Friday, 21 October 2016


The country's leading car manufacturer, Mahindra and Mahindra has launched the new four-door version of their all-electric 2-door e2o hatchback. Named as the e2oPlus, the car has more space, a faster charging capability and a bigger range than the standard e2o.

The car’s name - e2o plus is an amalgamation of e2o, which stands for energy to oxygen and Plus is for the positive contributions that the car will make in the lives of customers. Like the e2o, the new car's body is also made out of ABS panel. The panel's versatile character helps in moulding it to form a wide variety of products which has helped Mahindra in keeping both the weight of the car and manufacturing costs down.

The fascia has been updated with a new grille which is akin to the Scorpio's. The length of the car is increased by 310 mm to 3590 mm and the wheelbase is up by 300 mm at 2258mm. It comes loaded with features like a GPS enabled navigation system and an on-board computer that warns you about the car's driving range. The touch-screen monitor is easy to use and very responsive. The e2oPlus also gets an SOS feature called revive which is being carried over from the e2o that gives you an additional range of 7-10 km if your battery power dips below 10 per cent. This can be activated by a touch of a button or by using the e2oPlus app on your smartphone. The mobile app also hosts other features like switching on/off the car's air conditioning and even locking/unlocking the car.

The top spec P8 variant of the car has a 3 phase induction motor which is more powerful than the 2-door e2o. It has a peak power of 40 bhp and torque of 91 Nm. The battery has been upgraded. It has a 210ah lithium ion battery which claims a driving range of 140 kilometres and a top speed of 85Km/h. The other variants get a slightly less powerful battery claiming the same drive range of 110 km.A full charge for the e2oPlus takes about 9 hours same time as what 2-door e20 takes to power-up

The slightly softer suspension offers a decent ride but you do feel some of the bumps and potholes occasionally. The rear seat, also the cabin is spacious and offers decent legroom. The car comes standard with 14-inch wheels and power steering as well. The 4.35-metre turning radius is the best in the segment and the automatic gearbox is unchanged from the 2-door variant and gets a boost or sport mode.

This 4-door version is available in 3 variants and price ranges from 5.46 to 8.46 lakh (Ex-showroom Delhi).

The e20plus does suffer from the same challenges that every electric car in India faces. There is still lack of infrastructure to support electric cars in India and barring states like Karnataka, Delhi, Rajasthan and Chhattisgarh, no other states have announced any kind of incentives for electric vehicles in India. 
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Tuesday, 18 October 2016


With a nominal GDP of $285 billion, Pakistan can expect an investment of $46 billion to be a game changer. Around 30% of the people in Pakistan live in BPL. In such a scenario when China came up with a package of $46 billion during Chinese President Xi Jinping's Pakistan visit in April 2015, Pakistan couldn't have asked for anything more. In a country that been struggling in all fronts - from poor economics to terrorist activities, it is expected that an investment of this scale can work wonders. The Pakistan government which has done nothing over the years has found found Alladin's chirag which has a genie in China.

Why would China invest such a huge amount in Pakistan?
The Gwadar port in Pakistan is where the answer lies. If China connects to this port it will create a presence in the Indian Ocean and also have move closer to the Persian Gulf. This would increase China's presence in the water - making it a two-ocean power.  The CPEC will stretch from the Western Chinese city of Kashgar in the Xinxiang province to the port of Gwadar. It will providing China an access to the Arabian Sea barely 600 kilometre east of the narrow Strait of Hormuz through which passes about 35% of the world’s oil shipments.
If China wants to utilize this port effectively, it has to work on Pakistan’s infrastructure. The package was basically directed towards this objective. China plans to build a rail road and a 125 wide tunnel connecting Pakistan and itself. It also has plans to upgrade the Gwadar airport and a couple of existing highways. In order to boost the energy availability, China has plans to add around 10000 megawatts of power to Pakistan by 2018.
The CPEC would have a significant impact in reducing the transportation costs of Chinese good to Europe. China will also be able to receive the oil from the Persian Gulf at the Gwadar port and pump it to western China through pipelines.
The CPEC includes roads and railways that will pass through Pakistan, Azad Kashmir (PoK) and Baluchistan. It will greatly reduce the distance for Chinese exports to western countries. Trade by CPEC will bypass the Strait of Malacca in Southeast Asia and reduce the distance by much as 2000 miles. China would not have to depend on the US to keep the choke point of Strait of Malacca open because if it get access to port of Gwadar which is hardly a few hundred miles from the mouth of the Persian Gulf.
In future, the CPEC may be used by China to build to the Silk Road Economic Belt and a Maritime Silk Road linking China to Europe and beyond. Though the Gwadar port is being developed as a commercial port, China may turn this into a military port in future and increase its presence in the waters. What this essentially does is that China is able to use a lot of the ground in Pakistan as its territory and use it for its economic benefits.

For Pakistan, it’s like leasing its land for development. It lacks infrastructure and neither has the resources to develop it. They expect the Chinese investments to develop and upgrade its infrastructure and correct its energy shortage. As per reports, Pakistan’s economy loses up to 6 percent of GDP due to power and infrastructure problems. For China to work in Pakistan, it’s very crucial that the country sees development. Otherwise, if the nuclear armed country fails it could become a nightmare for China.
India has always supported development projects in Pakistan which may bring stability and benefits to the region. However, of late the Chinese state media started calling Gilgit-Baltistan a Pakistani territory. The territory is actually a disputed region between India and Pakistan. The CPEC runs through POK which is claimed by India. China is considering this region to be a Pakistani territory not a disputed region. India also has concerns that, in case of India-China conflict, China can quickly move its troops to LOC on the Pakistani side and thus opening another front and creating more pressure on India. Also with China creating presence in Gwadar port, it can create a strategically navel presence in it to encircle India from another front.

Though Pakistan is considering this project to be a game changer, reality is very different. Let's have a look at the true picture. Pakistan would have had some benefit from the projects if the construction of highways and power projects would have been awarded to Pakistani companies. But this has not happening. Even the workers working on the projects are Chinese so no employment opportunity created. Even the raw materials and machinery are imported from China.
It is also doubtful if the infrastructure development would help the industries in Pakistan as there would be high influx of cheap Chinese goods in Pakistan through the corridor once it is complete. It is very unlikely that Pakistani companies would be able to compete with Chinese companies. In the long run, this will lead to the downfall of Pakistani industries.
Pakistan will also not be able to impose import duties on Chinese goods, as these projects have been financed through Chinese loans and China is too big a power for them to take on.
There would be some benefits from the transit fee but that is too less given the fact that the Suez Canal, through which 7.5% of world’s ocean trade passes, generates $5 billion dollar annually.
There would be some positives to the exports but that too won’t have much impact. In the long run, this will be disastrous for Pakistani industries and the economy as whole. China would continue to strength its foothold and this would lead the debt ridden Pakistani economy to more sever condition.

Share your views on #CPEC!!!

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Tuesday, 11 October 2016


Some time ago, I was looking for an ULIP to invest in. My prime objective was to save taxes under the 80C. I came across a ULIP which had given a return of around 25% per annum over the last 5 years. I was surprised at that. We often consider Mutual Funds as a way of investing in equities but do miss out on ULIPs whose returns sometimes exceed that of Mutual Funds.

ULIPs often many advantages:

Investments in ULIPs offer good tax benefits. Premium payments offer tax benefits under Section 80C and Section 80D. Withdrawals are also not taxable as they come under Section 10D.

As ULIP are basically Life Insurance instruments, they offer life insurance coverage. There is a sum assured for the life cover. They also offer flexibility to increase the sum assured if required.

ULIPs offer a savings as well as a life insurance at the same time. Mutual Funds provide no life insurance whereas pure life insurance offers only insurance coverage. ULIPs on the other hand provide both at the same time.

Some ULIPS offer top-up facilities.  An individual can put in additional investments in the ULIP above the regular premium to get more returns.

ULIPS come up with a range of funds to invest in. There are balance funds, debt funds and a lot more. There are funds that invest more in equities carrying more risk and funds investing less in equities carrying less reeks. Investors can choose a single fund and or switch from one fund to another during the policy term as per risk profile and market conditions. 

The advantage with ULIPs is that they carry some features of Life Insurance. For example they have riders.  Riders like Accidental Death Benefit and Disability Benefit offer policy holders much relief in times of need.

There is also a 15-day free look period. The policy holder can return the policy within this period if he/she is unsatisfied with it. The entire premium is refunded to the policy holder.

It is easy to monitor the performance of ULIPs as the latest NAVs are available on paper and electronic media. The performance of NAV reflects the performance of the ULIP.

Investments in ULIPs can be done through SIPs. One can keep investing a fixed sum of money every month. Depending on the NAV, the numbers of units are brought. Thus there is rupee cost averaging and investments are made with a disciplined approach.
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Tuesday, 4 October 2016


With the government’s move towards creating an environment for more start-ups, the country is witnessing the rise of a huge number of start-ups. They are getting a decent amount of success as the digital revolution is helping them in reaching customers far and wide. Sensing this, a lot of MNCs have come into the field are trying to make get their share of the success. This has lead to a fight between the start-ups and the MNCs.

In the e-commerce field it’s Flipkart against Amazon.  Back in 2007, two software engineers at Amazon Web Services resigned from their job to pursue a start-up dream. Together, they would roam around the city and sell books that have been ordered on their website. Within time, success came and Flipkart emerged as a leading e-commerce company. Their success story reached far and wide and soon came, the MNCs to get a share of the success. Ironically, it was Amazon which was to be their main rival. Amazon had all the experience and the funding to take on Flipkart. Establish in 1999, Amazon was a global brand with huge funding to give more discounts to customers and global tested successful execution strategies.

Within a short time, Amazon managed to take the edge over Flipkart as customers were attracted to the lower pricing. Flipkart has a better a delivery mechanism in place but in a country like India customers are drawn more towards discounts. However, it has been seen that Upper Middle Class tends to prefer Flipkart more as products like electronics are brought more on Flipkart. Amazon is more preferred by the buyers of low cost items like which items like Food Products. However, the funding advantage will always be there for Amazon and the Flipkart cannot match up to Amazon as far as funding is concerned but it should continue the superior service quality and build customer relationship in order to fight this battle.

Such a similar fight has been seen in the Indian tax market where an Indian start-up OLA is fighting neck to neck with an MNC UBER. In fact, the fight has been uglier with both parties’ approaches legal routes against another time and again. However, in spite of UBER being the world most valued startup, OLA has been able to retain its lead. OLA, a brainchild of IIT Bombay graduates Bhavish Aggarwal and Ankit Bhati had earlier managed to edge out its rivals like Meru Cabs (started in 2006) and Mega Cabs (started in 2001) but UBER has not been an easy competitor to take on.

Taking on Meru and Mega was easy for OLA as it came out with a business model of short trips on small tickets and the latter were unable to change their business model which was more on Airport Taxis and self owned cars. However, UBER is a tough competitor and it has been quite adaptable to the Indian markets. It changed to cash payments when it found that Indian travellers were not always having cards. It also received huge funding time to time and appointing people like Amit Jain( former president of US-based housing rental site to have a strong management in place.

OLA has been coming up with more innovation to fight this out. It came out with OLA Micro at much lower price in order to counter UBER GO. It has shown smart competitiveness by having a wide variety of products such as Micro, Mini and Share. This has worked well and OLA has managed to keep its lead. However, in trying to retain the market share, OLA has had to run in losses. In FY 2015 OLA posted net losses of $7.96 billion.
UBER on the other hand has merged with China rivals - Didi Chuxing. Didi was earlier was a rival of UBER and has invested in OLA. With Didi and UBER merging things could turn out to be bad for OLA as Didi cannot invest in OLA since it is UBER's rival. Strategically, this has turned out to be a masterstroke for UBER as it can now fight OLA more fiercely and also have a safer position in China.

The fight between a start-up and an MNC is always an interesting once. While the start-up is fighting for its territory the MNC's objective is to dislodge the start-up and take its place. The start has the advantage that it knows the local conditions and requirements better than the MNCs. For the MNCs,
its a new market place. It’s a bit risky for them as the outcomes are unknown. They are exploring a completely new market where a start-up has already set up the rules of the game. The MNCs has to come out with more offerings. It has to get its share from the market in which the start-up has already started dominating.

The MNCS have established operations throughout the world. They have the experience of running business. It also has enough funds with which it can offer attractive pricing to lure the customers. While funding remains the main factor, the start-up has to come up with better innovations and
customer care in order to fight the rivals. 

Share your views on #IndianStartUps !!!
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Tuesday, 27 September 2016


Anil was goes through his tax savings plan, when his friend Akash suggested him about PPF. Anil called up his bank man and asked him to arrange for a PPF.  The basic idea about investing in PPF for most people comes from tax savings. 

Most people fail to understand about PPF as a good investment opportunity. Well, not much to talk about the interest rate as it is now only 8.1%.  But, there is a trick. It is calculated as compound interest.

Here is a look at the calculation. Let us a say a person ageing 23 decided to invest in a PPF for 15 years with an investment of Rs.1000 per month.  The return he gets at the end of 15 years is Rs. 3, 60,350.00. The amount he invested was: Rs.1, 80,000. So the return is around 100% in 15 years. In addition to that Rs.12000 gets deducted from the taxable income. There is no tax or market risk associated with the return.

Here is a quick through into PPF-
One can invest an amount as low as Rs.500 per month in the PPF account. The maximum investment that can be made is Rs.1, 50,000 per year.
If the PPF account does not have a minimum deposit of Rs.500 in a financial year the account stands as discontinued. The interest keeps getting credited and is paid at the end of the term.
To revive a discontinued account a fees of Rs.50 need to be paid along with the arrears of subscription.
The minimum tenure of a PPF account is 15 years which can then be extended in blocks of 5 years.
There is a provision to take loans on the amount of the investment made in PPF account. The loan can be availed to the maximum extent of 25% of the sum present in the account in the second year preceding the year in which the loan was applied for.
Interest is credited in the PPF based on the minimum balance between the 5th and the end of month so it’s advisable to invest in the PPF before the 5th of month.
One of the best ways to invest in PPF is through SIP. One can initiate an ECS where a fixed monthly sum would be deposited into the PPF account.
Even though a PPF is a 15 year product; it can be liquidated in times of emergency. There is an option to take out at from the 7th year of the term. The amount be maximum of the 50% of the money that was in the account at the end of 4 years.

A PPF account can be easily transferred from one post office or bank to another by submitting a written application and the transfer form. 
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Monday, 12 September 2016


To get a reward you need to take a risk…

One the most remarkable stock price movement I ever saw was Satyam. The stock price fell from around Rs. 500 to Rs. 8 and then recovered all the way to Rs.100.
For the traders on the first half it was a nightmare what for the risk takers who brought around the 10 rupees zone, the return was around 1000%.

Moving against the crowd requires a lot of courage. It requires nerves to steel to buy a stock when there are only talks of doom about it, everyone is pessimistic, people are panicked and there is only uncertainty.

This kind of contrarian investing requires deep analysis and looking for disconnect between what the crowd feels and what the reality may turn out to be. 

Let me tell you about Animesh, a man who brought Satyam at Rs.11 and sold at Rs.60. He is a wealthy person and believes that gambles are required for larger gains. He believed in the Indian Corporate Governance and when the stock price fell, he believed that the government would come out with a resolution. At Rs.11, he thought, it can’t get worse and there is a decent chance of at least a 60-70% return. So he invested Rs. 1, 00, 000 in the markets and made 6 times profit.

This was a classic example of how a risk taker analyzed the ground reality and compared it with the general sentiment. It was enough for him to identify the possible gains.

A bear mentally can also work in this way. We all know that Shankar Sharma said in 2007. The markets became too euphoric. A realistic person would realize that the fundamental were not that much good and short the markets.

Identifying sentiment is requires a good deal of experience. One of the mathematical parameter that can be use is to use the idea of value investing. One can study the valuations and identify the stocks that are undervalued. P/Es and P/Bs can be used to study valuations.

Let me tell you how I was investing in the 2008 lows. I was relying on dividend investing philosophy. I brought stocks which had a dividend yield of more than 8%. My simple idea to get returns at least something compared to FDs.  Dividends also reflect the cash in books of the company. When the markets recovered, my stocks also recovered.
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Monday, 22 August 2016


Entrepreneurship needs capital. There are some who have dreams of entrepreneurship from college days, but they do not have the capital. Here is a plan on how to build the capital from college days itself-

The most important thing of financial management is budgeting. So, the college time should too have a budget on the expenses. There should be some analytics on how to cut back spending and saving more. 

The holidays can be spent to do some work and earn some money. A couple of tuition or part time jobs can be undertaken to earn some thing. As they time is money, so doing some useful activity can help to add to the capital.

Cutting down on living expenses through sharing of accommodation can also be done. Students who reside in single rooms can opt for shared rooms or dorms and save a lot of money. If you have high ambitions you do need to sacrifice some part of your comfort level.

Starting a savings scheme like is a brilliant idea. A college student can save some part of his saving in a recurring account or even better a SIP. This would bring a disciplined approach to savings and also build the capital for the future. Investing in stocks is not a good idea as the inexperience brain can take incorrect decisions and end up in losses.

One should not carry loans. The interest rate on loans is around 10%. At student age earning more than 10% on investments is very difficult. So if one is carrying a study loan, the priority should be payoff the loan as quickly as possible.

There are lots of companies that offer special student concessions.  A college student should track them and try to avail them in needs. However, one should buy something because a discount is there as it would not serve the purpose.

Resource utilization is an important skill for all entrepreneurship. Resource utilization can begin from college itself. For example, student buy books for semester and after the semester they sell it off at low prices. As these books are only required for a semester a student can easily avail them from the library.

Though it may sound a bit difficult, a college student can save a lot of money by doing things by him or her rather than spending money on others. For example, washing and ironing of clothes or even cooking owns food. It would require a lot of effort but would also lead to considerable savings.

There are excellent scholarship opportunities for students who excel at their studies. The key is to work hard and achieve good results. That would lead to scholarships and there would be more savings.

At college level, students need recreation and often that requires money. A lot of students spend a lot of money on recreation activities. The expenses can be saved by attending the activities which are free of cost. For example, rather than go the bowling club, one can play basketball in the college premises.

Some of us are in the habit of buying off thing without thinking of the use. Use like idea of taking books from library without buying, getting things on rent can also help in savings. Things for temporary usage like a book shelf can be taken on rent rather than buying.

If you having some ideas on #CollegeSavings then do comment on this post.
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Monday, 8 August 2016


Santanu works as a manager in an IT firm. He gets a high salary and as such he has a lot of wealth which he can invest. Buying a land won’t work for him, as he does not have much of time for that. He also does not have the much know-how on purchasing land. Investing in other real estate is not much worth. He has realized it going to be equities.

He gets hold of an RM in a top broking house over the phone. “Come to this address I want to invest in mutual funds”. Santanu asks him for a good and quality fund. The RM talks of a large cap fund and talks about the big names in the portfolio. Santanu gets impressed and draws a cheque of Rs.100000.

Months later, the RM gives him a suggestion to invest directly in equities. Santanu trusts this guy as the Mutual Fund is in positive and demat is in place. Now he has a question, “Which stock should I buy”? His colleague asks him to invest in a small cap company.

After 6 months, the market moved by 8%, the mutual fund moved by 12% but the stock remained at the same price. What went wrong?

When markets move, the small and midcap stocks move more. However, not all investor have the skill to identify the quality small and midcap stocks. This should be brought through mutual funds. A mutual fund has a professional management to make the investments on behalf of the investors. For investors, who do not have the required expertise to identify the lesser known names, Mutual Funds are an excellent option to invest in small and midcap stocks. The fact that mutual funds carry diversification feature further reduces the risk associated with small and midcap stocks. A unit of the fund many represent 6-7 stocks and as such the risk associated with a single stock investment is reduced no matter how much the capital is. Though, I have only spoken about investing in small and midcap mutual funds, investors may invest in other types of funds as per the requirements. One may also invest in bonds and money market instruments through mutual funds.

The disadvantage with mutual funds is that the investor has to pay additional charges for the fund management and other facilities. The investor also has to depend on the fund manager to get him good returns. He does not have any say on the investment decisions.

If the investor can take care of the risks associated with equities, one can directly enter the equity markets. However, if one cannot but skill wants to be a part of the equity markets, he should buy only large caps and the blue chips. These stocks are comparatively safer investments scopes and such investments are safe.
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