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Corporate News
Interest rates unlikely to come down in near future
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ArcelorMittal, Posco pullout to hit investors’ sentiment
FIIs net seller
Tax Advice
Personal
Finance
Beware of misleading MFs
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Nod likely to IOC disinvestment soon
New Delhi, July 21 The Disinvestment Department has already selected five merchant bankers -- Citibank, HSBC, UBS Securities, SBI Capital and J M Financial -- to manage the stake sale of the oil major. "The proposal for 10 per cent stake sale in the IOC is likely to come up in the Cabinet next week," sources said. At present, the government holds a 78.92 per cent stake in the IOC. The Finance Ministry had in May moved a draft Cabinet note for the disinvestment in IOC through an offer for sale. The IOC has a market capitalisation of Rs 54,519 crore. It posted a net profit of Rs 5,005 crore in 2012-13, up from Rs 3,954 crore in the previous year. The company's profit peaked at Rs 10,221 crore in 2009-10.The IOC sells fuel at below-market prices, for which it is partially compensated by the government. The disinvestment target through PSU stake sales in the current financial year is Rs 40,000 crore. HDFC plans to buy Lever House
Mumbai: HDFC is planning to buy Hindustan Unilever's former headquarters, Lever House, located at Backbay Reclamation in the southern tip of the megapolis. "Today, the HUL building is on lease with us and we have the right to buy it and we will buy it," chairman Deepak Parekh told the shareholders at the annual general meeting held here over the weekend. Tata Power eyes local acquisitions
New Delhi: Tata Power is eyeing local acquisition opportunities amid "stress" in the domestic sector. Besides, the company, which has an installed generation capacity of over 8,500 MW, is seeking to strengthen its footprint in the solar and wind power segments by way of new projects and acquisitions. "Due to the current stress in the power sector, there are assets which may be available for acquisition. Your company is and will continue to evaluate opportunities to acquire projects in various stages of development across the country," Tata Power said in its 2012-13 annual report. The company is engaged in executing power generation projects, across domestic and international geographies, having a cumulative capacity of 1,151 MW. These include 400 MW hydro plants in Georgia, 202 MW thermal project in Odisha and 234 wind plants in South Africa. Venus Rem eyes
Rs 1,000 cr revenue
Mumbai: Venus Remedies expects Rs 1,000 crore revenue by FY'17 from the present Rs 460 crore on the back of higher exports. "We expect 15 per cent organic growth and our topline is expected to grow to Rs 1,000 crore by FY'17 from Rs 460 crore in FY'13, following R&D share of revenue increase from present 33 per cent to 50 per cent," Venus Remedies chief financial officer Dheeraj Aggarwal said here. The company currently has 25 products under its research and development portfolio, of which 13 are already commercialised, Aggarwal said. The margins for company's R&D products are much higher than generic products. Monnet Ispat may abort J’khand plan
New Delhi: Close on the heels of Posco and ArcelorMittal pulling out of $18 billion projects, Monnet Ispat and Energy is actively considering scrapping its proposed 1.5 million tonnes plant in Jharkhand. The city-based sponge iron and power producer has proposed 1.5 million tonnes per annum (mtpa) greenfield steel plant in Jharkhand. It is now considering withdrawing the plans for want of raw material, water and land - the same reasons cited by both ArcelorMittal and Posco as well. "Yes, it is correct that we are seriously considering to withdraw from the Jharkhand greenfield project," said Amitabh Mudgal, Senior Vice-President (Marketing and Corporate Affairs), Monnet Ispat and Energy.
— PTI
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Interest rates unlikely to come down in near future
P H Ravikumar has recently taken charge as managing director at Money Matters Financial Services. At a time when the Indian economy is in the throes of a slowdown and credit demand is tepid, NBFCs such as Money Matters has to watch out for delinquencies. However, Ravikumar, who has been a banking and financial sector veteran with over four decades of experience with stints at the Bank of India, ICICI Bank and NCDEX is unfazed. In an interview, Ravikumar says that loan demand from small and medium enterprises (SME) will continue to be strong and the sector is poised for robust growth once economy picks up. Ravikumar talks to Sanjeev Sharma about launching a real estate AMC, Money Matters’ name change and expansion plans for Punjab and Haryana. Q: How do you see the market for SME portfolio in the current financial year? How has been the demand for loans so far in the current fiscal year? A: Small and medium enterprises have been the bulwark of both services and industrial sectors. They are the largest exporters, largest providers of employment, but have the least funding from the organised financial sector. While the overall credit growth has been around 15 per cent for the banking sector, the latent demand from small and medium enterprises for funds from the organised sector will be manifold this figure. Even within the SME segment, the small and micro industries have the least support from organised financial sector. At Money Matters, the demand for loans has been strong in the first quarter of fiscal 2014. Our total loan book currently stands at around Rs 475 crore. Q: How do you see the growth of the SME market in North India, especially Punjab and Haryana? A: Both these states have been the drivers of the SME growth in the country. We see a steady growth at a compounded annual growth rate (CAGR) of over 18 per cent-20 per cent in this sector notwithstanding what is happening in the other parts of the economy currently. As the growth in the economy picks up over the next few years, the SME sector will grow at a compounded annual growth rate of well above 25 per cent. It is exactly for this reason that we are expanding our footprint in these geographies. We plan to open more offices in the two states based on our business growth and need to tap this potential opportunity. Q: What is your view on interest rates? Do you see room for more rate cuts and by what extent? A: Current macro trends —food inflation, current account deficit and the consequent pressure on value of rupee vis-à-vis major international currencies — seem to indicate that there is little room for interest rates to come down. The pressure on the operating profit levels of banks, particularly owing to level of stressed assets, also indicates that banks are unlikely to reduce their rates of interest in the near future. Unless there is dramatic improvement in the overall macroeconomic scenario, I do not see perceptible reduction in interest rates in the near future. Q: What are the new sectors you are looking to tap for lending? A: Residential home loans, particularly in tier II and tier III cities, revival of SMEs which are facing financial stress and specific structured corporate loans are the major segments where there is a strong latent demand for funds and can be tapped for lending. Our current growth plans for the current calendar year can be adequately met from our own net funds. We have no borrowings at present. However, towards the end of the calendar year, we would raise funds of about Rs 250 crore to Rs 300 crore. Q: Recently, Money Matters has entered into a strategic tie up with Capri Capital Partners LLC. (CCPL). Can you share details of this partnership? A: CCPL is among the top one per cent of the funds - by performance in the US in their segment. They have strong skills in raising resources from various international markets and managing risks in the realty sector. We have strong knowledge of the domestic real estate market. The partnership envisages setting up of a real estate AMC which will manage projects end to end subject to various approvals. The chairperson of CCPL will also be joining the board of our company. We believe their skill sets strengthen our growth in India. Besides, we are in the process of changing our name to Capri Global Capital that will reflect our tie-up. While the Reserve Bank of India nod has come as also the shareholders’ approval, we expect the ROC approval for the name change over next two or three weeks.
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ArcelorMittal, Posco pullout to hit investors’ sentiment
New Delhi, July 21 The DIPP deals with foreign direct investment related matters. Last week, the world's largest steel maker ArcelorMittal, in the biggest foreign investment pullout, scrapped its $12 billion (Rs 50,000 crore) steel plant in Odisha. South Korean steel major Posco too pulled out of Rs 30,000-crore steel mill in Karnataka. The projects were scrapped mainly due to inordinate delays, problems in acquiring land and securing raw material linkages, among others. "These moves would hit the sentiments of foreign investors and that too during the time when the country needs more FDI," the official said. Experts too have raised serious concern over the pullout of these projects. "Any such withdrawal will dampen the spirit of foreign investors," head of tax and expert on FDI with corporate law firm Amarchand & Mangaldas Krishan Malhotra said. FDI inflows in India have registered a decline of 38 per cent to $ 22.42 billion in 2012-13 as compared to $ 35.12 billion in 2011-12. India would require around $1 trillion in the next five years to overhaul its infrastructure sector such as ports, airports and highways to boost growth. — PTI |
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New Delhi, July 21 The outflows as on July 19 were about Rs 11,196 crore from the debt market and Rs 6,005 crore from equities, according to data on net FII investments with Sebi. Foreign institutional investors (FIIs) had withdrawn a record Rs 44,162 crore from the debt and equities markets in June. The weakness in the Indian currency was instrumental in overseas investors exiting the debt markets as the rising cost of hedging a volatile rupee hurts the yield differential the FIIs work with, according to market experts. — PTI
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Elderly not liable to pay advance tax
by SC Vasudeva Q. I am a super senior citizen aged 81 plus. As per calculation made by me in April 2012, my total income from all sources for the year 2012-13 was to be Rs 5.60 lakh. Since I was eligible for a deduction of Rs 5 lakh, I decided to submit Form 15-H to the banks. Thereafter, I deposited Rs 1 lakh in a tax-saving scheme of a bank with the assumption that my tax liability will be nil. In February 2013, I received an arrear of around Rs 60,000. Now, my total income from all sources has reached Rs 6.20 lakh. Please advise the manner in which I can liquidate my tax liability. — S Lal A. On the basis of the figures given in the query, your taxable income would be Rs 5,20,000 after availing deduction of Rs 1 lakh under Section 80C of the Act. The amount of tax payable thereon would be Rs 4,120. It would be advisable to make the payment of tax of Rs 4,120 before filing your tax return. I may add that you would not be liable to pay any penal interest on account of non-payment of advance tax in view of the provisions of Section 207 of the Act which provides that a senior citizen is not liable to pay advance tax if his income does not include any income from profits and gains from business or profession. Doctor’s fee
Q. Recently I have joined a private hospital at Ghumarwin, Bilaspur (Himachal Pradesh), as a radiologist. My professional fee for the month of March was credited by my employer to my bank A/c on April 8, 2013 and the income tax at source was also deducted. Kindly clarify whether the professional fee will be counted as my income for the assessment year 2013-14 (FY 2012-13) or the assessment year 2014-15 (FY 2013-14).
— Dr DV Kulkarni A. The tax liability in respect of professional fee would depend on the method of accounting followed by you. In case you are following cash method of accounting (i.e. on receipt basis), the amount of professional fee for the month of March 2013 will be taxable in the year of receipt i.e. financial year 2013-14. However, in case you are following accrual method of accounting, the professional fee for the month of March 2013 will be taxable for the financial year 2012-13. |
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That's where children's future solutions and insurance come in. Children need insurance for a variety of reasons, primarily for education, studies abroad, marriage, etc. Since most of us have relatively fixed sources of income, financial planning for a child's benefit becomes an essential part of the family's budget. So whether it is an international degree or a specialised training course, most parents would not like to deny it to their children any opportunity, due to lack of funds. Given the steep rise in the cost of education, which continues to climb with each passing year, saving for a child's future is no mean task. But save we must, to provide them with the wherewithal to stake claim to opportunities that will come their way. Children's insurance plans are designed to serve a variety of milestone needs and, if chosen well, are excellent long-term vehicles to manage a child's future. These plans while inculcating a sense of discipline among parents, invest systematically over the long term. These investments have the ability to beat inflation and thus, match the ever-escalating costs of education. Finally, these solutions have options that protect these future plans in the unfortunate event of death of the parents. So, how should you choose an insurance plan for your child? Here are four simple tips:
Buying a child insurance plan is a significant step in securing your child's future. We suggest you make it a high-involvement purchase by researching the products in the market, probing the insurance agent on features, charges and past performance. Satisfy yourself with evidence on every feature of the product. Do this and your child will think of you as smart parents 20 years from now. That should make it worth your while. — The author is MD & CEO, Birla Sun Life Insurance. The views expressed in this article are his own.
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Beware of misleading MFs
Many financial products in India come with fancy names. The nomenclature of these products suggests that it will have some basic features relating to the name, but in reality some of these products have completely different characteristics. If the generic name of the financial product itself is misleading, it is easy for the investors to misunderstand the product. The regulators and financial service providers in India are constantly trying to create awareness and spread financial literacy, but the important aspect that is missed is to change misleading name of certain generic financial product, which creates confusion among the investor class. Following are some of the mutual fund products which may create confusion among investors, purely based on the name of the products. Monthly Income Plan
When someone hears the name of this product for the first time, he may get a feeling that this product gives assured monthly income to the investor. A person with the objective of earning monthly income may get inclined to buy this product. But MIP is in no way is "True to its Name Tag". MIP mutual funds schemes closely resembles debt-oriented balanced funds scheme. These primarily invest in fixed income securities combined with around 15 per cent to 25 per cent in equities. This means that people investing in MIP schemes face market risks and NAV-related risks. Thus people investing with the objective of earning monthly income may not meet their goal due to heavy mark-to-market losses. The bigger irony is that such schemes usually offer "Growth" option. A growth option is an option wherein profits are not paid to the investors periodically, but instead it keeps growing in the fund itself. Thus contradicting the name of the financial product in its entire basic form. Gold Fund
A normal investor may think that such fund will invest in physical gold. But that is not the case. A mutual fund is not allowed to invest in any commodities directly. Gold funds are equity oriented schemes which invest in gold ETFs and gold mining companies, which are listed on the stock exchanges. The usual practice of a particular company's gold fund is to invest in Gold ETF of its own company. The NAV price movement of the gold fund depends on gold ETFs. These ETFs are listed on stock exchanges. Gold ETFs directly track real gold prices. Thus the gold fund's NAV indirectly reflect the real gold prices. But it is important for the investors to understand the product they are choosing and how their funds are been allocated. Highest NAV Guaranteed Fund
The catch in the name here is all the three words - "Highest", "Guaranteed" and "NAV". Highest NAV-guaranteed fund is a Unit Linked Insurance Plan (ULIP) and not a mutual fund. People after hearing the word "NAV" may believe it to be a mutual fund scheme. And after hearing the word "Highest" people may believe that they are going to get highest return from the stock market. The investors need to understand that these schemes guarantee the "Highest NAV", its Highest NAV and not "Highest Returns". These products invest in stock markets and debt markets, and mutual fund regulator does not allow mutual funds to guarantee returns. But recently even the insurance regulator has asked life insurers to stop selling highest NAV guaranteed products. Fixed Maturity Plans
The usual perception after hearing the word "Fixed" in investment product is that the product will give a fixed guaranteed return. This is probably because of extensive use of "Fixed Deposit" as a financial product. Some people also consider FMPs as the mutual fund industry's version of fixed deposits. So what really are FMPs? These are closed ended debt schemes with a fixed maturity date. They invest in debt and money market instruments maturing on or before the date of the maturity of the scheme. So basically a one-year FMP will invest in debt instruments which mature in one year or just before one year. This synchronised maturing completely eliminates the interest rate or reinvestment risk. FMPs do form an important part in the debt section of an investor's portfolio, for investors looking for an alternative for fixed deposits. Thus when you make an investment next time, make sure not to fall for a financial product based on its name but rather try to understand the financial product inside-out. To put it simply, as the famous saying goes "Don't judge the book by its cover". And until such misleading names of financial products remain, it is the duty of the financial advisers to make sure that they present a clear picture to the investors, so that they know what they are getting into. — The author is Research Analyst, Apnapaisa. The views expressed in this article are his own.
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Home Loan Floating interest rates for loan amount
Rs 30 Lakh as on July 18, 2013
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what are Options & Futures* An option gives you the right to buy or sell the underlying asset . A call option gives you right to buy the underlying asset while a put option gives you the right to sell. An option contract specifies the strike price, that is, the price at which you can buy or sell the underlying asset. In Futures, you buy a contract which will have a specific lot size of shares. When you buy a Futures contract, you don’t pay the entire value of the contract but just the margin. Open interest is the the total number of contracts not closed or delivered on a particular day.
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P H Ravikumar has recently taken charge as managing director at Money Matters Financial Services. At a time when the Indian economy is in the throes of a slowdown and credit demand is tepid, NBFCs such as Money Matters has to watch out for delinquencies. However, Ravikumar, who has been a banking and financial sector veteran with over four decades of experience with stints at the Bank of India, ICICI Bank and NCDEX is unfazed.
Children enrich lives of their parents and naturally in return parents want to give them the best, especially when it comes to their education and key future milestones. As parents, it is important to consistently save for the many milestones that their children might want to cross in their lifetime. Once identified, a parent assumes the role of a sculptor, who chisels and polishes the child's interest to create a masterpiece of a career and other future needs.
