Interest rate on small savings deposits, PPF cut by 0.1%; effective from tomorrow

The government has lowered interest rates on small saving schemes like PPF, Kisan Vikas Patra and Sukanya Samriddhi scheme by 0.1 percent for the April-June quarter, a move that would prompt banks to cut their deposit rates.

For April-June, these have been lowered by 0.1 percent across the board compared to January-March. However, interest on savings deposits has been retained at 4 percent annually.


Since April last year, interest rates of all small saving schemes have been recalibrated on a quarterly basis. For the January-March quarter, these have been kept unchanged compared with the October-December quarter.

A finance ministry notification said investments in the public provident fund (PPF) scheme will fetch lower annual rate of 7.9 percent, the same as 5-year National Savings Certificate. The existing rate for these two schemes is 8 percent.

Kisan Vikas Patra (KVP) investments will yield 7.6 percent and mature in 112 months.


The one for girl child savings, Sukanya Samriddhi Account Scheme, will offer 8.4 percent annually, from 8.5 percent at present, while it will be the same at 8.4 percent for the 5-year Senior Citizens Savings Scheme. The interest rate on the senior citizens scheme is paid quarterly.

Term deposits of 1-5 years will fetch a lower 6.9-7.7 percent that will be paid quarterly while the 5-year recurring deposit has been pegged lower at 7.2 percent.

Why you should say a big NO to LIC’s new Plans

In 2016, the biggest Insurance Company of India, LIC came up with 4 new schemes for the public. From January to December 2016, the company launched three Endowment plans and one Money-back plan. Out of the three endowment plans, one is a Limited Premium Payment Endowment scheme. The 4 plans are namely; LIC Bima Diamond Plan, LIC Jeevan Pragati, LIC Jeevan Shikhar & LIC Jeevan Labh.

Before discussing more on these plans, let us understand what Endowment & Money-back plans are.

  • An Endowment Plan is a combination of insurance and investment. The insured will get a lump sum along with bonuses on policy maturity or in a case of death.
  • A money back plan provides life coverage during the term of the policy and the maturity benefits are paid in installments by way of Survival Benefits (money-back payments).


LIC’s Bima Diamond Plan

Launched in September 2016 LICs BIMA Diamond plan is a non-linked, traditional Money Back policy. The plan is open up to 31st August 2017. It is a Limited Premium Payment Plan with survival benefit payable at the end of every 4th year.

Survival Benefit: At the end of each of the specified durations during the policy term, provided all due premiums have been paid, a fixed percentage of Basic Sum Assured shall be payable which is as below:

For policy term of 16 & 20 years: 15% of Basic Sum Assured is payable at the end of every 4th policy year.

For policy term of 24 years: 12% of the Basic Sum Assured is payable at the end of every 4th policy year.

Sum Assured on Maturity: For a policy term of 16 years 55% of the Basic Sum Assured and for policy terms of 20 & 24 years 40% of Basic Sum Assured is payable.

However, Maximum Basic Sum Assured that is offered under this policy is Rs 5 Lakh only, which is not enough if you are looking for a high insurance cover.

There are no simple and annual bonuses under Bima Diamond Plan. The Loyalty Addition, if any, shall be payable, on death after completion of 5th policy year but within the policy term or on maturity, at such rate and on such terms as may be declared by the Corporation.

Returns of around 4% to 5% can be obtained from this scheme.

Avoid buying this plan as it neither offers you better returns or a high life cover. However, If you have already bought it, you may let it lapse.


LIC’s Jeevan Pragati

Available for purchase from February 2016, LIC’s Jeevan Pragati Plan is a non-linked, with – profits plan which offers a combination of protection and savings.

This plan provides for the automatic increase in risk cover after every five years during the term of the policy. In addition, this plan also takes care of liquidity needs through loan facility.

Death Benefit:  In the event of death during the policy term, if all due premiums have been paid, Death benefit, is defined as the sum of Sum Assured on Death, vested Simple Reversionary Bonuses, and Final Additional bonus, if any, shall be payable.

Maturity Benefit: Sum Assured on Maturity + Simple Reversionary Bonuses + Final Additional bonus if any, shall be payable at the end of the maturity period.

The expected returns on this plan can be around 6%. However, these returns are highly dependent on the bonus rates that LIC declares every year.

If you are planning to buy this plan, you may ignore it.

LIC Jeevan Shikhar Plan : Tax Saver or Loser

LIC’s Jeevan Shikhar Plan

LIC’s Jeevan Shikhar is an endowment plan. It is a participating, non-linked, saving cum protection single premium plan wherein the risk cover is ten times of Tabular Single Premium.

This plan is no longer available as the availability period ended on 31st march, 2016.

The proposer can choose the Maturity Sum Assured. The premium payable shall depend on the chosen amount of Maturity Sum Assured and age at entry of the life assured.

Maturity Benefit: On policy maturity, the Maturity Sum Assured along with Loyalty Addition (if any) shall be payable.

The expected returns from this plan are around 6%.

For those who have already subscribed to this policy, it is advisable to surrender it. The policy can be surrendered at any time during the policy year.  The Guaranteed Surrender Value allowable shall be as under:

In First year (after 3 months): 70% of the Single premium paid, thereafter, 90% of the Single premium paid.

LIC’s Jeevan Labh Plan

LIC’s Jeevan Labh is a limited premium paying, non-linked, with-profits endowment plan which offers a combination of protection and savings.

Death Benefit:  The death benefit under this plan is:

Sum Assured + Bonus + Final Additional Bonus (if any)

Maturity Benefit: The maturity benefit under this plan is:

Sum Assured + Bonus + Final Additional Bonus (if any).

The expected returns can be in the range of 5 to 7% depending on the premium payment term.

This plan is an endowment plan with more limitations. A mix of insurance and investment, this plan neither gives you good returns nor adequate insurance. So, you should avoid buying it. However, If you have already invested in this plan, you may let it lapse.

LIC Jeevan Labh Plan : Reviews/Features/Return Sheet

Must read for prospective policyholders:

These plans are very expensive when it comes to assuring high sums. So if your aim is to get adequate life cover, availing these policies will not help.

The traditional Life Insurance plans can offer returns in the range of 4 to 7% which is a lower Return on Investment considering the large investment period of more than 10 years. Therefore these kinds of plan may not suit you unless you are satisfied with such low returns.

In case you wish to avail tax saving benefit under Section 80C, go for a long term Small Savings Scheme like PPF (Public Provident Fund) rather than choosing a traditional Life Insurance Policy.

Life Insurance companies offer many plans with specific benefits which may not be suitable for everyone. Therefore be aware of all the features of any financial product that you are about to buy.

Say a strict no to Guaranteed Life Insurance Plans

Say a strict no to Guaranteed Life Insurance Plans

Guaranteed Life insurance plans are the basic product offered by almost all insurance companies. These plans attract a wide customer base especially during the last few months of the tax saving season. Also, in a state of falling interest rates, such guarantees attract those individuals who want life insurance for availing tax benefits.

In these plans, Insurers declare a ‘guaranteed addition’ (GA) or ‘guaranteed return’ instead of bonus which varies depending upon the profits made by the insurer. Apparently, such plans appear attractive with lots of guarantees thrown in at different stages of the policy. All in all, the maturity amount is guaranteed and so are the monthly payouts.

Such plans may come up with the offers of guaranteed addition of 7-9 per cent of premium per annum or guaranteed payouts of 126-138 percent of the annual premium each year.


The gap between guaranteed and actual returns

The guaranteed addition is not equivalent to the actual annualized returns. These guaranteed benefits accrue only on maturity and hence the actual return will vary from the one which is guaranteed to the customer. Guarantee always comes at a cost, therefore, the returns, after adjusting for the costs because of the guarantee, are low in such plans.

Although actual returns would depend on one’s age, term and premium amount, the average IRR (internal rate of return) in most traditional plans, including money-back, endowments, lie between 2 to 6 per cent per annum. The plans with guarantees would carry even lower returns.


An illustration

Let’s assume that there’s a guaranteed plan for a 10-year term, but with a premium paying eight-year term. The plan offers guaranteed payout of 150 percent of premium every year after maturity of 8 years.

It means that the premium is to be paid for 8 years, but life cover will run for 10 years. After maturity, payouts will happen for the next 8 years. Illustratively, if the premium is Rs 20,000, it has to be paid for the initial 8 years. Thereafter, from 10th till the 17th year, there will be an annual payout of Rs 30,000. The IRR in the above plan comes to 2.9 per cent per annum!

Types of guarantees

The structure of the guaranteed plans is not the same across insurers.

  • Insurers may offer a guaranteed return based either on the premium or on the sum assured.
  • The guarantee may also differ based on the term of the policy or even the premium paying term.
  • In some plans, the guaranteed returns get added to the policy from the second year onwards, while in some, it may start at a later date.
  • Some of these plans are similar to money-back plans wherein there is a regular flow of income at regular intervals, while in some, there could be a lump sum payment on maturity.
  • Further, in a few of them, payouts happen after maturity for a certain number of years.

LIC Jeevan Shikhar Plan : Tax Saver or Loser

Guaranteed traditional plans gets complex

The offering could be anything, but hidden beneath the complex workings of insurance plans is the payout structure. There has been a vast change in the traditional life insurance which earlier represented the endowment and money back kind of policies. The terms and conditions of the payout are so complicated that understanding it may not be an easy task for many.

The premium, for a specific age and sum assured (SA), is paid for a limited period (say, 5 years) while the term of the plan is 15 years. Based on these parameters, the insurer will calculate a guaranteed maturity value and depending on that, will start paying a certain percentage of it as guaranteed cash amount starting the non-premium payment period (from the 6th year) till the end of the term.

Similarly, there could be a guaranteed plan in which every 5th year, 125 per cent of the premium is paid out, while the GA is added to policy each year, to be had on maturity along with SA (less amount paid every fifth year). In few other guarantee plans, the payout could be entirely on maturity, including GA and SA.

Contrary to the past when these policies were simple and straightforward, the newer versions are very complicated to understand. With guarantees thrown in, such plans may appear attractive, but the actual return in them is around 4 per cent per annum, or even lower.

Tip for insurance buyers:

One must not buy a life insurance for the purpose of saving tax. Traditional plans are inflexible and lock in funds for 15-30 years with a return of 2 to 5 per cent. so people must avoid buying traditional insurance plans, with or without inbuilt guarantees. Rather they should get a pure term insurance plan and park their savings in Public Provident Fund (PPF) or Equity Linked Savings Scheme (ELSS) for meeting long-term goals, while keeping the tax the tax liability at bay.

Shankara Building Products Ltd IPO Review

About the company: The company is one of the leading organized retailers of home improvement and building products in India based on the number of stores, operating under the trade name Shankara BuildPro.

The company was operating 100 Shankara BuildPro stores, spread across 10 states in India. Shankara Buildcon caters to a large customer base across various end-user segments in urban and semi-urban markets through its multi-channel sales approach, processing facilities, supply chain and logistics capabilities.

The company primarily offer steel-based products, such as structural steel, TMT bars, pipes and tubes and other allied steel products. Given the wide application of such building products, Shankara also caters to multiple sectors, including housing, general engineering, automotive, renewable energy, agriculture, construction and infrastructure.

The company’s retail operations were spread across Andhra Pradesh, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Odisha, Tamil Nadu, Telangana and Puducherry.

Issue Details:

Issue Opens on 22 March 2017
Issue closes on 24 March 2017
Issue Type: Book Built Issue IPO
Issue Size: Issue of Rs. 45 crores and  Offer for sale of 816252 shares by the Promoter and 5705488 shares by selling shareholders.
Face Value: Rs 10 Per Equity Share
Price Band: Rs.440 – Rs.460 Per Equity Share
Minimum Order Quantity:32 shares

Tentative Schedule:

21st March – Anchor Investors
30th March – Finalisation of Basis of Allotment
31st March – Unblocking of ASBA
03rd March – Credit to Demat Accounts
04th April – Listing on NSE & BSE

Lead Managers:

1.Equirus Capital Private Limited
2. HDFC Bank Limited
3. IDFC Securities Limited

Registrar to the IPO:

Karvy Computershare Private Limited

Objects of the Issue:

1.Repayment or pre-payment of loans of the Company and VPSPL;
2. General corporate purposes;

Top 10 share holder

Building material industry estimated to reach 6.8 7.0 trillion in 2020-21 (for the eight key segments), representing a CAGR growth of 8-8.5%


Negative :

There are various proceedings involving Company and certain of its Subsidiaries, which if determined against it or them, may have an adverse effect on its business.

Revenue growth at 6.4 % CAGR.

The company has had instances of non-compliances in the past, including in relation to regulatory filings to be made with the RoC and the RBI under applicable law.

One of its Subsidiaries, namely, VPSPL, has availed an unsecured loan that can be recalled by the lender, subject to the terms and conditions of the grant, at any time.

The company has certain contingent liabilities that have not been provided for in its financial statements, which, if they materialize, may adversely affect its results of operations, financial condition and cash flows.

Acquisition of its Subsidiary, VPSPL and transfer of its manufacturing business to its Subsidiary, TVS PPL were undertaken without obtaining valuation reports.

Uncertainty regarding the housing market, real estate prices, economic conditions and other factors beyond its control could adversely affect demand for its products and services, its costs of doing business and its financial performance.

The company does not have definitive agreements with a majority of its vendors for supply of its raw materials and retail products which may adversely affect its business and results of operations.

Any disruptions in its logistics or supply chain network and other factors affecting the distribution of its merchandise could adversely impact its operations, business and financial condition.

Company’s  success depends on the value, perception and product quality associated with its retail stores and any negative publicity of its products, its retail stores or its processing facilities may adversely impact its brand equity, sales and results of operations.

The inflation or deflation of product prices could affect its pricing, demand for its products, its sales and its profit margins.

Some of its lease agreements may have certain irregularities.

One of its Group Entities has incurred losses in the last three Fiscals.



Changing laws, rules and regulations and legal uncertainties, including an adverse application of tax laws and regulations, in India may adversely affect its business and financial performance.

Any downgrading of India’s debt rating by an international rating agency could have a negative impact on its business, results of operations, financial condition, and prospects.

A decline in India’s foreign exchange reserves may affect liquidity and interest rates in the Indian economy, which could adversely affect its financial condition.

Positive :

Providing its customers a unique experience by offering a comprehensive range of home improvement and building products.

Its strong vendor network and relationship built over two decades.

It’s presence across the entire value chain

Robust back-end infrastructure ensuring efficient supply chain management

Strong track record and financial stability.

Experienced and dedicated management team.

Strategies :

Scaling its retail presence

Enhancing its product offerings

Increasing its presence in bespoke products

Further strengthening its value chain

Focus on its brand equity and marketability in the home improvement and building space.

DMart IPO ( Avenue Supermarts ) Review and current market premium

Financials: For the financial year ended March 2016, the company had posted a net profit of Rs 65.56 crore against Rs 34.54 crore in the previous financial year ended March 2015. It had posted a net profit of Rs 42 crore, Rs 47.76 crore and Rs 44.75 crore in FY14, FY13, and FY12, respectively.

For the financial year ended March 2016, the company had posted a net profit of Rs 65.56 crore against Rs 34.54 crore in the previous financial year ended March 2015. It had posted a net profit of Rs 42 crore, Rs 47.76 crore and Rs 44.75 crore in FY14, FY13, and FY12, respectively.

However, the company had registered a negative cash flow in four of the preceding five financial years. Cash flows of a company is an indicator to show the extent of cash generated from the operations of a company to meet capital expenditure, pay dividends, repay loans and make new investments without raising finance from external resources.

EPS for the year ended on  March 31, 2016, is Rs. 19.04

Valuations :

At the upper end of the price band, Company’s market cap will be close to Rs.1050 crore and EV about Rs. 1300 crore. Which discounts annualised earning by EV/EBITA and PE multiplies of 18x and 9x respectively and 16x and 8x, based on FY18 estimates, which is not very aggressive. Company has a unique business model. With no direct peers in the listed space. Is compare with listed retailers, they are currently trading at EV/EBITA and PE multiplies of 20xand 35x respectively. While Tubes and piemakers ( Apollo tubes, Ratnamani Metals ) are ruling at PE multiples above 20x.

Is compare with listed retailers, they are currently trading at EV/EBITA and PE multiplies of 20xand 35x respectively. While Tubes and piemakers ( Apollo tubes, Ratnamani Metals ) are ruling at PE multiples above 20x.

The company earned INR 18.9 per share in FY 2016 on consolidated basis, which means the IPO is offered at a PE ratio of 24.3 times at the upper price band. For the latest nine months, the figures are better with EPS of INR 19. Simply annualization this leads to EPS of INR 25.3 and PE ratio of 18.2.

Current gray market premium is Rs.140/-  Kostak is Rs. 400


No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Cut down your Home loan EMI by switching to MCLR-linked interest rates

On comparing the interest costs of your friends and relatives on bank loans you may realize that they are way different from your interest payments. Also, you will see this differentiation not only across banks, but across customers of the same bank. Banks have been offering loans at cheaper rates to new customers, while still charging the old customers at higher rates.

So just as depositors, borrowers also need to be alert while getting a loan so as to protect themselves from unnecessary charges. Let’s understand the areas where banks tend to overcharge customers.

Newer benchmarks for setting interest rates

In April 2016 the RBI introduced the MCLR (marginal cost based lending rate) method, to enable a faster transmission of rate cuts to bank customers, replacing the existing base rate method that was being used by banks to set their lending rates. Before that, the base rate had replaced the less transparent prime lending rate (PLR).

MCLR : New Lending Rate on Bank Loans – Details and Review

Now, borrowers who took loan 4-5 years back, and were not aware of these changes, are still linked to the PLR. Likewise, those who borrowed during the effective base rate method are stuck with the base rate. And presently, while loans are being provided at cheaper rates, due to MCLR, old customers are still paying higher rates. Banks have been reluctant to pass on these rate cuts (in form of lower interest rates) to existing borrowers.

It is recommended to visit some common aggregators to understand the lowest interest rates available in the market. As of now, shifting to MCLR is a good move to reduce your interest outgo. Though RBI’s stand is neutral now, Rates may not rise from the current levels. Moreover, they may come down after an year. We should keep in mind that in an upward moving interest rate regime, MCLR will move up faster than base rates, just like it falls faster in a reducing interest rate regime.

Home loanLoan reset charges

Floating rate loans offered by banks are supposed to reflect the changes in interest rates set by the RBI. But this rarely happens. While banks increase rates immediately, they are very slow in cutting them down. The introduction of new benchmarks has also benefitted banks as they charge customers for shifting from one benchmark to another i.e. from PLR regime to base rate regime to MCLR regime now.

These charges are imposed to meet the expenses involved in drafting and registering new agreements, involving stamp duty, registration charges, etc. Although these expenses vary across states, ordinarily they aren’t more than 0.2% of the outstanding amount. However, some banks try to profit from this also by charging around 0.5%.



This brings us to the question that whether we should go for a reset even if it involves a small charge? The answer is yes! As the amount you save will be significantly higher over the years.

For instance, take the case of a home loan borrower with Rs 50 lakh outstanding loan amount and 15-year tenure. If the interest rate falls 1% from 9.5% to 8.5%, it will bring down his EMI from Rs 52,200 to Rs 49,250, a reduction of Rs 2,950 per month. This amounts to a total saving of Rs. 5.31 lakh which is much higher than the reset fee of Rs 25,000, even at the maximum rate of 0.5%.

However, you may be able to get this reset cost down by negotiating with your bank. One trick that often works is threatening them to switch to another bank. Or you can approach the branch manager. Based on the value of your relationship, they can reduce or even waive charges. Having a valuable relationship means availing various services of banks i.e. savings bank account, credit card, other loans, investment, etc. which might help in fetching certain benefits.

CL Educate IPO Review and current market premium

About the Company: It is a diversified and integrated technology-enabled provider of education products, services, content, and infrastructure, with a presence across the education value chain.

Since it commenced operations in 1996, it has  diversified its operations across six business segments, spanning the education value chain:
a) test preparation and training services, generally referred to as

a) test preparation and training services, generally referred to as “test prep”, conducted under our well-recognized brand Career Launcher;

b) publishing and content development, conducted under our brandb) publishing and content development, conducted under our brand GK Publications;

c) integrated business, marketing, and sales services for corporates, conducted under our brand Kestone, including event management, marketing support (including digital marketing support), customer engagement, managed manpower and training services;

d)  vocational training programs implemented by us under Government schemes in various States across India;

e) integrated solutions to educational institutions and universities, including business advisory and outreach support services, under our brand CL Media, as well as research incubation and support services conducted under the brand Accendere; and

f) K-12 schools operated under our brand Indus World Schools.

IPO Details:
Issue Opens on: Mar 20, 2017
Closes on  Mar 22, 2017
Issue Type: Book Built Issue IPO
Issue Size: 4,760,000 Eq. Shares of Rs 10 aggregating up to Rs 238.95 Cr
Fresh Issue of 2,180,119 Equity Shares of Rs 10 aggregating up to Rs [.] Cr
Offer for Sale of 2,579,881 Eq. Shares of Rs 10 aggregating up to Rs [.] Cr
Face Value: Rs 10 Per Equity Share
Issue Price: Rs. 500 – Rs. 502 Per Equity Share
Minimum Order Quantity: 29 Shares

Lead Manager :Kotak Mahindra Capital Co.
Registrar: Karvy Computershare Private Limited

Tentative Schedule:
17th March – Anchor Investors
20th March – Offer Opens
22nd March – Offer Closes
29th March – Unblocking of ASBA
30th March – Credit to Demat Accounts
31st March – Listing on NSE & BSE

Objects of the IPO:
1)  The proceeds of the issue will be used for acquisitions and other strategic initiatives
2)   Repayment of loans, to fund working capital requirements and
3)   for other general corporate purposes.

The promoters

Satya Narayanan R
R Gautam Puri
Nikhil Mahajan

cl ipoEducation Sector in India

The education sector in India can be broadly classified into the formal and non formal categories.The formal category comprises K-12 and higher education, up to post-graduation, and is subject to high levels of regulation in India, at the Central and State Government level as well as through the various curriculum boards and relevant nodal agencies that manage the various streams of professional education.

Another key factor governing the formal education category is that educational institutions in India cannot be set up on a ‘for profit’ basis. Business structures such as partnerships and private and public companies are prohibited from setting up educational institutions in India. Educational institutions in India are either set up by Government entities or by private sector entities such as a society registered under the Societies Registration Act,1860, a public trust registered under the Indian Trust Act, 1882, or under corresponding State laws such as the Bombay Public

Trust Act, 1950, or a ‘not for profit’ company set up under the Companies Act. The key common feature among all these entities is that profits cannot be distributed to the provider of capital, either as dividend or otherwise.

On the other hand, the non-formal category largely comprises segments like pre-schools, coaching (also known as test prepor supplemental education ), vocational and skills training, e-learning and academic publishing, which enjoy a lesser degree of regulation.

As education is on the concurrent list of the Indian Constitution, the sector is governed by both the Central and State Government. The Ministry of Human Resource Development plays a pivotal role in governing the education sector, through its two nodal agencies:

  • the Department of School Education and Literacy, which is responsible for disbursing Central grants to States for building educational infrastructure at the K -12 (kindergarten to grade 12) level in India; and
  • the Department of Higher Education, which is responsible for governing higher education (graduation, post-graduate and professional) in India.

Market Size of Publishing Industry

The Indian book publishing industry is valued at 244 billion as of 2015 -16, with the academic segment accounting for the largest share at 202 billion (approximately 83%) and the non – academic segment accounting for the balance 42 billion (approximately 17%).


K -12 Industry

K -12 education is part of the formal education system in India, regulated by the Central and State Governments, primarily by the respective State Government through local bodies such as municipal corporations and State -level education departments.

The K-12 education structure in India can be broadly classified on the basis of management, level of education; and board of affiliation, i.e., including the CBSE, Indian Certificate of Secondary Education and International General Certification of Secondary Education. Affiliation with a board is voluntary for schools, except when the school is full or partly aided by the State Government; in that case, the school must be affiliated with the respective State board.

Test Pre

Under the umbrella of its brand Career Launcher, it offers reputed test prep courses for MBA, Banking and Staff Selection Commission and Law entrance examinations, as well as courses for Engineering, Medical, Civil Services, Grade VIII-XII Tuitions and International Education (GRE, GMAT and SAT), among others. During the six months ended September 30, 2016, it has  53,892 enrolments in  test prep courses (including 15,491 online enrolments, referring to enrolments through its website, and 38,401 offline enrolments).

Under its brand GK Publications, it publishes niche test prep titles for popular professional and entrance examinations in India, including for Engineering, GATE, Civil Services and Banking and SCC entrances. During the six months ended September 30, 2016 and for fiscal 2016, it has released 1,851 and 1,679 titles, respectively, and sold over 0.58 million and 1.06 million copies, respectively. During the six months ended September 30, 2016 and fiscal 2016, it sold 751 and 817 titles, respectively, through the digital mode, comprising 40.57% and 48.66% of its title sales during these respective periods.

The company  undertakes vocational training programs, as an implementation agency, under project tenders issued by the Central and various State Governments in India. During fiscal 2016, it had 6,663 enrolments in Government vocational training programs of varying durations, across States including Gujarat, Jharkhand, Chhattisgarh, Madhya Pradesh, Odisha and Uttar Pradesh.

It provides infrastructure and education services and license its brand Indus World School, to K-12 schools providing English-medium education. As on September 30, 2016 and March 31, 2016, 2,654 and 2,671 students, respectively, were enrolled in eight Indus World Schools, across the States of Punjab, Delhi NCR, Madhya Pradesh, Chhattisgarh, Maharashtra and Haryana.


Diversified and integrated education products, services, content and infrastructure provider, with pan-India presence and a focus on knowledge -creation.

Develop and derive synergies from publishing and content development business;

Reputed courses, particularly in the aptitude based test prep segment;

Asset -light, technology- enabled business model;

Strong brand equity;

Track record of successful inorganic expansion; and Professionally qualified, experienced and entrepreneurial management team, and quality human capital.


The auditors in the annual report quoted that the company lacks a comprehensive procurement policy for purchase of goods and services. This results into buying unnecessary or lower quality goods or goods at unreasonable prices.

A large portion of its operating revenues comes from its test preparation business. Due to lower success ratio, the organistion is unable to attract more candidates which will badly affect its business & prospects. This subsequently hampers its brand image.

The company has granted unsecured loans to the companies and other parties covered in the register maintained under Section 189 of the act, and as per the auditors, 2 out of these loans are damaging to the company’s interests as it is not charging any interest on them.

The competitive and growth strategies of the company are at execution risk which may affect its performance.

Being a part of a highly fragmented and competitive market, any failure on its part to effectively compete may affect its profitability and market share.

External Risk Factors

Political, economic or other factors beyond our control may have an adverse impact on our business, results of operations and prospects.

Changing laws, rules and regulations and legal uncertainties, including adverse application of corporate and tax laws, may adversely affect our business, results of operations and prospects.

Significant differences exist between Indian GAAP and other accounting principles, such as the International Financial Reporting Standards (“IFRS”) and U.S. GAAP, which may be material to investors’ assessment of our financial condition. Our failure to successfully adopt IND (AS) may have an adverse effect on the price of our Equity Shares.

Performance : The company has (on a consolidated basis) posted turnover/net profits of Rs. 222.08 cr. / Rs. 14.57 cr. (FY13), Rs. 229.81 cr. / Rs. 15.34 cr. (FY14), Rs. 285.08 cr. / Rs. 21.23 cr. (FY15) and Rs. 296.69 cr. / Rs. 21.687 cr. (FY16). For the first half of the current fiscal ended on 30.09.16 it has earned net profit of Rs. 12.92 crore on a turnover of Rs. 160.70 cr.

MT Educare Limited                       PE                      12.74

TeamLease Services Limited         PE                      53.89

Zee Learn Limited                          PE                      94.79

CL EDUCATE                                   PE                     27.5

Currently no trade in Grey market


No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.


HDFC Mutual Fund launches Cancer Cure Fund

The HDFC Mutual Fund is launching the new scheme “HDFC Charity Fund for Cancer Cure” which is a 1136 days close-ended scheme offering two plans. This will be the 3rd offering from HDFC Mutual Fund, dedicated to providing treatment to needy and underprivileged cancer patients.

Double the Impact of your donations

In support of this social objective, HDFC AMC shall match the donation of dividends on behalf of investors by contributing an equal amount to the corpus. This would double the impact of your donations and provide financial assistance to a larger number of deserving cancer patients. HDFC Asset Management Company Limited (HDFC AMC) shall not levy any investment and management fees to manage HDFC Charity Fund for Cancer Cure.


Background of the scheme

The HDFC Debt Fund for Cancer Cure (HDFCC), was launched by the company in 2011 in association with Indian Cancer Society (ICS), a Public Charitable Trust and India’s oldest anti-cancer NGO. Further, the company came up with a second scheme in 2014 with the same attributes to continue the work done.


Scheme Features

  • The “HDFC Charity Fund for Cancer Cure” scheme aims to provide sustainable cash flows for Charity.
  • Tenure of the scheme: It is a close-ended scheme having a tenure of 1136 days from the date of allotment of units.
  • Investment plans: It includes two plans namely, Arbitrage Plan which is a close ended equity oriented scheme & Debt Plan which is a close ended income scheme.
  • Investment Objective:
  1. Arbitrage Plan: To generate income through arbitrage opportunities between cash and derivative market and through investments in debt and money market instruments.
  2. Debt Plan: To generate income through investments in Debt/Money Market Instruments and Government Securities maturing on or before the maturity date of the Plan.
  • Investment Sub-options: Plans offer only Dividend Option with Payout facility with two sub-options of 50% Dividend Donation Option & 100% Dividend.
  • Donation Option. One can choose to donate either 50% or 100% of the dividends declared under the plans.
  • Dividend declaration: Dividends will be declared on a half yearly frequency, subject to availability of distributable surplus. Dividends will be donated to the corpus of ICS or any other eligible institution(s), as applicable. This donation is eligible for claiming tax deduction under Section 80G of the Income Tax Act, 1961.
  • Fund Manager:

For Arbitrage Plan- Mr. Krishan Kumar Daga

For Debt Plan- Mr. Anil Bamboli

  • Minimum Application Amount (under each Plan): For Purchases/Switch-in: Rs.50,000/- and in multiples of Rs.1,000/- thereafter per application.
  • Loads: Entry/Exit Load is not applicable.
  • Benchmark:

Arbitrage Plan: NIFTY 50 Arbitrage Index

Debt Plan: CRISIL Short Term Bond Fund Index

Ths Donation of dividend made to the corpus of ICS is eligible for claiming tax deduction under section 80G of the Income Tax Act, 1961

The results of the two schemes so far…

  • Donations received from HDFC Debt Fund for Cancer Cure have transformed the lives of needy cancer patients.
  • These donations have made a difference to 3,168 patients from 28 states across the country.
  • Total amount sanctioned to patients is Rs. 81 Crores.

 Costs covered in Financial Assistance:

HDFC COSTFeatures of the financial assistance

  • There is a weekly meeting of the Due Diligence Team (DDT) of the Indian Cancer Society while the Governing Advisor Council (GAC) meets fortnightly for identifying genuine cases for financial aid.
  • Due to this, the turnaround time between registration of a patient in the hospital and the disbursement of funds is very short thereby ensuring timely treatment.
  • Patients, whose family annual income was less than Rs. 1 lakh, were provided the financial assistance.
  • In most of the cases, the maximum amount sanctioned per patient i.e. Rs. 4 lakh covers the entire cost of the treatment.

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Why Tata Group stocks are not attracting Mutual Funds anymore?

The Tata-Mistry boardroom battle greatly affected the Tata group shares in the previous quarter.

It all started on October 24, when the board in an unexpected move dismissed Mr. Cyrus Mistry as the chairman of Tata Sons. Further, in the next few months, Mr. Mistry was dismissed as chairman of the group companies as well.

The clash continued as both the parties resorted to multiple rounds of allegations, counter-allegations, and legal suits. Consequently, investors feared and started dumping Tata stocks which resulted in lowered share prices. Investors turned negative on Tata stocks.

On the other hand, mutual fund houses, with a total exposure of over Rs 15,000 crore to Tata stocks, preferred to play the wait- and watch the game. When prices went down few fund houses picked up shares of the group stocks. Most Tata group stocks lost nearly 15-20% in value over the two-month period of November-December 2016.


When the current commotion subsided, almost all of the Tata group stocks staged a rally in January 2017, with the appointment of Mr. Natarajan Chandrasekaran, as the new chairman of Tata Sons. In addition to these changes, equity mutual funds also went on a selling binge at that time.

Actively managed equity diversified mutual funds sold Rs 489 crore worth shares of Tata group companies. TCS and Tata Motors were the top-two highest sold stocks with shares worth Rs 456 crore sold.

Are the fund houses suspecting the long term prospects of Tata sons?

Mutual funds sold stocks of the group due to certain reasons, and it’s not just these two companies; there were many others stocks of the Tata group as well. Let’s have a look at these figures:

Tata Group stocks that were bought and sold in January 2017


Tata Stocks Came under Pressure

Out of the 53 equity mutual fund schemes that held TCS in their portfolio, less than half were net sellers of the stock in January 2017.

Out of these 53 schemes, seven schemes bought shares of the software major. Similarly, Tata Motors’ holding declined as 15 schemes sold shares of the stock amounting to Rs 194 crore. For the remaining Tata group stocks, there was no significant change holding.

Top 10 Fund Houses that bought and sold Tata Group Shares


Most Fund Houses divested Tata Group Shares

The top 3 sellers of Tata Group Stocks were SBI MF, ICICI Prudential MF, and Franklin Templeton MF among various other Fund houses. These three fund houses collectively sold Rs 386 crore worth of shares. While many fund houses were net sellers, in value terms it was much lower than the top four fund houses. Some of the fund houses such as L&T Mutual Fund, BNP Paribas MF and HDFC MF were even buying the shares of Tata stocks, although in lower quantities.

The Recovery stage

After suffering a major decline in November 2016, most of the stocks have exhibited a recovery in the ensuing two months. Fund houses reported buying shares of most companies as the prices decline.

At present, the total exposure to Tata group companies is at the same level as seen at the end of September 2016. Among the major holdings, the exposure to Tata Motors has declined by about 5%, while the price of the stock declined by 2.09%. Similarly, the exposure to TCS declined by 13.40%, while over the same period, the price of TCS declined by 8.13%.

On the other hand, the exposure of equity mutual fund schemes to Tata Chemicals and Tata Steel increased.

Should you be concerned as an investor?

While it seems that the mutual fund houses may be dipping their exposure to Tata group stocks, it may actually be a mix of price volatility and short-term trading bets taken by them. It is clear from the marginal reductions in stocks including mainly the TCS and Tata Motors stocks.

Though short-term portfolio churning is by mutual funds is often looked down upon, but if fund houses see a value buying opportunity or consider averaging out the buying price when stocks are oversold, it may turn out to be a good decision.

What we could learn from the Tata-Mistry spat is that at difficult times, even good stocks come under selling pressure; but that is mostly for the short-term. As most of the company’s stocks have recovered since then.

Therefore we recommend all investors to follow the same advice which is, as long as one invests in consistently performing best MF schemes that are from fund houses following sound investment systems and risk management processes, there is no need to bother. These schemes will surely generate optimal returns for them.

While planning for long-term financial goals, one must opt for Systematic Investment Plans (SIPs) mode of investing to mitigate volatility. It is light on the wallet, makes market timing irrelevant, facilitates rupee-cost averaging, compounds your portfolio better, and enforces a disciplined approach towards investing – which is a must in the journey of wealth creation.

However, if one wants proper guidance while investing in Mutual Funds he/she should approach a professional Financial Guardian, who stands as a symbol of Trust and safeguards investor’s interests.

CPSE ETF Further Fund offer 2 (FFO 2) at 3.5% Discount

CPSE ETF is an open-ended index scheme listed on the Exchange in the form of an Exchange Traded Fund (ETF), which tracks the Nifty CPSE Index.

An offer of units of Rs. 10/- each for cash (on allotment, the value of each Unit would be approximately 1/100th of the value of Nifty CPSE Index) to be issued at a premium, if any, approximately equal to the difference between face value and FFO 2 Allotment Price during the Further Fund Offer 2 (“FFO 2”) and at NAV based prices thereafter.

For the existing CPSE ETF the Ongoing Offer Period for the Scheme started from April 04, 2014.

Nifty CPSE Index

The Nifty CPSE Index is created in order to assist the Government of India’s (GOI) initiative to disinvest some of its stake in selected Central Public Sector Enterprises (CPSEs) through the ETF route. The index consists of 10 CPSEs with the base date of 01- Jan- 2009.

As on February 28, 2017 the one-year CAGR^ return of Nifty CPSE TRI* is 55.30% against 28.87% given by Nifty 50 TRI*.

Past performance may or may not be sustained in the future.

CAGR^ – Compounded Annual Growth Rate

TRI* – Total Returns Index reflects the returns on the index arising from:

  • Constituent stock price movements and
  • Dividend receipts from constituent index stocks.

Period – Feb 29, 2016 to Feb 28, 2017

Background: Government of India (GOI) used innovative route to divest its holding in CPSEs via ETF

New Fund Offer (NFO): Launched initially in March 2014, NFO received the awesome response; with the collection of Rs. 4363 crores out of which Rs.1,363 Crores was refunded to investors due to limited issue size of Rs.3,000 Crores. It witnessed participation across various categories of investors. Units of CPSE ETF were listed on 04th April 2014 on NSE & BSE.

Invest in 10 Maharatna’s and Navratna’s

Further Fund Offer (FFO): Launched initially in January 2017, FFO received an overwhelming response; with the collection of Rs 13,742 Crs, out of which Rs.7,742 Cr was refunded to investors due to limited issue size of Rs.6,000 Cr. FFO also witnessed participation across various categories of investors. FFO units of CPSE ETF were listed on 04th April 2014 on NSE & BSE.

FFO 2 Investment Rationale:

  • Portfolio diversification through investment in blue-chip Maharatna and Navaratna CPSE stocks which are sector leaders
  • Play on India’s growth story through investment in the large CPSE stocks at attractive valuations
  • FFO 2 offers upfront discount to all categories of investors
  • Attractive Valuation and Dividend Yields: P/E ratio and dividend yields better compared to broader market index
  • Flexibility of trading on real time basis
  • Lower expense ratios and transaction costs
  • Enabling Investors to diversify exposure across a number of Public Sector companies through a single instrument

Attractive Valuation

Attractive Valuation and Superior Dividend Yield – Compared to Other Broader Indices

PEPortfolio Constituents & Industry Allocation

Asset allocation

Details of Further Fund Offer (FFO 2)

  1. Opening and closing dates
  • For Anchor Investors
  • FFO 2 opens on March 14, 2017
  • FFO 2 closes on March 14, 2017
  • For NonAnchor Investors
  • FFO 2 opens on March 15, 2017
  • FFO 2 closes on March 17, 2017
  1. Benchmark Index – Nifty CPSE Index
  2. Pricing: 1/100th of Nifty CPSE Index
  3. Fund Manager: Payal Kaipunjal
  4. Load Structure: Entry and Exit load- Nil
  5. Category of Investors (During FFO 2)
  • Retail Individual Investor
  • Qualified Institutional Buyers or QIB
  • NonInstitutional Investors
  • Anchor Investors

Industry break up

  1. Minimum Application Amount (During FFO 2)
  • Retail Individual Investors- Minimum amount Rs 5000 and in multiples of Re 1 thereafter.
  • NonInstitutional Investors/QIB- Minimum amount of Rs 2,00,001/- and in multiples of Re 1/- thereafter.
  • For Anchor Investors- Minimum amount of Rs 10 Crores and in multiples of Re 1/- thereafter.
  1.  Minimum application amount (During ongoing offer period)
  • Directly with the Mutual Fund: Create / Redeem in exchange of Portfolio Deposit and cash component in Creation Unit Size of 1 lakh units of the scheme.
  • On the exchange: 1 (one) Unit and in multiples thereof.Plans: Growth
  1. Listing: FFO 2 Units offered pursuant to the FFO 2, listed on NSE & BSE on or before April 07, 2017. However, Units of the existing CPSE ETF Scheme were listed on 04th April 2014 on NSE & BSE.
  2. Maximum Amount to be raised during FFO 2: Rs. 2500 Crores.
  3. Discount offered by GOI: Discount of 3.50 (Three and a half) % on the “FFO 2 Reference Market Price” of the underlying shares of Nifty CPSE Index shall be offered to FFO 2 by GOI.


Be ready with at least one good Financial backup plan ( My Plan B )

For every man on this planet, his family is the priority for him. Family always comes first for everyone in any situation no matter the person lives anywhere in the world. Every individual has dreams and life goals which he wants to accomplish on any terms. That is the reason why the person works so hard day by day to achieve the life of his dream. Also as the days pass, the age of a man also increases and with the increasing age there comes many types of responsibilities and most important one of them is the responsibility of the family. Every person wants his family to be happy and safe in all terms like physically, mentally and financially. That is why the best solution to minimize the tension and risk is a financial backup.

  • About financial backup plan

Everyone has many targets for himself and for his family to achieve in his life like to live in a house like this, to drive a car like this, to wear clothes like this, to go on a trip etc.

But sometimes in life, conditions not remain stable as we wanted it to be, things could get worse and in those circumstances, all the dreams and goals seems to achieve difficulty and that is the situation where a financial backup really helps. Financial backup is like a substitute plan for achieving your targets which help you in many conditions.

  • Necessity of financial backup

 Untimely/sudden death

We all know and it’s being said that our life is not in our hands so we have to accept the fact that one can die anywhere at any moment. It is a saying that your birth and your death is always in god’s hands it means you cannot control these things no matter how hard you try. This is why a financial backup is very necessary for your family (especially when the family is depending on your income) so that they can live happily and peacefully after your death. And the future of your family is your responsibility as you want your children to go to better schools and colleges; you want your family to live in a better house always. And that is why a financial backup plan is a must.


  • Choosing a financial backup

You always have to be serious while choosing or making a financial backup plan for yourself and your family because it’s always a serious issue for the one.

It’s been recommended that there are two steps of choosing or making a financial backup plan—

  1. Primary step
  2. Secondary step

 Primary step

Primary step of making a financial backup plan is to buy a term insurance plan. It is the first step because protection is always been the priority and insurance is the protection itself. There are many types of insurance covers available but for the financial backup, the term insurance plan is recommended.

DMart IPO ( Avenue Supermarts ) Review and current market premium

Why term insurance plan?

Term insurance plans are ‘high cover low premium’ type products available in the market.

  1. Affordability

Term insurance policies always tend to be affordable, a high sum assured cover package can be bought by giving very low premiums.

  1. Variants

There are many variants of term insurance plans available in the market which makes it easy to take. One can easily choose a decreasing term plan if he has to pay a loan and also can choose an increasing term plan if he thinks the responsibilities of his life are going to be increased in the time. That is the benefit of the term insurance plan that it is always suitable according to your requirements.

In term insurance plan if something happens to you, your family can stand to receive the full coverage of the premium amount and that amount can be used according to them as they want it to spend, it would be utilized to take care of their expenses and needs.

So, there are so many benefits of taking a term insurance policy and only a term insurance plan provides a complete benefit more than the actual investment made in terms of premiums.

  • Secondary steps

There are some steps that can be used as a financial backup plan after taking the term insurance plan.

Creating additional source of income ( Regular monthly Income with good Asset allocation )

One can make many sources of income and not have to depend on only one source of income in his life which is very good as a financial backup for his family.

While making such serious financial backups for the family one should also carry some points in his mind like the individual should educate his nominee very well so that he can understand the concepts of income and can make use of the income well.