Insights

The Power of Compounding through Financial assets

“Compound Interest is the eighth wonder of the world.” – Albert Einstein

When you save or invest your money early, the returns you earn don’t just sit there; they make more money over time. It’s like a snowball rolling downhill, getting bigger as it goes. So, the sooner you start, the more time your money has to grow. That’s why it’s crucial to understand and use the power of compounding to build your wealth for the future. The earlier you begin, the more wealthier you’ll be!”

Image Source: Freepik

For example, – if you invest 15,000 every month at 15%  CAGR, you will end up with 1 crore at the end of 15 years.

-If you invested $1,000 in Apple stock 20 years ago, it would today be worth more than $600,000.

– If an investor had invested 1 lakh in Kotak Mahindra stock 20 years ago, its 1 lakh would have turned to 10.11 crore today provided the investor had remained invested in this stock throughout this period of two decades.

This is the power of compounding and with better investment approaches you can even achieve a better CAGR.

Now, let’s explore how you can potentially double your money at various time frames using a range of financial investments.

Annual growth required to double your money

Years

CAGR (%)

Possible Avenues

Risk Level

3

26

Select Small cap & Mid cap Equity Solutions

Select Private Equity Investments

High Risk

5

14.9

Select Mid- Cap & Large Caps Equity Solutions,

Private Equity Investments

Moderate to High Risk

7

10.4

Select Large-Cap equity solutions,

select Corporate Bonds,

Fixed Income AIFs

REITS, Corporate NCDs

Moderate Risk

10

7.2

Government Bonds,

Debt Mutual Funds

Fixed Deposits

REITS

Low Risk

Equity Solutions include:

1) Direct Stocks
2) Mutual Funds
3) AIFs and PMS

Private Equity Investments include

1) Direct
2) AIFs
3) Pre-IPO shares

Now, let’s explore how you can potentially grow your money fivefold at various time frames using a range of financial investments.

Annual Growth Required to multiply Your Money Fivefold (5x)

Years

CAGR (%)


Possible Avenues

Risk Level

3

71

Select Small-Cap Equity Solutions,
Select Seed/ Series A Private Equity Solutions

Very High Risk

5

37.7

Select Small & Mid-Cap Equity Solutions,
Select Series B / Series C Private Equity

Very High Risk

7

25.8

Select Mid & Large-Cap Equity Solutions,
Sector Specific Equity Solutions

High Risk

10

17.5

Select Large Cap Equity Solutions,
REITS

Moderate to High Risk

Equity Solutions include:

1) Direct Stocks
2) Mutual Funds
3) AIFs and PMS

Private Equity Solutions include,

1) Direct Startup Investing
2) AIFs
3) Pre-IPO shares

Finally, let’s explore how you can potentially grow your money tenfold at various time frames using a range of financial investments.

Annual Growth Required to multiply Your Money Tenfold (10x)

Years

CAGR (%)


Possible Avenues

Risk Level

3

115.9

Select Pre-Seed/ Seed Stage Private Equity Solutions

Ultra - High Risk

5

58.5

Select Private Equity (Seed & Series A) &
Select Small Cap Equity Solutions

Very High Risk

7

38.9

Private Equity Investments (Series A),
Select Mid-Cap Equity Solutions,

High Risk

10

25.9

Select Mid Cap Equity Solutions
Sector Specific Equity Solutions

High Risk

Equity Solutions include:

1) Direct Stocks
2) Mutual Funds
3) AIFs and PMS

Private Equity Solutions include,

1) Direct Startup Investing
2) AIFs
3) Pre-IPO shares

Please note:

AIF – Alternative Investment Funds
PMS – Portfolio Management Services
REITS – Real estate investment trusts

Risk: What It Means in Investing, How to Measure and Manage It

Conclusion:

When you’re on the path to building wealth through the power of compounding, it’s vital to find the right balance between risk and reward. The potential for growth is exciting, but it’s essential to understand that higher returns usually come with higher risks. As we’ve seen in the examples above, achieving a good growth rate can help your wealth grow significantly, but it requires a consistent and well-thought-out investment strategy. Don’t forget to diversify your investments and consider your comfort level with risk when aiming to double, quintuple, or even increase your wealth tenfold.

Economy & Market, Insights

Market Recap – Weekly Update (September 9, 2023)

Market Recap: Weekly Update

(September 9, 2023)

YTD refers the Returns from January 1, 2023 till September 8, 2023

Weekly Change

YTD

Nifty
19,819.85

1.57%

INR - 9.47%
USD - 9.1%

Sensex
66,598.91

1.69%

INR - 9.46%
USD - 9.09%

Bank Nifty
45,156.40

1.39%

INR - 5.05%
USD - 4.69%

NASDAQ 100
15,280.23

-2.06%

39.68%

S&P 500
4,457.49

-1.61%

16.1%

Index Valuation and Earning

Index

P/E Ratio

EPS

Nifty 50

22.4

885.2

Nifty Bank

16.4

2755.1

Nifty Financial Services

18.6

1084.4

Nifty IT

27.3

1189.1

Nifty Auto

25.5

632.5

Nifty FMCG

43.1

1201.1

Nifty Healthcare

36.4

264.6

Nifty Pharma

32.2

473.9

Nifty Consumer Durables

65

455.3

Exchange Rates, Brent Crude & Gold


Closing Price

Weekly Change

USD/INR

83.12

0.47%

EUR/INR

89.09

-0.27%

EUR/USD

1.07

-0.72%

Brent Crude

89.82

3.95%

Gold (USD/OZ)

1,919.16

1.07%

Gold (INR/10G)

24 caret

60,955

Delhi

0.37%

FII and DII Weekly Trading Data

FII

Gross Purchases

103,415

Gross Sales

121,570

Net Purchases / Sales

18,154

DII

Gross Purchases

100,434

Gross Sales

88,995

Net Purchases / Sales

11,439

 

Key Market Updates
  • The top five Nifty 50 weekly gainers were Coal India (19.08%), L&T (7.38%), HCL Tech (6.43%), BPCL(5.16%), and NTPC (4.14%).
  • The top Nifty 50 weekly losers were M&M (1.53%), Axis Bank (1.09%), Eicher Motors (0.87%), Asian Paints (0.66%), and Nestle India (0.15%).
  • Oil prices spiked as Saudi Arabia, Russia extended 1.3M barrel a day oil cut through December.
  • Nvidia Corp. on Friday announced separate partnerships with Reliance and Tata group companies to help them develop AI-powered supercomputers, AI clouds and generative AI applications.
  • Uday Kotak resigns as CEO, MD of Kotak Mahindra bank.

 

Startup Updates
  • Online furniture seller Pepperfry raised $23 million in a fresh round from existing investors, institutions, and family offices.
  • Electric mobility startup Ather Energy raised Rs 900 crore via a rights issue from its existing shareholders—Hero MotoCorp and Singapore’s GIC.
  • B2B fish and seafood startup Captain Fresh raised $20 million as part of an extended Series C round led by Japan-based SBI Investment and Evolvence Capital.
  • IPO-bound Ola Electric raises $140M from Temasek and others.
  • Munters signs an agreement to acquire ZECO and strengthens its market position in India.

 

Check the last week Market update here: Market Recap (September 2, 2023)

Subscribe to our newsletter and follow us on InstagramFacebook, and LinkedIn to get the weekly update.

Cover Image Source: Freepik
Economy & Market, Insights

India’s Growing Economy and Its Future on the Global Stage

India’s Growing Economy and Its Future on the Global Stage

Introduction:

India has witnessed a remarkable economic transformation over the years, and it’s important to understand how this journey has unfolded. Let’s delve into the key aspects of India’s economic growth story.

Economic Transformation: A Surging Economy

India’s economy has experienced impressive growth, surging from $0.3 trillion in 1991 to a substantial $3.7 trillion. This significant expansion in GDP has also translated into a nine-fold increase in per capita income, benefiting millions of Indians.

India GDP (1991 – 2023), Image Source: IMF

Exports Soaring High

India’s exports have skyrocketed, increasing a staggering 43 times. This reflects India’s enhanced competitiveness in the global market. Additionally, the country’s foreign exchange reserves have multiplied by a remarkable factor of 496, indicating a robust and stable economy.

Stock Market Success

India’s stock market performance is another success story, with the Sensex surging by 31 times. These achievements highlight India’s consistent growth in GDP, outpacing many developed nations.

India’s Position on the Global Stage:
Attractive Investment Destination

India’s thriving economic growth has made it an attractive investment destination and a significant global player. The country boasts a robust domestic-driven economy, demonstrating resilience even in the face of global uncertainties.

A Youthful Demographic Advantage

India’s favorable demographic profile, with a majority of the population under the age of 35, supports a vast consumer market and a skilled labor force. Coupled with a high saving rate and rising per capita income, this sets the stage for continued economic growth driven by increased consumption.

Stable Political Environment

India’s stable political climate, marked by a prolonged period of relative stability, enhances its appeal as an investment destination. The government’s pragmatic approach to policy reforms contributes to a favorable environment for investors.

Macroeconomic Strength

Solid macroeconomic conditions, including robust forex reserves, controlled inflation, and a stable currency, instill confidence in foreign investors. Additionally, the central bank’s clear stance on interest rate management adds to India’s attractiveness as an investment hub.

India’s Rising Wealth:
  • India’s middle class is set to emerge as its largest group by 2047 and also contributes the most to the nation’s income.
  • India is home to the third-highest number of billionaires in the world, with a collective net worth of approximately 675 billion dollars.
  • The growing aspirations of common people, including millennials and Gen Z, contribute to the growth of the luxury market in India.
  • The middle-class population is estimated to reach 102 crore out of the projected total population of 166 crore in 2047, constituting approximately 61 per cent. In contrast, the middle-class population stood at 43.2 crore in 2021.

Manufacturing Capabilities: A Global Alternative

India emerges as an appealing alternative for manufacturing, offering lower labor costs compared to other countries. Diverse sectors such as automobiles, electronics, pharmaceuticals, textiles, and renewable energy showcase India’s robust manufacturing capabilities. Government initiatives like ‘Make in India,’ the ‘China+1’ strategy, and the Production Linked Incentive scheme aim to bolster manufacturing.

Service-Based Industries and Tech Advancements:

India is a hub for service-based industries, offering offshore support to global clients. With a growing number of internet users, India’s talented young workforce enables the delivery of high-value services worldwide. The adoption of digital transactions, such as the Unified Payments Interface (UPI), has driven fintech solutions, financial risk management services, and insurance offerings, expanding India’s influence in the service sector.

The Startup Culture and Innovation:

India’s startup ecosystem has seen rapid growth, boasting numerous successful startups. Initiatives like ‘Startup India’ have cultivated an environment conducive to startups, making India one of the top destinations globally. The government’s focus on innovation-driven sectors supports entrepreneurs and contributes to economic growth.

Conclusion: India’s Global Ascent

In conclusion, India’s remarkable economic growth, expanding manufacturing capabilities, stable political environment, and thriving startups position it as a prominent player in the global economy. With inclusive growth, sustainable development, and technological advancement, India is well-prepared to face future challenges and seize opportunities. Investors worldwide can view India as a promising destination with abundant potential for growth and prosperity. As India continues to strengthen its global presence, it is poised to become a significant pillar of the world economy.

Author: SNIGDHA PARASHAR 

Read More About Understanding asset classes: Key to smart investing

 

Financial Products, Insights

Golden Returns: Earn Interest and Capital Appreciation with Sovereign Gold Bonds

Sovereign Gold Bonds (SGBs) are government-issued securities that are denominated in grams of gold. As such, they provide a secure way to invest in gold, with the added benefit of offering potential capital gains alongside annual interest. Furthermore, SGBs also contribute to diversifying your investment portfolio.

Image Source: Zerodha

Key features:
  • Issued by RBI:

The Reserve Bank of India issues SGBs, ensuring a secure investment option.

  • Denominated in Grams:

These bonds use grams of gold to measure how much gold you have, so you can know exactly how much you own.

  • Fixed Interest Rate:

SGBs offer a steady 2.5% interest rate, providing stable income.

  • Tenor and Redemption:

SGBs have an eight-year tenor and permit premature redemption after the fifth year, exercisable on the interest payment date.

  • Redemption Options:

SGBs offer redemption in cash or physical gold, granting flexibility to investors.

 

SGB Issuance Dates:

SGBs are issued in tranches, and each tranche has a different maturity period.
The subscription period for the next tranche is between September 11 and September 15, 2023, and it will be issued on September 20.
Additionally, people who want to immediately purchase it can do so through the secondary market

 

Taxation of SGBs:
  • Interest Income:

Taxation of the 2.5% interest income aligns with the individual’s income tax slab, with no TDS applied.

  • Capital Gains:

When selling SGBs in the secondary market, capital gains taxes apply.
Sale within three years classify as Short-Term Capital Gains (STCG) and are taxed per the individual’s slab.
However, if you hold onto them beyond three years, it falls under Long-Term Capital Gains (LTCG), subject to a 20% rate with the added benefit of indexation.
Notably, it’s essential to remember that redeeming with the RBI after five years incurs no capital gains tax.

  • GST and STT:

Moreover, it’s worth mentioning that neither Goods and Services Tax (GST) nor Securities Transaction Tax (STT) apply to SGBs. This further enhances the tax efficiency for your investments.

 

Additional Information:
  • Minimum Investment: Accessible to a wide range of investors, the minimum investment in SGBs is just one gram of gold.
  • Maximum Investment: Investors may purchase up to 4 kg of gold per person per fiscal year through SGBs.
  • Interest Payment: SGBs pay interest semi-annually, ensuring regular income for investors.

Image Source: TRCapital

 

 

Conclusion:

SGBs are a safe and secure way to invest in gold. Moreover, they offer the potential for capital gains, and they are also an excellent way to diversify your investment portfolio. Therefore, if you are looking for a way to invest in gold, SGBs are a good option to consider.

You can invest in Sovereign Gold Bonds with our partner, Zerodha.

You can signup with Zerodha here –> Sign up Here

Read more about Investment Avenues for NRIs 

 

Economy & Market, Insights

Market Recap – Weekly Update (September 2, 2023)

Market Recap: Weekly Update

(September 2, 2023)

YTD refers the Returns from January 1, 2023 till September 1, 2023

Weekly Change

YTD

Nifty
19,435.30

0.86%

INR - 7.35%
USD - 7.5%

Sensex
65,387.16

0.77%

INR - 7.47%
USD - 7.62%

Bank Nifty
44,436.10

0.48%

INR - 3.37%
USD - 3.52%

NASDAQ 100
15,490.86

3.03%

42.61%

S&P 500
4,515.77

2.03%

18.09%

Index Valuation and Earning

Index

P/E Ratio

EPS

Nifty 50

22.2

876.6

Nifty Bank

16.1

2754.9

Nifty Financial Services

18.2

1084.8

Nifty IT

26.5

1188.8

Nifty Auto

25.2

632.6

Nifty FMCG

42.7

1199.2

Nifty Healthcare

35.6

264.6

Nifty Pharma

31.7

474

Nifty Consumer Durables

63.2

455.3

Exchange Rates, Brent Crude & Gold

Closing Price

Weekly Change

USD/INR

82.72

0.2%

EUR/INR

89.32

0.24%

EUR/USD

1.08

-0.01%

Brent Crude

88.16

5.3%

Gold (USD/OZ)

1,939.85

1.34%

Gold (INR/10G)

24 caret

61,135

Delhi

1.1%

FII and DII Weekly Trading Data

FII

Gross Purchases

93,847

Gross Sales

-98,160

Net Purchases / Sales

-4,313

DII

Gross Purchases

41,066.66

Gross Sales

-32,510.67

Net Purchases / Sales

8,495.99

 

Key Market Updates
  • India’s Q1 GDP growth rises to one-year high of 7.8%
  • India’s manufacturing PMI jumps to 58.6 in August, hits 3-month high.
  • P&G Hygiene and Health profit jumps over 3-fold to Rs 151 cr in Jun qtr. Revenue from operations stood at Rs 852.53 crore.
  • Gillette India June quarter PAT up 36% to Rs 92 cr.Revenue from operations increased 12.03% to Rs 619.44 .
  • UBS posts massive profit of $29 bn in second quarter after Credit Suisse takeover.

 

PE/VC, M&A Deals
  • Fintech startup CredRight raised Rs 78 crore (about $9.7 million) in equity and debt from the Michael & Susan Dell Foundation, YourNest, Spearhead Capital, and 9Unicorns.
  • MediBuddy, a digital healthcare platform, has raised an additional $18 million in funding from its existing investors—Quadria Capital, Lightrock, and TEAMFund.
  • Spacetech startup SatSure raised $15 million from Baring Private Equity Partners India, Prosmus Ventures, Force Ventures, Luckbox Ventures, and IndigoEdge Advisors.
  • Sales technology platform Apollo.io turns unicorn after raising $100m led by Bain Capital.
  • Schaeffler India acquires automotive e-commerce platform Koovers for Rs 142.4 crore

 

Check the last week Market update here: Market Recap (August 26, 2023)

Subscribe to our newsletter and follow us on InstagramFacebook, and LinkedIn to get the weekly update.

Cover Image Source: Freepik
Financial Products, Insights

Investment Avenues for NRIs -Part 2

In PART 1 we covered fixed income Investments and some of the Equity Solutions. In this article we will look at the rest of the equity solutions and some of the Alternative Investments.

Equity Solutions

3. Initial Public Offerings (IPOs)

Image Source: Freepik

NRIs can participate in IPOs of Indian companies, allowing them to purchase shares during the company’s initial listing on the stock exchange.

 

4. Pre-IPO shares

Image Source: Freepik

Obtaining shares of a company before it becomes publicly traded, typically in an over-the-counter manner.

Alternative investments

1. AIF

Alternative Investment Funds (AIFs) predominantly serve High Net Worth Individuals (HNIs) and Ultra High Net Worth Individuals (Ultra HNIs), with the goal of consistently outperforming both the index and mutual funds in India. Managed by SEBI-regulated fund managers renowned for their impressive track records, these funds are classified into three types:

Category I AIFs

Invest in startup/early stage ventures, social ventures, SMEs, infrastructure, etc.

Includes venture capital funds, SME Funds, social venture funds, infrastructure funds.

Category II AIFs

Not in Category I or III, no significant leverage or borrowing.

May include real estate funds, private equity funds, distressed asset funds.

Category III AIFs

Employ diverse/trading strategies, may use leverage through derivatives.

INR AIF Funds cover public equity, private equity, real estate, and fixed-income etc. requiring a 3-year lock-in and INR 1 Crore capital.

USD AIF Funds offer offshore opportunities, mainly open-ended from Singapore, Mauritius, and GIFT City, with a $100k minimum investment.

2. Portfolio Management Services

Personalized investment strategies managed by SEBI registered professionals in the client’s own trading account, generating market-beating profits. Four key variants of PMS are explained below:

Active Portfolio Management

Aims to beat the market through active decisions; high-risk, high-return; pricey fees; manager-dependent; volatile.

Passive Portfolio Management

Follows market indices; low-cost, steady gains; for long-term investors; risk of stagnation; lacks market-beating potential.

Discretionary Portfolio Management

Manager controls investments; expert-driven; no stress for clients; higher costs; loss if manager makes error.

Non-Discretionary Management

Clients decide, manager advises; control retained; risk of uninformed moves leading to significant losses; access to expert guidance.

 

3. REITS (Real Estate Investment Trust)

REITs are companies that own and manage real estate properties, distributing rental income to investors as dividends, allowing both big and small investors to benefit from real estate ownership and dividend income. Properties in REITs include data centers, healthcare units, and more.

4. Startup Investments:

Image Source: Freepik

Startup investing involves providing funds to new and promising companies at an early stage, aiming to support their growth and potentially earn high returns. Investors become part-owners and share in the startup’s success and challenges.

Investors can invest in startups from Pre-seed stage to Series B and beyond.

Conclusion

To sum up, these are the ways NRIs can invest to make money. Each way has its own risks and rewards, and NRIs can pick the one that matches what they want to achieve with their money.

Author: Kevin Jose

To invest in India, reach out to us here –> Contact US

Financial Products, Insights

Investment Avenues for NRIs -Part 1

Image Source: Freepik

For NRIs seeking to nurture their financial growth, a plethora of investment opportunities are available especially in India. India’s flourishing economy makes it an appealing destination for investments that align with its growth trajectory. The following diverse range of options empowers NRIs to actively participate in and benefit from India’s ongoing growth story.

Fixed Income Investments

1. NRI Fixed Deposits:

NRIs have the opportunity to invest in fixed deposits through three distinct accounts: NRE, NRO, and FCNR. It’s important to note that each of these accounts comes with its own set of benefits and drawbacks. This variety empowers NRIs to make informed decisions based on their individual preferences.

Account Type

Features

NRE Savings Account & Fixed Deposit Account

NRE accounts are used to deposit or save foreign earnings in Indian currency. 

NRO Savings Account & Fixed Deposit Account

NRO accounts are used to manage and save Indian earnings that are made in Indian currency.

FCNR Fixed Deposit Account

FCNR accounts can be used to deposit or save foreign currency earnings in any of the currencies that the RBI has approved. 

2. Some of the other fixed income investment options are:

Government Bonds,
Corporate Bonds,
Money market instruments,
Debt Mutual Funds,
Pension Funds etc.

 

Equity Solutions

1. Direct Equity

NRIs can use a Portfolio Investment Scheme (PIS) to directly invest in the Indian stock market. This RBI-regulated requirement involves opening a PIS account with an authorized bank, serving as a link for stock transactions. This enables NRIs to trade shares of Indian companies on recognized exchanges while staying compliant with regulations and reporting. Indian Equity is subdivided as follows:

Sub Category

Market Cap

Associated Risk

Large Cap

Rs. 20,000 crores or above

Comparatively Low

Mid Cap

Rs 5,000 crore and less than Rs 20,000

Medium

Small Cap

Below Rs 5,000 crore

High

Image Source: Freepik

2. Mutual Funds

A mutual fund is like a big pot where many people put their money together. This money is used to buy different things like stocks and bonds. This helps people who don’t want to pick individual stocks or bonds, but still want their money to grow. Mutual funds are of various types:

Structure of Mutual Funds

Open-ended funds

These funds allow buying or selling units anytime.

Close-ended funds

These funds cab be bought and sold during a specific period only.

Asset Classes

Equity funds

Large-Cap, Mid-Cap, Small-Cap company shares etc.

Hybrid funds

Invest in both debt and equity.

Solution-oriented funds

For specific goals like education or retirement.

Other funds

Index funds, Fund of funds etc.

Investment Goals

Tax-saving Funds (ELSS)

Invest in company securities, eligible for tax deductions.

Capital protection funds

Partly invest in fixed income, partly in equities.

Growth funds

Invest in high-performing stocks for capital appreciation.

Liquidity-based funds

Ultra-short-term and liquid funds, are ideal for short-term goals.

Learn more about other Investment Avenues in Part -2

Economy & Market, Insights

Understanding asset classes: Key to smart investing

Introduction:

When it comes to investing, gaining a deep understanding of the various types of asset classes available in the market becomes crucial. This is vital for constructing a diverse portfolio that aligns with your financial goals. Moreover, each distinct asset class carries its own unique set of features, associated risks, and potential returns. In the following article, we will take a comprehensive dive into the different asset classes.

Fixed Income Instruments:

Fixed income investments are known for their stabile income.

  • Steady Income:

    Investors receive regular interest payments, ensuring a consistent cash flow.

  • Fixed income investments are of two types : government and non-government securities.
  • Risk: These investments are often backed by collateral or securitized with future cash flows, reducing the risk of default. Government based fixed income investments are more secure due to Sovereign guarantee.

 

Image Source: Freepik

Equity: 

Equity investments involve owning a share in a company, signifying partial ownership. This category covers both public and private equity.

Ownership and Public Accessibility based categories:

Category

Description

Public Equity

Stocks listed on stock exchanges.

Private Equity

Shares of privately held companies are not easily available in the market. (Less Liquidity)

Market Capitalization-based Categories:

Sub Category

Market Cap

Associated Risk

Large Cap

Rs. 20,000 crores or above

Comparatively Low

Mid Cap

Rs 5,000 crore and less than Rs 20,000

Medium

Small Cap

Below Rs 5,000 crore

High


Property:

Property investments offer the potential for rental income and value appreciation. Residential properties encompass land, apartments, flats, and villas.

Property Type

Description

Residential

Includes land, apartments, flats, villas. etc

Commercial

Includes office spaces, retail outlets, warehouses etc

Agricultural

Agricultural land

Precious Metals:

Investing in precious metals may act as a buffer against inflation and economic uncertainty. Examples include Gold, Silver, Platinum, and Diamond. Historically, these metals, especially Gold, have retained their value over time.

Image Source: Freepik

Luxury Collectibles:

Luxury collectibles present distinctive investment opportunities that merge personal passion with potential profit.

  • Distinct Value:

    Collectibles hold unique value, often appreciating due to their rarity and high demand.

  • Passion Investments:

    Investing in items of personal interest can offer both financial and emotional satisfaction.

  • Market Trends:

    The value of collectibles can shift due to changing trends and cultural shifts.

Type

Description

Art

Valuable artwork that can appreciate in value.

Watches

Collectible timepieces that retain or increase in value.

Vintage Items

Rare and unique items that appeal to collectors.

Antiques

Valuable antique items with historical significance.

Stud Farm

Luxury equine breeding facility for potential profits.

Conclusion:

Understanding these asset classes, their risks, and potential benefits is crucial for making well-informed investment decisions. This knowledge empowers you to craft a balanced portfolio in line with your financial aims and risk tolerance.

Checkout the various Investment avenues for NRIs here: NRIs Investment Avenues

Indian Stocks, Insights

Federal Bank : Gearing Up for Wider Expansion and Growth

In India’s banking landscape, Federal Bank has consistently demonstrated a stable trajectory marked by growth, innovation, and unwavering resilience. Originated in Kerala, the bank’s ambitious expansion strategies spans across the nation, as it strives to solidify its dominance within the banking industry. The bank’s distinctive approach lies in its strategic integration of fintech partnerships and a pronounced focus on secure lending avenues, particularly in the realm of gold loans. Guided by the leadership of CEO Mr. Shyam Srinivasan, Federal Bank has not only achieved commendable financial results, but has also paved the way for sustainable future growth. With its remarkable trajectory and strategic initiatives, the bank emerges as a promising investment prospect in India’s ever-evolving banking landscape.

 

Branch distribution:

Shareholding Pattern: (June 2023)

 

Key Ratios:

Capital Adequacy Ratio – 15.77%
Net Interest Margin – 3.16%
Gross NPA – 2.8%
Net NPA – 0.96%
CASA Ratio  ~37%

 

Growth Drivers for the bank:

Aggressive Branch Expansion:

  • With a mission to expand its branch network, Federal Bank plans to open 80-100 branches annually over the next three years, focusing on Gujarat, Maharashtra, Tamil Nadu, and Karnataka.
  • This strategy aims to tap into vibrant states, attracting a wealthier customer base and diversifying its regional presence. New branches achieve rapid profitability, indicating effective management and operational efficiency.

Dominance in Remittances:

  • Federal Bank holds a 21% share in India’s ₹1,00,000 crore remittance business.
  • It’s shifting from small-ticket transactions to larger sizes, particularly targeting eastern and northern India.

Fintech Partnerships:

  • Embracing the fintech boom, the bank collaborates with major players, investing in 300-400 APIs.
  • This positions Federal Bank as a vital fintech banking platform, with a head start in renewables, infrastructure, and digital ecosystems.

NIM Improvement:

  • The bank’s Net Interest Margin (NIM) of 3.16% is projected to reach 3.30% by year-end.
  • This growth is driven by credit adjustments, book balance strategies, retail CASA growth, fintech partnerships, and an expanding gold loan portfolio.

Healthy Credit Growth:

  • Year-on-year net advances growth is 21%.
  • The bank anticipates sustaining ~18-20% credit growth for FY24, reflecting an expanding customer base and strong lending practices.

Raising New Capital:

  • Federal Bank aims to secure ₹4,000 crore through preference shares and QIP.
  • This capital will aid in its expansion, branch establishment, and potential microfinance acquisitions

Potential Subsidiary Listing:

  • FedFina, the bank’s subsidiary, actively considers listing, which can unlock value for the parent company.

Attractive Valuation:

  • Federal Bank’s appealing P/B valuation ratio of 1.35 stands out compared to peers (IDFC First – 2.33, AU Small Finance bank-4.53, IndusInd – 2.27).
Financial Performance and key ratios:

 

10 Year view:

For Federal bank, we see a 13-15% CAGR growth in book value in the next 10 years.

Reasons include the aggressive branch expansion, remittance dominance, fintech partnerships, healthy credit growth etc.

The FII stake in the bank is currently at 26% . More FII inflows are expected due to the solid performance of the bank.

Also India economy is bound to grow rapidly in the next few decades and banking is the backbone of our economy. Federal bank can will capitalize on this growth which will reflect in the books of the bank.

We estimate the stock to grow by at least 5.1  times or grow by a CAGR of at least 17.7 % in the next 10 years.

Disclaimer: This research is for informational purposes only and does not constitute investment advice. Please do your own due diligence and consult your financial advisor before making any investments.

You can invest in Stocks through Zerodha.

To open an account with Zerodha, please provide the information HERE.

Economy & Market, Insights

Market Recap – Weekly Update (August 26, 2023)

Market Recap: Weekly Update

(August 26, 2023)

YTD refers the Returns from January 1, 2023 till August 26, 2023

Weekly Change

YTD

Nifty
19,265.80

-0.5%

INR - 6.41%
USD - 6.8%

Sensex
64,886.51

-0.24%

INR - 6.65%
USD - 7.02%

Bank Nifty
44,231.45

0.62%

INR - 2.9%
USD - 3.26%

NASDAQ 100
14,941.83

1.22%

37.55%

S&P 500
4,405.71

0.58%

15.21%

Index Valuation and Earning

Index

P/E Ratio

EPS

Nifty 50

22

876.5

Nifty Bank

16.1

2754.1

Nifty Financial Services

18.2

1082.7

Nifty IT

26

1189

Nifty Auto

24.3

632.5

Nifty FMCG

43

1199.2

Nifty Healthcare

35.2

264.6

Nifty Pharma

31.7

474

Nifty Consumer Durables

61.7

455.2

Exchange Rates, Brent Crude & Gold

Closing Price

Weekly Change

USD/INR

82.55

-0.67%

EUR/INR

89.11

-1.59%

EUR/USD

1.08

-0.94%

Brent Crude

83.72

-1.1%

Gold (USD/OZ)

1,914.23

-0.03%

Gold (INR/10G)

24 caret

60,450

Delhi

-0.44%

FII and DII Weekly Trading Data

FII

Gross Purchases

50,270.75

Gross Sales

-55,166.04

Net Purchases / Sales

-4,895.29

DII

Gross Purchases

41,066.66

Gross Sales

-32,510.67

Net Purchases / Sales

8,495.99

 

Key Market Updates
  • Among the Nifty50 stocks, top gainers include Bajaj Finance Ltd, Axis Bank Ltd, Asian Paints Ltd, Bajaj Finserv Ltd, Hindalco Industries Ltd.
  • The Indian rupee appreciated against the US dollar due to a weakened dollar, positive domestic markets, and a decline in crude oil prices.
  • Procter & Gamble Health Q1 FY24 results: profit falls by 27.53% YOY.
  • USA Q2 results: 476 companies having reported (93.7% of market cap), the current estimate for Q2 2023 operating earnings per share is $55.09.72% of companies have beaten earnings estimates, and only 53% have beaten revenue expectations amidst slowing inflation.

 

PE/VC, M&A Deals
  • Education-focused fintech startup GradRight has secured Rs 50 crore ($6 million) in a Series A funding round from IvyCap Ventures.
  • Mom and baby care startup Superbottoms has secured $5 million from Lok Capital, Sharrp Ventures, DSG Consumer Partners, and Saama Capital.
  • Quick commerce startup Zepto secured a Series E funding of $200 million at a valuation of $1.4 billion from new and existing investors.
  • AI startup Kombai raised $4.5 million in a seed round led by Stellaris Venture Partners and Foundation Capital.
  • CEVA Logistics, a wholly owned unit of Marseille, France-based CMA CGM Group, which runs the world’s third biggest container line, acquired Stellar Value Chain Solutions.

 

Check the last week Market update here: Market Recap (August 23, 2023)

Subscribe to our newsletter and follow us on InstagramFacebook, and LinkedIn to get the weekly update.

1 2 3 4 5 6 7 8

Open a Demat account with

– No. 1 Broker in India
– For Indian Stocks & MFs
– For Residents & NRIs
– Flat Brokerage per Order
– Best User Experience

OPEN ACCOUNT

Start investing in

– Start-Ups with Revenue
– Early & Growth Stages
– All Sectors
– Seed Stage to Series B
– Moderate to High Risk
– 3X to 10X Potential

REGISTER NOW
Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Youtube
Consent to display content from - Youtube
Vimeo
Consent to display content from - Vimeo
Google Maps
Consent to display content from - Google
Spotify
Consent to display content from - Spotify
Sound Cloud
Consent to display content from - Sound
Cart Overview

Request a Report

We will do our best to share it within 2 working days:

For e.g. 15th March '20 to 18th March '20