Arogya Sanjeevani: Is It For You?

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The Economic Times Wealth May 18-24, 2020

Arogya Sanjeevani Is it for you? Go through the pros and cons of the standardised health insurance plan to check if it suits your needs. By Riju Mehta

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mong the many learnings imparted by the coronavirus, perhaps the most relevant for India is the need for health insurance coverage. As the pandemic continues to rage, the dire health scenario has come to the fore: in a country where the average retail healthcare inflation has risen sharply from 4.39% in 2017-18 to 7.14% in 2018-19, as per the Economic Survey 2019, only 4.2 crore people, out of a 130 crore population, have retail health policies. This means that the out-of-pocket spends are a high 65% against a global average of 18%, as per the insurance regulator, Irdai. This is the reason that, in recent years, the government and Irdai have tried to step in and correct the skew. The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana was introduced in 2018, with the intention of providing free health coverage to the bottom 40% of the population, or 50 crore people. Last year, Irdai mandated the launch of Arogya Sanjeevani (AS), a low-cost product with a nominal cover and attractive features. “The need for health insurance has always been there, but people have not bought it for various reasons, one being the complexity in the product itself,”

says Pushan Mahapatra, MD & CEO, SBI General insurance (see ‘Arogya is a simple product..’). Besides the high premium and obscure terms and conditions in the fine print, there were other problems. “The traditional mindset was to procrastinate the purchase since it was not considered essential, not to mention the lack of accessibility,” says Bhabatosh Mishra, Director, Claims, Underwriting & Product, Max Bupa Health Insurance. Many of these hurdles seem to have been taken care of with Arogya Sanjeevani, with clearance given to 29 general and health insurance companies to market the product. While 16 odd insurers have already brought out the product, mandated to be launched by 1 April 2020, others are set to follow suit soon. Does this mean you can buy Arogya Sanjeevani without a second thought and it will take care of all your health insurance needs?

What does it offer? AS is a basic health plan that offers a limited cover of `1-5 lakh for one year, with the annual premium ranging from `4,000 to `7,500 (see Snapshot...). It can be bought as an individual or a family floater plan, covering spouse, children, parents and parents-in-law. The important thing is that the features,

in terms of coverage, inclusions, exclusions, as well as the terms and conditions, remain the same across insurers. The premium, however, varies. This is because it is reflective of the costs associated with a plan: claims, management expenses and distribution costs incurred by the company. “Since the claims ratio, staff and servicing, growth and expansion, distribution across various demographies and regions is different for each company, the premium is bound to vary,” says Mishra. There is, however, no zone pricing in the plan, implying that the premium will remain the same across regions, whether the buyer is in a metro or a tier 3 city. It does have a co-pay inclusion of 5%, which translates to the customer shelling out 5% of the sum insured from his pocket,

while the rest of the cost is borne by the insurer. “Co-pay is introduced by the insurer to cover the risk of uncertainty about the customer profile, and is, in fact, low in case of AS,” says Prasun Sikdar, MD & CEO, ManipalCigna Health Insurance. There is a waiting period of 30 days, but the coverage is wide, including treatment costs for coronavirus and other illnesses. It includes daycare treatments, Ayush and and modern treatments, besides dental and plastic surgery. There are, however, several restrictions and limitations in the coverage of some of these treatments.

Benefits & drawbacks While the plan seems to offer a good deal at a low cost, the market still has a lot of basic health plans that offer wide coverage and

“As the features of Arogya Sanjeevani are similar, the serviceability of the company will be important when customers choose a plan.” GURDEEP SINGH BATR A HE AD, RE TAIL UNDERWRITING, BA JA J ALLIANZ GENER AL INSUR ANCE

cover story The Economic Times Wealth May 18-24, 2020

relatively low premium stands out as a features. Should one discard those in fadistinct advantage. The premiums for vour of Arogya Sanjeevani? It is essential similar basic health plans in the market to consider the pros and cons before takare 20-50% more expensive, a huge differing a final decision. ence for buyers. No confusion: “One of the biggest Some of the latest treatments such as problems faced by buyers was that there stem cell therapy and oral chemotherapy were multiple insurance products ofare covered, while dental and plastic fered by companies, with different sets of surgery, even cataract pricing in metros and surgery is insured, non-metros, and with which are typically not various add-ons. It led covered by basic plans. to a lot of confusion Another attraction is as to which product the inclusion of alterto buy,” says Gurdeep native medicine treatSingh Batra, Head, ments, such as homoeRetail Underwriting, opathy and ayurveda. Bajaj Allianz General While most of these Insurance. treatments are covered “Besides, the fine by other health plans, print in the policy they usually come for a would typically surface higher premium. only at the time of claim Flexibility: The plan settlement,” says S. has other advantages Brahmajosyula, Head, like the option of paying Underwriting, SBI premium in monthly, General Insurance. quarterly, semi-annual With Arogya, there is or annual instalments. a high degree of clarity It also offers to cover since the features, as parents and parents-inwell as terms, are standPR ASUN SIKDAR law at a reasonable preardised and remain the MD & CEO, MANIPALCIGNA HE ALTH INSUR ANCE mium, which is typicalsame across insurers. ly offered by other plans So one doesn’t need to for a much higher premium. Besides, it compare and research for the best plan. If offers lifelong renewability, portability it meets one’s requirements, one can pick and the delivery of soft document copies to it depending on the premium that suits customers. one’s budget. “The plan is quite reasonably priced, Wide cover at low premium: To be able so one can easily buy a small individual to get such a large set of treatments at a

“Arogya is essentially for the first-time buyers with low income and low insurance visibility in tier 3/4 cities.”

How much premium will you pay?

ANNUAL PREMIUM FOR INDIVIDUAL POLICY (`)

ANNUAL PREMIUM FOR FAMILY FLOATER POLICY (`)

ManipalCigna Health Ins

7,433

10,710

HDFC Ergo Health Ins

7,352

14,704

TATA AIG General Insurance

 6,353

-

United India Insurance

6,343

15,007

Religare Health Insurance

6,013

15,149

Future Generali General Ins

5,996

14,089

Bajaj Allianz General Ins

5,950

 13,510

Kotak General Insurance

5,842

13,473

Max Bupa Health Ins

4,723

11,044

SBI General Insurance

4,501

11,721

Star Health & Allied Ins

 4,170

 9,255

Universal Sompo General Ins

4,164

9,304

Go Digit General Insurance

 3,263

  7,194

Individual: Cost of `5 lakh cover for a 35-year-old male. Family floater: 2 adults and 2 children, with the oldest member being 35 years old. Premiums for all insurers could not be sourced. Data sourced from websites and companies.

Snapshot of Arogya Sanjeevani

Main features Sum insured

Policy term

Renewability

`1-5 lakh

1 year

Lifelong

Eligibility

Co-pay

No-claim bonus

18-65 years (dependent kids: 3 months to 25 years)

5% of sum insured

5-50% of sum insured

What does it cover? Hospitalisation Includes hospital room rent, boarding expenses, doctor fees, nursing expenses, operation theatre and ICU charges, surgeon, anaesthetist, medical practitioner, consultants, specialist fees, medicines used during hospital stay, road ambulance charges, pre- and posthospitalisation expenses.

Ayush treatments

Modern treatments

This covers inpatient care treatment under Ayurveda, Yoga and Naturopathy, Unani, Sidha and Homoeopathy.

Stem cell therapy, robotic surgeries, oral chemotherapy, balloon sinuplasty, intra vitreal injections, among others.

Daycare treatments All daycare treatments are covered, but OPD is not.

Dental & plastic surgery Only the treatments caused by an injury or a disease are covered.

Cataract Covered up to 25% of sum insured or `40,000, whichever is lower, per eye.

Main exclusions

Diagnostic and investigative tests

Alcohol or drug abuse treatment

Maternity expenses

OPD treatment

Rehabilitation

Change of gender treatment

Cosmetic or plastic surgery

Hazardous or adventure sports

Obesity & weight control

Infertility and sterility

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The Economic Times Wealth May 18-24, 2020

Arogya Sanjeevani vs Basic health plans AROGYA SANJEEVANI

BASIC HEALTH PLANS

`1-5 lakh

Higher sums insured available

`4,000-7,500

20-50% higher than AS

Cover type

Individual, family floater, including parents & parents-in-law

Individual, family floater, parents optional at a higher premium

Room rent

2% up to `5,000 & 5% up to `10,000 for ICU

Either no room rent capping or 1-2%

5% of sum insured

Usually 10-30%

No zone pricing

Different premiums for metros and tier 1, 2, 3, 4 cities

Modern treatments

Covered up to 50% of sum insured

 All insurers are mandated to cover by 1 Oct 2020

Daycare treatments

All fully covered

Most plans cover these

Covered

Many plans cover these

OPD treatments

Not covered

Covered at almost double the premium of a regular plan

Waiting period

30 days

30-90 days

Pre-existing diseases

4 years

4 years

5-50% of SI

Up to 100% of SI

No riders/ add-ons

Allowed add-ons

30 days / 60 days

Mostly 60 days / 90 days

FEATURES Sum insured Premium

Co-pay Zone pricing

Ayush treatments

No-claim bonus Add-ons Pre- & post-hospitalisation

cover at a young age. Later, with growth in family and income, one can port to a bigger, more comprehensive cover,” says Anand Roy, MD, Star Health and Allied Insurance. Capping & limitations: Remember, however, that the low premium comes for a cost. The room rent sub-limit, which is typically 1% of the sum insured or nil in basic health plans is 2%of sum assured up to a maximum of `5,000, and for ICU, it is 5%up to a maximum of `10,000. Similarly, modern treatments are covered up to 50% of the sum insured, while cataract surgery is covered up to 25% of sum insured or `40,000 per eye. The dental and plastic surgery are covered only in case of an illness or accident. Many health plans that offer these facilities come without such limitations. Another limitation is the size of the

“Health insurance has now become a necessity, not luxury, and with AS offering premium payment in instalments, one should not postpone buying it.” ANAND ROY

Basic health plans details may vary

MD, S TAR HE ALTH & ALLIED INSUR ANCE

PUSHAN MAHAPATR A MD & CEO, SBI GENER AL INSUR ANCE

As the features of Arogya Sanjeevani are similar across insurers, what should one consider while buying a plan? Since the features are the same, you will need to see how close the company is to you, how strong is its brand and financial strength, servicing and claim settlement. Ultimately, it’s the customer experience in policy purchase and claim settlement that will be the distinguishing factor over a period of time.

The plan has been launched at a time when the

“Arogya is a simple product for those who want a basic health cover for the first time” Covid crisis is at its peak. Can it be a game changer for penetration? Even without the pandemic, the product fulfils a need in the society. Ayushman Bharat caters to the bottom rung of nearly 50 crore people. Another 11% are covered by corporates and group plans, and then there are the individual policies. Despite these, more than 40% of the population is uninsured. So the need is there, especially because of the rising medical inflation. However, insurance is not being bought for various reasons, one of them being the product itself, which comes with complex terms and conditions. There was a need to demystify the product terms, inclusions, exclusions, etc. Arogya is a very simple product for someone who wants a basic health cover for the first time. It’s a sort of starter kit, on which you can build for 2-3 years, and as your income and family grow, you can look at migrating to a more complex product.

As for it being a game changer, we now have a simple product like Arogya to cater to the huge uninsured population. It will depend on how well it is distributed by insurers and their reach in semi-urban and rural areas.

Are you at an advantage given your large presence in tier 3/4 cities, or will the lack of technology be a deterrent? If the processes can be made digital and channels made amenable to digital processing, it is very easy to sell insurance. The data being consumed by rural India is mind-boggling and, in any case, there are nearby contact points in bank branches and banking correspondents. In other places, we have agencies, which are a force multiplier.

Will the low premium be a big pull or will other factors come into play? Every product has an ideal customer profile and segment to which it is

pitched. The problem occurs when there is no synergy between the product and target group. This is when people’s interest drops and they stop buying these products. If people need more features, they will explore. But there is a large population for whom this product is adequate, given the areas where they stay, socio-economic background and income levels. There’s no reason why, if we reach this segment, Arogya cannot be a viable long-term product.

Will there be an increase in digital channels of distribution now? We will not only have to get used to digital channels, but also a contactless, digital process of sale. The agents are not going to go away and will be a strong part of the industry. We will have to build a digital process so that they can connect with customers. This should be one of the game changers and a facilitator for the physical channels.

cover story The Economic Times Wealth May 18-24, 2020

cover itself, which is capped at `5 lakh. “In a metro, this amount is not adequate and a person would need at least `10 lakh for health cover,” says Mishra. On the other hand, a co-pay of 5%of sum insured may be high for a person in a rural area. Besides, the no-claim bonus ranges from 5-50%, while several plans offer the option of 100% no-claim bonus.

“It does not have fancy features which may jack up its price, but has all the essential features and is affordable. So, it’s a very good deal for the customers.”

Should you buy it?

HE AD, UNDERWRITING, SBI GENER AL INSUR ANCE

Every insurance product is targeted at a specific audience and most experts are of the opinion that Arogya Sanjeevani is for the middle to low income population in tier 3/4 cities, or even rural areas. “The USP of the plan is that it is for the first-time buyers with low income in tier 3 or 4 cities who have no insurance visibility,” says Sikdar. Such a plan would work for this segment of population even with the various limitations and cappings. This is because the cost of hospitalisation in small towns and villages is much lower compared with that in metros or tier 1 cities. So even with a room rent limit of 2% or a 25% capping for cataract, the customer will be able to bear the hospital cost in smaller towns. “On the other hand, even a 2-3 day hospitalisation in a metro or tier 1 city would result in heavy medical expenses, which cannot be taken care of by this plan,” says Sikdar. In fact, a buyer may end up paying 70% of the healthcare cost from his pocket. It would then defeat the purpose of buying a health insurance plan. As for co-pay, since the plan is intended

S. BR AHMAJOSYUL A

“AS has high credibility as it is endorsed by Irdai, has low premium and flexibility of soft copies being sent to customers.” BHABATOSH MISHR A DIREC TOR, CL AIMS, UNDERWRITING & PRODUC T, MA X BUPA HE ALTH INSUR ANCE

for the uninsured, it will be a step-up for them since they will now pay only 5% of the total hospitalisation cost compared with the 100%they were paying earlier. Besides this amount is typically higher, ranging from 10-30%, for other basic health plans However, some experts believe that the plan would even work for the younger, single, lower income population in metros because it is very affordable and will help them shoulder the basic hospitalisation costs to a large extent. “After all, how many people can afford to buy a `10 lakh plan

even in metros,” asks Sikdar. “It’s a good entry level plan even for people who have just graduated and are in their first jobs because it is standardised and doesn’t require too much research,” says Brahmajoysula. Later, if the buyer wants a more evolved plan and can pay a higher premium, he can easily port to other insurers. So if you are in a metro or a tier 1 city and don’t want a small cover with limitations and cappings, you can avoid this plan and opt for a more comprehensive and evolved cover. Remember, however, that you will have to pay a premium that can be 20-50% higher than the premium for Arogya Sanjeevani. If, on the other hand, the plan seems to fit your budget and needs, do not postpone buying it because, as Roy of Star Health says, “Health insurance is no longer a luxury but a necessity and this prodcut is a great way to enter insurance.” So what you should you consider while buying a plan since the features are same

New tax filing deadline is 30 Nov Government also cuts TDS rates to leave more money in the hands of taxpayers

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s part of the Covid relief measures, the government has extended the deadline for filing income tax returns for the financial year 2019-20 from 31 July to 30 November. Similarly, the deadline for tax audit has been shifted from 30 September to 31 October. Earlier, the deadline for receiving Form16 had been extended from 15 June to 30 June in view of the disruption caused by the nationwide lockdown. Tax experts were therefore anticipating an extension in the ITR filing deadline. The government has also reduced the TDS rates applicable for non-salaried payments. As per the announcement, to provide more funds to taxpayers, TDS for non-salaried payments and TCS for specified receipts shall be reduced by 25%. The reduced TDS and TCS rates will remain valid till 31 March 2021. The reduced rates will be applicable on payments such as TDS on rent exceeding Rs 50,000 per month, dividend payments from mutual funds and companies and TDS on fixed deposits. However, the reduction in the TDS and TCS rates does not mean any reduction in the tax liability. An individual will still have to pay tax on the entire payment as per the applicable slab rate. If the tax is

higher than the TDS rate, the taxpayer may have to pay a higher self assessment tax later. Therefore, a lower TDS may simply defer the liability. In case the TDS rate is higher than the tax payable, the move will reduce the amount that gets stuck with the government before it is claimed as a refund. In a further relief to taxpayers, the last date for making payments without interest

and penalty under the Vivad se Vishwas scheme has been extended to 31 December. This is the second extension of the scheme. Earlier, it had been extended to 30 June. The Vivad se Vishwas Scheme was announced in the Budget 2020 to allow onetime settlement of tax disputes between the tax department and individuals. The settlement can be made without paying any penalty and interest on the disputed amount.

for all insurers? Most experts agree that the things to consider are the company’s track and serviceability record, claim settlement history, premium, and hospital network. Make sure that the company has experience in selling the type of product that you are buying. “Serviceability is a very important factor because you need to be sure that the company will stand by you during claim settlement,” says Batra. Adds Sikdar: “It’s also important to check how the company engages with you, how its officials explain the product or its terms and conditions to you, make an effort to keep in touch with you even after the sale of policy, or inform you about the changes.” Given the current circumstances, also ensure that you will be able to conduct the entire transaction digitally.

Please send your feedback to [email protected]

Reduction in EPF contribution will not benefit employees To ease the stress on employers, the government has reduced the contribution to the EPF account from 12% to 10% of an employee’s salary for the next three months. Employers will save money due to the 2% reduction in their contribution to the EPF of their employees. While the move will also increase the take-home salaries of employees, financial experts say it would also curtail the growth in the individual’s Provident Fund account. If the total contribution is reduced from 24% to 20%, the employee will be contributing 16.6% less to his retirement savings for the next three months. Of course, this would also depend on how salaries have been structured by an organisation. If the PF contribution is part of cost to company (CTC) of an employee’s salary, the employer may have to pass on the benefit to the employee by way of increasing some other allowance.

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guest column 06

The Economic Times Wealth May 18-24, 2020

How to exit long-term holdings securely What’s the right way to protect the gains that you may have already made in equity funds? It’s time you explored the SWP option, says Dhirendra Kumar.

DHIRENDR A KUMAR CEO, VALUE RESE ARCH

money mysteries SWPs are a regular redemption from a fund. There are a number of variations. Investors can either redeem a fixed amount, a fixed number of units or all returns above a certain base level. Often, they are a convenient way to make a regular income from a fund investment.

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ow can you ensure that if you have been saving and growing your wealth over the years, then an event like the Covid pandemic does not slash and burn through your portfolio within months? Even though Covid-19 is a new phenomena, there’s nothing new about the problem I’m talking about. Whether it was the dotcom crash or the 2008 financial collapse, there have always been events that have threatened to trash your investments just when you were about to need the money. This time is no different. Amongst investors in equity mutual funds, the talk of the last three months has been how much value their investment portfolios have lost. At the end of March, the crash in values looked apocalyptic, with funds having lost up to 40%of their peak value before the crash. April brought some relief as, against all expectations, just as the Covid was becoming a globe-girdling pandemic, equity values staged a recovery. However, regardless of what actually happens, one sees laments on twitter about how the value of money accumulated for this or that purpose has been decimated by the crash in equity funds.

The one-year period was the best in terms of delivering the best returns but also overall the least variability and the least worst minimum returns. At Value Research, this problem of a safe exit from a long accumulated portfolio has always been in focus. This is something that we always discussed in our books and magazines, as well as in the columns that I write. The standard advice that we have always given is that just as one must enter equities gently through SIPs, one must exit through SWPs. For planned exits, where one knows beforehand roughly when one needs the money, the thing to do is to start withdrawing the money through an Systematic Withdrawal Plan some time before the target date arrives. For those who are not familiar with the concept, SWPs are a regular redemption from a fund. There are a number of variations. Investors can either redeem a fixed amount, a fixed number of units or all returns above a certain base level. Often, they are a convenient way to make a regular income from a fund investment. However, they function very well as a way of safely withdrawing from long-running investments too. The idea is simple but easy. Let’s say that

you had accumulated `20 lakh in a set of equity funds that you needed about now. Let’s say the money was in funds that together had the same performance as the Sensex. The value of the money would have dropped from `20 lakh in late February to `15 lakh now. Not good. The SWP technique that we suggest would mean that around February 2019, you should have started a monthly SWP of roughly 1/12th of the value. If you had `20 lakh in equity funds in February 2019 and you started withdrawing them at this rate, then you would have been able to get out about `19.8 lakh over the year. There would have been some opportunity loss too but ignoring that is exactly what this is all about. This technique always works in sharply reducing any potential losses that you might face. The question then arises as to how we know whether one year is the right period. This started as a rule of thumb, but recently, when there has been an intense interest in this technique, we have done a little research

project comparing one, two and three-year periods over a long period of time and one year turned out to be the best. Here’s what we did: We took the Sensex’s entire history and assumed that there was a fund that gave exactly those returns. There wasn’t, but that does not matter for the purpose of this experiment. We ran a set of simulations (1110 odd in all) of making 10 year investments and then withdrawing them through an SWP of one, two or three-year period. The one-year period was the best in terms of delivering the best returns (which is obvious) but also overall the least variability as well as the least worst minimum returns. In short, there will always be sudden crises, now and in the future. For long term accumulations that are needed at a known point in time, a one year lead time is enough to make a neat exit.

Please send your feedback to [email protected]

real estate The Economic Times Wealth May 18-24, 2020

Where to buy a house now Suburbs and tier 2 cities are likely to gather more interest if work from home becomes the norm in future. by Narendra Nathan

tions in the metros, some companies may move their second centres to smaller cities. While this will be the back up plan of companies against disturbances like this, it will also create more job opportunities in smaller towns,” says Thakkur. More job opportunities in smaller cities would mean increased housing demand in those places and lower migration to metros. The working class profile may also support housing demand in tier 2 cities. “Demand in smaller cities is driven by end users. Since the percentage of government and public sector employees are high, the ongoing employment slowdown will not affect this segment,” says Thakkur.

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Emerging suburbs The work from home culture will change the way we live. Moving to more spacious homes in the suburbs would make sense because commuting will not be required.

The way forward

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hough residential real estate has very few takers right now, the future looks promising. The housing segment is expected to propel the real estate sector forward between 2022-25. Among favourable factors, the emerging structural change involving work from home will play an important role. While most people are now working from home due to the current circumstances, several IT companies have already announced that this would be a permanent feature for at least a part of their workforce. “Work from home as a concept is going to remain because some companies are realising that productivity is not impacted by this. This also allows companies to hire employees from smaller towns,” says Shveta Jain, MD, Residential Services, Savills India. In the first phase, this shift will be moderate because companies will be grappling with issues like data confidentiality, etc. “Once things settle, majority of the workers will go back to offices and only the non client facing will continue to work from home,” says Prashant Thakkur, Director & Head of Research, Anarock. What will be the impact? “The impact will be more in some sectors like IT and less in others. So, this could be around 10-15% of the aggregate work force, which will also be substantial,” says Samantak Das, Executive Director and Head of Research - Real Estate Intelligence Services, JLL India.

As most urban homes today do not come with space meant for a home office or study, a bigger home in the suburbs could be the answer. “Most people settled for small houses close to office. If they work from home, people will move away from city centres to suburbs, which are more spaced out and also cheaper,” says Jain. Companies have also started realising that lower travelling time means more productivity. “To reduce travelling time of employees, companies may go for the hub

Residential will lead next phase of recovery Average annual investment (in $ billion) is projected more in housing.

5.10 3.90

Others

5.50

Total

3.50

1.10

1.00

1.10

2.90

1.20

1.20

1.30

1.30

1.30

1.50

Phase 2 2014-17

Phase 3a 2018-19

Phase 3b 2020-21*

Phase 4 2022-25*

1.00 2.80

2.40

Phase 1 2010-13

Residential

3.60

0.70

0.80

Office

Figures for 2020-21 and 2022-25 are estimates by Savills India

Source: Savills India

and spoke model—main office in the city centre and several smaller offices in the suburbs. Since there is a shortage of quality office space in the suburbs now, this shift may happen only in the medium to long term,” says Das.

Tier 2 cities will gain Though metro dwellers are unlikely to shift to smaller towns, several positive developments are expected there also. “Due to continued Covid-19 induced restric-

Estimated time to recovery Affordable housing is more resilient and is expected to bounce back faster. Recovery will start once the nationwide restrictions are significantly eased Note: Based on a survey by Savills India

Within 6 months 6 to 12 months More than 12 months

21 62 51

28 Affordable Housing

32 Other Housing

6

Though home buyers have to consider factors like their job security, etc, experts feel that the coming quarters will be a good time to start searching because of the expected correction in price. Since new transactions are not happening due to the lockdown, the pricing pressure is not visible now. However, experts feel that the end user activity will come back in the next 2-3 months and the downward pressure in price will be visible after that. “Though the extent of price correction will vary from micro market to micro market, housing prices are expected to come down by 5-8% in the next 6-9 months and this will open up opportunities for end users,” says Jain. Since prices have remained flat for the past few years, time correction has happened already. Das also feels that this is a good time to search and zero in on the dream house of your choice. “Though prices of existing projects are not being lowered, new projects are coming up at competitive prices. Even corporate developers are giving good offers. Being in a buyers’ market now, home buyers can also drive a hard bargain,” he says. In addition to the suburbs and smaller cities, real estate investors can also look at lower priced segments like affordable and budget housing that are expected to recover first. “While high end projects will continue to suffer due to lack of demand, affordable and budget projects will recover first. Continued government support will be the main driver in keeping the affordable segment resilient,” says Thakkur. Das concurs. “While affordable and budget segments are expected see green shoots from the coming festive season (from October), high-end and luxury segments will remain stagnant in 2020-21,” he says. Properties costing up to `40 lakh are referred to as affordable housing and properties costing between `40 and `80 lakh are referred to as budget housing. Please send your feedback to [email protected]

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guest column The Economic Times Wealth May 18-24, 2020

Debt fund investors seem to have learnt their lesson April redemptions show investors are reacting judiciously to recent events, says Narendra Nathan

NARENDR A NATHAN IS CHIEF MANAGER, INVES TMENTS, E T WE ALTH

Comparison between March and April reveals AMCs and fund managers have also learned their lessons and reduced their exposure to lower rated papers. GETTYIMAGES

08

T

he recent closure of six schemes by Franklin Templeton shocked debt fund investors. Though there were a number of side pocketing incidents earlier, no one expected a complete closure. Side pocketing entails segregating bad quality papers from the main portfolio and converting these into a separate scheme. While the original scheme continues with reduced net asset value (NAV), no entry or exit is allowed in the segregated scheme. This scheme is wound up as and when money, either in full or in part, is received from its investments. Franklin Templeton’s action was akin to segregating entire schemes. Investors will have to wait years to get their money back—in part or full— depending on the situation then. The event created panic among debt fund investors and redemptions were not restricted to Templeton schemes alone. However, redemption data from April shows investors taking a judicious approach. For example, there has been a net outflow of `19,239 crore from credit risk funds in April. This indicates long -term investors are realising the folly of taking risks in the debt portion of their portfolio just to earn 1-2% more. Safety, liquidity and return (SLR) principle should guide

debt investments as debt should be for providing stability to the portfolio and not to generate additional returns. Equity is the right asset class for trying to generate additional return by taking higher risk. Investors are displaying maturity by distinguishing between categories based on risk and have started shifting money to safe categories. Net inflow into liquid and overnight funds were `68,848 crore and `2,603 crore respectively. However, investors were quick to reduce exposure to categories taking unnecessary risks. Duration funds are supposed to be normal debt funds with papers restricted to that duration. Dynamic bond category, on the other hand, is supposed to shift between different durations based on market situations and generate additional returns. Sebi’s classification rules did not specifically ban these categories from investing in lower quality papers and some AMCs used that loophole to generate higher returns by taking higher credit risk. The net outflows from all these categories in April show investors have figured out the game. Another point worth mentioning is that investors have started checking the portfolio quality of each scheme within categories and have started distinguishing schemes based on credit profile. For exam-

ple, the AUM of ICICI Prudential Medium Term Bond Fund, a scheme with 53% exposure to AA rated papers, fell by 19%. The AUM fall in IDFC Bond Fund, which has 100% in AAA and sovereign papers, fell only by 7% in April. Similar investor distinction is visible in the ultra short term category as well. While AUM of ICICI Prudential Ultra Short Term, a scheme with 55% AA or lower rated papers, fell by 12% in April, AUM of HDFC Ultra Short Term Fund, a scheme with 100% in AAA rated papers or equivalent remained flat. Comparison between March and April reveals AMCs and fund managers have also learned their lessons and reduced their exposure to lower rated papers. However, there is no guarantee that fund houses will continue to be extra vigilant forever. If one goes by history, AMCs and fund managers will forget about this incident in 1-2 years and will start taking risks again. For instance,the extra vigilant stance generated by the fixed maturity plan (FMP) crisis in October 2008 didn’t last long. The crisis then was triggered due to faulty design of the product. The FMP’s entire portfolio was locked into the tenure of the scheme, but investors were allowed to redeem in the middle with an exit load. This created an asset liability mismatch.

More importantly, most of these papers were illiquid and therefore, AMCs could not sell them in the market to meet redemption requests. The fund industry survived that crisis only with the help of Sebi and RBI. However, once things settled, AMCs started taking higher risks again. As blindly believing debt fund managers is not a good strategy, investors have to check the scheme portfolios every month. The credit profile of a portfolio can change either because the fund manager takes deliberate action in this regard or because of redemption pressures. Assume scheme XYZ has an AUM of `100 crore and 50% of its investments is in high rated papers and the remaining in low rated papers and it is facing a sudden redemption of `25 crore. Since lower rated papers are usually illiquid, the fund manager will be forced to sell high rated papers. After this, the scheme will be left with `25 crore of high rated papers (33% of portfolio) and `50 crore of low rated papers (67% of portfolio). Any fall in quality of portfolio and reduction in AUM is a warning sign and investors should rush to the door before it shuts.

Please send your feedback to [email protected]

mutual funds The Economic Times Wealth May 18-24, 2020

09

Don’t ignore risks of gilt funds Investors are rushing to buy, lured by great returns. However, returns can moderate to a large extent.

I

nvestors have been piling on to gilt funds, attracted by the high double-digit returns. It is not just new investors flocking towards this space. Data from AMFI shows that while `2,846 crore flowed into gilt funds in April, the segment saw only `330 crore worth of redemptions. Existing investors seem to be keen to hold on to their hefty gains. Very few are actually booking profits in this segment. Given the recent developments, can this approach hurt investors? Both gilt and long duration funds have enjoyed a good run for over two years now. Ever since the central bank embarked on a series of rate cuts from mid-2018, returns from such funds have soared. Bond yields and interest rates move in opposite direction to bond prices. When interest rates fall, bond prices go up. Longer duration bonds see steeper rise. The recent sharp 75 basis points cut by RBI further propelled the NAV of these funds. Gilt funds and long duration funds have clocked 15% and 16.6% respectively over the past year. During this time, yield on the benchmark 10 year sovereign bond has softened from 7.4% to below 6%. The question now is, how long will this party continue? Now even if the central bank cuts interest rates further to prop up a stuttering economy, the bond markets may not share the joy. This is because the government is now resorting to higher market borrowing to plug revenue shortfall arising due to weak economic activity amid the Covid-induced lockdown. The government intends to borrow `12 lakh crore—50% more than the earlier target—to finance its fiscal deficit. Bond markets fret over excess supply as it pushes bond prices down. Experts indicate the bond market trajectory going forward will be guided more by the fiscal math and the additional borrowing it entails. Early indications are that the government may not have to stretch the fiscal math as much as feared. Despite the `20 lakh crore stimulus package, the actual direct hit borne by the treasury is likely to be much lower. “From a fiscal standpoint the immediate cost to the exchequer will be in the range of `1-2 lakh crore, which is not too outlandish given the current situation,” says a note by Axis AMC. While this is a relief, bond markets still have to contend with the surplus borrowings. Further announcements may also keep the bond

Gilt and long duration funds have enjoyed a strong run for two years 1-year return (%)

Fund

Net assests (` Cr)

IDFC Government Securities - Constant Maturity Plan

18.8

229

ICICI Prudential Constant Maturity Gilt

18.4

164

IDFC Government Securities - Investment Plan

18.1

858

Axis Gilt

17.5

86

SBI Magnum Gilt

17.5

2,433

DSP 10Y G-Sec

17.4

48

DSP Government Securities

17.3

1,036

Nippon India Nivesh Lakshya

16.8

1,135

SBI Magnum Constant Maturity

16.6

609

Nippon India Gilt Securities

16.4

1,250

Data as on 13 May 2020

market on tenterhooks, analysts say. “A lot of volatility can be expected in the long duration strategies in coming days,” warns Pankaj Pathak, Debt Fund Manager, Quantum AMC. “There is still huge uncertainty about the financing of the fiscal deficit and how much of incremental government bond supply will be absorbed by the RBI,” Pathak adds. The dynamics between the known expansion in fiscal deficit and the somewhat unknown quantum of financing of this by the central bank is important, argues Suyash Choudhary, Head – Fixed Income,

Source: Value Research

IDFC AMC. “We have seen the reveal of the expansion in deficit but market yields are reacting to the absence of any absorption plan so far from the central bank of this excess duration supply,” he adds. The RBI will have to step up open-market purchases or execute further “Operation Twists”—where it buys longer maturity government bonds and sells short maturity notes. If the RBI does not absorb the additional supply in some manner, there could be a sell-off in gilts, analysts say. Radhika Gupta, CEO, Edelweiss

AMC, insists investors should not buy gilt funds expecting a repeat of last year’s performance. “If you buy a gilt fund make sure you have a very long horizon,” she says. Pathak argues it is better to play duration through dynamic bond funds given their flexibility to cut portfolio duration sharply in anticipation of rate hikes. “Existing investors in duration funds may cut back positions to some extent,” he adds. This will still allow you to gain from any further upside if it plays out. Apart from the great returns, investors have also latched on to gilt funds for another reason. Concerned by recent sharp NAV drops in debt funds owing to defaults and credit rating downgrades, investors are finding safety in the sovereign guarantee of government securities. But experts warn investors are turning a blind eye to a different type of risk in gilt funds. While credit risk in this basket can be safely ignored, gilt funds are highly susceptible to interest rate risk. There is the possibility of loss of capital owing to adverse movements in interest rates—specifically, an uptick in interest rates. A look at historical performance shows that this risk can deliver blows far worse than credit defaults. Pathak says, “Gilt funds may be safe from credit perspective, but are not from the interest rate perspective.” Do not buy gilt funds as a substitute for a ultra short duration fund because you are chasing safety, Gupta asserts. “To try and solve one problem, you will create another one,” she cautions.

Please send your feedback to [email protected]

GETTYIMAGES

by Sanket Dhanorkar

stocks The Economic Times Wealth May 18-24, 2020

Use APT model to identify quality stocks during volatility This model helps in estimating the fair value of a stock by taking into account multiple systematic risk factors. by Sameer Bhardwaj

ical intermediates, specialty chemicals, and also offers crop protection solutions. The company has significantly reduced its net debt in the fourth quarter of 201920 and the commentaries from its global peers indicate that the demand for agro-inputs is intact despite Covid-19 challenges. According to a report by Emkay, there is a likelihood of a rating upgrade in 2021-22 based on its estimated adjusted net debt to EBITDA ratio. The brokerage house estimates EBITDA margins of 22.1% and 22.5% for 2020-21 and 2021-22 respectively.

T

he expected return of a stock is based on the risks it is exposed to. The difference between the actual return and the expected return is termed as alpha. Stocks that generate positive alpha are sought after. The market or systematic risks hold considerable importance in the risk and the expected return relationship. This is because diversification strategy cannot eliminate the market risks and therefore, investors should be compensated for such risks. In finance theory, capital asset pricing model (CAPM) is widely used to estimate such expected returns. CAPM is a one-factor model where the sensitivity (or beta) of a stock with respect to the market index returns, acts as a crucial variable in estimating the expected return. However, the stock markets are influenced by several macro variables like inflation, industrial production, GDP growth, currency movements, government finances, international oil prices, etc. Each of these factors have a varying level of influence on different stocks. For example, the weakening of a nation’s currency has a positive effect on the exportoriented companies, whereas companies dependent on imported raw material get negatively affected. To include the impact of different factors on the expected return, a multi-factor model known as arbitrage pricing theory or APT model is used. It is an extension of CAPM where the expected return of a stock is calculated as a linear function of various macroeconomic factors. The sensitivity of a stock with respect to each macro factor is represented by a factor specific beta. In other words, there will be different betas, each representing a stock’s sensitivity to the said factor. The model is represented as: E(r)=Rf+

1

(f1)+

2

(f2)+

3

(f3)+ … +

n

(fn)

E(r) : The expected return of a stock. Rf : The risk-free rate (or the return when no systematic risk factors are present) , , 3 … n : Factor specific betas. 1 2 f1, f2, f3 … fn : Macro or systematic risk factors. The f1, f2…fn can include GDP growth, fiscal deficit, bond spreads, industrial production etc. Corresponding to these factors, there are betas: b1, b2…bn. Each beta measures the effect of a defined macro factor on the expected returns of a stock. The APT model has its limitations too. Since it does not specify the number of factors to be included in the model, the analyst/investor is free to decide the factors. As a result, the output may differ depend-

Navin Fluorine International

GETTYIMAGES

10

It is a specialty fluorochemicals company that specialises in the manufacture of refrigerants, and various organic and inorganic fluorides. The company’s specialty business & CRAMS (Contract research and manufacturing services) segments are growing at a robust pace helped by strong domestic and export volumes. Analysts believe that the proposed capex of `450 crore

APT positive alpha stocks with good potential The actual return is compared with the expected return to identify stocks with positive alpha. PE

Dividend yield (%)

Current price (`)

Target price (`)

Upside potential(%)

Buy

Hold

Sell

Finolex Industries

12.56

2.74

364

644

76.6

15

3

0

UPL

57.11

2.14

376

564

50.3

30

2

2

Navin Fluorine International

41.78

0.55

1,410

1,665

18.0

10

3

0

Essel Propack

61.53

0.74

170

199

17.3

9

1

1

Company

Experts’ views

Current price, PE and Dividend yield as on 12 May 2020. Source: ACE Equity and Bloomberg.

ing on the number of risk factors included. For the computational aspects, APT involves the application of multiple linear regression and cross-sectional regression. However, this article does not focus on computation methodology. It aims to identify stocks that have generated positive alpha as per APT. The constituents of the BSE500 index are analysed to identify stocks that have generated returns higher than expected. Last five years of quarterly data for four systematic risk factors namely, real GDP growth, IIP growth, WPI inflation rate and BSE Sensex returns are included. Using such data, the expected returns of all of the 500 stocks are worked out. The actual return (average return over the past 5 years) is compared with the expected return to find out stocks with positive alpha. For example, Pfizer has generated an actual 5-year quarterly average return of 5.3%, whereas as per the APT model, the return works out as 3.3%. This implies a quarterly

average positive alpha of 2%. To look at the future potential of such stocks only those that are covered by at least five Bloomberg analysts and with one-year forward price potential greater than 10% were included. Let us look at four such stocks:

Finolex Industries The PVC pipes and PVC resin manufacturer has its production facilities in Maharashtra and Gujarat. According to a sector report by Equirus, players like Finolex will continue to gain market share due to the likely revival in agri demand, difficulties faced by the unorganised players owing to liquidity issues, and expected increase in demand from the affordable segment. The brokerage house is bullish on the company and expects an EBITDA CAGR of 17% over 2019-20 and 2021-22.

UPL UPL is an agrochemical company that manufactures industrial chemicals, chem-

will help the company explore new avenues and scale up its international position.

Essel Propack This is a specialty packaging company that manufactures laminated plastic tubes catering to the FMCG and pharma space. According to a report by Motilal Oswal, the company is set to benefit from the various expansion measures and efforts to improve its product mix across geographies over the last two years. Moreover, the increasing share of higher-value personal care tubes will help improve the margins. Besides, its diversified presence across the globe reduces the concentration risk. New product launches, renewed growth strategy, prudent capital allocation, and increasing use of laminated tubes over aluminium are additional growth drivers going forward.

Please send your feedback to [email protected]

QA &

I am 30 and suffering from hypertension and prediabetes for the past two years. I want to buy a health insurance plan for my spouse and myself. Should I buy a family floater or separate plans for each of us, given my pre-existing health conditions?

Health insurance pricing usually is based on age, and not pre-existing conditions. Buying a floater policy will mean for the same price, you will get a higher coverage and risk is spread across two individuals. Opt for a family floater plan and choose a high sum insured. Now plans are available for sum insured as high as `1 crore at very competitive prices. Please declare your health conditions to the insurance company. before you buy.

Yashish Dahiya Co-founder and CEO, Policybazaar.com

I am a pensioner. In 1997-98, I started trading in stocks along with four friends. We stopped after incurring losses to the tune of `2 lakh, but never sold the shares we had. We started trading again three years ago, after opening a demat account. We could not convert all the shares as some companies had ceased to exist while shares of others were no longer traded. These shares in paper form were bought for `1.5 lakh-`2.5 lakh. Can we show this loss in our tax returns, against profits made during the last financial year? Since the investments were made many years ago, can we add some nominal interest?

It is not possible to claim such notional capital losses on equities in your income tax return. To calculate capital loss, there should be a selling price and selling date. All these elements are missing from your delisted/defunct paper shares. Therefore, you will not be able to claim these capital losses or any interest on it.

Shubham Agrawal Senior Taxation Advisor, TaxFile.in

I am a 25 and earn `4.8 lakh per annum. I can save `10,000 per month. How should I invest this amount for the next seven years?

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.

QUESTION OF THE WEEK I will retire on 31 May. My portfolio comprises `95 lakh in stocks. I have `16 lakh in ABSL Dynamic Bond, `24 lakh in Franklin Bluechip, `13 lakh in Franklin Small Com, `24 lakh in Franklin Income Opp Fund and `24 lakh in ICICI Prudential Medium Term Bond Fund. I will get `1.2 crore from my PF. I have FDs of `10 lakh. I stay in my own house and have no debts. We are a family of five with me the sole earning member. My children are settled. I pay a premium of `38,000 for a family floater plan. I earn `21,000 a month from LIC pension plans. I want to rebalance my portfolio to earn an additional `80,000 per month to meet expenses. After two years I might need an additional `20,000 a month and perhaps this will increase by `20,000 every two years. How should I proceed? Your cumulative exposure to direct stocks and equity funds is around `1.32 crore. Your free exposure to debt funds (excluding Franklin Income Opp but including ABSL Dynamic Bond) amounts to `40 lakh. To ensure regular income, invest your PF proceeds of `1.2 crore in an ultra short term bond fund with SWP option. You can consider the direct plans of any of these —IDFC Ultra Short Term Fund, ICICI Prudential Ultra Short Term Fund, Invesco India Ultra Short Term Fund and Axis Ultra Short Term Fund. Consider redeeming ICICI Prudential Medium Term Fund and ABSL Dynamic Bond Funds and invest the redemption proceeds in any of the above-mentioned ultra-short term funds. A lump sum investment of `1.6 crore in any of those ultra short bond funds with monthly SWP of `80,000 for 20 years to start with, assuming an annualised return of 5%, will leave you with about `1 crore in these funds at the end of the tenure. Redeem some of your equity funds and stocks in a staggered manner in every bull market phase in future. Invest the proceeds along with the cash inflows from Franklin Income Opportunities Fund, as and when you receive, in your selected ultra-short debt fund. This will ensure the longevity of your fixed income assets even after increasing your monthly SWP by `20,000 every two years.

Naveen Kukreja

your queries The Economic Times Wealth May 18-24, 2020

I am 46. I run a business with my wife. I want to invest `50,000 in NPS Tier 1 for the 80CCD (1B) benefit. My child’s school fee is `75,000. To exhaust the 80C benefits, should I invest another `75,000 in ELSS or NPS or both? Other than saving tax, the investments in ELSS or NPS will fund my retirement.

Tax saving with NPS under Section 80CCD (1B) is over and above the benefit under Section 80C. So, you can invest in both and avail of the full tax benefits. ELSS is a good option as it can yield above average returns in the long run. You should start SIPs of `2,000 each in two ELSS funds such as Axis Long Term Equity Fund and Mirae Asset Tax Saver. The balance can be invested every year in PPF. This will ensure asset allocation and optimum return with minimum risk. Buy a health cover for self and family and get additional deduction of up to `25000 under Section 80D.

Raj Khosla Founder and Managing Director, MyMoneyMantra.com

I am 18. My grandfather has left me `1 lakh in his will. Where can I invest this amount for 5 years?

Invest in a secure instrument to earn decent and assured returns. Low risk investments, such as bank FDs, government small savings schemes, etc., provide high safety but low returns. For a 5-year window, you can opt for schemes such as the NSC, Post Office Time Deposit or Post Office Monthly Income Scheme (POMIS). The NSC offers you 6.8% interest, while POTD and POMIS offer 6.7% and 6.6% returns respectively. If you have a longer investment window of 10-15 years, you can consider investing in Kisan Vikas Patra (KVP) or PPF. Investing in equity mutual funds is also a viable option. The best way to do this is to invest 20% in a preferred fund and deposit the rest in a bank to start an SIP. If you decide to take up this option, select a fund that has delivered consistently for the last 10 years. You must also put in a little time and effort to understand how mutual funds work.

CEO and Co-Founder, Paisabazaar.com

Adhil Shetty

Equity mutual funds have given returns of 12-14% on average over the long term. Returns are, however, not guaranteed. You should consider the risks and only if you are comfortable, you can invest in large cap funds like the Axis Blue Chip Fund and in low cost index funds like HDFC Index Fund - Sensex Plan or Motilal Oswal Nifty 500 Fund. You might want to first build an emergency fund to cover six months’ expenses in a fixed deposit or in a liquid fund.

Ankur Choudhary Co-Founder and CIO, Goalwise

CEO, BankBazaar

Ask our experts Have a question for the experts? [email protected]

11

learn & keep 12

The Economic Times Wealth May 18-24, 2020

A small drop does not mean a fast recovery

Will this bear market be brutal or benign?

2008-10 saw the steepest and fastest drop, yet witnessed the swiftest recovery. 1994-1999

2000-2004

635

2008-2010

572

Number of trading days

448

411

369 261

74

35

24

Peak to 20% drop

-40.7 -56.2 -60.9 20% drop to bottom

Bottom to peak

Sharp initial recovery may not always sustain 1994-99 phase took least time to recover initial 25% and longest for final 25%. Days taken to retrace market decline (post bottom) PERIOD

INITIAL 25%

25-50%

50-75%

FINAL 25%

1994-1999

15

42

79

499

2000-2004

51

433

65

23

2008-2010

29

22

150

210

2008-10 phase retraced initial 50% of the market fall very quickly but took much longer to recover final 50%. In current slump, index has retraced 25% within 9 days and nearly 50% within another 24 days. Even if market recovers quickly initially, it can take very long to fully recover lost gains. Be prepared for a lengthy fight.

Recovery can be very slow initially, gaining speed much later

Peak-bottom drop (%)

2020 has seen market transition from peak to bear market (20% drop from peak) in 41 trading days, but has not reached the depths of previous bear markets.

2000-04 saw index remain weak for several months. % of market decline recovered (post bottom)

As the ongoing bear market plays out, Sanket Dhanorkar looks back on three previous bear markets to offer you some perspective on the severity of drawdowns and eventual recovery.

Markets can trade far below peaks for a long time 2000-04 saw index stay beyond 40% drop for the longest time. Number of trading days below peak UP TO 20%

BETWEEN 20%-30%

BETWEEN 30%-40%

BEYOND 40%

1994-1999

391

494

270

2

2000-2004

120

154

194

508

2008-2010

294

178

81

143

PERIOD

After 30 days

After 100 days

After 300 days

1994-1999

36.2 54.3 54.5 2000-2004

14.1 31 21.2 2008-2010

22.4 Despite sharp sell-off, 2020 has not yet witnessed severity of previous bear markets.

57.8 66.2

Sharp upticks can be false signals

Index recovered 35% of lost value within first 30 days in ongoing phase of market. Even if market takes time to recover initial losses, the last leg of recovery may come through very rapidly.

Bear markets can often have steep relief rallies. Return (%)

-38.9

12 Sep 199425 Jan 1996

Investors have to be ready for myriad scenarios

Return (%)

-33.9

11 Feb 200022 May 2000

Vicious bear markets in the past have evolved in different ways

110

PERIOD

25 Jan 199614 Feb 1996

26.7

22 May 200012 Jul 2000

26.6

BSE SENSEX (Normalised to a base of 100)

100 90

-9.4

14 Feb 199625 Mar 1996

-27.6

12 Jul 200018 Oct 2000

PEAK DATE

BOTTOM DATE

RECOVERY DATE

1994-1999

12 Sep 1994

4 Dec 1996

14 Jul 1999

2000-2004

11 Feb 2000

21 Sep2001

2 Jan 2004

2008-2010

2 Jan 2008

9 Mar 2009

4 Nov2010

2008-09

2000-04

1994-99

100.1

101.7

101.7

20

18 Oct 200015 Feb 2001

23.5

Be ready for a topsy turvy ride

60 2020-? 50

-29.1

24 Apr 19964 Dec 1996

-41.4

Recovery phase can be very turbulent. The 1994-99 recovery saw steep fluctuations.

75.4

15 Feb 200121 Sept 2001

40 Bear markets are sometimes interrupted by sharp upticks that turn out to be “sucker rallies” —drawing in investors who mistake it for the start of a sustained recovery. Current bear market has already witnessed a sharp 30% uptick. It remains to be seen if it is a part of rebound or another false signal.

30 DAYS

In the past, market has taken under 2 years to recover fully from a similar cut.

PERIOD

40% DECLINE DATE

DAYS TO RECOVERY

Sep 1994-July 1999

4 Dec 1996

635

Feb 2000-Jan 2004

9 Apr 2001

687

Jan 2008-Nov 2010

3 Oct 2008

513

While recovery has been slow in recent instances, markets have recovered within 6 months after a 40% cut.

80 70

25 Mar 199624 Apr 1996

Recovery from steep cuts is not always quick

65.7

Return (%)

55.1

28.6 -26.8

4 Dec 19965 Aug 1997

-29

5 Aug 1997- 12 Dec 1997- 21 Apr 1998- 23 Jun 199812 Dec 1997 21 Apr 1998 23 June 1998 14 Jul 1999

Sometimes, markets can give up chunk of gains on the way to full recovery. The 1994-99 bear market recovered 96% of its value by Aug 1997, only to sink again.

0 37

111

185

259

333

407

481

555

629

703

777

851

925

1,073

1,147 1,157

NOTE: The figures pertain to movement of BSE Sensex daily closing values. Intra-day highs and lows not considered, including for peak & bottom days. Only trading days considered for calculating timelines.

financial planning The Economic Times Wealth May 18-24, 2020

Treat this period as a pause Retiring in times like these can seem unfair, but this is a phase that will pass, says Uma Shashikant.

GETTY IMAGES

14

W UMA SHASHIK ANT IS CHAIRPER SON, CENTRE FOR INVES TMENT EDUC ATION AND LE ARNING

The problem with retiring in the middle of an economic crisis is that the value of your investments shrink. What looked like a comfortable corpus is now a fairly diminished bundle of wealth.

hat if you are retiring now, in the middle of this crisis? It is tough. You worry about the wrong timing. It may not be so bad after all, if you exercise your options diligently. The problem with retiring in the middle of an economic crisis is that the value of your investments shrink. What looked like a comfortable corpus is now a fairly diminished bundle of wealth. Then the opportunities to invest remain low, if not quite risky in terms of timing. Rebalancing the portfolio or making long term decisions about money is tough. No one is able to say which are the assets worth investing in. What should you do? First, avoid making long-term strategic decisions. Do not assume that retirement means you must make all the decisions about your corpus and wealth at that turning point. Take it easy for the next few months until the economic scenario looks clearer. Treat your retirement like a career break mentally. Hold back the eagerness to gather and tabulate all your assets and to make modifications. Second, measure your situation based on the diversity of your assets. That holds the key to how your retirement will pan out. It is likely that you own a home in which you live. Maybe you own a second home or land too. You might have investments in mutual funds and in the stock market. You may have a PF and gratuity that you can draw or invest in an annuity. You may have bonds, deposits, PPF, post office saving cer-

tificates. You may also have some wealth in gold, jewels and silver. This diversity is your saviour. Not everything will be losing value and not everything is needed at the same time. If there is one portion of your wealth with a value that can fund your expenses for the next year to a possible extended period of three years, you should be alright. A simple source of liquidity and income until things settle down is all you need to be comfortable. Third, postpone the decision to rebalance and shuffle. This is not the right time. Do not sell that second house in panic. Do not liquidate your funds and stocks and convert them to deposits. Sit through that loss if you can. Ideally you will rebalance your assets a few years before retirement for generating income. If you have not done that already, don’t try to do it now. As long as one portion of your assets allows drawing an allowance for your regular expenses, you are quite ok. Fourth, do not indulge or distribute. Many feel quite rich with the corpus that is accessible after retirement. My mother got herself a whole stash of new jewellery when her PF got credited to the bank account on retirement. She knew that her corpus was not her source of post retirement livelihood, and rightly trusted her children. I know of elders who give away the new found wealth to children. Hold that thought. Keep your money and postpone any distribution or indulgence at this time. Fifth, don’t begin an enterprise and make large investments to set it up. My cousins always wanted to run a travel agency, and

called me last week saying a little office space was now available at a throwaway price close to her house. Why would you set up a travel agency when the whole world is confined to its homes, when airlines are grounded, and when people are mortally scared of traveling? She argued that this might be the most appropriate time as everything is down. That is a trap. Unless you are a maverick investor and a serial entrepreneur who has seen it all, including failure, this is not the time. If this business is the first you ever began, and if it is going to take your lifetime’s savings to set it up, do not get the timing wrong. Preserve your corpus at this time. Do not distribute it into risky avenues. Sixth, cash is king during troubled times. It is fine to have your retirement proceeds lying in the bank. It is ok to receive a small interest from fixed deposits that you have made. There is no need to earn top returns from your corpus from day one. Do not make investment decisions you will later regret. Tell yourself that return to normalcy is your trigger to making long-term decisions. Do not be compelled to act before you are convinced that the world has returned to normal. Seventh, account for lack of employment opportunities and for a second career. During these times of retrenchment and pay cuts, if you had plans for a second job, your search just got tougher. Be on the lookout for something that might come your way, but prepare for not having an income. This is only a phase and it will pass. Don’t despair that all your plans have failed. Take this crisis as a break from work, rest and rejuvenate yourself. Do not sink into complacency. Be prepared to find something worthwhile to do when the opportunity arises. Eighth, do not make too many drastic changes to your spending and living habits. It is unlikely that your PF balances or your assets do not cover your normal lifestyle expenses for a period of 12 months. Do not cut back severely and harshly and live in fear that retiring in the middle of the crisis has pushed you down the ladder of comfort. Be kind to yourself. You have worked hard all your life, devoting the best years of youth to earn an income. Don’t allow the negativity around you to take away from the fact that you can truly use what you have saved. Keep indulgence in check, but don’t cut back on the basics. Ninth, do not talk about your money, wealth or plans to everyone. During times when people are losing their jobs, suffering pay cuts and facing losses in investments that they cannot redeem, a recently retired person who has a neat bundle credited into the bank, is both enviable and a target. Do not lend. Do not let others know the details. Guard your wealth. Tenth, this too shall pass. Don’t be forced to make decisions in a hurry. Or opportunistically. Wait for normalcy and treat this period as a pause. Don’t forget that what you have on hand is precious.

Please send your feedback to [email protected]

financial planning The Economic Times Wealth May 18-24, 2020

Create an emergency fund

PAPER WORK :: Online EPF claim

Employees’ Provident Fund Organisation (EPFO) members now have the option to make a withdrawal claim using an online Aadhaar-based facility. One can file an online claim at the https:// unifiedportal-mem.epfindia.gov.in/ memberinterface/ portal.

This corpus can be your insurance against an unexpected shortage of income.

Prerequisites The member must have an activated UAN (Universal Account Number) and seeded his bank account details and Aadhaar to the EPFO account. Also, the employer should have approved and verified the e-KYC.

GETTY IMAGES

Approval by employer

Sharad is a 28-year-old pilot who understands the importance of an emergency fund to take care of unexpected expenses. However, he has not been able to create such a fund so far. He has tried to build a contingency corpus in the past, only to give up due to other demands on his income or because he did not have enough surplus. Mostly, he has ended up using whatever had been set aside for emergencies on needs that were not really urgent. What steps should Sharad take to get past this stage and move on to saving for other financial goals?

S

harad misses having an emergency fund at his disposal in these troubled times. The airline industry has ground to a complete halt and his income is under threat. There is even a possibility of job loss as the airline industry is not expected to be back on its feet in the near future. A contingency fund would have allowed him some cushion to fall back on. However, it is never too late to start building an emergency fund. Sharad needs to lay down rules that will help him create and manage the fund appropriately. His first step should be to calculate the amount he requires. A fair estimate would be six months’ worth of living expenses. He should factor in liablities like any loan that he may be servicing. He should then divide this required amount into smaller targets that he can reach in stages. The smaller targets will be easier to achieve and will give him the

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

smart things to know

1

Super top-up health insurance plans provide additional cover, typically over and above the basic hospitalisation policy.

2

The premium amount is cost effective due to threshold limits of the cover provided by the basic hospitalisation plan.

satisfaction and motivation to keep going. The next step would be to find the savings that can be apportioned for this goal. A good way of doing so would be to set aside money for the fund first before considering other expenses. An SIP into a short-term debt fund or an automatic transfer to a recurring deposit at the beginning of the month will allow Sharad to get used to managing his expenses on the reduced available income. A standing instruction automates the investment process while cancelling it requires a little effort, which he might not put in unless it is absolutely necessary. Sharad can reach this goal faster by cutting down on expenses and move any savings and excess income that comes his way, such as a bonus, towards this goal. He could take a conscious decision not to increase his lifestyle expenses in line with an increase in salary for at least a year. This will help him create the needed corpus quicker.

Super top-up health insurance plans

It provides cover over the threshold limit of the health insurance cover in multiple claims or multiple hospitalisations in the year.

3

4

Super top-up policy lapses when the entire cover is exhausted and not when you have used it once.

After logging in, the member should click on ‘Manage’ and then ‘KYC’ to enter Aadhaar number and bank details (of the seeded account). The online claim facility can be used after at least two months of leaving the job after it is approved by the employer.

Claim process The member can click on the ‘Online Services’ tab and then choose ‘Claim’ form, which is a composite form No. 31, 19, 10C and 10D. Member’s information will be updated on the page. One needs to enter last four digits of the registered bank account number. A pop-up with ‘Certificate of Undertaking’ needs to be approved to proceed for bank account verification. Once verified, the member can click on ‘Proceed for claim’. The desired withdrawal option must be chosen and the amount needs to be updated. Scanned copy of cheque needs to be uploaded and address of the member must be mentioned. An authentication OTP will be sent to the registered mobile number. On verification, the claim will be submitted.

Covid 19 EPF withdrawal One can withdraw an amount equal to three months’ of basic and dearness allowance (DA) or 75% of the credit balance in the account, whichever is lower, in case of financial emergency due to Covid-19. One needs to select ‘Outbreak of pandemic (COVID-19)’ option against the ‘Purpose’ field and click on ‘PF Advance’ claim.

:: Points to note  Status of the claim can be checked

5

It is a great product to enhance the coverage of hospitalisation expenses.

on the portal through ‘Check claim status’ under ‘Online Services’ tab.  It is important to weigh the pros and cons of withdrawal from EPF as it enjoys a tax-free investment status.

15

career strategy The Economic Times Wealth May 18-24, 2020

Write better, earn more

EDITING IS THE SECRET SAUCE

You can improve your writing skills for higher income and greater effectiveness, says Devashish Chakravarty

D

id you know that you wrote a novel last year? If you use email at work, then you write between 150 to 500 words or more a day depending on your job. That means about 40,000 to over 1,20,000 words a year making a small or a large novel. Add to that various presentations, team notes, pitches and proposals that could make or break your career and income. With that volume of writing contributing to your professional success, you need to constantly upgrade your skills to achieve greater success through effective writing. Let us get started, now.

The only purpose The only purpose of writing is to be read. By one person at a time. So, the first question is, who are you writing for? Step into that person’s shoes. Understand that person’s perspective, whether it is your boss, a client, or the customer service department. Unless you use the reader’s perspective, your writing will not be absorbed or even read. If your manager is going to use your material to make a presentation to the Board, then the directors are your final audience. Do not write until you have taken a few moments to specifically identify and be one with your reader. This automatically implies that there is no place for your own emotions, especially anger, in professional communication.

Outline to begin The first hurdle you will face is your resistance to writing especially if you are asking for something, writing to authority, dealing with your own or the reader’s negative biases. One simple trick will solve two problems. Make a brief outline on a page of what you wish to convey. This includes the background, a few points, implications, and actions. Making an outline bypasses your resistance to writing and gets you moving. It also gives you clarity of thought and builds a strong foundation for the actual output.

Using logic Use the problem-solving technique to choose your content. Firstly, establish the context to get the reader on the same page as you. What is the problem? How and who does it affect? Why does it matter today? Then what are the components of the issue, what are the reasons for each, what are the boundary conditions and if this problem is similar to another problem? Finally, how to solve the causes, who will solve it, what resources are required and by what time? Does this cover all the questions that will arise in the reader’s mind? This is also the critical thinking approach and you will not require all these questions all the time.

Telling the story How you tell the story or sequence your content changes the impact of your writing. You can use the standard story-telling technique—STAR or Situation, Task, Action and Result. There is an extended version of STAR that makes it easier to understand. Pixar Animation studios from the Walt Disney stable uses it extensively in its movies - Once upon a time there was _______. Every day, _______. One day _____. Because of that, ______. Until finally _____.

Back to basics Get the appropriate format right. If you are writing an email, spend 20% of your time in framing your subject line to make it relevant and important for the reader. If you are selling something, spend 80% of your time in the subject. Know the salutation or how you are expected to refer to the reader. Follow your firm’s standard format for the beginning and closing of your emails, presentations and project reports.

Make it interesting Your goal is to be read. So, it is your responsibility to make it interesting for the reader. Darius Foroux, the productivity blogger, has two tips. Firstly, remove all clichés from your writing like – in order to, to conclude, I am pleased to share etc. They

1

2:1 EDIT

2

GO FOR SIMPLE

3

PUNCTURE THE BALLOON

Do not succumb to the seductive myth of the Golden Draft. No writer in the world writes a perfect first draft. Always edit before you save your writing or click send on that email. Edit at least twice for each draft that you write. If you are a perfectionist who edits about 10 times, you can improve further by switching tasks or taking breaks between edits.

GETTYIMAGES

16

serve no purpose and create clutter for the reader. Secondly, make it appealing to the eye. If you are writing an email, break it up into paragraphs no longer than three sentences each, use bullet points and sub-headings, make important points bold and vary the length of your sentences. Additionally, use the active voice instead of the passive, thus reducing the number of words while focusing on the subject instead of the object of the sentence.

Get these right You are concerned about professional writing. Hold that thought when you are sending a message, chat, or WhatsApp. Your messages should all be in prose with no shortcuts in grammar, spelling or language. Save the informality for friends and family. Do a fact and figure check whenever you are referring to data, quoting a report or person and pay special attention to where you put the decimal point in numbers. A factual error in one sentence and your writing is no longer trusted. Each reader will need to expend extra effort thereafter to fact check and this will reduce your credibility and readability.

You can always improve Writing is a skill. You are the craftsman continuously improving upon your current level of mastery and thus increasing your professional effectiveness and income. Your biggest resource is conscious reading. The more you read and notice how other writers frame their emails, books, presentations and reports, the better you write and develop your individual style for different requirements. Additionally, your vocabulary improves and you exercise a more effective choice of words in your sentences.

THE WRITER IS FOUNDER AND CEO AT QUEZX.COM AND HEADHONCHOS.COM.

Use one of your edits to increase readability of your work. Go for simplicity both in choice of words and construction of sentences. Writing does not permit you the luxury of gauging your audience’s reaction and restating your point to improve understanding.

Let out all the hot air from your writing to increase impact. Shorten your writing drastically in the first edit itself. Delete the first two paragraphs and check if there was more than a ripple in impact. Use one word instead of a phrase or sentence. Delete fillers and adverbs like very, greatly, quickly, little, rather etc.

4

TYPOS

5

PARALLELISM AND REPETITION

Typos are the bane of professional writing and hence your second edit’s goal is to remove mistakes. Your word processor like Microsoft Word will not distinguish between lose (deprived of) and loose (not tight) and you will ‘lose’ respect on account of your ‘loose’ writing. Use a grammar checker tool like Grammarly or study good emails to improve grammar.

During your final edit, implement for parallelism and remove redundancy and repetition. Parallelism occurs in—he came, he saw, and he conquered. But not in—he came, he saw, and he finished conquering. Repetition is when you have used the same word multiple times. Redundancy is when you have repeated a point elsewhere, maybe using the same words.

The Economic Times Wealth May 18-24, 2020

SMART STATS ET WEALTH TOP 50 STOCKS

In This Section MUTUAL FUNDS - P18 LOANS AND DEPOSITS - P20 ALTERNATE INVESTMENTS- P21

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 is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt. RANK

PRICE `

Current Previous Rank Rank

Stock Price

GROWTH%* Revenue

VA LUAT I O N R AT I O S

Net Profit

PE

PB

Div Yield

PEG

RISK Downside Risk

Bear Beta

R AT I N G No. of Consensus Analysts Rating

KEC International

1

1

194.60

23.23

31.92

10.27

2.05

3.07

0.33

2.19

1.15

34

4.74

Power Grid Corp of India

2

2

160.80

13.31

21.93

6.71

1.43

5.08

0.31

1.43

0.59

27

4.70

HG Infra Engineering

3

3

170.45

41.94

72.67

8.69

1.67

0.29

0.14

2.40

1.00

16

5.00

JK Cement

4

4

1,091.35

15.46

70.89

29.40

3.10

1.54

0.47

1.65

0.71

28

4.79

JSW Energy

5

5

40.15

2.57

32.84

9.50

0.56

2.47

0.27

1.79

0.60

16

4.81

Emami

6

6

183.35

9.51

78.88

27.19

3.97

4.37

0.32

1.81

0.67

33

4.03

Birla Corp

7

7

399.25

9.35

54.11

11.91

0.68

1.89

0.29

2.14

0.98

11

Fast growing stocks

1

Top 5 stocks with the highest expected revenue % growth over the previous year HG Infra Engineering

42

5.00

Bayer CropScience

42

Alkem Laboratories

8

9

2,527.10

29.33

78.06

39.47

5.52

1.21

0.52

1.30

0.36

21

4.24

Ajanta Pharma

40

Engineers India

9

8

63.35

22.24

17.53

10.75

1.69

6.63

0.51

1.94

0.61

15

4.47

39

Sun Pharmaceutical

10

10

455.95

24.00

48.60

41.23

2.65

1.27

0.88

1.61

0.62

40

3.92

Ipca Laboratories

ITC

11

11

163.80

10.13

26.01

15.87

3.39

3.48

0.61

1.76

0.82

38

4.53

Info Edge India

32

Manappuram Finance

12

13

123.05

2.23

73.82

11.31

2.31

1.81

0.16

2.84

1.57

14

4.64

Larsen & Toubro

13

12

871.65

15.61

13.42

13.35

1.91

3.24

0.91

1.83

1.08

43

4.77

Sterlite Technologies

14

--

100.10

17.50

19.70

9.10

2.09

3.47

0.36

2.86

0.84

11

4.64

NTPC

15

21

89.35

18.68

10.01

5.84

0.81

0.54

0.65

1.52

0.72

27

4.93

Top 5 stocks with the lowest price-earnings ratio

Ipca Laboratories

16

15

1,594.35

39.01

84.33

45.35

6.46

0.33

0.55

1.50

0.16

24

4.13

NTPC

CCL Products India

17

18

187.10

21.16

24.06

16.15

2.98

3.54

0.67

1.75

0.83

10

4.80

Gujarat Gas

18

16

241.70

31.81

142.01

40.22

7.63

0.41

0.27

1.83

0.82

30

3.97

Mphasis

19

22

803.40

23.07

10.95

12.61

2.56

3.36

0.92

1.64

0.77

34

APL Apollo Tubes

20

--

1,220.40

18.61

55.77

19.45

3.01

1.12

0.41

2.21

1.23

5.84

Dilip Buildcon

6.24

4.26

Redington India

6.55

10

4.60

CESC

6.65

Power Grid Corp of India

6.71

UltraTech Cement

21

14

3,609.50

18.09

65.50

40.42

3.47

0.32

0.82

1.71

0.91

43

4.47

Jubilant Life Sciences

22

20

449.95

10.18

27.61

12.21

1.49

2.22

0.46

2.36

1.02

13

4.54

Cipla

23

26

569.75

13.29

29.11

29.98

3.05

0.70

1.05

1.33

0.32

43

4.39

Essel Propack

24

25

171.75

14.08

48.52

28.04

3.90

1.45

0.58

2.12

0.70

11

4.55

Crompton Greaves Cons.

25

23

208.15

14.59

41.50

32.50

11.88

0.93

0.79

1.51

0.64

37

4.59

Aurobindo Pharma

26

28

665.60

28.22

24.13

16.42

2.79

0.44

0.68

2.87

0.92

35

4.60

CESC

27

30

591.80

11.70

8.04

6.65

0.88

3.36

1.14

1.75

0.72

18

4.94

Mahanagar Gas

28

27

902.00

0.66

32.57

16.34

3.72

2.17

0.45

1.87

0.95

30

4.20

Ajanta Pharma

29

29

1,494.45

39.73

44.28

33.61

5.79

0.90

0.78

1.64

0.65

12

4.33

Pfizer

30

31

4,413.45

17.70

40.31

47.13

6.71

7.81

1.17

1.41

0.35

10

4.60

Transport Corp of India

31

33

155.75

11.81

19.72

8.31

1.35

1.26

0.53

1.97

0.96

10

4.90

Century Plyboards India

32

19

119.45

5.62

40.35

17.60

2.68

0.89

0.59

1.91

0.76

20

4.45

Dilip Buildcon

33

32

255.35

21.51

20.02

6.24

1.21

0.39

0.31

2.73

1.28

15

4.53

Dr Reddy's Laboratories

34

35

3,732.00

22.13

29.20

32.96

4.42

0.53

1.06

1.23

0.32

47

3.60

Thermax

35

38

700.05

1.84

34.61

24.22

2.77

1.99

0.72

1.37

0.41

32

2.94

Heidelberg Cement India

36

34

154.10

8.21

27.05

15.74

2.97

0.95

0.53

2.03

1.03

15

4.60

VRL Logistics

37

41

153.75

7.80

17.90

15.25

2.17

4.50

0.93

1.81

0.71

15

4.33

Torrent Pharmaceuticals

38

45

2,408.50

15.08

71.53

93.06

8.59

1.50

1.30

1.48

0.43

34

3.38

Bayer CropScience

39

50

4,500.25

41.81

146.10

65.46

8.26

0.40

0.71

1.52

0.59

10

3.80

Info Edge India

40

44

2,695.80

32.43

50.74

53.74

12.77

0.31

0.40

2.11

0.74

27

3.30

Coromandel International

41

46

615.70

5.57

45.30

24.76

5.31

0.57

0.55

1.49

0.74

15

4.33

SRF

42

--

3,651.60

14.12

44.90

32.46

5.04

0.39

0.69

2.01

1.13

21

4.38

Apollo Hospitals

43

--

1,294.40

24.61

44.59

76.31

5.40

0.51

1.40

1.93

0.99

23

4.87

Blue Star

44

37

469.95

10.09

24.96

31.53

5.79

4.22

0.96

1.71

0.82

25

3.80

Lupin

45

48

863.05

3.53

54.24

63.72

2.81

0.60

1.16

1.38

0.33

46

2.98

Tata Consumer Products

46

49

362.80

27.61

70.81

55.76

3.11

0.70

1.32

1.93

1.03

11

4.36

Carborundum Universal

47

--

209.65

12.64

22.76

15.92

2.29

1.86

0.99

1.80

0.91

11

4.27

Redington India

48

--

84.00

19.05

0.74

6.55

0.84

8.74

46.95

2.62

0.91

10

4.80

Ramco Cements

49

--

549.00

12.09

26.71

23.83

2.85

0.99

1.14

1.68

0.86

28

3.71

Prestige Estates Projects

50

--

157.00

27.51

6.03

14.05

1.38

1.94

3.24

2.98

1.03

18

4.78

*REVENUE AND NET PROFIT GROWTH IS BASED ON CONSENSUS ANALYSTS' EXPECTATIONS. NR: NOT IN THE RANKING. DATA AS ON 14 MAY 2020.

Least expensive stocks

2

SOURCE: BLOOMBERG

Best PEGs

3

Top 5 stocks with the least price-earnings to growth ratio Manappuram Finance

0.14

0.16

HG Infra Engineering

4

5

Gujarat Gas

0.27

0.27

JSW Energy

0.29

Birla Corp

Income generators Top 5 stocks with the highest dividend yield (%) Redington India

8.74

Pfizer

7.81

Engineers India

6.63

Power Grid Corp of India

5.08

VRL Logistics

4.50

Least risky Top 5 stocks with the lowest downside risk Alkem Laboratories

1.23

1.30

Dr Reddy's Laboratories

1.33

Cipla

Thermax

1.37

1.38

Lupin

SEE DOWNSIDE RISK AND BEAR BETA COLUMNS IN THE ADJACENT TABLE.

smart stats 18

The Economic Times Wealth May 18-24, 2020

LAGGARDS & LEADERS

ETW FUNDS 100

Taking a long-term view of fund returns, here is a list of 10 funds in each category—five leaders (worth investing) and five laggards (that may be a drag on your portfolio).

BEST FUNDS TO BUILD YOUR PORTFOLIO

LAGGARDS

ET Wealth collaborates with Value Research to identify the top-performing funds across 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.

LEADERS

Equity: Large-cap 5-year returns 7.41

-0.11 Taurus Largecap Equity

Axis Bluechip

6.37

0.07 Principal Nifty 100 Equal Weight

Canara Robeco Bluechip Equity

1.42 Franklin India Bluechip Value Research Fund Rating

Net Assets (` Cr) 3-Month

RETURNS (%) 6-Month

1-Year

3-Year

5-Year

Axis Bluechip Fund



12,716.81

-19.99

-14.63

-2.99

7.17

7.41

1.98

Canara Robeco Bluechip Equity Fund*



418.00

-17.94

-11.96

-1.69

4.01

6.37

2.42

HDFC Index Fund



1,177.38

-22.86

-20.42

-13.30

2.64

4.18

0.30

Tata Index Sensex Fund* Sundaram Select Focus Fund*



23.61

-22.52

-20.11

-13.00

2.63

3.82

0.46



932.85

-20.73

-16.75

-9.04

2.47

4.92

2.33

UTI Nifty Index Fund*



2,097.08

-22.96

-20.81

-15.14

0.92

3.58

0.17

Edelweiss Large Cap Fund



165.33

-22.78

-19.09

-12.05

0.72

3.32

2.44



1,153.47

-18.92

-14.63

-2.62

0.71

4.83

2.27



15,347.16

-22.67

-20.21

-13.84

0.47

6.05

1.65

ICICI Prudential Bluechip Fund*



21,820.93

-21.60

-19.19

-13.92

-0.29

4.00

2.05

Indiabulls Bluechip Fund*



127.95

-23.80

-21.59

-14.87

-1.73

4.06

2.43

Motilal Oswal Focused 25 Fund * Mirae Asset Large Cap Fund *

1.6

Expense Ratio (%)

EQUITY: LARGE CAP

Baroda Large Cap

EQUITY: LARGE & MIDCAP Mirae Asset Emerging Bluechip Fund* Kotak Equity Opportunities Fund Canara Robeco Emerging Equities Fund



2,282.43

-22.63

-18.84

-10.12



8,838.98

-20.91

-16.15



2,980.18

-22.33

-16.27



4,845.74

-21.98

-13.32

1.62

5.05

1.93

-6.92

1.03

10.28

1.73

-8.85

-0.95

5.41

2.10

-9.57

-1.36

7.70

1.90

LIC MF Large & Mid Cap Fund*



594.43

-24.81

-19.12

-9.25

-1.56

5.59

2.45

Sundaram Large and Mid Cap Fund*



1,012.99

-27.67

-24.66

-16.03

-1.61

4.53

2.09

DSP Equity Opportunities Fund



4,439.07

-23.54

-19.22

-11.23

-2.23

5.24

1.96

Principal Emerging Bluechip Fund



1,822.03

-22.19

-15.06

-9.54

-2.25

5.85

2.18

Nippon India Large Cap

THE 3-YEAR RETURN OF AXIS BLUECHIP IS THE HIGHEST IN ITS CATEGORY.

THE 3-YEAR RETURN OF INVESCO INDIA GROWTH OPPORTUNITIES FUND IS THE HIGHEST IN ITS CATEGORY.

HDFC Focused 30

-11

-14.51

-8.20

-1.64

6.37

7.68

2.09

7,967.80

-21.93

-14.61

-8.14

4.59

7.54

1.80

-10.06



1,896.90

-19.04

-12.03

-5.16

3.24

5.61

2.25

Motilal Oswal Midcap 100 Exchange

Axis Focused 25 Fund



9,493.38

-23.99

-18.54

-6.10

2.84

7.79

1.73

IIFL Focused Equity Fund



785.87

-23.31

-15.58

-3.88

2.69

6.52

2.30 3.77

-9.61 Sundaram Mid Cap

Tata Retirement Savings Fund



689.21

-19.00

-15.56

-6.12

0.88

7.13

Kotak Standard Multicap Fund



26,049.43

-23.28

-19.88

-13.40

-0.97

5.79

1.70

-9

Edelweiss Multi Cap Fund



488.67

-23.94

-19.47

-14.60

-1.43

4.45

2.46

SBI Magnum Midcap

JM Multicap Fund



118.78

-24.64

-21.90

-11.72

-1.48

4.72

—

SBI Magnum Multicap Fund*



7,912.14

-24.36

-21.53

-15.33

-1.96

4.75

1.86

Motilal Oswal Multicap 35 Fund*



10,236.93

-25.46

-22.66

-16.74

-4.42

4.66

1.18



5,098.37

-17.25

-10.15

1.67

6.78

7.18

1.94

L&T Midcap Fund

6,487.64

-19.50

-11.89

-4.99

-2.11

7.30

1.92

5,911.85

-26.66

-18.38

-12.24

-4.34

4.94

1.92



5,366.51

-23.61

-16.74

-13.86

-5.06

5.48

1.98

EQUITY: SMALL CAP Axis Small Cap Fund



2,169.10

-26.87

-17.39

-4.12

1.52

6.56

2.23

SBI Small Cap Fund*



3,280.30

-23.83

-18.42

-11.15

0.57

7.97

2.25

Nippon India Small Cap Fund*



6,994.88

-27.64

-21.37

-21.07

-7.05

5.28

2.21

L&T Emerging Businesses Fund



4,267.86

-30.79

-27.87

-29.69

-11.05

3.41

2.08

-8.36 IDBI Midcap

THE 3-YEAR RETURN OF AXIS MIDCAP FUND IS THE HIGHEST IN ITS CATEGORY.

-16.33 ABSL Small Cap

-16.17 Sundaram Small Cap

-13.62 HSBC Small Cap Equity

-12.86

EQUITY: VALUE ORIENTED 

Invesco India Contra Fund*

726.10

-24.31

-20.64

-15.45

1.15

4.20



4,273.93

-21.40

-15.30

-10.64

1.13

6.36

2.10



4,018.95

-20.61

-19.41

-14.10

-3.98

4.81

2.67

L&T India Value Fund



5,709.96

-25.12

-20.88

-18.26

-6.68

3.68

1.93



19,632.01

-22.63

-17.13

-5.05

3.85

6.01

1.72

940.59

-19.37

-11.95

-4.97

3.07

5.61

2.33 2.18

EQUITY: ELSS Axis Long Term Equity Fund Canara Robeco Equity Tax Saver Fund* Mirae Asset Tax Saver Fund*

 

3,184.25

-21.76

-18.69

-10.07

1.87

—

Invesco India Tax Plan*



930.37

-21.54

-16.10

-8.13

1.39

5.32

2.44

Aditya Birla Sun Life Tax Relief 96*



9,371.50

-20.06

-14.28

-10.15

0.24

4.94

1.47

Quant Tax Plan*



8.83

-17.01

-17.86

-9.17

-1.17

6.53

2.48



1,769.58

-23.48

-19.68

-13.33

-1.28

5.63

3.20

DSP Tax Saver Fund



5,407.34

-22.94

-19.35

-11.04

-1.42

5.61

1.87

Kotak Tax Saver Regular Plan



1,040.28

-24.04

-18.27

-12.24

-1.76

4.37

2.29

JM Tax Gain Fund



31.80

-26.94

-22.92

-13.46

-1.95

3.94

—

Motilal Oswal Long Term Equity Fund*



1,411.09

-26.81

-22.30

-12.30

-3.00

6.64

2.20

Tata India Tax Savings Fund*

-11.83

2.49

Tata Equity PE Fund*

6.78 Axis Midcap Fund

0.13 Quant Mid Cap Fund

-2.11 DSP Midcap

-2.75 Tata Midcap Growth

-3.3 Edelweiss Mid Cap

Equity: Small-cap 3-year returns

6.78%

Franklin India Smaller Companies Kotak India EQ Contra Fund

6.52 IIFL Focused Equity

Equity: Mid-cap 3-year returns

2,925.43



7.13 Tata Retirement Savings

0.52 LIC MF Multicap





7.54 SBI Focused Equity

0.07

1.62%



Kotak Emerging Equity Fund

7.68 Parag Parikh Long Term Equity

-0.8

SBI Focused Equity Fund*

DSP Midcap Fund

Axis Focused 25

-1.09 Nippon India Retirement

Aditya Birla Sun Life Mid Cap

EQUITY: MID CAP

7.79

-1.72 Nippon India Multi Cap

Parag Parikh Long Term Equity Fund

Axis Midcap Fund

4.96 Nippon India ETF Shariah BeES

Equity: Multi-cap 5-year returns

EQUITY: MULTI CAP

Canara Robeco Equity Diversified Fund

5.06 SBI ETF Nifty Next 50

1.87

7.17%

Taurus Starshare Invesco India Growth Opportunities Fund*

6.05 Mirae Asset Large Cap

DSP Small Cap

1.52 Axis Small Cap

0.57 SBI Small Cap

-7.05 Nippon India Small

-7.36 Union Small Cap

-8.49 Kotak Small Cap

Hybrid: Aggressive 5-year returns 3.85% THE 3-YEAR RETURN OF AXIS LONG TERM EQUITY FUND IS THE HIGHEST IN ITS CATEGORY.

-1.69 JM Equity Hybrid

-0.48 Nippon India Equity Hybrid

0.87 PGIM India Hybrid Equity

1.19 Franklin India Life Stage

1.57 LIC MF Equity Hybrid

6.92 Canara Robeco Equity Hybrid

6.23 DSP Equity & Bond

6.1 Tata Retirement Savings

5.94 Principal Hybrid Equity

5.69 SBI Equity Hybrid

ANNUALISED RETURNS IN % AS ON 13 MAY 2020.

smart stats The Economic Times Wealth May 18-24, 2020

ETW FUNDS 100 Value Research Fund Rating

Net Assets (` Cr) 3-Month

RETURNS (%) 6-Month

1-Year

3-Year

5-Year

1

Expense Ratio

HYBRID: EQUITY SAVINGS Edelweiss Equity Savings Fund



83.73

-3.94

-1.79

2.76

5.40

6.03

1.74

Kotak Equity Savings Fund



1491.74

-7.11

-4.95

-0.11

4.50

5.77

2.15



700.38

-10.55

-7.93

-2.77

3.32

—

2.39



1241.95

-11.34

-8.52

-3.29

2.68

5.28

1.33

Axis Equity Saver Fund ICICI Prudential Equity Savings Fund*

Canara Robeco Equity Hybrid Fund*



2,912.43

-13.22

-7.78

-0.81

3.73

6.92

2.02

SBI Equity Hybrid Fund*



29,105.88

-17.41

-12.46

-5.00

3.63

5.69

1.80



3,314.23

-15.38

-12.84

-6.67

2.69

—

1.90 2.43



1,047.69

-15.75

-12.37

-5.42

1.20

6.10

DSP Equity & Bond Fund



5,538.45

-18.13

-12.14

-2.75

1.09

6.23

1.90

HDFC Retirement Savings Fund



367.19

-16.86

-13.30

-9.88

0.57

—

2.63

HDFC Children's Gift Fund



2,776.99

-17.68

-14.34

-9.99

0.29

4.98

2.13

Principal Hybrid Equity Fund



1,087.56

-16.29

-13.19

-11.57

0.12

5.94

2.24

ICICI Prudential Equity & Debt Fund*



17,696.29

-17.60

-15.01

-11.44

-0.37

4.96

1.82

Tata Retirement Savings Fund

Top 5 SIPs Top 5 equity schemes based on 10-year SIP returns SBI Small Cap 15.02 Canara Robeco Emerging Equities 13.95

HYBRID: AGGRESSIVE (EQUITY-ORIENTED)

Mirae Asset Hybrid Equity Fund*

19

3.73%

Axis Long Term Equity 12.42

THE 3-YEAR RETURN OF CANARA ROBECO EQUITY IS THE HIGHEST IN ITS CATEGORY.

Principal Emerging Bluechip 11.85 DSP Midcap 11.33 SIP: SYSTEMATIC INVESTMENT PLAN

HYBRID: CONSERVATIVE (DEBT-ORIENTED) Baroda Conservative Hybrid Fund*



22.10

0.78

3.64

11.12

7.36

7.29

2.08

Kotak Debt Hybrid Fund



236.39

-5.04

-1.80

5.19

4.32

6.91

2.23

Tata Retirement Savings Fund



133.22

-3.55

-0.77

5.16

4.57

6.88

2.94

ICICI Prudential Regular Savings Fund*



1,581.24

-4.79

-2.04

3.54

5.76

7.71

1.91

Indiabulls Savings Income Fund*



24.56

-3.31

-2.05

1.71

6.61

—

2.00

Nippon India Income Fund*



305.89

3.45

6.69

15.09

8.61

8.66

1.62

IDFC Bond Fund Income Plan



670.57

3.56

6.93

14.92

8.06

8.61

1.92

2

DEBT: MEDIUM- TO LONG-TERM

% ANNUALISED RETURNS AS ON 13 MAY 2020

Top 5 MIPs Top 5 MIP schemes based on 3-year SWP returns Indiabulls Savings Income

SBI Magnum Income Fund*



1,292.48

1.55

6.57

13.69

7.94

8.77

1.46

ICICI Prudential Bond Fund*



3,153.22

1.88

5.18

12.35

7.80

8.35

1.08

DEBT: MEDIUM-TERM 

3,192.04

1.59

5.44

12.17

8.45

9.19

1.22

IDFC Bond Fund Medium Term Plan



2,807.92

2.43

5.09

11.41

7.72

8.06

1.43

Indiabulls Income Fund*



30.33

2.47

4.54

9.14

8.20

7.99

0.90

HDFC Medium Term Debt Fund



1,134.93

-0.61

2.77

7.94

6.63

7.60

1.29

SBI Magnum Medium Duration Fund*

15.09%

7.02 Baroda Conservative Hybrid

THE 1-YEAR RETURN OF NIPPON INDIA INCOME FUND IS THE HIGHEST IN ITS CATEGORY.

6.65 ICICI Prudential Regular Savings 5.05 Canara Robeco Conservative Hybrid 4.92 LIC MF Debt Hybrid

DEBT: SHORT-TERM L&T Short Term Bond Fund



4,421.96

2.51

4.69

10.50

7.91

7.97

0.75

Axis Short Term Fund



5,560.05

1.76

4.28

10.31

7.77

8.07

0.95

HDFC Short Term Debt Fund



11,000.38

1.40

4.25

10.13

8.01

8.25

0.39

IDFC Bond Fund Short Term Plan



11,459.35

1.72

4.08

10.12

7.78

7.94

0.80

IDFC Dynamic Bond Fund



2,030.79

4.03

7.90

16.15

8.62

9.05

1.80

SBI Dynamic Bond Fund*



1,352.43

3.42

7.09

15.94

8.69

9.33

1.65



60.58

2.76

6.98

13.69

8.17

—

0.68

DEBT: DYNAMIC BOND

Quantum Dynamic Bond Fund*



488.53

2.23

6.70

13.68

8.28

8.69

0.65

Edelweiss Dynamic Bond Fund



54.18

2.32

4.67

12.26

8.13

7.87

0.99

PGIM India Dynamic Bond Fund



43.61

1.72

5.03

12.23

8.23

8.67

1.75

ICICI Prudential All Seasons Bond Fund*



3,014.13

1.90

5.90

11.89

8.22

9.28

1.34



1,076.06

1.57

4.79

11.85

8.73

9.40

1.08

HDFC Corporate Bond Fund



14,518.19

2.19

5.05

11.19

8.39

8.70

0.50

Aditya Birla Sun Life Corporate Bond Fund*



17,647.81

2.51

5.01

10.73

8.36

8.65

0.45

ICICI Prudential Corporate Bond Fund*



11,860.11

1.84

4.37

10.21

7.90

8.30

0.56



4,031.53

1.45

3.63

9.31

8.08

8.27

0.60



1,071.73

-0.89

2.53

8.29

7.63

8.08

0.92

Axis Dynamic Bond Fund

Kotak Dynamic Bond Fund

4.63 SWP: SYSTEMATIC WITHDRAWAL PLAN

16.15% THE 1-YEAR RETURN OF IDFC DYNAMIC BOND FUND IS THE HIGHEST IN ITS CATEGORY.

3

% ANNUALISED RETURNS AS ON 13 MAY 2020

Mid & Small Cap exposure

of Multi Cap funds 63.97

56.17

55.84

55.71

52.53

DEBT: CORPORATE BOND

Kotak Corporate Bond Fund Franklin India Corporate Debt Fund*

Did not find your fund here?

All equity funds ranked on 3-year returns. Debt funds ranked on 1-year returns.

Expense as on 30 April 2020 *Expense as on before 30 April 2020 Returns as on 13 May 2020 Assets as on 30 April 2020 Rating as on 30 April 2020

Quant Active

Invesco ABSL Bal India Bhavishya Multi- Yojna cap

Aditya Birla Sun Life Retirement

Nippon India Multi Cap

% OF ASSETS AS ON 30 APRIL 2020

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 fund’s risk score from its return score. The result is assigned stars according to the following distribution:

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

  Top 10%

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



 Next 22.5%



 Middle 35%



 Next 22.5%



Multi-cap: Mostly invested in large- and mid-cap companies. Mid-cap: Mostly invested in mid-cap companies.

4 FUND RAISER

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. 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%. Arbitrage: Seek arbitrage opportunities between equity and derivatives. Asset allocation: Invest fully in equity or debt as per market conditions.

Debt: Low duration 0.49

0.50

0.55

0.55

0.38

4.5% of the total AUM of equity funds was in cash and cash equivalents in April 2020 as compared to 3.4% in April 2019.

UTI Treas- IDFC Low ury AdDuration vantage

ICICI Canara PruRobeco dential Savings Savings

DSP Low Duration

% AS ON 31 MAR 2020 % EXPENSE RATIO IS CHARGED ANNUALLY. METHODOLOGY OF TOP 100 FUNDS ON WWW.WEALTH.ECONOMICTIMES.COM

loans and deposits 20

The Economic Times Wealth May 18-24, 2020

LOANS & DEPOSITS ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.

HOME LOAN RATES

Top five bank FDs Interest rate (%) compounded qtrly

What `10,000 will grow to

7.50

10,771

IDFC First Bank

7.25

10,745

RBL Bank

7.20

10,740

Indusind Bank

7.00

10,719

AU Small Finance Bank

6.75

10,692

TENURE: 1 YEAR Ujjivan Small Finance Bank

With effect from 1 October, all banks have made the transition to external benchmarks for pricing new home loans. Most banks have picked the RBI repo rate as the external benchmark.

REPO RATE: 4.40% FOR SALARIED

BANK

TENURE: 2 YEARS

FOR SELF EMPLOYED (%)

RLLR (%)

FROM (%)

TO (%)

FROM (%)

TO (%)

WEF

Ujjivan Small Finance Bank

7.50

11,602

SBI Term Loan

7.05

7.20

7.55

7.35

7.70

1 April 2020

IDFC First Bank

7.25

11,545

Punjab National Bank

7.05

7.20

7.80

7.20

7.80

1 April 2020

RBL Bank

7.25

11,545

AU Small Finance Bank

7.25

11,545

Bank of India

7.25

7.25

7.55

7.25

8.15

1 April 2020

Central Bank of India

7.25

7.25

7.35

7.25

7.35

1 April 2020

UCO Bank

7.30

7.30

7.40

7.30

7.40

28 Mar 2020

DCB Bank

7.20

11,534

TENURE: 3 YEARS AU Small Finance Bank

7.53

12,508

Punjab & Sind Bank

7.30

7.30

7.65

7.30

7.65

16 April 2020

RBL Bank

7.50

12,497

Canara Bank

7.30

7.35

9.30

7.35

9.30

7 April 2020

DCB Bank

7.35

12,442

IDFC First Bank

7.40

7.40

11.40

7.40

11.40

IDFC First Bank

7.25

12,406

Ujjivan Small Finance Bank

7.25

12,406

SBI Max Gain

7.05

7.45

7.80

7.60

7.95

1 April 2020

Indian Overseas Bank

7.25

7.45

7.70

7.45

7.70

14 April 2020

TENURE: 5 YEARS DCB Bank

7.35

14,393

Indian Bank

7.20

7.55

7.85

7.60

7.90

1 April 2020

IDFC First Bank

7.25

14,323

J & K Bank

7.60

7.70

8.00

7.70

8.00

28 Mar 2020

AU Small Finance Bank

7.25

14,323

Union Bank of India

7.20

8.05

8.35

8.05

8.35

1 April 2020

RBL Bank

7.15

14,252

ICICI Bank

8.10

8.10

9.10

8.35

9.20

1 April 2020

Ujjivan Small Finance Bank

6.75

13,975

Karur Vysya Bank

7.60

8.20

10.05

8.20

10.05

1 April 2020

Bank of Maharashtra

7.45

8.20

9.00

8.45

9.35

7 April 2020

Kotak Mahindra Bank

8.20

8.20

9.15

8.30

9.25

16 April 2020

Bank of Baroda

7.25

8.25

8.50

8.25

8.50

28 Mar 2020

IDBI Bank

7.80

8.25

8.60

8.45

9.00

12 April 2020

Dhanlaxmi Bank

7.93

8.25

8.90

8.75

9.40

5 May 2020

Federal Bank

8.35

8.35

8.45

8.40

8.50

16 April 2020

Top five senior citizen bank FDs Interest rate (%) compounded qtrly

What `10,000 will grow to

8.00

10,824

IDFC First Bank

7.75

10,798

RBL Bank

7.70

10,793

Indusind Bank

7.50

10,771

AU Small Finance Bank

7.25

10,745

Ujjivan Small Finance Bank

8.00

11,717

IDFC First Bank

7.75

11,659

RBL Bank

7.75

11,659

AU Small Finance Bank

7.75

11,659

DCB Bank

7.70

11,648

AU Small Finance Bank

8.03

12,694

RBL Bank

8.00

12,682

DCB Bank

7.85

12,627

IDFC First Bank

7.75

12,590

Ujjivan Small Finance Bank

7.75

12,590

TENURE: 1 YEAR Ujjivan Small Finance Bank

TENURE: 2 YEARS

TENURE: 3 YEARS

TENURE: 5 YEARS DCB Bank

7.85

14,751

IDFC First Bank

7.75

14,678

AU Small Finance Bank

7.75

14,678

RBL Bank

7.65

14,607

Ujjivan Small Finance Bank

7.25

14,323

Top five tax-saving bank FDs TENURE: 5 YEARS AND ABOVE DCB Bank

Interest rate (%)

What `10,000 will grow to

7.35

14,393

IDFC First Bank

7.25

14,323

AU Small Finance Bank

7.25

14,323

RBL Bank

7.15

14,252

Ujjivan Small Finance Bank

6.75

13,975

ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP ([email protected])

Your EMI for a loan of `1 lakh TENURE

5 YEARS

10 YEARS

15 YEARS

20 YEARS

25 YEARS

@ 8%

2,028

1,213

956

836

772

@ 10%

2,125

1,322

1,075

965

909

@ 12%

2,224

1,435

1,200

1,101

1,053

@ 15%

2,379

1,613

1,400

1,317

1,281

FIGURES ARE IN `. 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

Post office deposits

Interest (%)

Minimum investment (`)

Sukanya Samriddhi Yojana

7.60

250

Senior Citizens' Savings Scheme

7.40

1,000

Public Provident Fund

7.10

500

Kisan Vikas Patra

6.90

5-year NSC VIII Issue

Maximum investment (`)

Tax benefits

One account per girl child

80C

5-year tenure, minimum age 60 yrs

80C

1.50 lakh p.a.

15-year tenure, tax-free returns

80C

1,000

No limit

Can be encashed after 2.5 years

Nil

6.80

100

No limit

No TDS

80C

5.50-6.70

200

No limit

Available in 1, 2, 3, 5 year tenures

80C#

Post Office Monthly Income Scheme

6.60

1,500

Recurring deposits

5.80

10

Savings account

4.00

20

Time deposit

Data as on 14 May 2020

1.50 lakh

Features

15 lakh

Single 4.5 lakh

5-year tenure, monthly returns

Nil

Joint 9 lakh

5-year tenure, monthly returns

Nil

No limit

5-year tenure

Nil

No limit

`10,000 interest tax-free

Nil

# Benefit available only for 5-year deposit

market watch The Economic Times Wealth May 18-24, 2020

21

HOW YOUR INVESTMENTS PERFORMED THIS WEEK This weekly tracker keeps you updated on the benchmark stock index, bond yields, forex movements and CPI-Industrial workers. It also tracks the changes in the past one year to give investors an idea how their investments performed over a longer period.

2.0

-1.4 -4.6

Jan '20

0.1

Mar '20

4.5 2.1

Feb '20

1.3

14 MAY 2020 ` PER DOLL AR

4.9

4.5

Dec '19

3.2

Nov '19

75.56

14 MAY 2019

Oct '19

14 MAY 2020

70.42

Sep '19

6.06

14 MAY 2019

Aug '19

14 MAY 2020

7.38

Jul '19

31,123

14 MAY 2019

CPI-Industrial workers (%)

Jun '19

37,319

USD-INR

May '19

10-yr bond yield (%)

Apr '19

Sensex

-6.6

-16.7

CHANGE X

1 WEEK

-1.02%

1 WEEK

2.90 (bps)

1 WEEK

-0.37%

LATEST

-16.70%

X

1 YEAR

-16.60%

1 YEAR

-131.90 (bps)

1 YEAR

7.30%

1-YEAR AVG

-0.60%

Markets continued to remain under pressure due to heavy selling in IT stocks, Fed's expectation of grim US economic outlook, and investors weak response to the first tranche of government's 'Atma Nirbhar Bharat' package.

Bond yields increased marginally on the expectations that the stimulus package could lead to an increase in government borrowings.

Rupee gained due to the increased volatility in the dollar index and positive expectations from the government's rescue package.

IIP contracted by -16.7% in March 2020 due to the weak performance by the mining, manufacturing and electricity sectors amid nationwide lockdown.

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

Siti Networks Opto Circuits (India) Sanwaria Consumer

MARKET PRICE (`)

1.81 5.90 3.55

Top volume gainers 1-WEEK (%) CHANGE

1-MTH (%) CHANGE

1-MONTH AVG VOL (LAKH)

1-MONTH AVG VOL CHG (%)

MKT CAP (`CR)

25.69 27.16 26.79

158.57 152.14 151.77

1.84 3.83 8.87

-64.88 226.72 225.84

157.85 177.37 261.32

Educomp Solutions

2.95

26.61

145.83

0.37

208.06

36.12

Arcotech Vikas Ecotech SE Power Vikas Multicorp Hindustan Fluorocarbons Atlanta

2.20 2.65 3.66 2.09 6.40 6.46

21.55 9.50 -5.91 5.56 13.27 -5.00

115.69 115.45 114.04 106.93 100.00 86.71

0.09 3.20 0.44 1.89 0.03 0.03

-17.68 45.82 1,126.92 32.23 58.26 -13.06

23.10 80.98 14.86 138.67 12.54 52.65

2.74 0.22 4.03 8.16 1.03 6.50 0.91 2.66 7.00 4.75

MARKET PRICE (`)

1-WEEK (%) CHANGE

1-MTH (%) CHANGE

1-MTH AVG VOL (LAKH)

1-MONTH AVG VOL CHG (%)

MKT CAP (`CR)

Prismx Global Ventures

8.46

-9.32

-47.29

0.01

16,558.25

24.02

DB Int. Stock Brokers Uttam Value Steels KSS Yamini Investment Beardsell Vikas Proppant

8.05 0.23 0.19 0.20 9.00 2.74

-9.65 9.52 -5.00 5.26 -0.44 -8.36

-14.36 21.05 5.26 33.33 -47.81

30.93 12.41 0.75 0.03 23.61

12,050.00 4,761.22 3,784.23 3,757.87 3,022.04 2,541.01

28.18 151.99 39.51 10.51 25.29 138.70

ISMT

3.45

-12.66

16.95

1.62

1,866.42

50.54

Maximaa Systems Transcorp International

3.00 6.88

-1.64 -2.55

33.33 -31.20

0.03 0.09

1,432.45 1,362.73

17.40 21.88

30.60 158.57 2.27 11.25 4.00 -8.40 5.76 0.63 28.70 -33.33

1.17 1.84 1.43 19.99 1.03 1.10 5.57 3.97 2.10 2.34

Top volume losers

Top price losers Vikas Proppant & Granite PMC Fincorp Vikas WSP Shiva Cement Reliance Naval & Engin. CG Power Syncom Formulations Gennex Laboratories MTNL Trident

STOCK

-8.36 10.00 -13.33 -6.21 -0.96 -12.04 -4.21 -2.92 2.04 0.85

-47.81 -33.33 -28.04 -27.27 -21.37 -20.92 -19.47 -19.15 -17.36 -12.68

23.61 2.34 1.53 1.39 10.52 1.96 18.18 2.30 1.14 6.57

2,541.01 -38.14 -2.81 -12.57 80.29 -8.45 0.59 82.76 -19.38 3.91

138.70 11.20 82.37 159.12 75.97 407.39 71.04 33.65 441.00 2,420.60

JMT Auto Siti Networks SREI Infra. Finance Jaiprakash Power Vent. Toyam Industries Shree Renuka Sugars Dish TV (I) Hindustan Construction JCT PMC Fincorp

2.39 1.81 4.05 0.89 2.60 4.80 4.77 4.79 1.39 0.22

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 14 MAY 2020. SOURCE: ETIG DATABASE AND BLOOMBERG.

18.32 25.69 7.71 21.92 8.79 -3.03 -0.21 5.74 25.23 10.00

-70.05 -64.88 -63.78 -56.69 -55.54 -50.97 -50.57 -46.21 -45.30 -38.14

120.41 157.85 203.75 608.80 55.25 920.06 878.30 724.73 116.54 11.20

pick of the week 22

The Economic Times Wealth May 18-24, 2020

GSPL: Strong player, good value The Covid-19 induced price correction has made this the best time to invest in players like GSPL.

G

ujarat State Petronet Limited (GSPL), the second largest gas transmission company in India, has reacted negatively to Covid-19 fears. Though the gas transmission industry won’t be affected by the pandemic disruptions, its transmission volume may come down due to disturbances in user industries. However, analysts believe that this negative impact will be limited for GSPL. Resumption of operations by user industries, like ceramic, fertiliser, chemical, etc. after partial lifting of lockdown restrictions, is a positive factor for 3 GSPL. Besides, negative impact Sell of reduced gas consumption by

international LNG prices and increased demand. However, more terminals, like Swan Energy’s LNG terminal that is expected to start in April 2021, are coming up and this should help GSPL in increasing its transmission volumes. City gas distribution is going to be another driver for GSPL’s volume growth in the coming years. In the last round, several new geographical areas have been allocated in Gujarat. Companies in these new areas have to do groundwork before starting the distribution of CNG and piped natural gas (PNG) to the consumers. In addition to increasing its volumes, increased gas consumption by its city gas 27 distribution subsidiary, Gujarat Buy Gas, will also increase its market valuation. Reasonable valuation is another factor attracting analysts to this counter. Though the earnings for 2020-21 is expected to remain flat, current trailing PE ratio of 6.63 shows that this flat growth is already priced in.

Analysts’ views

fertiliser plants during lockdown is limited as they usually go for maintenance shutdowns in April before ramping up production 3 for the upcoming crop season. Hold Though power consumption is low at present, improvement in industrial activity will push up GSPL will be able to minimise the negative impact of the power demand which in turn Covid-19 disruptions with the resumption of operations by Selection Methodology: We will increase gas demand from user industries after partial lifting of lockdown restrictions. pick up the stock that has shown gas-based power plants. Reasonable valuation is another factor which has made the maximum increase in ‘consencompany a favourite of analysts. Eco-friendly gas based power sus analyst rating’ during the plants are increasing in numbers last one month. Consensus rating is arrived at by averaging and this is expected to be the main transmission growth all analyst recommendations after attributing weights to each driver for GSPL in medium to long term, (3-5 years). Low of them (ie 5 for strong buy, 4 for buy, 3 for hold, 2 for sell and 1 for price of liquified natural gas (LNG), which is trading close strong sell) and any improvement in consensus analyst rating to a 10-year low, is another factor pushing the gas based powindicates that the analysts are getting bullish on the stock. To er plants. Since GSPL has wide network, it should be able make sure that we pick only companies with decent analyst to serve the existing as well as upcoming gas based power coverage, this search will be restricted to stocks with at least plants in Gujarat. The company’s gas pipeline projects are on 10 analysts covering it. You can see similar consensus analyst track and the entire Mehsana - Bhatinda pipeline is expected rating changes during the last one week in ETW 50 table. to be completed by the year end. Lack of sufficient LNG termi—Narendra Nathan nals in Gujarat is the only bottleneck to benefit from the low

Fundamentals CONSENSUS ESTIMATE

ACTUAL 2017-18

2018-19

2019-20

2020-21

11,439.75

12,370.90

Revenue (` cr)

7,213.26

9,307.67

Ebitda (` cr)

2,063.45

2,541.73

3,111.60

3,243.23

754.98

999.65

1,482.93

1,486.30

13.38

17.72

26.78

27.05

PBV

PE

DIVIDEND YIELD (%)

Gujarat State Petronet

3.13

6.62

1.09

GAIL (India)

0.84

6.20

4.17

Indraprastha Gas

7.49

27.25

0.52

Adani Gas

10.61

26.78

0.24

Mahanagar Gas

3.71

11.71

2.22

Net profit (` cr) EPS (`)

Valuations

Latest brokerage calls ADVICE

TARGET PRICE (`)

RECO DATE

RESEARCH HOUSE

11 May 20

Elara Securities India

Buy

315

6 May 20

BOB Capital Markets

Buy

275

29 Apr 20

HDFC Research

Add

209

29 Apr 20

Reliance Securities

Buy

286

29 Apr 20

Nirmal Bang Inst.

Buy

273

Relative performance 100 MARKET PRICE: `183.30

94.09 103.98

SENSEX 83.40 14 MAY 2019

GSPL

ET OIL & GAS

14 MAY 2020

GSPL compared with ET Oil & Gas and Sensex. Stock price and index values normalised to a base of 100. Source: ETIG and Bloomberg.

WHAT EXPERTS ADVISE BUY

*STOCK PRICES AS ON 14 MAY RESEARCH HOUSE

ADVICE

Blue Star

Anand Rathi

Buy

Manappuram Finance

IDBI Capital

Adani Gas

STOCK

Maruti Suzuki Coromandel International

STOCK PRICE* (`)

1-YEAR TARGET PRICE (`)

POTENTIAL UPSIDE (%)

470

626

33

Blue Star managed to retain its 12.5% market-share in room ACs. It has now upgraded to buy since it is expected to improve further due to its business model and balance sheet-focused approach.

Buy

123

160

30

Though non-gold portfolio remains worrisome, Manappuram should be better off because around 67% of its AUM is from gold loan, a segment that will do well during troubled times.

ICICI Direct

Buy

106

130

22

Adani Gas added 33 CNG stations in 2019-20 taking its total count to 115. Its future volume growth should also be stable because of continued strong capex along with favourable regulatory scenario.

Emkay

Buy

5,110

6,173

21

Though Maruti will be negatively impacted in short term, it should hold the pole position in the market, owing to increasing share of petrol vehicles, focus on new products and network expansion.

Motilal Oswal

Buy

616

738

20

Despite Covid-19 induced disturbances, Coromandel is expected to benefit from 22% higher preseason rainfall across India, good water storage and favorable shift in crop pattern in its market.

RESEARCH HOUSE

ADVICE

COMMENT

SELL STOCK

ABB India Havells India

STOCK PRICE* (`)

1-YEAR TARGET PRICE (`)

POTENTIAL DOWNSIDE (%)

HDFC Sec

Sell

836

755

-10

Prabhudas Lilladher

Reduce

501

485

-3

COMMENT

ABB business model is highly sensitive to operating leverage and `320 crore revenue shortfall for 10 days of disruption in Mar-2020 led to sharp erosion in profitability (`110 crore contribution shortfall). While demand for Havells' consumer portfolio is expected to bounce back faster, B2B segments will remain a near term drag due to longer recovery cycle in industrial products.

mutual funds The Economic Times Wealth May 18-24, 2020

Don’t dip into retirement savings for kids’ education

PORTFOLIO DOCTOR

GOALS

1

2

3

4

FIRST CHILD’S EDUCATION: 6 yrs

FIRST CHILD’S HIGHER EDUCATION: 10 yrs

FIRST CHILD’S MARRIAGE: 14 yrs

SECOND CHILD’S EDUCATION: 17 yrs

PRESENT COST: `12 lakh

PRESENT COST: `50 lakh

PRESENT COST: `28 lakh

PRESENT COST: `12 lakh

FUTURE COST: `21.25 lakh

TOTAL COST: `1.3 crore

FUTURE COST: `72.2 lakh

FUTURE COST: `60.1 lakh

5

6

SECOND CHILD’S HIGHER EDUCATION: 21 yrs

SECOND CHILD’S MARRIAGE: 25 yrs

RETIREMENT INCOME: 21 yrs

CURRENT NEED: `50 lakh

CURRENT NEED: `28 lakh

CURRENT NEED: `1.41 crore (`70,000 per month)

CORPUS REQUIRED: `3.7 crore

CORPUS REQUIRED: `1.5 crore

CORPUS REQUIRED: `5.8 crore

PORTFOLIO CHECK-UP Investing in mutual funds for the past 7-8 years.

Goals are ambitious. Must increase monthly investment by `24,000. All SIPs will also have to be hiked by 10% every year to reach goals.

IDBI Nifty Index

Take loan for children’s education but keep retirement savings intact. Avoid using insurance as an investment. Returns from plans are too low. Both husband and wife should buy term covers of at least `1 crore each. Review investments and rebalance at least once in a year. Reduce risk when goal is near so that you don’t miss the target.

18,587

1 SBI Bluechip

81,406

EXISTING SIP (`)

0 Shift corpus to multi-cap fund SBI Focused Equity. Switch to multi-cap SBI Focused Equity. Hike SIP

Fund is down but holds promise. Increase SIPs to

2,000 `6,000 and hike by 10% every year.

ICICI Pru Bluechip

2,61,282

4,000 Increase SIP to `12,000 and hike 10% every year.

Franklin India Bluechip

1,05,737

Sukanya Samridhhi Account

2,22,000

0 5,000

5,000 amount by 10% every year.

2,24,350

25,967

NEW SIP (`)

RECOMMENDED ACTION

HDFC Hybrid Equity

2 ICICI Pru US Bluechip Equity

6,000

Switch to multi-cap ICICI Pru Focused Equity.

12,000

Shift corpus to multi-cap ICICI Pru Focused Equity to

0 consolidate portfolio.

Fund offers global diversification. Increase SIPs to

1,500 `5,000 and hike by 10% every year.

7,000 Keep contributing to this small savings scheme and

0

Assumptions used in the calculations

5,000 7,000

INFLATION Education expenses

For all other goals

10%

7%

to the life insurance policy. Use the maturity

LIC policy

Some goals can be downsized if not possible to increase SIPs.

Note from the doctor

AMOUNT INVESTED (`)

FUND NAME

Hold too many funds. Need to streamline portfolio.

7

ARINDAM

Vijaya and Deepak Tyagi are saving for their kids’ goals and retirement. Here’s the doctor’s advice:

Not many investors know whether they have invested in the right funds and if their fund portfolio is on track. The Portfolio Doctor assesses the health of the fund portfolio, examines the schemes and their suitability with regard to the goals and, if required, recommends corrective measures. The advice given is based on the performance of the funds, the risk profile of the investor as well as his financial goals.

NA

IDFC Multicap

2,17,659

2,200 proceeds for education expenses. 0

Fund has slipped. Shift corpus systematically to Mirae Asset Hybrid Equity.

15,578

2,500 and midcap fund. Hike by 10% every year.

Mirae Asset Hybrid Equity

10,999

5,000 every year.

Nippon India Equity Hybrid Aditya Birla SL Frontline Equity

5 Nippon India Large Cap HDFC Children's Gift

6

1,38,793 90,454 1,43,217 34,595

Canara Robeco Emerging Equities

0

0

Increase SIPs to `3,000 in this outperforming large

3 Mirae Asset Emerging Bluechip

4

2,200

Continue SIPs in this hybrid fund and hike by 10%

Switch to Axis Bluechip and start SIPs of `4,000. Hike

Switch to multicap scheme Aditya Birla SL Equity.

8,000 Hike SIPs by 10% every year.

Fund has underperformed. Switch to Axis Focused 25

Continue SIPs in this stable hybrid fund and hike by

3,000 10% every year.

Start SIPs of `4000 in Canara Robeco Emerging

0 Equities. Hike amount by 10% every year. 7,000

Axis Long Term Equity

1,71,950

4,000

76,903

5,576

TOTAL

19,10,500

`37,65,497 `76,328

WRITE TO US FOR HELP

3,000

7,000 4,000 5,576

If you want your portfolio examined, write to [email protected] with “Portfolio Doctor” as the subject. Mention the following information:  Names of the funds you hold.  Current value of the investment.  If you have SIPs running in any

of them.  The financial goals for which you

16,052 The goals can be reached using the mutual funds marked in the same colour.

RAJ KHOSLA, Managing Director and Founder, MyMoneyMantra

4,000

Continue SIPs in this outperforming large-cap and ELSS fund. Hike by 10% every year.

16,052

PORTFOLIOS ANALYSED BY

3,500

Keep contributing; hike by 5% every year. Don't withdraw before retirement.

Provident Fund and PPF

8%

4,000

7 NPS

12%

8,000

3,500 and hike SIP by 10% every year.

15,520

Debt options

3,000 5,000

0 by 10% every year.

Mirae Asset Large Cap

RETURNS Equity funds

`1,00,328

invested.  How much you need for each

financial goal.  How far away is each goal.

23

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The Economic Times Wealth May 18-24, 2020

Readers’ response, online and in print, to ET Wealth stories has been enlightening. We pick some that add information and perspective to our articles from previous issues. This refers to the cover story, ‘How Covid is forcing Indians to rejig their goals’. There will be many stories of misery and despair. Cash is going to be king despite lower returns in bank interest. Prudence will be supreme. Discretionary spends, luxury holidays and renovations will be put on the back-burner. Buying a home will be a good idea for only a few and job security would be threatened. There will be no improvement till the government reduces GST to stimulate consumption.

requirement. Our exports are not picking up, even though the rupee has depreciated against the US dollar. Our current account deficit is increasing. We cannot afford to consume so much of fuel in our country. There is no question of passing any benefits in crude oil price reductions to consumers as it would only make them consume more.

Start making do with less In reference to the cover story, ‘How Covid is forcing Indians too rejig their goals’, I think thrift will be the key word in the post-Corona era. We will face huge budget deficits and hyper inflation. Spending a lot on education will not help as it would not guarantee high paying jobs. The solution will lie in adopting a simple lifestyle and toning down expectations.

Hemant Pisat

S. Kalyanaraman

The survey, ‘How Covid has hit homebuyers’, was informative. Large and reputed builders who have unsold inventory must offer a discount of at least 30% to induce buyers.

Vilas Save

For us retired people who have no pension, our only prayer is that our money in the banks remain intact. In these uncertain times, one can’t help but be worried about one’s money.

N.H. Rao

not last. Many pharma companies have not fixed the underlying quality and compliance issues that have periodically caught USFDA’s attention. Further, they have failed to substantially invest in R&D and sooner or later, the pharma sector will revert to its usual role of imitating MNC products. The scarcity of medicines during the lockdown in different parts of

Subbu, India

The article, ‘Can pharma stocks continue to outperform?’ provided interesting insights. While pharma seems to have fared better than other sectors, the good times may

the country also reveals the weakness in pharma supply chains. There is much work to be done for pharma stocks to deserve outperformance. Nandkumar Venkatachary

This refers to the column, ‘Once again, govt goes back on oil price reforms’. India has to import more than 80% of its crude oil

The column, ‘A higher order of coexistence’, was wonderful. I am a regular reader of ET Wealth. I find Uma Shashikant’s columns enlightening. Her way of assessing points related to earning, saving and investing are educative. The language is clear and simple. She is a worthy teacher of economics. Wishing her every success. D. Yadaiah

A well connected Delhi locality

REALTY

HOT SPOT

Proximity to the key job hub of Noida makes the area attractive for homebuyers.

LOCALITY SNAPSHOT

SUPPLY BY BHK

LAXMI NAGAR-PATPARGANJ, DELHI

1 BHK

4%

2 BHK

35%

3 BHK

52%

4 BHK

9%

Established area in East Delhi having ample residential options along with good social & retail infra Proximity to key job hub of Noida and sound overall connectivity makes it a preferred residential area A popular commercial centre with many electronic showrooms, coaching centres, malls and offices Key infra - Mayo International School, Max Super Speciality Hospital, V3S Mall, Cinepolis Cinemas, etc. Well-connected through Vikas Marg, Delhi-Meerut Expy, Noida Link Rd and Blue & Pink Metro Lines Preet Vihar Laxmi Nagar

Patparganj Shakarpur

VALUES

PRICE RANGE `4,700-16,800 per sq ft

LOCALITY

IP Extension

Indraprastha Extension

Price

Rent

(`/sqft)

(`/month)

8,200-12,000 20,000-29,000

Expressway: 3 km 1 BHK 480 sq ft

`30 lakh (avg) Schools 16+

2 BHK 870 sq ft

`80 lakh (avg) Hospitals 14+

3 BHK 1,400 sq ft

`crore 1.70 (avg)

Restaurants 20+

Laxmi Nagar

50 lakh-1 crore 1-1.5 crore

28%

11%

1.5-2 crore 2-2.5 crore

4,900-7,500

12,000-20,000

Consumer preference by covered area (sq ft) Patparganj

Shakarpur

8,200-12,300 18,000-26,000

4,700-7,100

11%

Below 750

12% 16%

750-1,000

10,000-17,000

1,000-1,250

20% Preet Vihar

Banks 18+

Below 50 lakh

9%

Above 2.5 crore

4 BHK 2,350 sq ft

`crore 3.40 (avg)

6%

24% 22%

Airport: 26 km Railway station: 4 km

Consumer preference by budget segment (`)

Grocery Stores 17+

12,300-16,800 19,000-30,000

Petrol Pumps 10+

17% 24%

1,250-1,500 1,500-1,750 Above 1,750

In dia’s No. 1 P ropert y Sit e

The Economic Times Wealth is available at an invitation price of `8/issue. To book your copy, contact your newspaper vendor or call 022-39898090; Email: [email protected]; SMS ETWS to 58888 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 07 NO. 20