MFs Small Town Investors pg 50 Making Travel Inclusive pg 70

D e c e m b e r 2 0 1 7, ` 5 0

o u tlo okmone y.c om

ETF
MUTUAL
FUNDS MF

VS
ETFs
Low in cost,
passive investment
products like ETFs
& Index funds set to
challenge large cap
mutual funds

Vidya Balans
Money Wisdom 8 904150 800027 12
 Highlights Cover
Story

MUTUAL
Fund Review
In-depth research and analysis to
FUNDS ETFs
help you pick the right mutual fund Low-cost passive investment products like
ETFs and Index funds are set to challenge large-cap
pg 26 equity mutual fund schemes. Malini Bhupta delves
deeper into the new trend playing out in the
equity markets

pg 32
Enterprise
Joy of Making
Smart Money Travel More
Accessible
Vidya Balans With Planet Abled, the enterprising
Money Wisdom Neha Arora has created a one-stop
travel shop for the disabled. Rimme
The National Award-winning actor bares her Dirchi tracks the travel firms
heart on all things money in an exclusive journey so far
tte--tte with OLM Editor Malini Bhupta
pg 82 pg 66
 Travel
Exploring Kerala on
Shoe-String
Budget
From rustic bus rides to sumptuous fish curries
to mesmerising backwaters, travelling across
Kerala as a solo woman backpacker is an
pg 70 unparalleled experience, says Shipra Singh

Fintech Watch

Borrow Against
Salary to Ease
Cash Crunch
To help young professionals tide
over the month-end blues, some
companies are offering quick loans
online for short durations. Anagh Pal
evaluates the pros and cons

pg 58
Trends pg 50 Everything you need to know about latest offers from
telecom majors Bharti Airtel and Reliance Jio
Small is the
Next Big Thing
The lure of higher returns is drawing
individuals from the not-so-big cities to
equity investing, but do they have the appetite
to stomach stormy market movements in the
short-term? Preeti Kulkarni seeks answers pg 78 Personal Tech
 Contents
December 2017 Volume 16 Issue 12

MUTUAL
FUNDS ETFs

pg 32
Regulars
6 Letter 14 Queries 20 News Roll 82 Smart Money
Cover Design: Praveen kumar .g

Head Office AB-10, S.J. Enclave, New Delhi 110 029; Tel: (011) 33505500, Fax: (011) 26191420 OtHer Offices Bangalore: (080) 45236100,
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Fax: (022) 33545100. Printed and published by Vinayak Aggarwal on behalf of Outlook Publishing (India) Pvt. Ltd. Editor: Malini Bhupta.
Printed at Kalajyothi Process Pvt. Ltd., Plot No. W-17 & W-18, MIDC, Taloja - 410208, Navi Mumbai and published from AB-10 Safdarjung Enclave, New Delhi 110029
For Subscription queries, please call: 011-33505562, 33505500 or email: yourhelpline@outlookmoney.com
Published for the month of December 2017; Release on 1 December 2017. Total no. of pages 84
Outlook Money does not accept responsibility for any investment decision taken by readers on the basis of information provided herein.
The objective is to keep readers better informed and help them decide for themselves.

www.outlookmoney.com December 2017 Outlook Money 3

Contents

pg 70
travel : Solo women travellers venture on budget trips
and bring you stories that have not been told before

25 LI Made Easy 56 Stock Pick

What sets Life Insurance apart from
all other financial instruments!
26 Morningstar Fund Review
In-depth research and analysis to
help you pick the right mutual
fund scheme
OLM picks Aurobindo Pharma and pg 66
Maruti Suzuki as the stock to watch
out for this season enterprise
With Planet Abled, Neha
76 Market Outlook Arora provides customised
Motilal Oswal explains what travel solutions to people
December has in store for you with disabilities

50 Trends 78 Personal Tech

Small cities growing fascination
with equity mutual funds: Will it last
over long-term?
55 Investment Risk
Gaurav Mashruwala talks about
mismatch of risks when aligning
financial goals
Everything you need to know about
latest offers from Airtel and Jio
80 Investment Destination
Kota, the coaching capital of
India, is all set for its much-
needed makeover

pg 58
Fintech
Watch
Bidding month-end cash
crunches goodbye, with
the latest crop of
borrowing options

4 Outlook Money December 2017 www.outlookmoney.com

 @
A SIP of ` 10,000 = ` 6.82 Cr.^ today
in HDFC Equity Fund

@
since inception

CALL YOUR FINANCIAL ADVISER TODAY.

SIP Performance - Regular Plan - Growth Option

Since Inception 15 year SIP 10 year SIP 5 year SIP
Total Amount Invested (`) 2,740,000 1,800,000 1,200,000 600,000
Mkt Value as on October 31, 2017 (`) 68,282,833.75 9,536,715.84 2,855,912.40 962,827.32
Mkt Value of SIP in Benchmark (`) 17,313,336.63 5,826,493.17 2,352,777.05 904,329.39
Returns (Annualised) (%) 23.27% 19.97% 16.53% 18.98%
Benchmark Returns (Annualised) (%) # 13.95% 14.34% 12.91% 16.42%
^ Assuming ` 10,000 invested systematically on the first Business Day of every month over a period of time. Past performance may or may not be sustained
in the future. CAGR returns are computed after accounting for the cash flow by using XIRR method (investment internal rate of return). The above investment
simulation is for illustrative purposes only and should not be construed as a promise on minimum returns and safeguard of capital. The AMC/Mutual Fund is
not guaranteeing or promising or forecasting any returns.

Performance - Regular Plan - Growth Option NAV as on October 31, 2017 ` 628.802
Period Scheme Returns (%) Benchmark Returns Additional Benchmark Value of ` 10,000 invested
(%)# Returns (%) Scheme (`) Benchmark (`)# Additional
Benchmark (`)##
Last 1 Year 22.77 21.95 19.47 12,298 12,214 11,965
Last 3 Years 10.83 11.03 7.48 13,618 13,691 12,419
Last 5 Years 18.20 15.51 12.95 23,082 20,575 18,391
Since Inception 19.87 10.18 N.A. 628,802 91,536 N.A.
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualized (CAGR). Load is not taken
into consideration for computation of above performance(s). # NIFTY 500 Index ## NIFTY 50 Index. N.A. Not Available. Inception date of the scheme January
01, 1995. The scheme has been managed by Mr. Prashant Jain since June 19, 2003. Different plans viz. Regular Plan and Direct Plan have a different expense
structure. The expenses of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses/commission charged in the Regular Plan.

Other Funds Managed By Prashant Jain, Fund Manager of HDFC Equity Fund
Returns (%) as on October 31, 2017)
Managing Scheme since
Last 1 year (%) Last 3 years (%) Last 5 years (%)
HDFC Top 200 Fund $ June 19, 2003 22.90 10.45 16.87
S&P BSE 200 $$ 20.77 10.20 14.81
HDFC Prudence Fund $ June 19, 2003 19.38 12.05 17.88
CRISIL Balanced Fund - Aggressive Index $$ 15.18 8.56 11.89
HDFC MF MIP Long Term Plan +
(Monthly income is not assured and is subject to December 26, 2003 10.36 10.19 11.66
availability of distributable surplus)
CRISIL MIP Blended Index $$ 9.02 9.68 9.93

Performance return of Category I - FPI Portfolio(s) managed by the Fund Manager (Mr. Prashant Jain)
^^

Returns (%) as on October 31, 2017

Managing Portfolio since
Last 1 year (%) Last 3 years (%) Last 5 years (%)
Category I - FPI Portfolio
(managed under a bilateral agreement under March 23, 2016 20.41 N.A. N.A.
Regulation 24(b) and subject to applicable laws)
Benchmark- MSCI India (Total Returns) 19.26 N.A. N.A.
Past performance may or may not be sustained in the future. Returns greater than 1 year period are compounded annualised (CAGR). Load is not taken into
consideration for computation of above performance(s). Different plans viz. Regular Plan and Direct Plan have a different expense structure. The expenses
of the Direct Plan under the Scheme will be lower to the extent of the distribution expenses / commission charged in the Regular Plan. $ All dividends
declared prior to the splitting of the Scheme into Dividend & Growth Options are assumed to be reinvested in the units of the Scheme at the then prevailing
NAV (ex-dividend NAV). +The Scheme is co-managed by Prashant Jain (Equities) and Shobhit Mehrotra (Debt). $$ Benchmark. ^^ FPI Portfolio. Inception date
is 23rd March, 2016. The performance is not comparable with the performance of the aforementioned scheme(s) of HDFC Mutual Fund due to differing
investment objective/s and fundamental differences in asset allocation, investment strategy and the regulatory environment. The said disclosure is pursuant
to SEBI no. Cir/IMD/DF/7/2012 dated February 28, 2012 pertaining to Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. N.A. Not Applicable.

HDFC Equity Fund is suitable for investors who are seeking*: Riskometer

l Capital appreciation over long term.

l Investment predominantly in equity and equity related

instruments of medium to large sized companies.

INVESTORS UNDERSTAND THAT THEIR

PRINCIPAL WILL BE AT MODERATELY HIGH RISK
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY
 Editors Letter
Making the most of disruptions
Its all about costs
High charges can eat into returns, so
it is important to evaluate what you
are paying for
Malini Bhupta
malini@outlookindia.com
6 Outlook Money December 2017 www.outlookmoney.com
F
or nearly two decades,
Outlook Money has brought
you best-in-class personal
finance coverage and we will
continue to do that, but we will look
at it through the prism of disruption
that the financial services industry
faces and implications for investors and
customers. We will bring you features
and analysis that will help you take
informed decisionsand this, we will
do fearlessly.
Given that existing business models
are being challenged at every level,
we will look at these shifts closely. For
example, new-age fintech companies
and their offerings are challenging
lenders like never before, while some
low-cost products are set to impact
existing distribution models. In the
current issue, we have endeavoured to
put the spotlight on such trends. In this
issue, we look at fintech companies that
offer quick and easy loans to Millennials
against their salaries, so that they can
deal with the month-end cash crunch.
While some disruptions are driven
by technological changes, others
are driven by regulators and market
maturity. Our Cover Story on Exchange
Traded Funds/Index Funds is about
one such disruption that is going to
take the asset management industry
by storm in times to come. For the first
time equity investor, low-cost exchange
traded funds (ETFs) are an ideal vehicle
to enter the markets. These funds have
always been around in India but they
have gained traction only after the
Labour Ministry allowed the Employees
Provident Fund Organisation to invest a
part of incremental flows in the market
through ETFs. Given that equity ETFs
simply track indices like the Sensex
or Nifty, investors have to pay less
than 50 basis points as management
fee. Chances are your mutual fund
distributor will never recommend an
ETF to you because there is little
incentive for him to do so. But we
put the spotlight on ETFs this time.
Globally, passive investment
funds are bigger than actively
managed mutual funds. Back in
2007, Warren Buffett publicly
wagered a bet that the S&P 500
Index would outperform the hedge
funds over a 10-year period. In his
letter to investors he wrote, I then
sat back and waited expectantly for
a parade of fund managers to come
forth and defend their occupation.
Buffet won the bet ahead of
schedule. ETFs are the new game in
town for Indian investors too.
Talking of the big shifts, the
equity cult is truly spreading far
and wide after last years move
to demonetise `500 and `1000
currency notes. OLMs Preeti
Kulkarni has delved deep into this
trend. The rush of money into
equity MFs is coming from small
towns where first-time equity
investors are betting big. Kulkarni
says: Even as first-time investors
claim to have the appetite to
stomach risks in the short-term and
stay invested, their faith will be truly
tested in volatile market conditions.
We are also introducing
Morningstars Fund Review from
this issue to help you select the best
mutual funds. We have also brought
back our Stock Pick section on
readers demand. And in our Smart
Money section, we get you money
lessons from celebrities. This time
actor Vidya Balan shared with OLM
her money mantras and mistakes.
Last, but not the least, we have
introduced new design elements to
make OLM more reader-friendly.
Heres hoping you all like the new
design elements and info-graphics.
Watch this space for more!
 Talk Back

Must in your
protection portfolio Editor
Malini Bhupta
I always had doubts about the ASSiStANt EditorS
various insurers protection Anagh Pal, Preeti Kulkarni
SENior CorrESPoNdENt
covers. The article A must in Himali Patel
your Protection Portfolio has SUB-EditorS
Devanjana Nag, Rimme Dirchi,
cleared a lot of them. With tons Shipra Singh, Anupam Pandey
Art
of options available it is always Praveen Kumar. G, Vinay Dominic (Senior Designers)
Rohit Kumar Rai (Designer)
a gamble to try and pick the Girish Chand (Operator)
right insurer. Would be PhotogrAPhy
Gireesh. GV (Picture Editor)
great if you could suggest Soumik Kar, R.A. Chandroo (Photographers)

some insurance companies tECh tEAm

Raman Awasthi, Suraj Wadhwa
to take the plan from. Business Office
Will look for them in the ChiEf ExECUtivE offiCEr
Indranil Roy
coming issues.
viCE PrESidENt
Meenakshi Akash (Events)
Advertisements
Tripti Mishra, ASSiStANt viCE PrESidENt
Tushar Kanti Ghosh
Hyderabad NAtioNAL hEAd
Santosh Nair
SR. GEN MANAGER: Mohan Sahasranaman
CHIEF MANAGER: Suchitra Vaidya
DEPUTY MANAGER: Vivek Singh
Digital Team
I have been reading OLM for more Amit Mishra
than a decade now. I have still not found Sumit Srivastava
another magazine on personal finance as Circulation
comprehensive as OLM. I find it focused NAtioNAL hEAd
towards salaried professionals like me, Anindya Banerjee
ASSiStANt gENErAL mANAgErS
so it is easy to relate to the articles. It Vinod Kumar (North), G Ramesh (South)
covers almost all topics in the financial ZoNAL SALES mANAgEr
arena and every time a new financial Arun Kumar Jha (East)
mANAgErS
product is launched, it finds a mention in Shekhar Suvarna
Naveesh Goyal, the magazine.
Production
Chandigarh In particular I like the Readers Queries gENErAL mANAgEr
section as it contains solutions to almost Shashank Dixit
all the financial dilemmas one can be facing at a given time. Further, ChiEf mANAgEr
Shekhar Kumar Pandey
reading through the systematic and consistent approach of OLM in mANAgEr
solving readers issues over time brings about a greater level of financial Sudha Sharma
understanding and maturity in the readers minds. Thanks for reserving a dEPUty mANAgEr
Ganesh Sah
big share for such case studies in each edition of the magazine. ASSiStANt mANAgEr
However, I miss the regular coverage of the OLM50 fund selection and Gaurav Shrivas
would request you to bring it back as that section completes OLM as a go Accounts
to person finance planning and advice product. ASSiStANt gENErAL mANAgEr
Diwan Singh Bisht
ComPANy SECrEtAry & LAw offiCEr
Ankit Mangal

Letters must be addressed to: The Editor, Outlook Money, AB-10, Safdarjung Enclave,
New Delhi 110029, or letters@outlookmoney.com. Please mention your full name and residential address.

8 Outlook Money December 2017 www.outlookmoney.com

Contact your Mutual Fund Distributor
or visit askwhatelss.com
 Talk Back

I love the OLM Elite section in the magazine. It is very well

researched and helps me with the insights of various funds. I
have started my SIPs after going through this section and they are
showing great results.

Himanshu Mishra, Lucknow

It has been very enlightening to be a reader of Outlook Money.

The financial solutions given by your magazine are commendable.
Reading these have helped me plan my future finances. The

performance of various funds based on your suggestions is another
eye catcher. Thanks for all your comprehensible articles.
Hope the learning continues.
Saumya, Delhi

Thanks to Outlook Money that I have understood the basics of

personal finance and have rightly invested across various mutual

funds for my future financial needs. The financial checklists that
you feature in the magazine are of great help; would love to see
more of them.

Gaurav Chandra, Gurugram

Kudos to the team for a very well written cover story. The writer

beautifully showcased some invisible stats of the various spends
that we exercise on our childs future. This story will certainly help
me plan my childs future much better, financially.

Suyash Pandey, Bengaluru

A fund to match your profile section has something for everyone. I

personally like the way these funds are listed as per the risk profile.
The table is well researched and helps people like us who are not
very good with numbers in choosing the right fund to invest in.

Kshitij Pal, Lucknow

10 Outlook Money December 2017 www.outlookmoney.com

 Queries
Ramesh KumaR, Bhopal
my father renewed his fixed
deposit with a cooperative
bank last year in which I was
the nominee. now, with my
fathers demise, the bank is
asking us to wait for the FD
tenure to get over before
the money can be paid. Is
this correct?
The bank cannot deny you the
proceedings of the fixed deposit
as you are the nominee. Unless
there is a Will left behind by your
father clearly stating that the
maturity proceedings should
go to someone other than you.
As the account needs to be
closed, you need to submit a
copy of death certificate along
Deepak Rawat, Dehradun
I want to sell my car, which
was insured only last month.
Can I ask the insurance
company to refund me
the premium amount for
the remaining time? Is the
policy transferable and can
I take the premium amount
from the new owner?
Generally, while selling a car it
is a good practice to cancel the
insurance policy and transfer the No
Claim Bonus (NCB) to another car
that a seller may be purchasing. The
NCB belongs to the car owner and
not to the car, therefore the NCB
is not transferable. For cancelling
your car insurance policy, you may
request your insurance company
in writing along with a filled copy
of Form 29 and Form 30 and notify
the Regional Transport Authority
(RTO) with respect to the change
in the ownership of the car. Further,
the insurance company may also
ask you for the submission of the
original policy certificate and proof
of delivery of the vehicle to the new
owner. The NCB certificate issued
14 Outlook Money December 2017 www.outlookmoney.com
with a letter stating for the
closure of the account, and the
nominees photo ID and proof of
address. Although most banks
dont charge exit penalty on
the deposit, you need to check
and ask the bank for the same.
Further, these days most
by the insurance company is valid
for three years and you can utilise it
for insuring your new car. However,
in case you wish to transfer the car
insurance to the new owner, you may
factor the same in your sales price.
But, since the insurance contract
is between the insurer and you,
the same cannot be automatically
transferred. As per the Section 157
(2) of the Motor Vehicles Act, the
new car owner needs to apply to the
insurance company within 14 days of
car purchase for the transfer of the
car insurance policy in his name.
PRashant KaPooR, CFP
kumaR anshuman, Indore
my wife has a health policy.
she recently underwent an
operation and made a claim
for it. now, she needs to go
for another operation. Can
she make another claim?
Mediclaim is an indemnity policy,
which means it will reimburse every
amount to maximum limit of your
insurance cover i.e. you can claim
multiple times, subject to your sum
insured. For example, if you have a
banks are asked by RBI to
incorporate a clause in account
opening form stating that during
the death of the depositor,
premature termination would
be allowed.
himali Patel, senioR
CoRResPondent, OutlOOk MOney
`5 lakh mediclaim policy and your
first claim comes for `1 lakh, you
still have `4 lakh in your account
to utilise in that year and if you are
through with your sum insured, it
will automatically refill on renewal.
Puneet obeRoi, FoundeR, Finadwise
kunal JaIn, Delhi
I am 30 years old and my
insurance agent advised me
to buy accident insurance
instead of a term policy on
the premise that my age
makes it much less likely
that I would die of an illness
than an accident. he said
that accident insurance is
cheaper than term covers. Is
his logic tenable?
Below the age of 50 years taking
term insurance with accidental
cover is suggested. For example,
if your yearly income is `10 lakh
then you can preferably take
10x insurance, that is `10 lakh
multiplied by 10 will equal to `1
crore term insurance with `1 crore
accidental benefit. Premium for this
additional `1 crore is very less and
when combined, it will be known sanJay ahlawat, Ghaziabad deposit in advance rather than
as one plus one policy. Moreover, my `2.5 lakh FD will mature waiting for the maturity of your
to all my investors I usually suggest next month. please suggest fixed deposit or for the auto transfer
buying term insurance with how I can invest this of the amount in your saving
accidental cover online as the rate amount for a period of account where it may start earning
of premium will be lower in case of one year and reap the negative real interest rate, after
buying it online. maximum returns? accounting for inflation.
PanKaj ladha, FoundeR, It is good that you are planning a In the current scenario, where
PanKajladha.Com re-investment option for your fixed bank interest rates have been
on a downward spiral, it is quite
unlikely that you may find a similar
interest paying fixed deposit as
Rajan awasthi, Bhopal your last one. In addition, your
objective is to maximise your
returns, but your investment
period is very less at one year.
One option would be to compare
FD rates across banks for various
tenures and choose the highest
paying one for the period you are
comfortable investing for. Another
option would be to consider AAA
rated company fixed deposits,
which may pay slightly higher
interest rates but are riskier
investments than FDs. Third
option, which you may consider
are short term debt mutual
a friend has been diagnosed with terminal stage funds. While the returns are not
cancer. Is it possible for his life insurance policy to guaranteed in mutual funds, a
pay off before he actually dies? good short-term debt fund may
Generally, in plain vanilla life insurance policies, the be able to provide you comparable
insurance benefit is payable only upon the demise of the returns. Further, you may consider
life assured. However, in case your friends life insurance investing in dividend option in
policy has a built in or an additional rider for terminal case you are in the highest taxation
illness, the accelerated death benefits may be payable slab since dividend distribution tax
either as a lump sum or in installments. In addition, if may be marginally lesser than the
your friend has an additional critical insurance rider or tax you may pay in other options.
separate policy, the benefits may be payable out of However, marginal taxation
the same as well, in addition to the life insurance benefits should not be your sole
policy, and your friend may utilise the said amount for aim of choosing investment
his treatment. options like debt mutual funds.
It is unfortunate that your friend is undergoing such The ideal scenario for you would
a severe situation, however it is for the similar reasons be to link your investment to your
only that one needs to plan for life insurance holistically tangible goals which may increase
at an early age while one is in pink of health to account your investment horizon as well,
for such eventualities. While the mental trauma during and accordingly if your investment
such unfortunate scenarios cannot be mitigated, the horizon is say five years, then you
overall mental state of the family could be assuaged may be able to look at higher risk-
if there is availability of sufficient financial resources higher expected reward, equity
for managing the treatment for the terminal illness. linked investment options rather
PRashant KaPooR, CFP than keeping yourself bound in
low returns debt options.
PRashant KaPooR, CFP

www.outlookmoney.com December 2017 Outlook Money 15

 Queries
anIRuDh BhasIn, Noida
I want to know how the
insurers calculate mortality
charges. Do they hike the
charges every year with
increase in age or keep it
fixed at the age at which the
policy was taken?
Mortality charges are a function
of actuary calculation made by
professional and experienced
actuarial managers. It is important
because sufficient experience
and skill goes into calculation of
mortality charges which form the
basis of premiums paid for various
age bands.
Mortality charges calculation is
based on a number of factors:
Gender costingmortality
charges differ for both women
and men (women are said to have
a higher mortality than men)
Inflation rates.
Future Growth rates .
Administration and policy
handling charges.
Further, every premium paid is
divided into cash value, which is
the interest earned on the policy
ViKas nagPal, Gurugram
what points should
be kept in mind before
deciding in favour of any
particular insurance agent
or a broker?
Choose an agent who is
honest and puts the interest
of his clients first. Your agent
should be willing to give you
advice on a financial product
based on your need and not on
the basis of the commission
he earns out of the deal. Make
sure that your agent has
sufficient qualification and
skills to advise you. A timely
response to clients queries
is agents responsibility. For
efficient client servicing, an
16 Outlook Money December 2017 www.outlookmoney.com
and pure risk cover charges.
The discounted rate of future
lapsed policies is covered in the
mortality charges calculation.
For life insurance policies, premium
rates are not hiked every year
because the probability of losing
a life in a pool of insured policy
holders is lower.
For health and general insurance
policies, the premium rates are
reset every year and increase by 10-
15 per cent per annum depending
on profitability of the company and
positive claim ratio the company
has earned over the years.
dilshad billimoRia, CFP,
dilzeR Consultants
sanJIt kumaR, Delhi
my cousin is a heavy drinker
and is unlikely to survive
any longer. will his life
insurer pay for the policy
proceeds if his death is due
to alcoholism?
Life insurance claim depends on
declarations. If a person has taken
a policy 10 years back and has
declared all relevant information
correctly but started drinking
agent must ensure that he has
the required infrastructure and
staff with sound general and
technical knowledge to help
you. You can do the reference
check through existing clients
before availing the services.
PanKaj mathPal, Ceo, oPtima
money manageRs
heavily after 4-5 years down the
line, he will be paid his claim
regardless of anything. It comes
under self injury. In case of life
insurance even suicide is covered
after one year of the policy.
Puneet obeRoi, FoundeR, Finadwise
RItesh pathak, Bhopal
I have zeroed down on two
flats which I wish to buy.
Can I take two separate
home loans at the same
time for these two flats?
Can I borrow from the same
bank for these two loans?
Multiple home loans are allowed for
different properties with the same
bank. Further, bank will evaluate
your applicability which will include
your income, current job, and credit
score. However, banks can reject
your application in case you have
poor repayment capabilities with
existing or past loans. So, before
taking multiple loans, you need to
evaluate all the above mentioned
factors to avoid your credit score
from getting impacted.
himali Patel, senioR
CoRResPondent, OutlOOk MOney
naveen saRIn, Gurugram
how do life insurance
companies deal with the
claim of life assured if the
life assured dies after the
date of maturity of the
policy but before receiving
the maturity proceeds?
If the policy has matured and
the insured dies just after, the
claim paid is the same as maturity
proceeds, which may include bonus
and other terminal benefits.
In addition to this, the family
of the life assured would have
to submit the original policy
documents in addition to the
beneficiary documents title to
receive the benefits from the
insurance provider.
dilshad billimoRia, CFP,
dilzeR Consultants
 Queries
vIvek soota, Delhi
I would like to invest in
mutual funds for funding
my sons college education
abroad. my son is 7 years
old, and I am investing
`50,000 a year in a child
plan from lIC for this goal.
I would like some guidance
to achieve this goal 10 years
from now.
At the outset, let me complement
you for identifying a focused goal
i.e. child education. For effective
goal setting, it is important for
you to identify the present cost of
education that you want to fund
through this investment. To make
the planning more focused, apart
from the tuition and college fee,
you may also like to provision for
additional costs like travel and
living expenses for the duration of
the education abroad. Assuming
that the present cost of total funds
that you require for your childs
education abroad is `30-`40 lakh,
the same cost after 10 years would
increase to `48.31-`64.42 lakh.
This is after taking into account
a conservative inflation of 5 per
cent per year in the total costs. For
getting to this future cost, assuming
investment returns of 10 per cent
per year, youll need to invest `3.03
-4.04 lakh per year. You should
consider investing on a monthly
basis into diversified equity mutual
funds, since you have investment
time of 10 years on your side.
PRashant KaPooR, CFP
vIpul shaRma, Delhi
what is the difference
between diversified equity
scheme and elss? which
one of them is more secure
and profitable?
Like any other diversified equity
mutual fund, equity-linked saving
schemes, or ELSS, invest in a
diversified portfolio of equity
shares. However, unlike an open-
ended diversified equity scheme,
18 Outlook Money December 2017 www.outlookmoney.com
manjunath, Bengaluru
my mother holds some equity shares which she
inherited from my father when he passed away. the
holdings are in physical form. she now wishes to gift
them to me and I want to hold them in my demat
account. Could you please advise me on the process to
convert them into demat form?
Your mother can transfer the shares to you through the
registrar and share transfer agents of the company. She
needs to submit her original share certificates to the R&T
agent along with the Share Transfer Deed in Form No SH-4
(Securities Transfer Form) duly filled in, executed and affixed
with appropriate share transfer stamps. A self-attested
copy of your PAN card will also be needed. Stamp duty for
transfer of shares is 25 paise for every `100 or part thereof
of the value of shares on the date of the execution of the
transfer deed. Once shares are transferred to you, you can
get them dematerialised through the depository participant
(DP) where you hold your demat account.
PanKaj mathPal, Ceo, oPtima money manageRs
ELSS comes with a lock-in period BRIJesh malIk, Hyderabad
of three years from the date of I have a home insurance
investment, which means, the units policy, can I also add the
cannot be redeemed during this expensive fittings that I have
period. Investment in ELSS funds recently included?
qualifies for a deduction of up to This is a very subjective matter. For
`1.5 lakh under section 80C of the this you need to read the annexure
Income Tax Act. Schemes under of the policy which clearly contains
both these categories bear the same the ifs and buts. For this, you should
kind of risk and have a similar contact your advisor via whom you
growth potential. You can make the purchased the policy. Usually add
choice of your investment based ons are not included but please read
on your needs. the policy note.
PanKaj mathPal, Ceo, PanKaj ladha, FoundeR,
oPtima money manageRs PanKajladha.Com
 News Roll

Know Your Aadhaar linkage deadlines

With the Supreme Court deliberating on whether Aadhaar should be
made mandatory, some important deadlines to keep tab on

E
ven as the Supreme Court
prepares to deliver its
verdict on the mandatory
Aadhaar seeding for
various services, many have been
getting frantic calls and messages
from financial services and telecom
companies urging them to complete
the linking process.
Be it banking, insurance, mutual
funds, stocks or post office schemes
all regulated financial services are
now under the Aadhaar ambit. This
is in line with the central
governments decision to amend the
Prevention of Money Laundering
(maintenance of records) Act, 2005.
The deadline for seeding Aadhaar
with PAN was extended from August
31 to December 31. For telecom
companies, the last date for the
purpose is February 28, 2018.
While banks had been exhorting
their customers to comply with the
rule for several weeks now, insurance
companies have jumped on to the
bandwagon after the Insurance
Regulatory and Development
Authority of India (IRDAI) clarified
that Aadhaar linkage was mandatory
for all insurance policiesexisting
and new. Many insurers have
welcomed the move, pointing out

Bharti-AXA launches Smart Super Health policy

W ith rising medical costs and varied needs of

customers, general insurance companies are
introducing products with added features and more
flexibility. Bharti AXA General Insurance has launched a new
plan called the Smart Super Health Policy that comes with
some key features.
The policy is designed to cater to a larger audience covering
up to five family members, including the policyholder. It
allows customers to modify their policy features later. For
example if the policy is taken without maternity benefit, it
can be bought later should the need arise.
There is no capping on room rent in any of the plans

20 Outlook Money December 2017 www.outlookmoney.com

Important Deadlines
Deadline for Consequences of
Service
linking Aadhaar non-compliance
I-T returns will not be
PAN December 31, 2017
processed
Accounts will be
Banking December 31, 2017
blocked
Mutual funds/
December 31, 2017
Account will turn SC issues notice on
Stocks non-operational bitcoin regulation
With bitcoin and other
Insurance Policies will be
December 31, 2017 cryptocurrencies being widely
policies inaccessible used despite lack of clarity around
Post office its regulations, their popularity
schemes PPF, Accounts will be continues to soar, putting gullible
December 31, 2017 investors who are not savvy enough
KVP, deposits, blocked
to make an informed choice at
NSC, etc
risk. The current situation where
Number will be circulation of such cryptocurrencies
Telecom February 28, 2018
deactivated continues unabated without being
bound by any rules prompted
Social benefit
advocate Dwaipayan Bhowmick
services like Access to benefits
March 31, 2018* to file a petition in the Supreme
LPG and will be curtailed
Court seeking regulations for the
pension cryptocurrency space. The SC has
*The central government has agreed to extend the deadline up to now sought responses from the
March 31 for those who do not have Aadhaar central government, SEBI and RBI,
among others on the matter.

that the framework will boost to the Unique Indentification GST Council takes
their ability to detect and prevent Authority of India (UIDAI). 28 per cent slab list
frauds. However, given the Earlier, the finance ministry had down to 50
mammoth Aadhaar numbers in made it clear that even post office End-consumers bearing the brunt of
operation, service providers have schemesNational Savings high GST rates can now heave a sigh
their task cut out over the next Certificate (NSC), Public of relief. Only 50 items will attract
one and a half months. Nearly Provident Fund (PPF), Kisan the highest tax rate of 28 per cent
118 crore Aadhaar numbers Vikas Patra (KVP), etc. had to be now, with the GST Council moving
have been generated so far, with linked. Alternatively, users could nearly 175 items to the lower slab.
4 to 5 crore authentications submit Aadhaar application or The council, which took a call
taking place every day, according enrollment details. on widely expected relief measures
ahead of the crucial Gujarat polls,
agreed to shift mass consumption
products like shampoos, washing
which means that a patient can choose any room when being treated powder, detergent and shaving items
at a hospital. The plan also covers medical expenses for in-patient into the 18 per cent bracket.
treatment for alternative treatments like ayurveda, yoga, naturopathy, This is a crucial decision, as India
unani, siddha, and homeopathy. has very high tax slab of 28 per cent
In case of an emergency, air transportation from the site of excluding cess. In future, we may
emergency to the nearest hospital is also covered. It also pays for expect that the government will
organ donation expenses. further slash tax rates by moving
from 4-tier tax slabs to fewer slabs

www.outlookmoney.com December 2017 Outlook Money 21

 News Roll

or even single GST rate, says Vishal

Raheja, DGM, Taxmann.
Concerns around transmission
of these benefits, however, persist.
The government should ensure
that the benefit of the rate reduction
goes to the consumers. It appears
that after this mass rate reduction
various anti-profiteering problems
may kickoff for businesses which
would not pass on the benefit to the
consumers, cautioned Abhishek
Rastogi, partner, Khaitan & Co.

GST will reduce your SBI General introduces

a simplified home
restaurant bills but only just insurance policy
The complex structure and wordings

I t was good news for consumers when the GST tax rates were revised
to a uniform 5 per cent from 12 per cent for non-air-conditioned
restaurants and 18 per cent for air-conditioned restaurants. Will this lead
of home insurance policies are often
seen as impediments to pick up in
demand for such products, despite
to a significant reduction in restaurant bills? Let us take a look. rising awareness around the need for
Says Aditya Singhania, DGM-GST, Taxmann, the rates have been insurance post the earthquakes and
significantly reduced from 18-12 per cent to 5 per cent on the output side floods in the last couple of years. To
but at the cost of Input Tax Credit (ITC) being withdrawn. The blocked bridge this gap, insurers like New
ITC is certainly going to be a part of the cost of the menu prices as no India and Bajaj Allianz have rolled
restaurant is going to bear the same from its own pocket and it appears out simpler products. Private non-life
that they are going to recover the same from the customers. insurer SBI General Insurance has
Rahul Singh, Founder & CEO, The Beer Cafe and also the Vice President joined the list with the launch of its
of National Restaurant Association of India elaborates, on 15th Simple Home Insurance Policya
November, the restaurants were moved to a 5 per cent flat GST without package product providing coverage
ITC, which means that the input tax which is in the range of 4 to 12 per for a tenure of up to three years.
cent becomes a cost to the restaurant. The menu base price increases It allows policyholders to cover
from `100 to `104-112 (depending on the restaurant input taxes). And apartments on an agreed value basis as
the customer would pay 5 per cent GST on this base price. against reconstruction cost approach.
The overall bill to the customer still would be lower than the `118 paid It provides protection for your house
earlier, but the reduction in prices will not be as much as expected. against public liability, personal
accident, breakdown of appliances and
so on. House owners as well as tenants
Gold demand dips 24 per cent post GST are eligible to buy this policy. The
GST and anti-money laundering legislations pertaining to jewellery have product also offers discounts to those
severely affected the segment in India, with gold demand in the third choosing longer tenures of two and
quarter of 2017 slipping 24 per cent to 145.9 tonne. During the same three years.
period last year, gold demand stood at 193 tonne. The fall was a result
of retail buyers staying away from jewellery transactions, according to a
World Gold Council (WGC) report. In value terms, gold demand
plummeted 30 per cent to touch `38,540 crore. Investment demand for
the precious metal fell 29 per cent to `8,200 crore compared to `11,520
crore in the third quarter of 2016.
However, WGC is upbeat about the yellow metals prospects, thanks
to rollback of the AML legislation and progress made in GST transition.
The recovery is expected to take root in 2018.

22 Outlook Money December 2017 www.outlookmoney.com

Edelweiss Tokio rolls
out Wealth Plus Ulip
Private life insurer Edelweiss Tokio
Life has launched a unit-linked
insurance plan (Ulip) targetted at
digitally-savvy individuals who do
not rely greatly on distributors for
their investment decisions. Launched
in associated with Policybazaar, the
product does not levy any premium
allocation or policy administration
charges. It also contributes additional
units on every premium paid by
the customer. These additional
allocations start at 1 per cent for the
first five years, rising subsequently to
3 per cent, 5 per cent and 7 per cent
every five years. As per the company,
the rationale is to get policyholders
to stay invested over the long term.
Bajaj Allianz unveils
cyber insurance cover
Bajaj Allianz General Insurance has
come up with a cyber liability cover
for individuals that insures against
risks like identity theft, malware
attack, IT theft loss, phishing,
e-mail spoofing, cyber extortion,
and cyber stalking. Termed Cyber
Safe Insurance Policy, it will cover
financial losses and legal costs related
to identity theft, IT theft loss as
also restoration cost of retrieving or
reinstalling data damaged by entry
of Malware. It also provides coverage
for expenses incurred on counselling
services treatment, claim for damages
against third party for privacy and
data breach, cyber extortion loss, and
transportation expenses for attending
court summons. The minimum sum
Paytm, ICICI Bank tie up to
launch digital credit account
P aytm has partnered with ICICI Bank to launch Paytm-ICICI Bank
Postpaid, a digital credit account to provide digital credit instantly to
customers. This account can be activated online instantly and a customer
does not need to visit a branch. There is also no transaction, administration
or hidden fee. The app can be used to avail interest free credit for up to 45
days. So it actually is in essence a virtual credit card. The credit limit ranges
from `3,000 to `10,000 and can be extended to `20,000 depending on the
payment history of the customer.
The app is available 24X7 and works using big data-based algorithm by ICICI
Bank to make a real time credit assessment of the customer. The algorithm
will use a combination of financial and digital behaviour of the customer
including credit bureau check, purchase patterns, frequency of purchase to
ascertain the credit-worthiness of a customer within seconds, and decide on
his credit limit. If you are going to Paytm and making a purchase, you will have
various options of paymentwallet, debit card, credit card or so on. This will
give you a buy now, pay later option. We will give a credit line, using which a
customer can purchase goods through Paytm, says Anup Bagchi, Executive
Director, ICICI Bank.
Once the credit limit is set up for a customer, a consolidated bill is generated
on the first day of the next month, which has to be paid by the 15th day of the
same month. Customers can use their Paytm Wallet, debit card or internet
banking of any bank to repay their dues. In the beginning, this product will be
offered only to the ICICI Bank customers who use the Paytm app. Later it will
also be extended to non-ICICI bank users.
Such short-term loans for small amounts are in demand, but banks do not
offer any product in this space. It will come in handy for those who are new to
loans and do not have a credit history to tide over short-term cash requirements.
Like credit cards, a customer has to make sure that he pays back the money
within the stipulated period, beyond which he would have to pay interest at the
rate of 3 per cent per month, same as that in the case of credit cards. Says Vijay
Shekhar Sharma, Founder & CEO - Paytm, its common for us to ask a trusted
friend for money for frequent expenses and promise to pay later. We believe
our customers are sincere with their payments and Paytm post-paid will play a
major role in helping them pay for their daily expenses on time.
www.outlookmoney.com December 2017 Outlook Money 23
 News Roll

RBI launches
awareness
drive to insured that one can opt for under the

caution
policy is `1 lakh, while the maximum
is `1 crore. Any adult insurance-
seeker who uses internet facility on a
customers computer system and digital devices is
eligible for this cover.
against Max Bupa launches
scams ATH machines for
instant policy issuance
Soon, health insurance-seekers
will be able to get health insurance
policies issued through machines,
without human intervention.

R ecognising that SMS, email and phone call are fraudsters favourite
platforms to ensnare gullible users, the Reserve Bank of India (RBI)
has decided to beat the fraudsters at their own game by using these
Standalone private health insurer
Max Bupa has announced the launch
of AnyTimeHealth (ATH) machines,
tools to spread awareness among customers. The banking regulator a technology-based solution that
plans to send emails and SMSes to the general public cautioning them the company claims will allows
against falling prey to unsolicited and fictitious offers received through insurance-seekers to run instant
emails/SMSes/phone calls. health assessment, choose the policy
Now, how can customers ascertain whether these messages are best suited for them and leave with
genuine or not? To start with, they should look for messages from the the policy document in hand within
RBISAY sender ID. This is the first time it will be using the same media three minutes. To avail of the facility,
(SMS and emails) as those used by the fraudsters. Make it a habit to the proposer has to register using
ignore or report any messages that seek bank or card details and PIN. Do email and phone number, proceed
not believe any SMSes that claim that you have won a lottery. Members to a health assessment, evaluate an
of public can give a missed call to 8691960000 to get more information automated health insurance policy
through Interactive Voice Response System (IVRS) on fake calls/emails recommendation based on details
as well as investing wisely and cautiously in chit funds, an official release entered and pay the premium to
said. Despite constant warnings from RBI and other financial regulators, complete the instantaneous policy
such frauds are rampant, swindling unsuspecting customers across the issuance process. The machines will
country. Many masquerade as official emails to gain customers trust and installed at the companys banking
elicit bank details, password or even an advance fee to transfer lottery distribution partners branches,
winnings. The central banks latest move aims to counter tricksters by including those of Bank of Baroda.
using similar platforms. In addition to anti-fraud warnings, the messages In the first phase, the company will
will also educate individuals about various banking regulations and install 20 ATH machines at its partner
facilities available to them. The initiative which carries the tagline Suno banks branches across multiple
RBI kya kehta hai, will also seek feedback on the campaign by email. cities. In the next 12-15 months, the
Customers who want to share their suggestions can send an email to health insurer plans to put up these
rbikehtahai@rbi.org.in. machines across retail locations such
While RBIs proactive communication will certainly help, it would as malls, housing societies, airport
do well not to leave out Whatsapp from its ambit, given that it is fast lounges and hotels.
becoming their new platform of choice to trap gullible users.
editor@outlookmoney.com

24 Outlook Money December 2017 www.outlookmoney.com

 Life Insurance Made Easy
Tax Edge
Life insurance is not just about protection, savings, and investments; there
are also tax benefits to be claimed on the premiums paid and on maturity
T
he manifold
benefits of a
life insurance
policy are
well documented:
protection, savings, and
investments. A feature
that sets life insurance
apart from other
financial instruments is
the tax benefits that one
can claim. So, when you
pay the premium towards
your life insurance
cover, you can claim tax
benefits under Section
80C of Income Tax Act,
up to a maximum sum
of `1.5 lakh.
The benefits under
Section 80C exist only
if the policy has been
in force for at least five
years, because if the
policy is terminated
within five years, the
deductions are added
to income and taxed
accordingly.
The condition to
claim tax benefit is that
the sum assured has to
be at least 10 times the
annual premium being
paid. For instance, if
the sum assured is `15
lakh and the annual
premium paid is less
than `1.5 lakh, then the
entire amount can be
claimed as deduction
under Section 80C. If the
premium is more than 10
per cent, say `2 lakh for
the same sum assured,
attached to your base
AdvAntAge
life insurance. Health
insurance offers tax
benefits under Section
80D, wherein premiums
Premiums paid towards servicing a life insurance up to `30,000 for senior
policy qualify for tax deductions under Section citizens and `25,000 for
80C of the Income Tax Act
others are eligible for
The maximum deduction that can be claimed tax benefits. Remember
under Section 80C is `1.5 lakh that regardless of its
Tax-free proceeds on maturity/death under nature, life insurance not
Section 10(D) are subject to conditions only helps you meet the
mentioned therein. financial needs at every
Premiums towards health riders like critical stage in life but also
illness qualify for tax deductions under offers tax benefits; a trait
Section 80D that makes it useful to
Premiums up to `30,000 for senior citizens and align financial goals and
`25,000 for others are eligible for tax benefit. tax savings.
olmdesk@outlookindia.com
then the deduction
amount is capped at
`1 lakh. However, for
policies purchased
before April 1, 2012, the
premium to sum assured
should not exceed 20 per
cent for the proceeds to
be tax-free.
There are also tax
benefits to be claimed
in case of maturity of
a life policy or in case
of a death claim. Under
Section 10(10) D, the
proceeds from maturity/
death are tax free
subject to conditions
mentioned therein.
Additionally, there
are also tax benefits
to be claimed through
health riders like
critical illness when
www.outlookmoney.com December 2017 Outlook Money 25
Morning Star Fund Review
Morningstar Mutual Fund Guide
Kaustubh belaPurKar

Picking the right Mutual Funds

Morningstar Analyst Ratings help identify those
funds which have the ability to outperform their
benchmark and/or peer group

I
nvestors today are faced with a plethora of options These ratings capture the risk adjusted returns of
when it comes to investing in Mutual Funds. the fund over longer time horizons and as well use
Picking funds is often a hard task as there is a sea of proprietary metrics to penalise funds with large
information available to investors and the sheer number downsides. Star Ratings are based on a 5 point scale
of funds to pick from can make the task seem daunting. from 1-star to 5-star, with 5-star being the best. We
Many investors tend to rely purely on historical short- believe these are a good starting point for investors to
term performance to make investment decisions, which shortlist more consistent funds basis their historical
to our mind can be misleading. For starters, historical performance.
performance may or may not be repeatable in the future. While Star Ratings are a good starting point, the
Secondly, it is important to ascertain the attribution of Morningstar Analyst Ratings help identify those funds
the performanceis it due to the fund being invested which, we believe, have the ability to outperform their
in specific segments of the market that have done really benchmark and/or peer group, within the context of the
well? Or is the performance more broad-based across level of risk taken, over the longer term. Analyst Ratings
stocks and sectors? The latter would suggest a more use a globally consistent five pillar process to assess
repeatable performance going forward. funds on People, Process, Parent, Performance and
Founded in 1984 in the United States, Morningstar Price. Analysts carry out extensive research followed
is an independent investment research firm with by fund manager interviews to assess funds on these
operations in 27 countries. Our mission is to create criteria. The first three pillars (People, Process, and
great products that help investors reach their financial Parent) form the core of our assessment and believe
goals. We are fiercely independent in our research and these eventually translate into long term consistent
put investors at the center of everything. Morningstar performance going forward. Funds are rated again on
has been in India since 2008 and produces two ratings a five point scale Gold, Silver, Bronze, Neutral, and
on funds Morningstar Ratings (Star Ratings), which Negative.
are quantitative ratings based on historical performance These fund reviews are intended to help new
and Morningstar Analyst Ratings, which are a qualitative investors looking to invest into mutual funds as well as
forward-looking assessment of the fund manager and help existing investors take a decision whether to stay
the strategy. invested in a particular fund.
The Morningstar Ratings are based on the historical We are glad to be associated with Outlook Money to
risk adjusted returns of fund versus their peer group. bring our best investment ideas across to investors to
help them make the right investment decisions. Happy
investing!
Dont pick funds purely looking
at past performance, which to The author is Director Fund Research
Morningstar Investment Advisor India
our mind can be misleading
Disclaimer
@2017. all rights reserved. The Morningstar name and logo are registered marks of Morningstar, Inc. This Report is issued by Morningstar
Investment Adviser India Private Limited (Morningstar), which is registered with SEBI (Registration number INA000001357) and provides
investment advice and research. Please visit http://www.outlookindia.com/outlookmoney/invest/picking-the-right-mutual-funds-2542
and read important statutory disclosures, as mandated by SEBI, regarding the information, data, analyses and opinions given in this report.

26 Outlook Money December 2017 www.outlookmoney.com

 Franklin India High Growth Companies Fund

Manager biography and Fund strategy

R equity
oshi Jain has 12+ years of experience portfolio and invests in stocks from Portfolio
Date:
in equity research and portfolio across market segments (large, mid, sectors 10/31/2017
management. She has been a co- and small) without any bias. She does
manager of this fund since 2012 and not shy away from taking significant
the lead manager since 2014. The sector and stock bets. Jain is cognizant
investment process is research intensive of the underlying risk in this strategy %
and relies heavily on a bottom-up and takes requisite measure to mitigate Basic Materials 5.0
approach. Only companies that have them. Hence, single stock weight in the Consumer Cyclical 12.9
durable competitive advantages versus portfolio is capped at 10 per cent. Also, Financial Services 40.5
peers, sustainable business models, while constructing the portfolio, she
Real Estate 1.3
strong entry barriers, able management ensures that it doesnt have significant
Consumer Defensive 0.0
teams, and good corporate governance exposures in two sectors which are
standards are included in the coverage fundamentally aligned. For instance, Healthcare 7.1
list. The portfolio is currently positioned given she has high exposure to banking Utilities 3.7
to benefit from a turnaround in the stocks, she has avoided investing in Communication Services 9.2
economic growth. Also, Jain has been metal and mining companies. In our Energy 7.5
investing in sectors and companies opinion, the process is sound and Industrials 5.1
which are related to domestic growth workable over the long term and it has Technology 7.6
recovery rather than export oriented. been executed with skill by the manager total 100.0
She is flexible in her investment so far, which results in long term
approach while constructing the sustainable performance.
Portfolio
top holdings
Weighting (%)
Calendar Year returns
HDFC Bank Ltd 8.63
Calculation Benchmark: S&P BSE 500 India INR State Bank of India 8.28
100.0
79.6 ICICI Bank Ltd 8.27
80.0
Axis Bank Ltd 8.06
60.0
42.5 Bharti Airtel Ltd 5.42
Return

30.3 31.3 37.0 31.2

40.0
Tata Motors Ltd Class A 4.93
20.0 9.2
5.0 3.8 1.5 3.3 Whirlpool of India Ltd 4.09
00.0
-20.0
-0.8 Indian Oil Corp Ltd 3.63
YTD 2016 2015 2014 2013 2012 NTPC Ltd 3.39
Franklin India High Growth Cos Gr S&P BSE 500 India INR Idea Cellular Ltd 2.88

Fund snapshot
trailing returns
Morningstar Category India Fund Flexicap
Data Point: Return Calculation Benchmark: S&P BSE 500 India INR Fund Size (`) 73 billion
YTD 1 Year 3 Years 5 Years 10 Years Inception Date 7/26/2007
Franklin India High Growth Cos Gr 30.28 21.75 15.10 24.26 12.09
Annual Report Net Expense Ratio 2.31
Morningstar Rating Overall ****
S&P BSE 500 India INR 31.25 21.94 10.99 15.27 6.41 Manager Name Multiple
Minimum Investment (`) 5,000
Average 28.54 20.05 10.84 15.61 7.83
Deferred Load 1.00
Data Source: Morningstar India

www.outlookmoney.com December 2017 Outlook Money 27

 Morning Star Fund Review
Morningstar Mutual Fund Guide
ICICI Prudential Top 100
Manager biography and Fund strategy

N aren has 25+ years of experience

in research and fund management
and has been associated with ICICI
high leverage. He favours companies
with attractive fundamentals, shifting
away from ones where he thinks equity
Portfolio
Mutual Fund for the last 13 years. Naren valuations are stretched. He does sectors Date:
is known for being a contrarian and has not take cash calls and remains fully 10/31/2017
a good understanding of value stocks. invested; cash levels are unlikely
Naren follows a disciplined to exceed 5 per cent of assets. The
investment process and an active strategy is complex, but we believe in %
portfolio management approach. The Narens execution skill which makes Basic Materials 12.6
fund has a large cap bias with a focus the process robust. Consumer Cyclical 8.2
on stocks which have significant long The fund runs a concentrated Financial Services 24.7
term growth potential. He aims to portfolio based on the number Real Estate 00
generate alpha by active sector rotation of stocks in its portfolio than its Consumer Defensive 6.4
through a top-down approach. Within peers. With Narens excellent stock Healthcare 7.4
the chosen sectors, Naren makes use picking skills we are comfortable of
Utilities 11.3
of relative valuation parameters to the concentrated portfolio, which
Communication Services 3.7
invest in large-cap stocks he believes could have the potential to fetch
are attractively priced relative to their higher returns. The funds long term Energy 8.2
growth prospects. performance track record is good, Industrials 9.6
While picking stocks, he focusses but it can underperform its peers in Technology 8.1
on the financial strength of the the short run due to its valuation- total 100.0
company and knocks out stocks with conscious approach.
Portfolio
top holdings Weighting (%)
Calendar Year returns
Calculation Benchmark: S&P BSE 100 India INR
ICICI Bank Ltd 5.66
38.3 Infosys Ltd 4.69
32.3 32.8
30.0 26.9
28.5 30.0 Oil & Natural Gas Corp Ltd 4.66
22.5 Axis Bank Ltd 4.49
Tata Chemicals Ltd 4.27
Return

15 10.3 11.4
7.5 3.6
5.9 State Bank of India 3.65
00.0 Bharti Airtel Ltd 3.53
-0.6
-7.5 -3.2 Power Grid Corp Of India Ltd 3.51
YTD 2016 2015 2014 2013 2012 Larsen & Toubro Ltd 3.35
Franklin India High Growth Cos Gr S&P BSE 500 India INR Tata Motors Ltd Class A 3.20

trailing returns Fund snapshot

Data Point: Return Calculation Benchmark: S&P BSE 100 India INR Morningstar Category India Fund Large-Cap
Fund Size (`) 29 billion
YTD 1 Year 3 Years 5 Years 10 Years
Inception Date 7/9/1998
ICICI Pru Top 100 Gr 26.91 21.87 11.25 17.86 9.57 Annual Report Net Expense Ratio 2.58
Morningstar Rating Overall ****
S&P BSE 100 India INR 28.49 20.70 8.73 13.90 5.98 Manager Name Multiple
Minimum Investment (`) 5,000
Average 28.54 20.05 10.84 15.61 7.83 Deferred Load 1.00

28 Outlook Money December 2017 www.outlookmoney.com

 Aditya BSL Short Term
Investment strategy Fixed-Income stats
Portfolio Date: 10/31/2017

M aneesh Dangi heads the fixed income

team at Aditya Birla Sun Life AMC
and is also the co-CIO at the AMC. He has
analysts tend to undertake an in-depth
evaluation of the management, corporate
governance practices, financial standing
Average Eff Duration
Average Eff Maturity
-
2.4
15+ years of experience in research and of the issuers, liquidity, and risk. Overall, Average Coupon 8.1
fund management and has been with the investment process seems robust, Average Price -
Aditya BSL AMC since 2006. Dangi is an given the managers focus on conducting Average Credit Quality AAA
experienced portfolio manager and we competitor analysis, scenario analysis,
view his in-depth understanding of the and client profiling that form important risk-reward
macro-economy as being an advantage. aspects of the process. The core of the
Time Period: 11/1/2012 to 10/31/2017
The fund house runs one of the largest strategy lies in a combination of taking a
12.0
teams on the Fixed Income side, consisting duration view based on the interest rate Aditya BSL

Return
of a 12-member analyst team. This includes directional movements and taking some 8.0 Short Term
four portfolio managers who also double credit bets in high quality corporate bonds Reg Gr
up as analysts. Analysts too take on dual/ at the shorter end of the yield curve. In line 4.0 India Fund
multiple roles based on their expertise. with its philosophy, the strategy allocates Short-Term
0.0
The fund typically invests in high quality a portion of its assets to G-Secs and State 0.0 0.3 0.6 0.9 1.2 1.5 1.8
Bond
debt papers and has not taken active Development Loans (SDL) in addition to
credit bets in the past. The issuer-selection investing in high quality debt papers. Dangi
Portfolio
process on the corporate bond side is can vary his allocation towards these top holdings
Weighting (%)
extremely detailed and based on a well- based on their valuations and relative
defined set of processes. The team relies spreads. The execution of the strategy 8.40% Govt Stock 2024 2.52
on their internal ratings and processes as is reflected in the funds noteworthy Power Finance 1.96
opposed to external credit rating agencies. performance. The fund has remained a Corporation Ltd.
Given their focus on quality and liquidity, consistent performer over the years. ONGC Petro Additions Ltd. 1.93
Rural Electrification 1.91
Performance relative to Peer Group Top Quatile Corporation Ltd.
2nd Quartile
Peer Group (5-95%): Open End Funds - India - Short-Term Bond 3rd Quartile
Aditya BSL Cash Plus Dir Gr 1.87
Calculation Benchmark: None Bottom Quartile Reliance Jio Infocomm 1.76
11.0 Limited
8.83% Govt Stock 2023 1.23
9.0
Tata Sons Ltd. 1.20
Return

7.0 Mahindra & Mahindra 1.20

5.0
Financial Services Ltd
6.84% Govt Stock 2022 1.09
3.0
YTD 2016 2015 2014 2013 2012
Key Information
Aditya BSL Short Term Reg Gr India Fund Short-Term Bond

trailing returns Morningstar Category India Fund

Short-Term Bond
Data Point: Return Calculation Benchmark: None
Fund Size (`) 209
YTD 1 Year 3 Years 5 Years 10 Years 15 Years Inception Date 3/3/1997
Aditya BSL Short Term
6.19 7.69 9.05 9.21 8.67 8.09 Annual Report Net Expense Ratio 0.32
Reg Gr Morningstar Rating Overall ****
India Fund Short-Term Manager Name Multiple
Bond 4.86 6.10 7.21 7.45 7.32 6.74
Minimum Investment(`) 1,000
Data Source: Morningstar India

www.outlookmoney.com December 2017 Outlook Money 29

 Cover
story

ETFs Vs

Mutual Funds
Low-cost passive investment products like ETFs and
Index Funds are set to challenge large-cap mutual fund
schemes, says Malini Bhupta

Mutual
Funds
ETFs

32 Outlook Money December 2017 www.outlookmoney.com

 magine walking into a retail store and change with time as these funds have become the
seeing two similar products priced vehicle of choice in other world markets for both
differently. Which one would you institutional and retail investors. Morgan Stanley
choose? Obviously, the one that is expects retirement funds to invest $170 billion
priced less, if all other things remain into such funds by FY26.
the same. It is time then that investors view As Indian financial markets mature, equity
financial products in the same light as they do products that generate returns which closely
other products because the charges you pay track the benchmark indices will become more
to manufacturers erode returns. This is more
relevant for investments made in large-cap
equity mutual funds because their expense
ratios are anywhere between 2.5-3.5 per cent. Key Index Performance over 1 year
So, if investors are looking at participating
Benchmark % Change
in equity markets at significantly lower costs,
then passive investment options like exchange
S&P BSE SmallCap 35.4%
traded funds (ETFs) make for a compelling S&P BSE MidCap 27.6%
option. ETFs are similar to mutual funds, but S&P BSE 500 24.7%
they follow benchmark indices like the Nifty S&P BSE 200 23.1%
or Sensex. On the other hand, mutual funds are S&P BSE 100 22.8%
actively managed by fund managers. Among S&P BSE LargeCap 22.2%
other reasons, actively managed funds charge
Nifty 50 21.1%
higher management fee because such funds can
generate higher returns than the benchmarks.
S&P BSE Sensex 20.9%
But even globally, it is widely accepted that
beating the benchmarks is becoming tough. So ETFs Annualised Returns
if a fund manager cannot beat the benchmark AUM in crores (Figures Annualised return
and continues to charge higher expenses, then ETF's
as on 6th Nov) in last 1 year
returns will be comparatively lower. ETF Nifty 31,646 24.50%
Interestingly, in developed markets like the US,
ETF Sensex 9084 25.30%
such passive funds have consistently done better
than actively managed funds. Says Ashishkumar Banking ETFs 7074 34.85%
Chauhan, MD and CEO, BSE: Internationally, Gold ETFs 5300 7.27%
ETFs have taken over the world such that they Debt ETFs 1809 4.92%
are bigger than all funds. An ETF investor knows CPSE ETF 5082 25.12%
exactly where the money is invested and that too Source: LIC Mutual Fund research
at lower costs. In an ETF, the cost of distribution
goes away as funds are traded on the exchange. Market share of largest ETF providers
ETFs are nothing but a bunch of listed securities by assets as on Sep 2017
that investors can buy as units on exchanges.
ETFs have been around for several years now, but 2.8%
they are gaining currency only now as Indian 2.2%
markets are maturing. In August 2015, the 3.4%
government allowed Employees' Provident Fund 4.1%
Organisation (EPFO) to invest upto 5 per cent
Source: ETFGI Research Data

4.2%
of the incremental flows into equity markets 14.5%
through the ETF route. Now, 15 per cent of
18.6%
incremental flows are invested in equity ETFs.
Even though it is a cheaper investment option 50.3%
Reliance AMC ICICI HDFC MF
with returns almost identical to those of the
UTI AM Kotak Mahindra Others
benchmark indices, ETFs are not yet popular
SBI LIC Nomura
with retail investors. But, this is expected to

www.outlookmoney.com December 2017 Outlook Money 33

 Cover Story

popular because such The A to Z

passive funds are priced of passive
significantly cheaper. This investment
category of products that I clearly see ETFs ETFs compare well with
ape indices are known as challenging large-cap large-cap diversified
passive funds, because no mutual funds. mutual funds that
active intervention of a Natural maturity will lead track specific indices or
fund manager is required to markets moving to ETFs benchmarks. However,
in these funds. for large-caps. what makes ETFs relevant
It is like buying a bunch from a retail investors
of stocks that constitute SuNdEEp SIkka perspective is the low total
the BSE Sensex, Nifty CEO, Reliance Nippon Life expense ratio (TER) or
or any other specified Asset Management Company the charge that the asset
index. Steve Rive, chief management company
commercial officer of levies from investors.
S&P Dow Jones Indices The cost of investing in
LLP, who was in India for passive funds is as low as
the launch of Bharat-22 20 basis points (100 basis
ETF, says: Passive investments are points makes one per cent), while
a lot simpler. Where markets are diversified equity mutual funds can
efficient, it is hard to better the charge between 2.5 per cent to 3.5
indices. A major factor that leads to per cent. So, an ETF that tracks the
greater acceptance of ETFs is when Nifty 50 or the Sensex will deliver
there is a move to fee-based advise. similar returns but the charges that
This has happened in the US. Unless this the investors pay are significantly lower.
happens, advisor has no interest in passive Explaining the importance of ETFs in India,
investments like ETFs. Anuradha Rao, managing director and CEO of
SBI Mutual Fund says: Both the regulators and
the government understand that returns are
Sectoral Returns over 1 year under pressure and they would like to ensure
Consumer Durable 58.6% that distribution cost should not affect returns.
Realty 57.9% ETFs allow investors an opportunity to generate
Energy 44.7% decent returns at lower costs. As a product,
Telecom ETFs are appropriate for new equity investors.
43.5%
But dont expect your distributor to sell you
Metal 40.5%
an ETF because they dont get commission on it.
Basic Materials 37.9% Since there is no incentive for the distributor to
Oil & Gas 37.0% push such products to the investor, awareness for
Finance 30.7% such products is low, laments Rao. But natural
Bankex 28.2% maturity will lead the market to move towards
Capital Goods 27.8% ETFs for those looking to invest in large-caps.
Consumer Discretionary 26.4% ETFs cannot be ignored, Rao believes.
The reason that ETFs charge very low fund
Utilities 26.2%
management fee is because the discretion or
Industrials 22.3% active intervention of fund managers in these
FMCG 20.0% schemes is negligible. Money is allocated on the
Power 15.2% basis of the index. Fund allocation in an exchange
Auto 13.8% traded fund or an index fund is based on the
TECK 12.8% Nifty or the Sensex, and follows the weightage of
Information Technology 8.6% stocks in the index. Since ETFs are designed to
track indices, the fund management fee is 20-30
Healthcare -7.90%
basis points.
Source: BSE But ETFs need not be plain vanilla offerings that

34 Outlook Money December 2017 www.outlookmoney.com

 ETFs
An ETF is like a mutual fund but the units of these funds are
actually listed on exchanges and can be traded in real time.
These units are like shares of listed companies and can be
bought during the market hours. An ETF basically follows an
index or a benchmark like Nifty or Sensex. Investors typically
get the same returns as that of the index the ETF tracks,
minus the charges. So, buying a Nifty 50 ETF is like buying a
share of the Sensex, which is a basket of 30 companies. An
ETF apes the index it is based on or designed to follow.
The price of an ETF is a reflection of the real time price of
the underlying security like stocks or gold. So, the price of
an equity (Nifty 50) ETF will be a reflection of the real time
prices of these 50 stocks. Each unit of an ETF will change
depending on the prices of the underlying securities like
stocks. Within the same day, ETF price will vary and investors
can trade (buy or sell) them like shares.
It is cheaper to invest in ETFs as they are not actively
managed by fund managers. The charges for ETFs are less
than 0.5 per cent as the asset allocation is based on the index
it apes. While buying ETFs, investor would have to pay a small
fee to the broker every time the ETF is traded as is the case
with stocks.
Tax treatment of equity ETFs is 15 per cent short-term capital
gains tax for selling the security in less than one year. For long
term investors, there is no capital gains tax on equity ETFs.
Same is the case for sector specific equity ETFs. For Gold ETF,
the tax is based on income tax slab of the individual. For index
and sector ETFs, securities transaction tax of 0.125 per cent
is charged.
ETF investors can buy a fixed number of units every month
in a systematic way just as you buy stocks through SIP
(systematic investment plan). The purchase would need to
be done through the broker.
Mutual
Funds
A mutual fund is an investment scheme that is actively
managed by fund managers and the underlying
securities can be stocks or bonds. However, a fund
manager actively decides on the asset allocation
strategy. Even in a large-cap diversified mutual fund,
a fund manager can take aggressive calls and invest
in illiquid stocks to generate higher returns (alpha). A
mutual fund manages the money investors put into
different schemes equity, debt or a mix of both
which is why MFs are actively managed schemes.
Mutual fund units can be bought at the days declared
NAV (net asset value). A mutual fund investor cannot
trade the units during the day at different prices. So if
you have invested in a large-cap mutual fund, you can
only buy it at the days declared NAV and not during the
course of the day as it is not listed on the exchange.
Mutual funds are relatively expensive, as they charge
a fund management fee of 2.5-3.5 per cent. The fund
manager actively manages the fund and, therefore,
he/she uses discretion to allocate funds to different
securities. Actively managed funds are, therefore,
expected to deliver returns that are better than the
indices. However, over time the alpha has been shrinking
as market matures.
Equity mutual funds are exempt from long-term
capital gains tax. If an investor sells equity
mutual fund in less than 12 months then
there is a flat capital gains tax of 15 per cent.
A securities transaction tax will be levied for all
equity mutual funds redeemed.
Mutual fund investments can be made through
the systematic investment plan by buying a few
units of the mutual fund scheme every month.
www.outlookmoney.com December 2017 Outlook Money 35
 Cover Story

follow the big benchmarks. Management and at the

Seeing the writing on the end of September, SBI ETF
wall, both the NSE and Many investors are Nifty 50 had `24,067 crore
the BSE are constantly wary of active fund in assets.
designing interesting managers and their Another factor that has
indices on which new adventurous investments. given a boost to this asset
ETFs can be constituted. an investor of ETF knows class is the governments
India Index Services and exactly where the money divestment process
Products Limited (IISL), a is invested and that too through the ETF route.
group company of the NSE, at reduced cost. In an ETF, The government launched
has been launching new the cost of distribution its CPSE ETF in March 2014
and innovative indices goes away as funds with an issue size of `3,000
across multiple strategy are traded on the crore. A second edition
and asset classes. exchange. of the CPSE ETF with an
For instance, the gold issue size of `6,000 crore
ETF has been very popular, aShIShkuMar was launched in January
which allows the investor ChauhaN 2017 by Reliance Nippon
to buy units where the CEO, BSE Life Asset Management.
underlying security is gold. Through the third tranche,
The first ETF in India was the central government
launched in December 2001, mopped up over `2,500
which was benchmarked crore. Interestingly, the
to Nifty 50 index. In India, government gave an
the AUM of equity ETFs has grown upfront discount of 3-5 per cent to
around six times in last two financial investors for ETFs like CPSE and
years (ending March 31, 2017). In FY11 Bharat-22 ETF. The funds charge
there were 11 equity ETFs with `1,976 very low management fee. Bharat-22
crore assets under management (AUM). ETF charges less than one basis point.
At the end of September, ETFs AUMs Even though ETFs are not so popular
touched `53,609 crore. In India, the largest with retail investors in India, globally they
ETF is the Nifty 50 based ETF issued by SBI Funds are the vehicle of choice for both institutions and

Liquidity: A Key Factor for ETFs

R
egarded as one of the key features
that give exchanged traded funds
(ETFs) an upperhand over regular
mutual fund schemes, liquidity lends this
advantage to ETFs through two sources
primary and secondary.
In the primary market, the authorised
participants (APs) or market makers
(MMs) transact directly with the
issuers of ETFs to buy as well as
redeem their ETF holdings. In the
secondary market, liquidity
originates from the continuous
buying and selling of ETF units
traded on the exchanges, with
Indicative Net Asset Value (iNAV) the
underlying value of an ETF unit as the
core metric. Adequate trading volumes
on the exchanges hold the key to creating
ample liquidity for investors.
Put simply, retail investors can access
ETFs through two routes NFOs and the
stock exchanges, once they are listed.
For example, the central government
floated NFOs for the marquee CPSE ETF
and Bharat-22 ETF schemes, post which
the former was listed for trading on
the bourses. Now, the government has
raised nearly `14,500 crore through the
Bharat-22 ETF.
High liquidity is considered an
attractive proposition as it provides
investors an opportunity to stay or
exit their investment positions at
fair values, with minimal risk and
expense. ETF liquidity gives investors
the flexibility to enter and exit the
investment. The more the liquidity, the
finer are the prices that are offered on
the exchange thereby ensuring more
flexibility, says Koel Ghosh, Head
Business Development, S&P Dow Jones
Indices in South Asia.
by Himali Patel

36 Outlook Money December 2017 www.outlookmoney.com

 Cover Story
retail investors. Globally,
assets worth $4.4 trillion
are being managed by
5179 ETFs and investors
are choosing a passive
investment strategy
rather than an active one,
where expensive fees are
paid to fund managers
who very often dont beat
the benchmark indices.
Beating the market
or benchmark indices
depends on a number
of factors like volatility,
depth of the market, and
deviation between the
performance of stocks
and benchmarks. BSEs
Chauhan asks: Why
do you want to take a
fund manager risk when
you are already taking
market risk?
Do ETFs score over
large-cap mutual funds?
Indian markets have undergone a
structural shift over the last three
years. Policies of the government have a lot
to do with this shift. Earlier, Indian equities were that large-cap funds can charge 3.5 per cent
largely driven by foreign institutional investors management fees. Why on earth will someone pay
Investment Activities: Then & Now!
Nov 2016 Oct 2017
MF AUM (` Cr) 1650011 2141346
EQ AUM (` Cr) 531575 855449
MF Folios 5.20 Crs. 6.32 Crs
EQ Folios 4.17 Crs. 5.15 Crs
EQ. Avg. Ticket Size (`) 1,27,603 1,65,984
MF Inflows (` Cr) 36021 51148
EQ Inflows (` Cr) 12711 21899
Monthly Folio Addition 6.96 Lks 10.27 Lks
Source: AMFI
38 Outlook Money December 2017 www.outlookmoney.com
and their whims. This
made Indian markets
more volatile because
Both the regulators asset allocation of foreign
and the government investments depended
understand that returns a lot on both global and
are under pressure and local developments. Over
they would like to ensure the last three years,
that distribution cost Indian equities have
should not affect returns. delivered steady returns
ETFs allow investors an because the government
opportunity to generate has taken steps to
decent returns at ensure that markets
low cost. are insulated from the
vagaries of foreign capital
aNuradha rao flows. Take for instance,
Managing Director and CEO, increase in investment
SBI Mutual Fund
of incremental inflows in
EPFO into Indian equities
from 5 per cent in 2015 to
15 per cent at present.
In a steady state when
the indices are rising
steadily upwards, generating alpha
(index beating returns) is rather
difficult. Explains Sundeep Sikka,
CEO of Reliance Nippon Life Asset
Management Company: Like
any industry, financial services too
are maturing in India. It is impractical
such a high fee because the alpha that an active
fund house will generate will not justify the
management fee. I clearly see ETFs challenging
large-cap funds. Natural maturity will lead
market moving to ETFs from large-caps.
Few fund houses like Reliance and ICICI
30% Prudential are realising that generating returns
higher than the benchmarks to justify high
61%
management fees will be tough. ICICI Prudential
for instance has filed for 8-9 ETF products
22% because it needs to have more such offerings as it
is a financial super market. But, some large fund
24%
houses still believe that India is an active market
30% and fund managers will continue to outperform
the benchmark indices.
Fund managers typically charge investors 2.5-
42%
3.5 per cent of assets as fees. Once an investor
72% factors in these charges, the returns in the
hands of investors would be that much lower.
48% Like in gold jewellery, making charges are a
percentage of the gold price, expense ratios
 ETF Returns
Scheme Name 1 Year 3 Years Tracking AUM
Error (as on Oct 31, 2017)
Aditya Birla Sun Life Nifty ETF 20.51 8.83 216.57
Aditya Birla Sun Life SENSEX ETF 22.66 -- -- 11.14
Axis Nifty ETF -- -- -- 7.49
CPSE ETF 18.92 5.14 0.28 5395.39
Edelweiss ETF - Nifty 50 21.69 -- -- 2.98
Edelweiss ETF - Nifty Bank 28.33 -- -- 1.45
Edelweiss ETF - Nifty Quality 30 11.56 -- -- 4.41
HDFC Nifty ETF 20.74 -- 0.08 179.91
HDFC Sensex ETF 20.23 -- 0.03 29.33
ICICI Prudential Midcap Select iWIN ETF 25.93 -- -- 11.14
ICICI Prudential Nifty 100 iWIN ETF 21.14 10.01 0.34 38.36
ICICI Prudential Nifty iWIN ETF 20.71 8.73 0.09 1228.39
ICICI Prudential Nifty Low Vol 30 iWIN ETF -- -- -- 11.45
ICICI Prudential NV20 iWIN ETF 23.81 -- -- 8.11
ICICI Prudential Sensex iWIN ETF 19.84 7.31 0.22 3.14
IDFC Nifty ETF 20.52 -- -- 4.62
IDFC Sensex ETF 20.12 -- -- 0.81
Invesco India Nifty ETF 20.89 8.61 -- 1.80
Kotak Banking ETF 28.28 -- 0.08 3870.33
Kotak Nifty ETF 20.75 8.72 0.08 539.72
Kotak NV 20 ETF 24.52 -- 0.18 2.74
Kotak PSU Bank ETF 19.08 1.01 0.25 141.55
Kotak Sensex ETF 19.87 7.18 0.12 11.16
LIC MF ETF - Nifty 50 20.72 -- -- 448.62
LIC MF ETF - Sensex 20.12 -- -- 328.36
LIC MF Exchange Traded Fund - Nifty 100 21.77 -- -- 291.02
LIC MF G-Sec Long Term ETF - Reg - Growth 4.75 -- -- 72.36
MOSt Shares M100 22.58 17.97 -- 22.86
MOSt Shares M50 18.97 7.53 -- 20.84
MOSt Shares NASDAQ 100 23.61 16.5 -- 68.10
Quantum Nifty ETF - Growth 20.63 8.54 -- 4.82
Reliance ETF Bank BeES 28.08 14.09 0.08 2607.08
Reliance ETF Consumption 23.18 13.45 0.18 19.86
Reliance ETF Dividend Opportunities 23.18 9.23 0.34 17.76
Reliance ETF Hang Seng BeES 21.19 9.78 0.33 6.68
Reliance ETF Infra BeES 24.93 3.39 0.13 18.05
Reliance ETF Junior BeES 26.95 19.09 0.11 199.65
Reliance ETF Nifty 100 20.95 9.54 0.19 8.64
Reliance ETF Nifty BeES 20.64 8.47 0.06 842.98
Reliance ETF NV20 24.22 -- -- 17.41
Reliance ETF PSU Bank BeES 19.1 1.02 0.15 193.49
Reliance ETF Sensex 20.15 7.42 0.13 34.69
Reliance ETF Shariah BeES 27.12 10.68 0.15 2.61
SBI ETF BSE 100 22 -- 0.40 1.51
SBI ETF Nifty 50 21.17 -- 0.04 26515.33
SBI ETF Nifty Bank 28.57 -- 0.12 749.19
SBI ETF Nifty Next 50 27.4 -- 0.32 9.69
SBI ETF Sensex 20.31 7.7 0.55 8164.91
UTI Nifty ETF 21.04 -- -- 4749.06
UTI Nifty Next 50 ETF -- -- -- 57.81
UTI Sensex ETF 20.31 -- -- 1522.84
Note: Kotak ETF tracking error calculated based on daily value since inception as on 30th Oct, 2017; Reliance ETF tracking error calculated using daily value for 36 months period
as on 30th Sep, 2017; HDFC ETF tracking error calculated based on daily rolling returns for the last 12 months as on 30th Sep, 2017; SBI ETF tracking error calculated based on daily
value since inception 30th Sep, 2017; AUM Source: MFI Explorer. CAGR returns as on 31st Oct, 2017 and tracking error Source: Factsheet

www.outlookmoney.com December 2017 Outlook Money 39

 Cover Story

are also a percentage of Regulatory push

funds invested. Higher for ETFs
expenses impact returns The government is keen
when investors redeem We have been to push low-cost equity
their mutual funds units. pioneers in promoting products like ETFs,
So, if a large diversified ETFs among our retail which is why it is taking
equity fund has to charge clients and believe that the ETF route for all its
3.5 per cent as fees, the retail investors should divestment programmes.
fund has to give returns look at this low-cost index The response seen by
that are higher than the tracking product even all the CPSE ETFs has
benchmarks to justify though the market for ETF been very good as the
the cost. Imagine this, has not grown the extent upfront discount given to
if the Sensex returns it should have. the investors has helped
15 per cent in a year, an generate double-digit
actively managed fund dEEpak JaSaNI returns for the investors.
will have to generate Retail Head, Both institutions and retail
returns that are at least HDFC Securities participation has been
4-5 per cent higher if it healthy in these funds.
has to charge a 2.5 per Additionally, the
cent management fee government has also
from investors. allowed the EPFO to invest
In comparison, ETFs upto 15 per cent of its
charge only 20-50 basis points incremental flows into equity ETFs.
(100 basis points make one per So far, `43,000 crore of this money
cent) and tend to deliver returns has gone into equity ETFs, which has
that are marginally lower than propelled the rise of the benchmarks.
benchmark indices they track. The NSE too has been promoting ETFs
Deepak Jasani, retail head of HDFC to investors as they provide attractive
Securities, which is one of the largest returns at low cost. The exchange has
intermediaries for ETFs, says: We have also organised several investor camps in
been pioneers in pushing ETFs to our retail partnership with market regulator SEBI to
clients and believe that retail investors should educate retail investors on ETFs.
look at it even though the market for ETF has not In FY15, the labour ministry, for the first
grown to the extent it should have. This is due time, mandated employee provident funds to
to lack of awareness among investors because invest a minimum of 5 per cent investment of
equity is a push product in India. incremental flows into equity. This has been
increased to 15 per cent of incremental flows in
FY17. This flow is directed into equities through
domestic ETFs. Morgan Stanley believes that the
Inflows since Dec'16 till Oct'17 governments move could imply additional flows
Total MF Net Inflow ` 2,93,279 Crore of `30,000 crore into Indian stocks through
ETFs. These flows will not only support markets,
Equity Net Inflow ` 1,96,727 Crore but also further reduce volatility in the markets,
making it that much more difficult to beat the
Total MF Folios added 1.11 Crore
benchmark indices.
Equity Folios added 98.79 Lakh The Securities and Exchange Board of India
(SEBI) too has been nudging the industry towards
becoming more transparent while disclosing
Net EQ Invt since De-Mo(Dec' 16-Oct'17) returns. The regulator wants mutual fund
By FIIs ` 26,953 Crore houses to benchmark equity schemes against
the Total Returns Index (TRI), which will give a
By MFs ` 1,05,809 Crore true picture of the returns generated by these
Source: AMFI, NSDL, and Reliance Nippon Life AMC actively managed schemes when compared
Continued on p44

40 Outlook Money December 2017 www.outlookmoney.com

Exchange Traded Funds are Part of
Everyday Lexicon of International Investors
This class of funds are tapped by institutions, professional
investors, and active traders as it offers strong liquidity
T
he Exchange Traded Funds (ETFs)
have become part of everyday
lexicon of international investors,
with the global exchange traded fund
industry smashing past $4.3 trillion
in assets, according to figures from
ETFGI, an industry data provider and
independent research and consultancy
firm. Since the introduction of first ETF
more than two-and-half decades back,
the ETF industry has come a long way,
with appetite for cheaper and passive
alternatives continuing to grow at rapid
pace, predominantly with institutional
and professional investors and individual
active traders.
Raghav IyengaR
Head- Retail & Growing Popularity of
Institutional Business, Passive Alternatives
ICICI Prudential AMC From one fund in 1993, the ETF market
grew to almost 7,000 exchange-traded
products managed by 313 providers.
This class of funds is extensively tapped
by institutional, professional investors
and individual active traders as ETFs
offer strong liquidity, convenience,
diversification, transparency and cost
advantage. ETFs have expense ratios
that are a fraction of the cost of actively
managed fund, which are estimated to
have an average expense ratio of less than
1.5 per cent; whereas ETFs expense ratios
can be as low as 0.05 per cent. This can
make a difference in the returns earned by
investors over a long period of time.
The Exchange Traded Funds are
reshaping the way people are investing
for their financial future. ETFs provide an
opportunity to participate in a growth
story of countrys bellwether companies
and allow investors to diversify risks across
sectors. Over the recent years, intense
competition among ETF providers has
resulted in lowering prices making ETFs
www.outlookmoney.com December 2017 Outlook Money
more lucrative investment option for
retail investors.
Evolving Indian
Investment Panorama
India is also fast catching up the
trend with more number of investors
considering ETFs as a medium for
passive investing with an upsurge in
assets and products. India is among
the leading countries globally in terms
of growth in domestic ETFs, as assets
have witnessed tremendous growth in
past three years to about $8.5 billion
and counting. The Indian ETF evolution
that took off with the gold ETFs is seen
moving into a whole new direction,
with the government approving its
divestment strategy through ETF. In
addition, the Ministry of Labour and
Employment approving 15 per cent of
Employees Provident Fund Organisation
(EPFO) flows into ETF investment is a
booster for the domestic ETF industry
that may grow multifold over the next
decade. India should certainly draw
inspiration the way global ETF industry
has exponentially grown over the last
decade, and implement the necessaries
to make ETFs more investor friendly.
India-focused offshore equity
funds and ETFs are gaining immense
popularity among international
investors. The combined asset base of
the India-focused offshore equity funds
and ETFs currently stands at more than
$55 billion. An investor looking to remain
invested for the long term in Indian stock
markets can consider ETFs based on
benchmark indices. One can select ETFs
linked to large-cap indices like Sensex,
Nifty, etc. or mid-cap indices like BSE
Midcap 100, Nifty Midcap 100, etc based
on market-cap orientation.
41
 Cover Story
NSE Promoting ETF for Indian Investor
Series of incentive schemes have been implemented by
NSE for enhancing ETF liquidity
After the government
allowed a portion of
incremental flows of EPFO
into equities through
the ETF route, almost
`60,000 crore has flown
into such funds. Do
you see ETFs gaining
momentum among
retail investors?
As on September 30, 2017,
the equity ETF AUM
accounted for 9 per cent of
total equity mutual fund
AUM. It was only 4 per
cent of total equity mutual
fund AUM as on March 31,
2016. In addition to equity
ETFs, asset management
companies in India have
also launched ETFs on
G-Secs. Another trend
which we are seeing is
focused on smart beta
ETFs, which have done
very well internationally.
We believe that ETFs in
India will gain momentum
in the coming years.
Are ETFs popular with
retail investors?
Retail participation in
ETFs is increasing. Retail
accounts for 64 per cent of
total daily trading volume
of ETFs. A few financial
advisors are advising
monthly SIPs in ETFs also,
which is a good sign for
the industry. Increasing
product awareness is going
to play an important role
in further increasing retail
participation in ETFs.
42 Outlook Money December 2017 www.outlookmoney.com
Going by global
experience, how do you
see ETFs growing in India?
Globally, ETF is more
than a $4 trillion industry.
In terms of AUM, USA is
largest followed by Europe
and Asia. India is still at a
nascent stage as compared
to global peers. Even in
Asia, we are smaller than
Japan, Hong Kong, Korea,
Taiwan etc. However,
there is potential to make
Indian ETF industry big in
the next few years.
All the stakeholders
need to collaborate to
make it a successful
product category.
Photo: soumik kar
Interview
VIKRAM LIMAYE
MD & CEO, NSE
Even though a lot of
money has gone into these
schemes, liquidity is still a
concern. Is NSE planning to
do anything to improve the
liquidity in these funds?
Most of the increase in
AUMs of ETFs in the recent
past has been on account of
EPFO, which, essentially, is
a long-term investment.
That may not directly add
to the liquidity.
NSE has been
constantly endeavouring
to promote ETFs for
Indian investors. While
Securities Transaction Tax
(STT) has been reduced
significantly for ETFs,
liquidity providers, which
are Authorised Participants
(APs) appointed by AMCs,
still face high STT for their
transactions as they have to
constantly provide buy/sell
quotes throughout the day.
NSE has been working with
the government to reduce
STT for AP transactions
so as to enable them to
quote with tight spreads
which would help build
further liquidity.
NSE has also
implemented series of
incentive schemes for
enhancing ETF liquidity
by providing discounts
on transaction charges
to trading members who
invest in ETFs. NSE also
incentivised trading
members to bring more of
their clients to ETFs.
 Interview
AShIShKUMAR ChAUhAN
MD & CEO, BSE

ETF is an Idea Whose Time has Come

When markets are driven by institutions, then investors dont like to take
fund manager risk. Compared to active funds, ETFs are more transparent

Passive investment
funds like ETFs are big
internationally, where
fund manager plays no
role in managing a fund.
What is the reason?
In most countries, for
the longest time fund
managers were considered
to be heroes, who were
capable of generating
returns higher than the
Index on a consistent basis.
But over time, passive
funds - index funds started
coming into markets,
where the fund had
stocks exactly in the same
proportion as that on the
Index. You could buy and
sell the fund on exchanges, In an index in government enterprises, ETF has been launched.
so cost was very little for fund, the fund then you can invest in The index fund evolution
managing and distributing managers job is S&P BSE Bharat-22 ETF in India is at the halfway
the index funds. or if you believe in IT mark, but the inflexion
In that sense, what
to act as a clerk sector then you can invest point has come.
is happening in India Is the risk lower for in a S&P BSE IT sectoral
now has happened in ETFs compared to actively ETF. If you are investing If mutual fund houses
global markets earlier. managed mutual funds? in S&P BSE Sensex, very are not going to push
The distribution cost for In some sense the win of few people have beaten it ETFs, then do they have a
active mutual funds and the passive funds is the over a period of 10 years future in India?
insurance products was victory of an idea, which other than the greats like Over time people will
high even in the US back in became larger than the Warren Buffet. look at returns and costs.
time. It is the index that is hot shot fund managers. For instance, S&P BSE
giving you the returns. My Transparency and lower Do you see ETFs Bharat-22 index ETF will
job as a fund manager is to costs have made ETFs what becoming popular have less than 1bp cost
act as a clerk. they are. They are engines in India? in a year. When markets
In active funds, some of finance globally. Recently, when EPFO become institutions
fund managers would buy started investing in the oriented, they dont want to
illiquid stocks and show How should retail market through such take a fund manager risk.
very large returns on paper investors view ETFs? funds, asset management The index funds give them
but when they went to sell, If India is going to do well companies started low cost fund management
very little was coming out. as a nation and if an Index managing a larger corpus. and enhanced transparency.
That was not the case in represents India, then at The government also No amount of de-marketing
index funds. Funds had to the lowest possible cost we created a PSU index. And can stop ETFs from
invest in only liquid stocks. will do well. If you believe now, S&P BSE Bharat-22 becoming popular.

www.outlookmoney.com December 2017 Outlook Money 43

 Cover Story

Continued from p40

to the benchmarks rise. only about 1-2 per cent
The returns generated higher returns than the
by the schemes often do benchmark. With this
not include dividends kind of outperformance,
paid by the companies on regulatory action it is hard to justify high
the benchmark indices. will lead to shrinkage in fund charges.
Mutual fund schemes alpha which the (mutual Also, in India fund
simply compare the fund) industry has been managers claim that
returns generated by generating so far. alpha generation was
their schemes to the high because of the loose
benchmarks, but do not kapEN parEkh definition of large-cap
President,
include the dividends paid funds so far. In October
DSP BlackRock
by the companies listed on this year, SEBI has
the exchange. What this defined the top 100 listed
will do is pare the alpha companies by market
generated by these mutual capitalisation as large-
funds. And if the mutual cap stocks. So large-
fund houses are not able cap diversified mutual
to deliver a significantly higher fund schemes will no longer be
return, then the higher fees they able to invest in companies with
charge will also come into question. a smaller market capitalisation.
So, if a large-cap diversified mutual Kalpen Parekh, president of DSP
fund is charging a fund fees or Total BlackRock, believes this move
Expense Ratio of 2.5-3.5 per cent, will also impact the ability of fund
then that will impact the returns by a managers to generate returns that
similar number. are superior to benchmarks or passive funds
like ETFs, which follow benchmarks. In fact,
Has the mutual fund industry globally ETFs are now charging zero fees as
been over-stating alpha? they are managed using technologies like
Ask any fund manager at any leading fund house artificial intelligence.
and they will claim that 65 per cent of funds in In India, mutual funds have been showing
India generate alpha. But, the reality could be returns based on absolute index performance,
slightly different. While there is no doubt that which excluded the dividend payouts. If one
active fund management has its own advantages, weeds out the returns after factoring in the
in the large-cap space the returns are not dividends, then performance of large-cap mutual
sufficiently high to justify a high expense ratio funds schemes would show lower returns.
of 2.5-3.5 per cent, believe the industry experts. Returns that factor in total returns (including
In the last ten years, mutual fund industry has dividend payouts) are called TRI. Quantum
generated an alpha of 4 per cent but this has Mutual Fund was the first to voluntarily move
come down to 1 per cent. This means that to benchmarking their schemes against the TRI
the performance of large-cap funds and now even DSP BlackRock is doing the same.
has been higher by 4 per cent in the Parekh also believes that regulatory action will
last ten years but is now generating lead to shrinkage in alpha, which the actively-
managed funds have been generating so far.
According to HDFC Securities, one study
shows that active large-cap equity mutual
ETF Returns funds generated alpha of 4 per cent (2000-
2007) compared to TRI Nifty, but now this is
ETF product 1 Year 3 Year 5 Year 10 Year
down to 1 per cent (2008-2017). Some reasons
NIFTYBEES 17.38% 9.86% 14.39% 8.55%
for this shrinkage include increasing size of
That means, `10,000 invested before 1 year, 3 year, 5 year, and 10 corpus (leading to risk-averse behavior by fund
years would have become `11,738, `13,259, `19,585, and `22,714 managers) and overlap in portfolios.
respectively. Going forward, beating the Index will become a

44 Outlook Money December 2017 www.outlookmoney.com

 The SPIVA Difference *Regional benchmarks included here are large-cap, with the
exception of Brazil, Chile, and Mexico where SPIVA results
displayed reflect regional broad market indices. Multiple
1 Accounts for the entire opportunity setnot just the survivorsthereby eliminating
survivorship bias.
benchmarks exist in all regions tracked by SPIVA. For more
information on SPIVA methodology, including a full list of

2 Applies an apples-to-apples comparison by measuring a funds returns against the

returns of a benchmark appropriate for that particular investment category.
regional benchmarks and results, visit www.spdji.com/spiva

3 Shows that asset-weighting matters by using both equal- and asset-weighted averages.
4 Uses only the share class with greater assets, which avoids double counting multiple
share classes in all count-based calculations.
Source: S&P Dow Jones Indices LLC, Morningstar, Fundata,
CRSP. Data as of June 30, 2017. Charts and tables are provided
for illustrative purposes. Past performance is no guarantee
of future results.

challenge and the demand for passive products like
ETFs will increase as investors will not be willing to
pay for higher charges. Industry veterans believe
that returns generated by large-cap mutual
funds will come down. SBIs Rao also believes that
investors need to be prepared for lower returns in
future compared to the past 10 years.
Downside of ETFs
Even though nobody denies that ETFs are the
future and that investors will move towards
them, this asset class will remain a pull product.
Given that the ETFs are low cost and distributors
dont get commission to push this product, not
many would advise investors to opt for this.
Some fund houses themselves are not terribly
keen on promoting it for this very reason.
Explains Lakshmi Iyer of Kotak Mahindra Asset
Management: Equity in India is a push product
and distributors have to be incentivised to sell
mutual funds. Distributors have a cost too, so
why would they sell mutual funds if expense
ratios are as low as 10-15 basis points? Iyer also
believes that while the opportunities to generate
alpha in the Indian market are coming down,
they still exist. Reliance Nippons Sikka begs to
differ and says that the industry at times tends
to get carried away by the distributors and what
they want. In the longer-term, the distributor
will do what is good for the customer, he says.
Other than this, another disadvantage of such
funds is that investors have to buy ETFs only
Continued on p48

www.outlookmoney.com December 2017 Outlook Money 45

 Cover Story

Global investors have been unable to take

meaningful exposure to India through ETFs
A dual listing of Bharat-22 ETF on global exchanges could serve as a huge
opportunity for the government to redefine investing in India

partake in Indias growth story in a Cross listing or a dual listing of the

balanced way.
ETFs have globally received a lot of
Sanjay
attention from both large institutional
Sachdev
investors managing long-term sovereign
Chairman,
funds as well as retail investors, and have
ZyFin Holding
PTE Ltd. increasingly become a preferred mode of
investment. Assets under Management
(AUM) of ETFs have grown from US$ 1.75
Bharat-22 ETF in global markets viz USA
and London would be an ideal first step
to bridge this gap and provide global
investors with the option to diversify
their holdings and take exposure to a
high yielding asset class in their portfolio.
They can derive extra comfort from
the fact that the Indian government

D
isinvestment through the route of
ETFs with the underlying of strong
fundamental companies has
been a unique initiative that the Indian
government has taken. Bharat-22 ETF is
a step forward in this direction with the
underlying of smart beta formulation,
making the deal sweeter for local
investors. This comes on the back
of the success that Indian government
had with the Central Public Sector
Enterprise (CPSE) ETF launched in
2014, which was more of a pure passive
investment strategy.
The Bharat-22 ETF comprises many
stocks in a unique combination of
private and public sector companies. Of
these, 16 companies are Maharatnas/
Navratnas or Miniratna-1. These 22 stocks
span six different sectors of the Indian
economy - industrials, finance, utilities,
energy, FMCG, and basic materials, which
directly stand to benefit from the various
key reform initiatives undertaken by the
government, like financial inclusion, Make
in India, infrastructure development and
others. With sectoral capping at 20 per
cent and stock-specific capping at 15 per
cent in place with an annual rebalance,
the Bharat-22 ETF ensures diversification
and is likely the only smart beta ETF
that offers investors the opportunity to
ETFs have globally received attention from institutional
investors managing long-term sovereign funds
trn to over US$ 4.3 trn in a space of five
years representing a CAGR of 19.70 per
cent. Number of ETFs have also grown
exponentially from 3330 in 2012 to more
than 5150 in 2017.
A large part of this growth can be
attributed to the fact that ETFs are the
most efficient and lowest cost financial
products resulting in higher returns in
the hands of the investor and also due
to mature markets offering limited
alpha generation opportunities to fund
managers, thus making a strong case for
smart beta and passive investing. This,
in turn, has driven investors attention
increasingly towards smart beta and
rule-based asset management strategies
where ETFs score over other products.
Despite the trailblazing growth in ETF
AUM, global investors have been unable
to take any meaningful exposure to India
through ETFs. A case in point is the fact
that while USA has ETF AUM of over
US$ 3 trn, which amounts to close to 70
per cent of the Global ETF AUM, India
focused ETFs (ETFs with more than 90
per cent allocation to India and over 90
per cent assets exposure to equities) have
a cumulative AUM of less than US$ 15 bn.
This is less than 0.5 per cent of the total
USA ETF AUM. The comparable figure is
even lower for the whole of Europe.
holds a substantial stake in most of the
constituent stocks of the Bharat-22 ETF.
Also, it has allowed Employees Provident
Fund Organisation (EPFO), Indias
largest provident fund body, to take
part in equities only via CPSE ETF and
in all likelihood, would continue to do so
through Bharat-22 ETF.
This will enable greater participation
in the ETF from a larger ecosystem of
investors. Also, as the investor base
widens, it will lead to greater liquidity in
the ETF, which in turn would benefit all
participants.
The success of Masala Bonds, as
witnessed in the recent past, is a definite
sign of global investors acknowledging
Indias improving macros and increasing
allocation to India. This way, global
investors, including the retail category
of investors, will have an option to take
exposure to India at low cost merely at
the click of a button.
A dual listing of Bharat ETF on
global exchanges could serve as a huge
opportunity for the government to
redefine investing in India and take India
to the global markets as opposed to
bringing global investors to India, as has
been the trend in the past. Additionally,
with several pro-growth reforms
undertaken by the government and the
resulting improvement in Indias macro-
economic scenario, the timing may be
ideal to consider such a move.

46 Outlook Money December 2017 www.outlookmoney.com

Important to get Retail Investor
Acclimatised to Investing through MFs
It is important to learn to walk before before you learn to dance and few
are as privileged as Prabhu Deva or Michael Jackson to do both seamlessly
LakShmI IyeR
CIO (Debt) &
Head, Kotak
Mutual Fund
E
xchange Traded Funds (ETFs) play
an important role for an investor
in his/her investment strategy.
ETFs provide ease of asset allocation
and convenience of capturing the index
potential without the hassle of basket
formation and regular recalibration. This
way ETFs take the benefits of mutual
fund investing to the next level.
For an active investor, ETFs allow
almost real time investment into the
fund. The index experiences price
changes throughout the day. ETFs reflect
these changes like a stock. Thus, an
investor can use ETF to buy and sell at
near index levels.
ETFs by nature are low-cost products
as compared to active mutual funds.
Since ETFs broadly replicate the index,
the need for active trading, fund
management and analysis does not
arise per se. This reduces the cost of
fund management. For this reason, the
regulators limit the chargeable expenses
to the ETF.
Here, it is important to understand
that asset class ownership via ETF is
also for the more financially aware
investor. In a country like India, financial
asset classes like equities still have a
Cinderella kind of treatment i.e. allocate
only when all other asset classes like
real estate, gold, traditional mode of
investments are consummated. Barring
banking products like fixed deposits,
savings account, etc, most financial
products are actually push products.
The population of India is over 1.3
billion (130 crore). Yet the number of
Demat accounts in India is only around
30 million (3 crore). The number of
Mutual Fund (MF) folios is a little over
60 million (6 crore). In that, the unique
mutual fund folios would be much lower.
Additionally, Indian equity markets
still continue to be a land of alpha
meaning most active equity funds
still continue to outperform their
benchmarks across market capitalisation
with the net of expense ratios charged.
Therefore, initially, it is important
to get a retail investor acclimatized to
the world of investing through actively
managed mutual fund schemes. It is
important to learn to walk before you
learn to dance and very few are as
privileged as Michael Jackson or Prabhu
Deva to do both almost seamlessly!
In most parts of the country,
especially in non-metro cities in India,
a Systematic Investment Plan (SIP) is
construed as a mutual fund product
rather than a facility to participate in
an asset class like equities. Hence, there
www.outlookmoney.com December 2017 Outlook Money
is much of education / awareness that
needs to be done before we proclaim
financial nirvana in terms of investor
understanding.
Herein, the role of a financial advisor/
distributor is of significance, where
enough time and effort is being spent
to convert a physical mode investor to a
financial asset investor. And as it is said,
'There is no free lunch there has to be
a monetary incentive for the advisor to
get in prospective clients. With the low
expense ratios in ETFs, it is an onerous
task to get an intermediary to advise
ETFs to clients.
However, if you are a financially savvy
investor, you could use ETFs as an add-
on to your current investment portfolio.
Also, institutional investors who are
more financially aware could use ETFs
as an effective tool as part of their
portfolio. In such cases, you can actually
have your cake with icing and a cherry
on the top!
But for the average Indian retail
investor, while it is good to have proteins
in the diet, the time to understand
quinoa as high in protein is still some
time away.
47
 Cover Story

The ETF Path to Divestment

by Himali Patel

T
he year 2014 saw the central government adopt a novel approach for diluting its stake in
premier state-owned enterprises. It launched CPSE (Central Public Sector Enterprises)
ETF in March that year, following it up with two more tranches in January and March
2017. Reliance Mutual Fund managed the second and the third tranches.
The combined issue size was `11,500 crore, with the three tranches seeing
oversubscriptions of 45 per cent, 128 per cent, and 303 per cent respectivelya strong indicator of investors
enthusiasm for such funds. So far, they seem to have justified the investors faith. As on November 10, 2017, the three
CPSE tranches had delivered returns of 16.29 per cent, 19.62 per cent, and 12.33 per cent respectively, since inception.
In November, the centre tapped the ETF route again to mop up over `14,500 crore through the Bharat-22 ETF.
Managed by ICICI Prudential Mutual Fund, the new ETF is part of the governments ambitious plan to achieve the
`72,500 crore divestment target for FY 2017-18.
While both CPSE and Bharat-22 ETF offers have tasted success, whetting investors appetite further, Saravana
Kumar, CIO, LIC Mutual Fund has a few words of advice for them. Keep in mind that the underlying assets owned by
ETFs should also have ample liquidity, which would enable the fundhouse to effectively invest in those underlying
assets ensuring lower cost of buying the shares, he cautions. Lower liquidity in underlying assets will have a bearing
on the returns, making it imperative for investors to factor it in while making investment decisions.

Continued from p45

through the exchanges. For this they need a
broking account and a demat account. Some fund
houses believe that given the low penetration
of direct equities, investors may not want to
invest in ETFs because a demat account can be
a deterrent. In contrast, investing in a mutual
fund is easier as distributors make life easier
for investors.
Interestingly, fund houses like DSP
BlackRock have a solution for this too. Fund
houses are coming up with Index Funds, which
are passive and have low expense ratios but
are not traded on exchanges. The investor
then gets the benefit of a passive fund with
the advantage of a mutual fund. Given that
there are only three crore demat accounts in
India, many intermediaries and mutual fund
houses believe that investors will not invest in
ETFs simply because it is more cumbersome.
In comparison, there are five crore mutual
fund folios as the distributors play a key role
in pushing the funds to retail investors. In
an Index Fund, the fund management fee
is significantly lower and almost similar to
ETFs, but is still a mutual fund. An investor
can invest in it at lower cost without having
to purchase it on a stock exchange.
An idea whose time has come?
In India, equity investments are still a push
product where distributors have to convince
investors to participate in it. But over time, as
Indian markets and investors mature, ETFs will
become the instrument of choice. Given that
the government is investing a lot of retirement
funds into ETFs, the liquidity of these products
is also critical. While the government currently
is the biggest subscriber/buyer of ETFs, the
product also needs liquidity (there must be
large number of buyers and sellers) to make
the product attractive. To this effect, broking
houses and exchanges are working towards
creating more awareness among investors. HDFC
Securities conducts seminars and comes out
with research for its retail investors regularly, as
do other brokerages. Even if retail participation
is currently low, passive investing is an idea
whose time has come.
malini@outlookindia.com

48 Outlook Money December 2017 www.outlookmoney.com


 Trends

Small is the Next Big Thing

First-time investors from smaller cities are increasingly showing
greater appetite for mutual fund investments, but is the trend
here to stay? Preeti Kulkarni probes for answers

R
oopesh Kumar Yadav, a 37-year-old
central government employee based
in Meerut, is not associated with
the citys famed sports equipment
manufacturing industry, which has supplied
its sought-after willows to many a celebrated
cricketer. Yet, Meeruts legendary status as
the Sports City of India has lent its flavour
to his investment approach. He believes in
accumulating the ones and twos while not losing
sight of the occasional sixer to push up total
gains. I have been investing in an equity mutual
fund since June through an SIP of `4,000 per
month. Recently, I also directed an additional
savings of `20,000 to this fund to boost my
corpus, explains Yadav. Why settle for a 280-
odd score when 350-plus is the new normal
seems to be his mantra. My PF is unlikely to
grow into a sizeable corpus as it does not fetch
lucrative returns. Moreover, interest rates
offered by post office and bank deposits are also
quite low. Equity funds are my best bet to create
a large enough retirement fund, he reasons.
Aiming Big
Yadav represents the growing tribe of retail
investors from the not-so-big cities who are
increasingly relying on mutual funds to realise
their dreams. As per data from mutual fund
research firm Morningstar India, investors from
B-15 cities the ones beyond the list of top 15
cities accounted for 17.7 per cent of the overall
industry assets under management (AUM)
as of September 2017, up from 17 per cent in
October 2016 (See: Upward March).
A close look at the Association of Mutual
Funds in India (AMFI) data on AUM by
geographies (see: Gaining ground) reveals that

Name: Rajesh Arun Bara

Age: 32
Location: Nashik
Investment Rationale:
Tax-saving; prefers
ELSS over other section
80C instruments due to
these schemes ability to
generate higher returns.
Photo: sanjit kundu

50 Outlook Money December 2017 www.outlookmoney.com

 Name: Alamelu Vishwanathan Sundaram
Age: 60
Location: Coimbatore
Investment Rationale: Building a corpus
for post-retirement requirements and
grandchildrens secure future.

the share of top five citiesMumbai, Delhi,

Chennai, Bengaluru, and Kolkatahas dipped
slightly from 72.42 per cent in January-March
2017 to 71.57 per cent in the subsequent
quarter, and further to 71.53 per cent during
July-September 2017. Correspondingly, the
contribution from the other cities has risen
during the period.
We are seeing a strong interest from
retail investors in smaller cities. What we
are witnessing is a structural change in
investors mindsets. There is a clear shift away
from physical assets and towards financial
Photo:guna amugathum
instruments, asserts Sundeep Sikka, Executive
Director and CEO, Reliance Nippon Life AMC,
which has recorded considerable interest from smaller cities. For the period March-September
the North-eastern states too. The total AUM 2017, we witnessed a 40 per cent growth in
from the region shot up nearly 80 per cent overall AUM and more than 50 per cent in
to cross `14,905 crore in October 2017 (See: equity, adds Manish Mehta, National Head -
North-east rising) compared to the year ago Sales and Distribution Alliances, Kotak Mutual
period. We continue to see good traction from Fund. However, he believes that the decline in
share of larger cities could also be attributed
towards the quarter-end redemptions by
institutional investors.
Upward March
B-15 T-15
25
DeMo the Catalyst?
20
Sikka attributes this trend to multiple factors.
15
The trend started with Jan Dhan accounts when
10
a large number of people gained access to bank
5
accounts. Next, with demonetisation, money
0
October 2016 September 2017
flowed into these accounts, he notes. Sundaram
Source: Morningstar India AMC CEO Sunil Subramaniam concurs with
Sikka on demonetisations role as a catalyst. It
Gaining Ground hurt real estate and gold, besides prompting
City Share in AUM (%) banks to ease interest rates as they were flush
Jan-Mar 17 Apr-June 17 July-Sept 17 with liquidity. Mutual funds offer much higher
Mumbai 43.06 42.37 41 returns, attracting more retail investors, he says.
Delhi 14.46 14.1 13.8 SEBI rules for distribution in B-15 cities have
Bangalore 5.74 5.66 5.82 helped as well. We can now offer attractive
Chennai 4.6 4.83 6.35 incentives to distributors to source new investors
Kolkata 4.56 4.61 4.56 from smaller cities. The industrys ad campaign
Total 72.42 71.57 71.53 too has played a role, suggests Subramaniam.
Other Cities 27.58 28.43 28.47 Mutual fund distributors based in such
Source: AMFI

www.outlookmoney.com December 2017 Outlook Money 51

 Trends

Name: Roopesh
Kumar Yadav
Age: 37
Location: Meerut
Investment Rationale:
Creating an adequate
retirement kitty, as he
feels his provident fund is
not capable of yielding the
desired performance.

Photo: deePak

cities back these views. I manage to convert acknowledging the role of demonetisation,
more enquiries into actual investments these Jamnagar-based mutual fund distributor Raj
daysit has gone up 25-30 per cent since Jivrajani of Money Matrix Advisors also credits
demonetisation, informs Sachin Uddhav factors other than the disruptive event for the
Chumble, partner, WealthGuru Financial trend. Interest rates offered by banks are down.
Services, a Nashik-based mutual fund So, people have realised that mutual funds can
distribution firm. Now that the cash lying in provide better returns. Also, awareness levels
their house is parked in their bank accounts, have risen in the last two years, says Jivrajani.
they want the money to earn returns. While Chumble is confident that these new investors
are aware of the market risks involved. Most of
them are recurring deposit investors who can
see that SIPs are better option even if they yield
9-10 per cent returns, he adds. Technology has
played a pivotal role in deepening mutual fund
penetration, ensuring ease of communication
and execution. What investors look for is
a mobile-friendly platform to execute their
transactions. Language is not a huge barrier,
Sunil maniSh mehta as people are conversant with English as the
National Head - language of transactions. However, the next
Subramaniam Sales & Distribution Alliances, level to be unlocked would be that of region-
CEO, Sundaram AMC Kotak Mutual Fund
specific portals and communication channels,
People in smaller cities Digitalisation can be a says Kunal Bajaj, founder and CEO, Clearfunds.
typically rely on avenues key driver for distributors
like real estate and gold, in smaller cities to The Long-term-SIP Fix
where the horizon is one improve coverage and It cannot be ruled out that many have jumped
year or more. They are on to the bandwagon purely due to the bull run.
productivity.
Many investors do recognise the risks and also
attuned to longer-tenured
the importance of systematic investment over
instruments.
the long term. We have observed that people in

52 Outlook Money December 2017 www.outlookmoney.com

smaller cities typically rely on avenues like real AUM Ascent
estate, gold, National Savings Certificate (NSC) Jan-Mar April- July-Sep
and Kisan Vikas Patra, where the horizon is Mutual
Fund 2017 June 2017 2017
one year or more. They are, therefore, attuned Category AUM AUM AUM
(` Crore) (` Crore) (` Crore)
to longer-tenured instruments, explains
Equity (other
Subramaniam. Whats more, many seem to 4,82,138 5,25,264 5,88,478
than ELSS)
prefer the SIP mode for investing in mutual Equity - ELSS 61,403 66,113 70,704
funds, which is not surprising given the overall Balanced 84,763 1,09,513 1,34,868
SIP inflows recorded (See: SIP by SIP). Income 7,43,783 7,78,266 8,09,965
First-time mutual fund investor Bathinda- Liquid/ Money
3,14,086 3,44,923 3,55,408
Market
based Hitesh Pant, 35, falls in this category. He
Gilt 14,875 14,863 16,753
started investing in equity mutual funds through
Gold ETF 5,480 5,174 5,148
the SIP route since July this year to build an Note: As on last date of each quarter; Source: AMFI
education corpus for his four-year-old daughter
by the time she turns 17. Since funding her North-east Rising
higher education is a long-term goal, I dont
Industry AAUM
intend to redeem my investments in the near Oct'16 Oct'17
(in Cr)
future even if the market cycle turns, he clarifies. Arunachal Pradesh 248.54 636.84
The goals of the newer crop of first-time Assam 4984.17 9154.49
mutual fund investors may be as varied as their Manipur 249.68 351.24
age-groups, professions, and locations, but Meghalaya 1086.52 1814.3
there seems to be unanimity in their vehicle of Mizoram 222.33 347.09
choice for achieving themSIPs. Take the case Nagaland 368.68 523.25
of Coimbatore resident Alamelu Vishwanathan Sikkim 579.13 948.84
Sundaram, 60, for instance. A retired school Tripura 553.92 1129.67
teacher, she stepped into the world of mutual Total 8292.97 14905.72
funds in August with a monthly SIP of `3,000. Source: AMFI

I want to create a savings fund for my post-

retirement needs, in addition to creating wealth even if markets turn choppy, their investments
for my grandchildren, she says. Nashik-based are likely to yield better returns when compared
banker Rajesh Arun Bara, 32, zeroed in on an to bank fixed deposits or post office schemes.
ELSS for a far simpler purposetax-planning. Interest rates are very low at present and even
I have started a monthly SIP of `4,000 in a PPF rate has been slashed. After tax, the returns
tax-saving fund since April. Compared to other will not add any value to my portfolio. ELSS
instruments, an equity scheme is likely to fetch is a more remunerative option even if returns
higher returns, says Bara. plummet to say 9-10 per cent in case of a market
This is the common thread that runs across crash, reckons Bara.
all four first-time investorsthe realisation that Asset management companies acknowledge
the durable nature of such inflows, which largely
come in through the SIP route. The ticket
SIP by SIP size is small, but the quality of inflow is quite
good. Even if the market cycle were to turn,
SIP Month-
these investors are likely to stay invested, says
Month Contribution on-month
(Rs crore) Growth (%) Sikka. According to him, it is the high networth
Sep' 17 5,516 5.95 investors with large chunks of money who
Aug' 17 5,206 5.24 tend to make panic withdrawals. For smaller
Jul' 17 4,947 4.28 investors directing `2,000 per month into the
Jun' 17 4,744 3.5 funds, such downturns do not matter,
May' 17 4,584 7.34 he affirms.
Apr' 17 4,269 -1.5 Put simply, the future looks bright, according
Mar' 17 4,335 7.03 to industry-watchers and players. While it
Feb' 17 4,050 -1% will be interesting to see the impact if there is a
Jan' 17 4,095 -- sharp correction in the market, there are enough
Source: AMFI reasons to believe that increasing awareness and

www.outlookmoney.com December 2017 Outlook Money 53

 Trends

Name: Hitesh Pant

Age: 35
Location: Bathinda
Investment Rationale: Creating a fund for his
daughters education when she turns 17; is prepared
to stay invested in equities over the long term.

Not Just Equities

While equity mutual fund SIPs feature in the
list of most-discussed topics, debt funds legion
of loyalists too has grown in size (See: AUMs
Ascent). A lot of money is also coming into debt
funds. With FD rates hovering around 6 per cent,
many are moving towards debt mutual funds,
says Sikka. Jivrajanis experience with his clients
sounds similar. Investors are not making blanket
investments in equities. Given that bank deposit
rates are down, they realise that debt mutual
funds will offer better returns, he explains.

A Note of Caution
Clearly, smaller cities share in the industrys
AUM has seen an expansion, but they have a
long way to go before they make a noticeable
dent in the larger cities dominant position.
Photo: kulbir beera
Large cities will continue to play a pivotal role
maturity of investors coupled with a sizeable in the overall industry. Incremental wealth
SIP book should result in investors staying put, creation in large cities will continue to remain
says Kaustubh Belapurkar, director-manager strong, says Mehta. Bajaj echoes his sentiments.
research, Morningstar India. The interest has grown, but bulk of the
business is still sourced from larger cities, he
points out. Also, it is tempting to believe that
retail investors across cities have matured into
seasoned equity investors mindful of the risk-
reward trade-off, but their resolve can be truly
tested only during a market collapse. While
small town investors are aware of the risks, they
would do well to shun the greed that typically
takes root during a bull run, cautions Pankaj
kunal bajaj Pankaj mathPal Mathpal, CEO, Optima Money Managers. Bear
Founder and CEO, Clearfunds CEO, Optima your risk appetite in mind instead of blindly
Money Managers investing in schemes that yields eye-catching
Language is not a barrier
While small town returns. Start with less-risky schemes like
in smaller cities, as people large-cap equity funds and balanced funds
are conversant with investors are aware of the
rather than small and mid-cap equity funds,
English as the language risks, they would do well
advises Mathpal. Finally, ensure that you link
of transactions. The next to shun the greed that your investments to goals, identify schemes
level to be unlocked typically takes root during that have a reliable track record and commit to
would be region-specific a bull run. equities only if you are willing to stay invested
communication channels. over a period of at least five to seven years.
preeti.kulkarni@outlookindia.com

54 Outlook Money December 2017 www.outlookmoney.com

 Debunking Risk Series

Mismatch Risks
Aligning financial goals with investments is important for generating
optimum returns from investments

properties, and a few shops. Out of `5 crore, only

about `25 lakh of investment were liquid in the form
of bank fixed deposits, shares, mutual funds, etc. Rest
were all in illiquid form, indivisible real estate. They
had called me because they needed `47 lakh to fund
their daughters forthcoming education abroad. They
had two choices, either to take an education loan or
liquidate portion from their real estate property, which
was approximately costing `90 lakh. Hence, there
was an apparent mismatch between their financial
goals and investments.
Most of us never spend time to make an appropriate
list of our financial goals; the financial goals for which
we are saving and investing money. Due to this habit
we are unknowingly exposed to mismatch risk.
All of us want to invest in instruments which generate
higher, faster, and maximum

I
n the month of May, I was returns. Now consider this,
returning from Ahmedabad between an airplane and cycle
in Duronto Express, which Most of us never which will move higher and
is a non-stop train between faster? The obvious answer is
Ahmedabad and Mumbai. One make an appropriate airplane. However, if we want to
of the fellow passengers wanted list of our financial go to a place that is 3 km away,
to get off at Borivali. However, he which one should we opt for
did not know that train does not goals for which between the two? Everyone will
have a stoppage at Borivali. He we are saving and agree for cycle.
had two optionseither to jump Always focus on optimum
at Borivali, which was obviously investing money. If returns and not on maximum
a riskier option, or to travel upto investment is not returns. What is the point in
Mumbai Central and return to generating maximum returns if
Borivali from there. He opted aligned to a financial they are not of any use to you
for the second option. He had goal, unknowingly when you need them? Everytime
to make arrangements for going we invest, we should ask
back to Borivali; his time got we are exposed to ourselves which financial goal the
wasted, money spent, and energy mismatch risk investment is for? If investment
drained. There was a mismatch is not aligned to a financial goal,
between the station he wished unknowingly we are exposed to
to get off at and the train he mismatch in risk.
had chosen.
Most of us end up making similar mistakes while
investing. Several years ago, a middle aged, well off
couple called me from a small city in Gujarat. Apart Gaurav Mashruwala
from the bungalow they lived in, total value of assets (Financial Planner & Author
they owned was about `5 crore. This mainly consisted of Yogic Wealth)
of real estate in form of plot of land, two residential gmashruwala@gmail.com

www.outlookmoney.com December 2017 Outlook Money 55

 Stock Pick
Aurobindo Pharma
x CMP: 695.8 x PE: 17.224
*As on Nov 23
Best in play
The company is best placed to weather the
regulatory storm, as it is building capabilities and
entering new geographies, says Malini Bhupta
140
120
100
80
60
Aurobindo Pharma
40
BSE Sensex
20
00
Jan 1, 2015
A
urobindo Pharma has
emerged as a favoured
pick of analysts, as it
is among few pharma
companies to have reported
strong sales growth in the first six
months of FY18. The reason for
this is diversification in its product
portfolio and geographical mix.
For instance, in the July-September
quarter, revenues from Europe
were up by 37 per cent compared
to the corresponding period in the
previous fiscal year, while rest of
the world markets grew by 38 per
cent. With its peers facing signifi-
cant regulatory risks, Aurobindo
pharma has been busy scaling up
its capabilities in complex generics
and injectables. Revenues from the
injectables business in FY17 stood
at $150 million, analysts expect
this to grow at a CAGR (com-
pounded annual growth rate) of 40
56 Outlook Money December 2017 www.outlookmoney.com
`122.10
`61.71
Nov 23, 2017
per cent over the next few years.
Like most other generics
manufacturers, the price erosion
(companies having to charge lower
prices for the same products due to
competition) is very high. But this
is more so in the oral solids (tablets
and capsules), claim analysts. The
company is building capability in
nutraceuticals, over-the-counter
drugs, controlled substances, and
injectables. There has been no price
erosion in the injectables business.
Despite the change in focus, 70 per
cent of the companys US sales still
come from oral solids and it will take
the company some time to build
muscle in these new areas.
In addition to defocusing from
oral solids, where the competition is
very high, Aurobindo Pharma is also
bringing new manufacturing facili-
ties, which will aid new launches. The
company intends to spend 5 per cent
Why Buy?
n Solid perforamce in H1 of FY18.
n Focus on injectables to drive
future growth
n Goldman Sachs says Aurobindo
faces limited regulatory risk
Watch Out for
n Pricing pressure in key markets
n Delays in approvals for new
products by regulators
n The company has got approval
for only 2 new products in Q2FY18
Financials
net Sales (` crore) pat (`crore)
FY17 14909.54 FY17 2296.17
FY16 13794.65 FY16 2022.14
FY15 12120.52 FY15 1571.26
Op (`crore) EpS (`)
FY17 3550.17 FY17 39.284
FY16 3391.92 FY16 34.605
FY15 2660.33 FY15 53.965
Op: Operating profit; pat: profit after tax;
EpS: Earnings per share
Note : aurobindo pharma had
announced bonus in 2015 in the ratio
of 1:1.the share has been quoting ex-
bonus from July 20, 2015.
of revenues on research and devel-
opment in FY18. On the downside,
the companys interest payout will
increase as its debt is also rising
because of the acquisition of Generis
Farmaceutica SA and this acquisition
was funded by debt.
The stock price has risen 33 per
cent in the last six months, even as
the stock has delivered measly re-
turns of 4 per cent in last 12 months.
Leading brokerages like Citi Equities
Research and Goldman Sachs have a
Buy rating on the stock.
Goldman Sachs is of the opin-
ion that the company faces limited
regulatory risk, unlike most other
players. However, erosion in its base
business (oral solids) in the US will
continue to be a downside.
Maruti Suzuki
x CMP: 8481.85 x PE: 33.895
*As on Nov 23
In Top Gear
Maruti Suzuki looks set for a great ride,
but capacity constraints could call for deft
manoeuvering, says prEEti KulKarni
250
Maruti Suzuki
BSE Sensex
200
150
100
50
Jan 1, 2015
T
he bellwether of Indias au-
tomobile industry, Maruti
Suzuki has emerged as the
top pick for analysts on
the back of strong domestic sales, ex-
ports, demand, and a healthy pipeline
of new launches.
Foreign brokerage firm JP Morgan
is overweight on the stock, while No-
mura maintains a Buy recommenda-
tion because the company is on track
to premiumisation of its portfolio.
This will drive profitability. The fes-
tive demand was up 15-20 per cent
YoY. Nomura expects volumes, rev-
enues, and earning per share (EPS) to
grow at CAGR of 13 per cent, 17 per
cent and 21 per cent respectively over
financial year 2017-18 to FY19-20.
The stock got a thumbs-up from
JP Morgan for a similar reason. The
automakers domestic sales were up
9.9 per cent YoY in October and ex-
ports grew 4 per cent YoY. Marutis
`253.83
`122.10
Nov 23, 2017
Graphics: Praveen Kumar .G
October 2017 wholesales were up
9.5 per cent YoY to 146000 units and
YTD volumes are up 15 per cent YoY,
the report says. The line-up of model
launches will keep the demand mo-
mentum going. This should continue
into FY18 with the launch of Ignis,
Dzire, recent facelift of S-Cross, and
the likely launch of Swift later in the
year, JP Morgan analysis reckons.
Edelweiss Securities too is upbeat
on the stock as it sees the auto giant
sustaining its market share, thanks
to long waiting periods for key
products, superior franchise and
strong financials. During the second
quarter of FY18, Maruti posted
EBITDA `36.7 billion (growth of 21
per cent YoY), 17 per cent higher
than Edelweiss estimates, primarily
due to lower discounts and benefits
of product mix. Demand for new
models - Baleno, Brezza and Dzire -
remained healthy. According to the
www.outlookmoney.com December 2017 Outlook Money
Why Buy
n Strong growth in domestic sales
and exports in October
n Market dominance with cost
advantage in the small car segment
and strong pipeline of new launches
Watch out
n Capacity constraints could lead to
lower growth in rest of FY 18
n Sharp jump in commodity prices
could mean lower earnings
Financials
net Sales (` crore) pat (`crore)
FY17 68085 FY17 7338.2
FY16 57589 FY16 5378.3
FY15 50801.4 FY15 3790.6
Op (`crore) EpS (`)
FY17 12647.7 FY17 248.672
FY16 10369.3 FY16 181.99
FY15 7709.1 FY15 126.073
Op: Operating profit; pat: profit after tax;
EpS: Earnings per share
brokerage firm, 50 per cent buyers
of new Dzire were first-time buyers.
Higher share of these models will
help Marutis cause further as it will
boost margins by lowering dis-
counts. As per Edelweiss, discounts
for older models too could see a
dip in the backdrop of weakening
competitive intensity and a revival
in macro demand. JP Morgan fears
lower growth over remainder of FY
18 due to production constraints.
Given that the second phase of
Suzukis plant is likely to be commis-
sioned only by early 2019, capac-
ity issues will continue in the next
financial year.
Even as it maintained a Buy rec-
ommendation, Edelweiss Securities
has raised EPS estimates for FY19 by
only 4 per cent after factoring in the
sharp jump in commodity prices.
With inputs from Himali Patel
57
 Fintech Watch

CASH CRUNCH?
NOW BORROW AGAINST
YOUR SALARY
In a bid to help young professionals tide over the month-end blues, a
clutch of companies are offering quick loans online for short durations
at 24-36 per cent per annum interest rates, finds Anagh Pal

A
ll of us at some point would have owing to some unforeseen situation. In such
faced a cash crunch, especially a case, requesting advance salary from your
towards the end of the month. This employer is one fitting way out. However, less
could be due to several reasonsa than two per cent companies in India provide
medical emergency, car breakdown or a sudden advance salary support to their employees.
plan for a friends bachelor trip. While that puts For those who run out of cash at the end of
us in urgent need of cash, it could still be few the month, there is help at hand. A handful
days before the salary is credited.
Or let us take another scenario. Your
SIPs (systematic investment plan) and EMIs
(equated monthly installments) would normally
be due at the start of the month. But, your
salary is delayed from normal and will only
come in a week later. Again, you need some
cash, could be for a short period of time, but
you need it immediately. What do you do in the
above situations?
Subro Sengupta, 25, Mumbai
Way out Associate at a law firm
Today, for many young working Indians
borrowing money from parents is generally the Has taken a salary advance
last resort. Friends can help, but they too could
from EarlySalary several times
be in a similar situation. You may ask your
to meet short-term cash crunch.
Prefers this over other options
employer for advance salary, but your employer because of minimum paperwork
may not have such a policy in place. This is and the money is credited to his
one need that new age financial technology account within 15 minutes. Avoids
(fintech) companies are looking to address overspending on the credit card.
through a loan product known as salary
advance. Most of these companies tie up with His recent borrowing from
RBI-registered NBFCs to extend such loans. EarlySalary was of `28,000 to
Despite good planning, a salaried class cover some medical expenses.
person may face a financial challenge, To repay `28,857 within
especially during the middle of the month 30 days.

58 Outlook Money December 2017 www.outlookmoney.com

of companies like EarlySalary, PayMeIndia
among others offer instant loans to
professionals for a short duration that helps
people tide over the immediate cash crunch.
Mahesh Shukla, co-founder and CEO of
PayMeIndia, a fintech company, says that in the
scenarios where salaries are delayed or people
have run out of money, a salary advance comes
in handy.
Fintech companies are also seeing an
opportunity because banks dont cater to this
need. A salary advance loan is a quick solution
to help avoid the embarrassment of asking
someone for money. Its a new and hassle-free
way to get your salary just when you need it,
that too within minutes. Banks would require
you to have a strong CIBIL score to be able to
borrow. Moreover, banks will provide you with
personal loan schemes for around `3 lakh for
a time period of 36 months rather than short-
term loans like `20,000 for 10 days till the
next salary day, says Akshay Mehrotra, co-
founder and CEO, EarlySalary.com, a fintech
company, which focuses on providing salary
advance options.
What also makes this a strong business
proposition is that employers are tying up with
Fintech companies to offer salary advance
options to their employees; an association that
benefits all parties. Mehrotra claims to have
associated with 150 companies for providing
salary advance, We have tie-ups with various
companies including large IT companies like
KPIT, and e-commerce companies like Flipkart
to offer instant loans to employees. One of the
most interesting tie-up includes the one with
Enrich Salon as the hair stylists were never
able to borrow with such ease from a regular
financial institution.
If a company is associated with EarlySalary,
the eligibility criterion is relaxed; there is no
restriction for minimum salary of `20,000 per
month or minimum three months salary credit.
Employees of these companies get an edge over
others as they can borrow large amount and
pay-back in EMIs for specific problems like
house deposits, medical emergencies, school
fees payment, etc, along with reduced interest
rates. One also gets options for interest free
online shopping on EMIs. Employers on the
other hand benefit by not having to worry
about setting an internal process that extends
salary advances around the clock. These
fintech companies also free the employer from
liability in case of nonpayment. Elaborating
on the merits of these tie-ups Shukla says:
Photo: Soumik kar
www.outlookmoney.com December 2017 Outlook Money 59
 Fintech Watch

The employees get dynamic credit limit
and quick credit into their account, if their
company is listed with us. Additionally, the
charges are quite low for such customers. For
advance salary support, we have tied up with
some leading BPOs and a company, which
provides manpower to various industries, and
are working towards adding more companies
to the list. The tie-ups, hence, are a win-win
proposition for both the employees and
the employers.
Simple borrowing process
The best bit about salary advance is the simple
process and that the money is credited to
your account almost instantly. This is possible
because of the technology that these loan
providers run in the background. Apart from
the CIBIL score and repayment track record
of customers, these companies also consider
a social score, which is derived from tracking
digital footprints of the customers from their
social media accounts, mainly Facebook.
We have built a social media-based decision
making system, which uses complex machine
algorithms to help us take faster decisions and
give out the loan in minutes. We consider non-
traditional data adding a layer, which further
gives confidence to lend to a young customer
when Credit Bureau like CIBIL/Equifax data
is not available or inaccurate for lending or
creditworthiness, says Mehrotra.
Cashkumar, a peer-to-peer lending company
gives salary advances only to existing borrowers
who have taken a short-term loan from them.
We thought of the product when some
borrowers would call us to say they might delay
an EMI as their salary was not credited yet. It
was a difficult situation because even with intent
to pay, the borrower would have defaulted and
borne penalties. Obviously, they would not have
funds to meet other expenses too. So instead of

PayMeIndia EarlySalary.com Cashkumar

Co-founder Co-founder Co-founder

Mahesh Shukla, 33 Akshay Mehrotra, 36 Dhiren Makhija, 36

What they do: Provide easy and
quick short term financial support in
the form of salary advance to salaried
persons to sail through mid
or month end financial crunch.
Business model: They partner with
NBFCs to disburse the loan.
Interest rates, average age, and
loan size: Interest rates on loans
range from 0.1% to 0.3% per day with
the loan amount ranging from `5,000
to `1 lakh. Major age group that they
serve is 21-35.
Number of customers: 3,000 plus
customers avail their service in
a month.
What they do: Provide instant ultra
short term loans and salary advance on
a mobile app.
Business model: The loan is given by
their partner banks/NBFCs registered
with RBI.
Interest rates, average age, and
loan size: Interest of `9 per `10,000
per day is charged. Average loan
amount is `18,000 for a period of 22
days. Average customer age is 26 years.
Number of customers: They have
garnered 1 million app downloads and
have provided 60,000 loans worth `85
crore. They are ambitious with a target
of 18,000 loans in November.
What they do: Connect verified loan
seekers with lenders for short term loans.
Salary advance is one of their products.
Business model: Individual lenders
provide funds and it does not advance
any loans from its own books.
Interest rates, average age and
loan size: Have a fixed interest rate of
24% per annum on the full loan amount.
The average size of loans is `50,000
with an average repayment period of
8 months.
Number of customers: Currently, doing
about 100 short term loans per month.
On average, about 5,000 loan requests
are placed every month.

60 Outlook Money December 2017 www.outlookmoney.com

 LokeSh VaddLa, 28, bengaluru
IT Services Professional
Has taken salary advances from
EarlySalary several times over the
last one year. Chooses this option
because of the ease of repayment,
which is either within 30 days or
split into EMIs over 3 months.
Likes the process and instant cash.
Borrowed `22,000 from
EarlySalary.Com last month to
meet medical expenses related
to health tests of a family
member. He has to pay back a
total amount of `23,500 over
three months.
undergoing this we thought the borrower could
just take a small loan of `10,000 and pay back
soon as salary was credited. It is not something
which is given every month and only approved
in the time of need, says Dhiren Makhija,
co-founder, Cashkumar.
A word of caution
As attractive as borrowing may seem from
these platforms due to their user-oriented
interfaces and processes, do not plunge into
a borrowing spree just because the service
comes in handy and offers flexible re-payment
options. Remember, that a salary advance is
still a loan and you need to pay it back with
interest as soon as you receive your salary. So,
if you have taken a salary advance of `20,000
this month, your effective salary next month
will be `20,000 less. Says Chenthil Iyer, CEO,
Horus Financial Consultants and author of
Everyone has an Eye on Your Wallet! Do You?,
Anyone going for a salary advance loan should
really think why ones expenses are more than
the income. If it is due to some temporary
emergencies, it is alright to borrow, but
care should be taken to create ones own
Photo: DeePak G Pawar
emergency reserves instead of having to
depend on such loans. A conscious budgeting
exercise can also help one prevent needing
such expensive loans.
Another important thing to consider when
taking salary advance loan is how it will affect
your credit score. If you take a salary advance
and pay it back on time, it will facilitate
building a healthy credit score, especially if you
are new to credit and do not have any credit
history. We feed data on loan performance
back to all four credit bureaus each month
helping form users credit scores, which
would help them get access to other formats
of credit instruments like home, personal,
and car loans, says Mehrotra. But for reasons
mentioned above, while salary advance may
come in handy during a cash requirement, it is
best not to make a habit of it.
Remember the time when one had to stand
by the roadside and flag down a cab? Then
entered technology and changed it all. It is the
same for your finances. If used wisely, a salary
advance will help you tide over end of the
month financial shortage.
anagh@outlookindia.com
www.outlookmoney.com December 2017 Outlook Money 61
event | WOMEN OF WORTH 2017|

Grit, glamour,

I
t was a night of celebration. Right from the resplendent jewels in We then invited an interesting trio
the green room to the glamour on the red carpet and the inspi- comprising Payal Nath, Pankaja
rational speeches on stage there was never a dull moment at Munde and Zarina Screwvala who
Outlook Business Women of Worth. And the packed ballroom at The helped us discover that the only
Four Seasons, Mumbai can stand testimony to this. The evening kick- place women must look for empow-
started with two starkly different personalities, restaurateur Monica Liu erment is within themselves.
and Lata Bajoria of The Hooghly Mills, enthralling the audience with The crowd couldnt help but
their life stories. cheer on incessantly as all our
glory
Presents

DRIVEN BY

WEALTH PARTNER

AWARDS GALORE: (Clockwise) Outlook Business editor N Mahalakshmi,

Vipin Sharma of PC Jeweller, Bollywood actor, Vidya Balan and Outlook In association with
Group CEO Indranil Roy unveil the 2017 Women of Worth edition. Women,
child welfare and rural development minister of Maharashtra, Pankaja
Munde is felicitated; Vandana Mohan of The Wedding Design Company,
Sandhya Chandrasekharayya of Indiahikes, Aakanksha Bhargava of PM
Relocations, Monisha Advani of Emmay Entertainment, restaurateur Monica BEAUTY RETAIL PARTNER WELLNESS PARTNER
Liu, editor N Mahalakshmi, Neeru Sharma of Infibeam, Vidya Balan, Zarina
Screwvala of Swades Foundation, Lata Bajoria of The Hooghly Mills and
Meena Kaushik of Quantum Consumer Solutions pose for the shutterbugs
OUTDOOR PARTNER

Women of Worth made their acceptance speeches. And then

they watched with rapt attention as our cover girl, Vidya Balan,
www.wow.outlookbusiness.com
unveiled the edition and sat down for a candid chat with edi-
Follow us on #WOW2017
tor, N Mahalakshmi. No matter where they came from, each of
OutlookBusiness
our women achievers epitomise our tagline They dreamt, They
dared. And through their entrepreneurial journeys, these unstop- OutlookBusinessIndia

pables inspired several more women entrepreneurs present that outlook_business

evening to get going b Outlook Business
event | WOMEN OF WORTH 2017|

STANDING TALL: (Clockwise) Vipin Sharma of PC Jeweller; Usha Ramoo, head, HR, Volkswagen
Group Sales India; restaurateur Monica Liu, Lata Bajoria
j off The Hooghly
g y Mills, Dr Umakant Tiwari
of Organic India, CK Kumaravel of Naturals
aturals Salon & Spa; ASK Group CEO and MD, Sunil Rohokale,
address the audience at Four Seasons, Mumbai

ALL SMILES: (Clockwise) Meena Kaushik of Quantum receives

es her award from
Renuka Ramnath of Multiples, WOW2015; Aakanksha Bhargava,
va, Monisha Advani,
Neeru Sharma and Vandana Mohan try jewellery at the WOW green room
ENLIGHTENING VOICES: (L-R) Payal Nath of Kadam India;
Pankaja Munde, minister of state for Women and Child Welfare;
Zarina
Za Screwvala of Swades and Laveena Iyer of Outlook Business on
how women professionals can rise up to the challenge
ho

LADIES NIGHT: (Clockwise) Aditi Kothari,

Zarina Screwvala and Schauna Chauhan
strike a pose; Vidya Menon, publisher, Outlook
Business; Sandhya Chandrasekharayya of
Indiahikes with the Volkswagen Passat and editor
N Mahalakshmi shares a laugh with Vidya Balan

DRESS DESIGNER: SAMANT CHAUHAN

DR
 Enterprise
Joy of Making Travel
More Accessible
With Planet Abled, the enterprising Neha
Arora has created a one-stop travel shop
for the disabled. By Rimme Dirchi
T
he journey of Planet Abled, a company that provides
travel solutions to the disabled, began when its founder
Neha Arora was a little girl. Trained to be an engineer,
33-year old Arora spent nine years in the corporate sector,
but she always knew what she wanted to do in life. With disabled
parentsher mother is wheelchair-bound and her father is blind
Arora believes there is a sense of discrimination when it comes
to access to public spaces. Arora explains: As kids, my sister and I
wanted to travel with our parents. All of us shared our love for travel,
despite many complications along the way. We have always been
there to take care of our parents, but I realised there was more that I
could do. Everyone loves to travel, including people with disabilities,
that is where the idea of Planet Abled germinated.
Given that public infrastructure is still not very accessible to
people like her parents, Arora wanted to start a conversation on
social inclusion. She hosts workshops on the subject with different
entities and even engages with not for profits to create more
66 Outlook Money December 2017 www.outlookmoney.com
awareness. Public transport in India, like
buses and trains, are devoid of accessible
platforms for people with disabilities. Even
when it comes to every day work commute,
there are many challenges one faces
with public transport. In such scenarios,
travelling can sometimes feel like a
luxury, she says.
Planet Abled intends to bring universal
accessibility to the forefront. We make
customised, tailor-made travel happen for
anyone who is interested. We have had
group trips with people with great mix of
all kinds of disabilities and these have been
enriching interactions for everyone involved.
Whether it is about visiting heritage sites,
religious spots, and regular get-togethers,

Company Name:
Planet Abled
Founder: Neha Arora
Profile: Customised travel
solutions company for
people with disabilities
Launched in:
January 2016
Destinations:
30 locations within India
Awards: NCPEDP Mphasis
Universal Design Awards,
World Responsible Tourism
Awards (WRTA)
Photo: gireesh gv
everyone learns a lot about the environment and even about each
others lives, Arora adds.
As a society, we are aware of the taboos involving disabilities.
While there are efforts being made by the government on policy
level, at the execution level there are not enough mechanisms in
place for these reforms to organically fall in place. For instance, apart
from enabling a travel platform to people with disabilities, what
Planet Abled also tries to encourage is a sense of inclusion. For this,
Planet Abled organises group meetings in restaurants over dinner,
walks to heritage sites across Delhi, apart from the usual workshops.
Neha says, the idea is to encourage and allow everyone to see each
other with a genuine sense of curiosity. We encourage conversations
between people who have never stepped out of their comfort zones
or homes to just hang out at clubs or go out for walks. We want them
to be seen and in turn, we want them to see as much as possible.
It is well known that changes take some time to take place
and it seldom happens overnight. Many among the developed
and developing countries are making efforts to make their
infrastructure disability friendly. India is no exception; recently,
Kerala Education Minister C Raveendranath has announced that
the Kerala government is planning to construct autism parks for the
children with disabilities in all the 140 assembly constituencies in
the state in the coming three years. Professionals will be appointed
in these parks to train children for their overall engagement and
development. These are baby steps in the direction towards bridging
these spaces closer.
I have always travelled with my family.
Solo trip to Rishikesh was a revelation, it
gave me the confidence to travel more
Name: Rahul Rawal
Age: 34
Occupation: Operations
Manager, AON
Experience: Rawal has
gone on a customised
solo trip to Rishikesh
with Planet Abled. He
also takes active part
in group interactions
hosted by Planet Abled
in Delhi. His next trip will
Photo: gireesh gv
be to Goa.
www.outlookmoney.com December 2017 Outlook Money 67
 Enterprise

However, currently when the conversations are picking up
pace in India, it is important to note that India is nowhere close
to becoming universally inclusive. One of the earliest day-trips
organised by Planet Abled was to Qutub Minar and the company hit
its first hurdle because the washroom for the disabled was locked
and nobody in the premises had a key for it. A year later, however,
the washrooms in Qutub Minar are clean and open to visitors. While
it may seem like a small feat, it happens to be a victory nevertheless
for Arora. I faced similar problems when we went to religious
places. I think overall, there is plenty of room to still work on for
improvement, she believes.
It has been a journey like no other for Neha Arora and Planet
Abled, as there are no previous set models that she could emulate
and take lessons from, when she started out this venture. At the end
of two years, Arora has 300 happy customers. Planet Abled organises
both group tours and customised ones for people who wish to travel
by themselves.
Name: Mohit Gupta
Age: 30
Occupation:
Family Business
Experience:
Gupta, who is visually
impaired, has gone on city
tours with Planet Abled
and participates in group
interactions with all forms
of disabilities.
Photo: gireesh gv
While the idea to set up a company was
always in her mind, it was a matter of taking
that step towards this exciting adventure
trip of her own. After a nine year long career
in the corporate sector with multinational
companies, she took the plunge to strike out
on her own. Like all entrepreneurs, she too
was assailed with some doubts, but starting
from her first city trip to this day, the
numbers have not disappointed her.
While I was working with other
companies, I spent time doing my research
and took up job profiles that allowed me to
learn more with my future venture in mind. I
enjoyed high salary that my work permitted
and I saved portions from it. When I launched
Planet Abled, I was very well prepared despite
the nerves. I relied on savings and on grants
from fellowships that I had taken up. It gives
me immense satisfaction to meet so many of
my clients and hear their stories and
learn about them and my own self, she
explains humbly.
Mohit Gupta is an old customer of Planet
Abled, is all praises and plans to go on his first
solo trip next year. He wants to gift himself a
fun trip with the help of Planet Abled, as he
is visually impaired. He is among many who
have expressed how Planet Abled has helped
them get out more and make new friends. My
family has always been protective of me but
I informed them about my decision to travel
and they have been very supportive. Neha also
personally spoke to my family and gave them
confidence to support my decision to travel
without family. It would be my first trip of this
kind, says the 30-year-old.
For Arora, this is personal because several
times she has to handhold people, both
literally and metaphorically. When most of
her clients decide to take the plunge to step
out for trips, their parents worry about these
decisions. I speak to families as they worry
for very obvious reasons, I help them see that
we are here to take care of everything. I even
encourage them to come for trips, workshops
and for our in-city gatherings, she explains.
Another avid traveller is Pranav Lal. He
is fairly famous in his own right, delivering
TED Talks and being written about in the
media. Lal is well known for being a blind
photographer and writer. He is very profound
in his selection of words when it comes to
expressing himself, I really enjoy the visual

68 Outlook Money December 2017 www.outlookmoney.com


medium and wanted to express myself
through my photography and writing. It
challenges me and helps me push myself.
With Planet Abled, I have gone on heritage
walks within the city and experienced history
in forts and old world architecture like never
before. I also make new friends and just hang
out and chit-chat with them. I have expressed
my wish to Neha about visiting shipyards in
India so I can learn about ships.
The uniqueness of Planet Abled lies in its
diversity when it comes to clients it caters to.
Unlike most other travel service models across
the world, where people with disabilities are
usually clubbed together with only their own
section, let us say, blind groups or groups of
children with autism, but at Planet Abled,
everyone is welcome to interact with each
other on trips so they develop a sense of
camaraderie without even realising. They
encourage mixed group interactions, making
the whole experience unique. Rahul Rawal,
34, is an operations manager with AON and
has been wheelchair-bound since childhood.
He went on several heritage walks with Planet
Abled, before going on a solo trip to Rishikesh
last year with aid from Planet Abled.
A couple of years ago, I was looking
Name: Pranav Lal
Age: 38
Occupation: Writer,
Photographer, Cyber
Security Specialist
Experience: Lal has a
love for parks and forts
of Delhi and visits them
with the help of Planet
Abled. Plans to visit
shipyards in India and
Planet Abled is gearing
Photo: gireesh gv
up to make it happen.
I enjoy expressing myself through
photography; travel has proved to be
a vehicle for new visual experiences
for travel packages online for people with disabilities and then I
stumbled upon Planet Abled last year. I got in touch with Neha and
the rest is history. I have always wanted to travel and I love to write
during my spare time. I am wheelchair-bound and my family was
very sceptical about letting me travel by myself, but Neha spoke to
them personally and they have been very supportive and trusting.
I plan to go to Goa sometime early next year with Planet Abled. I
also want to visit Landour in Uttarakhand as I am a fan of Ruskin
Bonds work. To me travel is not just about enjoying a new place, it
is also about experiencing a sense of self confidence of having done
something great for my soul, says Rahul Rawal.
It is hard to quantify in words what these experiences can mean
to everyone who are part of the inspiring Planet Abled journey. Neha
likes to goof around and says, Planet Abled is a travel company
started by someone who has never travelled much. All in all, this
world is kaleidoscopic and made of myriad hues and nuances, with
one better than the next.
rimme@outlookindia.com
www.outlookmoney.com December 2017 Outlook Money 69
 Travel
Exploring Kerala on
Shoe-String Budget
From rustic bus rides to sumptuous fish curries to mesmerising
backwaterstraveling across Kerala as a solo woman backpacker is an
unparalled experience, says Shipra Singh
T
hey say Kerala is Gods own country. I
wasnt too sure what that meant when I
embarked on my solo trip across Kerala from
Bengaluru. With a tight budget and loose
itinerary, I was brimming with excitement
about the coming six days.
Bus ride from Ernakulam (Cochin) bus
stand to Fort Kochi was my first brush
with Kerala and its culture. Arriving at
Fort Kochi, I dumped my rucksack in the
hostel I had booked and set out for city
tour on my ride; a bicycle. The port city is a
perfect amalgam of the old and the new. It
offers historical sites like Indo-Portuguese
museum, Synagogue in Jew Town,
Mattancherry Palace, Santa Cruz Cathedral
Basilica, St. Francis Church, etc. and has
a vibrant art and caf scene. The day went
by exploring the tourist attractions and
concluded watching sunset on the beach
70 Outlook Money December 2017 www.outlookmoney.com
while exchanging stories with a fellow
Canadian backpacker I had befriended in
my hostel.
Day two started with a ferry ride from Fort
Kochi to Ernakulam bus stand at six in the
morning watching sunrise against humongous
ships docked at ports. Hesitantly enough, I
took a rustic, non-AC KSRTC bus for Munnar
as it was going to be my first one such long
journey. However, now I can claim without
exaggerating that the bus rides were the
highlight of my entire trip. Shared with locals,
each ride through lush green mountains and
little towns was breathtakingly beautiful.
One peculiar detail about Kerala government
buses which amused me was absence of glass
windows, and even iron bars for that matter,
to which nobody had a clear explanation.
Either you get an all-clear unhindered view or
an opaque shutter on your face.
 After arriving in Munnar, I did a quick
search for accommodation on foot and How to reach: in Thekkady,
found a private room for `400 per night in Cochin is the perfect Kalaripayattu
a little guesthouse managed by a middle- destination to start performance
aged couple. They helped me hire a scooty from, easily accessible Must try delicacies:
for the day and advised me to replace the via air, train, and road Fish Molly and Kerala
30 km ride to top station with Kathakali Must do: prawn curry
show in Punarjani traditional village for a Shikara backwater Appam with stew
ride in Alleppy, (for vegetarians)
better experience. Needless to say, the dance
Synagogue in Fort Expense:
indeed was magical and is a must watch
Kochi, Ayurveda Under `10,000
when in Kerala. body massage, for 6 days
Covered in endless trails of tea spice plantation
plantations, Munnar is a delight to eyes
for its scenic beauty but, is like any other
hill station and does not offer much. After Thekkady bypass road near the bus
riding through the hilly roads to Mattupetty stop hosts several budget homestays and
Dam and back to Punarjali village, I decided guesthouses flooded mostly with foreign
to curtail my stay in Munnar to one day as travelers. After much striding around and
against the initial plan of two days. Next stop negotiations, to my satisfaction I managed to
was Thekkady. get a private room for `400 per night in Rose
By the end of second day I had overcome Garden homestay. The room was equipped
my doubts surrounding communication with essentials I look forclean sheets
and safety as a solo woman traveller. People and blanket, and hygienically maintained
were friendly and except a few gazes here washroom with running hot water. A private
and there, I did not experience any degree balcony was an added bonus. The hosting
of hostility. In fact, I did a lot of impromptu family was delighted to see an Indian woman
planning based on my interaction with locals solo traveller for a change and offered me to
as most people understood English well join them for lunch, which I gladly accepted
enough to guide me through. for a local food experience.

Villagers riding Canoe in Alleppey backwaters

Elephant ride at Elephant junction, Thekkady Mattupetty Dam

www.outlookmoney.com December 2017 Outlook Money 71

 Travel
Periyar National Park
Cliff beach in Varkala
Plans for Thekkady consisted of Safari
in Periyar National Park, however, after
reaching there I discovered that the only
option available to me was the boat ride
as most other activities were organised for
groupsfirst downside of solo traveling.
So, after my original plans for Thekkady got
defeated, with the help of my hosts I had put
together a stereotypically touristy itinerary
for the day, saving the boat ride for next
morning. I began with fulfilling my ardent
wish of riding an Elephant at Elephant
junction. The bumpy ride on the mighty but
calm animal was exhilarating. Next was an
excursion to Green Spice Plantation. In the
lingering aroma of cardamoms, cloves and
pepper among other spices, the guide gave
us an insightful walk through the plantation
explaining the growing and processing of
72 Outlook Money December 2017 www.outlookmoney.com
spices; a memorable experience one cannot
miss when in the heartland of spices.
Kalaripayattu, a martial art form that
originated in Kerala was the next venture.
Action-packed with sword fights and fire
stunts, Kalaripayattu, likewise Kathakali, is
a must-watch. Post the dramatics, I decided
to conclude the eventful day with an
ayurveda massage.
Next morning was the day to spot some
animals in their natural reserve. On my
way to Periyar Park, driver of the auto-
rickshaw instructed me to start running
soon after getting off the auto. Finding it
absurd I didnt enquire further only to find
a few minutes later as we approached the
entry gate that people indeed were running
hysterically towards the lake. Seeing the
apparent confusion on my face, the driver
explained that tickets are being sold on first
come first serve basis and I too should join
the race, which I did. Laughing hysterically,
I was living the Forrest Gump moment.
With great scenic charm the jungle was
nothing short of majestic. However, I wasnt
too lucky to spot many animals except a
few wild boars and a bison. Post the rather
comical boat ride experience, I took a bus
for Kottayam to catch a train for the cliff
city, Varkala.
Varkala was a stoppage for my love for
beaches and to unwind after the incessant
running around in last four days. Hunt
for accommodation on the clifftop didnt
begin too well as after an hour-long failed
attempt for a place in my budget, I had to
shell out `1000 for a sub-standard room in
a guesthouse. However, during my search
I managed to book a room in Daffodils
homestay for `500 for the following
day. Daffodils experience was that of a
quintessential homestay with a kitchen for
travellers to use and joint meals organised
for the guests by the host Ricchu, a cheerful
local guy nearly my age who had also
helped me in finding a room for the night.
Nestled at the bottom of the red cliff,
Varkala beach is a paradise for water
sports enthusiasts with activities such as
parasailing, surfing, etc on offer. However,
for me the day was only about soaking sun
on the beach only interrupted by dips in
the sea and gorging myself on sea food at
several cafes on the cliff. Post sunset, the
cliff when seen from the beach gives an TipS for Solo BACkpACking
awe-inspiring sight of a jewel twinkling
with countless lights. Safety: Backpacker hostel, Fort Kochi
On the last morning of my trip I took Pair of scissors or pepper spray through hostelworld.com.
a train to Alleppey for the much awaited for defence. A quick hunt on feet will
backwater ride. Alapphuza port was Avoid taking deserted lanes/ come in cheaper. After Cochin,
packed with agencies offering backwater routes, even during the day. Id managed to find private
rides so it didnt take me a lot of effort to rooms in the range of `400-
snag a good deal of `650 for a five hour What not to do `500 in homestays.
ride including lunch. Finally began the Avoid taking private taxis for Take accomodation near bus
ride in the enchanting backwaters and I both budget travelling and stand to simlify conveyance.
was spellbound with the sweeping vistas. safety reaons.
Cruising along narrow lanes of the canals, Build a financial cushion in Conveyance
we got a glimpse into full glory of village your budget apart from the KSRTC buses are easily
life. Canoes were used by villagers and even set amount for instances accessible, safe and rock-
schoolchildren to move around just as we where you may have to book a bottom cheaptickets range
use cycles and bikes. Backwater ride was costelier hotel or private taxi. from `80-`120.
everything and much more than touted in Timings for buses can be
the brochures. Accommodation gathered from information
I took a train back to Bengaluru in the Look for hostels with foreign booths at bus stands.
evening convinced of the title conferred to travellers as such places are For longer distances, look for
Keralait truly is Gods own country. But, used to hosting female solo trains on irctc.com.
was I satisfied? Not so much. I finished my travellers. Based on reviews, Carry your driving licence
trip with a longing to come back again, and Id booked a shared dormitory for local traveling on a
with more time in hands this time. for `400 in Rampart scooty/bike.
shipra.singh@outlookindia.com

Tea plantations in Munnar

www.outlookmoney.com December 2017 Outlook Money 73

 Travel
Paradise
Trekking in
Escaping the rush hour of the city to the quaint, snow-clad mountain
tops can be more than enriching for the solo travellers,
discovers Saachi dhillon
I
first discovered the joy of solo
travel on my back packing trip to
Europe. Nine years and nineteen
countries later, my passion
for exploring new places continues.
I work full time as a marketer in a
renowned media company. My annual
leave is used for travel only, unless
there is a medical emergency.
I made full use of all the long
weekends this year including the
Dussehra long weekend. I wanted to
escape the frenetic crowds of the city
and decided to go on a trek. After
doing a lot of research, I finalised on
the trek to Chopta Chandrashila
lake, which would be for 3 days. There
are multiple online travel start-ups
that are offering hassle free adventures
for solo travellers these days; I decided
to travel with one of them.
For `6,800, my travel, stay and
meals at the camp were taken care
of. From Delhi, we took the 11 pm
Majestic Tungnath temple
Volvo to Haridwar. We then got onto
74 Outlook Money December 2017 www.outlookmoney.com
View of Tungnath from above
a private bus to continue our journey
to Chopta, a picturesque valley with
evergreen forests and never-ending
meadows. The bus ride was eleven
hours long and wove along the banks
of the rivers Ganga and Alaknanda.
We journeyed past dense forests,
verdant green mountainsides and
cascading waterfalls; stopping along
the way for frequent rest breaks.
We reached our camp aptly called
Moksha around 5 pm and were
allocated our tents. I could not get
enough of the lush green meadows
around the campsite. Soon after the
excitement of the new surroundings
had died down, I climbed up the
adjoining mountainside and was
rewarded by a fantastic view of the
mighty, snow-clad Chaukhamba peak
(7,138 m) in the setting sun. The local
guide told us that a lot of people had
attempted to climb its summit but
only a few had been successful.
After breakfast the next morning,

with my rucksack in tow, I made
my way to Tungnath (3,680 m), it is
the highest Shiva temple in world.
Believed to be around 1000 years,
Tungnath temple dedicated to Lord
Shiva, is one of the sacred Panch
Kedar and the highest of them all.
Although it was a short 4 km trek, the
incline was fairly steep. I climbed up
cross country for most of the way in
order to avoid the donkeys and their
dung strewn along the stone pathway.
While climbing up the green slopes,
I came across wild red berries and
flowers growing on the mountainside.
Largely known as an easy trek, I
found the incline challenging and took
several breaks in order to pace myself.
About an hour later, a thick blanket
of mist enveloped the mountain.
Thankfully, we reached our local
home stay where we were to spend the
night. I was drenched in sweat by the
time we got there. As the washroom
was very basic, I decided to splash
my face with cold water and use wet
wipes thereafter. Simple but delicious
vegetarian food was provided at a
neighbouring dhaba. I climbed up the
last few steps to the temple and made
an offering there. The view of the
surrounding snow crested mountain
peaks from the temple was amazing.
Electricity is only available
between 710 pm in this region.
Hot water for a bath is hard to come
by; although the friendly locals try
their best to help you out. I woke up
at 4 am the next day in order to get
Travel Tips
How to reach: Frequent volvo bus
services are available from Delhi to
Haridwar or Rishikesh. Buses also ply
from Rishikesh to Ukhimath which is
the closest town.
Must do: Trek at sunrise trek to
the Chandrashila peak, stay in the
camps at Chopta , bask in the sun at
the meadows of Tungnath and trek
to snow-clad Chaukhamba peak at
sunset.
Must try delicacies: Pahadi (local)
pumpkin vegetable and local sweets
that are sold by the villagers
Expense: Under `10,000
Duration: 3 day trek
Safety : The area is relatively safe
and one can see solo as well group
ready to climb up to Chandrashila
peak (4000 m) to watch the sunrise.
Equipped with a torch, I started
climbing up under a blanket of stars.
Although it was a 1.5 km hike, the
path was incredibly steep. As the
horizon lit up in orange, I made it
to the summit. There were at least
a hundred people there, waiting to
capture the sunrise on their cameras.
The snowy mountains stood tall in
front of me, providing the perfect 180
degree panoramic view of the entire
area. With the sun rising up from
www.outlookmoney.com December 2017 Outlook Money
camping in chopta
travellers along the way. It is always
crucial to ensure that your phone
and power banks are well charged as
access to electricity is limited in the
area. Also, make sure your loved ones
are aware of your itinerary as you
would be trekking at high altitudes.
Essentials: Dont forget to carry a
power bank, medicines and a torch.
Accommodation: Camping. Many
camping sites are available for all
types of budgets. Moksha is a good
choice for people on a budget. They
arrange group treks as well.
Conveyance: Roadways is the most
reliable form of conveyance; taxi, own
vehicle or bus.
Itinerary: Chopta - Tungnath -
Chandrashila. Add Deorit taal lake to
your itinerary if you have tim extra time.
behind the Nanda Devi (7816 m),
the second highest mountain peak
in India, the snow-capped mountain
peaks seemed to catch on fiery
reddish hue and then turn a glittering
white as the sun rays reflected off
them. The warm glow of the sun
felt very comforting in the chill of
the morning and filled my heart
with happiness.
The writer is a full time marketer
with a media company and part
time traveller.
75
 Market Outlook
Markets will take a breather before
making decisive move upwards
With stronger foundations being laid, it is only a
matter of time before current measures begin
reflecting in revival of economic growth
S
ince 2014, when the Modi-led
government assumed office, Indian
markets have been on a bull run.
Investors perceive this government as
pro-business and expected that economic
growth, which was languishing then
largely due to policy inertia, would revive
quickly under the new regime. Three
years on, and despite (or due to, if you so
believe) the bold measures taken by the
government, this is yet to happen.
Valuations have been running ahead
of fundamentals and investors are
concerned that Indian stocks have moved
too far, too fast. However, there is little
doubt that the longer-term prospects for
Indian equities remain bright. I believe
we are only at the beginning of a multi-
year structural bull run. At this juncture,
the markets could take a breather and
consolidate before making a decisive
move upwards.
I believe the markets are already
discounting an increase in the US Fed
rate in December. Domestically, a rate
cut looks unlikely in the short term.
Rising commodity prices, especially crude
oil, need to be watched closelyin the
absence of bigger triggers, it is concerns
around these which will drive short-term
market movements. I wouldnt hazard a
guess on the outcome of the assembly
elections in Himachal Pradesh and
Concerns around rising
commodity prices will
drive short-term market
movements
76 Outlook Money December 2017 www.outlookmoney.com
Gujarat, though wins by the BJP would be
perceived positively by the markets.
India is in the midst of a massive
renovation, not only in terms of physical
infrastructure, but also in terms of
mindset. The renovation will yield sizable
benefits in the medium to long term. Until
earnings revival becomes clearly evident,
the market movements will be driven by
renewed hopes of a brighter future and,
at times, by these recurrent doubts.
Though not yet an ideal solution,
GST has already seen a round of
improvements. With a few more such
rounds, we should quickly move towards
the goal of a truly one-India-one-
market. Not only are inter-state tariff
barriers being dismantled, the physical
infrastructure for efficient movement of
goods and people across the country is
also being enlarged through initiatives,
like DFCC, Sagarmala and Bharatmala.
The banking system, which forms
the bedrock for economic growth is
being strengthened through continued
focus on asset quality, recoveries, and
recapitalisation of the state-owned
banks. Demonetisation has significantly
hastened the financialisation of
household savings, reflecting in
unprecedented flows into mutual fund
SIPs and the all-time high equity AUM of
domestic mutual funds. The Indian stock
markets are no longer dictated solely by
foreign buying or selling.
India is recognising the fallacies of
poorly-targeted subsidies that resulted
in leakages and inefficient allocation of
capital. It is, therefore, cutting subsidies in
Motilal oswal
Chairman & Managing Director,
Motilal Oswal Financial Services
general. Where it is necessary to continue
subsidies for social good, it is ensuring
that they are properly targeted and the
benefits are being credited directly to
the targeted recipients. Aadhaar-linkage
is ensuring the veracity of the recipients
themselves.
Fiscal expenditure aimed at pump-
priming the economy is no longer seen
as merely pump-priming but also as an
opportunity to create national assets
for longer-term benefits. This is evident
in the nature of projects taken under
schemes such as MNREGA. Though the
main emphasis remains on providing
employment, the aim is also to create
durable productive assets.
There is also a growing realisation
among Indias citizens that they need
to begin paying their share of taxes if
they wish to enjoy the privileges of being
Indian. Following demonetisation, there
has been a rise in the number of income
tax return filers. Also, the GST framework
is intended to significantly increase
indirect tax compliance. As overall tax
compliance increases, there should be a
progressive reduction in tax rates, fuelling
a virtuous cycle of rising tax compliance
and declining tax rates.
Strong foundations for a vibrant India
are being laid. It is only a matter of time
before these measures begin reflecting
in revival of economic growth. Given
the growing domestic flows into equity
and foreign funds continuing to invest
selectively even in an otherwise fairly-
valued market, would you like to risk
waiting on the sidelines?
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 Jio V
Personal Tech
feature
Telecom behemoths
Airtel and Jio are
phone
rolling out the
red carpet for
consumers. Outlook
Money tells you
what's on offer

Airtel Prepaid
Plans
`8
Local+STD mobile calls 30p/m
for 56 days

`93
Jio Prepaid Plans*
Local+STD unlimited calls and `19 `309
1GB 3G/4G data for 10 days 0.15 GB data and 20 SMS for 1 day 49 GB data and unlimited SMS
for 49 days
`149 `98
Unlimited Local & STD Airtel 2.1 GB data and 140 SMS for 14 days `399
Mobile calls and 300 MB 70 GB data and unlimited SMS
3G/4G data for 4G Handset `149 for 70 days
(50 MB for other Handset) 4.2 GB data and 300 SMS for 28 days * Unlimited voice calls included
for 28 days

`349
Unlimited Local, STD,
Roaming outgoing calls along
with 1.5 GB data/day and 100
SMS/day for 28 days
`399
Unlimited Local and STD calls
along with 84GB data (3 GB/
day) for 28 days
Reliance Jio
feature phone
Display Size: 2.40-inch display
Resolution: 240 X 320 pixels
Processor: 1.2GHz dual-core processor
RAM: 512 MB
Internal Storage: 4GB, can be expanded up to 128GB
Battery: 2000mAh removable battery
Connectivity: Wi-Fi, GPS, Bluetooth, NFC, FM, 4G
SIM: Single SIM (GSM), accepts Nano-SIM
Primary Camera: 2 megapixel
Front Camera: 0.3 megapixel
Operating System: KAI OS

78 Outlook Money December 2017 www.outlookmoney.com

s Airtel smart
phone R
eliance Jio Phone, an
affordable feature phone
that has gained huge
popularity in recent months comes
with a bagful of offers. Jio members
can enjoy free voice calls, unlimited
data, free SMS with their special
Jio Dhan Dhana Dhan packs. The
company has finished delivering
the first batch of phones and it will
launch its second phase of pre-
booking soon. Some news reports
suggest that their next offering may
be an Android phone, unlike the
current phone which runs on KAI OS,
a modified version of the Firefox OS.
The Jio phone comes with a
refundable deposit of `1,500. Under
this scheme, the user pays `1,500
n for the phone and has to return the
Karbo0n phone by the end of three years to
A4
Indian claim this amount. As the amount is
interest free, the user will not bear
any deduction on this, but they will
have to recharge their phones with
`1,500 to get the refund.

Mera
Airtel along with Karbonn and
Celkon has launched a similar offer.

Pehla tphone With Karbonn, after the success of

4G - Karbonn A40, under the Mera

Smar Pehla Smartphone initiative, Airtel

has announced two new Android
smartphones - Karbonn A41, and
Karbonn AI Indian. Celkon is offering
Karbonn A40 one smartphone, Celkon Smart

Indian smart phone 4G. The prices of these phones

Display Size: 4-inch display
Resolution: 480 X 800 pixels
Processor: 1.3GHz processor
RAM: 1 GB
Internal Storage: 8 GB
Battery: 1400mAh battery
Connectivity: Wi-Fi, Bluetooth, FM, 3G, 4G
SIM: Dual SIM
Primary Camera: 2 megapixel
Front Camera: 0.3 megapixel
Operating System: Android 7.0
start from `2,849. However, there
are cash back offers. The Karbonn
A40 or Celkon smart 4G user shall
recharge with `3000 for 18 months
and get cash back of `500. Further,
if the user continues to recharge
with `3,000 for another 18 months,
then additional cash back of `1,000
is provided, reducing the effective
price of the phone. The cash back
will be credited to a users Airtel
Payments account. Unlike Jio
phone, the user of these phones will
not have to return back the phone
sets to claim the cash back. These
phones also support most Indian
languages and give access to the
Google Play Store.

www.outlookmoney.com December 2017 Outlook Money 79

 Investment Destination
The Coaching Capital of India
The city of Kota has been listed under the Smart City Project and it is all
set for its overall transformation
K
ota, famously known as
the coaching capital of
India, is part of the
northern state of India, Ra-
jasthan. Located approximately 250
kilometers from its capital, Jaipur, the
city finds itself nestled on the banks
of Chambal River. It has been identi-
fied as a Smart City Project, which is
likely to aid in overall development of
the city, significantly improving the
infrastructure as well as the business
and other trade opportunities.
Kota is a well-established regional
urban centre and a focal point of
industrial development within the
state of Rajasthan. It is widely known
as an educational hub with over two
lakh students travelling to Kota from
80 Outlook Money December 2017 www.outlookmoney.com
across the country to prepare for
various competitive entrance exams.
Housing Demand
The coaching centers have played a
vital role in increasing the demand
for real estate in the city. With
students flocking from every part
of the country to study, the city has
witnessed an increase in the demand
for affordable housing as they are
easy to rent and easy on pocket for
the student community.
The city has also been drawn to
the emergence of several medium
and big companies in and around
Kota, which has largely contributed
to the boom in commercial and
residential property market.
With increasing number of
students coming in with employ-
ment opportunities being created,
the city is attracting high demand
the in affordable housing segment.
The Urban Improvement Trust
Kota has launched a new housing
scheme for the economically weaker
section of the society and lower
income group for allotment of flats
under affordable housing. The flat
prices range from `4 lakh to
`6.30 lakh.
Additionally, several real estate
developers are also keen to develop
flats in the low price segment. Areas
near the Kota Railway Station and
Mala Road are the prime locations
where real estate players are
Education Hub developing flats under affordable
housing scheme.

Kota is attracting Infrastructure Growth

developers and
investors alike
with slew of latest
investments
Kota Zoological park
Godavari Dham
Kota
SFC Captive Power Plant
Development
indicators
The city will get assistance of `1000
crore in next five years under Smart
City Project
The Delhi-Mumbai Industrial
Corridor passes through the city
The government is working on
interlinking several rail lines
including, Katni - Bina - Kota and
Udaipur - Chittaurgarh Kota
Ajmer/Nasirabad-Devli and Devli-
Kota (NH-12) links to be developed
Army Area
Manpura
Booming
Kota
Railway station area and Mala
road are promising destinations
for real estate developers
Every year, close to two lakh
engineering aspirants move
to Kota to prepare for
competitive examinations
The presence of several
industries in Kota have
made this city economically
prosperous in last few years
Kota is one of the industrial hubs in
northern India, with several chemi-
cal, engineering and power plants
based within the city. The total num-
ber of industrial units in the district
from 2010-11 stood at 12908 with
705 registered units
Kota City will be receiving `1,000
crore in next five years under the
smart city project which would be
distributed to augment and boost
the green belt, the citys roads,
sewerage system, tourism develop-
ment, water supply network, parking
system, gardens and other develop-
ment projects.
The Delhi-Mumbai Industrial
Corridor which will pass through
Kota will act as a key driver in
growth of trade and investments
in the region. As the city will get
benefited from the east-west cor-
ridor highway project and the invest-
ments coming to their door steps,
the demand for real estate, both
residential and commercial, will also
grow rapidly.
The Ajmer/Nasirabad-Devli
and Devli-Kota (NH-12) links will
further undergo development. The
proposal to interlink several rail lines
including, Katni - Bina - Kota and
Udaipur - Chittaurgarh Kota will
not only enable connectivity but
also give a rise to the flow of
capital in the city.
With the Smart City tagline under
its belt, Kota is all set to witness ex-
ponential growth in the low cost real
estate segment.

Affordable Housing In Kota

Direct Logo
Developers Name Location Price range (`)
Shree Pvt Ltd Near Station Area 25 Lakh IFAN (Independent Financial
KRP Industries Ltd Mala Road 28 lakh Associates Network) is a web-
enabled distribution platform of
KRP Industries Ltd Mala Road 36 lakh Reverse Logo
IFAN Finserv Pvt. Ltd. (ifan.co.in)

www.outlookmoney.com December 2017 Outlook Money 81

B&W Logo
 Smart Money
Vidya Balans
Money Wisdom
L
ike success, money means
different things to different
people. Like all other
relationships, peoples relationship
with money is rather complex. It is
driven not just by social stereotypes
but by their perception of self worth.
In a no-holds barred interview with
Outlook Moneys Malini Bhupta,
actor Vidya Balan talks about what
money means to her and big money
lessons she has learned over the years.
While for most it is a measure of
success, Balan believes it is purchasing
power at a very basic level, but for
women, Money is power and security.
Money gives you the strength and
courage to live your life on your terms.
Incidentally, Balans latest film Tumhari
Sulu is about the journey of a married
woman who steps out to earn a living as
a radio jockey, after 12 years of marriage.
Other than financial independence,
Balan says: Money is also a measure of
ones self worth, which is why it is power.
Money Mantra for WoMen Realise your worth and dont be
It is important that you handle
your own money. There is
no guilt or shame in having
control over your own money.
I encourage my female staff
to save for themselves and
set aside a sum every month
diligently. Women who dont
work must also do the same
with the money they get from
their husbands or fathers.
Big Money Mistake
I remember, I was scared when
I was offered big sums to sign
brand endorsements, after my
film Parineeta. I could have
bought a few penthouses in
Bandra with that money.
She should know this because it took her
a while to accept the kind of money she
was beginning to be paid as an actor. I
was almost scared of the money I was
making. So, I turned down some offers
early on in my career as I believed I didnt
deserve it.
Even if money is about self-worth
as much as it is about freedom, Balan
doesnt compare herself with the male
counterparts in Bollywood. But, she can
rattle off the returns her film has made
for producers, which is 10 times the cost
of production. The same cannot be said
for male stars. Kahaani, for instance,
was made for `6 crore but went on to
make `60 crore at the box office. The
ratio is still the highest in Bollywood.
And she has actually taken the trouble
to understand the returns that her films
make for producers, rather than chase a
headline figure. Of course, Balans films
are not in the `100 crore league yet, but it
doesnt bother her because like all other
investments, it is the returns that count.
scared of the money you make.
first Big Purchase
A flat in Chembur. Now, I invest
in debt or equity as the returns
are superior.
Money advise
Understand your own
investments. Dont leave it to
the discretion of others, even
if they are experts. My father
forced me to understand
different asset classes,
even though I hated it. Now,
I understand asset classes,
returns and take my own
decisions on where to invest
my money.
RNI NO. DELENG/2002/08292