KAUTILYA
IBS Mumbai Newsletter
NEWS
DOMESTIC NEWS
SBI IS DOING A MEGA E-AUCTION OF
PROPERTIES SHOULD YOU BUY IT?
All types of properties like housing,
residential, commercial, industrial, etc will be
included in the auction, all the other details
will be accessible on the official website. In
order to get its money back, SBI is marketing
those properties in this mammoth e-auction
which belongs to nonpayers who failed to
repay loans. As per the website of the bank,
there are at present 3317 residential, 935
commercial, 513 industrial and 9 agricultural
possessions to be auctioned.
(Source: Mint)
RECORD LEVEL PROFIT BOOKING
BEFORE CHRISTMAS WAS SEEN IN
THE INDIAN MARKETS: Domestic
markets have witnessed profit-booking at
highest levels before Christmas. As there is the
absence of domestic news, the equity market
was more focused on global events like the US
financial stimulus update and development
related to COVID-19 shot in the holiday-
shortened week. As a decision on the US
stimulus package and Brexit deal can be
expected, the market will be more focused on
a global
event.
(Source: Mint)
AMAZON INDIA IN 2020: Rs1 CRORE
SALES MARK CROSSED BY 4,152
SELLERS: Amazon India, which announced
its annual report on December 20, 2020,
showed the growth of its small and medium-
sized sellers on the marketplace in 2020,
according to them, 4,152 sellers have crossed
Rs 1 crore in sales by an increase in a number
of ‘crorepati’ sellers by 29 % year-on-year
(YoY). Among other key seller-side
achievements stated by the company during
the COVID-19 year included 1.5 lakh new
sellers joining Amazon in 2020 out of which
more than 50,000 recording in Hindi and
Tamil, company’s business marketplace is
growing 85 % YOY in sales. Amazon
currently has more than 7 lakh sellers on its
marketplace. Technology acceptance and
digitization will continue to play a decisive
role in expansion and opportunities to SMBs.
Delhi had the highest sellers at more than 1.1
lakh followed by 87,000 in Maharashtra and
79,000 in
Gujarat.
(Source: Financial Express)
8th January’2021
Konflux Edition 20.12
IPO PAPERS FILED BY MTAR TECH IN NIKE’s FREE WORKOUT APPS ARE
ORDER TO RAISE RS 600-650 KEY TO ITS HIGH-END PRICING
CRORE: To raise a projected Rs 600-650 STRATEGY: With customers logging into
crore through an initial share-sale, MTAR Nike's fitness apps and digital shop under
Technologies, a precision engineering lockout, the Beaverton, Oregon based
solutions company, has filed preliminary organization has been able to obtain additional
papers with capital markets regulator data from tens of millions of people on
SEBI. The IPO comprises fresh issuance of up shopping preferences, personal details and
to 40 lakh shares and an offer for sale up to exercise routines. According to data firm
82,24,270 shares from the promoters and other Sensor Tower, the Nike Run Club app was
existing shareholders. Company is proficient to downloaded 15.4 million times around the
build nuclear and pressurized water reactors, world between January and November 2020,
aerospace engines, missile systems, aircraft up 45.3 % versus the same timeframe in 2019.
components and many such critical The online store app for Nike SNKRS was
components and assemblies. The firm has downloaded 59.5 % more times than in 2019.
clients like Indian space research organization,
Defence research and development (Source: Mint)
organization, nuclear power corporation of
India. The funds raised will be used for WHATSAPP TO BRING VOICE AND
reimbursement of debt and long-term working VIDEO CALLS TO DESKTOP NEXT
capital requirement. YEAR: Facebook Inc's WhatsApp will add
(Source: Times of India) voice and video calling functionality to the
desktop edition of the messaging app next year.
WhatsApp will be on par with video
INTERNATIONAL NEWS conferencing bigwigs Zoom and Google Meet
to facilitate calls over large screens, but it is
uncertain whether it has plans to compete with
THIRD ANTIRUST LAWSUIT FILED
the two in the enterprise room. WhatsApp is
AGAINST GOOGLE FOR MONOPLOY:
second only to the namesake app of its parent
Google has been hit with third antitrust laws in
company, Facebook Inc, with over 2 billion
just a few months. It has been led by Iowa
users worldwide, but it is mostly used for
Attorney General Tom Miller and a set of 38
personal calls, unlike Zoom or Google Meet.
states and territory suits claim that Google has
unlawfully maintained the monopoly in
(Source: Money Control)
general search and general advertisement
through dominant contracts and conduct. The
Attorney General Phil Weiser started a press
conference. The group will file the merged
case with a justice department. Apparently, News as highlighted:
pressure continues to build particularly on Shivam lakhani, Section Q
google. After this news, the share of Google
also fell.
Shimpi Kumari, Section M
(Source: Mint)
Newsletter Editors:
US FED PLEDGES TO SUPPORT THE Milind Sharma
ECONOMY THROUGH STIMULUS: The Riddhi Rajput
Federal Reserve said that, through significant
monetary easing, it will continue to stimulate
Khuzaima Banatwala Q
the economy until it sees "substantial further Raj Ghudka, Section A
progress" in jobs and inflation. According to a
Shimpi Kumari, Section M
statement, policymakers led by Chairman
Jerome Powell voted at their final meeting of a
turbulent year to sustain monthly bond
purchases of at least $120 billion.
Policymakers made no changes to the
Newsletter Designer:
composition of purchases, refusing to move Geeta Jadwani
them towards longer-term maturities. At the
Section Q
last Fed meeting of the year, policymakers
agreed to sustain monthly bond purchases of at
least $120 billion.
(Source: Mint)
 A GLIMPSE INTO FINANCIAL WORLD
GOOGLE'S GROWING LEGAL PERILS WITH
THIRD ANTITRUST LAWSUIT
Google, Apple, Facebook, and Amazon have established vast
empires over trade, communications, and culture, and then
exploited their increasing control.
Since the DOJ's 1998 suit against Microsoft, the antitrust
litigation against Google brought by the Department of Justice
(DOJ) and eleven state attorneys general has the potential to be
the most significant competition case against a technology firm.
The complaint alleges that in three markets, Google unlawfully
retains monopoly power: general search services, search ads,
and general search text advertising.
Google actively uses its monopoly positions, and the revenue
that comes from them, to constantly foreclose competitors in
these industries, the lawsuit claims, and maintain its
monopolies.
The prosecutors also accused the company of using exclusive
deals with phone manufacturers like Apple to prioritize
Google’s search service over rivals like Bing and
DuckDuckGo, but it was only recently that federal or state
regulators brought big lawsuits against them.
The lawsuit calls for "structural relief," meaning the company's
disruption or restructuring, and court orders that the anti-
competitive activities listed in the complaint be stopped, but no
cash harm.
If the government can claim that Google breached antitrust
laws, the court can concentrate on creating successful systemic
and behavioural solutions by opting to forego cash damages.
For years, major tech firms have been under fire for being too
large and too able to exert market influence in ways that are
abusive or worsen current issues.
A few that come to mind are unfair labour practices, outsized
control over the speech of others, and the locking out of new
goods by imposing incompatibility on a technical level. If this
lawsuit is the best chance of keeping Big Tech accountable
in a decade, it may seem disappointing that none of these
concerns are discussed.
-Rahul Kejriwal
(Head)
WHY HAS THE US PUT INDIA ON ITS
CURRENCY MANIPULATOR WATCHLIST?
The United States has once again put India on its currency
manipulation watchlist. The US Department of Treasury
(USDT) had removed India from its semi-annual foreign-
exchange report last year. With the addition of India, Thailand
and Taiwan there are in total ten countries on the list which are
China, Japan, South Korea, Germany, Italy, Singapore, and
Malaysia.
If USDT feels that any country is engaging in “unfair
currency practice” it remains on the watchlist. It includes
gaining an advantage by deliberately devaluing the currency,
here against the US dollar. The US Trading partner that
accounts for a “large and propionate share of the overall US
trade deficit remains on the monitoring list, that’s one of the
three criteria. The criteria are: -
1) If a bilateral trade surplus with the US exceeds $20 billion,
the country merits the attention. As per the USDT Report, in
the four quarters since June 2020, India had a trade surplus with
the US worth $22 billion.
2) Next, the USDT also uses the benchmark of the current
account surplus to check for manipulation. If a country has a
current account surplus of at least 3% of GDP it can be part of
the list.
3) Lastly, A country’s net purchases of foreign currency are 2%
of GDP over 12 months. India’s net purchases of foreign
currency stand at 2.4% of GDP.
Therefore, India qualifies two of the above three criteria.
Currency Devaluation can help countries to boost their exports
and shrink trade deficits.
India will be under scrutiny but will not attract any penalties as
of now. Though currency wars can strain trade ties in the long
run.
- Falguni Chhajer
(Co-head)
ANECDOTES FROM FINANCE WORLD: ENRON
SCANDAL
The tale of Enron Corporation is of a company that reached
dramatic heights only to face a tremendous fall, shaking Wall
Street to its core.
Enron merged with two transmission companies for natural gas.
With the assistance of Jeffrey Skilling, initially a consultant
later became company's CEO, it turned into a broker of energy
derivative contracts.
Playing along with the bull market of the 1990s, Enron was
appreciated for its growth and ambitious ventures. Between
1996-2001, Fortune called it "America's Most Innovative
Company" for six consecutive years.
However, the company's profits shrank rapidly as boom years
came to an end, and Enron faced tough competition in the
energy-trading industry. Under pressure from shareholders,
executives started to rely on dubious accounting methods, such
as "mark-to-market accounting".
A rising star who was promoted to CFO in 1998, Andrew
Fastow strategized a scheme to use off-balance-sheet special-
purpose vehicles (SPVs), also known as special-purpose
entities (SPEs), to hide investors and creditors from their
massive debts and toxic assets. Besides Fastow, Enron's
accounting firm Arthur Andersen LLP, partner David B.
Duncan, who managed Enron's finances, played a significant
role in the Enron scandal.
In April 2001, several investors started to question Enron's
earnings and the company's transparency. Securities and
Exchange Commission started investigating dealings between
Enron and Fastow's SPEs.
As accounting fraud data emerged, the company's stock price
dropped from a high of $90 per share in mid-2000 to less than
$1 by the end of November 2001, taking with it value of 401(k)
pensions of Enron workers, which were primarily tied to stock
of the company. Lay and Skilling resigned and two days after
the SEC investigation began, Fastow was fired.
Further, on December 2, 2001, Enron filed for Chapter 11
bankruptcy protection. Several Enron executives were arrested
on a variety of charges and later sentenced to prison. Arthur
Andersen had to dissolve himself by intimidation.
Thus, Enron's bankruptcy, which held assets of more than $60
billion, was one of biggest bankruptcies in U.S. history that
created a lot of controversies and led to the strengthening of
accounting standards and procedures with long-lasting
implications in the financial world.
-Rushil Patel
(Co-head)
WILL INCLUDING GOVERNMENT BONDS IN
GLOBAL BOND INDEX BE BENEFICIAL FOR
INDIA?
The Indian government is trying to include Indian sovereign
bonds in global bond indices from 2021. Earlier in March this
year, the government attempted to secure access to global
indices by opening up a wide swath of its sovereign bond
market to overseas investors. That effort has captivated $2.4
billion of inflows in the Indian bond market.
RBI has also established a separate route named as Fully
Accessible Route (FAR) for the investment of non-residents in
securities issued by the Government of India.
The benefits that India will receive by access to global bond
indices could be, as public finances are declining, global
indices can attract billions of dollars into Indian debt.
It will also reduce the financial suppression of Indian banks as
it will ensure a market price for government debt which in turn
will give an option to domestic savings for productive
investments. It will also attract a large amount of passive
investment from overseas; as a result, domestic capital will be
available for local industries.
RBI has also made some efforts by allowing FPIs to invest in
corporate bonds and the limit has been increased from 9 % to
15 %.
In one of the budget speeches for 2020-21, Finance minister
Nirmala Sitharaman has also confirmed that certain specified
categories of G-sec will be fully opened for non-resident
investors also along with domestic investors. Also, the
specified government securities which will be listed on the
indices will not have a lock-in requirement.
There are trillions of passive investments that track the global
indices regularly, and if Indian bonds will be able to gain even
a small amount of weightage, it’ll ensure an entire small amount
of weightage, it’ll ensure an entire supply of capital in Indian
market.
The global bond indices will definitely open a way to massive
long-term funding which will be positive both for government
securities as well as the private corporate bond market.
-Riddhi Rajput
(Newsletter head)
WHY CHINESE COMPANIES WERE DELISTED
FROM NYSE?
Those who thought that the power struggle and the cold war
between the US & China was over, were wrong. In a new U. S.
executive order, restrictions have been imposed on companies
identified as affiliated with the Chinese military.
This has led the New York Stock Exchange to delist three
Chinese corporations namely China Mobile Ltd., China
Telecom Corp Ltd., China Unicom Hong Kong Ltd. These
companies will be suspended from trading between 7th Jan &
11th Jan, while the proceeding to delist them have already
started.
The three Chinese companies are separately listed in Hong
Kong and they generate their entire revenue in China without
any meaningful presence in the U.S. except for their listings.
Even the shares are thinly traded on NYSE as compared to
Hong Kong, which makes this NYSE delisting a symbolic blow
amid the heightened geopolitical friction between the U.S. and
China.
President Donald Trump had signed an order in November
barring American investments in Chinese firms owned or
controlled by the military, in a bid to pressure Beijing over what
it views as abusive business practices.
The order also prohibited U.S. investors from buying and
selling shares in a list of Chinese companies designated by the
Pentagon as having military ties.
Chinese Foreign Ministry has vowed to protect the country’s
companies and have accused the U.S. of viciously slandering
its military-civilian integration policies. They have also
threatened to respond with their own blacklist of U.S.
companies.
A series of companies have been removed from indices
complied by MSCI Inc., S&P Dow Jones Global Indices &
FTSE Russell after the order.
In May, the U.S. Federal Communications Commission had
barred China Mobile from operating in the US and by
December it had ordered carriers to remove equipment made
by Huawei and began looking into whether China Telecom
should be allowed to operate in the U.S.
-Milind Sharma
(Newsletter Head)
WHAT LESSONS THE STOCK MARKET HAS
LEARNT FROM 2020?
The Dоw Jоnes Industrial Аverаge сlоsed the yeаr at
а reсоrd, rising аbоut 0.7% alongside the S&Р 500, which
finished the yeаr up 16% at its own new high.
Investors would have found it difficult believe that 2020
would turn out to be а stellar yeаr for stосk market after
the March 200s selloff. It is the соld reality
that the market’s rally has оссurred in the midst of а
саtаstrорhiс раndemiс that killed more than а million
реорle and brought the world to а standstill disrupting the
global есоnomy.
Аlthоugh there аre suffiсient reasons fоr the mаrket’s
соmebасk suсh аs Federal Reserve’s intervention but the
reality is still hard to believe.
Here аre some lessons learned from the yeаr 2020:
Markets perfectly reflect the eсоnоmy, but they don’t:
The first doubt rises when the stосks reached the year
low on March 23rd, the surge in coronavirus саses асrоss
the U.S., аnd аn inсreаsing rаte оf unemployment, hоw
соuld the mаrket be doing so well?
The stock mаrket оften begins tо recover fаr sооner thаn
the eсоnоmy. Lооking аt the саse оf the finаnсiаl сrisis, the
U.S. stосks hit their nаdir оn March
9, 2009. It took seven years frоm thаt роint fоr the
unemployment rate tо fаll below рre-crisis levels.
Mаny eсоnоmists dоn’t exрeсt the U.S. tо reсоver аll
оf the jobs lоst during the раndemiс until 2023 later, while st
осks mаnаged tо сhаrge higher in 2020.
Nоt tо try tо time the mаrkets, it раys:
With bоth the раndemiс аnd the finаnсiаl сrisis, the
individuаls whо sоld оn аwful news аnd trusted thаt the
eсоnоmy will reсuрerаte tо get оnсe more into the market
would have раssed uр the greater раrt оf stocks' potential
gain. Аs emоtiоnаlly nerveracking аs sizable sellоffs mаy
be, histоry shоws that lаrgeрооl оf investors аre better оff
nоt trying tо jump аll thrоugh the mаrket.
Teсh is the future:
With сhаnging trends and advancements in technology,
investors whо рrediсted the vаlue wоuld finally unseаt
grоwth were proved wrong yet аgаin.
2020 wаs the yeаr when mаny teсhnоlоgy соmраnies
disрrороrtiоnаtely benefited frоm а раndemiс аs individual
were fоrсed tо sрend mоre time аt hоme аnd оnline.
Zооm Videо Соmmuniсаtiоns Inс. rоse 396% fоr the yeаr
rоughly 24 times the S&Р 500’s gаin. Furthermоre, an
online retailer Etsy Inс. added 302% while РаyРаl
Hоldings Inc. climbed 117%.
-Aishwarya Bhandari
(Newsletter Designer)
THE US FED PLEDGES TO SUPPORT THE
ECONOMY THROUGH STIMULUS
The outgoing US President Donald Trump finally signed a $900
billion stimulus package on 27th December, after months of
negotiations between US lawmakers to reach a compromise
between being too costly on one hand and not enough to help
Americans on the other hand. This would be the second
stimulus package after the $2 trillion package introduced in late
March.
The $900 billion package includes funds to restore
unemployment benefits, stop evictions, provide rental
assistance, help small businesses, health providers and school
add substantially more money for vaccine distribution, and
much more. It is expected to stop the US economy from
contracting again.
Initially, under the relief package, every individual with an
annual income of up to $75,000 was expected to receive $600
with an additional $600 available per child. But on 28th
December it was voted to increase the amount to $2,000 per
individual which is expected to increase the cost by $464
billion.
To help in reviving small businesses, the package includes $284
billion for Paycheck Protection Program under which loans of
up to $2 million will be available to small, hard-hit businesses
and $15 billion is dedicated to help live venues such as movie
theatres and museums.
Economists are of the view that the stimulus package has come
just in time to forestall a double-dip recession and it would add
around 1.5% to annualized real GDP growth for the quarter
ending March 2021, and around 2.5% to next financial year’s
growth.
It lowers the risk of a negative GDP print in the first quarter of
2021 and over time it could boost the GDP by around 3%.
It is now estimated that economic recovery would kick start by
mid-2021 with the help of this additional financial support and
expected increase in economic activity due to ongoing
vaccination drives.
-Simran Sanan
(Creative Head)
ARE EMPLOYEES EQUIPPED FOR THE NEW
JOB ENVIRONMENT WHICH IS RESHAPED BY
COVID-19?
From last-mile specialists to campuses, from freelancers to the
middle and senior-level administration, the advanced and
digital change in the post-Covid world has started to change the
composition of the Indian labour force.
Each job is currently getting assessed utilizing a three-layered
focal point — will the occupation be significant for the future;
would this be able to work through a computerized system later
on; can fewer individuals do it?
The quick speed of progress in tech and automation requires
those working in this field to be continually learning new
technology. Profound area information will keep on being a
basic part of a technologist's career.
Mobile, cloud, information, artificial intelligence and
mechanization are the columns on which these careers will be
fabricated. Youthful specialists need to assume responsibility
for their professions by attributing these basics into their
knowledge.
One significant point that hung out was an adjustment in
outlook that reflected in three major regions — recruiters
currently had little hindrances over area-based jobs; there was
a recently discovered acknowledgement of gig-based recruiting
across enterprises and digitized employing was acknowledged
for the first time. This is a pattern, which is known as a Gig
Economy, everybody hopes will proceed in 2021.
There is a mentality among experts who are considering
freelancing as a smart profession in a dubious employment
market.
With an expansion in quality freelance jobs — as organizations
move to more agile ability models — there is a more
noteworthy comfort among experts and organizations the same
on remote and equally distributed work, also, how it can have
more prominent flexibility while getting strong work done.
As technological changes occurred the labour force of the
bottom of the pyramid decreased, the quantity of individuals
dealing with this labour force has diminished over a long time.
New jobs are coming up for middle managers in innovation (IT)
and BFSI.
Supervisors and job-seeking candidates who have tech-drove
aptitudes are popularly in demand because of advanced change
in how a corporate connects and works on a global level.
Middle managers have also been seen as a key to smoothen the
transition process of adapting the new work from home culture.
They can help absorb and act as a bridge in keeping the cultural
set up of an organization alive even being remotely away from
the premises.
-Muskan Kedia
(Newsletter team member)
REVERSE MORTGAGE IN INDIA
Reverse Mortgage is a product which will allow senior citizens
to avail themselves of funds by mortgaging their residential
property. The scheme is similar to a housing loan except that in
a home loan the borrower pays a fixed EMI to the lending
institution, while in a reverse mortgage the lender pays the
borrower a fixed sum of amount on a monthly (or quarterly)
basis, the entire payment being adequate to the worth of the
property and therefore the interest on the loaned amount.
In case of the death of the borrower and the borrower's spouse
both, the housing company sells the property to recover the
quantity paid out alongside interest at a rate similar to interest
on housing loans.
Condition to avail reverse mortgage in the United States: -
Borrowers should be above 62 years.
Property should be the primary residence of the borrower.
Reverse Mortgage helps the elderly people to get the return on
their property through reverse mortgage loan while living in the
subject property.
Possibility of Reverse Mortgage in India:
The reverse mortgage was introduced in India in 2007. In spite
of a very effective product, it does not gain much popularity in
India. This loan is unpopular among senior citizens due to three
reasons,
1) Emotional attachment to the property
2) Lack of understanding of the product
3) Lack of awareness
In India, the tradition is to pass away the property to the
subsequent generation. People are not used to this type of
product. A reverse mortgage is a complicated product and
people are unaware of the product in India.
Reverse Mortgage will help the elderly people in cashing out
their property, while still living on the property.
In the United States, the government brought many schemes to
support reverse mortgages.
For e.g., Home equity conversion mortgages. In India, there are
no such schemes available till now. In India, more banks should
bring reverse mortgage products as this product can reduce the
NPA and can also help elderly people as their income source.
-Niyanta Khare
(Newsletter team- member)
WHY IS THE TATA GROUP INTERESTED IN
BUYING AIR INDIA?
Tata’s association with Indian air travel drives back a long time.
Tata Sons recognized Tata Airlines in 1932 and was given a
new name as Air India in 1946. The Tatas left Air India exactly
67 years ago, in 1953, and the government grabbed control.
Tata evoked two airlines in 2013, viz. Air Asia in partnership
with Malaysia's AirAsia and Vistara along with Singapore
Airlines. Tatas have channelled its concentration through
AirAsia India, in which it holds 51% stake after its Malaysian
parent expressed incapability to suffuse fresh funds due to
COVID-19 crisis.
Earlier Tata’s were watching to express their interest in Air
India through its joint venture with Singapore Airlines, Vistara.
However, Singapore Airlines apparently was not keen on
joining the privatisation programme of the struggling airline
Air India.
Getting a grip of Air India will give the Tata Group and
SpiceJet a strong domestic existence, with the second-highest
market share by far, after IndiGo.
Vistara can fasten up on network experience if it buys Air
India’s processes and can pull its image of being an ambitious
airline. If the Tata group acquires Air India, it could pave the
way for an alliance in the aviation segment. Tata Sons holds a
51% stake in Vistara and a widely held stake in AirAsia India.
Air India, AirAsia, and Vistara reported a joint domestic market
share of 22.9% in October.
This transaction could make Tatas the second-largest player in
the segment after IndiGo, which relishes a market share of
55.5%. Nevertheless, the Tatas would have to first streamline
structures with partners in prevailing airlines.
For Tatas, Air India's purchase can be rewarding; it gets
proficient and skilled staff of the airline and its ground handling
division, main domestic and international airport slots, market
share and the likelihood of driving collaborations among the
national carrier and its current airlines - LCC AirAsia India and
FSC Vistara.
-Khuzaima Banatwala
(Section - Q)
 WHAT IS BRAND INDIA MISSION? metros, bus tickets, cab fares that permit automatic speedy
cashless payments thus reducing waiting time, traffic
With the current & continuing conflict with China, India has congestion and transit time. These transactions are faster and
moved to “Self-reliant India” or “Self-sufficient India”, a policy help as queue buster than a normal card deal.
articulated by Prime Minister of India, Narendra Modi for
making India "a bigger and more significant part of the RBI also permitted a preliminary test on the retail offline
worldwide economy", is following policies that are effective, transaction. This facility is stretched for retail stores as they also
modest and strong, and being self-sufficient and self-generating. face issues of internet connectivity particularly retailers in
remote areas and stores which are located in underground
With this comes “Brand India” Mission, put forth by the rooms, they can’t take complete benefit of digital transaction.
Commerce & Industry ministry led by Piyush Goyal. Among the
leading associations working on Brand India mission, one of the So, to solve this, providing an option of offline payments will
associations is India Brand Equity Foundation (IBEF), an have a tendency to enhance the usage of digital transactions.
initiative of the Ministry of Commerce & Industry. IBEF objects This facility will assist merchants as it cuts physical payment
to presenting India’s business perception and getting leverage in time to “tap and go” mode and its fast acceptance structure
the universal market. eases payments.
What is Brand India Mission? If the acceptance of RuPay infrastructure rises exponentially,
it will result in quick on-boarding of merchants and customers
Brand India Mission focuses on the advancement of the quality across the nation in diverse topographies and with this, the
of products that are mass-produced in India. The foremost goal customers are anticipated to experience a new level of
behind Brand India Mission is to boost local production and protection, convenience and safety with the newest decision to
encourage the quality of the goods produced. Under this mission lift the transaction cap on contactless payments.
a tag would be offered to the goods that will be manufactured in
India. In order to receive this tag, there are few guidelines which NPCI states that the RuPay contactless offline characteristic
are given as, will not only improve the ecosystem of digital payments but
also help to achieve the dream of a less-cash economy.
The manufactured goods should conform to the health and safety
standards of the country. -Jattin Jacob
(Section-H)
The manufactured goods should have at least 20% of input from
the local market.
SEBI’S ACTIONS TO ENCOURAGE START-UPS
The establishments must have headquarters in India. IN INDIA
By fulfilling the above-stated conditions, a Made in India tag Securities and Exchange Board of India (SEBI) has proposed
would be offered, which will support India to demonstrate its nine changes in Innovators Growth Platform (IGP) agenda
leadership skills & quality of goods that will be produced in based on inputs from start-ups and revised the regulations
India. anticipated earlier in 2019 with the aim of reassuring start-ups.
Brand India mission will be helpful in the upliftment of the It plans to increase the maximum investment to Rs. 10 crores
economic growth of the country, generating employment from Rs. 5 crores by the source of angel funding in venture
opportunities & increasing the amounts of exports. capital events. This act of SEBI was to provide an edge and to
Its preliminary emphasis will be on the tire & rubber industry. support a premature start-up ecosystem after the collapse of the
With more sectors & industries being recognized by the industry Indian economy.
experts, they aim at achieving Rs. 200 lakh crores worth of In order to attain a sense of balance with the fast-changing
manufacturing in the following 10 years. environment, SEBI desires to provide opportunities to angel
-Raj Gudhka funding as venture capital in angel funds is invested in higher
(Section-A) amounts for the start-ups than any other source of funding
does.
NPCI'S EFFORTS TO STRENGTHEN
The maximum period for accepting funds from an angel
CONTACTLESS OFFLINE PAYMENTS
investor is revised to five years from the current period of three
years. The increase in tenure is to make available more time to
The National Payments Corporation of India (NPCI) has angel funds for suitable analysis and finding the best prospects
announced RuPay contactless feature to enable seamless day-to- to invest in venture capital firms.
day retail transactions, with a replenishable wallet feature where
customers can stock money to safeguard quick and continuous Apart from this, SEBI also plans to provide an option to start-
transactions. ups which are listed with the dispersal of cash benefits either
in form of dividend or interest either directly or through the
This characteristic will eradicate the problems which were met registrar to an issue and share transfer agents which were
by poor internet connection at the Point of sale (POS) machine restricted in the existing system.
or during any online contact.
The pre-issue shareholding may be reviewed to the entire 25
The offline wallet of the RuPay National Common Mobility Card % of the pre-issue capital mandatory for meeting admissibility
(NCMC) is used to make transit ticket payments like condition standards.
Among other variations suggested, permitting issuer companies
in search of listing under IGP to be permitted to issue differential
voting rights or superior voting rights to promoters or founders.
Also, the stipulation of Qualified Institutional Buyers (QIBs) to
hold at least 75 % of the total issued capital.
To ease innovation and improved reach to more investors at a
faster pace, SEBI has planned to take the above steps to
encourage start-ups in India.
-Sanjana Shah
(Section - E)
WHY IS CO-LENDING TRENDING IN
INDIA?
The Reserve Bank of India has come out with a Co-Lending
Model (CLM) scheme. Under this scheme, banks can give loans
along with Non-Banking Financial Companies (NBFCs) to
priority sector borrowers created on a prior agreement.
Under Co-Lending Model (CLM) scheme, banks will be
allowed to co-lend with all the registered NBFCs including
Housing Finance Companies (HFCs) based on a prior
agreement. RBI also mentioned that the co-lending banks will
be accountable for each of their share of the individual loans on
a continuous basis in their corresponding books.
The key concentration of CLM is to recover the flow of credit to
the unserved and underserved sectors of the economy and make
funds accessible to the ultimate recipient at a reasonable cost.
This CLM has been worked out taking care of the lesser cost.
The co-lending of loans offers an exceptional opportunity for
formal lenders like banks, NBFCs and HFCs to come together
and enter into a plan where risks and rewards are shared by all
parties of the co-lending contract. The co-lending of loans
supports all stakeholders of the lending system. While NBFCs
and HFCs have a wide existence in local markets, the
commercial banks are rich with funds for lending purposes.
The additional benefit of this co-lending of loans is that NBFCs
and HFCs have grasped the art of finding out affluence of certain
exclusive target customer segments, which the banks have been
circumventing due to differences in their core target segment and
credit risk management style.
In the opinion of the above advantages, co-lending is trending
in India. The big banks like State Bank of India and Bank of
Baroda have by now knotted with some foremost NBFCs across
the country.
-Rhea Pinto
(Section - Q)
FINANCIAL PRODUCT OF THE MONTH
INFLATION LINKED BONDS
Inflation linked bonds are those bonds where the principal is
indexed to inflation. They are also known as Daily Inflation-
Indexed Bonds or Linkers. The first inflation bond was issued
by Massachusetts Bay Company in 1780 but these bonds have
grown in popularity only in recent years. International debt
market comprised of roughly 3.1 trillion dollars government-
issued inflation linked bonds as of 2019.
The UK, USA and France are the maximum issuers of these
bonds. The most liquid instruments are Treasury Inflation-
Protected Securities (TIPS), a type of US Treasury security,
which has an issuing of nearly 500 billion dollars.
Inflation has an enormous effect on fixed-income
investments. During inflation, there is a drop in the purchasing
power as well as the real returns. Inflation-linked bonds rise
their real income during inflation so that they can windbreak
against inflation risk.
The bond’s principal and interest payments are associated
with nationwide recognized inflation measures. This measure
varies from country to country, in the UK it is Retail Index
Price (RPI) whereas in the USA and India it is Consumer Price
Index (CPI). This means any surge in the price level will lead
to rise in the principal value of bonds.
These bonds pay interest that is equivalent to the product of
principal amount and the nominal coupon rate. In some bonds
the basic principle of the bond increases with the same coupon
rate which in due course leads to increased income.
For instance, the coupon rate is 10% and the principal value
of the bond is 100. But if the inflation index rises by 15% then
the principal value will be 115, which will lead the interest to
rise from 10 to 11.5.Every investor is exposed to inflation and
should have some amount of inflation protection. Thus,
inflation-linked bonds play a significant role in hedging
compared to inflation.
-Raveena Batreja
(Section - Q)
GLOSSARY
Gig Economy: A gig economy is a free market system in
which temporary positions are common and organizations
hire independent workers for short-term commitments. The
term "gig" is a slang word for a job that lasts a specified
period of time; it is typically used by musicians.
Geopolitical: Topics of geopolitics include relations between
the interests of international political actors focused within an
area, space, or a geographical element, relations which create
a geopolitical system.
Bilateral trade: Bilateral trade is the exchange of goods
between two nations promoting trade and investment. The
two countries will reduce or eliminate tariffs, import quotas,
export restraints, and other trade barriers to
encourage trade and investment.
FPI: Foreign portfolio investment (FPI) involves holding
financial assets from a country outside of the investor's own.
FPI holdings can include stocks, ADRs, GDRs, bonds,
mutual funds, and exchange-traded funds.
G-sec: A Government Security (G-Sec) is a tradable
instrument issued by the Central Government or the State
Governments. It acknowledges the Government’s debt
obligation. Such securities are short term or long term.
G-Secs carry practically no risk of default and, hence, are called KONFLUX 2021 “UJWAL”
risk-free gilt-edged instruments.

Coupon rate: The coupon rate is the rate of interest paid by bond
issuers on the bond's face value. It is the periodic rate of interest
paid by bond issuers to its purchasers. The coupon rate is
calculated on the bond's face value (or par value), not on the issue
price or market value.
Co- lending: Co-lending occurs when two lender firms come
together to disburse loans. The association allows firms to source
clients, perform credit appraisals, and disburse a small part of the
loan amount. Simultaneously, the arrangement enables a bank
to lend out more funds.
-Vidhi Morvadiya
(Section-F)
QUIZ
1.Which bankruptcy is one of the biggest bankruptcies
in U.S history?
2.In which year was the reverse mortgage introduced in
India? –
3.What is the amount of stimulus package signed by the
US President to support the economy?
4.From which index were the Chinese companies
delisted?
5.What does FAR stand for?
ANSWERS
KAUTILYA PRESEENTS
“FINOVATION”
All that you need to know about Finovation:
Goods things come in a packet of three. Finovation is
here to enhance your financial knowledge in a way that
every bug pays off!
Finovation- where finance meets innovation. A set of
events where we test both your skill and the power of
your will. Get ready to enhance your skill in finance,
we are here to test you and see if you would survive
the battle of great minds.
The events of Finovation are,
Mock Stock: Do you consider yourself a stock market
expert? Well, here is your chance to prove it. Mind
Over matter; where you all can participate in the
biggest game of luck, speculation and strategies. It is a
real time simulation of market trading. Investing is
Interesting, so stay interested, invested and involved
for 3 days of online trading on Finlatics. You trade,
you prosper, you excel. We are calling out all the stock
market enthusiasts to come along and get lost in the
market of bulls and bears.
Finquiz: Bring your grey cells to the party. A quiz
game of questions and answers based on finance,
economics and accounts. Are you ready? Check,
chase, chill and win. Get ready for a roller coaster ride
into the intense world of Quizzing.

1. Enron’s Multi-Bagger: ‘Price is what you pay; value is

2. 2007 what you get.’ Whether we’re talking about socks or
3. $900 Billion stocks, I like buying quality merchandise when it is
4. NYSE marked down. The event will touch your presentation
5. Fully Accessible Route skills and ability to identify a superstar-in-the-
making wherein the team would exhibit a Multi-
- Kritika Dhiman
Bagger stock in front of the panel.
(Section J)

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