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Year 2019

Education Finance Solutions Provider Meritize Appoints New COO

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Meritize’s approach to education finance is based on an individual potential to succeed not just on a credit score or similar measures, according to a statement. Despite growing interest in the potential of short term, skills based training among students, employers, and policy makers, financial access too often remains a barrier for learners who stand to benefit most. Meritize unique funding model considers more than just a credit score so that we can unlock access to educational and economic opportunity. Meritize is first chief technology officer to lead the development of the company’s technology platform by bridging the gap between job seekers, training providers, and employers, according to a statement. Meritize has shown 36 percent employee growth and recently closed a $13.2 million .Totally funding round and raised a total of $23.4 million in funding. Meritize has invented its skill based hiring and finance platform to serve more than 6,000 students and trainees participating in over 1,200 in demand training programs.

By Umair Musaib (MBA 1st Year, Finance)

Bharti Airtel world’s 3rd best telecom stock in 2019

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Airtel’s $3b fund raisings and improved free cash could mitigate the risk of AGR payments. With 55.8 per cent returns since the beginning of the year, it has become the third-best performer among the stocks of service providers and equipment makers, show data from Bloomberg. Ubiquiti Networks, a US-based wireless data communication products firm, and China-based telecom equipment provider ZTE rank as the top two telecom stocks in the world. Bharti Airtel’s stock has outperformed the Bloomberg World Telecommunication index, a capitalization weighted index of the world’s leading telecommunication stocks – by 45 per cent since the beginning of 2019. The tariff hike decision by the incumbents and Reliance Jio Infocomm’s decision to participate in the tariff hike led to a rerating of the valuation of the telcos. Investors are factoring in 40-45 per cent tariff hike for the incumbent telecom operators; but given the higher risk to spectrum debt and AGR payments, investors prefer Bharti Airtel to Vodafone Idea. Besides, Bharti Airtel’s planned $3-billion fundraisings and improved free cash could mitigate the risk of AGR payments.

By Tejas Jagnade (MBA 1st Year, Marketing)

Russia Banned from Olympics for 4 years

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As world Anti doping Agency executive committee voted unanimously to ban Russia for tampering with Anti - doping data, Russia is banned from world's top sporting events for 4years that includes next summer, winter Olympics and world cup in Qatar. This decision by WADA is a very serious blow to Russia's reputation and a disappointment for Russia's sports players. WADA's executive committee in Switzerland acted after concluding that Moscow had tampered with laboratory data by planting fake evidence and deleting files linked to positive doping tests that could have helped indentify drug cheats. The decision to punish Russia with a ban was unanimous.
- Punishments
Out of
2020 Summer Olympics
2022 winter Olympics
2022 football World Cup in Qatar
May also be stopped from hosting matches in the UEFA Euro 2020 Football championship. The entire fiasco created by Russia has cheated far too many athletes of their dreams and rightful careers, for far too long.

By Sunubia Shaikh (MBA 1st Year, Marketing)

RIL in talks with SBI, HDFC, ICICI for Rs 5,000 crore loan to acquire Alok Industries

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Reliance Industries Ltd (RIL) is reportedly in discussion with several banks, including State Bank of India (SBI), HDFC Bank and ICICI Bank, for a Rs 5,000 crore long-term loan facility to fund its acquisition textile company Alok Industries Ltd in a bankruptcy takeover. In March this year, RIL won the right to acquire Alok Industries in the Insolvency and Bankruptcy Code (IBC) process.
It is worth mentioning here the textile company was among the 12 large stressed assets identified in June 2017 by the Reserve Bank of India (RBI), where lenders were asked to begin proceedings under Insolvency and Bankruptcy Code (IBC). “RIL has decided to borrow from banks and spend. It is in negotiations with SBI, HDFC Bank and ICICI Bank, which is one reason for the delay. We have approached National Company Law Appellate Tribunal to expedite the process and also written to the company to make the payment quickly,” a person familiar with the matter told the Economic Times.
Earlier, the National Company Law Tribunal (NCLT) had given green signal to RIL bid, made jointly with JM Financial Asset Reconstruction Company, which had pledged to pay Rs 5,050 crore to take the distressed company. The liquidation value of the textile firm was Rs 4,500 crore. SBI, in order to recover its Rs 3,772-crore loan, had initiated insolvency proceedings against the embattled textile player in 2017. Alok Industries — a fully integrated textile company with a presence in the cotton and polyester segments — has total dues of more than Rs 30,000 crore, which means lenders are taking a collective haircut of 83 per cent.
“SBI has sanctioned Rs 1,800 crore for this loan. But ICICI and HDFC are yet to take a decision. RIL credit is top-rated and these banks have supported the company before. Let us see how long they take to decide,” the second person cited above told the business daily.
In August this year, RIL chairman and managing director Mukesh Ambani had unveiled plans to divest a 20 per cent stake in its oil-to-chemicals business to Saudi Aramco and in a fuel retail network to BP Plc for a combined Rs 1.15 lakh crore amid plans to make it a zero-net debt company by March 2020.
The financial daily quoted a highly reliable source aware of the plan as saying, “It is only a matter of time that RIL manages to get the loans. We expect it to happen before the end of this month.”

By Surbhi Sinha (MBA 1st Year, Finance)

RBI sets up an expert team to look into HDFC banks net banking glitches

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RBI appointed a team of experts in the process of investigating the reason for the breakdown of HDFC banks digital banking channels, which caused for millions of customer to be locked out of their net banking and mobile banking accounts for over 48 hours in this week. It happened on 2nd December due to technical glitches and was restored on 3rd December. Customers were unable to access their salary account to make bill payment. HDFC bank is the largest private lender with a customer base of around 50 million of which 90% transactions are done through the internet, as per the bank’s annual report. Last year also around the same period the same incident happened and the bank’s applications broke down due to heavy payday traffic forcing.

By Pratiksha Sontakke (MBA 1st Year, Finance)

Maruti Stock to Face Pressure on Slowing Sales, Diesel Rethink

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The stock of Maruti Suzuki India, the country’s largest PV maker, trades at 29 times one year forward earnings. That’s 66% higher than 10-year average valuation on hopes of volume recovery. The slow down and liquidity problems faced by dealers has led to a reduction in inventory across most car makers and focused on retail sale an opposed to wholesale volumes. For instance, in October, retail sales rose by 11%, according to data provided by the Federation of Auto Dealers Associations, while Wholesale data released by the society of Indian Automobile manufactures (SIAM) showed a measly growth of 0.3%. Maruti Suzuki’s volume fell 24% in the first half of the current fiscal. It is expected to fall 15-17% for the Financial Year 2020, the worst decline in over 5 years. Maruti Suzuki has launched its eight petrol models ahead of new emission norms effective from April 2020. However, the company will not be manufacturing diesel vehicles in the medium term as it is evaluating cost competitiveness of diesel cars under BS-VI. Maruti has lost 190 basis points of market share year-on-year in the current fiscal so far primarily driven by 15% loss of market share in the compact SUV segment. These factors make it a tough task for it to review volumes, which may affect its stock valuation.

By Pranav Kathare (MBA 1st Year, Finance)

Railways record its worst operating ratio in 10 years

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The Indian railways recorded its worst operating ratio in 10 years in 2017-18 at 98.44%, the CAG said in a report in parliament. Operating ratio is the amount of money spent to earn each rupee. Lower the rate, healthier is railways' finance. The national general auditor in its report on railways' finance said that, the railways would have ended up with a negative balance of ₹5,676.29 Cr instead of a surplus of ₹1,665.61 Cr., but for advance received from NTPC & IRCON. The audit analysis of the finance accounts of Indian railways revealed a declining trend of revenue surplus and the share of internal resources in capital expenditure. The net revenue surplus decreased by 66.10% from ₹4,913 Cr in 2016-17 to ₹1,665.61 Cr in 2017-18. The share of internal resources in total capital expenditure also fell to 3.10% in 2017-18. “This had resulted in greater dependence on Gross Budgetary Support and Extra Budgetary Resources,” the CAG said. The CAG also recommend that railways need to take steps to augment their revenue, so that dependence on gross and extra budgetary resources is contained.

By Pooja Yadav (MBA 1st Year, Finance)

Triumph of Reliance Industries

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Reliance industries limited became the first Indian company to set the bar of surpassing the market capitalization of more than ₹10 lakh crores. The conglomerate has overtaken many industry magnates like Petroleum-China to enter the Elite top 5 club globally. At present, it is the 67th most valuable stock and has risen upwards to 40% this year. With a market capitalization clocked at a whopping $139.69 billion, RIL captures 6.5 % India’s total M-cap. In May 2009, the figure rocketed upto 8.62%.
The Mukesh Ambani Company has contributed to 1/3rd of the total NIFTY gains this year and outperformed the benchmark index by 30%. The current M-cap leaders globally are Apple and Microsoft with capitalization over a trillion dollars, which is higher than the GDP of a few countries.
It’s a real accolade for a growing economy like ours to have achieved this milestone. RIL’s triumph is set to catch eyes of plenty of the foreign investors. Let’s hope what else the conglomerate achieves in coming years.

By Mayank Goyal (MBA 1st Year, Finance)

FM Introduces bill to reduce corporate tax in lok sabha

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Finance minister Nirmala Sitharaman on Monday introduced the Taxation Laws (Amendment) Bill, 2019 in Lok Sabha that seeks to replace the ordinance, issued on September 20, to splash corporate tax rate to 22% sans incentive and 15% for new manufacturing entities. Sitharaman had on September 20 announced the lowering of the base corporate tax rate to 22% from 30% for companies that do not seek exemptions, and reduced the rate for some new manufacturing companies to 15% from 25%. The latest bill empowers the government to notify activities that may not qualify as manufacturing to be eligible for 15% tax rate. Mining, printing of books, film production, and software development will not be eligible for new lower corporate tax rate of 15%. Reduction in corporate tax rates for existing and new domestic companies, the ordinance also provided for withdrawal of higher surcharge for non-corporate on certain capital market transactions and relief from tax on listed companies on buybacks which were publicly announced prior to the budget announcement on July 5, 2019.

By Kirti Moralwar (MBA 1st Year, Finance)

Yogi Government Working overtime to give shape to its Ayodhya Dream

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With the Supreme court paving the way for Ram temple in Ayodhya (U.P), government is working overtime on several related projects that it aims to put in place before the temple comes up by 2023.A 100 acre Eye Theme Park is being built with a symbolic Ram setu to take visit across a manmade lake from Shabri garden to Ashok Vatika, an international museum on Lord Rama's life is set to be unveiled. 640 crore has been released to fast track an airport and Lord Ram's statue and 600 crore is being spent on cleaning the Saryu river. Around 526 crore has already being released as per government officials. The statue project will get a corporate social responsibility account to make it easier to get funds for construction. The country’s biggest theme park is coming up in Ayodhya in 2020 where Lord's Ram story will be depicted,alongside a mythical Ram Setu will be built upon manmade lake with Ashok vatika on other side. This park will have 4 zones and would be completed by 2023. Another project is the Bhajan Sandhya Sthal for holding prayers and religious events in Ayodhya and expansion of existing Ram Katha park which will be opened in 2020.A digital museum and an interpretation centre is planned to be housed underneath the giant Ram statue planned in Ayodhya.

By Jayanti Prasad (MBA 1st Year, Marketing)

Hero electric to stick to Expansion Plans despite Slowdown

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Company is going to invest Rupees 700 Crores in next 3 years. Managing Director predicts big demand in the near future. Although the market is down Hero Electric has decided to go ahead with its investing plan. Managing Director Navin Munjal told Economic Times that the demand for electric scooter is going to increase in future. Legendary player Bajaj Auto is going to enter in electric scooter segment. The motive behind investing is to develop new products and increase production capacity to continue to hold leadership position in this segment. 7 crore will be raised via internal profits of the company and borrowing capital from capital market. Hero electric which was having a single facility in Ludhiana plan is 80000 to 90000 per year What they are looking to do is to make economic commercial environmental sense for consumer to switch to electric.

By Ishwari Kunkalekar (MBA 1st Year, Marketing)

Essar Steel, GSPC win the Biggest Share of RIL Gas

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In the auction of natural gas Reliance Industries, Essar Steel and Gujarat State Petroleum Corporation (GSPC) won two-third of the natural gas where the winning bids were between $5.3 and $5.4 a unit. Reliance-BP offered 5 million metric standard cubic metres a day (mmscmd). About half a dozen companies participated in the e-auction. Essar Steel is learnt to have won 2.25 mmscmd, while GSPC got 1.2 mmscmd. State-run Hindustan Petroleum is believed to have won 0.35 mmscmd, while Adani, Mahanagar Gas and GAIL won 0.3 mmscmd each, according to the people. Gujarat State Fertilizer Corp is also said to have won 0.10 mmscmd. RIL-BP sold all the gas offered. The duration of supply could not be ascertained. Buyers had the option to bid for a supply period of two to six years. The current rate is $63 per barrel for dated Brent. Prices will vary during the period of supply.After including the pipeline tariff, the delivered cost of gas would be about $6.5 for buyers. Reliance-BP has the marketing and pricing freedom for all the gas they produce from the Rcluster field. The prices, however, cannot exceed the government-set ceiling for the gas from difficult fields, which is currently $8.43 per unit. The RIL-BP’s gas auction were influenced by a collapse in the global liquefied natural gas (LNG) market and an expected rise in supply from domestic sources over the next few years. This meant the auction ended up with rates that were close to the floor price set by the producer. ONGC is also auctioning 0.75 mmscmd on November 19.

By Bharat Suthar (MBA 1st Year - Marketing)

How to play and win by investing in insurance stock?

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Insurance stocks are now a bread in the domestic market, and are seeing heavy demand. Annual premium equivalent for private players grew 6.9% year on year in October, thanks mainly to strong performance from ICICI prudential life insurance and kotak life insurance. SBI Life insurance is the biggest gainer year to date surging 65% followed by ICICI Lombard, both of which are up 60 % and 42% respectively.
Heavy buying over the past few weeks have turned most of these stock pricey. The only insurance stock that has given negative returns year to date is govt. owned The New India Assurance whose shares have slipped as much as 20% because after rally that lifted the P.E to 107.4(TTM), investors found it pricey enough and cut corners.
Shrinivasan Subramanian, MD for investment banking at Axis capital said the huge growth potential is the reason the market is willing to pay such high prices for the insurance stocks. The market is extremely positive about the insurance sector because growth here has been extremely strong over the past 10-20 years.

By Champa Bhandarkar (MBA 1st year, Finance)

TCS to take Insurance Platform Places

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Tata Consultancy Services is doubling down on its insurance platform which has already won more than $5 billion business in last two years and is looking at newer market in Continental Europe to expand. TCS is now focusing on the open book business, so that new policies constantly replenish old ones and the number of policies being managed continues to grow. TCS expanded its contract with Phoenix Group for long term client, to include open-book policies. In 2018 TCS won an over $2 billion deal with Transamerica in the United States. TCS currently opened $4million active Policies. With this expanded Phoenix Group Project, they will take up to over $7.5million policies. Suresh Muthuswami, President of TCS BFSI Platform business, told ET. TCS manages over $40million policies worldwide. TCS have life pensions and annuities plan, now workplace is a big focus area for them. Future Plans of TCS:
1. Firm looks at other market.
2. Company studying regulatory nature of these markets.

By Avinash Shelar (MBA 1st year - Finance)

Sachin Bansal puts ₹888cr More in Navi Technologies.

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Flipkart founder Sachin Bansal has raised an additional Rs 888.5 crore into his latest venture BAC (Bank of America Corporation) Acquisitions, which has been recently renamed Navi Technologies. As per the regulatory disclosures, Bansal has picked up 6.8 crore equity shares in the company and each share has been priced at Rs 130. In September, Bansal said he has acquired a majority stake in Chaitanya Rural Intermediation Development Services, which runs a microfinance platform. Sachin Bansal picked up more than 90% in the firm, Bansal said he was taking over as its chief executive officer.
ET had already written in its February 21st edition that Bansal was getting a banking licence. His first attempt into microfinance is being seen as a step in that direction. As per the financials reported to the ministry by Navi Technologies, the company has made a profit after tax of Rs 1.9 crore on revenue of Rs 16 crore for financial year ending March 2019.

By Arun Suryawanshi (MBA 1st Year - Finance)

EOW arrests another auditor in PMC bank scam

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The Economic Offenses Wing (EOW) of Mumbai Police has arrested another auditor in connection with alleged Rs 4355 Cr PMC Bank scam. This is the eighth arrest regarding this case. On Tuesday, a senior police officer said that, Anita Kirdat, who is concurrent auditor of the Bank, was arrested on the day. He also said that, she used to do systematic and timely examination of the bank’s financial transactions. Kirdat audited bank’s transactions monthly, but could not find or she didn’t find out any irregularities in it. Again the officer said, she was called for some questioning but after that she got arrested & she will be in custody of EOW till 18th Nov. Again on Monday EOW arrested two more statutory auditors namely Ketan Lakdawala & Jayesh Sanghani, in connection with the same case, under charges of helping for hiding the irregularities in the bank’s transactions. EOW suspects some other people who are concerned with the bank & realty group HDIL.

By Akshay Thorat (MBA 1st year-Finance)

Year 2018

Banking Industry of India: The changing face

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Because of a continuous and persistent effort by the central government in improving the banking technology and promoting banking habit amongst the non-banking population of India, the Indian banking industry has been witnessing a persistent growth. During FY06–17, deposits grew at a CAGR of 12.03 per cent and reached 1.54 trillion by FY17. With the Read More

The Indian Banking System

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The Indian banking system consists of 27 public sector banks, 21 private sector banks, 45 foreign banks, 56 regional rural banks, 1,589 urban cooperative banks and 93,550 rural cooperative banks, in addition to cooperative credit institutions.   As of Q1 FY18, total credit extended by commercial banks surged to US$ 1,217.19 billion and deposits grew Read More