All posts by ANAND BHIDE

Depending on one’s affinity for investments, investors can be divided into two categories – those who take risks and those who prefer to play it safe. Irrespective of the category you belong to, mutual funds can act as a preferred investment option. Mutual funds allow investors to invest in bonds, stocks and other securities, with each investor owning his/her share(s) of the holdings of the mutual fund. Before you decide to invest in mutual funds, carefully consider the following types of schemes and funds:

1. Equity Funds

The main objective behind choosing equity funds is to potentially generate high returns while tackling the inherent high risk. Equity funds are of different types, such as:
A· Index funds – involves equities of companies that form a part of the stock market index
B· Income funds – stocks with very high dividends
C· Sectoral funds – dependent on the sector of a company
D· Diversified funds – includes ELSS and RGESS
E· Value stocks, etc..

2. Open-Ended Schemes

This type of mutual fund is flexible in allowing investors to enter and exit without any end date. Investors can simply buy and redeem units on any business day at the prevailing values.

3. Close-Ended Schemes

Close-ended schemes come with a New Offer Fund (NOF) period after which new investments are not accepted. The mutual fund is conducted only for a specific time span after which it is closed and the returns are given to the investors. If an investor wants to exit before the redemption date, he can do so by selling the units through the stock exchange.

4. Debt Funds

Debt funds are low-risk-low-return mutual funds that invest in government securities, debentures, corporate bonds and other market instruments. For investors who look for more stable and stress-free source of returns, debt funds are the best choice. Debt funds can be categorized into different types based on the investment made. They include money market funds, fixed maturity funds, gilt funds and income funds.

5. Hybrid Funds

People who wish to invest in mutual funds that are more stable than equity funds, yet more rewarding than debt funds, should choose hybrid funds. Based on the balance drawn between equities and debts, hybrid funds can be divided into three types:
A· Balanced Funds involve 65% investment in equities and the rest in debts.
B· Monthly Income Plans involve only 25% to 30% in equities.
C· Asset Allocation Funds can involve up to 90% of equities based on the market conditions.
There is another type of hybrid fund that involves investing in a combination of equity, debt and gold. This involves increased expenses to have a smooth management of the diversified funds.

6. Exchange Traded Funds

Exchange traded funds, commonly referred to as ETFs, work similar to stock trading. They can be bought and sold only in the stock market and have a lower expense ratio than equity funds. ETFs based on gold (called Gold ETFs) are popular and help to safeguard the gold assets of the investor along with reassuring the quality of the metal.

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Trends

Planning a holiday? Reach for your credit card! How plastic money is making vacations more fun.

May 31, 2016 ANAND BHIDE Leave a comment

With the April-May holidays here, families across India are getting ready for the great summer getaway. Parents with kids, bored after the closure of schools, look forward to the day when they set out for the airport, for their next big adventure! Young people start thronging airports seeking to explore new destinations, while nuclear families plan large get-togethers in cooler climes. The energy of summer is palpable!

The underlying reality is that a significant amount of money will be spent in planning and putting together a memorable holiday. Travelling and holidays, though always pleasurable, are not always inexpensive!

There is, however, a great way to plan ahead and maximise the value that you can get out of the money you will spend on a holiday. This can be done by a simple piece of plastic that should be in your wallet: the credit card!

As a starting point it is critical to select a credit card which suits your lifestyle. If you have a travel bug in you, there is no better way to build your free holidays and getaways with a card which will Reward you with rich features and benefits pertaining to travel (including potentially free air tickets!), while addressing your other travel needs.

Credit Cards with strong travel/flight benefits typically come in airline co-branded credit cards such as the Jet Airways IndusInd Bank Credit Card, which provide cardmembers with a great option to earn JPMiles even when they are not flying. All day-to-day spends, both discretionary and non-discretionary, can be done on the card and valuable JPMiles can be earned. These Miles can be accumulated throughout the year and then the Miles could be redeemed for free flight tickets on Jet Airways for the holidays. The truly savvy traveller, therefore, would try to maximise miles earnings by moving as much of his or her monthly expenses, as is possible, onto the miles-earning credit card. In addition, the card also provides Bonus Miles at the time of enrolment, which can go a long way towards a free air ticket.

Affiliations of such strong Frequent Flyer programmes with hotel chains, coupled with the card issuing company’s own range of offers from leading hotels across price brands, can ensure that the best deals are also got while making hotel bookings. There are other credit cards, such as the IndusInd Bank WorldMiles Credit Card, which also provide great options for free flights and more without direct partnership with any particular airline.

In addition, many premium credit cards also provide great airport lounge access facilities ensuring that the long waits at airports are done in the peaceful confines of a well-provided and exclusive lounge. Tie-ups with car rental companies, hotel chains, priority check-in at airports and other important features, such as free extra baggage etc., is what aspiring credit card applicants should look for while selecting a credit card. These come with strong discounts and should be availed of to make that rupee go further.

Most sophisticated card issuers also enable cardmembers to convert their existing Rewards points in the issuers own Rewards programmes into Miles in leading Frequent Flyer programmes such as the Jet Privilege programme. This is also a strong repository of potential free flights.

With the growth of the Indian affluent class and the emergence of a discerning middle-class, more and more Indians find the need and having the money to plan at least one major holiday a year. For Indians, London, Singapore and Dubai, along with Thailand, continue to be favourite holiday destinations for international vacations; whereas, within India, Goa, Rajasthan and Kerala are popular destinations, apart from the hill stations which continue to be a perennial favourite during summers.

With a robust increase in the cards acceptance infrastructure in India, more people are finding it easier to use their credit or debit cards as opposed to carrying cash to meet their needs on holiday. International travellers are also finding it convenient to carry a preloaded foreign currency (FX) card so that they have better control over their spending while overseas, without having to worry about the ever-changing conversion rates.
Planning a holiday can be a lot of fun, and a lot of cost, and the small challenges of putting together a great vacation can be surmounted by planning ahead. Select a credit card product which will Reward you handsomely and provide you with simple ways of making your card usage more rewarding. Utilise the benefits and offers (and the great discounts) which come to you on your card and don’t forget: that free ticket for a holiday is closer than you think!

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Beyond business

Realizing the Dream of a Sporting Nation

April 5, 2016 ANAND BHIDE Leave a comment

When I started playing squash in 1986, I hardly had an idea about what an attractive, mobilizing and inspiring force ‘Sports’ could be. Sport has the power to rescue us from the daily grind of life. A heroic act, a sporting gesture, an impromptu quote, talking tough, looking mean, a brave decision, an affectionate hug you see them all on the field!! And this is not only about the sporting greats like Sachin Tendulkar or Usain Bolt , but is experienced by anyone who plays a sport regularly .Sport doesn’t build character. It actually reveals it.

Today sports are a 600 billion dollar industry globally. In India this landscape has never been more exciting. Last year, role models for women were created with the Indian women’s hockey team qualifying for the Olympics after a 36 years gap and Sania Mirza bagging the World No. 1 WTA Doubles ranking. India continued its dominance in South Asia with the highest ever medal tally in the SAG 2016 and winning the South Asian Basketball Championship. Badminton, squash, shooting, archery, chess, billiards, golf, gymnastics and cycling also witnessed some stellar performances individually on the world stage. The inclusive power of sports found expression in the 173 medals that India brought back home from the Special Olympics (intellectual disabilities) held in Los Angeles in 2015. With India doubling its medal projections for Rio, standing out at the Olympics may not be a distant dream. With a robust economic climate and newfound aspiration to etch its place on the globe, India has found a voice to express itself through sports.

Sports unites and hence cannot be confined to only those who take it up as a career. The average Indian who seeks to remain fit in his/her stressful lifestyle or find a forum to voice support for a cause like cancer awareness has turned amateur running into a movement. Companies are taking up sporting competitions within/across organizations to bring together employees isolated due to technology and deadlines. The rising Indian middle class projected to spend 10% of its wallet on education and recreation by 2050 is increasingly seeking non-fictional content backed by a story and sports is fulfilling this demand. “Bharat” is not left behind with rural India backing the popularity of leagues of traditional sports like Kabaddi, Wrestling, Kho Kho and Mallkhamb. And not to forget, ambassadors of conflict resolution of Indo-Pak are none other than the fans rooting to see the arch-rivals play together in a great game of cricket.

Sports in India has traditionally been a government led initiative. Policies like compulsory physical education in schools, higher budgetary allocation and inclusion of community playgrounds in master plans of towns in Manipur have preserved sporting traditions that date back to its erstwhile competing kingdoms. In Haryana, initiatives like Play 4 India that scout for talent in the age group of 8-14 at the grassroots, groom and sponsor them, provide career support in terms of academic scholarships or reservation in government jobs are a stand-out. Not only the individuals but also the village that nurtures sports is awarded monetary support for development. The strengthening of the sports ecosystem in these states has shown commendable results in terms of contribution to national and international games medal tally for India.

Times are changing and so is the role of the private sector in revolutionizing sports in the country. Billion-dollar TV rights, millions of viewers across the globe, and consequent ad revenues, ticket and merchandise sales are bringing in money like never before. Indian Premier League in cricket started the trend and soon the Indian Super League in football had become the fourth biggest football league (average stadium attendance of 24,357) in the world , beating the French, Italian and Brazilian leagues. It is noteworthy that all 8 ISL franchises are mandated to invest 2 Cr p.a. for development of football at the grassroots level. The recent collaboration between Sports Authority of India and Gopichand Badminton Foundation is a welcome move of PPP in sports. Not everything is for profit. Philanthropic funds like Olympic Gold Quest (founded by Geet Sethi and Prakash Padukone) have supported Saina Nehwal and Mary Kom. Tata Group has set the benchmark for CSR in sports by initiatives like Tata Archery Academy (which professionally trained world No. 5 Deepika Kumari) and developing Kati, a popular tribal sport in Jharkhand.

However a lot remains to be done for unleashing the power of sport in the country. Poor governance as seen in the tussle among federations affecting the morale of players, limited reach of Sports Authority of India in scouting players (a mere 0.0035% of the population in the 8-25 age group), lack of industry status for sports, inhibiting private sector investments, limited legacy planning and monetization of sports infrastructure and duty structures making sports equipment unaffordable, need to be addressed as soon as possible. Sponsorships are mostly directed towards well established athletes and that too mostly in team sports that have professional leagues. In spite of bagging 3 golds, 14 silvers and 16 bronzes in the Paralympic Asian Games in S. Korea and more recently 14 medals at the 2016 Dubai IPC Athletics Asia-Oceania, funds still elude the Paralympians.

And finally, it is vital to further drive the culture of sports in our country within the multiple roles we play as individuals viz. parents, teachers, mentors, family & friends. We need to take cognizance of how sport shapes character as well as health (more than 20% children in India suffer from obesity). Whether it turns out to be a career choice for the child or not, time and effort needs to be given to explore this. Sports is no longer an alternate career option and isn’t confined to being an athlete. Coaching, sports psychologists, fitness trainers, journalists, commentators and marketing / consulting roles are just some of the whole range of avenues available today.

We are aware of what needs to be fixed. We are aware of where we need to go. As Andre Agassi puts it, the only secret is “to be inspired”.

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Press Releases

IndusInd Bank Q2 Net Profit up by 30%

March 1, 2016 ANAND BHIDE Leave a comment

IndusInd Bank Q2 Net Profit up by 30% at Rs.560.04 crore YoY basis Operating Profit up by 39% to Rs.1,006.53 crore YoY basis Non Interest Income increases by 32% YoY basis Capital Adequacy Ratio ( CAR) improves to 16.52%
Net NPA down to 0.31%

Highlights Q2 FY 2016

Key performance vectors show significant improvement.
NIM increased to 3.88%
Net Profit up by 30%
Total Revenue up by 32%
Net NPA down to 0.31%
Capital Adequacy Ratio ( CAR) improves to 16.52%

Mumbai, October 9, 2015: The Board of Directors of IndusInd Bank Ltd., today approved and adopted
its Unaudited Financial Results for the second quarter and first half-year ended September 30, 2015.

Key Financials:

Key Ratios:

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MSME

SME Banking – A Different Approach and a Different Mindset

November 19, 2015 ANAND BHIDE Leave a comment

The time is ripe for banks to step up their efforts to serve small and medium-sized enterprises (SMEs) in Indian markets. With innovations in technology, newer business models, increased thrust on encouraging SMEs and encouraging regulations, banks are overcoming traditional barriers and finding ways to partner with SMEs profitably.

The banking solutions that work for larger organizations will often not work with SMEs. Partnering with SMEs requires a very different approach and a different mindset. SMEs can sometimes tend to become lax with external capital as they do not have the same kind of capital controls as their larger organization counterparts. Yet, the same SMEs are able to get the most return for the buck when they bring valuable equity to the table as they exercise more diligence. Thus, a new model of banking where the interests of the SME clients and the interests of the banks are integrated is required.

The winning banks of tomorrow are the ones who will –

Encourage SMEs- Most SME clients tend to have little or no financial or business background. Their financial/business illiteracy is one of the most important factors that influence their credit applications. Instead of taking decisions based on their applications, banks must take proactive steps, understand the contextual background of the SMEs and empower them by providing the financial education they need through seminars, creating special start-up packages and handholding them through the life-cycle of their business. The success of the Mudra Bank which caters to the needs of micro-enterprises is a successful example.
Partner with the Government: The government is the banker’s biggest ally when it comes to reaching out to the SMEs. Several new initiatives by the government have led to more SMEs coming forth for banking relations. Banks can influence government policy by sharing its learning, establishing risk-sharing facilities and providing valuable information on under-served and un-served SMEs. The government has recently launched several new initiatives and banks can provide advisory support to budding entrepreneurs
Building a deep understanding of the SME markets: SMEs operate across a widely-dispersed geographical cluster as well as their business models would cover diverse sectors. Dealing with such high levels of heterogeneous clients is a tough ask and one that is nearly impossible to achieve. Instead, banks can identify clear geographical clusters, specific business models and sectors to which it can cater to. Building a deep expertise across a few verticals and geographies will enable the banks to understand how SMEs operate and the nuances of this segment. Digital portals such as SMEcorner.com have made knowledge acquisition and understanding SME sector easier by use of innovative technology.

While most banks are still trying to penetrate and capture the SME opportunity, it is important that banks ask themselves a few important questions –

Does the bank have the required capabilities to enter and sustain in the SME segment?
What is the cost-benefit analysis of embracing the SME segment?
What kind of opportunities would the bank have to forego in its quest to make a meaningful impact in the SME segment?
What kind of customized offerings does the bank offer to the SME segment that will attract business from the SMEs?
And lastly, does the bank have resources, the strategy, the human resources, the team and the tools to execute the SME strategy?

In the end, banks must answer these questions honestly, based on data and with a view towards the future. The opportunity to build a sustainable practice that partner with the SMEs in a profitable, value-creating relationship-based approach is there for the grabs.

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