurance@timesgroup.com;
Realty to et.realty@timesgroup.com

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

 13

14  Make in India Week

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

STATEMENT OF ACCOUNT The boards of banks will be professionalised and the government plans to
trim its stake in public sector banks to 50-52%, says finance minister at the Make in India week

Bank Reforms on Way, but No


Govt Pullout Just Yet: Jaitley
Ruchika Chitravanshi
& Anirban Chowdhury

Mumbai: Indias banking system, which


has become a sore point of the economy, is
set to see a series of reforms soon, finance
minister Arun Jaitley said on Sunday.
The government is conscious of the
health of public sector banks but India has
not reached a stage yet where the government can pull out of the banking sector
altogether, Jaitley said during an interactive session during Make in India week.
Public sector banks such as Bank of
Baroda, Bank of India and IDBI Bank have
posted highest-ever losses of `12,000 crore
due to bad loans. State Bank of India and
Punjab National Bank also saw a decline
in their profit levels in the third quarter.
Public sector banks have been reeling
under pressure of non-performing assets,
which form 5-10% of their overall portfolio.
The boards of the banks need to be professionalised and we are thinking on the lines
of bringing government equity in banks to
the levels of 50-52%, the finance minister

Maharashtra CM Devendra Fadnavis receives the


key of a Volvo Hybrid bus from Swedish PM Stefan
Lofven on the sidelines of the Make in India event
Krishna.Kumar@timesgroup.com

ON REFORMS

ARUN JAITLEY, Union finance minister

Short Takes

Chandilya Still with


AirAsia: Tony Fernandes
Mittu Chandilya is still with the company ,
AirAsia Berhads group CEO Tony Fernandes
said on Sunday. There have been reports that
Chandilya, the chief of the low-fare carriers
Indian arm, has resigned. Mittu hasnt disappeared anywhere. I am going to meet him in
Bangalore later tonight, Fernandes told reporters on the sidelines of the Make In India
conference. Fernandes also said AirAsia will
add two more planes to its fleet shortly.

Union finance minister Arun Jaitley takes stock of the Make in India event on Sunday

Not Just Cheap Labour, Use New Tech


for Manufacturing: Birla & Mahindra

BHARAT CHANDA

Haryana chief minister ML Khattar started his


speech by praising Mumbai in Marathi to great
applause. He then had a riddle: Gita humare Dil
mein hain. Dil ke beech mein Gita dalo toh kya
banega? When the audience gave up, he said,
Dil ke beech mein Gita dalo toh diGITAl banata
hai. Thats why we want to be Digital Haryana.

Jochelle.Mendonca@timesgroup.com

(From left) CNNs Richard Quest moderates a panel discussion on Made in Asia with participants Aditya Birla group chairman Kumar Mangalam
Birla, Mahindra group chairman Anand Mahindra, GE South Asia CEO Banmali Agrawala and Emerson Electric Co president Edward L Monser
Megha.Mandavia@timesgroup.com

Litaram (in yellow), part of a folk


dance troupe, had a query: What
is Make in India? They got us from
Madhya Pradesh, but they havent
told us what all this fuss is about.

Colourful Socks? You Dont

Need Licence to Wear Them


A TV anchor complimented Emerson Electric
president Edward Monser for his colourful
socks. Monsers repartee had the audience in
splits. He said, I dont need a licence to wear
them, in a not-so-subtle dig at the many approvals needed in India to start a business.
Later, in a meeting, he said the ease of doing
business in India has improved: a request for
permission got cleared in just two months,
instead of three years, he said.
CONTRIBUTED BY: Anirban Chowdhury,
Rachita Prasad & Baiju Kalesh

Mumbai: Maharashtra is set to sign `4.65 lakh crore


of investment deals with a number of companies in the
next few days at the ongoing Make in India Week even
as the Devendra Fadnavis government continues to
roll out business-friendly policies.
For starters, Maharashtra has decided to give a
power tariff subsidy of `1 per unit for three years to
electronic system design and manufacturing (ESDM)
units in the state. Also, new ESDM units will be exempt from paying electricity duty for 15 years.
ESDM units in certain categories would be exempt
from paying stamp duty while acquiring land or for
availing loans, state government officials said.
Similarly, micro small and medium enterprises
(MSMEs) would be exempt from paying property tax
for 10 years.
The state has also lined up other incentives for
MSMEs, including giving a 25% one-time subsidy on
capital equipment for technology upgradation up to a
limit of `25 lakh; 75% subsidy on expenses incurred on
patent registration with a cap of `10 lakh for national
patents and `25 lakh for International patents; and
providing assistance to get a maximum of three industry standard quality certifications, state government
officials said.
They said that existing ESDM units that want to benefit from the policy would be required to make a minimum of 25% more additional fixed capital investment
or effect at least 10% increase in employment in the
non-supervisory category.
There are also huge incentives for MSMEs with reduced VAT, interest subsidy on term loans from banks
and public financial institutions. Products such as
mobile phones, tablets, laptops and surveillance cameras will be classified as goods of special importance
and will be taxed at the lowest VAT rate.

Plans `100cr
Fund for R&D
at Universities

The Connection

Between Gita and Digital

Make in India: What


is All the Fuss About?

PTI

BHARAT CHANDA

said. He also said the government has to be


at an arms length from the banking system. State sector banks have performed an
important role20 months ago before this
government came to power, only 58% population was connected to banks, he said.
Prime Minister Narendra Modi earlier
this year had called for an end to lazy
banking, saying there will be no government interference in their functioning.
Jaitley, in a conversation with CNNs
Fareed Zakaria, said the government is
moving in the direction of reforms and a
market-oriented economy but will have to
take into account all stakeholders.
The government has projected itself as
reform-oriented. It has announced a series
of initiatives, in a way breaking away from
the paralysis the previous government
was criticised of. But investors are worried about the slow pace in some important
policies such as the Goods and Services Tax
(GST). On whether the GST bill has been
watered down by the government, Jaitley
said the government cannot push things
that would be a deal-breaker such as petrol, which is under the control of states.

If you look at the sum total of all measures... you will see
the government has moved in one single direction. It has
not erred in reversing that direction

Maha in Big
Push for
Electronics

Mumbai: Industry leaders Kumar


M a n g a l a m Bi rl a a nd A n a nd
Mahindra have spoken about the
need for new technology and digitisation in the manufacturing sector rather than depending solely
on cheap labour to make Prime
Minister Narendra Modis Make in
India initiative successful.
T he M a ke i n I nd i a we ek i n
Mumbai brought industrialists together on Sunday to discuss ways
to make the country the worlds
manufacturing hub. The government wants global and domestic
companies to set up factories in the
country to boost employment and
reduce expensive imports.
There will be a migration of
large-scale, low-cost factories from
China to India. But that shouldnt
be the only kind of manufacturing
that India does, said Mahindra,
chai r ma n of t he $ 16.9 bi l lion
Mahindra Group. Is there going
to be disruption in the way we make
in India? Manufacturing should be
democratised, digitised and decentralised.
Assuming India is not innovative
enough would be wrong, Birla said,
but added the country is highly de-

pendent on western companies for


fundamental research, something
that needs to change.
India has a track record of setting up world-class cement, textile
factories and oil refineries. We
have to take India to the next level, said Birla. New skills such as
use of algorithms, remote sensing
must be used in manufacturing to
remain constantly contemporary.

ON MANUFACTURING

There will be a migration


of large-scale, low-cost
factories from China to
India. But that shouldnt
be the only kind of manufacturing that India does
ANAND MAHINDRA

Chairman, Mahindra Group

Edward Monser, president of


Emerson Electric, said Make in
India should mean high-quality
production unlike earlier. He was
referring to Indias image abroad
of producing cheap but poor quality
products.

Suzuki Wants to Set up


Units in Haryana: CM
Rachita.Prasad@timesgroup.com

Mumbai: Suzuki Motors of


Japan has indicated that its next
manufacturing units would be
set up in Haryana, the state
from which it entered India,
said Chief Minister Manohar
Lal Khattar.
Suzuki Motors has already
announced its plans to invest
`18,000 crore in Gujarat to set up
multiple units over the decade
with total capacity of 1.5 million
units. The industry will look for
announcements from the company to figure out if the likely
investments would be done by
the parent company Suzuki
Motors of Japan or its Indian
arm Maruti Suzuki India. We
have spoken to the Suzuki chief
executive officer in Japan and he
has conveyed that the company
is interested in setting up another project in Haryana, Khattar

told ET in an exclusive interaction on the sidelines of the Make


in India event in the city.
Khattar said at a time when different states are trying to lure
investors, Haryana has taken
concrete steps
to improve the
ease of doing
business. All
clearances and
processes have
been made
time-bound
and put under
one ro of. We
a r e wo rk i n g
hard on improving the ease of doing business. In fact, we have already
exceeded our target of attracting
`1 lakh crore investments to the
state, he said.
Haryana will host Happening
H a r ya n a Glob a l I nve st or s
Summit next month to attract
investments.

Mumbai: The Maharashtra government has given


its State Innovation Council complete autonomy and
is readying a more than `100-crore pool of money to
fund R&D activities at its universities, as the state
looks to beat neighbouring Karnataka in the innovation stakes. We have given the council autonomy, but
thats just the beginning. We will support the innovation council to help the state lead in innovation explosion, said chief minister Devendra Fadnavis at the
Maharashtra Innovates session during the Make in
India conference.
Make in India is a central government initiative to
boost manufacturing and the Maharashtra government and the Confederation of Indian Industry have
put together the week-long summit in Mumbai.
The state government plans to fund
its public universities to spur innovaThe state is
tion at all levels, a senior bureaucrat
considering
in the education department said at
creating
the event. We are planning to introwork
duce innovation into our university
spaces that
system and are looking to pump in
innovators
`100 crore into public universities for
can use to
research and innovation over the next
turn their
two years. We will use money from
ideas into
RUSA as well, said Sanjay Chahande,
products
principal secretary for higher and
technical education. RUSA (Rashtriya
Uchchatar Shiksha Abhiyan) is a government programme for higher and secondary education that has
earmarked `20 crore for such initiatives.
Chahande said the government was also readying a
training programme for teachers at its universities to
train them in research methodologies. The state has
appointed former director general of the Council of
Scientific & Industrial Research (CSIR) Raghunath
Mashelkar as co-chair of the Maharashtra State
Innovation Council. We do not want jugaad or jugaadu innovation. That implies less focus on safety
and aesthetics. We want systematic innovation. It is
easy to make high-quality products for the rich and
poor quality products for the poor. We need affordable
excellence, thats the challenge, said Mashelkar.

Pvt Sector Looking to the PM to Lead the Way on Spending


Q&A
ANIL AGARWAL
CHAIRMAN, VEDANTA

Vedanta chairman Anil Agarwal wants Prime


Minister Narendra Modi to kickstart the investment cycle as mining companies continue
to mothball plants, hit by the commodities
meltdown and an influx of imports from
China. Agarwal spoke to Megha Mandavia
and Baiju Kalesh about the governments
right intentions but cautious approach to
make it easy to do business in India.

What are your plans for India?


This is a time to build India. There is so much
capital available. India has not borrowed
as much as China. You can build natural re-

sources at 25-30% cost. All the large global


companies have no work. India is a place
they can come and employ locals. They can
build natural resources and infrastructure
sectors. This is the time to build India. It is
time to borrow, invite people. Let the world
know that India is not hesitant about companies making money.

What do you want to see in the budget?


We are looking at safeguard duty on aluminium. Imports in India are rampant. No
country will tolerate this. They have to
protect the local industries. They have addressed steel. The current duty is just 5%.
It can go up to 15%. The world is expecting
this budget to be one of a kind. We hope he
(finance minister Arun Jaitley) will address
personal tax, corporate tax, simplify the
process to make it easy to do business.
Has the ease of doing business in India

FILE PHOTO

improved in the last one year?


(Laughs) The intention is there. They have
been going very cautiously.
Are there any other recommendations
for the budget?
We want spending on infrastructure to go
up. The oil money India has got should be
spent on infrastructure. Millions of jobs will
be created. Private sector investment will
take time. The government has to kickstart
the investment cycle.
But the government is complaining the
private sector is not spending.
It will follow. Private sector is looking at
Prime Minister Modi. We expect Modi to
anchor. It is up to the leader.
Why did the government ignore the aluminium industrys demands for import
duty?

ON BUDGET

We want spending on
infrastructure to go up. The
oil money should be spent
on infrastructure. Millions
of jobs will be created

Aluminium is a new industry. Steel industry has 50-60 players. Aluminium has
three Vedanta, Hindalco and Nalco. I
want to make the government realise how
important aluminium is. Central American
countries have flourished because of
natural resource exploration. Largest
employment comes from natural
resources. You have to find in India and
make in India.

New exploration has stopped. What


policy changes can speed it up?
The government should free up exploration. If the entrepreneurs are capable, they
should be allowed to explore. If they find
something, they should be given licence to
mine it. A new exploration policy is under
works. The mines ministry is aggressive
about reforms in exploration. They have
started believing about exploration. Earlier,
they thought we dont have oil, gold, potash.

Now the belief has started coming. Earlier,


they were scared about huge funding, but
now they believe revenue-sharing policy is
a good policy.

You have been importing alumina instead of mining bauxite. Why?


Niyamgiri in Odisha is closed. We are requesting Nalco to give us alumina so that we
dont have to import. The Odisha government is very serious about giving us bauxite. We have a plant ready.
Are things still difficult in India?
India needs large industries like oil and
gas, gold and iron ore mining. There are too
many restrictions. There are hopes on Modi.
What is your view on the weak commodity cycle?
2016 is going to be similar; 2017 will be
better.

Make in India Week  15

WWW.ECONOMICTIMES.COM *

Massive Fire Breaks Out


During Cultural Function
No casualties as people were evacuated quickly; CM orders a high-level inquiry

Mumbai A massive fire broke


out on Sunday evening during a
cultural functionMaharashtra Rajani organised by the
Maharashtra government as
part of the Make In India event.
The fire completely gutted
the stage. Fortunately, there
were no casualties reported as
people were alerted immediately and evacuated. The fire
was doused within an hour.
The programme was attended by Chief Minister Devendra Fadnavis, Governor Vidyasagar Rao and Shiv Sena President Uddhav Thackeray.
The remaining four-day cultural event has been cancelled.
Fadnavis has ordered an enquiry into the incident. He himself stayed at the location till
late, monitoring the situation
and ensuring everyone was
evacuated safely.
Still, the incident will cause a
major embarrassment to the

TOI PHOTO

Krishna Kumar &


Anirban Choudhary

Artistes were performing on stage during Maharashtra Rajani of


the Make In India event on Sunday when the fire broke out

Maharashtra
government
which has, for the first time,
organised an event of such
proportion for PM Narendra
Modis Make In India campaign. Prime Minister Narendra
Modi spoke to the chief minister about the fire and enquired as to what caused it, said
government officials.
Interestingly, the fire occurred just an hour after Fadnavis, Thackeray and others left

Odisha CM Unveils Policy


for Industries, Startups
Mumbai: Odisha Chief
Minister Naveen Patnaik
unveiled a 10-year plan at
the Make in India week on
Sunday, seeking to make
the state one of the top
three investment destinations in India.
Patnaik said the industrial development policy
2025 will help the state attract 2.25 lakh crore of investment over the next 10
years and create 10 lakh
jobs, making the mineralrich state a manufacturing
hub of the east coast.
It presents a paradigm
shift with government acting as an enabler to aid industrial growth. It aims at
sustainable manufacturing
and employment generation, the CM said.
The policy aims at boosting he ease of doing business by providing infrastructure, land and some
funding. The state is setting up an infrastructure
development fund of `. 100
crore, and has decided to
tap the expertise and experience of the private sector
for the implementation of
industrial townships and
parks. Patnaik said Odisha

TOI

Our Bureau

Naveen Patnaik

has ready-to-use land of 1


lakh acres for the industries waiting for appropriate
infrastructure.
Odisha witnessed robust
economic growth of over
8% last year and expects to
grow at 12% by 2020. The governments efforts to expand the industrial base
and promote value addition are triggering economic growth, said Patnaik.
The state government unveiled several e-governance
initiatives at the Odisha state seminar at Make in India. These e-governance
websites aim to bring down
corruption by reducing
physical contact with the
bureaucracy and encouraging transparency by putting out all information on
the website.

Chinas Sany Group Plans


to Invest $4 billion in India
Rachita.Prasad
@timesgroup.com

Mumbai: Chinas heavy


equipment major Sany group has committed to invest
$4 billion in setting up manufacturing units and
wind farms in India, as it
sets eyes on the No.1 position in construction equipment space in the country.
We want to be the number
one in five years in construction equipment in India.
We will be growing more
than 60% year-on-year, Deepak Garg, CEO at Sany Heavy Industry India, told ET.
The company has already
set up a $100-million unit in
Pune to manufacture heavy equipment. It now plans
to invest $1 billion in setting up manufacturing
units for equipment and
another $3 billion on wind
energy projects.
We plan to invest $1billion

over the next decade to set


up manufacturing capability. There is a recovery in India, led by the roads sector,
but people are cautious. Liquidity is still a constraint
in the industry, Garg said.
Sany group has revenue of
$100 million in India, of
which half is from locally
manufactured goods and the
rest from imports from the
Chinese parent. Garg dismissed the local manufacturers contention that Chinese makers have a price advantage over Indian makers.
Imports are not cheaper.
Importing most equipment
from China is not cost effective. If there is demand for a
certain product in India
and in neighboring countries then we make in India.
But for some products the
advantage of manufacturing in India is not very
high, so we import these
products from our Chinese
parent, he explained.

the stage. In fact, after Fadnavis speech, actor Amitabh


Bachchan and Hema Malini
performed on stage. When the
fire broke out at the left side of
the stage, a group of women
artistes was performing lavani. As the people noticed fire,
they anxiously asked the dancers to move away from the stage. In minutes, thanks to the
sea breeze, the whole stage
was engulfed .

Fadnavis, who had invited delegates to the Maharashtra Rajani programme, stayed put till
the fire was doused, which took an hour. Government officials have indicated that a shortcircuit below the stage could
be the primary cause of fire.
While speaking to reporters,
Fadnavis said, It was an unfortunate incident, I have asked for a high-level inquiry to
fix the responsibility. We will
do it with a proper authority.
The one good thing is that there was no injury to anyone.
He added a fire audit was done
four days before the event and
also disaster preparedness was
done which also helped. The fire was brought under control
soon. Its too early to speculate
on the cause, he said .
He said that there would be
no change in the Make in India programme. However, the
Maharashtra
government
was pilloried by the opposition. The NCP claimed that the
fire had embarrassed the state
in front of the whole world.

16 Companies

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

Ranbaxy Whistle Blower may


Bat for Drug Quality in India
Dinesh Thakur may set
up advocacy group to
increase transparency,
accountability in cos
Divya.Rajagopal
@timesgroup.com

Mumbai: Dinesh Thakur, who


rattled the generic drug industry in
India through his expose of malpractices in Ranbaxy as a whistle
blower, may be looking to address
issues related to the quality of pharmaceutical products in the country.
Hes considering setting up a patient advocacy group that will aim to
increase transparency and accountability among drug makers in India, according to people aware of the
matter. Thakur is said to have approached public relations companies in
India to initiate the campaign that
will try to raise matters related to
drug safety standards.

Pop This!
Dinesh Thakur rattled generic
drug industry in India through
his expose of malpractices in
Ranbaxy

He is considering
plans to set up a
patient advocacy
group

His aim is to increase transparency


& accountability among drug makers
Thakur is said to have approached
PR cos to initiate a campaign
Top Indian drug makers already face US FDA
strictures over non-compliance with quality
standards
Indian drug controller may then also be
nudged into establishing similar quality
standards

Thakur, however, denied any such


plans in an email to ET. However,
others said Thakur has shared his
ideas with a few people on how the
process could be taken forward.
Such a move, if it does come about,
would take place as top Indian drug
makers face USFDA strictures over
non-compliance with quality stan-

Dinesh Thakur

dards.
Since November 2015, the USFDA
has issued warning letters to leading Indian drugmakers Sun, Dr
Reddys and Cadila for not complying with good manufacturing practices. Though warning letters are
not uncommon in the drug business, observations on data integri-

ty and quality of manufacturing


are serious matters, experts said.
Also, since the Ranbaxy scandal,
there has been increased scrutiny
of drug makers in India by the USFDA. Nearly 40% of drugs consumed
by US patients is manufactured by
Indian generic makers. The companies are in firefighting mode as 40%
of revenue at large Indian generic
makers comes from the US market.
If Thakur was to indeed launch
such an initiative, the Indian drug
controller may be nudged into establishing similar standards of quality
as practiced by global regulators, experts said. In 2012, a parliamentary
committee report on health and family welfare revealed mismanagement at the Central Drug Control Board and alluded to collusion with
pharmaceutical companies.
The committee is of the firm opinion that most of the ills besetting
the system of drugs regulation in
India are mainly due to the skewed
priorities and perceptions of
CDSCO (Central Drugs Standard
Control Organisation), the committee had noted.

L&T Eyes `. 1.5 L cr


Worth of Orders
from Navy in 4 Yrs
Our Bureau

New Delhi: Engineering giant Larsen &


Toubro is targeting `. 1.5 lakh crore of orders from the navy in the next four years,
with the company looking at its investments in the submarine and warship building industry paying dividends under
the Make in India initiative.
L&T, which has played a major role in
the Indian nuclear submarine project,
said it is a strong contender for several
major contracts in the naval sector by
2020, besides a wider opportunity in land
systems to be tapped over a longer period.
We have a `. 1.5-lakh crore opportunity
within the next four to five years. This is
in the naval sector where submarines
and ships are to be placed on order by
2020, JD Patil, who heads the companys
defence business, told ET.
L&T is counting on several major naval
projects, including an upcoming contract for building an indigenous range of
nuclear attack submarines, besides additional orders for nuclear missile boats
and ongoing efforts to order a new class
of diesel electric submarines.
Besides the naval shipbuilding sector
where L&T has a first-mover advantage,
having worked closely with the navy since the 1980s on the Arihant nuclear submarine project, the company is looking
at bagging a major share of missile orders to be placed by the three services.
The opportunity in missile systems,
where we already produce and deliver to
the armed forces, is also very large. We
are looking at a `. 85,000 crore market, Patil said, adding that the company delivers
major components and systems for the
Akash surface-to-air missile system, the
Brahmos land attack and anti-ship missile as well as upgrades of the Russian BM
21 Grad rocket launchers.
L&T is close to bagging a major deal
with the army with its K 9 Vajra howitzer
being selected for a mobile artillery contract. Price negotiations are on and the
`. 4,500 crore contract is expected to be signed in a few months.

Government of Bihar

turk dks rax D;k djuk tsy tkuk vkSj ikuh Hkjuk

FOREX, TRADE & FEE-LED BIZ TO GROW

Kotak Expects to Reap ING Vysya


Aquisition Benefits from April 16
Cost-to-income ratio to start dropping from next fiscal: Ekambaram
Joel.Rebello@timesgroup.com

Mumbai: Kotak Mahindra Bank


will begin to enjoy full benefits of
the ING Vysya acquisition from
April as it moves to a single technology platform and pushes loan
growth through a wider branch network,
Shanti
Ekambaram,
president of consumer banking at
Kotak, told ET.
The acquisition, which was effective from April 2015, has enabled Kotak
to double its branch network, improve savings accounts balances and cut
costs. Now, the bank plans to take advantage of the extended branch network to push for loan growth, especially to individuals.
In the next five years, we will reap
the harvest (of the acquisition), said
Ekambaram. We have started pushing home loans, car loans, working
capital loans. One by one, we will ensure a complete suite of products
which will help us reap the benefits,
she explained.
Kotaks percentage of low-cost current and savings account (CASA) deposits at 35% in December 2015 has
changed little from the 36% reported
in the quarter ended March 2015, just
before the merger took effect. However, the banks branch network doubled to 1,269, post merger from 684.
Ekambaram said the bank expects
the benefits to spread further to foreign exchange, trade and fee-led

TOI PHOTO

BUSINESS PLANS

We have started pushing


home, car and working
capital loans. One by one,
we will ensure a complete suite of products which
will help us reap benefits
SHANTI EKAMBARAM
President Consumer Banking,
Kotak Mahindra Bank

businesses such as mutual fund distribution.


Kotak expects its cost of income ratio to drop, starting next fiscal, which
will ultimately feed into operating
profit. They have created a bad bank
by taking the pain upfront, which means the recovery process will be smo-

OILMIN REWORKING CRITERIA FOR ALLOTMENT

Oil Firms Likely to


Miss Target for New
Petrol, LPG Outlets
Sanjeev.Choudhary
@timesgroup.com

New Delhi: State-run oil firms


will likely miss their respective
targets for adding new petrol
pumps and LPG distributors in
rural areas in 2015-16 due to an
oil ministrys restriction on adding new outlets, according to
official sources.
Sensing they will not be able to
meet targets on beefing up rural
distribution, Indian Oil Corp
(IOCL), Hindustan Petroleum
Corp (HPCL) and Bharat Petroleum Corp (BPCL) have sought relaxation from the government on
this parameter for their annual
performance evaluation, sources said. Companies have told the
government that the target
shortfall was because of factors
beyond their control since the oil
ministry had placed restrictions
on appointing new dealers.
The oil ministry has kept in
abeyance for almost a year policies governing the appointment
of petrol pump dealers and cooking gas distributors. Officials
said the policies are being reworked and will be unveiled
with new provisions soon.
A restriction on appointing new
petrol pump dealers mean state
firms cant quickly expand, especially in the inadequately-served
rural regions. This could also mean putting state firms at a disadvantage when private firms such
as Reliance and Essar are adding
new filling stations following the
deregulation of diesel sales more
than a year back.
Slower appointment of cooking
gas distributors is a hurdle in the
governments goal of taking clean fuel to more homes quickly,
especially in rural and underdeveloped regions of the country.
IOCL, HPCL, BPCL declined
comment for the story.
PSU firms performances are
annually assessed based on the

Fuelling Trouble
State-run oil marketing cos
have told the govt that the
target shortfall was
because of factors
beyond their control
since the oil ministry
had placed restrictions on
appointing new dealers
A restriction on appointing
new petrol pump
dealers mean state
firms cant quickly
expand, especially
in the inadequatelyserved rural regions
Slower appointment of
cooking gas distributors
is a hurdle in govts
goal of taking clean
fuel to more homes
quickly, especially in
the rural and underdeveloped
regions of the country

criteria and targets set at the beginning of each year in their respective memorandum of understanding (MOU) signed with
the government. This practice
of several years is aimed at ensuring accountability of the management and boosting efficiency at state firms.
Different weightage is assigned to evaluation criteria,
which for oil marketing firms
include financial and physical
performance, project management, social responsibility, research and development.
According to the agreement
between Indian Oil Corp and the
oil ministry for 2015-16, the targets for the company included
commissioning 350-450 rural filling stations, with poor rating
assigned for meeting the lower
end of the band and excellent
for the top end.

other. This banks loan book is clean,


capital dilution is not expected anytime soon and retail loans are likely to
pick which is why the bank is coveted
in the market, said Manish Ostwal,
analyst at Nirmal Bang Securities.
Last week, Kotaks market capitalisation surpassed that of ICICI, a
bank more than three times its size.
But Ekambaram didnt read too
much into it, saying market cap is
just a number. I dont look at market cap at all. You cannot build a business looking at markets. You build a business around the strategy
you are thinkinghow to leverage
on that and create value, she said.
Profit from retail banking makes
up about 34% of the banks profit
before tax, a level similar to before
the merger.
However, one thing that will slow
down for the Mumbai-based lender is
the pace of branch expansion. In a
presentation on its website in April
2014, Kotak had a target to increase its
branch network to 1,000 in calendar
2016 from 605 in March 2014. With a
1,298 branch network currently, the
bank will add only 200 branches in the
next two years, said Ekambaram.
We have to digest doubling of the
network after ING, plus the trend is
we will slow. The pace of expansion
of branches will slow down. Network, connectivity and digital will
perhaps reduce the space and the
need for the number of physical
branches, she said.

UP Protests AAI
Move to Term 3
State Airfield
Projects Unviable
MihirMishra@timesgroup.com

New Delhi: A few months after


dropping its opposition to a new
airport being built at Jewar near
Greater Noida, the Uttar Pradesh
government has protested against
three other airfield projects in the
state being termed unviable by the
Airports Authority of India (AAI).
State-run AAI has said proposed
airport projects in Meerut, Moradabad and Faizabad were unviable, Uttar Pradesh chief minister Akhilesh
Yadav said in a letter to civil aviation
minister Ashok Gajapati Raju.
We had signed a memorandum
of understanding for six airports
Agra, Allahabad, Kanpur, Bareilly, Meerut, Moradabad and Faizabad. While AAI has taken up work
at the first four, they have termed
the latter as unviable on the basis of
negative IRR (investment return
ratio), Yadav said
State-run AAI
in a February 4 lethas said
ter written in Hinproposed
di and seen by ET.
airport
He asked the miniprojects in
ster to direct AAI to
Meerut,
implement these
Moradabad
airport projects deand Faizabad
spite its contention.
were
The civil aviation
unviable
ministry hasnt taken any decision on the letter.
An airport can only be built if it is
financially viable and we need to look into this request, said a senior
civil aviation ministry official,
who did not want to be identified.
Two of the three are close to the
proposed Jewar airport, to which
the Uttar Pradesh government
dropped its opposition in November last year. Meerut is 110 km from
Jewar, Moradabad is 165 km away
and Faizabad is more than 600 km
from the Greater Noida location.
The Samajwadi Party-led UP government and the Centre had not
originally been in agreement on
the Jewar airport in Greater Noida. While junior civil aviation minister Mahesh Sharma, who represents Noida in the Lok Sabha, had
backed the idea of a second airport
in NCR at Jewar, the Yadav government had opposed it.

Companies  17

WWW.ECONOMICTIMES.COM

AV Birla Group to Promote


Pros with Wider Experience
People with experience in, at least, 2 geographies, 2 functions & 2 biz to get plum posts
Devina Sengupta &
Baiju Kalesh

Mumbai: Being the master of


a chosen field alone would not
be good enough for one to land
a plum job in Aditya Birla Group where senior posts are now
given only to those who have
worked in at least two geographies, across two functions
and two businesses.
The 2x2x2 policy is among
multiple steps the Kumar
Mangalam Birla-owned firm
has taken to ensure the right
talent pipeline gets built
from within.
Chairman Kumar Mangalam Birla said those who work
in two and more unrelated business will have higher chance of bagging plum posts. It
will add to their global exposure and enrich their personalities, he said.
The $40-billion metals-toecommerce conglomerate introduced the 2x2x2 policy
last year and businesses have already started imple-

menting this.
This was done to encourage one to expand their knowledge across functions, businesses and geographies and
not just gather narrow sliver
of expertise, said Santrupt
Misra, director HR and CEO
of carbon black business at
Aditya Birla Group.
So promotions as the head of
profit centre will happen only
to those who have worked in
Those who
two functions
have
and two busiworked in 2
nesses across
and more
two geographiunrelated
es, he said.
businesses
This January
will have a
onwards the
higher
AV Birla group
chance of
has also implebagging
mented a hiplum posts,
ring freeze for
said Birla
senior managerial
posts
from outside. All firms under the business house were
asked to roll out senior managerial positions only to
employees of the company.

Chasing Talent
$40-b

metals-toecomm
conglomerate
introduced
2x2x2 policy
last year and
businesses
have already
started
implementing it

January onwards the AV


Birla group has also
implemented hiring freeze
for senior managerial
posts from outside
All firms under biz
house were asked to roll
out senior managerial
positions only to
employees of the co

Freeze, however, was not applicable to


junior & middle management posts

This is for employees in the


grade of Band 7 and above,
Misra said. They typically
comprise 1,500 employees
globally in senior managerial posts for the conglomerate. The freeze is not applicable to the junior and middle
management posts, the group said.
According to the firm, this
idea was first suggested to

the chairman in 2013, but various businesses were alerted in 2015 and given a year to
build their talent pipeline.
About a year back, ET had
reported that every year the
group recruits around 220
people at the senior levels,
starting with deputy general
managers and about 1,000
such hires have been made in
the last five years.

Parke Davis Case: SC Rejects Plea Against Mussas Bail


Our Bureau

Mumbai: The Supreme Court has dismissed a Special Leave Petition (SLP) challenging the bail granted to UK-based businessman Nazir Mussa by the Bombay High Co-

urt in a matter related to the dispute over 13acre prime property in Mumbai, said a statement issued by Mussa.
The case relates to a long-standing corporate war between Arnool Jamal, a Canadian businessman based out of Kenya and Indian businessman Shobhit Rajan over a 13-

acre land parcel earlier owned by Parke Davis on which a massive commercial property Logitech Park was built .
Mussa argued before the high court that
Rajan had filed the case against him apparently to hide his own misdeeds and fraud
to acquire control of the prime property.

18  Companies
Short Takes
 Sterlite Inks Deal with

Finland Firm Sharper Shape


MUMBAI Sterlite Power on Sunday entered
into partnership with Finland's unmanned
aerial vehicles solutions provider Sharper
Shape for inspection of power transmission
projects. The partnership would help by eliminating manual inspections with unmanned
aerial vehicles which offers timely information
from remote places that are inaccessible
through manual methods, thereby making
operations more efficient, Sterlite Power said.
The agreement was signed between Sterlite
Power Grid Ventures chairman Pravin Agarwal
and Shaper Shape chairman Samuel Salmenlinna in presence of Finland Prime Minister
Juha Sipila at Make in India Week here.

 Sahara to Take Back

Documents from Sebi


NEW DELHI As it scurries to garner funds to

ensure release of jailed chief Subrata Roy,


embattled Sahara group has begun another
mammoth exercise of taking back loads of
investor documents it had given to the markets
regulator Sebi in 128 trucks over three years
ago. The move follows Sebi getting `. 41crore,
from interest earned on money deposited by
Sahara for investor refunds, as reimbursement
of expenses incurred by the regulator in this
high-profile case including towards huge
storage costs of these documents that are key
to verification of investors.

 Adani Carmichael Project

may Start Ops by August


CANBERRA Adani Group's much-awaited

$16.5-billion Carmichael project will start


operations this year as the firm expects
clearances for the mining lease to come by
August. All the clearances have come through. There are only two issues related to
land, etc. We expect this to happen soon. All
decks will be a go in the next 5-6 months. We
will then start operations. Both the central
and state governments in Australia are very
positive about the project, a top Adani
Group executive said.

 L&T Fin Invests `


. 100 cr in

TDI's Panipat Township

NEW DELHI Realty firm TDI Infracorp Ltd has

raised `. 100 crore from L&T Finance to fund its


ongoing township project at Panipat. TDI
Infracorp had last month gave an exit to Kotak
Realty Fund from its housing project in Sonepat by repaying a debt of `. 110 crore. The
company is building five townships, spread
over an area of 2,480 acres, at Kundli, Panipat, Mohali, and Moradabad. We have entered into financial partnership with leading
NBFC player L&T Finance, said TDI Infracorp
mananging director Kamal Taneja.

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

SEEKING FRESH INVESTMENTS Telecom ministry has proposed a 10-year tax holiday for mega projects as part of
suggestions for upcoming Budget; it has also proposed excise duty exemption for a range of electronic equipment

Ministry Wants Sops to Fire Up Telecom


Stimulating Local
Production
The government
made mobile
phone imports

11%

more expensive in
last years Budget
It resulted
in local
production
value rising

95%

on-year to
`18,000 cr
and
volumes
soaring to

100 m
units in
2015

Post this move,


companies like
Foxconn, Sony,
Lava, Micromax
and Intex took
to domestic
manufacturing
The quantum
of production
is set to
double by
March 2016
Employment
will go up by
over

60%

because of
the duty
structure
changes

Gulveen.Aulakh@timesgroup.com

New Delhi: The telecom ministry has proposed a 10-year tax holiday for mega projects in the sector as part of its recommendations for the upcoming Union Budget
that are aimed at attracting fresh investments for the Make in India programme.
The ministry also suggested excise duty
exemption for a range of electronic equipment, which would help lead to the creation of a much-needed manufacturing
ecosystem in the country.
According to senior ministry officials,
a 10-year tax holiday in a block of 15 years
may draw fresh investments worth over
$1 billion (.`6,800 crore) over three years.
Such proposals would be exempt from
MAT (minimum alternate tax) as well for
the same time frame, an official said. Extending the differential excise duty thats
levied on mobile phones to electronic equipment such as network switches, routers
and modems has also been proposed, the
official added.
After the government made mobile phone imports 11% more expensive in last ye-

ars Budget, companies such as Foxconn,


Sony, Lava, Micromax and Intex took to domestic manufacturing, which resulted in
local production value rising 95% on-year
to `. 18,000 crore and volumes soaring to 100
million units in 2015, according to the Indian Cellular Association.
The quantum of production is set to double by
March 2016, while employA 10-year tax
ment will go up by over
holiday in a
60% because of the duty
block of 15
structure changes, which
years may
have prompted the associdraw fresh
ation and its counterparts
investments
representing other secworth over
tors to demand similar
$1 billion in
taxation-led sops.
over three
The Manufacturers Asyears,
sociation of Information
according to
Technology, which repreofficials
sents IT companies, including Dell and Lenovo, has demanded
that similar duties should be applied to
this sector to incentivise local production. The Indian Cellular Association
suggested that the existing duty differential should be extended to more pro-

LOOKING TO PRODUCE 2G, 3G AND 4G EQUIPMENT

Ericsson to Hire 1,000 for


Pune Manufacturing Plant
Plant, set up with an
initial investment of
up to $20 m, to come
on stream in Sept
Danish.Khan@timesgroup.com

Pune: Swedish telecom gear maker Ericsson will hire around


1,000 employees for its Pune manufacturing plant, which is likely
to start commercial operations
by September, managing director
Paolo Colella has told ET.
2016 is a milestone year for
Ericsson in India. The setting
up of the Pune plant will generate employment and lead to
the development of the vendor
ecosystem in an around Pune,
he said.
The Pune plant, which is being
set-up with an initial investment
of up to $20 million at the Indospace Industrial Park in Chakan, will manufacture 2G, 3G
and 4G mobile broadband gear
along with Microwave products.

Once the unit is live, the company will look at expansion of


this plant. The company already has a manufacturing unit in
Jaipur, which is catering to the
demand coming from the Indian
telecom operators. It is producing an average 60,000 base stations per year.
Even though we have the ability to increase the capacity of the
plant in Jaipur, it will continue to
run at the current capacity. We
will shift the additional capacity
to the Pune plant, he said.
Collela added that the new
plant will also serve as an export hub for the company's exports to South East Asia, West
Asia, and sub Saharan Africa
regions. He said Ericsson has
lot of suppliers in Pune and the
plant is a natural choice for export purposes.
Swedish Prine Minister Stefab Lofven, who also visited the
Pune facility just after the Make In India week in Mumbai, said Ericsson is important in India as well as in Sweden. It is
important to visit units of Swedish companies in Pune, including Ericsson's. Those are real

AMRENDRA JHA

Paolo Colella

things when we say Make in India, Lofven said.


At 22,000, Ericsson has the biggest workforce in India. We will
generate employment in India,
and that will be a great pride for
us. We are here for long term,
Lofven said.
Collela said the company will
continue with its investment in
India in terms of manpower. In
addition to our plant, we have
our global services business,
which is growing. More hiring
will happen, he said.
Ericsson is also involved in early stage discussions for various
Smart City projects in the country, the India head said.

ducts such as mobile parts, accessories


and components.
According to sources, the telecom ministry has proposed that voice over Internet
protocol phones and gateways, besides
laptops or notebooks priced under `. 15,000,
should be brought under the differential
duty blanket. Inclusion of lithium ion batteries, wired and wireless USB modems,
routers and set-top boxes for television
and those that connect to the Internet, has
also been proposed.
If these proposals are accepted, local production of some components that are common to mobile phones and laptops can begin in India, inviting fresh investment and
creating an ecosystem for taking the next
critical steps for complete local production from the ground up.
Telecom network equipment such as
switches, wired and wireless access points and wireless access controllers, have been suggested as some of the inclusions, while security and surveillance
communication systems like CCTV cameras, access control systems and network and digital video recorders have been added to the list as well.

Buyers may Jump


from 2G to 4G
SUNIL LALVANI

Deepali.Gupta@timesgroup.com

Mumbai: More 4G devices are coming to the market than 3G devices, suggesting that customers
may leapfrog from 2G to 4G technology, said Sunil Lalvani, president, Qualcomm India.
The company has carrier aggregation support technology
that it is looking to supply to mobile makers like Micromax and
Samsung, he said. Reliance Jio,
the Mukesh Ambani company
that is yet to commercially
launch services, is trying to aggregate airwaves in the 800MHz,
1800MHz and 2300MHz bands,
but most phones don't support it.
The increase in 4G shipments
has resulted in a narrowing of the
price difference between 3G and
4G devices, leading customers to
buy 4G-enabled mobile handsets
even though there are limited services on that platform.
You get a good 4G phone at sub
.`5,000. 4G devices in India outsold 3G devices and one key catalyst is the 4G delta with 3G is lowering, Lalvani told ET. Phones in the mid-tier segment,
which have advanced features
but aren't priced for the luxury

President, Qualcomm India

You get a good


4G phone at
sub`. 5,000. 4G
devices in India
outsold 3G devices and
one key catalyst is the 4G
delta with 3G is lowering
segment, are picking up, reflected in Micromax and competing
brands getting cutting-edge
Snapdragon chipsets for phones
to be launched soon.
Qualcomm has two carrier aggregation solutions one that
can be plugged into existing chipsets, and the second that is inbuilt. Both have an active market,
Lalvani said.
The company also has a venture
capital arm that invested recently
in language translation software
company Reverie and is looking at
several targets in the financial inclusion space, Lalvani said.
Qualcomm has also announced
a prize of `. 2 crore that will be made as equity investment in the
winner of the QPrize-Make in India contest for startups.

NIIT Tech
to Focus on
Digital
Services
Priyanka.Sangani
@timesgroup.com

Pune: Global IT solutions provider NIIT Technologies is


sharpening its focus on digital
services as it seeks to drive greater business benefits for its clients. The contribution of digital services to the companys
turnover has risen from negligible three years ago to 15%
now, Arvind Thakur, chief executive officer at NIIT Technologies, told ET. In 2014-15, digital services accounted for 9% of
its turnover.
Given that digital is a new
area, there is no pricing pressure at present, Thakur said.
We have gone from zero to 15
(per cent) in a short time and we
are experimenting along with
the customer. It is important to
build front end capabilities and
skill sets that are more creative
than technical.
Six months ago,
NIIT Technologies set up an Internet of Things
lab where it is
working along
In 2014-15,
with its custodigital
services
mers on proof of
accounted for concepts.
We
9% of its
are focusing on
turnover
building prototypes that can
provide robotic solutions,
Thakur said.
The company recently announced a partnership with London-based software firm UiPath, which specialises in robotic process automation
(RPA) to provide intelligent
automation solutions.
RPA is the application of technology (software robot) to interpret existing applications for
processing a transaction, manipulating data, triggering responses and communicating
with other digital systems.
Thakur said NIIT Technologies is focusing on four areas within the digital services space-providing digital experience
solutions, analytics, digital integration and cloud.
The company has also been
working to change its organisational culture with the aim to
improve service. It has engaged
global customer service expert
Ron Kaufman, who has worked
with companies such as Singapore Airlines, on how to provide
uplifting service.

Economy 19

WWW.ECONOMICTIMES.COM

Short Takes
 First Policy for Capital

Goods May be Approved


NEW DELHI The country's first-ever

policy for the capital goods sector


will be placed before the Cabinet
for approval this month, a senior
official told PTI. The draft policy envisions
increasing the share of capital goods in total
manufacturing activity to 20 per cent by 2025
from 12% at present. It aims to increase domestic employment from the current 15 lakh to at
least 50 lakh by 2025 thus providing additional jobs to over 35 lakh people in the sector.

States Like Odisha May


Auction 40 Mines by March
NEW DELHI After successful e-

auction of two limestone blocks by


Jharkhand, other states, including
Odisha and Rajasthan, are likely to
put under the hammer about 40 mines containing minerals like iron ore by March-end.
Jharkhand on February 12 became the first
state to auction two limestone blocks through
an electronic platform after the passage of the
MMDR Act by Parliament. States were keen to
know about the auction process for blocks
other than coal and lignite. Now that Jharkhand has successfully auctioned two limestone
blocks, we expect states to auction about 40
mineral blocks by March, a senior mines
ministry official told PTI.

 Govt to Use Search Panel

to find Oil India Head


NEW DELHI After three failed

attempts, the government has


dumped its headhunter PESB and
instead will use a search committee
to find a chief for Oil India Ltd, the nation's
second biggest state-owned oil and gas explorer. With previous attempts by the Public
Enterprise Selection Board (PESB) failing to
find any suitable candidate from within, the Oil
Ministry now wants private sector candidates
in the age group of 45 to 57 years to also apply
for the job of Chairman and Managing Director .

FINANCE MINISTER ARUN JAITLEYS FACEBOOK POST

TAKING STOCK

State-run Banks Apprise What Manmohan


Should
Advise
Modi of Rising Bad Loans His Party?
Capital requirements of PSBs & impact of bad loans on their profitability were discussed
Dheeraj.Tiwari
@timesgroup.com

New Delhi: Prime Minister Narendra Modi met senior finance


ministry officials last week to
take stock of rising bad loans at
state-run banks.
State Bank of India, Bank of
Baroda and others declared poor third-quarter results last week after being pushed by the
central bank to set aside money
to cover bad loans in a bid to clean up their books.
The prime minister was apprised of the situation. It is not
that grave as it
is made out to
be, said a seRBI governor
nior
governRaghuram
ment official
Rajan said
aware of the delast week
liberations.
that the
We are hoperegulators
ful that as the
intent is to
bankruptcy
have fully
law gets passed,
provisioned
financial instibanks by
tutions will haMarch 2017
ve more teeth to
rein in defaulters. The legislation is currently in parliament.
Another senior government
official who attended the meeting said capital requirements
of state-run banks and the impact of bad loans on their profitability were discussed.
The government is committed to adequately capitalise

Wake-up Call
Issue

Govt pledge

Many PSBs others


declared poor thirdquarter results last week

`70,000 crore

till FY19 toward bank


recapitalization

Largest Loss
Bank of Baroda

In the future

`3,342 crore

Gross NPAs at the end of the Sept

`3.14 lakh crore

Last quarter of this


fiscal will also see some
more rise in bad loans
because of RBIs asset
quality review

Jaitley says
Volume and extent of
bad loans should not be
exaggerated so as to lead
to a panic

PSBs (public sector banks), he


said. It is expected that the last
quarter of this fiscal will also
see some more rise in bad loans
because of Reserve Bank of Indias asset quality review
(AQR).
The government has committed `. 70,000 crore till FY19 toward bank recapitalisation.
The amount can be increased if
required, the official said.
Bank of Baroda, Central Bank
of India, Dena Bank, Allahabad
Bank and IDBI Bank all posted

third-quarter losses last week.


Bank of Barodas loss of `. 3,342
crore was the largest ever by an
Indian bank.
State Bank of India reported
its net profit slumped 61% and
bad loans rose to `. 72,792 crore
or 5.1% of the total.
RBI governor Raghuram Rajan said last week that the regulators intent is to have fully provisioned banks by March 2017.
We are fully supporting RBIs
initiative, said the official cited above. Banks have been di-

rected to take stringent action


against defaulters and that promoters, if required, should
bring in capital to have more
skin in the game.
Banks are deciding matters on
a case-by-case basis, he said.
There is no panic on NPAs
(non-performing assets), said
the first official cited above.
Even the RBI has said the
same. Rajan said last week
that wild claims were being made about the size of the stressedasset problem.
This verges on scare-mongering. Our projections are that
any breach of minimum core
capital requirements by a small
minority of public sector
banks, in the absence of any recapitalization, will be small,
he had noted.
Finance minister Arun Jaitley has also cautioned that the
volume and extent of bad loans
should not be exaggerated so as
to lead to a panic.
There is obviously a problem
as far as banks are concerned...
and as part of a prudent policy
it has been considered that the
balance sheet should be as
transparent (as possible), he
had said in a video blog post.
Gross non-performing assets
of state-run banks at the end of
the September quarter rose
25% to `. 3.14 lakh crore, constituting 5.64% of total advances,
from `. 2.51lakh crore in the year
earlier.

Former Presidents and Prime Ministers rarely speak, but when they
do, the nation should listen to them
with rapt attention. They represent
the wisdom of the nation.
They are expected to be non-partisan, render constructive advice and
at times send a powerful message
even to their own political party to
act in broader national interest. Having consistently held Dr. Manmohan Singh, the former Prime Minister in high respect, I expect the
same from him.
I have read his interview in the latest edition of India Today, particularly his concern that the Prime
Minister and the Government are
not reaching out to the opposition.
He feels that the Government is not
doing enough to move up the countrys economy.
I am sure if Dr. Singh would dispassionately analyse the present
Government, he would really realize the India has a Government where the Prime Minister has the last
word, where natural resources are
allocated without corruption through transparent process, where industrialists no longer visit North
Block to push files/decisions, where environmental clearances are dealt with in routine and not stalled on
sadistic or corrupt considerations.
Has there been any change in the
work culture of the Government?
During the UPA Government, the
public sector banks were hardly
run by their own Boards or even by
North Block. They were run from

FILE PHOTO

24, Akbar Road. In Power and Infrastructure areas, sectoral challenges were not addressed during
the UPA. It is the present Government which is clearing up these accumulated challenges. Many stalled infrastructure projects have
now started moving. Indias journey is from policy-paralysis to a
global bright-spot, as the fastest
growing economy moves on notwithstanding major challenges.
On consultations with the opposition, almost all political parties except the Congress, support the GST.
The Congress has done a volte face.
Both the Parliamentary Affairs Minister and myself have discussed
the GST with every senior Congress
leader in Parliament. Is the Congress position on Constitutional
cap not motivated by real politics?
The economist in Dr. Singh should
advice his party that tariff are not
provided for in the Constitution.
This is what nation expects from
the senior leaders and statesmen
like former Prime Ministers.

 150 Critical Infra Projects

India Proposes Informal Forum to Resolve RCEP Issues

Identified under Sagarmala

REACHING OUT Forum will seek to informally resolve issues, other than those related to tariffs, to cut long-drawn regulatory and legal disputes

NEW DELHI Government has identi-

fied as many as 150 critical projects


to augment infrastructure in coastal
areas under its ambitious Sagarmala project. We have reviewed the National
Perspective Plan (NPP) of Sagarmala and have
identified over 150 critical infrastructure
projects, Road Transport, Highways and
Shipping Minister Nitin Gadkari said. The
minister had recently said that about `. 70,000
crore have been lined up for various projects
under Sagarmala and would be spent on development of major ports.

Kirtika.Suneja
@timesgroup.com

New Delhi: Keen on an expeditious conclusion of the biggest trade


accord in Asia, India has proposed the creation of a forum for informal resolution of prickly issues under the planned Regional
Comprehensive Economic Partnership (RCEP).
The forum would be on the lines
of one under the recently concluded US-led Trans Pacific Part-

nership (TPP), which has raised


many concerns in India. Commerce and industry minister Nirmala Sitharaman has said that
TPP will have an impact on Indias exports in sectors such as
pharmaceuticals, textiles and
chemicals.
The forum will seek to informally resolve issues other than those
related to tariffs so as to reduce
long-drawn regulatory and legal
disputes as the RCEP talks go ahead. It is an informal mechanism
so that issues dont get escalated

to legal levels. The inspiration


was ad hoc discussions mentioned in the TPP, said an official
aware of the matter.
The non-tariff measures refer to
prohibitions, conditions or specific market requirements that
restrict trade between countries.
The proposal will be discussed at
a meeting of the RCEP in Brunei
from February 15 to 19.
Under the proposed mechanism, which India floated a few
weeks ago, any of the 16 RCEP countries can resolve issues with

each other without legal hassles.


In the first step, the aggrieved
party raises a query on paper and
the party being questioned has to
give a written response.
On ad hoc discussions, the TPP
agreement says that a party (the
requesting party) may request ad
hoc discussions on any matter
arisingincluding a specific
non-tariff measure that the requesting party believes may adversely affect its interests in trade in
goodsby delivering a written request to another party (the requ-

ested party).
However, since the mechanism
is sought to be voluntary and doesnt mandate the other country
to resolve the issue, India has also
mooted the idea of maintaining
records so that all countries are
aware of the non-responders. The
proposal also talks of third-party
facilitators in case theres no resolution.
The mechanism also helps because instead of direct bilaterals,
it lets other countries with similar grievances to join in based on

the consent of the party being questioned, the official said.


RCEP is envisaged as a comprehensive free-trade agreement
subsuming goods, services, investment, competition, economic
and technical cooperation, dispute settlement and intellectual property rights between 10 countries
under the Association of Southeast Asian Nations umbrella and
their six free-trade agreement
partners Australia, China, India, Japan, Korea and New Zealand.

THE ECONOMIC TIMES

The Edit Page

Time for Some Real


Make in India Magic
Global, local concerns skewer market prospects
Let us hope that the ongoing Make in India promises to
yield a positive momentum in the economy, for the outlook is grim. Marketsmen define a bear market as one that
has shed 20% in a year. Indian equities are down nearly
23% from March last year, wiping off the gains since May
2014. The collapse of the market also coincides with revelations that the core of Indias financial system, its stateowned banks, is rotten. State Bank of India, the largest of
the lot, saw Q3 profits fall 62%. IDBI Bank, which the
Centre wanted to parade as a turnaround success, posted
`. 2,184-crore loss in Q3, second-highest quarterly loss ever
by an Indian bank beaten only by Bank of Barodas
`. 3,342-crore loss. The IDBI Banks loss scuppers the Centres plan to sell 26% of the lender to strategic investors.
Apart from banks, other sectors have also had a muted
third quarter, as numbers keep trickling in. Capital goods have been a huge drag in industry, most infrastructure
and real estate companies are struggling and large projects continue to be stuck for lack of finance or an excess of red tape. Worse,
the market does not believe that the
government has any serious policy
initiative to revive growth. On February 11, BoAML released a report titled
Limited catalysts in the Budget, due
February 28, reflecting the mood. We
hope the finance minister would prove them wrong.
How soon should we expect markets to bottom out and
begin the slow crawl upward? One answer, provided by
technical analyst Vivek Patil to a business TV channel, is
2018-19, election year for the Lok Sabha. Patil sees a possibility of the 30-share blue-chip Sensex, now at 22,950, to
fall all the way to 12,500 or 15,000, a dreadful scenario for
anyone looking for quick gains in equities. The year-onyear Sensex price-to-earnings (PE) ratio is still near 21.
This is close to the bubble year of 2007-08, when it was
22.6, and way over its 10-year average around 17. As equity
prices fall, the ratio could also come down, but only if
earnings hold their own. Most analysts, however, expect
poor results from Indian companies for the next 18 to 24
months. Something has to change, and drastically.

WIDE ANGLE

With the bulbs increasingly lighting up


the country, Indians need not go Dutch

The Silsila of Tulips


Still Continues

Not very many Indians may have seen tulips before rows of
them became the setting for an extramarital celluloid Silsila
over three decades ago. However, judging by the popularity
of the Keukenhof gardens in Holland for Indian tourists
ever since, the flower has a pretty special place in Indian
hearts now. Its star billing at this years display of winter
blooms in Rashtrapati Bhavans Mughal Gardens is entirely
understandable therefore. After all, Indians are now quite
used to seeing the usual roses, dahlias and chrysanthemums, not to mention the humbler annuals and craved something new. So, the initiative of the late former First Lady
Usha Narayanan already a fan of the flower to plant
tulip bulbs gifted by a visiting Dutch dignitary in the presidents garden must be appreciated.
That tulips are a real tourist magnet is amply evident from
the hordes that throng to see the Keukenhof s seven million
blooms and Ottawas one million every year. Rashtrapati Bhavans 5,000 are modest by comparison, but maybe another
city or organisation could contemplate a grander display in
the future. Since tulips actually went westwards from Persia
around the same time they came east to India with the Mughals via Central Asia, their reappearance in the Mughal
Gardens in New Delhi is absolutely apt!

India must start working to reverse the plunder of our national artistic heritage

Bring Back Our Gods

would have channelled billions of dollars worth of artefacts over three decades. There are several such operators in North America, Europe and
the Asia-Pacific.
These are not small-scale deals
done in shady back alleys. Many of
the stolen pieces are proudly displayed in museums and galleries around
Sanjeev Sanyal
the world. Meanwhile, the stealing
of artefacts, especially temple sculphe organised theft of the co- tures, carries on unabated despite
untrys artistic heritage is the fact that Subhash Kapoor is in
perhaps the biggest scand- jail in Chennai awaiting trail.
The good news is that the authorial of modern India and it
goes on virtually unnotic- ties have become more aware of the
ed. It is not merely about the sheer issue. The few high-profile investigascale of plunder but the erosion of tions have made museums and private collectors in the West more careful
the very soul of our civilisation.
According to experts, around about making purchases. Private ci20,000 idols, sculptures and other an- tizen initiatives like the India Pride Rest in one piece: A stolen sandstone Bodhisattva sculpture from 11th-12th c
tiquities have been stolen and sold in Project have also played an importa- Bihar-Bengal recovered by the US customs in January 2014
foreign countries since 1980. This ex- nt role in tracking down stolen goods
Third, a clear framework of propcludes colonial-era loot. The estima- and spreading awareness. This new ir return has been reportedly hamted market value of these antiquities activism has already led to the reco- pered for years because of delays in erty rights needs to be established
paperwork on the Indian side. The and enforced to make it possible for
is over $10 billion, although many of very of a few idols.
On his state visit to India in Septe- Indian authorities need to step up enforcement agencies to trace and
these artefacts are priceless from a
claim back antiquities. This is essencultural perspective. Even iconic na- mber 2015, Australian Prime Minis- their game.
Second, the trade in stolen antiqu- tial for countering criminal gangs
tional monuments such as the Jain ter Tony Abbott handed over an 11thtemples of Mt Abu have not been spa- century Chola Nataraja to Prime Mi- ities is a sophisticated international that have mastered the art of creatred, many of the idols there being nister Narendra Modi. A month la- operation and the local police cons- ing a paper trail for their stolen items
ter, German Chancellor Angela Mer- table cannot be expected to effective- and even getting well-known schomodern replicas.
kel handed back a 10th-century idol ly fight against it. It requires specia- lars to vouch for them.
The Gods Must Be Crazy
of Durga stolen from Kashmir two list knowledge that can only be expA National Antiquities Register
can be created that allows any owner
It is important to note that the syste- decades ago. But these are no more ected from a dedicated team.
to register items and makes it easy to
matic plunder of national treasures than a drop in the bucket. Here are a
look up the ownership history. It shois not due to petty local thieves, but few simple things that need to be do- Gods Own Country
Italy has had a Carabinieri Art Squ- uld be simple enough to allow me to
part of a well-oiled international net- ne urgently to turn the tide.
First of all, let us bring back the ad that has so far recovered half-a- register my great-grandfathers old
work run by a handful of criminal
organisations. They identify specific hundreds of idols and sculptures million pieces. It is now training si- watch. The government can easily
pieces, buy off officials to smuggle that have already been identified and milar teams from Greece, Cambodia get this going by recording items
across borders, use well-known auct- seized by law enforcement agencies and other countries. In India, the on- from national monuments as well as
ion houses and even have prominent around the world. The US authori- ly example of a specialist team is Ta- those from museums. This will have
ties alone have around 700 pieces mil Nadus Idol Squad, which has the added benefit of forcing an audit
art experts on their payrolls.
Raids in New York on the wareho- stored in their vaults that they can had some notable successes despite of our museums and archaeology deuses of a single Madison Avenue art hand over immediately. An additio- pitifully little resources. This needs partment warehouses.
Alot of work needs to be done to reto be replicated in all states and coordealer Subhash Kapoor unearthed nal 1,200 pieces are being processed.
There are many artefacts similar- dinated at the national level.
verse the plunder of our national he$107 million worth of antiquities,
Unlike some other branches of ritage. However, the three above memostly stolen from India. He alone ly ready for return from Europe. Thecriminal investigation, this field can asures would be a good way to start.
benefit enormously from active par- For once, we are likely to get a lot of
ticipation of scholars, history enthu- international support because the
A National Antiquities Register, which allows any owner siasts and temple devotees. Indeed, Islamic State (IS) uses the same crimsuccessful investigations ha- inal networks to raise money by selto register items and makes it easy to look up ownership several
ve depended on critical inputs from ling antiquities from Syria and Iraq.
history, should allow one to register a family heirloom
There is not a moment to be lost.
private citizens.

JNU: Sedition Charge


Mocks Supreme Court
The sedition charge that has been brought against a student
leader of the Capitals Jawaharlal Nehru University (JNU)
amounts to contempt of the Supreme Court. The apex court
has said, time and again, that only incitement to immediate
violence will attract the charge of sedition, and not mere advocacy of projects inimical to the constitutional scheme of things, which is protected by the Constitutions guarantee of free
speech. The court should issue a contempt notice against the
Delhi Police officers responsible for framing this charge against the student. This will prevent the habit from spreading.
Dissent is an integral part of democracy. Sometimes, the dissent can be on things that a large majority consider beyond
dispute. But the point about democracy is
to respond to such dissent with a counter
narrative, the ensuing dialogue finding
common ground on some points and continuing the debate on the rest. Muzzling
dissent is not part of democracy. In the case of JNU, the mainstream left organisations take their cue from the Left parties
at the national level, all of which view Kashmir as an integral
part of India but uphold the right of those who want to debate
this within a democratic framework to do so. Tarring everyone in JNU as anti-national reveals a political attack on the Left
and on university autonomy, and not defence of the nations
integrity or sovereignty.
Those who defend tribal rights in Chhattisgarh are labelled
anti-national, as are people like Teesta Setalvad, who ensured
that communal rioters in Gujarat did not go off scot-free the
way rioters in Muzaffarnagar and elsewhere have. If all subaltern groups and their champions are anti-national, the nation
reduces to a tiny Hindu elite. That, however, would not be particularly democratic, would it?

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

Bell Curves

R Prasad

Disaster Count
A new UN analysis has found that a total of 98.6 million people
were affected by disasters in 2015 the hottest year on record.
Moreover, climate often aided by a strong El Nio phenomenon
was a factor in 92% of those events. Heres a snapshot

If you press
me to say why I
loved him, I can
say no more than
because he was
he, and I was I.
Michel de Montaigne
Philosopher

Disasters
in 2015

346

People affected

22,773
dead

98.6m

affected

Number of reported disasters by continent

(in million)

North Korea 18.0


India 16.5
Ethiopia 10.2
Nepal
5.6
Bangladesh
4.5

(in $ billion)

Top 5 countries
Economic damage

US
24.88

China
13.66

Nepal
5.17

Natural disasters: Epidemic and insect infestations not included

UK
3.6

India
3.3

Shore Up for Shocks


Kaushik Das
Despite fiscal deficit remaining high
in recent decades, India has seen its
public sector debt-GDP ratio decline
owing to high real and nominal growth rates and low real interest on public
issuances. Indeed, the debt-GDP ratio
has gone down from 83% in 2003 to
68% in 2013. Recent economic slowdown, particularly manifesting in a
sharply lower nominal GDP growth,
and a rise in real rates owing to the
RBIs inflation targeting has, however,
flattened this ratio.
Against this backdrop, here are a few
baseline assumptions:
 Real GDP grows by 7.75% on an
average over the next five years.
 Consumer price index (CPI) inflation stabilises in the 4-5% range as per
the RBIs medium-term inflation targeting framework. Wholesale price
index (WPI) inflation and GDP deflator (used in the debt sustainability
exercise) settles at a lower level compared to CPI inflation, in line with
current trend, averaging about 3% in
the years ahead.
 Real interest rate on public debt
works out to 5.5%, derived from 8.5%
nominal rate and 3% GDP deflatorbased inflation.
 Primary deficit persists at 2%
of GDP.
 The rupee depreciates against the
dollar by 1-2% per year.
These baseline assumptions paint a
fairly comfortable adjustment path
for the remainder of the decade as
growth is expected to strengthen and
fiscal effort to continue. In such a
scenario, debt-GDP would fall to 56%
of GDP by 2020.
But the fact of the matter is that high
growth cannot be taken for granted, as

Click!

Citings

DEBT-GDP RATIO

has been made amply clear in recent


years, especially given the likely persistence of weakness in external demand and domestic investment landscape. In 2012, a debt sustainability exercise predicted the debt-GDP ratio to
come down close to 60% by 2015-16.
But the actual out-turn of the debtGDP will end up being more than 10%
higher. Assumptions about growth
and real rates were wrong by a large
margin. Hopes of mean reversion
may well turn out to be wrong again.
The following are some shocks that
have been introduced in the above
baseline scenario to see how the projections change if some of the key
macro-variables associated with debt
dynamic were to take a turn for the
worse in the coming years:
 No change in fiscal effort. If the primary deficit stays at around 3% of
GDP, Indias debt path would still be
on a downward path. But the debtGDP ratio will only fall to around 61%
of GDP by 2020.
 Real interest rate (policy repo rate

Better counselled than sorry: Detail


from Knight, Death and the Devil,
1513, Albrecht Drer

OSHO

A centipede was going for a


morning walk when a little rabbit asked him, Uncle, Ive to
ask a question: how do you manage your hundred legs, which
one should come first, which
one second, and which one
third? How do you manage
one hundred legs together?
He said, I have never thought about that. I am not a philosophical type. But I will try and
find out.
He tried and fell over his legs.
He was very angry with the rabbit. He said, Keep your philosophy to yourself. Never ask
any centipede. Everything is
being managed on its own, and
I have never thought about it.
You are a dangerous fellow!
If you know three or four
lives, you will be in the same
position. You will not be able to
move, because these same people were related to you in your
past lives in different relationships. Perhaps the neighbours
wife was your wife. Your mind
will be so bombarded.
Thats why nature absolutely
closes the doors, so you dont
know anything about where
you are coming from. Only in
the East has reincarnation
been considered. To get entangled in a question like death or
birth, immediately brings you
to the point that these things
are beyond thinking.
All that you perceive, name,
know is contained in your
mind. From all your five senses, you go on collecting knowledge. Those five senses are
really extensions of your
mind. Birth and death have no
influence on the no-mind. It
simply floats away above birth
and death. I would like to call
this witnessing the Buddha.

Why a Function
for Afzal Guru?

$66.5b

economic damage

Top 5 countries

Falling Over
Past Lives

Chat Room

Source: United Nations Office for Disaster Risk Reduction

20

minus GDP deflator) rises to about


8.5%. If CPI inflation rises disproportionately in the years ahead, led by a
spike in high food and services prices,
the RBI will be compelled to hike the
policy rate, which may raise the real
interest rate to high single digit, when
measured in terms of WPI and GDP
deflator. Under the interest-rate shock
scenario, the debt ratio rises above
70% in the next fiscal year and then
slowly reduces to 65% by end-2020.
 Real growth of about 5%. Here, real
GDP growth is lowered by 250-300 basis points (from the baseline forecast),
which pegs economic growth to around 5%. The shock impacts the debt
path severely, pushing up the debt
ratio to 83% by 2020.
 Combined shock. There could be occasions when a growth shock eventually leads to a fiscal shock that then translates into an interest-rate shock. For
this scenario, when these shocks are
incorporated into the forecast exercise, we find that the impact on debt is
immediate and extremely adverse
(the debt-GDP ratio rises to 76% by
2020). While the probability of such a
manifestation is low, it is important to
be cognisant of such eventualities.
From a policy perspective, the need
to reduce debt burden is an imperative
as high debt levels reduce the room for
fiscal flexibility to counter future economic shocks. In the near term, the
authorities seem committed to reducing the fiscal deficit and debt.
But if global growth shocks were to
materialise, affecting India adversely,
they may consider a fiscal response.
This was, indeed, the policy response
in the aftermath of the 2008 global financial crisis. The debt-GDP path was
unaffected then as high inflation and
growth ensued.
In a deflationary and low-growth
world, however, the debt path will be
more difficult to manage, and the
available fiscal space to support the
economy will be limited.
The writer is India economist,
Deutsche Bank AG

Monetary
Design
ASHLEY KINDERGAN

In the old days, before the world was awash in capital with
nowhere to go, an announcement of monetary easing was
generally considered a good
thing, a sign that central bankers were on the job. Historically, in all but the most extreme
circumstances, lower interest
rates have tended to spur economic activity, with the contemporaneous effect of supporting risky assets.
But we are clearly living in
an extreme circumstance, and
after eight years of such announcements from central banks, its time to ask whether monetary policymakers are pushing on a string. The latest
example of such: the Bank of
Japans January 29 decision to
apply negative interest rates
to a small portion (4%) of commercial bank reserves.
Europes experience shows
that negative interest rates
arent terribly effective at stimulating domestic demand,
since commercial banks have
refrained from passing negative rates on to depositors and
customers, for regulatory reasons and to prevent capital
outflows. However, Japans policy is likely to encourage other countries to ease further.
Since the financial crisis, central bankers have been left almost entirely on their own to
stimulate growth, with politicians loath to commit to significant, long-term fiscal stimulus. But its becoming increasingly clear that central banks
cannot conjure up demand on
their own and that there are
diminishing returns to additional monetary easing.
From Are Central Banks Running
Out of Steam?

Student politics is not something new on Indian campuses,


where there is one constant:
leftism. However, one wonders
why someone should be allowed to hold a function in the memory of a person who attacked the heart of the country:
the Parliament. Do they hold
such functions in the memory
of the soldiers who give up their lives fighting such elements and protecting the peaceful
sleep of the countrymen? How
fair is it that the Indian government spends taxpayer
money on JNU students who,
in return, shout anti-India
and pro-Pakistan slogans?
J AKSHAY
Bengaluru

Wholl Bell the


Identity Cat?
Apropos Politics for Economics by T K Arun (Feb 11), identity politics does result in usversus-them mindset. This
seems to have accentuated in
recent past. Todays generation seems to have taken George
Bush, Jr, very
seriously who
had (in)famously said that
either you are
with us or against us. Rule
of law cannot
be seen only
from the procedural lens. We
need to clean our philosophical lenses. Unfortunately, no
one among the present political leaders seems to possess
the moral authority to clean
peoples philosophical lenses.
VASANT V BANG
Pune

As Truthful as
David Headley
Apropos the edit Democracy
at Stake, Not Ishrat Jahan
(Feb 13), the BJPs new-found
saint, David Headley, has not
uttered a single word of truth
or done a legit act in his life.
Nor has he helped India by his
revelations on Pakistan hand
in the gory terror strikes. The
truth remains that Ishrat and
others were on a malevolent
mission. Of course, the mode
of elimination was not fair.
Having said that, if anyone is
involved in a terror act, instant just deserts must be meted
out. Avoid the legal rigmarole.
MUKUND KUMAR
Mumbai
Letters to the editor may be addressed to

editet@timesgroup.com

World View  21

WWW.ECONOMICTIMES.COM

Christchurch Hit
by 5.7 Magnitude
Quake, Cliffs
Collapse into Sea
WELLINGTON: A strong 5.7
magnitude earthquake
struck near Christchurch in
New Zealand on Sunday,
causing cliffs to collapse
into the sea but no major
damage to the city, which
was devastated by a 2011
quake which killed nearly
200 people. The epicentre
of Sundays quake on New
Zealands south island was
15km east of Christchurch
and at a shallow depth of
15km, said the countrys
seismological body
Geonet. Geonet said there
were more than 40 aftershocks. The quake came
eight days before the anniversary of the deadly 2011
quake that caused upwards of NZ$40 billion
($26.52 billion) of damage,
causing much of the city to
require a rebuild. Police
said there were no reports
of major damage or serious injuries, but people
were evacuated from several buildings and there
were reports of some liquefaction. The Christchurch City Council said cliffs
collapsed in several places,
spreading large clouds of
billowing dust across the
sea and hills. Its certainly
been a big shock for the
city, a set back in terms of
peoples confidence and
feeling of security, said
Christchurch mayor Lianne Dalziel. Reuters

CO-WORKING GROWS AMID

Search For New Ofce Lifestyle

The emergence of co-working spaces with low-cost memberships has become appealing to new startups,
individual entrepreneurs, consultants and others who want a flexible but professional work environment
Rob Lever

Amid the rapid expansion, some co-working spaces are focusing on scale, like New
York-based WeWork, which has 58 locations in the United States, Britain,
Netherlands and Israel. A broad network
enables participants to use multiple locations when they are in different parts of a
city or traveling.
WeWork last year announced it had
raised $400 million from investors, boosting its valuation to $10 billion, to fuel expansion in the US and abroad.

hen Lance Macon started his


real estate consulting firm, he
did not want a traditional office. But he wasnt going to
work out of his home or a coffee shop either. Macon instead signed on with the coworking space Cove, where he gets an
available desk and conference room, along
with coffee, Wi-Fi, copier access, soft
drinks and a professional work environment. I have to be in the field every day, so
it doesnt make sense for me to have a regular office, Macon said at the workplace in
the Columbia Heights neighbourhood in
Washington, a short walk from his home.
Here, I have the comfort of the office, but
I dont have the expense and hassle of being
trapped in the office.
In Washington and in communities
around the world, growing numbers are
turning to this new kind of work environment, sharing office space with people
from various fields and using their smartphones and laptops as portable offices.
A survey by the website Deskmag, which
tracks the trend, found 7,800 co-working
spaces worldwide as of October 2015, up
from 3,400 in 2013 and just 75 in 2007.
These workspaces had more than 500,000
members, tenfold growth since 2011.
The survey projected the number of coworking spaces to grow to more than 10,000
in 2016, in dozens of counties, with a strong
growth trajectory in Canada, Italy, France,
Thailand, Australia and India.
While informal office sharing has always
existed, the emergence of co-working spaces with low-cost memberships has become
appealing to new startups as well as individual entrepreneurs, consultants and others who want a flexible but professional
work environment.
These spaces fill a need for people seeking a work community who dont necessarily have a work organisation, said
Gretchen Spreitzer, a University of
Michigan professor of management who
leads the schools co-working research
project.
Spreitzer said the co-working movement
is a natural extension of the sharing economy which draws on unused resources
like vehicles or apartments. People are

INDIAN-AMERICAN JUDGE
ON US SUPREME COURT?
Washington: Sri Srinivasan
could become the rst IndianAmerican to be on the bench
of the US Supreme Court after
conservative icon Justice
Antonin Scalias sudden death
gave rise to speculation that
President Barack Obama
may nominate the moderate
judge who enjoys impeccable
bipartisan support. Chandigarh-born Srikanth Sri
Srinivasan, 48, tops the list of prospective justice to
the countrys highest judicial body as Obama said he
plans to fulll his constitutional responsibilities to
nominate a successor to Scalia. Any list begins with
Sri Srinivasan, a member of the US Court of Appeals
for the District of Columbia Circuit a traditional
launching pad for Supreme Court nominees, the CNN
reported on Sunday. The moderate DC Circuit Court
of Appeals judge has already been labelled Obamas
Supreme Court nominee in waiting, by Jeffrey
Toobin, legal analyst for CNN and The New Yorker.
Srinivasan, whom Obama had rst nominated to
the post in 2012, was a high school basketball star in
Kansas before attending Stanford University, which
he graduated from in 1989. PTI

TIPS, TRIVIA & TRENDS

150,000 Antarctica
Penguins Die after
Iceberg Grounding

ITS FOR EVERYBODY

ANIRBAN BORA

QUICK
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used to the idea of sharing a car, or sharing


tools, so it makes sense to be part of a coworking community, she said.
Spreitzer said co-working helps provide
a sense of belonging that allows independent workers to thrive, while also making more efficient use of real estate.
She sees ongoing growth in co-working
because we have more people freely
choosing independent careers and more
people working remotely, helped by collaborative technologies like cloud computing and strong Wi-Fi.
EVOLUTION OF THE WORKSPACE

Co-working spaces offer plans similar to


gym memberships without a long-term

Justice Antonin Scalia, who died on Saturday at


age 79, served on the US Supreme Court for 30
years and made as big a mark on the court and on
American law and politics as some of the chief
justices under whom he served. It took about 10
minutes after the announcement of his death for
the right wing to start screaming that the Senate
should not confirm a replacement while
President Barack Obama is in office.
Given how blindly ideological the Republicans
in the Senate are, after nearly eight years of doing
little besides trying to thwart Obama, it is disturbingly likely that Mitch McConnell, the Senate
majority leader and architect of the just-say-no
approach, will lead his colleagues in keeping
Scalias seat open, and the highest court in the
land essentially paralysed, in the hope that one of
the hard-right Republicans running for the presidency will win. McConnell announced Saturday
night that this vacancy should not be filled until
we have a new president, claiming that he wanted to give American voters the chance to decide.
Obama recognised Scalia as a towering figure
in American law. He will be remembered as one
of the most consequential thinkers on the
Supreme Court, he said. Obama said he would
nominate a successor and called on the Senate to

fulfill its responsibility to give that person a fair


hearing and a timely vote.
Scalia, who was appointed by President Ronald
Reagan in 1986 to fill an associate justice seat
when William Rehnquist was elevated to chief
justice, was more than any other conservative
justice responsible for bringing ideology to the
foreground in the courts deliberations and,
sometimes, its decisions. The conservative justices who preceded him, including Rehnquist,
and who followed him, like Anthony Kennedy,
were not ideological animals in the same sense as
Scalia.
The originalist, fundamentalist constitutional

Crossword

COUNTRIES WITH MOST


ASYLUM APPLICATIONS
Figures from the Organisation for Economic Cooperation and
Development (OECD) show Hungary tops the rankings for developed
countries in asylum applications per population. The OECD gures
show that the country had the highest amount of applications per
person, with 17,500 per million people. The below chart from Statista
shows the top 15 countries, all of which are European:

9,189
5,793

Finland

5,746

Germany

4,514

Switzerland

4,048

Belgium

2,979

Luxembourg

2,956

Denmark

2,950

Turkey
Italy

Indrajit Hazra

ject of illegal immigration.


Those of us front-stallers waiting for at least one cuss word from
Like Banquos ghost, the spirit of a possible future American presiSupreme Court Justice Antonin dent went back to our Sunday
Scalia hovered throughout disappointed. Not a word from
Saturday nights South Carolina Trump needed bleeping out as
Republican debate. Hours after it did most recently when Rubio
the news of Scalias death in had to explain to his children that
Texas, the six Republican presi- Uncle Donald had just used a
dential hopefuls lined up, main- synonym for cat to describe
tained a minutes silence, and Uncle Teds perceived pusillanimthen ripped apart any notion of ity regarding waterboarding on
quietude that might be associated national TV.
with a venue by the name of
Trump was muted, but his
Peace Center.
smirks and shrugs not to menFor early Sunday watchers in tion the boos that the conservaIndia, this was a Valentines Day tive audience punctuated many
skit with not a shred of love in the of comments with may actualair. Magnified by the threat of a ly bolster his image as the Great
lameduck president slipping in a Disruptor. Did he cross a line in
Liberal successor to Scalia, there South Carolina, of all places,
was only one objective: to come when he reiterated that Jebs
across as a Real Conservative brother George was responsible
while exposing the five others as for letting 9/11 happen under his
the GoPs false prophets.
watch? Perhaps.
In ter ms of
But a nominapropheteering,
tion TV debate
no one, of
is not about discourse, does it
playing ones
b e t t e r t h a n An Indian View on the US Elections policy wonkDonald Trump.
ness. Its an
One of the joys of following this Americas Got Talent show, this
elections is to watch Trump open one showcasing a Republican talhis mouth. On Monday morning, ent face-off before the same jeerhe did, calling not only Jeb Bush ing-cheering mob. Moderator
standing two lecterns away a John Dickenson may as well have
liar, but also describing Ted been the host of Whos Line Is It
Cruz standing next to him as a Anyway? when he asked Trump
nasty guy and the single biggest whether he ever admits to being
liar, even bigger than Jeb Bush.
wrong. Trumps response, My
The details hardly mattered af- wife tells me Im wrong all the
ter that, which incidentally were time, was perhaps the most reasabout Cruz and Bush charging suring thing people heard the
Trump of being a closet Liberal, whole evening. (When I dont
liberal being the equivalent of agree with him, I tell him, was
what sickular is here. It didnt Melania Trumps model confirhelp matters when Trump willy- mation to the media after the denilly compared himself to anoth- bate.)
Used to our prime-time televier Democrat-turned-Republican,
Ronald Reagan, making the usu- sion debates, this American
ally chocolate lava cake Bush Valentines Day massacre may
erupt: [Reagan] didnt tear down seem tame in comparison. But
people like Donald Trump does. these are people jostling to be the
He tore down the Berlin Wall. next president of the United
Trumps shrug that followed States, the equivalent of
could have appeared distinctly Congress leaders making their
case on television to be nominatSoviet to Bush.
Perhaps it was Republican ed as party prime ministerial
frontrunner Trump dictating the candidate without having the
show. Perhaps it was Scalias luxury/obstacle of having a
death prompting unnatural be- Gandhi in the fray.
Trump is not ideological.
haviour from grown men in suits.
But Florida governor Marco Trump is attitudinal. Its popRubio, still smarting from his ulism, Rubio had said before
poor show in the last GoP debate Saturdays debate. With the
in New Hampshire a week ago, Republican South Carolina prialso got into the spirit of things mary next Saturday and
calling Cruz a liar. Cruz, look- Hillary Clinton and Bernie
ing quite the George to Rubios Sanders locked in a less-than-inJeb with both in identical ties, spiring Yale-Chicago University
suits and traditional non-Trump- debate sitting here in liberalish Republican headgear (slick, conservative India, one cant help
combed-back dark hair), gave it but remind Americas top rightback, though in Spanish, after wing contenders for the White
being accused by Rubio of not un- House that being attitudinal,
derstanding the language during populist and non-ideological
a heated discussion on the sub- can pay off quite handsomely.

Armchair On

America

6407

Teen Gifts Flowers


to Every Girl in
School for V-Day

17,500

Norway

Netherlands

Shrapnel Flies on
American TV Too!

14,829

Austria

A 69-year-old Spanish civil servant who


skipped work for six years and went
unnoticed has been ned 27,000 after his
long absence came to light just when he was
about to be awarded for his long service.
Joaquin Garcia dodged work by taking
advantage of a mix up between his bosses at
a water company and was due to collect his
long-service medal when he was nally
caught and inquiries found the true extent of
his contribution to the local authority. PTI

ideas that have driven many of the courts decisions were more the product of Scalias intellect
and politics than of the other conservative justices. Scalia wrote few of the divided courts 5-4
decisions, perhaps because the chief justices
were aware that Scalias lack of self-control in his
judgments made him unreliable in those cases.
One prominent exception was his majority decision in District of Columbia v. Heller, in which the
court ruled for the first time that the Second
Amendment granted an individual right to bear
arms. Scalia did say that that right was not absolute, and that certain weapons like assault rifles
could be banned, but the case still set the courts
fundamentalist approach to gun rights.
From abortion rights to marriage equality
and desegregation, Scalia opposed much of
the social and political progress of the late
20th century and this one. He wanted to overturn the Roe v. Wade decision on womens
rights to privacy, he dissented on the decision
that said anti-sodomy laws were unconstitutional, and he dissented on decisions that it
was unconstitutional to execute mentally disabled or teenage prisoners. He disapproved of
the Miranda decision that requires police to
read prisoners their rights. The New York Times

YOUR DAILY DIET OF FUN AND FACTS

Sweden

Spanish Man Skips


Work for 6 Years,
Goes Unnoticed

AFP

Scalias Supreme Court Legacy

Hungary

Some 150,000 penguins died after a massive


iceberg grounded near their colony in Antarctica,
forcing them to make a lengthy trek to nd food,
scientists say in a newly-published study. The B09B
iceberg, measuring some 100 square kilometres,
grounded in Commonwealth Bay in East Antarctica
in December 2010, the researchers from Australia
and New Zealand wrote in the Antarctic Science
journal. The Adelie penguin population at the bays
Cape Denison was measured to be about 160,000 in
February 2011 but by December 2013 it had
plunged to an estimated 10,000, they said. The
icebergs grounding meant the penguins had to
walk more than 60km to nd food, impeding their
breeding attempts, said the researchers from the
University of New South Wales Climate Change
Research Centre and New Zealands West Coast
Penguin Trust. AFP

commitment some as low as $60 a month


for part-time use of a desk while others offer dedicated or locked offices. We view
this as an evolution of the workspace, said
Adam Segal, a co-founder of Cove, which
has nine locations in the US capital and two
in Boston, with plans to expand to other
American cities. This is part of a decoupling of the organisation and the individual. Its a lifestyle change.
The culture change is reflected in a coworking manifesto signed by nearly 2,000
members of these workplaces, stating We
envision a new economic engine composed
of collaboration and community, in contrast to the silos and secrecy of the
19th/20th century economy.

The origin of the new co-working trend is


debatable. Some trace it to a hacker space
which opened in Berlin in 1995 or the 1999
opening of a collaborative workspace in
New York.
The first official co-working space
opened in 2005 in San Francisco, according
to Deskmag, followed by hubs in London
and Berlin, and the field has been on an upward trajectory ever since.
Co-working has been a staple for tech-focused startups but has grown to attract independent professionals such as lawyers
and consultants, as well as employees who
work away from their headquarters.
Co-working isnt just for startup teams
and millennials any more, says John
Arenas of Serendipity Labs, which has
eight locations in the eastern United
States. Although 20% of our members are
startups, 35% are independent and about
45% are trusted employees of established
companies.
Jacqueline Sloane, an executive coach
and consultant who works out of Creative
Co-working outside Chicago, said using
the space is better than a coffeehouse. Its
a pleasant environment, and you meet
other professionals, and they sometimes
send business to me or I send business to
them, so it works out well, she said.
Moving to a co-working space has advantages over coffee shops, many of which are
becoming less welcoming to those who
want to park their computers for the day to
use free Wi-Fi. You get the conversations
around the water cooler, but its nice to feel
you have an office where you can come and
go as you please, said Laura Doody, who
works out of Cove for the District
Communications Group.

NEVER TONGUE-TIED: Jeb Bush, Donald Trump and his wife


Melania after the debate

2,328
1,783
1,298

Iceland

1,004

France

1,001

In a heart-warming gesture, a
teenager in the US gifted owers
to over 800 girls in his school for
Valentines Day after saving money
by doing odd jobs. 17-year-old
Hayden Godfreys gesture for all the
girls at his school in Smitheld, Utah,
resulted from years of buildup and
planning. He saved for a year-anda-half to afford the $450 it cost to
purchase 900 carnations from an
online wholesaler. Every Valentines
Day since he was 14, Godfrey would
anonymously send owers to dozens
of his friends, he said. Each year,
the project grew larger in scale until
he ultimately decided he wanted to
make as many people as possible
happy this Valentines Day. With the
help of volunteers, Godfrey handed
carnations to 834 girls. PTI

Indian Restaurant Chains $34m Assets Seized in NZ


The police have seized Indian restaurant chain Masalas 33 properties
worth $34 million in what is believed to be the largest cache of property
ever restrained by the law enforcement authorities in New Zealand, a
media report said. The asset freeze came after allegations of tax fraud
of $7.4 million dollars, newstalkzb.co.nz reported on Saturday. Revenue
authorities have been investigating 17 rms involved with the Masala
chain for allegedly under-reporting earnings. The restaurant chain owners,
Joti Jain, Rupinder Chahil, Rajwinder Grewal and Supinder Singh, have
allegedly evaded paying tax by systematically stripping cash from the restaurants and not declaring cash
sales in GST returns, investigator Elena Bryleva stated in an afdavit. The brand came under scrutiny last year
for paying its employees as little as $2 an hour. Co-owner Jain was sentenced to 11 months home detention
last October after admitting immigration and exploitation charges. Masala founder Chahil is already facing
six charges alleging he falsied immigration documents and supplied misleading information contrary to
immigration laws. Properties seized include a $3-million house in Aucklands Remuera area, a parcel of land in
Takanini and four other properties believed to have been used as accommodation for Masala workers. IANS

Dilbert

by S Adams

22 Economy

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

SUITS & SAYINGS


ANIRBAN

INDUSTRIAL
PREMISES
LAND FOR SALE

ETs weekly roundup of the wackiest whispers and murmurs


in corporate corridors and policy parlours

The Humble Prince

They say Mumbai is a great leveler. Prince or pauper, you are forced to
stand in queues, get stuck in traffic snarls and on occasion, even take a
local train. But then again, this royalty did not need a lesson in humility
from the city. When Crown Prince of Abu Dhabi Sheikh Mohamed bin
Zayed Al Nahyan, who rang the closing bell at the Bombay Stock
Exchange, an ornate chair was put up for him on the dias alongside the
usual ones for the aam janta. Twenty minutes before the function
kicked off, the protocol officer from the richest middle eastern country
replaced the princely chair with a normal one. Apparently, the Crown
Prince wanted none of the preferential treatment.

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Happy Birthday, Guv

LEASE & RENT

RBI governor Raghuram Rajan had a pretty special birthday this year.
After all, its not often that one is wished by the leader of a billion
people. Thats right. We hear that Prime Minister Narendra Modi
wished the governor. The greetings show that all is well between the
man who is trying to fuel Indias economy and the man who is
cleaning up the cobwebs in the Indian banking system.

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PUBLIC NOTICES

Come Tuesday evening, a US-India Business Council (USIBC) gala


bash will see Cisco Systems Executive Chairman John Chambers,
who has just taken over as the chairman of the powerful US trade
lobby body, and Telecom & IT minister Ravi Shankar Prasad sharing
stage. With the Budget less than a fortnight away, US business
hotshots arent likely to miss the opportunity to cozy up with the
mantri to demand sops for tech companies participating in Digital
India/Make in India drives. Grapevine also has it that some USIBC
members may crib about the telecom regulators recent decision to
bar all forms of differential data pricing.

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That the bears have their fangs and


claws out in the stock market is well
known. But the bulls arent making
their own lives any easier. One big
bull of Mumbai not just lost
truckloads of money in the bazaar
but also ended up on the losing side in
the derby. We hear that this big bulls
horse was placed seventh in the
derby, even though the bull had
expected it to win by a fair distance. Wonder if the bull is
drowning his sorrows in gallons of single malt?

Yogic Cures For All


These tough times call for unusual cures. While some down single malts, others
turn to more uplifting pursuits. We hear the scion of a prominent textile
manufacturing family in Western India has introduced yoga sessions for
employees to soothe their frayed nerves. Sirasana, anybody?
Privy to the whispers in power corridors or juicy tips on India Inc?
Do share with us at etsuits.sayings@gmail.com

Once Again, Blood on the Streets

STOCKS & SHARES

Investors must avoid panic and remember the real lesson from past crashes

Expert
Take
Dhirendra Kumar
CEO, Value Research

Back in January 2008, when the initial equity crash of the financial
crisis had just happened, there was
a news story that in Ahmedabad,
policemen had been deployed on some lakeshore to prevent suicides. I
dont know what became of that,
but investors would be wondering
whether that stage would be reached this time around.
There are any number of quotes,
sayings and aphorisms that will
tell investors what to do or at least, what to think when the stock
prices are crashing. A typical one
would be: I've found that when the
markets going down and you buy
funds wisely, at some point in the
future you will be happy, which
was said by the great investments
manager Peter Lynch. Or the famous Buy when theres blood in the
streets, even if the blood is your
own, attributed to the 18th century
Baron Rothschild of the Rothschild
banking family.
What theyre telling investors is
that the best time to buy stocks is
when the equity prices are down.
This has to be the most obvious idea
in investing. In fact, it has to be the
most obvious and the simplest idea
in buying anything at all. If you are
buying anything at all, surely it is
better to buy when its cheaper. Its
often pointed out that we do this all

ANDHERI EAST

BUSINESS OFFERS

ANDHERI WEST

SELF
DEVELOPMENT

SITUATIONS VACANT
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ACCOUNTANT

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BUSINESS
PROPOSALS

the time in everything else we purchase. We wait for sales and we flock
to shops and websites running discounts. And yet most buyers behaviour is the opposite when investing in stocks. They rush to buy
when prices are going up and sell
when they are going down.
Actually, this isnt much of an
anomaly. Our behaviour for things
that we consume and things that
we intend to trade are bound to be
FILE PHOTO
different. We buy stocks with an intention of selling them later. The probability that they will start riutility that we expect from the sing. And the more they fall, the grestock of a company is the price that ater the rise will eventually be.
we sell it at. In a bull market, we coIs this just a something people say?
me to believe that No, in fact it is provable by data. At
utility will be much Value Research, we recently did a
greater in the futu- small but very interesting study
Our
re, so we rush to that quantified this rule over the enbehaviour
buy when the stock tire history of the Sensex.
for things
is down. In bear
We calculated the returns of the
that we
markets, the oppo- Sensex every month for every peconsume and
site is true, as is the riod from the previous one month
things that
case nowadays. In a to the previous 60 months. We also
we intend to
way such behavio- calculated the returns of the Sentrade are
ur happens while sex going forward for five years
bound to be
purchasing anyt- from each of these points (there
different
hing. If a pair of were a total of 24,360 such points
trousers is at a 20% discount, you over the entire history). And then
will not buy it if you expect the dis- we collated this data and looked at
count to increase in the near futu- the patterns. It turns out that if you
re. You are still driven by the gap summed up all periods where there
between the utility you will get and had been a decline of of 5-40% in
the price you will pay.
the Sensex, then the likelihood of
However, even if theres a logical the Sensex being higher over the
explanation for such behaviour, it next five years went up from 88% to
doesnt mean that its not wrong. 100%. The median return over the
This behaviour is driven by a simp- next five years ranged from 80% to
le linear projection of the recent 292%. Essentially, if you buy the
past into the foreseeable future. If Sensex after any kind of a decline
stock prices rose over the last few even a moderate one of 10-20%,
weeks or months, then they will go then you are pretty much certain of
on rising. And the opposite, of cour- making a substantial amount of
se. This is not just simple but even money over the next five years. So
simple minded. In reality, when as the blood on the streets runs
stock prices fall, it always raises the thicker, you know what to do.

Emphasis on Irrigation
From Page 1
MEDICAL

MEDICAL
FINANCE
FARMS, FARM LAND

TOURS & TRAVELS

I have changed my name from


Devndra Singh to Devendra
Singh (affidavit no.
PB 531459)

Though the economy is forecast to grow 7.6% in the


current fiscal, its riding only on urban demand
and government capital spending, with little contribution from the rural economy, the jobs-intensive
construction sector and exports.
After two successive bad monsoons, the Budget
will seek to alleviate rural stress through more social initiatives and an emphasis on irrigation to derisk agriculture.
The Pradhan Mantri Jan Dhan Yojana financial
inclusion platform is going to be loaded with more
initiatives to reach out to the poor.
We are going to be doing some significant things
on the social security and universal social security
side, said the official cited above.
The government has already rolled out a host of
welfare schemes such as the Atal Pension Yojana
but its seeking to put an ambitious social security
and health insurance plan in place.
The idea is to marry these ideas to ensure there is
a complete bouquet available, the official said.
The Food Security Act will be backed with more
funds and an intent to move to direct benefit transfers could also be announced. This means subsidy
payments go directly into bank accounts of beneficiaries to minimise leakage.
A bigger direct benefit transfer through cash distribution of fertiliser subsidies is also on the cards.
Loans under the MUDRA umbrella lending scheme
will be given priority to encourage rural entrepreneurship to create more non-farm jobs.
Farm infrastructure will be given a boost with
more spending on irrigation and better rural roads. As reported by ET, the government will leverage National Bank for Agriculture and Rural Development (Nabard) to fund irrigation through taxfree bonds in view of fiscal constraints.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is likely to
be tweaked to help strengthen the countrys irrigation system.
MORE FOR EQUITY INVESTORS

On the markets side, there is likely to be a comprehensive package to incentivise financial savings,
in particular equity, amid a growing realisation
that lack of this had led to over-reliance on debt and
consequently the problem of excess leverage.
The government is also looking at overhauling
or phasing out the Rajiv Gandhi Equity Savings
Scheme, which hasnt been too successful and is
instead devising a new mechanism to draw investors to the stock market.

Reappointing Sinha
May Require a
Change in Rules
From Page 1

The search-cum-selection committee had recommended a short


list of Abhishek, Mathew, State
Bank of India chairman Arundhati Bhattacharya and whole-time
Sebi member Rajeev Agarwal. The
panel, headed by the cabinet secretary, had not made any suggestion
to reappoint Sinha, sources said.
The finance ministry subsequently moved a proposal to re-appoint him. This has caused some surprise as the ministry had constituted the selection panel to replace
the chairman.
Reappointing Sinha may require
a change in rules as the chairmans
tenure cant exceed five years. Sinha will complete five years on February 17. A reappointment may
also mean that vigilance clearance
will have to be obtained afresh as
per the current Sebi rules.
Whenever rules are changed, it
cannot be a one-time affair to suit a
particular contingency, said a securities law expert. It has to be
there to apply to all and for all times to come.
DR Mehta is the only Sebi chairman who has held the post for more than five years. That was due to
exceptional circumstances as the
joint parliamentary committee
was enquiring into the Ketan Parekh scam. The government of the
time had to defend itself against a
challenge to that extension in the
Delhi High Court.
The six-member search cum selection panel is headed by cabinet
secretary PK Sinha. The other
members are PK Mishra, additional principal secretary to Prime
Minister; DEA secretary Shaktikanda Das, among others.

Economy 23

WWW.ECONOMICTIMES.COM

Merc, China Machine & Others Have Lined Up to Invest in State


From Page 1

Automobile majors Mercedes-Benz and


Mahindra & Mahindra to realty firms Ascendas, bio-technology companies such
as Novozymes, and China Machine & Engineering Corporation and Adani are
among the companies that have lined up
to invest in Maharashtra.
While Fadnavis is expected to do in Mah-

arashtra what Narendra Modi has done


with the Vibrant Gujarat event when he
was the chief minister of the neighbouring state, his peers from states such as
Chhattisgarh, Odisha and Haryana
seemed to be playing a waiting game.
They mostly spent the day gauging investor appetite and announcing policies to
attract investment.
Odisha chief minister Naveen Patnaik
unveiled Industrial Development Policy

2025, a 10-year plan that seeks to make


his state one of the top three for investment. Patnaik said the new policy will
help the state attract `. 2.25 lakh crore of
investment and create 10 lakh jobs, making the mineral-rich state a manufacturing hub of the east coast.
Raman Singh of Chhattisgarh said he
used the opportunity to meet leading
businessmen, including Kumar Mangalam Birla and Sajjan Jindal. We have in-

vited them to our state and have asked


them to look at other areas than resources. Birla apparently evinced interest in setting up a skill development institution in Chhattisgarh.
Birla and Mahindra Group chairman
Anand Mahindra were optimistic about
the event helping sell India as a manufacturing destination. Birla said: India has
a track record of setting up world-class
cement and textile factories and oil refin-

Jasper Has Raised


Focus on Two Areas:
Ecomm Biz and Logistics $2 Billion in Funding
From Page 1

His ambition is driven more by a sense of


urgency than audacity. If Snapdeal, Paytm
and a rush of young startups are snapping
at Flipkarts heels, Amazon has ploughed
`. 3,676 crore (nearly $540 million) into its
India operations in the past two months,
underlining its intent to climb to the top of
the domestic ecommerce market. Overall,
Amazon has invested about `. 6,700 crore in
India since January 2015.
Binny Bansals answer is to double down
focus in two areas: the main ecommerce
business and logistics, a unit he knows only too well. Today we are really focused on
two areas, commerce through Myntra and
(Flipkart), and supply chain, Binny Bansal, 33, said in an interview with ET in
which he outlined his strategy for the companys growth. Improving customer experience is integral to his plans, an area
where several industry experts believe
Amazon is taking the lead by aggressively
expanding its supply chain network.
Flipkart, Indias most valuable internet
company with an estimated worth of about $15 billion, sees four pillars to its business commerce, supply chain, advertising and payments, which it is yet to
launch. In 10 years, Binny Bansal wants
each of these to be sector leaders, although, at present, the first two hog the companys priority charts.
Flipkart under Binny Bansal has already
outlined big plans for strengthening its
supply chain, starting with building out
its logistics unit eKart as an independent
business, as ET reported on February 1.
We are taking a big bet on externalising
eKart, (which will) start to work with
other businesses apart from Flipkart and
Myntra, said Binny Bansal, who was
overseeing the logistics unit before he took
over as CEO of the 8-year-old company
from cofounder Sachin Bansal in January.
eKart is the new joker in the bag that will
generate cash flows in the future, he said.
The advertising business, launched last
year under Sachin Bansal as a potentially
quick path to profitability, will scale up
this year, Binny Bansal said.
As for payments, he said the company
plans to venture into it step by step. I dont
think anybody has solved payments. There
is some traction out there but we dont beli-

eve that its a done deal, he said. Snapdeal


and Paytm, Flipkarts main domestic rivals, have their own payments businesses.
Binny Bansal has an eye for zeroing in on
the right things to focus on, a former top
executive at Flipkart said on condition of
anonymity. Quality of customer service
will get back on track and profitability will
get streamlined better (under Binny Bansal)... What you will not get is something as
drastic as app-only, this person said, referring to Flipkarts now-abandoned plans
to shut its desktop website and run only as
a smartphone application.
Indias ecommerce market is expected to
triple to $68.8 billion by fiscal year 2020
from $23 billion in 2015-16, according to
Goldman Sachs. This has attracted global
strategic investors such as Alibaba, which
has picked up stakes in both Paytm and
Snapdeal, but Amazon has been the most
aggressive in directly expanding its India
operations. Flipkart is negotiating with
investors to raise about
$1.4 billion, ET reported on
January 7.
Indias
Sachin Bansal and Binny
ecommerce
Bansal started Flipkart in
market is
September 2007 as an online
expected to
book store and rapidly built
triple to
it into the countrys largest
$68.8 billion
online retailer. Sachin Banby fiscal year
sal was named executive
2020 from
chairman in a manage$23 billion in
ment restructuring last
2015-16
month and will now focus
on fundraising and strategy, leaving the running of Flipkart to Binny Bansal.
Binny Bansal said he will be spending
most of his time on expanding and strengthening the core commerce platform,
which Myntra founder Mukesh Bansal
was overseeing. Senior vice presidentengineering Hari Vasudev and Amitesh
Jha, vice president, will oversee day-today operations at eKart.
Mukesh Bansals resignation last week
puts Binny Bansal in charge of all the business segments at Flipkart with the top managers reporting directly to him. Mukesh Bansal had joined Flipkart after it acquired
Myntra in May 2014. One of the main challenges for Flipkart, according to some experts, had been the second layer of management that the company had built across functions such as engineering, product, marketing and finance in the past 12-15 months.

From Page 1

We see these investments as a


continuing endorsement of
Snapdeals strategy to build Indias most reliable and frictionless commerce ecosystem, said Anup Vikal, chief financial
officer at Jasper Infotech.
Including this round, Jasper
Infotech has raised almost $2
billion in funding from a list of
marquee investors, including
Japans SoftBank, Chinas Alibaba Group and Taiwans Foxconn. The proceeds will be
used by the company to further
build its technology platform,
logistics, payments and backend infrastructure, according
to a company spokesperson.
We continue to make targeted investments in building internal and external capabilities that will enable us to consistently deliver optimal experience for the millions of buyers
and sellers who transact daily
on Snapdeal, Vikal said.
Singapore-based
Brother
Fortune Apparel Pte Ltd has invested `. 335 crore in the New
Delhi-headquartered company,
according to documents filed by
the company with the Registrar
of Companies (RoC) on Friday.
Brother Fortune is an entity
that represents several Chinese
high net-worth individuals, and
were advised by Iron Pillar, the
new venture capital firm focused on mid-market technology
investments, and which has been founded by former Citi India
M&A head Sameer Nath and exMorgan Creek Capital director
Anand Prasanna.
According to the documents
filed with the RoC, Jasper Infotech has issued 20,205 Series J
compulsorily convertible cumulative participating preference shares priced at Rs
1,65,929.15 each to Brother Fortune Apparel.
Preference shares in the previous round announced in Au-

gust by Foxconn and Alibaba


were issued at `. 1,25,802, indicating that Snapdeal's new round
of financing is being done at
32% premium.
Additionally, Bennett, Coleman & Co Ltd, the publisher of
The Economic Times, has also
participated in the latest round, and has been issued 15,638
warrants estimated at Rs 25.49
crore. The total investment is
estimated to be between Rs 250
crore and Rs 300 crore according to people aware of the details of the transaction.
Jasper has taken approval to
issue 90,000 shares in the series-J transaction, which at the
new share price, amounts to
nearly a round of Rs 1,500 crore.
In September last year, ET
was the first to report that Ontario Teachers Pension Plan,
which manages assets upwards of $154 billion, is likely
to acquire a significant minority interest in the parent of online marketplace Snapdeal. com,
and which were primarily secondary in nature.
Many in the investment community have been expecting
that deteriorating global economic condition, coupled with hyper-competition pushing profitability further away, valuation
of Indian etailers are likely to
see corrections. However, Indias top online retailers have
continued to hit the road with
their ambitious capital raising
plans at lofty valuations.
In October last year, ET was
the first to report that Jasper
Infotech had started talks with
existing and new investors to
raise about $300 million for digital services platform FreeCharge, its biggest acquisition,
as it looks to counter Vijay
Shekhar Sharma-led Paytm,
which has snagged about $680
million from Alibaba and its affiliate, Ant Financial, and is
swiftly building capabilities as
an online marketplace.

eries ... we have to take India to the next


level." Mahindra predicted migration of
large scale factories to India from China.
But that shouldnt be the only kind of
manufacturing that India does. Manufacturing should be democratised, digitised and decentralised, he said.
In fact, Chinese companies were
among those that have shown keen interest in investing. Heavy equipment
major Sany Group committed to invest

$4 billion in India, for setting up manufacturing units and wind farms. We


want to be the number one in five years
in construction equipment in India. We
will be growing more than 60% year-onyear, Deepak Garg, chief executive at
Sany Heavy Industry India, told ET.
China Machine & Engineering Corporation is expected to announce an
.`18,000 crore investment in Maharashtra, state officials said.

24 Sports

THE ECONOMIC TIMES | MUMBAI | MONDAY | 15 FEBRUARY 2016

A New Fire in Babylon?


The Under-19 World Cup win is just what West Indies
cricket needed now with the senior game in a dire state

Boria Majumdar

t was heartbreak for India. A team that


had not lost a single match under Rahul
Dravids stewardship failed to absorb
the pressure of the big final and caved
in for 145 runs. Even then the match
wasnt won for the West Indies. A superb
spell from Mayank Dagar put them at 77-5.
But the Windies survived and deservedly
won the Uunder-19 World Cup with the remaining five wickets in hand.
Now, what does the win mean for the
Caribbean game and for world cricket?
There is little doubt the result is the best possible for the sport under the circumstances.
West Indies cricket, troubled and torn apart,
needed an infusion of fresh blood. The sport
has had to combat the growing influence of
the NBA and Minor League Baseball in the
Caribbean and perennial the pay dispute between the senior team and the West Indies
Cricket Board.
Thats why this victory is significant. It has
come unexpected and tells us that cricket in
the Caribbean is not dead. There is still hope
for not all athletic talent has chosen another
path. The manner in which Keacy Carty (52*
off 125) and Keemo Paul (40* off 68) batted
showed that not everyone there is obsessed
with Twenty20 cricket. Five wickets down,
it was time for restraint. To absorb the pressure and see off Dagars spell.
Dagar was bowling beautifully and another wicket at that point would have tilted
the balance in Indias favour. So what if the
asking rate was touching five? A target of 145
meant they had the luxury of being patient.
Carty and Paul calculated it to perfection.
They played themselves in and were content in picking up singles every now and
then. Shamar Springer, the player of the
tournament for many, had perished with
a reckless shot. Repair was necessary and
the Indians helped out with dropped catches
and fielding lapses.
And once it was all over, the celebrations

The West Indies


players celebrate
winning the Under
19 World Cup

said it all. Coaches Graeme West and Corey


Collymore could finally let loose.
Can this victory be a watershed moment for
them? Can the likes of Springer, Carty, Paul,
Ryan John (3/38) and Alzarri Joseph (3/39)
step up to fill the boots of
left vacant by the senior
The manner in
team?
which Carty
The West Indians, un(52* off 125)
like
Australians and
and Paul (40*
Indians, are great amaoff 68) batted
teurs. Australia might
showed that
well have a more robust
not everyone in
system and cricketing
the Caribbean is
structure in place but
obsessed with
they lack the flair the
Twenty20
West Indians bring
to cricket. And with cricket continuing to
struggle with the problem of empty grounds
around the world, the sport needs flair.
The big problem for the waning of Calypso
cricket was the lack of money in the game in
the Caribbean. Players from the recent past
were often left with clerical jobs, like acting
as the liaison officer for a visiting India A
team. For current players and young talent,

cricket did not seem a good career choice.


Even the Allen Stanford experiment in 2008,
which offered West Indian stars fast money
(a million dollars a match) was short-lived
and controversial.
Local talent had the option of making it
to the NBA across the border in the United
States, or going over to Dominica to try a
hand at baseball. A successful season of minor league baseball could earn a player five
times the money playing cricket.
It was this failure to commercialise the
game in the mid-1990s that pushed the
game to its current state, notwithstanding
stars like Brian Lara. Even the Champions
Trophy victory of 2004 proved to be an aberration. Cricket just did not have the financial
muscle to attract talented youngsters.
The T20 leagues made a difference then.
The millions Chirs Gayle and Kieron
Pollard earn attracted back to the game.
Cricket, thanks to the leagues, can perhaps
combat baseball and basketball. Thats why
this victory is significant. It marks a resurgence, one that can prove crucial for the existence of the sport.

Arsenal Feel the Love, Late


Valiant Foxes a man
down are undone
by injury-time goal as
Gunners come back
from a goal down

Danny Welbecks last-gasp winner saw


Arsenal come from behind to defeat 10-man
Leicester City 2-1 at the Emirates, moving
them to within two points of the leaders in
the Premier League title race. Jamie Vardy
won and converted a penalty on the stroke of
half-time, but Danny Simpson was sent off for
a second booking early in the second half.
The Gunners capitalised when substitute
Theo Walcott equalised with 20 minutes
remaining and sealed a dramatic victory
through the returning Welbeck off the
bench to make his first appearance since
April as he headed home in the fifth minute
of stoppage time.
Leicesters defeat is only their third of the
league campaign, while Arsenals second
straight victory puts them within striking
distance of the top of the table.
Arsenal had a half-hearted penalty
claim turned down after Alex OxladeChamberlains cross struck the arm of NGolo
Kante from close range, but it was the visitors
unchanged for the sixth straight game

Arsenals Danny Welbeck (R) with


Petr Cech (L) and Nacho Monreal

who created the first major opportunity.


Marc Albrighton delivered a threatening
cross from the right channel and Vardy got
up at the back post to head towards the bottom corner, but Petr Cech reacted superbly
to get down and save. Arsenal striker Olivier
Giroud was correctly denied by an offside flag
after heading in Mesut Ozils inviting cross.
Leicester made the breakthrough in the

last minute of the first half when a trademark


counter-attack led to Vardy being clumsily
brought down by Nacho Monreal in the corner of the box. Vardy took the penalty himself
and hammered his attempt into the bottomright corner, sending Cech the wrong way.
Arsenal, already without the injured
Gabriel, had to replace Laurent Koscielny at
half-time as Calum Chambers came on and
they were relieved to see the visitors have
a penalty claim turned down when Riyad
Mahrez went down.
The game took a crucial turn in the 54th
minute when Simpson was shown a second
yellow card for tugging back Giroud, just
five minutes after fouling Alexis Sanchez to
pick up his initial booking the first time
Leicester had been reduced to 10 men in the
league this season.
It was Arsenals first shot on target that gave
them the equaliser. Hector Bellerins cross
from the right was cleverly headed on by
Giroud and Walcott beat Kasper Schmeichel
with a cool finish 9 minutes after coming on.
Welbeck made his comeback from the substitutes bench as Arsenal pressed hard for a
late winner. Per Mertesacker headed inches
wide and Giroud was thwarted by an excellent
reflex save from Schmeichel.
And the breakthrough arrived when Ozils
perfectly flighted free-kick was coverted by
Welbeck, sending the home crowd wild.
Goal.com

VITALS
Ashwin Traps Lanka
as India Clinch Series
Ravichandran Ashwin weaved his magic
with a career-best 4-wicket haul as India
beat Sri Lanka by nine wickets in the
deciding T20 international to clinch the
series 2-1. Ashwin took two wickets in the
first over and ended with figures of 4-18-4 as the hosts bundled out Sri Lanka for
82, their lowest total in the format. PTI

Mary Kom in South


Asian Games Final

MC Mary Kom led the charge as six


Indian boxers stormed into the final with
comprehensive wins in the first session
of semi-finals at the South Asian Games.
On a comeback trail after recovering from
an injury, the five-time world champion
Mary Kom's 51kg-category bout lasted
less than 40 seconds. PTI

PUBLISHED FOR THE PROPRIETORS, Bennett,


Coleman & Co. Ltd. by R. Krishnamurthy at The Times
of India Building, Dr. D. N. Road, Mumbai 400001Tel.
No (022) 6635 3535, 2273 3535, Fax (022)
2273-1144 and printed by him at (1) The Times of
India Suburban Press, Akurli Road, Western Express
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Tel No. (0832)-3045100, Fax - (0832)-3045102.
EDITOR Mr. R. Sriram. (Responsible for the selection
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Reproduction in whole or in part without the written
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THE ECONOMIC TIMES

wealth

www.wealth.economictimes.com | Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune |

IS THERE A
LEAK IN YOUR
BUDGET?
PAGE 2

February 15-21, 2016 | 32 pages | `7

THE ECONOMIC TIMES

wealth

HOW
HEALTHY
WILL YOU BE
WHEN YOU
RETIRE?
PAGE 14

www.wealth.economictimes.com | Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune | February 15-21, 2016 | 32 pages | `7

ALSO INSIDE

11

27

REAL ESTATE

MUTUAL FUNDS

TECH

Financial Planning PAGE 13

Build a house for


less right now

Are you making the


most of ELSS?

Get everything at
your doorstep

Family Finance PAGE 16

Prices of construction materials


are down and labour is easily
available. This could be the time
to set the ball rolling.

Most buyers dont invest


systematically and opt out
after the three-year lock in
period is over.

Home delivery of everything


from groceries to medicines
takes on a new meaning
with these must-have apps.

Q&A PAGE 18

PLUS
The weeks best stocks, mutual funds,
loans and deposits.

Here's how to mend the spending


and investing ssures draining
your nances. PAGE 2

The Economic Times Wealth is available at an invitation price of `7/issue. To book your copy*, contact your newspaper vendor or call 022-39898090; Email: crm.mumbai@timesgroup.com; SMS ETWS to 58888

02

Cover Story

The Economic Times Wealth, February 15-21, 2016

IS THERE A

LEAK
IN YOUR

BUDGET?
Heres how to identify and mend
the spending and investing fissures
that are draining your finances.

GETTYIMAGES

RIJU DAVE
ho doesnt love a good suspense
thriller, especially if it involves
money? One such whodunit
plays out in your home virtually
every month. It involves the
mysterious erosion of money from the household
budget, but no one has a clue about the origins of
this financial black hole. The anti-climactic twist
in this story is that the victim is also the villain.
Yes, we are referring to you, our readers.
Your budgets have holes and you are either unaware or incapable of plugging these. You suffer a

monetary loss, but its you who causes these


leakages in the first place. In fact, according to a
recent study by YouGov and Visa, Indians lose
nearly `1 lakh a year to unknown, or mysterious,
expenses. The biggest suspect is snacks (65%),
followed by shopping for food and groceries
(48%), as well as leisure shopping for non-essential items (48%).
This is only the tip of the iceberg because there
are several other leakages, direct and indirect,
that are depleting your budget every day. These
spring from wrong saving and investing patterns
as well as flawed spending and behavioural biases. While spending typically results in small leak-

ages, the bigger leakages take place in taxation,


insurance and loans, says financial planner
Pankaaj Maalde.
The reasons for spending leaks are many, but
the solution invariably centres on effective budgeting. It requires a diligent recording of expenses
every month, going back to compare the discrepancies at the end of the month, and then taking effective action, says Jayant Pai, Head, Marketing,
PPFAS Mutual Fund. You could also implement
standard spending rules, such as the 50/30/20
rule, wherein you spend 50% of your income on
essentials, 20% on goals and debts, and 30% on
non-essentials. As for saving and investing leaks,

Cover Story

The Economic Times Wealth, February 15-21, 2016

it is best to have a financial plan in line with


your goals so that you can make right investing decisions and avoid losses. Consulting a
financial planner is a good option to get your
budget on track. In the following pages, we
list the various ways your budget suffers
seepage and what you can do about it.

Do you know you are paying for these?


BANKING SERVICE

CHARGE

Not maintaining average monthly


balance in savings account

`150-600

Additional chequebook

25-cheque leaf per half year. `75 per


additional chequebook of 25 leaves.

Duplicate passbook issuance

`100

Issue of duplicate/ad hoc statements

`100 (bank); `75 (phone banking);


`50 (Net/mobile banking)

Cheques deposited returned unpaid

`100 per instance

Standing instructions

`25 per transaction

SAVING & INVESTING


The ways in which your budget can spring a
leak increase manifold when it comes to saving
and investing. Picking wrong products and
being careless with your investments invariably causes drainage.

BANKING
The first source of leakage is your bank
savings account, which is also a salary account for many people. If its not a flexi or
sweep-in account linked to a fixed deposit,
you are earning a lower rate of interest of
4%, instead of a higher 6-7% that a fixed deposit-linked account would earn. Thats a
2-3% leakage to begin with.
The focus on online and mobile banking
also means that there are a host of charges
for services you thought were free (see Do
you know you are paying for these?). If you are
unaware about these charges, your bank
statement will pop up seemingly mysterious
deductions, which translate into leakages for
your budget. For instance, if you let the
monthly balance in your account dip below
the stipulated threshold, you could lose
`150-600 a month, the charge varying for
different banks. My average monthly balance (AMB) did dip once and I had to shell
out `250, but since then I have been very
cautious, says Delhi-based Aparna Mehra, a
marketing manager in a private company.
If you ask for hard copies of credit cards
or bank statements, you end up paying for
them even though e-mailed statements are

03

High-interest loan Low-interest


investment = Leakage
If you take a loan of `2 lakh at 18%, while
investing in a fixed deposit that earns 8% for
two years:
Net leakage
`16,000
You spend
`39,000 on
repaying
loan

You gain
`33,000 from
FD

Your net gain


after taxation
for 30% bracket

`23,000

For a regular savings bank account in metro/urban area with an AMB requirement of `10,000.
Charges may vary for other banks. Source: HDFC Bank

free, says Pai. You can easily avoid these


charges by opting for SMS alerts, planning
your monthly withdrawals and being more
careful with your transactions.

TAXATION
This is a landmine of leakages as far as the
average investor is concerned. If you wait
till the end of the financial year to do your
tax planning and invest in the wrong product, you will lose out on returns, especially if
you are in the 20-30% tax bracket, says
Maalde. So if you are investing in a product
that levies a tax on maturity but you didnt
know about it, the return will be much lower
than the one you would expect or account
for in your goal planning and budgeting.
Not paying the quarterly tranches of advance tax on time (see Breach the deadline...)
is another reason for losing money as penalty. Its best to consult a tax professional
about planning and payment at the beginning of the financial year, says Maalde.

Ujas Selarka
37, MUMBAI

MY MONTHLY BUDGET

`65,000

LEAKAGE

20%
MAIN SOURCES OF
LEAKAGE
Online and retail shopping,
unplanned travel, HD cable
TV, mobile & broadband
plans.
HOW I PLUG IT
Postponing, delaying
purchases and outings.
Shifting to low-cost
broadband plans, opting for
standard cable/mobile plans.

Another way most people allow seepage to


set in is when they pay higher tax because
they dont avail of all the exemptions and deductions they are entitled to.
Deduction on home repairs and mainte-

nance: You may be claiming deduction of interest on repayment of your home loan, but
Section 24 also allows deduction for interest
paid on loan for reconstruction or repair up
to `30,000, subject to the overall limit of `2

04

Cover Story

The Economic Times Wealth, February 15-21, 2016

BREACH THE
DEADLINE,
CREATE A LEAK

How smoking can burn a


hole in your budget
CAUSE OF LEAKAGE

ADVANCE TAX
Deadline: 15 September (not less than
30% of liability); 15 December (60%);
15 March (100%).

Opportunity cost (invested


at 8.5% in 35 years)

AMOUNT OF LEAKAGE

`52.28 lakh

Cigarette (8 a day)

`2,000 a month

Life insurance premium higher


by 35-40% for a 25-year-old

`3,000 more a year for a cover of `1 crore

`6.27 lakh

Health problems

`3,000 if you fall ill twice a year

`6.27 lakh

Leakage: 1% per month simple interest.

`64.82 lakh

TOTAL LEAKAGE

LTA & MEDICAL


REIMBURSEMENT
Deadline: Annual for medical; twice in a
block of four years for LTA.
Bill proof to employer is typically given
towards the end of the financial year.
Leakage: You can claim it only through
your employer, not in the income tax
return. So you lose the entire tax-exempt
amount if you dont claim it.

CREDIT CARD
PAYMENT
Deadline: Monthly
Leakage: Varies for different banks.
Heres the late payment schedule for
ICICI Bank.

lakh. Even the processing fee for a home loan


qualifies for deduction under this Section.
(see page 30)
Adjusting losses against gains: If you lost
money in stocks or other investments in the
previous financial year, you can adjust it
against capital gains from the sale of stocks,
property, gold or debt funds. Short-term
capital losses can be set off against both
short-term capital gains and taxable longterm capital gains. Unadjusted losses can be
carried forward for eight financial years.
Deduction for rent paid if you are not availing
of HRA: You can claim a deduction to the extent of `2,000 per month under Section
80GG even if you dont receive HRA from
your employer, provided some conditions
are fulfilled.
National Pension Scheme: Since last year,
you can claim exemption of an extra
`50,000 under Section 80CCD (1b), which is
beyond the `1.5 lakh under Section 80C.

INVESTING & LOANS


Total amount due

Late payment
charges

Less than `100

None

Between `100 & `500

`100

Between `500 &


`10,000

`500

Between `10,000 &


`20,000

`600

More than `20,000

`700

WATER BILL
Deadline: Monthly

If you do not invest in the right product with


the right amount or calibrate it with a rise in
income, you are losing money due to low returns, says Pai. This is besides the high opportunity cost. So, if you invest `10,000 in a
traditional insurance plan that gives you 6%
return, you will get `23,966 after 15 years, as
opposed to `54,736 that you could have got
by investing in a high-interest instrument
like equity (12%). In the former case, you not
only slash your budget due to the high premium you pay, but the returns may not even
beat inflation or help achieve your goals.
Similarly, if you are investing in a low re-

turn instrument like fixed deposit at 8%,


and have also taken a loan with a high interest rate of, say, 18%, you are ensuring a
leakage (see High interest loan...). You can
plug this by consulting an adviser and investing in line with your goals, risk appetite
and income.
Another loophole is loans. Avoid personal loans (15-25%) or credit card debt (36%)
because of the high cost of borrowing. If
you have a high-interest home loan, a credit card that offers poor rewards, a high-premium health insurance plan or an expensive traditional life plan, the best option to
plug the high degree of leakage is to either
negotiate with the issuer for a cheaper deal
or move to another player in the market.

SPENDING
These are the leakages that may seem small
but add up to an enormous, insidious outflow over the years. AL/HABITUAL

EMOTIONAL SPENDS
Spending habits and addictions are like termites eating into your budget. Do you think
you are entitled to a gift after a fight with
your spouse? Or feel you deserve a lovely
dress after a good bonus? This retail therapy may improve your mood, but if you forget to factor it in the budget, it will make for
a substantial leak. If you are spending, say,
`1,000 a month on seeking emotional
boosts, you are losing `12,000 a year.
Similarly, habits like smoking or eating
gutka can burn a neat hole in your budget
(see table). In fact, a 25-year-old can blow
up nearly `65 lakh in 35 years if he uses to-

bacco. If he smokes 8 cigarettes a day, he


spends close to `2,000 a month. If this is invested every month, he could amass `52.2
lakh in 35 years at 8.5%. Add to it the cost of
higher insurance premium and healthcare
costs, and you could lose a fortune.

LATTE FACTOR
Author David Bach coined the term latte
factor, which is used to describe small
amounts of money spent on a regular basis
that can add up to a substantial sum. It can
include things like money spent on coffee,
juices, snacks, parking tickets, even lunching out every other day. So, if you pick a
packet of `10 chips every day, you will end
up spending `300 a month. If you were to
invest this sum at 8.5% return and the price
of chips rises at 5% a year, in 20 years, you
would have `3.58 lakh.
While its not easy curbing these expenses, try noting down every single rupee you
spend in a couple of months. Then figure
out whether you need to curb these expenses or make a provision in the budget. The
latter will allow you to fix a threshold to this
category of spending.

FOOD WASTAGE
The two reasons food causes leakage is because you eat out too much or because of
flawed buying patterns. If you purchase perishable food in bulk or go shopping for groceries without a list, you are bound to waste
food or spend more than required. One of
the reasons for my leakage is dining out, but
I try to curb it consciously through budget-

Small spends create a big leakage


Chocolate
@ `5

Leakage: 5% of total bill amount (water)

Chips
@ `10

Ice cream
@ `15

Car parking
@ `20

Momos
@ `50

POLLUTION CHECK
Deadline: One year (validity) for Delhi
Leakage: `1,000 for first offence; `2,000
for subsequent offences.

LEAKAGE
IN A MONTH
(25 DAYS)
LEAKAGE
IN A YEAR

`125

`250

`375

`500

`1,250

`1,500

`3,000

`4,500

`6,000

`15,000

Cover Story

ing, says Kolkata-based Dhiraj Das.


The best way to tackle this is to spend on
dining only after you have saved, invested
and spent on essential items. Another remedy is to plan your meals, buy food only for a
week and make a list to avoid duplication.
Select food as per its shelf-life, using green
vegetables first, and use canned and bottled
food before expiry dates. I never go shopping without a list and make a point of sticking to it, says Delhi-based Rupali Brar. She
also makes lists at the start and end of a
month to implement her budget well.
Never go shopping for food with kids as
their pester power will see you picking more
junk food than is needed. I end up buying
chips or sweets when I take my kids, aged 10
and 7, with me. This raises my average
monthly budget by `300-350, says Mehra.
Also, dont go shopping on an empty stomach because you will end up buying more.

SHOPPING & TRAVELLING


Online or otherwise, shopping is a penchant
that takes a toll on many a budget. Shopping and unplanned travel are two big reasons my budget is inflated by nearly 20%
every month, says Mumbai-based Ujas Selarka, manager in a professional services
firm. However, I try to evaluate my needs
and wants and delay or postpone purchases
that dont fit into a particular months budg-

The Economic Times Wealth, February 15-21, 2016

et, he adds.
Shops and e-tailers are adept at breaking
shoppers psychological barriers, which explains the year-long sales on one pretext or
another, a price threshold for free delivery
in online shopping, free trial offers, heavy
discounts, etc. All these are aimed at making
you buy and spend more even though you
dont particularly need a given item. This is
not even counting the faux sales that hike
the original prices, brandish misleading rebates, or dish out poor quality stuff. Suppose
there are two offers in a sale. The first, Buy
one, get one free, offers a pullover free if
you buy one for `1,599. In the second Buy
one, get second at 50%, if you buy two for
`999 each, you will spend `1,499, or `100
more in the first case.
Most such leakages are lifestyle spends
over which people dont have control, says
Maalde. Keep a fixed budget, say, 5% of
your income and dont just buy the next
phone or gadget that comes in the market.
Even while travelling or on a vacation, plan
well. If you have a budget of `60,000 and
end up spending `1 lakh, `40,000 is your
leakage, he adds.

HOUSEHOLD WASTAGE
Your house has endless sources of financial
drainage. Is there a leaky tap in your toilet?
Are your home appliances and gadgets on a

05

Rupali Brar
40, DELHI

MY MONTHLY BUDGET

`60,000

LEAKAGE

10%
MAIN SOURCE OF
LEAKAGE
Unexpected car or
scooter breakdown.
Shopping.
HOW I PLUG IT
By accounting for all
expenses at the end of
the month. Keeping a
tighter rein on spending
in the next few months.

06

Cover Story

The Economic Times Wealth, February 15-21, 2016

6 WAYS TO LEAK-PROOF
YOUR BUDGET
USE BUDGETING APPS OR ENVELOPES

Most budgets spring a leak because they are not implemented well. To
account for each paisa, you need to track your expenses under various
heads and reconcile these with your income. So, note down all your
expenses in a diary or on your mobile, and do it consistently. You could use
envelopes to put in money at the start of the month under different
categories, say, utility bills, entertainment, childrens fees, insurance
premium, etc. At the end of the month, compare your income with your
outgo to identify leaks. Another way is to download a budgeting app that
will do all this for you. You could pick from:
i) Money View: This comprehensive Android app not only sets the monthly
budget and keeps tabs on category-wise spending, but also tracks your
bills and ensures you dont miss a payment. It organises your bank balance
and credit card accounts, and tells you the best ways to manage shared
expenses. Download from Google Play.
ii) Mint: One of the best budgeting apps, it keeps track of your expenses,
income and cash flow, and integrates card and bank accounts. It even
analyses your spending habits and gives you tips on where to save.
Download from App Store or Google Play.
iii) Mvelopes: Available on Android and iOS, it breaks down the monthly
budget (food, entertainment, etc.) and puts it in as many as 25 envelopes
(free version). If the money in an envelope is over, wait till the next month
or transfer money from another envelope. It also integrates four online
financial accounts and credit card accounts. Download from App Store or
Google Play.

SPENDING RULES

DONT MISS DEADLINES

The 50/30/20 rule should help straitjacket your spending and stick to your
budget. Assign 50% of your income to necessities like utility bills,
groceries, etc. The next 20% should go towards paying debts and saving for
goals. Lastly, 30% can be used for entertainment. This will not only ensure
smooth cash flow but also avoid discretionary spending. Also, never go
shopping for essentials, especially food, without a list.

Kill two birds with one stone by giving ECS mandate to your bank,
insurance company and mutual fund company, among others, for your
SIPs, premium payment and bills. This will not only ensure that you dont
bypass any deadlines and incur penalty, but also help cut out on dining out
too often or shopping without agenda. Save first, spend later is a motto
that never fails to curb fringe spends.

standby most of the time? Are the appliances


energy inefficient? Do you delay the servicing of your AC and car? If you answered in
the negative to most of these questions, you
are spending more than you should. Here
are some tips that can help you plug leakage
around the house.
Cars: Driving at 70 km an hour, rather
than at 90, will help reduce fuel consumption by 10%, while idling a 1,200 cc engine
consumes about one litre of petrol an hour.
So, if you stop for more than a minute, shut
off the engine. Keep your tyres properly inflated since one psi drop in pressure in all
four tyres can increase fuel consumption by
0.3%. Clogged air filters reduce fuel efficiency by 3-5%, while spark plugs in a poor condition reduce the mileage by up to 3%. If you
keep the clutch pedal pressed while driving,
youll consume 4-5% more fuel.
Water: Go for taps with aerated flow as
they save up to 30% water compared with
regular taps. An efficient and dual-flush system cuts the use of water by up to 60%.
Electricity: CFL bulbs use 20% of the
power compared with regular bulbs and last
10 times more. Cut power bills by 80% by using a mix of CFL and solar lighting. When
buying new gadgets, pick the most energy-efficient models with 5-star rating.

VOUCHERS/MEMBERSHIPS
Its almost a given that you will not utilise
your gym membership, but most people
dont learn till they have tried and failed. A
couple of years ago, I had impulsively enrolled in a gym as it offered a discount, but I
went for barely two months. I lost nearly
`12,000, says Selarka. He has learnt and not
repeated the mistake.
Then there are gift vouchers that can be
used only on the next purchase or come with
a time constraint; discount coupons with

short validity periods; retail store membership cards that charge a fee and offer reward
points; and credit cards with reward points
that are never redeemed. I recently spent
`150 for an upgrade of a membership card of
a well-known retail chain even though I
knew the benefits were minimal, says Ritika
Gupta, a boutique owner from Noida. There
are others like Das who are more careful. I
never go for such redemption offers and always redeem my credit card reward points,
says Das, who works for a private company.
Make sure you are not bulldozed by headstrong salespeople into buying cards and
vouchers you dont need. If you pick up discount coupons, redeem before their expiry.

CABLE/MOBILE PLANS
Sub-optimal plans, be it for phone, TV, Internet or magazine subscriptions, cause a big financial fissure. I had taken a two-year subscription for an IT magazine that cost me
`3,000. Since I barely read it, it was a waste
of money, but now I make a point of read
only online reviews, reveals Selarka. He
also found a way to reduce his landline, mobile and TV cable plan leakage of nearly
`5,000 when he cut one HD subscription because of minimal usage, and saved more by
selecting the best mobile and home broadband plans based on actual usage.
Most people shell out more for fewer
needs, or continue with subscriptions to servicese-books, gaming sites, music servicesthat they no longer use. My children
made me register my credit card for an online gaming site that had an automatic renewal of `999 every six months. After a
while, the kids stopped playing and I forgot
about it till I couldnt reconcile the mysterious `999 that started appearing in my credit
card bill. I cut the registration last year, says
Mehra. This is saving her `2,000 a year.

Dhiraj Das
41, KOLKATA

DUMP THE CARD, DONT CARRY CHANGE


If you are addicted to shopping, online or otherwise, cut your credit card
immediately. The one-swipe convenience can translate into a big breach in
your budget, besides big lumps of regret at the end of the month. But
remember that small change in your wallet could boost the latte factor,
making you spend on small treats or knick-knacks that you dont need. So,
preferably carry higher currency and only for the shopping you intend to do.

MY MONTHLY BUDGET

`40,000

BE PREPARED FOR SMALL EMERGENCIES

Did your car break down without a warning? Did you forget your friends
bday? There are other minor expenses you dont anticipate, such as a
wedding, a childs school excursion or broken shoes, a plumbing issue at
home, a medical expense, or a traffic violation. A one-time damage to a
home appliance or vehicle can push back your finances by `7,000-10,000.
I end up spending `5,000-6,000 on such expenses and theres nothing
much I can do about it, says Rupali Brar. Since there is no getting away
from such expenses, it is better to be prepared. Maintain a small corpus
of, say, `10,000, and keep it separate from the contingency corpus that
should be equal to 3-6 months household expenses.

RESEARCH & NEGOTIATE


Be it a loan, insurance, or a cable plan, dont buy without research and
considering all options in the market. If you are stuck with a sub-optimal
product on which you seem to be paying a higher interest or premium
home loan, health insurance, credit cardshift to a cheaper option or
negotiate with the existing company for a better deal. This will prevent the
leakage of several thousands of rupees from your monthly budget.

LEAKAGE

1-2%
MAIN SOURCE OF
LEAKAGE
Eating out and shopping.
HOW I PLUG IT
Factoring it in budget and
foregoing the expense in
subsequent months.

Cover Story

The Economic Times Wealth, February 15-21, 2016

Rolling over credit card bill bloats budget


If you pay due
amount in full

If you pay 50% of


due amount

If you pay minimum


(5%) due amount
EXTRA AMOUNT PAID
NIL

ASSUMPTIONS: You get a


bill of `10,000 due on 29 Jan.
Billing cycle is 5th of one
month to 4th of the next
month. Interest rate: 3%
monthly on due amount.
Average monthly purchase:
`5,000

`15,000

`10,150

`3,538

`21,978
`86,978

`65,000

`68,538

CREDIT CARDS

`5,785

TOTAL PAYMENT AFTER 1 MONTH

The best way to tackle such leakages is to


track your phone and Web usage for a month
and subscribe only to a plan that suits your
needs. Take out a couple of hours every few
months to take stock of the services no longer used or to end automated payments.

MISSED PAYMENTS
Procrastination and forgetfulness are twin

Das, who is otherwise particular about not


missing deadlines. A fool-proof way of
avoiding it is to set reminders on your
phone or give an ECS mandate to your
bank, insurance company or mutual fund
and have the money automatically deducted from your account.
Also make sure you know what you are
paying for, especially when it comes to big
purchases like a house or car. The builder
or agent will tag on fees or charges for facilities and options you may not need, and unless you question it, you will end up with a
higher cost.

TOTAL PAYMENT AFTER 1 YEAR

sins that can lead to big leakages. Have you


ever calculated the money lost for all the
times you forgot to pay insurance premium
or the penalty incurred on delayed utility
bills? (see Breach the deadline...) Have you
added up the charges levied on your childs
school fee that skipped your mind? For the
first time last year, I missed `6,000 as EMI
for my car loan. I had to pay `16,500 the next
month, which impacted my budget, says

Rolling over credit card bill is probably


among the most avoidable leakages and,
yet, very difficult to plug. Use of credit card
escalates spending because one doesnt
feel the pain of parting with money if the
payment is delayed, or what psychologists
term the coupling effect.
Not only can it land you in a debt trap
and ruin your credit score, but also disrupt
your budget and prove expensive in terms
of lost opportunity cost (see table). The high
interest of 3% a month can easily pay for a
goal if invested in the right instrument.
Besides, if you exceed your credit limit, the
issuer can charge a hefty amount for every
instance. The other hidden charges include
fuel surcharge, processing fee for an EMI,
late payment charge or cash withdrawal

07

charge. A bank even levies a charge for


non-usage of credit card.
The best way to avoid such seepage is to
carry cash instead of cards because the
process of spending will register more
starkly than a plain swipe of card. Also, if
the spending is extensive, destroy all but a
couple of cards.

Please send your feedback to


etwealth@timesgroup.com

08

Real Estate

The Economic Times Wealth, February 15-21, 2016

Build a house for less now


Prices of key construction materials are down and labour is easily available. If you are planning to construct,
extend or renovate your house, this could be the best time to set the ball rolling.

-5%

-21%
BRICKS

CHANGE
IN PRICE
SINCE
APR 2014

-18%

-10%

CEMENT

10%

8%

Construction material
now cheaper than in 2014

STEEL

5%

-15%
ELECTRICAL
FITTINGS

5%

Decline in prices of six key building materials have


brought down the total construction costs by over 6%

-6%

4%

15%

PAINTS

FLOORING
% SHARE
IN TOTAL
COST
Figures based on prices
in Delhi market .
Source: Delhi Govt

TOTAL
TOTAL

47%
NILANJANA CHAKRABORTY
his is not the best time to buy a
house. Though an estimated 2.45
lakh houses are lying unsold
across the country, the correction expected in property prices
has still not happened. Interest rates too are
not coming down. Even so, the dip in commodity prices means this could be the ideal
time to construct a house. Prices of key construction materials that account for nearly
47% of the total construction costs have
come down 6-21% in the past six quarters,
bringing down the overall costs by more
than 6% (see graphic). These figures are
based on prices of construction material in
Delhis Burari Market between April 2014
and September 2015.
Steel accounts for the biggest chunk of the
costs of construction material. Last week,
the government imposed a minimum import

current market conditions are perfect for


price on steel to protect the domestic indusyou to begin executing your plan.
try. This is likely to cause a spike in steel prices which had dropped almost 18% between
Cant buy in bulk
April 2014 and September 2015. The other
There are, however, certain limitations to
big component is cement. Cement prices
making the best of this opportunity. It is not
have hardened in the past few months but
easy to find space to store building materials
still remain 5% below their April 2014 levels.
like cement, bricks and steel. Even if you
Bricks, paints, electrical fittings and sanitarhave enough space, cement cannot be
yware are also cheaper now.
stored for extended periods of time.
Some other costs such as labour, arSo, you cant buy the entire steel and
chitects fee and other ancillary excement required for construction
penses would have obviously
Bankrolling
at one go. These will have to be
gone up in the past two years.
your home
makeover
purchased in small installments,
Also, the ban on sand mining
Page 29
according to usage. Moreover,
around Delhi has caused prices
many items will not be immedito go up. However, given the slowately required. Prices of paints,
down in the real estate sector, not
electrical fittings and tiles are
too many projects are taking off. This
down but they are needed when the
means artisans, labourers and construcstructure is ready, which could be 4-6
tion equipment are easily available now. If
months down the line. By the time you need
you have already secured the land and necthese items, their prices might have gone up.
essary clearances for your future home, the

-13.6%*
* Change in
weighted cost of all
six materials

Even so, if you have been planning to build


a house, this is the best time to take the
plunge. Overseeing the construction of a
home is an arduous task, which is why many
house owners endlessly procrastinate the
decision. But delaying the decision could
mean missing out on the low construction
costs. Our calculations show that if the total
cost of construction is `30 lakh, one can save
close to `1.9 lakh by acting now.
Keep in mind that construction involves a
lot of time-consuming paperwork as well.
Getting the initial permission from municipal authorities alone can take a few weeks.
Finalising the architectural drawings and arranging for finances also take up a lot of
time. So if you start now, the construction
might start only two to three months later.

Please send your feedback to


etwealth@timesgroup.com

10

Retirement

The Economic Times Wealth, February 15-21, 2016

Should you opt


for retirement
funds by MFs?
Investors need not rush to invest in retirement products by
mutual funds. There are better products in the market.

NARENDRA NATHAN
f you have been thinking
about planning your retirement, you now have more
options in the form of retirement products from mutual
funds. Even though Franklin India Pension Fund (FIPF) and UTI
Retirement Benefit Pension
Fund (UTI RBPF) have around
for decades, the Income Tax Department has only recently allowed more such funds, with Sec
80C benefits, to be introduced.
And after Reliance Retirement
Fund (RRF), which hit the market in February 2015, now HDFC
has launched its Retirement Savings Fund (HDFC RSF). But, are

mutual funds retirement products better when compared with


the existing products?
Lets take a look at the newest
retirement fund, HDFC RSF. This
funds equity plan, which comes
with a five-year lock-in period, is
similar to an ELSS fund. Since
ELSS, with a lower lock-in period
of three years, is available, why
go for a scheme with a higher
lock-in period and also a 1% exit
load, if redeemed before the age
of 60, asks Manoj Nagpal, CEO,
Outlook Asia Capital. Such products are also costlier because of
their small sizesmall schemes
charge a higher expense ratio.
Except for UTI RBP, other
schemes have much smaller as-

sets under management (AUM).


FIPFs AUM, for instance, is just
`339 crore. The expense ratio of
these products will be higher
than the national pension
scheme (NPS) but cheaper than
insurance products.
The main advantage of mutual
funds retirement products is
that you dont have to buy an annuity, as is the case with the NPS
or pension plans from insurance
companies. Instead, you can opt
for a systematic withdrawal plan
to meet your regular cash flow
needs. Since a part of the withdrawal is your principal, it will be
more tax-efficient as well.
Also, while the NPS restricts
your equity exposure to 50%,

KEY FEATURES OF RETIREMENT FUNDS


HDFC Retirement
Savings Fund

UTI Retirement
Benefit Pension

Franklin India
Pension Plan

Reliance
Retirement Fund

Plans

1. Equity plan
(80% - 100% in equity )
2. Hybrid Equity Plan
(60% - 80% in equity),
3. Hybrid Debt Plan (5%
- 30% in equity).

Only one plan. Invests


upto 40% in equity.

Only one plan. Invests


upto 40% in equity.

1. Wealth Creation Plan


(65% - 100% in equity)
2. Income Generation
(0% - 35% in equity)

Exit load

1% upto age of 60

1% upto age of 58

3% upto age of 58

1% upto age of 60

Lock-in period

Five years

Three years

Three years

Five years

The new fund doesnt offer big advantage compared to peers

Note: Tata Retirement Savings Fund has not considered because it doesnt offer Sec 80C benefits.

DECENT LONG-TERM PERFORMANCE


CAGR (%)
SCHEME

1 YEAR

3 YEAR

5 YEAR

10 YEAR

15 YEAR

Franklin India Pension Plan

-1.05

11.98

11.33

9.72

11.95

UTI Retirement Benefit Pension

-0.98

9.05

8.70

8.20

9.58

Reliance Retirement Fund-Income Generation

-0.48

Reliance Retirement Fund-Wealth Creation


Source : Accord Fintech, Complied by ETIG Database

with mutual fund products such


as the HDFC RSF, you can take a
100% equity exposure. However,
these products do not come with
the additional `50,000 in deduction, available to NPS. Mutual
funds have asked for the extra
tax benefit to be extended to their
products, but whether or not this
happens, will be known only
when the Budget is presented on
29 February.
Mutual funds pension products also offer greater liquidity,
compared with the NPS or products from insurance companies.
You can withdraw your accumulated corpus after the lock-in period3-5 yearsis over. You may
have to, however, pay a small exit
load, if you want to withdraw
your corpus but have not reached
the retirement age58 or 60, depending on the product. Calculating the lock-in period also varies
across funds. For instance, in the
case of HDFC RSF, the lock-in for
each instalment is calculated
from the date of investment. So,
the money you invest at the age of
59 can be withdrawn only at the
age of 64.
Should you buy?
Experts feel these retirement
products do not meet the requirements of the millennials.
The young generation wants to
retire early, so pension funds
should align with the aspiration
of this generation, says Nagpal.
Also, the one-cut-fits-all strategy
is not the ideal one, as each individuals needs are different. Instead of going for a pension plan
from a mutual fund, investors
should sit with their advisor and
design a pension plan according
to their needs, advises Arun Gopalan, VP, Research, Systematix
Shares & Stock.

-13.51
Existing retirement funds have generated
good returns for long-term investors

Please send your feedback to


etwealth@timesgroup.com

RETIREMENT
FUNDS STUCK
IN APPROVAL
BOTTLENECK
The mutual fund industry is peeved that the
Central Board of Direct Taxes is taking too
long to approve tax benefits under Section
80C for new schemes. At least eight
retirement mutual funds are stuck at the
approval stage, some of them for the past
15-18 months. Though Sebi wants fund
houses to launch retirement plans, only two
retirement mutual funds have been launched
in the past one year. The Reliance Retirement
Fund was launched in February last year and
HDFC Retirement Savings Fund was
launched this week. According to a report in
the Financial Chronicle, the industry body
Association of Mutual Funds in India (Amfi)
has written to the finance ministry to let Sebi
approve the schemes instead of waiting for a
nod from the CBDT. Permission should be
given to Sebi to approve the offer documents
instead of CBDT, the report quotes C.V.R.
Rajendran, Chief Executive of Amfi. In its
Budget wish submitted to the finance
ministry, Amfi has also sought additional tax
breaks for retirement mutual funds under
Section 80CCD, similar to those extended to
the NPS in last years Budget. Babar Zaidi

FUNDS IN PIPELINE
FUND NAME

PENDING
SINCE

SBI Retirement Benefit Fund

Aug 2014

Axis Retirement Fund

Nov 2014

DSP BR Retirement Benefit


Pension Fund

Dec 2014

Birla SL Retirement Fund

Feb 2015

IDBI Retirement Saving Fund

Apr 2015

LIC Nomura MF Retirement


Benefit Fund

Apr 2015

Canara Robeco Retirement &


Pension Solution

Jul 2015

ICICI Prudential Retirement


Income Fund

Jan 2016

Source: Sebi

Mutual Fund

The Economic Times Wealth, February 15-21, 2016

11

Are you making most of


the ELSS opportunity?
Most buyers dont invest systematically and withdraw when the three-year lock in period is over.
BABAR ZAIDI

Inflows into ELSS funds peak in last three months of the financial year

hey are very transparent, offer taxfree gains and high liquidity and have
very low charges. But the biggest draw
of ELSS funds is their potential to deliver spectacular returns. The best
performing ELSS scheme, Axis Long-Term Equity
Fund, has churned out over 18% compounded annual returns in the past five years. So, `60,000 invested in the fund in February 2011 is now worth
`1.4 lakh.
However, not all investors have made money.
ELSS funds carry the same risk as any equity
scheme and if you had invested in February 2015,
you would be sitting on losses. Thats why financial advisers and fund houses tell investors to invest in equity funds through monthly systematic
investment plans (SIPs). But it seems investors
arent listening.
According to data from Computer Age Management Services (CAMS), barely 15% of the total inflows into ELSS funds comes through SIPs. In
2014-15, SIPs accounted for only `578 crore of the
total inflows into the ELSS schemes of the 15 fund
houses serviced by CAMS. If extrapolated to the
entire industry, this means roughly `1,200 crore
came in as SIPs during a year when the total inflow into the ELSS category was `8,343 crore.
More than 85% of the inflows were one-time or
lump sum investments.
Figures from the Association of Mutual Funds
in India (AMFI) are more disturbing. Nearly 50%
of the total inflows into the ELSS category happen
in the last three months of the financial year. The
month of March alone accounts for 22-25% of the
total inflows. Instead of taking the safer and more
convenient SIP route, taxpayers are getting
caught in the rush of March and investing lump
sum in risky assets.
Delaying tax planning and investing in the last
few months can be disastrous. Calculations show
that if a taxpayer started an SIP of `5,000 per
month in the Axis Long-Term Equity Fund in April
2012 and continued till March 2015, the `1.8 lakh
invested over three financial years would be now
worth `2.95 lakh. However, if the investments
were bunched into the last three months of the
three financial years, the corpus would be 14%
smaller at `2.54 lakh. Not taking the SIP route
would have cost him `41,000.
The other mistake is that investors take a blinkered view of ELSS funds. Instead of looking at
them as a means to grow wealth over the long
term, they are seen as a short-term tax-saving investments that can be redeemed after three years.
Investments are followed by redemptions, so the
net inflows into the category are low and average
folio size is very low. ICICI Prudential Long-Term
Equity (Tax Savings) has given returns of over 21%
since it its August 1999 launch. `10,000 invested
in the NFO is now worth `2.42 lakh. But despite
robust inflows every year, the average folio size is
`61,220. This means very few investors have
earned the 21% returns since launch.

Instead of using SIPs, most buyers invest in lump sum during the tax
planning season from January till March

47.1%

Monthly inflows into ELSS (`cr)


2,000
1,750

12.5%

1,500
1,250
Inflows in last three
months as % of total
during financial year

1,000

51.9%
49.9%

750
500
250
0

A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J
2012

2013

2 01 4

2 01 5

Source: AMFI

SIPs generate higher returns than lump sum investing


Value of `5,000 SIP started in the best performing Axis Long-Term Equity Fund.
SIP FOR

INVESTMENT PERIOD

AMOUNT
INVESTED (`)

VALUE OF
REGULAR SIPS (`)

IF INVESTED IN
LUMP SUM IN
MARCH (`)

YOUR LOSS (`)

IMPACT ON
CORPUS (%)

1 year

Apr 2014-Mar 2015

60,000

70,869

55,658

15,211

-21.5

2 years

Apr 2013-Mar 2015

1.2 lakh

1.83 lakh

1.55 lakh

28,898

-15.8

3 years

Apr 2012-Mar 2015

1.8 lakh

3.13 lakh

2.78 lakh

34,914

-11.2

4 years

Apr 2011-Mar 2015

2.4 lakh

4.56 lakh

4.18 lakh

37,886

-8.3

5 years

Apr 2010-Mar 2015

3.0 lakh

6.03 lakh

5.65 lakh

37,798

-6.3

Data as on 10 Feb 2015; Source: Value Research

Investors dont take long-term view


High outflows indicate that investors redeem as soon as lock-in ends.
Inflows (`cr)

Outflows (`cr)

Net inflows (`cr)

ELSS AUM growth lags


that of equity funds
From 15% in 2012-13, ELSS category is
now only 11% of equity fund AUM.

8,343
6,613
2,626

2,908

2,661

-1,656
-4,282
2012-13
Source: AMFI

-1,642
-4,303
20 13-14

-2,924
-5,435
2014 -15

ELSS
(`CR)

%
CHANGE
IN AUM

EQUITY
FUNDS
(`CR)

%
CHANGE
IN AUM

2012-13

22,731

-3.9

1,49,777

-5.46

2013-14

25,547

12.4

1,65,560

10.54

2014-15

39,470

54.5

3,05669

84.63

2015-16

39,169

-0.8

3,45,181

12.93

3,689

2015-1 6

12

Financial Planning

The Economic Times Wealth, February 15-21, 2016

THE MONEY QUESTION


Should you invest an extra `50,000 in NPS to save tax?
Kapil is 40 and self-employed. He earns well
and has created assets for his family. His
investments include mutual funds, deposits,
equity shares and the like. His adviser has
recommended the NPS as a tax-saving
investment. The recent changes in the tax
regime offering an additional benefit of
`50,000 per year on investments in the NPS
has made it more lucrative. The adviser feels
this might be a good retirement planning
product for Kapil, who falls in the 30%
income tax bracket, as this benefit of
`50,000 is over and above `1.5 lakh under
Section 80C. An additional tax saving of
`15,450 is quite significant! Kapil is now
wondering if he should invest that extra
`50,000 in NPS to avail of tax breaks.

Paper
Work
PAN application by NRI
A PAN is mandatory for every person who
is required to file a return, and for those
who wish to carry out a financial transaction for which the quoting of PAN is compulsory. An NRI (non-resident Indian) also
needs to obtain a PAN if he falls into either
of the above categories. The procedure to
obtain a PAN is fairly simple and similar
across all categories of individuals. However, NRIs need to provide certain documents while applying for a PAN, which are
specific to them.

Form
NRIs who are Indian citizens have to apply
for a PAN by filling Form 49A, while NRIs
with citizenship of another country need
to fill up Form 49AA. These forms can be
accessed, filled and submitted online
through the websites of UTIITSL and
NSDL. On submitting the form, an
acknowledgement copy with a 15 digit
number is generated, which needs to be
sent to the designated address along with
other documents.

eres how the NPS works. Kapil invests in the NPS


Tier-I account. He chooses a fund manager and
decides the asset class mix of his retirement portfolio: equity (E), corporate bonds (C) and government securities (G). Equity investment is capped
at 50%. Kapil can choose to manage the portfolio actively or
passively (auto choice, which reduces equity exposure gradually with age). He will not be able to withdraw his funds until
he turns 60. Further, he will have to make a compulsory purchase of an annuity with at least 40% of the corpus amount,
while the balance will be paid to him as a lump sum.
The NPS is drawing attention because of its tax benefit.
However, Kapil must remember that NPS falls under the EET
(exempt-exempt-tax) regime. Hence, the benefit is just a tax
deferral. Instead of paying tax on his income today, he defers
the tax payment to a later date (20 years later) when he withdraws the money. Both the lump sum and the income from
annuity will be taxed at Kapils marginal tax rate. NPS might
prove to be a better bet from the RoI perspective, if he can
manage a lower marginal tax rate at the time of withdrawal.
Buying an annuity may not be the optimal choice for returns when he retires. While NPS offers a tax break now, the
benefits after retirement seem constrained. Kapil must not
base his decision purely on tax incentives on his current income. He should consider the taxation during withdrawal. He
must decide by evaluating the product based on two key parameters: Does the product fulfil a need like no other product
in the market does? Will the post-tax return scenario be in his
favour, compared with other EEE investments such as PPF,
EPF and ELSS? He might be better off with the EEE choices.

Fees
If the communication address provided by
the NRI is within India, the fees are `107,
and if it is outside India, the fee is `989,
which includes application fees and dispatch charges. In case of online applications, the fees may be paid through
debit/credit card or through Netbanking.
Alternatively, a demand draft favouring
UTIITSL /NSDL can be dispatched, along
with the documents and form.

Documents
Two photographs must be pasted in the
space provided in the acknowledgment
form. Also to be submitted is a copy of the
passport as proof of identity. Any of the
following will serve as proof of address:
Copy of passport
Copy of bank account statement in
country of residence
Copy of NRE bank account statement
showing at least two transactions in six
months and duly attested.
GETTYIMAGES

SMART THINGS TO KNOW: Direct Equity SIP

Online trading
accounts offered
by brokers include
a facility for investing systematically in chosen
equity shares,
using an equity
SIP.

Investors set up
an investment
amount, or a
given quantity
of shares, to be
bought at a certain frequency
over a fixed
period of time.

For example, an investor


can place a request to buy
100 shares or invest `5,000
in a specific share on the 5th
of every month, for say the
next 12 months. Choices for
amount, quantity, dates,
share and period are provided in the facility.

On the given date, a


market order for
the quantity (as
defined or arrived
at by dividing the
amount by the market price) is placed
by the brokerage to
buy the shares.

Equity SIPs enable the


accumulation of shares
of chosen companies
over time by placing a
request in advance.
Money is not debited
on placing the request,
but only on the execution of the orders.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.

Process
The signed form with the requisite
documents should reach the designated
address within 15 days of the online
application. If the payment mode is
demand draft, the PAN card is issued on
realisation of the payment, and dispatched to the communication address
mentioned by the applicant.

Points to note
 NRIs can provide a foreign address as residential or office address if they do not
have any Indian address of their own.
 PAN card dispatch facility outside India is
available only in select countries. It is best
to check the list before applying.

Financial Planning

The Economic Times Wealth, February 15-21, 2016

13

Do not compromise on
investments, insurance
Our inability to separate investment and insurance and failure to understand the benefits of pure term
plans while working towards our money goals are costing us dear, says Uma Shashikant.
nderstanding how many of us
think about protection and insurance can be a learning experience. My 30-year-old friend
has an ancestral home in a small
village in Karnataka. His grandparents
moved out in search of jobs about 40 years
ago. The house has been rented out for a pittance and is cared for by the local uncles.
While it is unthinkable for them to move
back into that house, in my friends mind it
represents a place he can go to, if all else
fails. A house in the village represents a
hedge in his mind, even if he might never
use it. The house is his mental equivalent of
an insurance policy. He has let go of a few
benefits for the comfort of a last resort at a
time of distress.
Our idea of insurance is woven around actions that provide mental peace. We prod
children to study well and get into a course
of study that would lead to getting a good
job. We like to believe that the premium we
pay for that education is a good insurance
for the children, who would be able to earn a
stable income in the future. It is common to
hear parents speak of education as an investment rather than a cost. So much so, that
parents dont think twice about pushing
children to become a ballet dancer, swimming ace and aeronautical engineer all
rolled into one. The willingness to incur
costs for unknown future benefits seems to
come somewhat easily.
But we are not able to think of a simple
term insurance in the same manner as the financial equivalent of an ancestral home or a
quality education. Not even if we dont have
an ancestral home or dont intend to depend
on our children in the future. We think that if
we saved and invested, we would be fine.
Building long-term wealth is the preferred
approach to securing our future and most of
us go about it without including adequate
life insurance cover in the mix. A term insurance product provides actual tangible benefit against the very real risk of losing a life.
Many of us dislike the product for two reasons: We dont want to think about death
and we consider paying a premium and getting nothing, if one survives the policy, to be
a bad idea.
When the desired outcomes are positive
and encouraging, we are motivated into action. Fees for coaching classes are easier to
pay. Repairs of ancestral homes are routinely done. But when the visualisation involves
disease and death, we are not likely to think
about it. Any long-term wealth-building
strategy is incomplete without basic life insurance. Only, we do not see its merit.
Assume that a 30-year old investor wants
to build a long-term corpus of `1 crore. If he
chooses to save and invest to meet his goal,

GETTYIMAGES

he would need to put aside say, `60,000 a


year (for 30 years, at an assumed return of
10% p.a.). If his life is at risk before he builds
this wealth, he should have it covered, so
that his family receives the corpus anyway.
Term insurance cover of `1 crore for 30 years
costs `10,000 a year in premium (actual
rates vary from `7,500 to `14,000 depending on the terms of the policy).
To an ordinary investor with modest
means, building a corpus of `1 crore takes
time. Insurance is the hedge that he can offer
his family, even as long-term wealth building
is in progress. Term insurance enables doing

it at a fraction of the cost it takes to build the


actual corpus, which makes it worthwhile.
In itself, the term policy seems wasted, but
combined with the investment, it seems logical and less painful. The positive outcome
from investments can offer motivation, providing the basis to view the term insurance
as a back-up plan for the same goal, if something were to happen mid-course. An insight
that is quite blatantly misused in the insurance marketplace.
Investors typically buy a bundled product that offers both insurance cover and investment return. The problem is that the

premium required for the same benefits is


much higher, due to two reasons. First, the
cost of the product is higher, which leaves a
smaller amount of contribution towards insurance. Second, the investment returns are
lower, which leads to a higher contribution
for the same benefit.
The better the return on investment, the
greater the speed with which an investor
moves to the desired level of wealth. A combination of a term insurance premium of
`10,000 and a lower annual investment of
`50,000 a year would still lead our investor
to the goal of `1 crore, if we increased the
requisite return on investment to 11% p.a.
When it comes to long-term wealth, return is
the lever that matters. If investment products in the market offer a better return, an investor who combines these products with a
simple term insurance will end up with a
higher level of wealth and equivalent risk
protection.
Therefore, products that offer a combination of insurance and investment should be
able to match or better the cost and benefit
of putting a term insurance and an investment product together. If their costs or investment performance is poorer, they shortchange the investment goals of the investor.
Investors lean on the comfort of protection
offered and fail to see the poor return; or
they are too taken in by the tax benefit to
evaluate whether they are paying too much
to reach the same level of wealth.
Many investors buy the wrong insurance
products, which yield poor single-digit returns, especially when they are bought at the
end of the year from persuasive agents who
can demonstrate the tax benefits. Higher
amounts are invested every year into products that offer lower return and a high cost
insurance. Both the cover and the corpus are
short-changed for a small tax benefit.
Investment decisions that are made in the
tax season tend to focus too much on tax savingsthe triumph of the urgent over the important. Investors routinely commit to insurance premia that they cannot keep up with
and end up discontinuing ambitious policies
that they bought without thought, or surrender them at a loss. Building long-term wealth
requires both investment and insurance. Do
not compromise that goal by settling for
poor investment return and expensive and
inadequate insurance cover, even if aggressive product promotions and persuasive sellers have you believe otherwise.

The author is Chairperson, Centre


for Investment Education
and Learning.

14

Learn & Keep

The Economic Times Wealth, February 15-21, 2016

Why would you like to retire in the next five years?

43% 34%
To spend
more time
with family.

To have freedom to travel


or pursue other
interests.

32%

Am tired of
everyday routine of work.

20%

27%

Want to pursue
another career
or voluntary
work.

Work is having a
negative impact
on mental/physical health.

(Base: Pre-retirees
aged 45+ who would
like to retire in the next
ve years.)

state of health

in retirement
Most people expect their health and
financial condition to improve in
retirement, reveals the new HSBC
survey, Healthy New Beginnings, on
the future of retirement. Here are
some other findings.

Which situation would make/made saving more difficult for your retirement?

40%

25%

Having poor
health.

39% 43%
Buying a
home.

Do you worry about


poor health interfering
with the following in
your retirement?

32%

31% 35%

22%

Partner
becoming
ill.

32%

Ability to take
care of myself.

Sending
children to
university.

26% 27%

Retirees

Sending children
to school.

31% 31%

My nancial
well-being.

Pre-retirees

My mobility.

31%

My ability to take
care of others.

Base: Pre-retirees and retirees

Why would you not be able to retire in the next five years?

72% 53%
I would
struggle
nancially.

I haven't
saved enough.

42%

I have dependants who rely


on my income.

To what extent do you expect


your health and financial
situation to improve/worsen
when you retire?

17%

I have a lot of
debt.

31%

(Base: Pre-retirees
aged 45+ who would
like to retire in the next
ve years but are unable to do so.)

It would be too
soon. I still have
a lot to give.

How much will you spend on healthcare provisions and/or treatment


for yourself in your retirement?

FINANCES

HEALTH

45%

54% 18%

24%

DONT KNOW

40% 40% 40% 51%

25-34 yrs

35-44 yrs

45-54 yrs

55-64 yrs

(Base: Pre-retirees)

Improve

Worsen

Improve

Worsen

(Base: Pre-retirees)

What, if anything, currently prevents you from leading a healthier lifestyle?

30%

To what extent do you expect your overall health to improve or get worse when you retire?

25%
25-34 YRS

48% 24%
35-44 YRS

41%

22%
45-54 YRS

47% 25%
55-64 YRS

48%

GRAPHICS

Get a little/a
lot worse
Improve a
little/a lot

RAJ

Source: Healthy New Beginnings was conducted in 17 countries among 18,207 people of
working age (25+) and in retirement. The research was conducted online in September and
October 2015. The study had 1,011 people from India. All responses do not add up to 100%
due to multiple choices.

15%

Nothing
prevents me.

19%

38%

Work
commitments.

27% 34% 20% 26%


Lack of free/
leisure time.

Affordability/
too expensive.

10% 19%
Poor health
condition.
Retirees

Pre-retirees

16

Family Finances

The Economic Times Wealth, February 15-21, 2016

Hardik Rathod, with his younger


sister, in Mumbai.

NET WORTH OF
RATHOD
Asset

Current
value (`)

EPF

2.5 lakh

Stocks

1 lakh

Mutual funds

4,000

Total assets

3.54 lakh

Liabilities

Current
value (`)

Loan

Nil

Total liability

Nil

Approximate net worth

`3.54 lakh

Since I am single right now, my risk appetite is high and I would


like to invest for my goals accordingly.
HARDIK RATHOD

Rathods cash flow


Inflow

Funds needed to achieve goals


Goal

Rathods income
`33,000

Total monthly
income
`33,000

Outflow
Total monthly
expenses
`12,458

Time to
achieve
(years)

Future
cost (`)

Resources used

Emergency fund

82,500

3,500

Vacation

70 lakh

6,000

Retirement

34

4.65 crore

EPF, Stocks

`16,542

Household
expenses
`12,000

Investments

`4,000

A comprehensive plan has


been mailed to Rathod.

Insurance premium

`458

4,000

Investible surplus needed

13,500

Additional insurance cost

750

Total

Surplus

Further
investment (`/
month)

Surplus
* After six months, Rathod will take a `27 lakh home loan for which the EMI will be
`14,250, and will get an approximate monthly rental income of `8,000.
Annual rate of return assumed to be 13% for equity, 9% for equity income
funds and 8% for debt funds.
Inflation assumed to be 8%.

14,250
42*

Family Finances

The Economic Times Wealth, February 15-21, 2016

17

Planned investing, early


start to ensure security
Having realistic goals in line with income means Mumbai-based Rathod will reach them comfortably.
RIJU DAVE

ASSET ALLOCATION
EXISTING

30%
Equity

70%
Debt

RECOMMENDED

60%
Debt

40%
Equity

f you have been putting off investment


citing low surplus, here are a few things
you could learn from Mumbai-based
Hardik Rathod. Despite a low salary,
this 26-year-old has maintained a high
savings rate, has started investing in mutual
funds through SIPs, is set to buy a house, has
formulated clear, realistic goals, and has
bought the right insurance. Most of these are
essential for good financial planning. An
early start also means that despite the current low net worth, he will have sufficient
time to save for his goals without stretching
his limited resources. To help him do this,
financial planner Pankaaj Maalde will prepare a plan that will act as a guideline.

Existing financial status


Rathod is a PSU employee and stays in
Mumbai with his parents and sister. He
brings in a monthly salary of `33,000 and
has been provided government accommodation, which means he saves on rent. He is
not married, but plans to do so in 2-3 years.
His current savings include `2.5 lakh in the
EPF, `1 lakh in nine stocks and `4,000 in
mutual funds, in which he has started investing recently. This means that his portfolio currently has 70% debt and 30% equity.
But as Rathod says, Since Im single right
now, my risk appetite is high and want to invest accordingly.
Of his total income, Rathod spends
`12,000 on household needs, `458 as insurance premium and invests another `4,000.
This leaves him with a surplus of `16,542,
which he wants to use judiciously for all his
goals. These include building a contingency
corpus, purchasing a house, going on a
vacation after his wedding, buying a car and
saving for retirement. While it may not be
possible to invest for all the goals immediately, Maalde explains how he can optimise
his investments.
Insurance portfolio
Rathod has been savvy when it comes to insurance and has bought an online term plan
worth `50 lakh. This means he doesnt need

RATHODS GOOD MOVES...

Buying online term plan.


Investing in mutual funds
via monthly SIPs.
AND THE BAD ONES...

Ignoring disability insurance.


Relying solely on health cover
provided by employer.
Not planning investment for
future goals.
to buy any more life insurance. As for health
insurance, he and his parents are covered
by his employer for a sum of `4 lakh. Since
this facility will continue even after retirement, Maalde suggests he continue with it
and look for a higher cover only after he
gets married. However, he should consider
buying an accident disability and a critical
illness cover worth `25 lakh each, which
will cost him `9,000 a year. This should take
care of all his insurance needs.
Road map for the future
Rathore can now start planning for his
goals, beginning with a contingency corpus
that is equal to three months expenses and
will amount to `82,500. Since he doesnt
have any resource that can be allocated to
this, Maalde suggests he start investing a
sum of `3,500 in an arbitrage fund for two
years to build the emergency fund.
Next, Rathod wants to go on a vacation
after three years when he is married and
this goal is likely to cost him `2.5 lakh at that
time. Maalde suggests he start investing a
sum of `6,000 in an equity income fund,
which invests 25% in equity and the remaining in debt. After two years, he can consider
shifting to an arbitrage fund or a recurring
deposit. This will accumulate the required
amount in the specified period.
Rathod also wants to purchase a house

worth `30 lakh in a period of six months.


With help from family, he will be able to
muster `3 lakh as down payment. He can
then take a home loan of `27 lakh, which
will result in an EMI of `14,250. Since
Rathod is a PSU employee, he is entitled to a
low rate of interest on the home loan, resulting in a low EMI. Besides, he wants to
rent the house, which will provide him with
a rental income of nearly `8,000. This
amount can be used to fund some of the
goals once the EMI payment starts.
Finally, Rathod wants to save for his retirement, which is nearly 34 years away. He
has estimated a requirement of `4.65 crore
assuming expenses of `13,000 per month
and an inflation of 8%. To achieve this goal,
Maalde has allocated the EPF corpus of `2.5
lakh and stocks worth `1 lakh. These will
yield `2.1 crore in the given period. This is
assuming that he continues to invest in the
EPF and works till the age of 60. For the remaining amount, Rathod can continue with
the SIP of `4,000 in a diversified equity
fund. He is, however, advised to shift his
stock investment to mutual funds.
Rathod also wants to buy a car worth `5
lakh after about five years. Since he doesnt
have the required surplus to invest for it,
Maalde advises that he put off this goal till
there is a rise in his income or after he gets
married and reviews his finances with his
partner.

Financial plan by
Pankaaj Maalde,
Certified Financial Planner

WRITE TO US
FOR EXPERT
ADVICE
Looking for a professional to analyse
your investment portfolio? Write to us
at etwealth@timesgroup.com with
Family Finances as the subject. Our
experts will study your portfolio and offer
objective advice on where and how much
you need to invest to reach your goals.

18

Your Queries

The Economic Times Wealth, February 15-21, 2016

Q A

QUESTION OF THE WEEK


work for a private company and will retire in about eight years. I
Q Ihave
`25 lakh in savings. How best can I invest this amount to

&

maximise returns, while paying less tax, to build a retirement corpus?

You could opt for eitheror a combinationof the following:


1. Invest `2 lakh per month`50,000 each in four schemesin equity mutual funds
through monthly SIPs, and withdraw the accumulated corpus via a systematic
withdrawal plan when you retire. This will provide a regular, tax-free income.
2. Invest in the Equity option of the National Pension Scheme (NPS). Half of your
contribution will be invested in equity index fund schemes. The balance will be
invested in bonds. After retirement, 60% of the accumulated corpus can be
withdrawn as a lump sum. The remaining 40% has to be converted into an annuity,
which, unlike the lump sum, is subject to tax.
3. If you are not comfortable with equity, you could consider purchasing an
apartment or a plot, with the aim of selling it on retirement. However, you should
be aware that such assets are illiquid. Also, you will have to pay long-term capital
gains tax at 20%, after availing of cost-indexation benefits.

Our panel of experts will answer questions


related to any aspect of personal finance. If
you have a query, mail it to us right away.
work for a PSU bank and 10% of my
Q Isalary
goes into the NPS. In this
financial year, my contribution to NPS will
be around `85,000. Can I claim deduction
for `50,000 under the new Section 80CCD
(1B) and for the remaining `35,000 under
Section 80CCD?

Yes, you can claim the deduction for


`50,000 under Section 80CCD(1B) and
`35,000 under Section 80CCD. Apart
from this, you can still claim deduction
of the balance `1.15 lakh by investing in
other suitable tax-saving options under
Section 80C.

JAYANT R. PAI
CFP AND HEAD OF
MARKETING, PPFAS
MUTUAL FUND

56 years old and want to generate a pension of `1.5 lakh


Q Iperammonth
after 12-14 years. I would prefer an LIC scheme,

have invested `1.5 lakh in PPF


Q Iand
`58,000 in NPS. Am I still

though I am not looking for insurance. I have a surplus of `1 crore to


invest. Please advise.

entitled to the employers


contribution of NPS (`58,000)
under Section 80CCD(2)?

You want an income of `1.5 lakh per month`18 lakh a yearafter 12 years,
from a surplus of `1 crore. Given your age, it is advisable that you invest the
surplus into a mix of equity and debt schemes, targeting an annual return of
10%. For a 10% return, your investment should grow to around `3.13 crore
after 12 years. To invest in equity, you should opt for diversified equity funds
with a proven track record. If you invest this entire amount into a debt
instrument, which fetches an annual after-tax return of 6%, you should be
able to generate an annual income of `18 lakh after 12 years.

Yes, you can claim deduction if the


contribution to the NPS has been
made by the employer. The deduction
will depend on your basic salary. If
your basic salary, excluding all
allowances and perquisites except
dearness allowance, is upwards of
`5.8 lakh, you can claim deduction of
`58,000 under Sec 80CCD(2). Else,
the deduction will be capped at 10%.
From this year, there is an additional
tax benefit on employees contribution to NPS up to the actual amount
invested or `50,000, whichever is
lesser. While details of this deduction
are awaited, you can claim a
maximum of `2 lakh in deductions. In
effect, an employee can claim the
entire benefit of `1.5 lakh on Sec 80C
instruments and claim the additional
`50,000 deduction for investment in
NPS over and above `1.5 lakh.
Employers contribution to NPS is
eligible for deduction up to 10% of
basic salary plus dearness allowance.
This deduction can be claimed over
and above Sec 80C and employees
contribution to NPS.

MINAL AGARWAL

SAILESH MULTANI

MANAGING PARTNER,
MAHESH K AGARWAL &
COMPANY

CHIEF FINANCIAL
PLANNER,
EDELWEISS BROKING

am 29 and save `4,000 every


Q Imonth.
I want to invest in
mutual funds (MF) via SIPs. Which
are the top funds to invest in?

Can the sale proceeds from an NRIs Indian property be


utilised for repayment of the housing loan taken in a foreign
country to save on capital gains tax?

According to provisions of the Income Tax Act, to claim exemption for


capital gain on sale of immovable property, it is essential that the new
property be located in India. Assuming that a foreign housing loan is taken
for the purchase of a property located outside India, it will not be possible to
save capital gains tax on sale of a property in India, even if you employ the
sale proceeds to repay the loan taken in a foreign country.

It is good to take an asset-allocation


approach to investing in
consistent funds, rather than
chasing top funds. If you plan to
invest for the long-term, we suggest
you start with a large-cap equity
fund like Birla Sun Life Front Line
Equity (70%) and a debt income
fund like HDFC Medium Term
Opportunities (30%). These are
consistent performers and would
be ideal for a starters portfolio.

SHUBHAM AGRAWAL
SENIOR TAXATION ADVISOR,
TAXFILE.IN

HOMI MISTRY
PARTNER, DELOITTE
HASKINS & SELLS

C.R. CHANDRASEKAR
CEO AND CO-FOUNDER,
FUNDSINDIA.COM

Ask our experts


Have a question for the experts? Mail it to
etwealth@timesgroup.com with Query as subject.

Mutual Funds

The Economic Times Wealth, February 15-21, 2016

19

Gold may get back some


of its sheen this year
have reserves to cover nine months of imports. Where are we headed?
At present, intervention is being carried out,
not to protect the rupee but to ensure that
there is an orderly movement of currency.
When the dollar is gaining strength vis--vis
most other currencies, the rupee cannot remain unaffected. If you look at it from the import perspective, nine months is fair, but India also has exports. The past months data
shows a slide in imports and exports. If exports slide more than imports, the trade deficit will widen. The RBI Governor has managed currency market expectations well. The
rupee being at 68 in 2013 had resulted in a
hue and cry, but the markets are far more tolerant now. Intervention has also been timely.
We received an FDI pledge, courtesy of our
Prime Minister, and as and when that happens, it could lead to currency appreciation.
We are confident that the RBI will step in to
buy dollars just as it is selling now. For now,
$350 billion is reasonable enough to tide
over, in case of a pseudo currency collapse
or currency fiasco.
What will be your strategy with the RBI electing to maintain status quo on interest rates?
The status quo on rates was in line with expectations. On the yield curve front, the long
-end yields have risen higher than the shortend, making the curve steep. This is on account of the lack of commensurate demand
for long bonds and lack of clarity regarding
future rate cuts. We will therefore, refrain
from adding more long positions to our portfolio. Further, we will wait for the Budget before tinkering with the current portfolio.

Lakshmi Iyer
Chief Investment
Officer (Debt) & Head
Products, Kotak
Mutual Fund
Global pressures are bound to
affect India, but the RBI has
managed currency market
expectations well, Iyer tells
Anuradha Himatsingka &
Atmadip Ray.

There are conflicting opinions about the impact of China on India. What are your views?
China is a manufacturing hub and there has
been a clear slowdown there. Whether we
like it or not, we cant remain aloof, despite
our strong macros. If the situation in China
worsens, there could be multi-level impact
on us. In case the Chinese currency depreciates, we will not be able to stay isolated. If
our currency starts depreciating, it would
lead to FII outflows This will put pressure on
the currency. A global slowdown is in the offing. We are the fastest growing economy in
the world, but if global factors dont settle, it
could pose a threat to us.
In the past few weeks, close to $5 billion was
withdrawn from Indias forex reserves. We

What do you think of the ministrys decision


to link small savings interest rates with government securities?
Thats the way it should be. If you have to
give 8.5% return to small savings investors,
where would you invest? The yield curve on
government bonds is below 8.5%. The corporate PSU curve is also under 8.5%. If you
want to generate returns, you can go down
the credit curve; take an equity risk; or wait
for capital gains to add on to the portfolio. In
2015, there were hardly any capital gains.
To what extent will the RBI cut rates in 2016?
There could be a scope for an additional 2550 bps easing in 2016. RBI is likely to hold on
to rates after September, unless inflation
crash lands at 4.5%. The caveat here is that
this target does not take into cognizance the
recommendations of the Seventh Pay Panel.
What is your assessment of the credit profile
of Indian companies at present?
It is a mixed bag. Cyclical sectors will be un-

der stress. The commodity cycle is also not


very favourable, barring exceptions. Real estate is still not out of the woods. The global
meltdown in commodities and the overall
slowdown in China have made some of the
related sectors vulnerable. There is more
fear than greed in the credit space, which
presents pockets of opportunity.
How have the revised exposure limits introduced by Sebi impacted your portfolio?
It has impacted the NBFC segment, which is
one of the largest issuers of credit in the private space. Since the announcement, yields
have risen by 80-100 bps. The revised norms
are yet to be formalised by Sebi. We are well
within the sector limits and dont foresee any
churn on account of these changes. We are
cherry picking good quality investments
wherever we were underweight.
How have you positioned your duration
funds at this juncture?
We have cut exposure to long-duration
bonds marginally, not substantially. Overall,
we have reduced our exposures a little by
selling long-end bonds and being positioned
more towards the belly of the yield curve.
What is the outlook for short-term debt
funds and long term funds in 2016-17?
In 2015, liquid funds and short-term funds,
including accrual debt funds, were among
the higher return generating asset classes.
The lowest returns came from duration
funds. In 2017, the return gap between shortterm and long duration funds will narrow,
with long-duration funds catching up to an
extent. We have stayed constructive on the
short-term and accrual fund categories.
What are your views on the rupee movement
and gold scenario?
The rupee is likely to maintain its depreciation bias, given the dollars strength, as well
as our need to keep exports reasonably competitive. With the Fed likely to delay subsequent rate hikes, gold may get back some of
its sheen this year. While the view on gold is
not outrageously positive, the asset class
could deliver some returns.
Where is the 10-year bond yield headed?
Currently bond markets are facing more
headwinds. We are still optimistic about the
possibility of an additional 25-50 bps rate cut
in 2016. In response to that, the 10-year GSec benchmark has the potential of coming
down by a similar magnitude in 2016.

Please send your feedback to


etwealth@timesgroup.com

20

The Economic Times Wealth, February 15-21, 2016

smart
stats
ET WEALTH TOP 50 STOCKS

In
This
Section

Smart Stats
Mutual funds

21

Loans and deposits

24

Alternate investments 25

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result of this
exercise is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.

Fast Growing Stocks


PRICE `

RANK
Current
Rank

Previous
Rank

GROWTH%*

Stock
Price

Revenue

Net
Profit

VA L UAT I O N R AT I O S

RISK
Bear
Beta

No. of Consensus
Analysts
Rating

Top 5 stocks with the highest expected revenue


% growth over the previous year.

PE

PB

Div
Yield

CESC

417.70

27.35

289.11

26.96

0.92

2.05

0.10

1.68

1.55

26

4.77

Indiabulls Housing

PGCIL
LIC Housing
NIIT Technologies

2
3
4

1
4
5

136.70
406.60
485.25

38.89
75.26
24.21

41.76
65.64
148.90

14.20
14.72
25.91

1.86
2.61
2.18

1.47
1.16
1.88

0.35
0.22
0.16

0.91
1.52
1.85

0.53
1.48
1.34

46
46
28

4.91
4.39
4.46

LIC Housing

PTC India

60.40

31.66

41.77

6.99

0.58

3.51

0.18

1.78

1.81

17

4.75

PEG

Downside
Risk

R AT I N G

4.85

106
75
57

Reliance Power

54

J Kumar Infra.
Prestige Estates

51

Grasim Industries

3,392.15

24.20

64.84

17.75

1.34

0.53

0.31

0.90

0.85

27

Jagran Prakashan

155.95

33.82

63.13

21.12

4.44

2.18

0.37

1.16

0.72

25

4.76

Yes Bank

11

714.45

47.01

45.81

14.51

2.55

1.22

0.34

1.60

1.69

52

4.48

Oriental Bank

85.05

13.13

173.00

5.17

0.19

3.45

0.03

2.10

2.31

15

3.73

Prestige Estates

10

162.75

51.49

57.40

17.90

1.60

0.94

0.34

1.83

1.39

19

4.68

Least Expensive Stocks

Axis Bank

11

13

377.20

37.55

37.12

12.02

2.00

1.17

0.42

1.51

1.63

59

4.54

The 5 stocks with the lowest forward PE.

Kalpataru Power

12

15

167.15

21.49

95.31

21.44

1.16

0.83

0.21

1.82

1.26

16

4.69

JK Cement

13

10

443

27.77

52.37

21.62

1.92

0.90

0.33

1.44

0.86

20

4.68

Tata Chemicals

14

16

334.40

10.20

69.20

14.29

1.53

3.57

0.21

1.41

1.50

11

4.50

See revenue column in the adjacent table.

JK Tyre & Industries

5.16

Oriental Bank

5.17
6.99

PTC India

Unichem Laboratories

15

18

194.95

29.50

81.85

23.09

2.01

0.98

0.28

1.77

1.46

11

4.82

J Kumar Infraprojects

16

20

301.05

54.21

79.07

18.86

2.44

0.63

0.43

1.61

0.94

16

4.81

South Indian Bank

7.50

South Indian Bank

17

17

17.15

20.19

42.57

7.50

0.64

3.31

0.18

1.33

1.13

19

3.84

Oil India

7.53

JK Tyre & Industries

18

19

81.35

13.69

67.60

5.16

1.31

1.75

0.11

2.03

2.17

12

4.67

Tata Power

19

22

56.30

9.33

695.63

332.35

1.16

2.20

0.12

1.40

1.35

32

3.84

Hindalco Industries

20

21

63.70

6.33

73.57

15.46

0.34

1.49

0.20

1.80

1.69

34

3.50

ICICI Bank

21

14

199.25

22.96

17.25

9.45

1.37

2.41

0.66

1.40

1.31

53

4.45

M&M

22

29

1,126.60

21.46

47.09

21.22

2.58

1.01

0.47

1.26

1.03

47

4.40

Torrent Pharma

23

26

1,266.10

44.97

78.90

28.32

8.54

0.85

0.36

1.47

1.11

30

4.37

Cox & Kings


Greaves Cotton
Indiabulls Housing

24
25
26

27
23
25

177.00
121.70
614.35

2.45
8.08
106.00

333.10
144.64
44.02

29.02
21.39
11.26

1.17
3.62
3.32

0.54
0.85
5.76

0.11
0.15
0.49

1.71
1.32
1.60

1.02
0.96
1.25

11
14
14

5.00
4.57
4.43

Reliance Power

27

30

42.85

57.40

46.01

11.71

0.59

2.17

0.24

2.00

2.15

12

3.00

Maruti Suzuki India

28

38

3541.45

30.47

63.89

28.16

4.41

0.68

0.53

1.10

1.03

55

4.35

Cipla

29

32

540.85

48.64

79.52

36.83

4.03

0.37

0.45

1.29

1.04

44

4.09

ACC

30

NR

1,234

16.81

80.43

39.26

2.74

2.37

0.49

1.03

0.74

44

3.34

Coal India

31

36

305.10

20.43

23.98

14.08

4.79

6.60

0.61

1.29

0.95

47

4.38

See PE column in the adjacent table.

Best PEGs
Top 5 stocks with the least price
earning to growth ratio.
CESC

Cox & Kings

0.10

0.11

0.03
Oriental
Bank

0.11

0.12

JK Tyre &
Industries

Tata Power

BHEL

32

24

120.25

14.66

62.46

20.30

0.86

0.91

0.31

1.66

1.49

46

2.30

Glenmark Pharma

33

34

720.40

34.00

176.96

41.12

6.51

0.28

0.24

1.65

0.83

31

4.16

IRB Infrastructure

34

33

209.95

48.73

23.82

12.93

1.70

1.79

0.67

1.76

1.80

24

4.56

Simplex Infrastructures

35

40

245.95

18.35

91.40

21.22

0.82

0.19

0.21

1.63

1.01

16

4.00

Cadila Healthcare

36

31

319.80

28.69

105.07

28.43

7.70

0.74

0.27

1.65

0.88

37

3.62

Sobha

37

12

252.25

9.80

17.62

10.47

1.02

2.66

0.56

1.68

0.90

25

4.70

Allcargo Logistics

38

44

152.30

20.15

46.82

16.18

2.03

0.70

0.25

1.58

1.53

11

4.82

Oil India | 8.44

Ashok Leyland

39

39

80.90

38.29

903.43

165.73

5.02

0.52

0.18

1.60

1.54

43

3.77

Coal India | 6.60

UPL

40

41

387.70

21.22

34.97

14.60

2.85

1.26

0.46

1.73

1.15

26

4.73

Indiabulls Housing | 5.76

KEC International

41

37

101.70

14.23

50.25

16.28

1.97

0.84

0.32

2.11

2.36

23

4.65

Tata Global Beverage

42

NR

105.25

13.50

83.69

26.98

1.19

1.90

0.30

1.45

1.74

12

3.85
4.50

HSIL

43

43

258.40

18.17

54.78

20.19

1.42

1.30

0.48

1.62

1.31

14

IndusInd Bank

44

NR

811.15

40.32

32.50

21.00

2.77

0.48

0.79

1.24

1.14

55

4.56

Motherson Sumi

45

47

220.90

30.96

95.16

33.82

8.78

0.86

0.36

1.94

1.42

35

3.94

Coromandel International

46

49

158.90

10.89

16.28

11.49

2.10

2.73

0.39

1.33

0.84

18

4.33

Oil India

47

50

326.75

9.15

7.63

7.53

0.91

8.44

0.98

1.30

0.74

37

4.32

Hero MotoCorp

48

46

2,496.90

15.54

46.58

21.11

7.63

1.17

0.45

1.09

0.61

51

3.82

NCC

49

NR

56.95

2.50

422.48

46.34

0.93

0.66

0.16

2.38

2.03

21

4.30

UltraTech Cement

50

45

2,717.90

22.79

52.64

35.56

3.92

0.32

0.68

1.22

0.99

54

4.46

* The figures under this head are for expected growth. NR: Not in the ranking. Data as on 11 Feb 2016. Source: Bloomberg

See PEG column in the adjacent table.

Income Generators
Top 5 stocks with the highest dividend yield.

Tata Chemicals | 3.57


PTC India | 3.51

Dividend stocks are considered


safe stocks during a downturn.
Figures indicate what an investor
can earn as dividend for every
`100 invested.

Least Risky
Top 5 stocks with the lowest downside risk.

Methodology
The four filters used to arrive at
the Top 50 stocks
Only traded stocks: Of the about 7,000
listed stocks, only actively traded stocks
were considered.
Only big stocks: Only companies with
an average market capitalisation and
revenue of over `1,000 crore were
considered.
Only well tracked: We picked stocks
that are tracked by at least 10 analysts.
Only profitable and growing: We
considered only those stocks that are

expected to show growth in revenue, net


profit and EPS (earnings per share) in the
in the next four quarters. The final two
filters were that the companies should
have made profits in the past four
quarters and have a positive net worth.
Rating rationale
Having arrived at the final stocks
universe, we ranked them using the
following four principles.
A percentile rating (on a 1-100 scale) is
given to each parameter and the
composite ranking is arrived at using the
weighted average of these parameters.
1. Growth is the key...
Total weight: 30%, which comprises
10% weight to revenue growth, 10%

weight to net profit growth and 10% to


growth in EPS (the higher, the better,
for each parameter). Growth is
calculated by comparing the
consensus estimate for the next 12
months with the historical 12-month
values.
2. ... but only at reasonable valuation.
Total weight: 40%, which comprises
10% weight to PE ratio, 10% to PB
ratio, 10% to PEG ratio (the lower,
the better, for all three parameters)
and 10% to dividend yield (the higher,
the better).
3. Analysts views matter...
Total Weight: 20%, which comprises
10% weight to the total number of

analysts covering the stock (the


higher, the better) and 10% to
consensus rating (a composite rating
based on the recommendations by all
analysts who track a stock. Again, the
higher, the better).
4. ... and so do the risks.
Total weight: 10%. Two kinds of risks
were considered. A 5% weight was
assigned to downside risk and bear
beta each (the lower, the better, in
both cases).

The ranking methodology has been developed


by Narendra Nathan. A detailed explanation
of the methodology is available at

www.wealth.economictimes.com

Maruti
Suzuki
Hero
MotoCorp

1.10

1.09
PGCIL

0.91

ACC

1.03
Grasim
Industries

0.90
See downside risk and bear beta columns
in the adjacent table.

Smart Stats

The Economic Times Wealth, February 15-21, 2016

LAGGARDS & LEADERS

ETW FUNDS 100


B E S T

F U N D S

T O

B U I L D

Y O U R

Taking a long-term view of fund returns, here is a list of 10 funds


in each categoryfive leaders (worth investing) and five laggards
(that may be a drag on your portfolio).
LAGGARDS

P O R T F O L I O

2.2
Sundaram Growth Fund

4.99
DHFL Pramerica Large Cap Equity

5
IDFC Imperial Equity Fund

5.28
NET
ASSETS
(` cr)

R E T U R N S
3-MONTH

6-MONTH

1-YEAR

( % )
3-YEAR

5-YEAR

Religare Invesco Growth Fund



143.14

-7.59

-15.41

-10.4

14.11

11.5

2.99



275.07

-7.46

-16.68

-9.6

13.59

2.93



10,174.85

-6.84

-14.36

-11.3

13.46

12.22

2.16



118.60

-6.35

-13.38

-10.33

13.28

9.78

2.87

Religare Invesco Business Leaders Fund



241.34

-6

-12.15

-8.5

12.82

10.66

2.71

Religare Invesco Dynamic Equity Fund



74.95

-6.38

-13.05

-7.22

12.17

11.01

3.05

ICICI Prudential Focused Bluechip Equity Fund



9,731.64

-8.01

-14.81

-12.53

11.99

11.39

2.16

IDBI India Top 100 Equity Fund


Birla Sun Life Frontline Equity Fund
DWS Alpha Equity Fund

HDFC Large Cap Fund

EXPENSE
RATIO

Equity: Large Cap

5.31

14.1%

HSBC Dynamic Fund

The 3-year
return of
Religare Invesco
is the highest in
its category.

5.63
HDFC Premier Multi-Cap

Kotak 50 Regular Plan



1,231.12

-8.15

-14.65

-10.15

11.73

10.19

2.61

SBI Magnum Equity Fund



1,251.55

-7.67

-12.62

-9.55

11.61

10.6

2.43

LIC Nomura MF Equity Fund

UTI Mastershare Fund



2,998.49

-8.38

-16.28

-12.93

11.29

9.76

2.34

5.94

Reliance Focused Large Cap Fund



1,071.39

-12.05

-19.64

-12.94

10.74

9.41

2.46

Sahara Growth Fund

Tata Pure Equity Fund



827.23

-7.78

-15.24

-11.42

10.73

10.11

2.63

Franklin India Bluechip Fund



6,628.07

-7.56

-14.5

-9.44

10.32

9.63

2.2

Kotak Classic Equity



103.70

-7.23

-15.65

-13.61

9.7

9.86

2.94

Canara Robeco Large Cap+ Fund



102.42

-8.23

-17.18

-12.69

8.98

9.76

2.89

UTI Opportunities Fund



5,063.64

-9.77

-17.89

-17.73

8.89

10.2

2.25

ICICI Prudential Value Discovery Fund



10,664.05

-9.04

-14.61

-8.3

22

17.84

2.24

Franklin India High Growth Companies Fund



3,888.05

-13.8

-19.62

-14.11

20

16.83

2.26

6.07
JM Core 11 Fund

6.45
Taurus Bonanza Fund

Equity: Multi Cap

SBI Magnum Multiplier Fund



1,489.69

-6.21

-13.86

-4.4

18.47

14.42

2.43



574.24

-5.1

-11.9

-3.12

18.05

13.37

2.77

Religare Invesco Contra Fund



864.77

-6.81

-14.28

-9.68

17.78

13.44

2.69

Tata Ethical Fund



396.95

-6.44

-12.59

-4.86

17.72

15.07

3.01

Franklin India Prima Plus Fund



5,991.08

-6.47

-13.25

-6.83

17.2

14.7

2.26

The 3-year return of ICICI Pru


Value Discovery
is the highest in
its category.

12.86
Reliance Regular Savings Reg.

13.66
Reliance Growth

Kotak Select Focus Fund



3,745.12

-8.03

-14.87

-9.2

17.09

13.74

2.21

13.69



2,391.55

-8.39

-14.97

-9.99

16.88

12.45

2.28

Reliance Regular Savings Dir.



3,163.64

-4.78

-10.73

-4.03

16.55

14.69

2.32

13.73



2,762.00

-8.57

-14.71

-8.98

16.47

13.1

2.29

IDFC Sterling Equity

Mirae Asset India Opportunities Fund



1,391.25

-7.73

-15.47

-9.71

15.94

13.88

2.41

Birla Sun Life Special Situations Fund



133.80

-12.51

-16.37

-8.25

15.74

11.35

2.88

Franklin India Flexi Cap Fund

13.84
SBI Emerging Businesses

Tata Equity Opportunities Fund



1,081.90

-7.39

-13.77

-8.58

15.58

13.43

2.52

ICICI Prudential Multicap Fund



1,048.93

-8.92

-13.69

-6.92

15.47

11.97

2.51

HDFC Capital Builder Fund



1,032.54

-8.64

-14.56

-10.6

15.35

11.97

2.61

BNP Paribas Equity Fund



1,107.99

-6.29

-15.22

-9.61

14.99

13.9

2.48

HSBC India Opportunities Fund



542.74

-6.79

-15.48

-14.51

14.85

11.77

2.61

BNP Paribas Dividend Yield Fund



176.07

-6.46

-15.64

-7.9

14.71

13.96

2.73

11.57

Birla Sun Life Top 100 Fund



1,808.18

-7.19

-14.61

-11.26

14.49

12.72

2.33

Sahara Star Value Reg.

Kotak Opportunities



693.82

-8.41

-16.65

-10.04

14.33

11.47

2.73

ICICI Prudential Indo Asia Equity Fund



146.31

-9.84

-15.53

-11.66

13.93

11.7

2.77

L&T India Special Situations Fund



969.32

-7.9

-15.96

-11.71

13.85

12.75

2.52

UTI Equity Fund



4,642.75

-7.34

-14.79

-9.65

13.67

12.48

2.35

15.43

Mirae Asset India-China Consumption Fund



35.34

-11.61

-16.17

-10.81

13.41

2.95

HDFC Small and Mid Cap Reg

14.24
Sahara Star Value Dir.

Equity: Mid Cap

HDFC Small and Mid Cap Dir



3,356.05

-7.29

-16.06

-4.23

Mirae Asset Emerging Bluechip Fund

28.56

20.82

2.4



1,054.32

-6.09

-12.18

-0.26

28.19

24.1

2.55

17.52

Birla Sun Life Pure Value Fund



406.21

-5.6

-13.12

-5.21

26.06

18.23

2.73

Sahara Midcap Fund

JP Morgan India Mid and Small Cap Fund



655.32

-6.72

-15.43

-4.21

25.55

20.5

2.44

Franklin India Prima Fund



3,846.39

-5.91

-11.59

-5.35

24.24

20.47

2.31

HDFC Mid-Cap Opportunities Fund



10,639.48

-6.59

-13.94

-4.09

23.82

19.98

2.32



449.13

-6.49

-14.95

-2.22

23.34

22

2.69

BNP Paribas Midcap Fund


Religare Invesco Mid N Small Cap Fund



473.11

-6.25

-14.29

-7.01

23.13

20.17

2.74

Religare Invesco Mid Cap Fund



123.26

-5.81

-14.09

-6.46

22.85

19.67

3.01

SBI Magnum Global Fund



2,352.02

-5.05

-12.17

-4.53

22.55

20.27

2.47

28.5%
The 3-year
return of UTI
Midacp is the
highest in its
category.

4.93
Sundaram Balanced Fund

LIC Nomura MF Balanced

Canara Robeco Emerging Equities Fund



829.81

-8.58

-15.71

-2.69

27.69

21.64

2.93

SBI Magnum Midcap Fund



6.72

1,326.02

-3.74

-10.1

5.18

29.06

23.02

2.55

LIC Nomura MF Unit Linked Insurance



2,608.00

-5.69

-10.74

-1.83

29.27

23.19

2.4

Franklin India Smaller Companies Fund

Birla Sun Life Frontline Equity Fund

11.5
Religare Invesco Growth Fund

11.39
ICICI Pru Focused Bluechip Reg.

11.01
Religare Invesco Dynamic Equity Fund

17.84
ICICI Prudential Value Discovery Fund

16.83
Franklin India High Growth Companies

15.07
Tata Ethical Fund

14.7
Franklin India Prima Plus Fund

14.69
SBI Bluechip Fund

29.5
Mirae Asset Emerg Bluechip Dir

29.47
UTI Mid Cap Fund Direct Plan

28.56
UTI Mid Cap Fund

28.19
Mirae Asset Emerg Bluechip Reg

27.03
Birla Sun Life Pure Value Fund

35.75
SBI Small & Midcap Fund Dir.

34.34
SBI Small & Midcap Fund Reg.

33.79
DSP BlackRock Micro Cap Dir.

33.55
Reliance Small Cap Fund

32.89
DSP BlackRock Micro Cap Reg.

Hybrid: Equity oriented 5-year returns

6.01

Equity: Small Cap

12.22

Equity: Small cap 3-year returns

16.44

UTI Mid Cap Fund

ICICI Pru Focused Bluechip Equity Inst.

Equity: Mid cap 3-year returns

22%

Birla Sun Life Equity Fund


SBI Bluechip Fund

12.34

Equity: Multi cap 5-year returns

5.74

SBI Magnum Multicap Fund

LEADERS

Equity: Large cap 5-year returns

ET Wealth collaborates with Value Research to identify the top-performing 100 funds
across 10 categories. Equity funds and equity-oriented hybrid funds are ranked on 3-year
returns while debt-oriented hybrid and income funds are ranked on 1-year returns.

VALUE
RESEARCH
FUND RATING

21

Reliance Small Cap Fund



1,874.13

-9.52

-12.52

-2.31

32.53

21.37

2.44

7.19

DSP BlackRock Micro Cap Fund



2,233.01

-6.15

-11.65

5.27

32.89

23.34

2.43

Tata Regular Saving Equity Fund

7.23
Baroda Pioneer Balance Fund

15.51
Tata Balanced Fund

14.65
ICICI Prudential Balanced Fund

14.45
HDFC Balanced Fund

14.17
L&T Dynamic Equity Fund

13.98
SBI Magnum Balanced Fund
Annualised returns in % as on 10 Feb 2016.

22

Smart Stats

The Economic Times Wealth, February 15-21, 2016

Top 5 SIPs

ETW FUNDS 100


VALUE
RESEARCH
FUND RATING

Top 5 equity schemes based on 10-yr SIP returns.


NET
ASSETS
(` cr)

R E T U R N S
3-MONTH

6-MONTH

1-YEAR

Canara Robeco Emerging Equities Fund

( % )
3-YEAR

5-YEAR

EXPENSE
RATIO

19.09
IDFC Premier Equity Fund

Equity: Tax Planning

19.03

Axis Long Term Equity Fund



Birla Sun Life Tax Relief 96


Reliance Tax Saver Fund
Birla Sun Life Tax Plan
Tata India Tax Savings Fund
Religare Invesco Tax Plan
Franklin India Taxshield Fund

6,479.59

-3.36

-11.57

-3.35

25.03

20.56

2.51



1,947.66

-4.36



4,451.34

-8.97

-12.79

-4.94

19.63

14.26

2.38

-17.17

-17.16

19.27

16.24

2.37



283.92



233.77

-4.19

-12.72

-5.36

18.79

14.79

2.96

-5.69

-11.55

-3.51

17.53

13.79

2.73



254.63

-7.35

-14.42

-8.08

17.43

14.8

2.78



1,834.68

-6.19

-13.43

-7.1

17.26

14.87

2.39



2,794.48

-5.97

-10.19

-8.11

17.13

13.86

2.41



409.20

-5.39

-15.02

-7.93

17.05

16.35

2.82

DSP BlackRock Tax Saver Fund



1,103.86

-7.78

-14.96

-8.05

16.03

13.26

2.5

IDFC Tax Advantage (ELSS) Fund



356.21

-7.23

-17.42

-10.44

15.81

13.38

2.88

L&T India Prudence Fund



1,008.22

-4.14

-8.39

-1.46

17.94

13.97

2.76

Tata Balanced Fund

ICICI Prudential Long Term Equity Fund


BNP Paribas Long Term Equity Fund

Franklin India Smaller Companies

19.03
ICICI Prudential Value Discovery

18.60
UTI Mid Cap Fund

17.89
SIP: Systematic investment plan

As on 10 Feb 2016

Top 5 MIPs

Hybrid: Equity-oriented


5,010.49

-4.85

-10.59

-5.36

17.52

15.51

2.27

SBI Magnum Balanced Fund



2,892.74

-3.69

-7.05

-1.92

17.08

13.98

2.47

HDFC Balanced Fund



4,732.11

-6.65

-10.58

-5.97

16.59

14.45

2.13

Franklin India Balanced Fund



759.92

-4.37

-8.77

-3.97

16.04

13.3

2.75

ICICI Prudential Balanced Fund



2,458.96

-6.57

-10.8

-7.19

14.75

14.65

2.38

ICICI Prudential Balanced Advantage Fund



9,842.88

-5.15

-7.69

-2.2

12.64

13.61

2.35

% annualised returns

17.9%
The 3-year return
of L&T India
Prudence Fund is
the highest in its
category.

Top 5 MIP schemes based on 3-year SWP returns.


SBI Magnum Monthly Income Plan

11.50
UTI MIS Advantage Fund

11.12
ICICI Prudential MIP 25

10.69
Franklin India Monthly Income Plan

Hybrid: Arbitrage
ICICI Prudential Equity Arbitrage Fund



3,661.15

1.29

Kotak Equity Arbitrage Fund



4,728.35

1.36

IDFC Arbitrage Fund



3,130.61

1.28

2.82

6.98

8.35

8.53

0.87

2.91

7.05

8.32

8.45

0.89

2.87

6.86

8.14

8.35

10.63
Reliance Monthly Income Plan

9.87

Debt: Income
Kotak Medium Term Fund



1,146.71

1.68

4.07

8.73

1.69

IDFC Banking Debt Fund



1,256.12

1.75

3.68

8.4

0.32

HDFC Medium Term Opportunities Fund



4,078.55

1.59

3.72

8.22

8.87

9.2

0.28

ICICI Prudential Banking & PSU Debt Fund



3,270.29

1.16

3.81

7.88

9.09

0.37

DWS Banking & PSU Debt Fund



1,555.58

1.36

3.56

7.85

0.44

JP Morgan India Banking and PSU Debt Fund



464.17

1.47

3.54

7.79

0.55
0.37



4,944.49

1.31

3.83

7.64

10.04

9.86

Franklin India Income Builder Fund



1,714.02

1.16

3.38

7.23

9.31

10.11

1.94

DWS Medium Term Income Fund - Regular Plan



826.51

0.98

3.62

7.14

0.48

Tata Dynamic Bond Fund



1,004.41

0.61

3.24

5.17

9.5

9.18

1.73

UTI Dynamic Bond Fund



825.16

0.22

3.18

5.17

9.21

9.67

1.09

Birla Sun Life Dynamic Bond Fund



15,762.98

-0.75

1.89

5.06

9.03

9.54

1.36

ICICI Prudential Long Term Fund



846.77

-1.04

1.77

2.92

10.92

10.43

0.92

Birla Sun Life Treasury Optimizer Fund

8.7%
The 1-year return
of Kotak Medium Term Fund
is the highest in its
category.

SWP: Systematic withdrawal plan

% annualised returns
As on 10 Feb 2016

Tax Planning:
Cash Holdings
37.07

Debt: Dynamic Bond


19.87
10.56

8.83

6.11

All equity funds, including balanced equity funds, sorted on 3-year returns; debt funds ranked on 1-year returns

Returns as on 10 February 2016


Assets as on 31 December 2015
Rating as on 31 January 2016
Expense Ratio as on 30 September 2015

DHFL
Pramerica
Tax Savings Fund

Peerless
Long
Term Advantage
Fund

Tata Infrastructure Tax


Saving
Fund

UTI Long
Term
Equity
Fund

Tata
Tax Advantage
Fund

% as on 31 Dec 2015

Did not find your fund here?


Log on to www.wealth.economictimes.com for an exhaustive list.

Methodology

EQUITIES (figures over the past one year)

The Top 100 includes only those funds that have a 5- or


4-star rating from Value Research. The rating is determined
by subtracting a funds risk score from its return score.
The result is assigned stars according to the following
distribution:

Large-cap: Mostly invested in large-cap companies.



Next 22.5%



Middle 35%



Next 22.5%

Multi-cap: Mostly invested in large- and mid-cap


companies.

0.28

Mid-cap: Mostly invested in mid-cap companies.


0.22

Small-cap: Mostly invested in small-cap companies.

Top 10%



Debt Income :
Lowest Expense Ratio
0.23

0.24

Tax planning: Offer tax rebate under Section 80C.


(Not covered
in ETW Funds
100 listing)

Bottom 10%

Fixed-income funds less than 18 months old and equity


funds less than three years old have been excluded. This
ensures that all the funds have existed long enough to be
tracked for consistency of performance. Given the focus on
long-term investing, liquid funds, short-term funds and FMPs
are not part of the list. For the same reason, we have considered only the growth option of funds that reinvest returns
instead of offering dividends that increase the NAV of funds.
Despite these rigorous filters, the list includes 2/3 funds of
each category to maximise choice from the best funds.
The fund categories are:

International: More than 65% of assets invested abroad.

0.14

Income: Average maturity varies according to objective.


Gilt: Medium- and long-term; invest in gilt securities.
Equity-oriented: Average equity exposure more
than 60%.
Debt-oriented aggressive: Average equity exposure
between 25-60%.
Debt-oriented conservative: Average equity exposure
less than 25%.

Reliance
Banking &
PSU Debt
Fund

UTI
Banking &
PSU Debt
Fund

JP Morgan
India
Income
Fund

Sahara
Income
Fund

HDFC
Medium
Term Opp
Fund

Arbitrage: Seek arbitrage opportunities between equity


and derivatives.
Asset allocation: Invest fully in equity or debt as per
market conditions.

% expense ratio charged annually. As on 30 Sep 2015.


Methodology of Top 100 funds on www.wealth.economictimes.com

Mutual Funds

The Economic Times Wealth, February 15-21, 2016

23

KOTAK 50 REGULAR PLAN

A consistent outperformer
ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals
of the fund, its portfolio and performance to help you make an informed investment decision.

BASIC
FACTS
DATE OF LAUNCH

6 Feb 2003

Growth of `10,000 vis-a-vis category and benchmark

WHERE DOES THE


FUND INVEST?

CATEGORY

Equity

Fund

Portfolio asset
allocation

TYPE

`38,148

Fund style
box

Debt & cash


2.85%

AVERAGE AUM
`1,288.12 cr

Category

`31,716

Small Medium Large

Large Cap
15.13%
MID CAP

BENCHMARK

Nifty 50 Index

`10,000

LARGE CAP

Index

`29,901

Feb 2006

84.87%

Feb 2008

Feb 2010

Feb 2012

Feb 2014

Nov 2015

As on 30 Nov 2015

The fund has a stellar long-term track


record of outperformance.

Fund
Nifty 50 Index
Category average

Annualised performance (%)

WHAT IT
COSTS
NAVS*
GROWTH OPTION
`155.5
DIVIDEND OPTION
`30.63

EXPENSE RATIO^ (%)

9.77

6.24 7.50

1 year

1% for redemption
within 365 days
*As on 9 Feb 2016

3 year

-1.39

5 year

^As on 30 Sep 2015

The fund mostly takes a top-down investing


approach, placing emphasis on sector selection.

Top 5 stocks in portfolio (%)


8.38
7.66

Infosys
HDFC Bank

5.68
4.31
4.06

ICICI Bank

-4.49

-5.91 -4.61

8.77
7.94

Energy
Construction

EXIT LOAD

12.27

6 month

27.26
15.26
12.37

Financial

Automobile

15.95

2.98

Top 5 sectors in portfolio (%)

`5,000

2.61
10.51

The fund has a predominantly large-cap tilt,


with flexibility to invest upto 20% in mid-caps.

Technology

`1,000

Larsen & Toubro

-7.56

As on 30 Nov 2015

Reliance Industries

The fund has beaten peers across


different time periods.

The funds top picks are mostly leaders


in their respective sectors.

Yearly performance (%)

HOW RISKY IS IT?

42.47
31.39

4.26

6.76
2013

2014

Fund

Category

Index

Standard Deviation

15.35

14.00

13.94

Sharpe Ratio

0.39

0.25

0.13

12.75

10.26

8.49

35.15

3.77

6.92

INVESTMENT STYLE

Equity
97.49%

MINIMUM INVESTMENT
MINIMUM SIP AMOUNT

Growth Blend Value


CAPITALISATION

HOW HAS THE FUND PERFORMED?


With a 10-year return of 14.33%, the fund has out performed both the
category (average return: 12.23%) and the benchmark (11.58%) comfortably. .

-4.06 -1.93
2015

4.45

-4.19 -1.81
2016

FUND
MANAGER
Harish Krishnan

The fund has fared particularly


well in recent few years.

As on 30 Nov 2015

TENURE: 2 YEARS
Education: MBA

Mean Return

Based on 3-year performance; data as on 31 Jan 2016.

The funds risk-reward profile is


better placed than its peers.
All data on this page as on 31 Dec 2015, unless
specified. Source: Value Research.

SHOULD
YOU
BUY?

This large-cap biased fund has a healthy


track record of outperformance. It focuses on quality, growth-oriented businesseswhose valuations may be at a premium to the underlying benchmark

because of relatively higher growth as


well as higher return on equity. It mostly
invests in sector leaders that invest in
their business during a downturnwhich
drives down their costs. A top-down

approach implies the emphasis is more


on sector selection. The portfolio construction is mostly aligned to that of the
benchmark, which is typical of a largecap fund. The current fund manager took

over the reins only recently and is yet to


build a track record of performance.
However, with a strong investment team
in support, investors can monitor the
fund for a while before they invest.

24

Smart Stats

The Economic Times Wealth, February 15-21, 2016

LOANS & DEPOSITS


ET Wealth collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Dont miss the information on investments for senior citizens and a simplified EMI calculator.
Cheapest personal loans

Top five bank FDs


8.25
8.00
8.00
7.90
7.90

10,851
10,824
10,824
10,814
10,814

Tenure: 2 years
DCB Bank
J & K Bank
Oriental Bank of Commerce
Lakshmi Vilas Bank
Andhra Bank

8.20
8.00
8.00
7.90
7.75

11,763
11,717
11,717
11,694
11,659

Tenure: 3 years
DCB Bank
J & K Bank
Oriental Bank of Commerce
Lakshmi Vilas Bank
Andhra Bank

8.20
8.00
8.00
7.90
7.75

12,757
12,682
12,682
12,645
12,589

Tenure: 5 years
DCB Bank
J & K Bank
Oriental Bank of Commerce
Lakshmi Vilas Bank
Andhra Bank

8.20
8.00
8.00
7.80
7.75

15,006
14,859
14,859
14,714
14,678

Tenure: 1 year
Oriental Bank of Commerce
IndusInd Bank
J & K Bank
HDFC Bank
Kotak Mahindra Bank

INTEREST RATE (%)

Tenure: 2 years
DCB Bank
J & K Bank
Lakshmi Vilas Bank
Andhra Bank
Axis Bank
Tenure: 3 years
DCB Bank
J & K Bank
Lakshmi Vilas Bank
Andhra Bank
Axis Bank

11.45 - 14.45

ICICI Bank

11.49 - 22

Punjab National Bank

12.6 - 15.6

Central Bank of India

12.7

State Bank of India

12.7- 17.8
11

12

13

14

15

16

21

22

9.9

Canara Bank

9.9 - 9.95
9.95
9

10

11

12

13

14

15

16

17

18

19

Above `75 lakh


ICICI Bank
State Bank of India
Punjab National Bank
Bank of Baroda
Canara Bank

8.50
8.50
8.50
8.40
8.40

10,877
10,877
10,877
10,867
10,867

8.70
8.50
8.40
8.25
8.25

11,878
11,832
11,809
11,774
11,774

9.55
9.55
9.60
9.65
9.65

ICICI Bank
State Bank of India
Punjab National Bank
Axis Bank
Canara Bank

9.55
9.55
9.60
9.65
9.65

Punjab
National
Bank

United
Bank of
India

9.7 12.7%

9.7 11.7%

9.7 11.25%

12,946
12,870
12,832
12,776
12,776

15,378
15,228
15,080
15,043
15,043

Minimum
invt. (`)

Interest (%)

Monthly Income Scheme

Dena
Bank

Bank of
India

Central
Bank of
India

8.4

1,500

Maximum
investment (`)

Tax
benefits

Features

Single 4.5 lakh

5-year tenure, monthly returns

NIL

Joint 9 lakh

5-year tenure, monthly returns

NIL

Recurring Deposit

8.4

10

No limit

5-year tenure

NIL

Savings Account

50

No limit

`10,000 interest tax free

NIL

5-year NSC VIII Issue

8.5

100

No limit

No TDS

80C

Time Deposit

8.4 - 8.5

200

No limit

Available in 1, 2, 3, 5 years

80C*

Senior Citizen Saving Scheme

9.3 payable quarterly

1,000

15 lakh

5-year tenure, minimum age 60

80C

Kisan Vikas Patra

8.7

1,000

No limit

Can be encashed after 2.5 years

NIL

Public Provident Fund

8.7

500

1.5 lakh per year

15-year term, tax-free returns

80C

Sukanya Samriddhi Yojna

9.2

1,000

1.5 lakh per year

For girls below the age of 10

80C

*Benefit available only for 5-year deposit

Bank base rate (%)


As on 11 Feb 2016.

What `10,000
will grow to

8.20
8.00
8.00
7.80
7.75

15,006
14,859
14,859
14,714
14,678

Base rates are reference rates for all floating-rate home loans.

BANK

9.30

9.30

9.35

HDFC
Bank

State
Bank of
India

ICICI
Bank

9.50

Axis
Bank

15 YEARS

20 YEARS

25 YEARS

2,028

1,213

956

836

772

2,125

1,322

1,075

965

909

@ 12%

2,224

1,435

1,200

1,101

1,053

1,613

9.6513.25

9.6
-12.6

These are average rates for the entire tenure.

Post office deposits

Interest
rate (%)

10 YEARS

Cheapest education loans

Interest
rate (%)

9.55
9.55
9.60
9.65
9.65

@ 10%

2,379

20

9.8 - 9.85

Allahabad Bank

ICICI Bank
State Bank of India
Punjab National Bank
Corporation Bank
Union Bank Of India

@ 8%

@ 15%

19

9.75-10.1

State Bank of India


Bank of Baroda

9.55
9.55
9.60
9.65
9.65

Your EMI for a loan of `1 lakh


5 YEARS

18

Punjab National Bank

20 YEARS

Top five tax-saving bank FDs

TENURE

17

Interest
rate (%)

Up to `75 lakh
ICICI Bank
State Bank of India
Punjab National Bank
Canara Bank
Corporation Bank

What `10,000
will grow to

8.70
8.50
8.30
8.25
8.25

Tenure: 5 years and above


DCB Bank
J & K Bank
Oriental Bank of Commerce
Lakshmi Vilas Bank
Andhra Bank

INTEREST RATE (%)

10 YEARS

Interest rate (%)


compounded qtrly

8.70
8.50
8.40
8.25
8.25

Tenure: 5 years
DCB Bank
J & K Bank
Lakshmi Vilas Bank
Andhra Bank
IndusInd Bank

Syndicate Bank

Cheapest home loans

Top five senior citizen bank FDs


Tenure: 1 year
IndusInd Bank
J & K Bank
Oriental Bank of Commerce
Kotak Mahindra Bank
Lakshmi Vilas Bank

Cheapest auto loans


LOAN AMOUNT: `5 LAKH

What `10,000
will grow to

LOAN AMOUNT: `2 LAKH

Interest rate (%)


compounded qtrly

1,400

1,317

1,281

Use this calculator to check your loan affordability. For example, a `5 lakh loan at 12% for 10 years will translate into an EMI of `1,435 x 5 = `7,175

9.60

9.65

9.65

9.65

Punjab
National
Bank

Bank of
Baroda

Canara
Bank

Corporation Bank

Cheapest
gold
loans

9.65

State
Bank of
Mysore

9.65

Union
Bank Of
India

9.70

9.65

United
Bank of
India

9.70

Allahabad
Bank

Bank of
India

9.70

9.70

9.70

Bank of
Maharashtra

Central
Bank of
India

Dena
Bank

INTEREST RATE (%)


9.7 - 13.7

Allahabad Bank

11.1 - 12.1

Punjab National Bank

11.15

Andhra Bank

11.2

Syndicate Bank

11.5

State Bank of Mysore


9

10

11

12

13

14

15

16

17

18

19

All data sourced from Economic Times Intelligence Group (etigdatabase@timesgroup.com)

Non-traditional Investments

25

The Economic Times Wealth, February 15-21, 2016

Alternative investment
returns monitor
The scope and attractiveness of alternative investments is increasing. Heres a weekly tracker of returns from such investments. But dont
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.
Diamond Index

Precious Metals Index


1,607.81
1,562.62

20,320.1

269.81

11 Feb 2015

10 Feb 2016

3 Feb 2016

10 Feb 2016

122.02

11 Feb 2015

Coin Index

271.94

11 Feb 2015

133.57

Wine Index

15,000

11 Feb 2016

CHANGE

11 Feb 2015

0.51%
8.65%

1 WEEK

1 WEEK

1 YEAR

1 YEAR

3.19%
2.81%

The S&P GSCI Precious Metals


Index comprises gold (91.33%) and
silver (8.67%) and provides a benchmark for investment performance in
the precious metals commodity
markets. It is updated daily.

Overall Diamond Index is based


on actual transactions from 20
different market players and
reflects price movements in the
global diamond market. The
index is updated daily.

1 WEEK
1 YEAR

0%
0.78%

9.84%
35.47%

1 WEEK

1 YEAR

The Liv-ex Fine Wine 50 Index


tracks daily price movement of the
most heavily traded commodities in
the wine market. It includes only the
10 most recent vintages and is
updated daily.

The Krugerrand Coin index


represents the denomination of a
22 carat gold bullion coin weighing
one troy ounce that is listed for
trading on the Johannesburg Stock
Exchange.

Penny stocks update


Penny stocks as a recommended non-traditional investment? Not exactly. ET Wealth neither has the expertise nor
does it recommend investing in such stocks. But since the relatively low cost of investment attracts some investors
to penny stocks, we provide a weekly snapshot of this most volatile and uncertain type of stock investing.

Top Price Gainers


Stock

Top Volume Gainers

Market price
(`)

1-week (%)
change

1-month (%)
change

1-month
average volume
(lakh)

1-month
average volume
change (%)

Market cap
(` crore)

Vertex Sec.
Chandni Text
Sun Techno O

3.14
1.08
0.30

3.97
4.85
11.11

57
42.11
25

0.29
0.51
0

186.07
1898.31
-87.41

Gayatri Suga

4.00

8.70

24.61

0.22

1.42

17.48

Info-Drive S
Atharv Ent.
PS IT Infra
Shalimar Wir
Ramsarup Ind
Cubical Fin.

0.47
5.45
7.63
5.21
2.95
5.75

14.63
0.55
9.94
-0.76
-8.10
-0.17

23.68
22.47
19.59
18.68
16.14
15.23

11.19
2.21
0.41
0.02
0.15
0.02

2.53
-46.55
-6.53
254.78
51.04
-90.75

26.28
46.33
410.19
19.59
10.35
37.46

23.16
17.43
19.58

Top Price Losers


Urja Global
Syncom Healt
Era Infra En
Castex Tech
Indosolar
Gennex Lab
Andhra Cem.
GV Films
JCT
Westn.(I)Shi

1.82
7.55
1.99
8.22
7.69
7.83
6.24
0.86
5.76
2.58

Stock

Market price
(`)

1-week (%)
change

Safal Herbs

7.58

-3.44

Focus Indl.R
Chandni Text
Omnitech Pet
Avance Tech.
Khaitan Fert
Neha Intl.
Shalimar Wir
BLS Infotech
Sat Inds.

9.82
1.08
0.97
0.26
8.19
5.48
5.21
0.37
8.99

-10.89
4.85
-5.83
0.00
2.76
1.11
-0.76
-13.95
3.33

1-month (%)
change

1-month
avg volume
(lakh)

1-month
avg volume
change (%)

Market cap
(` crore)

-21.12

0.64

5,204.71

75.80

-9.16
42.11
-20.49
13.04
-18.02
-15.56
18.68
-5.13
-5.86

0.50
0.51
0.98
5.94
0.31
1.58
0.02
1.91
0.59

3,447.26
1,898.31
1,010.45
403.55
307.17
290.93
254.78
239.47
230.02

11.97
17.43
25.47
51.53
79.44
15.55
19.59
16.19
44.95

0
-26.52
-14.04
-37.46
-19.46

2.38
7.66
1.04
8.11
2.16

-84.57
-81.49
-81.30
-75.17
-71.94

Top Volume Losers


-7.14
-12.82
-21.03
-23.25
-16.05
-8.42
-16.69
-5.49
-17.48
-9.15

-53.81
-49.02
-43.79
-42.80
-39.06
-38.39
-37.97
-37.68
-37.46
-37.38

10.83
2.95
1.25
6.51
2.89
5.47
1.25
2.92
8.11
1.77

-49.29
-71.72
-21.58
-47.97
-42.45
-35.04
-62.34
-71.70
-75.17
-68.05

92.31
30.20
65.99
310.80
275.40
99.05
183.16
31.70
320.72
76.02

Aadhaar Vent
Udaipur Cemn
Chromatic
JCT
Sundaram Mul

0.12
9.67
2.94
5.76
2.69

Suryach.Powr

2.77

-1.77

-27.86

1.48

-71.75

41.45

Syncom Healt
GV Films
Kailash Auto
KS Oils

7.55
0.86
1.53
1.01

-12.82
-5.49
-1.92
-11.40

-49.02
-37.68
-20.73
-33.55

2.95
2.92
1.29
3.76

-71.72
-71.70
-70.42
-70.11

30.20
31.70
89.83
46.38

The stocks have been selected using the following filters: Price less than `10, one-month average volume greater than or equal to 1 lakh and
market-capitalisation greater than or equal to `10 crore. Data as on 11 Feb 2016. Source: ETIG Database and Bloomberg

0
-9.37
-1.34
-17.48
-1.47

18.85
285.46
20.89
320.72
58.0

26

Pick of the Week

The Economic Times Wealth, February 15-21, 2016

Alembic: Good long-term buy


The company is likely to sustain its high growth largely on account of its US business.
FDA. Alembic Pharmas US partner, which lost some market
lembic Pharma beat analysts 2015-16 third
share, has started gaining ground. To increase its US presquarter performance estimates. Aided by windence, the company also plans on ramping up its front-end in
fall gains from the sale its anti-psychotic drug,
the US and to directly launch some older productslaunched
Abilify, in the US, its third quarter revenue went
earlier through partners.
up 80% compared to the same period last year.
With both the domestic and the international businesses
Increased sale of high-margin Abilify also helped the compadoing well, analysts estimate Alembic Pharmas revenues and
ny improve its margins. Its earnings before interest tax depreprofit to grow 26% and 37% respectiveciation and amortisation (EBITDA)
ly between 2014-15 and 2017-18. Most of
zoomed 279% helping Alembic Pharthis growth will come from the internama report a net profit growth of 281%
tional business. Its revenue is expected
year on year (y-o-y).
see a compound annual growth rate of
The restructuring activity carried
35% during the same period. The reout by the management has led to a
7
cent fall in the counter has made the
marked improvement in Alembic
Buy
stock inexpensive. This growth stock is
Pharmas growth and profitability. Its
1
now trading below 16-times its historisustained focus on high-margin speciSell
cal earnings per share (EPS). The counality segment in the domestic market
ter provides a good opportunity for
has already started yielding fruit. In
long-term investors.
the third quarter, domestic branded
formulation grew 15% y-o-y, led by a
Selection methodology: We pick the
22% y-o-y growth in the speciality segstock that has shown the maximum inment. Speciality business has contribcrease in consensus analyst rating in
uted around 60% of domestic sales in
8
the past one month. Consensus rating
the past nine months. The company
Hold
is arrived at by averaging all analyst recplans to increase its share of speciality
ommendations after attributing
therapies by launching new products
High revenue and profit growth, a dozen
weights to each of them (5 for strong
and increasing on-ground sales force.
applications for approval generic
buy, 4 for buy, 3 for hold, 2 for sell and 1
In the third quarter, Alembic Phardrugs,and cheap valuations have made
for strong sell) and any improvement in
mas international generic business
the counter analysts favourite.
consensus analyst rating indicates that
grew 248% y-o-y. Though it may not
the analysts are getting more bullish on
be possible to maintain such excepthe stock. To make sure that we pick only companies with detional growth, the company should be able to maintain the
cent analyst coverage, this search is restricted to stocks that
momentum in the US market for the next few years. Alembic
are covered by at least 10 analysts. You can see similar conPharma is planning to file 10-12 abbreviated new drug applisensus analyst rating changes during the past week in the
cation (ANDAs)applications for generic drig approvaland
ETW 50 table.
plans to launch 79 products per year in the US market. It has
Narendra Nathan
received two ANDA approvals in last quarter from the US

Analysts views

Fundamentals
Actual

Revenues (` cr)
Operating profit (` cr)
Net profit / loss (` cr)
EPS (`)

2013-14
1,863.22
320.98
235.51
12.49

2014-15
2,056.13
353.19
282.92
15.01

Consensus estimate
2015-16
3,240.28
972.83
688.11
35.01

Valuation
Alembic Pharmaceuticals
Lupin
Glenmark Pharmaceuticals
Alkem Laboratories
Ajanta Pharma
Divis Laboratories

PBV
12.59
9.10
5.15
5.10
13.60
7.74

PE
15.94
40.18
36.31
33.01
30.98
26.67

2016-17
3,336.33
1334.05
592.06
32.11

Dividend
yield (%)
0.59
0.42
0.28
0.00
0.46
1.96

Latest brokerage calls


Reco date
3 Feb 16
25 Jan 16
25 Jan 16
23 Jan 16
22 Jan 16
22 Jan 16

Research house
Advice Target price (`)
Batlivala & Karani Securities
outperform
750
Nirmal Bang Securities
hold
755
JM Financial Institutional Securities buy
740
Firstcall India Equity Advisors
buy
730
ICICIdirect.com
buy
790
Karvy Stock Broking
buy
737

Relative performance
139.93

Market price: `590.80

100

80.44

11 Feb 2015

Sensex

Alembic Pharma

11 Feb 2016

Performance of Alembic Pharma compared with the Sensex.


Figures are normalised to a base of 100. Source: ETIG Database & Bloomberg

What experts advise

BUY
Stock

Research house

Advice

Market
price* (`)

Target
price (`)

Comment

Retain 'buy'. Positive outlook on domestic business. Expect it to grow


at 16% and 18% in 2016-17 and 2017-18 respectively. The valuation is
also attractive given its strong balance sheet.

Torrent Pharma

Nomura

Buy

1,266

1,787

Westlife Devt

Axis Capital

Buy

210

300

Upgrade to 'buy'. Westlife has taken multiple initiatives to beat the


slowdown and the same has started bearing fruits, and hence the
increased target price.

Ipca Labs

ICICI Direct

Buy

606

735

Upgrade to 'buy'. Though 2015-16 has been more or less washed out
due to a warning letter from the US FDA, increased the target price
because of improved visibility in its business outside the US.

Ashok Leyland

IDBI Cap

Buy

81

95

Upgrade to 'buy'. The recent correction in stock price provides a good


opportunity to invest from a long-term perspective, hence increased
target price.

Britannia Ind

Motilal Oswal

Buy

2,637

3,500

Retain 'buy. This is because of a consistent double digit volume


growth and improvement in margins in an otherwise sluggish
consumption demand environment.

SELL
Stock

* Market price as on 12 February

Research house

Advice

Eicher Motors

J P Morgan

Underweight

PNB

IIFL

Reduce

Market
price (`)

Target
price (`)

Comment

17,627

15,450

Retain 'underweight'. Going forward, the growth rates will moderate


from the elevated levels now due to reduction in pent up demand and
increase in competition in the lifestyle biking segment.

77

70

Retains 'reduce'. Punjab National Bank reported sharply lower net


profit for third quarter of 2015-16 and, but for a tax write-back, would
have reported loss for the quarter.

Technology

The Economic Times Wealth, February 15-21, 2016

27

GET
ANYTHING
DELIVERED
Home delivery is not a new concept,
but thanks to smart apps it has
become easier and simpler to get
things delivered to your doorstep.
Karan Bajaj takes a look at some
must have apps in this space.

GOODS

FOOD

Sending goods through courier works


when you have enough time. However, you
cant run around looking for a courier all
the time. The following apps help you find
a courier and even take care of packaging.

Ordering food has become simpler with


delivery services. You are no longer restricted to neighborhood restaurants and
moreover these apps dont even ask for a
minimum order quantity for delivery.

Pyck
You can choose from a preset (documents,
electronics, clothes, books) or mention what
you want to send on this app. Just enter the
pick-up address, select a time and provide
the delivery address. A person will come to
collect the goods, pack them in their warehouse properly and send them via the cheapest and fastest courier service available.

Fassos
Fassos is a food delivery app that delivers
fresh rolls, meal combos and even desserts from its own kitchens that are located across the city. The best part is that the
minimum order is `100 and thanks to
their multiple kitchen set-up, they are capable of delivering orders within 30 to 60
minutes. Whats more, you can even earn
credits by referrals that can be used to pay
for your order.

Pickrr
Pickrr focusses on deliveries within the city
using its own team. You can choose to have
items picked up, packed and delivered in
three optionswithin 24 hours, within 4-5
hours or within 90 minutes. Delivery rates
for each option differ and you are charged
on basis of weight too. You can choose a desired pick-up time and track the package on
the app.

Swiggy/Foodpanda
Both these apps work on the same conceptdelivering food from nearby restaurants. They detect your location and show
you restaurants in the vicinity from where
you can order. While Foodpanda restricts
you with minimum order value, Swiggy
has no minimum order requirements.

GROCERY
With increase in traffic and lack of personal
time, shopping for groceries has become a
tiresome chore. But you could use these
dedicated apps to get anything delivered to
your home without bothering about parking or queues.
Grofers
Boasting of over 1.75 lakh products in its
catalogue, Grofers lets you choose stores
near your location for faster delivery. You
can schedule delivery as per your convenience and even opt to pay cash on delivery.
There is a 100% return and exchange policy
but keep in mind that the refunds come
into your Grofers account as Grofers Cash.
BigBasket
Big Basket stands apart from other similar
services thanks to its big product catalogue
and 60 minutes express delivery service.
Moreover, it has offers and discounts available on one or the other product every
week. You can schedule your delivery time
and have the option of paying via various
digital wallet as well as cash on delivery.

MISC
Zopper
Zopper helps you get the best deals on electronics from stores in your city. You just
need to search for or browse through categories to find what you want and the app
will find the store offering the best price.
You can then order it through the app. The
Zopper team will pick up the product on
your behalf and deliver it to you.
GoodService
This service has been our favourite from
day one. With a simple chat interface, you
can ask for anything to be delivered or for
any services required. It informs you of the
cost in advance so you can choose to go
ahead with the request or not.
1mg
For medicine delivery, 1mg is our recommendation thanks to its easy to use interface and prompt service. You need to upload your prescription on the app to get the
medicines delivered. It shows you a cheaper substitute with possible side effects.
Not all apps have services available in all cities.

28

Your Feedback

The Economic Times Wealth, February 15-21, 2016

Readers response, online and in print, to ET Wealth stories has been


overwhelming and enlightening. We pick some that add information
and perspective to our articles from previous issues.

THE ECONOMIC TIMES

wealth

FRO
THE WM
EB

Monday, February 15-21, 2016

www.wealth.economictimes.com

Great quiz, but solutions please


The quiz, Whats your money personality that appeared as part of the cover story, Are you made for each
other? was excellent. However, what would have made it even better would have been suggestions on how
one could change the drawbacks in their personality.

BEST OF ARCHIVES
Protect your assets from disaster: You
cant stop natural calamities but you can
minimise their impact on your finances by
taking adequate insurance cover. Find out how.

Nuzhath Parveen, e-mail

Greed leads us to traps


Tax planning traps to avoid in the
Learn and Keep section was
informative. Many investors are
victims of greed and fall easily into
the traps set up by unscrupulous
brokers and agents. I feel senior
citizens should just keep their
money in fixed deposits to avoid
getting cheated.
Shamkant, e-mail

This refers to the article, Tax


planning traps to avoid. The
best way to go about it is to do a
little bit of research and invest on
your own. Nowadays it is very
easy to invest online for free or
for very nominal charges.
Prateek Senapati, e-mail

The article, Tax planning traps to


avoid was good and informative.
ET Wealth should do more stories

ing down people and making them


dependent on the job.

not only on this subject but also


on other products where brokers
and agents try to take undue benefit of peoples ignorance of hidden
or cumbersome rules.

The article, How to destroy a


career in 8 steps was nice. However, I never seem to come across an
article aimed at bosses, telling
them to avoid politics, discrimination and favouritism in the workplace. I hear a lot of stories from
co-workers and friends who face
such issues, but not much is written about the problem.

Satish Babu, e-mail

Apropos of the article, Tax planning traps to avoid, every tax consultant or broker will first think of
his fat margin and guide us accordingly. One has to study investments independently before putting in hard-earned money. All
thanks to ET Wealth for highlighting these tips.

In reference to the article, How to


destroy a career in 8 steps, I think
young Indians should learn to
stand on their own feet rather
than look out for jobs as career
options. Most jobs end up dumb-

LEARN & KEEP


10 tricks to spend
less while shopping:
If you end up splurging
at every trip to the
mall, go through these
research-backed
strategies to curb your
instincts.

Jagdish Chanddra, e-mail

DO YOU HAVE A PLAN?

A quarter of the 1,100 respondents do not have a health cover,


reveals the latest Bajaj Allianz survey. Here are some other findings.
Why did you buy a
personal health
insurance plan?

Do you have health insurance?

75%

All these stories are available at


www.wealth.economictimes.com

This refers to the article, How to


destroy a career in 8 steps.
Remain committed to the job, with
full dedication, and you will produce good results. Overreaction,
outspokenness, being provocative
and lethargic will not get you anywhere.

Talk about the bosses

NO

Are you aware of the pitfalls of ETF


investing? Though exchange traded funds
make good investing sense, you should not get
into them blindfolded.

Malleswara, e-mail

Gandhi Vadlapatla, e-mail

25%

Know your LTA rules: It will soon be that


time of year when you leave behind worries
and take off on a break. Alongside, you should
also carefully plan to make the most of LTA.

Augustus, e-mail

40%

76%

YES

Which lifestyle disorders do


you suffer from?

Its a tax-saving
measure.

Chronic
body pain

24%
It offers financial
security net
against medical
problems.

Why dont you have


health insurance?

46%

Cover is expensive.

22%

Too young to
have a cover.

17%

What kind of health insurance


cover do you have?

15%

Weightrelated
issues

18%
Hypertension

60%

Employerprovided
mediclaim
policy.

Unaware about health


insurance products.

Products are
complicated.

20%

10%
Respiratory
disorders

10%

30%

Personal
plan.

Both
employerprovided and
personal
health cover.

8%
Digestive
disorders

4%
High blood
sugar levels

Source: Bajaj Allianz General Insurance survey. It was conducted among 1,100 working professionals in 23-35 year age group, in January. It covered Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Pune, Hyderabad, Gurgaon and Goa.

The Economic Times Wealth, published by Bennett, Coleman & Co. Ltd. exercises due care and caution in collecting the data
before publication. In spite of this, if any omission, inaccuracy or printing errors occur with regard to the data contained in this
newspaper, The Economic Times Wealth will not be held responsible or liable. The content hereof does not constitute any
form of advice, recommendation or arrangement by the newspaper. The Economic Times Wealth will not be liable for any
direct or indirect losses caused because of readers reliance on the same in making any specific or other decisions. Readers are
recommended to make appropriate enquiries and seek appropriate advice before making any specific or other decisions.

PUBLISHED FOR THE PROPRIETORS, Bennett, Coleman & Co Ltd by R.Krishnamurthy at The Times of India Building, Dr. D.N. Road, Mumbai 400001. Tel. No.: (022) 6635 3535,
2273 3535. Fax: (022) 2273 2544 and printed by him at (1) The Times of India Suburban Press, Akurli Road, Western Express Highway, Kandivli (E), Mumbai-400101 . Tel. No.: (022)
28872324, 28872931, Fax: (022) 28874231. (2) The Times of India Print City, Plot No.4, T.T.C. Industrial Area, Thane Belapur Road, Airoli, Navi Mumbai-400708. Tel No.: (022) 2760 9999,
Fax: (022) 2760 5275.
EDITOR: Babar Zaidi (Responsible for selection of news under PRB Act). Reproduction in whole or in part without written permission of the publisher is prohibited. All rights reserved.
RNI No.: MAHENG/2014/57046. VOLUME 03 NO. 07

Last Word

The Economic Times Wealth, February 15-21, 2016

29

Securing business information


This New Delhi-based IT startup is setting new standards in information security.
VINAY DWIVEDI
ushrooming of marketplaces and service aggregators
almost makes it seem that
these businesses are all
that is to the Indian startup
scene. Not true. There are enterprises,
such as Innefu Labs, that buck the trend,
add variety, and solve critical problems.
Founded in September 2012 by two IT
engineers, Tarun Wig and Abhishek Sharma, Innefu Labs is an IT security solutions
company. Most vendors in India, including leading IT companies, have been focused on just providing IT services. Security products have largely been imported.
The space offered a huge opportunity,
says Wig, 32. Increasing incidences of cyber-attacks also called for the adoption of
more potent solutions. In the security
sphere, hacking has moved away from attacking an organisation to attacking key
users in the organisation, says Sharma,
31. To address the challenge, Innefu Labs
built AuthShield, a patented security solution. It employs an imageand speech
based authentication system. To log into a
system or an application, a user needs to
click a selfie from his phone or say a few
words. The selfie is then matched using a
3-D modelling pattern with the users features (stored in the software), to allow
him access to the device/application. For
voice recognition, the users speech pat-

Abhishek Sharma (left) and Tarun Wig, Co-founders, Innefu Labs

the companys R&D teams salary. Wigs house


became the companys office. We had a running joke in the office that Dell started from a
garage and reached such heights. Since we
were starting from the second floor of a house,
we could only do better, says Wig. This New
Delhi-based startup , which has grown its staff
strength from 10 to 48, reported a revenue of
`2.1 crore in 2014-15. It is about to close 2015-16
with a topline of `2.6 crore.
The biggest challenge for Innefu Labs was
gaining industry acceptability. Despite being
the first Indian company to get OATH (Initia-

tern is matched. The biggest advantage of this


technology is that it cannot be spoofed,
claims Wig. This is because the system employs a unique gesture recognition technology
and text-independent speaker recognition,
he explains. The product can also be used to
secure email clients on smart phones as well as
desktops, employees SAP accounts, etc. This
feature is not available in any other authentication solution in the market, says Sharma.
The founders invested `60 lakhtheir savings and loans from friends and familyto start
Innefu Labs. The entire sum went into paying

tive for Open Authentication) Certification, we had to put a lot of effort to be taken seriously, says Sharma. The founders
had to give umpteen number of product
demonstrations to win clients. Focus on
showcasing the product to the biggest
names in the industry, even though it prolonged sales cycle, eventually helped AuthShield gain acceptance and, thus, build
sales traction. Now, AuthShield is being
used by 50 organisations, which includes
information-sensitive institutions such as
the Defense Research and Development
Organization and National Housing Bank.
The Reserve Bank of India has reviewed
and approved the product, and could
soon start using it.
Demand for credible cyber security
products is only likely to rise, say the
founders, given the spate of cyber attacks
that are being witnessed world over.Next
generation wars will be fought in the virtual world. Countries with indigenous cyber
security products will have an edge. And
this is where we come in, says Sharma.
This bootstrapped startup is now in
talks with VC firms for funding to boost its
sales and marketing.In 2016-17, we intend
for a major sales push across the Indian
market. Subsequently, well target Sri Lanka and Bangladesh, says Wig.

Please send your feedback to


etwealth@timesgroup.com

Heres how to fund your home makeover


A little help from your lender can make your home renovation much easier on the pocket.
PREETI KULKARNI
epairing or renovating your
house is no easy task. It entails careful planning and the
execution process can be
gruelling. Then there is the
constant struggle to ensure that you
dont overshoot the budget. You can always avail of a home improvement loan
to ease the burden, but you need to understand the bearing s of such loans before applying for one.
Banks and housing finance institutions
extend home improvement loans to customers looking to make substantial
changes or repairs to the structure of
their homes. This includes tiling, flooring, internal and external plaster, roof repairs and painting. While the loan is offered to both existing home loan customers and new borrowers, the quantum is
higher for the former.
In this case (existing borrower carrying out repairs on the mortgaged property), the loan amount can be up to 100% of
the cost, subject to the total exposure, in-

Benefits of home
improvement loans
9.5-10%
 Tenure: 10-15 years
 Processing fee: 0.5-0.75%
 Prepayment fee: Nil
 Loan-to-value ratio: 75-100%
 Interest rate:

of the estimated renovation cost

30,000

 Tax benefits: Up to `

under Section 24, subject to


consolidated cap of `2 lakh

cluding all other loans on that property not exceeding 80% of the market value of the property, says an
HDFC spokesperson. New customers can expect 80-90% of their repair costs to be funded by such
loans.
If you have an existing home
loan, the process is quicker, as the
lender already has your documents.
In that case, your existing property
acts as collateral, says Manavjeet
Singh, Founder and CEO, Rubique.
com, an online loan aggregator. The
loan is usually disbursed in tranches, depending on the progress of the
renovation work.
However, the loan doesnt cover
furnishing or woodwork. Movable
furniture cannot be included in the
improvement funding, says Sukanya Kumar, Director and Cofounder, Retailending.com. Further, lenders only sanction loans
for reasonable expenses. For instance, for a house worth `30 lakh,

a flooring estimate of `20 lakh will


not be considered, she adds.
Once you quote an estimate, the
bank will send across a valuation
expert to confirm it, and to certify
that the loan amount is being used
for the cited purpose. The processing fee ranges from 0.5% to 0.75%
of the loan amount.
While you might be tempted to
opt for a personal loan or others,
given the long processing time involved in the issuance of a home
improvement loan, keep in mind
that the latter offers a number of
ancillary benefits. It bears a lower
interest rate than personal loans,
and has a longer tenure longer at 15
years, ensuring a comfortable repayment schedule. As an added advantage, home improvement loans
also yield tax benefits.

Please send your feedback to


etwealth@timesgroup.com

THE ECONOMIC TIMES


Officially
dating
Is it time for
you to be
exclusive?

MUMBAI
MONDAY
15 FEBRUARY 2016

www.etpanache.com

P2

ADVERTORIAL &
PROMOTIONAL FEATURE

There are no bubbles,


How does one
only pockets

for
KIRAN MAZUMDAR-SHAW, Chairman, Biocon Ltd

translate an
idea into an
opportunity?

Vinod Dham, the father of the Pentium processor, on the idea of a startup
bubble, big money valuations and why India should lose its service mindset

Investors want
money. Once
everybodys
investing, you dont
want to be left
behind, and so you
invest

The Intel
Pentium
processor

Sapphire
watch is a
transparent
marvel
Hublots Big Bang Unico
Sapphire will put a huge
dent in your pocket

Is it true you were forced into


engineering?
You should do what you want to
do because then work becomes
play. I was forced to shift from
physics. My brother felt I wont
be able to earn enough money
in my life. I dont blame him for
that. I ultimately ended doing
my masters in solid state physics, which is basically semiconductors.
The Intel Inside was a breakthrough campaign. How did
that come about?
Intel had existed since 1969.
It was only in 1993-94 that we
realised Intel chips were going into 90 per cent of the
computers, but no one
knew they come fitted
with the same processor
inside. It was then that
we came up with the
idea of the Intel Inside
sticker. Then Bill
Gates got his, and so
on and so forth. Thats
how it started.

Is smartphone heating bad engineering or a necessary evil?


Its a necessary evil. Physics
creates the heat. The
architecture has
been scaled over
the last 40 years
to one billionth
of the original.
Youve not scaled
only one thing, and
thats the voltage or
power supply.
If you dont scale everything, heat will be created as a byproduct. Youre
at an atomic level. So
youll have to live with
the heat. Alternately,
you can try chilling
and other mechanisms that Apple
Kunal
Bahl
is trying.

On the startup bubble

There are no bubbles, only


pockets. In the enterprise
software industry in
the US, there are 78
unicorns. Everybody
decided to go on
funding them. In the
process, if 20-30 per
cent of them die, I
dont see a problem.
If you want to call that a
bubble, you may, but
thats part of a
natural evolution,
says Dham.

gether. It almost looks as if theres no


crystal over the dial because the rest
of the case is already sapphire. The
only components that arent sapphire
are the combination titanium-and-sapphire crown and pushers, the titanium
screws, the strap-release system, and
the translucent silicone strap itself. Its

A dusty Enzo, impounded by the Dubai police, has received no offers because
Interpol believes it was stolen or purchased with illegal money
businessinsider.in

Curating the Nobel Museum, a


place meant to showcase some of
the greatest minds that this world
has known, is not a simple job. The
institution in Stockholm features
photos of Nobel laureates and a wide
range of artifacts relating to them.
Cu rator Tobias Degsel l says,
When we had to put up photos of
900 laureates, we had to be a little
creative as we wanted to tell the
story of each Nobel laureate. We
hung all their photos on the ceiling,
where it rotates like a cloth hanger,
moving slowly.
The floor of the 1,000-square metre
museum is printed with motivating
words that mean a lot to the Nobel
prize work, courage, playfulness,
persistency, disrespect, question,
collaboration, being a few of them.
When it comes to choosing a favourite exhibit, Degsell is spoilt for
choice but during a visit to Mumbai,
he revealed his top picks.

doned in a Dubai Police


impound lot turned up on
the internet in 2012. Even
more extraordinary is that
the Enzo still remains unclaimed.
The car has been in the
possession of the Dubai police since it was abandoned
by its British owner in 2011.
Although law enforcement
in Dubai usually sells impounded vehicles after a period of time in detention, this
car is not for sale.
According to a local publi-

cation, Interpol believes the


Enzo was either stolen or
purchased with stolen funds.
There is also an active legal
dispute over the ownership
of the car in Dubais court
system.
Dont wor r y too much
about the well-being of this
precious car though. While
initial photos show the Enzo
baking in the desert sun and
caked in dirt, the Ferrari
has since been moved to an
indoor facility to prevent further damage

PICS: MOTOR AUTHORITY/TWITTER, ABANDONED/TWITTER

Amartya Sens bicycle

th $6
r
o
W lion?
mil

Scotch tape with Graphene


used by Andre Geim and
Kostatine Novoselov

rashmi.menon@timesgroup.com

Bloomberg

News of the Ferrari


first broke in 2012
when photos surfaced
on the internet

satya.kandala
@timesgroup.com

NOBEL MUSEUM CURATORS


TOP PICKS: TAGORE AND SEN

Luxe Ferrari still wears deserted look

The Enzo Ferrari is one of


the rarest and most desirable hypercars in recent
memory. Named after the
legendary Italian sports carmakers founder, only 400 of
the vehicles were built.
Although the car sold originally for around $6,00,000
when it debuted in 2002,
values have skyrocketed
since then.
Last year, the final Enzo
built, which was owned by
Pope John Paul II, sold at an
auction for $6 million, while
a rebuilt wrecked one sold
for more than $1.75 million
earlier this month.
Which is why it was truly
extraordinary when pictures of a dusty Enzo aban-

What about inflated


valuation?
Greed is human. You
work between greed
and fear. Investors are
humans too, and they
want money. Once
everybodys investing, you dont want
to be left behind,
and so you
invest. There
will be a collective learning.
Failures teach
you something.
You wont make
the same mistakes
next time at least.
Sachin Thats how you
Bansal
learn and grow,
and I like it

You need to create an ecosystem that


allows ideas to f lourish. Dont start
regulating those ideas, for Gods sake.
And let those ideas at least reach a
critical mass before you decide you
want to regulate it. When there was
no venture fund, I was actually trying to raise a debt to scale up my
homegrown technology, which
was patented. What was the clear
signal I was given forget it, it
is better to import something
rather than rely and take the
risk of homegrown technology. They dont understand
innovation. Ultimately I
got Narayanan Vaghul
(former chairman, ICICI)
who said, Hey, I like
what you are doing,
and he invested in me.
And that technology,
believe me, I sold for
a huge, huge value to
a large multinational
company because of
the patents. So Im just
trying to tell you, you
can do it in India but you
need to make sure that
you have an enabling ecosystem. We dont have it.
Kiran Mazumdar-Shaw

:::::: a thing of greatness

much lighter weight than youd expect


and is still waterproof to 100 metres.
One advantage to using sapphire as
the case is you can see the movement
inside from every angle. Here, that
means a great look at Hublots in-house
Unico chronograph movement, which
is a flyback chronograph with a column
wheel and a double clutch. To make
all this even easier to see, Hublot has
treated the movement with a black
PVD finish. The watch has a
72-hour power reserve and is
automatically wound by the
57,900 rotor on the backside of the
movement.
Sapphire watches dont come
cheap. Even if you compare the
Big Bang Unico Sapphire to some of
Hublots other sapphire watches, it
looks like tremendous value. Take
the LaFerrari Sapphire, for example,
which carries a $575,000 price tag.
The Hublot Big Bang Unico Sapphire
is a limited edition of 500 pieces and is
priced at $57,900

Hublots got a new watch. And instead


of being technicolor or solid gold, its
completely see-through.
The Big Bang Unico Sapphire is all
about showing off what Hublot can do
with sapphire. The 45 mm multipart
case, bezel, and (of course) crystal are
all sapphire and blend seamlessly to-

Why doesnt India have a global


software brand?
The very fact that we are the
ultimate destination for software services in the world is our
weakness. We have an entire
generation of young engineers
wholl do anything you tell them
to. Theyre smart kids, dont get
me wrong. However, in the process weve not allowed them to be
creative.
We need to get out of service
mode, and get into problem solving mode. I already see Vishal
Sikka steering his big boat into
product orientation. Im sure
Wipro and TCS will follow.

PIC: GETTY IMAGES

e invented the
first Pentium
processor that
made Intel the
worlds biggest
chip-maker. He then
invented the AMD
K6, popularly

known as the Pentium Killer.


Today hes better known as
the Executive MD of IndoUS
Venture Partners, the VC that
funded Snapdeal in its initial
days. Vinod Dham, 65, is
nothing short of a legend. In
an interview, Dham holds
forth on Intel, smartphones
and startup ecosystems.

PICS: N NARASIMHA MURTHY, SHRIYA PATIL

businessinsider.in

This bicycle was used by Sen (who


won the Nobel Prize in Economics
in 1998), when he was conducting
research study on poverty in India.
He needed to collect a lot of data for
his projects. One thing he wanted
to ascertain was how much did babies weigh in rural areas. Degsell
says, He asked his students if
they would collect the data for him
but the students refused. They
didnt want to leave the campus.
So he biked around the Indian
countryside and weighed the children himself. He collected the
data, which he later
used to help de velop the Human
Development

Tobias Degsell

Index, along with others.


This exhibit shows it was not
enough to sit in your room in the
university. You have to be part of
society.

In 2010, the Nobel prize in Physics


wa s won by A nd re G ei m a nd
Konstatine Novoselov. They saw an
ordinary graphite pencil and decided to investigate it. By using ordinary scotch tapes, they peeled small
pieces of graphite, which they dissected further and discovered a new
material called Graphene. Its one
atom thick, super small but super
strong. Its stronger than diamond.
You can fold it any way you want
t o. We c a n
build microchips of
Graphene
instead of
silicones.
A n d ,
t hi s i s
going to
change the
world. They (the
scientists) think that in
the future, we can produce computers as thick as napkins and fold
anyway you want to, says Degsell.

Rabindranath
Tagores slate
When Tagore (who won
the prize for literature
in 1913) was dissatised
with his writing, it was
easy to erase. We used
that slate to narrate
how Tagore used to
work, says Degsell.

PICS: BCCL, SAYANTAN GHOSH

A container with the


Helicobacter pylori bacterium
consumed by Dr Barry Marshall
The 2005 Nobel prize winner in
Physiology/Medicine discovered
that the Helicobacter pylori bacterium was the cause of peptic
ulcer not stress, spicy
food or acid, as was long believed. To prove that, he
drank that bacterium and
got ulcers. So we have that
little bottle.

It is an extra dividend when you like the girl youve fallen in love with. CLARK GABLE

variety

Time for a
status update?
So you have been
hanging out, but are
you ready to get
serious and lock it
down? Heres how
to know for sure

PICS: ANUJA GUPTA, AP

in.askmen.com

Ranbir Kapoor has


not only portrayed
commitment-phobic
characters, he is
reportedly one in his
relationships too

pursuitist.in

ou have been forever cri ng i ng at


the slightest hint
of commitment. In
fact, your fear of taking casual dating to a relationship
that could go the distance may not be
entirely your fault family and dating history does play a part. However,
if youre holding onto your single
status for the sake of it, even though
youre obviously crazy about the girl
youre seeing, its time to have a long
hard look at yourself. Here are some
signs and reasons to lock it
down, stat:

Your friends and family are asking

In Happy Ending, both Yudi and


Aanchal are easy-going about
their relationship and dont
want to attach labels to it

PICS: BCCL, GETTY IMAGES

Boss T-Tie Italian


wool tweed tie at
hugoboss.com $145

Switch out the old-fashioned cotton fabrics


and replace them with tweed, flannel,
corduroy or wool for a chic makeover

Gitman Bros.
woven twill tie at
gitman.com $115

You have plans together


If your first (or even the second)
thought about a long weekend is where
youll go with her, youre already making her your girlfriend. Talking about
things you should do together as a couple in the future is a sign you want her
in your future. Anything from something as simple as restaurant openings, concerts or events to something
as big as a vacation or getting a dog
together are good indicators. Being
in a relationship isnt the same as proposing. Depending on how old you are,
where you are in your life or what you
ultimately want out of your future in
terms of marriage and children, the
scariest part of being in a relationship
maybe isnt losing your freedom, but
deciding how serious it is

Fitoor
(Drama)

Cast: Aditya Roy


Kapoor, Katrina
Kaif, Tabu

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blackwatch
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Paul Smith
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Dunhill polka dot


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J Hilburn
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Deadpool

Cast: Ryan Reynolds, Morena


Baccarin, Ed Skrein, TJ Miller,
Stefan Kapicic
Director: Tim Miller
Language: English

cousins and Deadpool is the first


to acknowledge its roots and undying
love of Hugh Jackmans Wolverine it
is also Reynoldss last shot at a superhero. And boy, does he grab it with both
hands and motormouth, even dissing
his Green Lantern avatar in one of his
many fourth wall breaks.
With an interesting albeit not entirely
inventive narrative tangent that announces its intention right off the bat

Language: Hindi

Tommy Hilfiger
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Sprezza charcoal
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Barneys
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The funny thing is, Deadpool is well


aware that the audience is slowly tiring
of the superhero genre in general and
the smart quips shtick in particular.
So, true to its origin character, Wade
Wislon aka Deadpool (an aptly cast
Reynolds) makes it his mission to go
all guns blazing into smugville. The
surprising end result: Even the most
cynical audience member who refuses
to indulge in the sprinkled-in-largedoses meta and self-aware jokes will ultimately succumb to its R-rated charm
(of course, censored in India).
Not only is Marvels latest fan
service film a mile away from its usually gentrified X-Men and Avengers

Sure, you might have what you consider a friends-with-benefits relationship right now. While you like the
latter part of that deal, consider the
former. Friendship is a key indicator
in any healthy relationship, and if you
have a woman in your life who you
happen to enjoy hanging out with and
talking to as much as you like having
sex with, its apparent shes a winner
in your life. And needs to um, be come
a permanent fixture before she loses
interest in your wishy-washy ways
and moves on.

Alexander
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(Superhero)

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Director:
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Adar
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Shes also your friend

Shes your first call

THE TIES THAT BIND

Heres news that will cheer the inner nerd in


you. And if you have a cool $8,000 to spare,
get your own armoured Batman suit. Not
literally one that you can t into, but it is a
stunning life-size statue of Batman for the
dedicated collectors. The statue is part of the
life-size collectibles from Hot Toys new LifeSize Masterpiece Series.
The realistic collectible stands at
approximately 6.4 ft tall (7.2 ft with base). It
features an armoured head with light-up
eyes, Batmans lower face (resembling
Afeck, so no buyers remorse), a Batsuit
and armour, a fabric cape, and a circular base
with light-up function. The statue is now
available for pre-order for a whopping
$7,999

those victories with her, its a good indication that its time to claim her as
your partner. After all, shes already
acting like it.

As much as you might try to play it off


or act like you arent really invested in
your could-be, should-be relationship,
your friends and family wont let you
get away with it that easily. A big sign
that youre actually ready is the fact
that youre introducing her to the people you love the most. And if those people are already calling her your girlfriend, its time to ask yourself why you
arent. In many instances when the
were official conversation doesnt
happen or is ignored, you
(as a couple) can evolve
into becoming the unofficial other half.

One of the benefits of


being in a relationship instead of a casual hook-up
situation is having
someone to share
the little and
big moments
with. Consider
the last time
something
truly great
happened
in your
life you
b e at you r
race time in
your last halfA self-proclaimed
marathon, you got a
commitment phobe,
promotion at work.
Shahid Kapoor later
W ho did you call
said he wasnt like
f i r s t ? W hen you
that anymore
want to celebrate

FOR
HER

Salvatore Piccolo
striped tweed tie at
thecorner.com $145

Nerd alert: Own a


life-size Batman
statue for $8,000

Benedict
Cumberbatch

Bloomberg

with cranky credits. It


then immediately sets
up a violently gory action piece, moving on
to intermittently reassemble how Wilson became Deadpool. Enter
Vanessa (Baccarin) as
love interest, Silicon
Vall e y s M i l ler a s
funny and hilariously
honest friend Weasel,
and villain Ajax (new
Transporter Skrein,
again hamming).
Deadpool is a scrappy film so much so,
that Reynolds even
sews his own unchic costume and
doesnt shy away from the
fact that it is attempting
to build up a bloodlusting
antihero in a universe
infested with larger than life children-friendly do-gooder superheroes.
Thankfully though, for all its layered
awareness, it never loses its sense of
humour, and that is the gold standard

Fitoor, an adaptation
of Charles Dickenss
Great Expectations,
while at no point letting
you down, doesnt really
soar to the heights you
expect it to.
Noor (Kapoor) is a Kashmiri
boy, interested in the arts. He
meets the horse-riding angelic
Firdaus (Kaif) and is besotted.
This comes to Firdauss mother,
Begum Hazrats (Tabu) notice,
who simultaneously encourages and snubs Noors growing
interest in Firdaus. Years later,
Noor and Firdaus again meet in
Delhi, and Noor falls in love yet
again. Will his love be reciprocated by Firdaus, who is claustrophobically watched over by
an off-her-rocker Begum?
This is a larger-than-life romance, but the scale doesnt
make up for the lack of depth.
Adapting a piece of literature
into a Bollywood film is a task
that in places, seemingly overwhelms the director. Cue to plot
changes from the classic.
Noor is reduced to the onedimensional character of an

Trumbo (Biographical
Drama)

1/2

Cast: Bryan Cranston, Diane


Lane, Helen Mirren, Louis CK,
John Goodman
Director: Jay Roach
Language: English
The Hollywood Ten are a legend unto
themselves and Dalton Trumbo was
one of the most reputable names on the
1947 list of 10 screenwriters who were
labelled as communists and blacklisted
from working again in Hollywood.
So it makes sense that the story of such
resi lience
and bravado
gets handled
by the fantastic Cranston. He takes on the task of
portraying Trumbos conviction in his
beliefs, his incarceration for defying the

Movie Reviews

tasneem.balapurwala@timesgroup.com

PERSONALITIES ARE FOR REPRESENTATION ONLY

After knocking divas over with his red


soles and glamorous lip shades,
Christian Louboutins Piloutin
Maharadja clutch is an attempt to make
a fascinating statement. The clutch
from the Parisian luxury brand adds an
exotic touch to the wardrobe with its
Indian bent. Resembling a precious
pillow, Louboutin has designed the
intricately embroidered clutch such
that no two Maharadja versions are
the same. Boasting of exquisitely
embroidered ribbon from Christians
personal collection, each piece is
unique. Fitted with signature
Louboutin red colour zip all around the
body, it also features a logo charm
zipper pull. Dressed with red suede
lining inside, it is also trimmed with
soft beads on the outside that renders
a playful feel. A lightweight chain strap
acts as a delicate handle, or can be
wrapped around the clutch. The
Maharadja version is a limited edition
rendition of the Piloutin. This jewelencrusted clutch is priced at $1,650.
Gold and silver Piloutins are available
for $990

02

:::::: collectible gallery

In Trainwreck, Amy
has a hard time
reconciling to the fact
that Aaron wants to
be in a relationship
with her

International
luxurys
Indian pivot

MUMBAI, MONDAY, 15 FEBRUARY 2016

Poor

Average

Congress and his struggle to get back on


his feet with his silently suffering family. All is not dark though in the Jay
Roach a comedy veteran, including
Meet the Parents franchise version, as
Trumbo and his fellow band of merrymen (read scriptwriters) rally together
and have each others back.
Even as the establishment, namely government, media (led by Mirrens Hedda
Hopper) and industry, chases them out

Good

obsessive lover, while Firdaus


is a beautiful doll. Both protagonists look great against
the spectacular backdrop of
Kashmir. Kapoor and Kaif try
to become the characters, with
only Kapoor partly succeeding
in looking like a tortured artist
albeit with a chiselled body. The
lack of chemistry between the
lead pair in the intended epic
romance is also a setback.
Tabu, as expected, is sublime
as the Begum. But the film
couldve used a little more madness and a little more screen
time from her, which wouldve
instantly elevated the viewers
experience. Competent cameos
by Ajay Devgn and Lara Dutta
help the films cause.
Fitoor doesnt lack intensity.
On the contrary, what it lacks is
relief making the film fierce,
without being compelling

satya.kandala@timesgroup.com

of work, the screenwriters


find ways to beat the system
and move scripts under aliases. Trumbo even managed to
win a couple of Oscars for his
uncredited scripts of Roman
Holiday and The Brave One.
Cranston manages to evoke
pathos as a practical artist
looking to live life as honourably as he can considering his
circumstances and delivers
a fine performance. The rest
of the cast are also competent
in their roles, helping the narrative forward, but the film suffers for
being overtly simplistic in painting its
heroes and villains. It squarely puts
Hopper and all those that dont share
Trumbos world view as evil liars and
makes the viewer question the authenticity of the events portrayed. Over twohours long, the film would also do better
if it was pared down and stepped away
from pontificating to storytelling

tasneem.balapurwala@timesgroup.com

Very Good

Excellent

Dont sweat the petty things and dont pet the sweaty things. GEORGE CARLIN

personal

MUMBAI, MONDAY, 15 FEBRUARY 2016

:::::: haute stuff

Inside the wacky world


of animal wearables

This wireless
speaker is
mind-blowing

The tech world thinks having a pet is boring and needs to be gamified
in.techradar.com

n the olden days, wearables for animals went no


further than putting a
pair of sunglasses on a
sleepy dog. Things have
changed now. The pets of fashionable folk may now be adorned
with as much spurious technology as their owners because, incredibly, wearables for animals
have become a fairly big thing.
Check out these seven gadgets
that offer more interactivity to a
pet and its owner.

Chord Collar
Purporting to offer a unique
wearable interaction is the
Chord Collar. It is a smart collar for dogs and cats that allows
you to create an invisible fence
wherever you go. It allows a human-dog interaction entirely
led by app prompts and collar prompts making
your pet entirely remote
controlled. The tool is
only at Kickstarter
stage at the

moment. As such, those that


want their dog to be a curveleading tech guru should get
in now.

GoPro Fetch
You can seriously i n fri nge
your pets privacy by watching

Devialet Phantom wireless speaker


promise a power and preciseness
unlike anything you have heard before

planet is full of obese or skinny dogs. It a l so h a nd s out


B a rk Poi nt s s o you k now
if youre being a good pet parent
or not.

Pet Pace
Another so-called health tracker, Pet Pace is a medical collar
that claims it can let you know
if your animals off colour;
by tracking its temperature,
pulse and activity level to tell
its carer, perh ap s , when
its not well, or
at least when
somethings
d i f ferent . It
even goes so far as
to suggest it improves
clinical outcome for the
animals its attached to, potentially reducing vet bills, though it
could also encourage you to take
it to a vet more.

Wonderwoof

everything it does, through


its eyes but a bit higher up, at
whatever resolution and frame
rate your GoPro can handle. It
might be fun at first, while youre
watching it running around and
playing in 1080p, but what happens when it approaches another
dog and puts its nose right up its...

Fitbark
If a human sleep
t r acker i snt
enough of
a novelt y,
how about
one for
your dog?
T h a t s
t he i n s a ne
boast of FitBark,
which thinks we
shou ld approach
pets themselves as
mini fitness gadgets. The claims of
F it Ba rk a re t hat
it monitors a pets
activity so you can
work out how much
to feed it, as if the

$2,000

Slightly more peculiar is the


WonderWoof. Its similar to
FitBark only in shape, like
a bow tie to humiliate the
wearer. This sort of ruins
the core concept of having
a pet in the first place by
gamifying the experience, pairing with an
app to award the
owner with virtual bones and
badges for doing
the walking and
feeding basics.

Disco Dog
For something a bit more fun,
theres this. While you can debate the usefulness of GPS tracking, theres no denying the lifechanging potential of the Disco
Dog LED vest. Not just a walking
billboard, but one controlled via
smartphone. Your
dog wi l l b e
the life and
soul of all
the dog
pa r-

03

gizmodo.in

ties. Better still, its also an emergency wearable, displaying the


text lost dog on its light pixel display should it stray out of range.

Motorola Scout 5000


The Motorola Scout 5000 is one of
the proper wearables in this list.
It also has GPS, so you can track
down a disobedient pet. But its
also augmented by an on-board
camera for backing up the bad
boy claims with photographic
evidence. The craziest feature is
a push-to-talk option, for chatting with or really confusing
your pet from afar

The Devialet Phantoms


been around a while,
but the Apple Store
recently started selling
the basic-but-stillvery-expensive version of
the speaker. Everything
about the speaker is
impressive. Its wireless,
incredibly powerful, yet
compact and it plays bass so
low you can only feel it,
while looking like Swiss
artist HR Gigers creation.
While you can drop two
grand on a single speaker,
each Phantom is designed to
connect with other
Phantoms to create a
network speaker system
that you control with an app.
Its basically an upmarket
Sonos that looks like it came
from outer space.
The regular 750-watt
Phantom can blast music at
99 dB. Theres a premium
3,000-watt Silver Phantom
that can do 105 dB.

Permanent hearing loss


occurs after listening to
audio at 100 dB for 15
minutes, so in addition to
being incredibly expensive,
both are incredibly loud.
It has one port for power.
But you can buy its
intelligent hub for another
$330. But is it worth it?
That really depends on how
rich you are and how much
you want to impress your
friends

More features
z Can connect two to 10

Phantoms via WiFi

z Reproduces music from

16Hz to 25kHz

z Hybrid analog and

digital amplication

How to get the most money


from your old gadgets

MORE POWER TO THE


MID-ENGINE SPORTS CAR

The more you get for your


old device, the cheaper
the new one will be

The two-seat convertibles are now


more powerful yet more fuel efficient.
With them, Porsche continues the tradition of the four-cylinder flat engines
that were used in the Porsche 718 midengine sports cars that won numerous
races back in the 1950s and 1960s.
Yes. More power, improved design
and an updated interior are all highlights of the new 718 Porsche Boxster.
Featuring a turbocharged flat fourcylinder engine, the base 718 Boxster
2.0 litre engine generates 300 horsepower, while the 718 Boxster S uses a
2.5 litre engine developing 350 horsepower, up 35 horsepower.
The electromechanical steering system is configured to be ten per cent
more direct. This makes the Boxster

even more agile and easier to steer,


both on circuit tracks and in everyday
traffic. The top speed of the 718 Boxster
is 275 km/h, and the 718 Boxster S has
a top speed of 285 km/h. The Boxster
models also have fuel economy im-

provements of up to 13 per cent.


In addition the Boxster has been completely redesigned with only the trunk
lid, windshield and convertible top
carried over from the previous model. Inside, theres a new instrument
panel and Porsche Communications
Management (PCM) is standard which
includes Bluetooth mobile connectivity and a 110 watt sound system. The
PCM can be extended with optional
modules to thoroughly adapt it to personal requirements. The 718 Boxster
models will appear in showrooms in
late June 2016. The 718 Boxster starts
at $56,000, and the 718 Boxster S begins
at $68,400

pursuitist.in

No matter how old your tech is, someone on the internet wants it especially when it comes to smartphones and
tablets. So, the best thing you can do
is sell your old gadgets on online marketplaces. Here are some tips to get the
most cash from your old gadgets:
Keep them in as good a condition as
you possibly can. Obviously, youll get
more cash for a phone without scratches than a phone with a cracked screen.
That means you should use a case or
specific carry bags for your device.
Keep the original box and accessories. Use any spare USB power
brick and charging cable instead of
using those that came with your device. People will pay more for original
packaging and accessories, especially
if they havent been used.
If your old gadget is in great condition, take pictures of every sur-

PIC: THINKSTOCK PHOTOS/GETTY IMAGES

businessinsider.in

face and side to show it off. Potential


buyers like to see for themselves that
a device is in great condition if you
list it as such.
Check around before selling, especially if your device isnt in great condition. You never know if youll get more

cash from a trade-in site than eBay.


Sell your device before the newest model comes out. Youll get more
cash if you sell your old device before
it gets too outdated by a newer models
release. Research the release dates for
the newer models of your old gadget

Fresh leaks from Hugo Barra:


Dual SIM phone with full HD display
Xiaomi Mi 5 key features revealed ahead of Mobile World Congress
gizmodo.in

The centrepiece of the new model series is the newly developed four-cylinder flat engine with turbocharging

Stretching
the speed
limit
Fibre optic
internet
speeds are
coming to
smartphones
in 2016

in.techradar.com
Modems arent exactly
the sexiest aspect of technology, but getting fibre
optic internet speeds on
your mobile phone is pretty
cool and thats exactly
Downloading
what Qualcomms X16 LTE
22420 mb of
Modem claims it can do.
28380 mb
Time remaining
Qualcomm says the X16 is
3 secs
able to offer download speeds
up to 1GB per second, which
is incredibly quick. At that
speed you could download a
full HD movie in less than
30 seconds. It would also
greatly improve streaming on your mobile device, making your online

79%

streaming smoother and buffer-free.

Powerful than the fastest


4G modem
These are theoretical speeds though,
and the likelihood is you wouldnt
top out during normal usage. The
modem is just one component as well,
but smartphones packing the Z16
LTE modem are due to arrive during
the second half of 2016.
Theres also the issue surrounding
network providers, as most carriers
around the world are unable to offer
such speeds on their current setups.
Qualcomm may have the tech
ready to go in 2016, but it could
be a few years before we can
really harness the
power of the X16

As we are inching closer


to the 2016 Mobile World
Congress, we are getting a
lot of features-related rumours of Xiaomi Mi 5 thats
slated to be unveiled at the
event in Barcelona. The latest
comes from none other than
Xiaomi VP Hugo Barra.
He has teased Xiaomi fans
with a home-screen snapshot
of the device on Facebook,
with a post that reads:

Heres a little sneak


preview of my #Mi5
home screen. Can your
eagle eyes spot
whats new with Mi
and coming to you
on February 24?
POSTED BY
HUGO BARRA

A l l that we cou ld f ind


out i n t h i s s c r e en shot
is one N FC (Near Field
Communication) as its activated icon can be seen at the
status bar on top. Besides
this, we could also spot two

signal bars that hint at the


possibility that this smartphone will come with dualSIM card slots, wherein
one would be 4G and the
other CDMA 1x. Lastly, the
screenshot is 1920x1080 pixels and tells at least one Mi
5 variant would come with
a 1080p full HD display.
A c c o r d i n g t o e a rl i e r

specu lation by r u mou r


mills, the Xiaomi Mi 5 will
be powered by Qualcomm's
Snapdragon 82 0 processor, a 16MP rear camera
and an 8MP front snapper
as well as a 3,600mAh battery. There is also another
rumour that Xiaomi Mi 5
will also be available in a
Windows 10 variant

I think the older I get, the more I realise that the ultimate luxury is time. MICHAEL KORS

melange

MUMBAI, MONDAY, 15 FEBRUARY 2016

Tour the inside of a


$73 million yacht

The Bombay Plan


for economic reform
rashmi.menon@timesgroup.com

LUXURY

The interiors of a luxury-yacht


headed to the Miami boat show
The master suite

The windows in the spacious,


curved master suite provide an
expansive 180-degree view over
the bow of the boat. The circular
lighting fixture is custom-made
for the space, and the bed frame is
dark-stained beech, with an ivory
leather headboard.

The profile
The 11.11 has a distinctive
ver tic a l a xe bow, which
avoids upward push from
waves to create a surprisingly stable ride.

The lobby

The bow

The sun deck


The primary leisure space on the
ship is the upper sun deck, which

The sky lounge


A bar that the ships designers
call the Sky Lounge is nestled on
the upper deck. It features a custom-made cocktail bar, polished
stainless steel bar stools, and a
bespoke Tracey Emin neon.

The spa
The 11.11s spa area features a
dedicated treatment room and a

steam room made entirely from


mosaic tiles with a pearly lustre.

The pool
The pool on the sun deck is inspired by the spa. A second jet
pool and hang-out area can be
found on the upper deck.

SINGLE
IN THE CITY

The dining area


The centrepiece of the upper
deck is a 14-seat dining table with
backlit LED quartzite panels. The
nearby outdoor bar was carved
from Italian f luted stone that
once weighed over a ton

Bloomberg

Football or cricket?
Cricket all the way.
Whats your favourite
city in the world?
New York City its a great mix
of everything.

Which TV character
would you be?
I would love to be Sherlock.
Benedict Cumberbatch killed it as
the character.

What was your rst job?


My rst job was teaching tennis
in New Jersey. With my rst
salary I went to NYC and
celebrated my birthday.

J R D Tata
G D Birla

while, sportingly tweeted a link


of the photograph with the caption, My job moonlighting
as a police officer in Brazil
is no longer secret. We
arent sure if hes happy
that his good looks put him
on a billboard or if hes planning a Brazil takeover.
Considering Musk is a
man of ambition, we are
betting on the latter

etpanache
@timesgroup.com

A rough landing

Working out or lying in?


Working out all day, any day.
Your most prized possession?
The tennis racket with which
I won my rst tournament
in 1998.
Whats on your bucket list?
To learn one magic trick that
even Penn and Teller cant
gure out

glynda.alves@timesgroup.com

PICS: GETTY IMAGES

On a night out, youd wear...


Whatever my choice of outt a
good watch is a must.

:::::: up in the sky


Esha
Gupta

Five things you would


take to a deserted island...
A device to watch all of Bear
Gryllss episodes, they will come
in handy. An AB roller, chips, a
lethal weapon and a juicer.

Name: Arnav Jain


Age: 26
Job: Founder of a mens
accessory brand

Just when you


t houg ht Elon
Musks Big Bang
Th e or y c a me o
was a hoot, here
is something to
top that. The billionaire CEO of
Tesla and SpaceX
moon l i g ht s a s
a police officer in Brazil. Not in
person though, just his photograph. Recently a billboard
in the Brazilian state of
Mato Grosso do Sul had a
picture of Musk promoting
their union of police officers. Reports say the union
thought it was a stock
image of a man and
werent aware that
it was the Silicon
Valley star.
Musk, mean-

separated@birth

Who would you invite to dinner?


Roger Federer and Blake Lively.
Perfectly balanced, beauty and
class great dinner company.

JRD Tata, GD Birla, AD Shroff,


K astu rbhai L a lbhai,
Purshottamdas
Thakurdas and John
Mathai. The industrialists of the time
said, We lack the
capacity, technology, resources to
invest in steel, highways, dams, etc. Just
give us some consumer
goods and you do the rest.
And everyone at that time believed that a strong state intervention was crucial for economic development. (Jawaharlal)
Nehru was merely ref lecting
the consensus of the time, said
Guha

Billboard hit

PICS: GETTY IMAGES, TWITTER/ELON MUSK

At the bow, two teak sun loungers


are positioned far ahead of the
rest of the entertainment space.
Recliners will feel as if they are
flying over the waves and getting a suntan at the same time.

From above
The 11.11 was built by Benetti,
the oldest luxury shipyard in the
world, having constructed boats
along the coast of Italy since 1873.
The brand considers this boat
its finest example of innovative,
luxury yacht design.

Full-height picture
windows and the absence of bulwarks
create a sense of proximity to the water.
Forty-six lights set
beneath the waterline create a magical
night-time glow.

Mumbai is currently
hosting the Make
in India week. The
aim is to attract
foreign investors
for economic development. Turns
out economic policies in the aftermath
of Independence were
quite contrary.
In fact, leading industrialists
of the time supported the state
centred model, as they believed
that a strong state intervention
was crucial for economic development. Proof of this fact can
be found in the document called
the Bombay Plan, published in
1946, said historian
Ramachandra Guha
in his talk in the city
recently.
The signatories of
t he do c u ment
were i ndustrialists and
economists of
Jawaharlal
Nehru
the time like

Angelina
Jolie
Angelina Jolie is no more a wild child and has few secrets from the
media while Esha Gupta made her debut with Raaz 2

Which TV character
do you want to date?
Serena van der Woodsen from
Gossip Girl. Blake Lively is
perfect.

`1,50,00,00,000
PIC: BCCL

What turns you on?


The rst thing I notice and nd
the most attractive are the
eyes.

Kingfisher House

The amount that is set as the reserve price for


Kingsher House, the headquarters of the
grounded airline, in Mumbai. The house is being
sold in an effort to recover loans from its
promoter Vijay Mallya

PICS: DEEPAK SALVI, THINKSTOCK PHOTOS/GETTY IMAGES

The interior of the 11.11 has an


art deco theme. Seen here, the
central lobby has a white Italian
marble floor inlaid with a diamond geometric pattern and a
polished stainless-steel trim.

The stern

is fitted with an adjustable table that can


be raised for an informal lunch or dinner,
as well as a fluted outside bar made of sandblasted Italian stone.

PICS: BCCL, GETTY IMAGES

n anticipation of one of
Americas most glamorous yacht conventions,
Yachts Miami Beach,
we took a photo tour of a
200-foot, privately owned Benetti
ship thats estimated to cost $73
million. Called the 11.11, it has a
top speed of 17.5 knots and its four
decks are kitted-out so that
12 guests can travel in total
luxury.

04

Sunil Alagh, the former managing director of


Britannia Industries was in Cambodia recently.
But turns out it wasnt the smooth sailing
vacation Alagh anticipated it to be. Recently a
YouTube video of a rough landing of a hot-air
balloon in Siem Reap came to light, which was
promptly tweeted by Alagh with the caption, I
was on this. Was crazywe were badly injured.
About time Co/driver were penalised. Not
sure what the course of
action going ahead
will be, but surely
the man who is
credited with the
rise of brand
Britannia is not
going let a
shaky landing
spoil his future
adventures

etpanache@timesgroup.com

PICS: AFP, REUTERS

PRECIOUSGIFT BOOK

Kopi Luwak, Vietnam


This coffee is made from
the droppings of the
Civet cat, who eats
cherries and later passes
them in the poo.

Valentines Day gift ideas for next year from around


the world, especially for travel lovers with money to burn

businessinsider.in

Take a trip to space

New Mexico
Youll receive basic
astronaut training before
ying up into the earths
outer atmosphere,
experiencing
weightlessness before
coming back to earth.

Go on a private glacier
expedition

El Calafate, Argentina
Go glacier walking in beautiful
solitary surroundings seeing
some of the worlds most
stunning winter settings and
relax by an open re in your
luxury cabin all evening.

$200,000

$100,000
PICS: THINKSTOCK PHOTOS/GETTY IMAGES

The Virgin Islands


Enjoy a stay in the
presidential suite of
your own luxury villa
before going on a real
life treasure hunt.

$4,400 per person

Stay in an Indian palace

$1,200 per lb

Jaipur, India
The bedroom and the lounge
in Shahi Mahal in Jaipur is
decorated in gold-leaf and ivory.
You can enjoy your own private
theatre and library.

Private helicopter ride


over Victoria Falls

Zimbabwe
Take a romantic ight over
one of the worlds most
spectacular waterfalls.

$100,000

Submerge yourself
in romance in an
underwater hotel

Fiji
Sleep under the sea in a
fully submerged hotel,
staring at the shoals of
sh above you as you
fall asleep.

Custom locket
making

Germany
Visit a gemstone cutter
and collaborate with an
award winning
jewellery designer on
your own bespoke
locket.

$600 per lb

$28,595

Do diving for
diamonds

Buy a bag of the


worlds most expensive coffee

$15,000 per person

$5,000

Worlds most expensive spa bath

Miami, USA
Enjoy a romantic Evian
Bath (with 1,000 bottles
of Evian!), chocolate
cake, champagne and
two further spa
treatments

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