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3 Equity Large Cap Mutual Funds SIPs Top-Ranked By CRISIL

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Canara Robeco Bluechip Equity Fund

Canara Robeco Bluechip Equity Fund Direct-Growth manages a total of 3,691 crores in assets (AUM). The fund’s expense ratio is 0.34 percent, which is lower than the expense ratios charged by most other Large Cap funds.

Canara Robeco Bluechip Equity Fund Direct-Growth has returned 52.16 percent in the last year. It has had an average yearly return of 16.56 percent since its inception.The Canara Robeco Large cap+ fund is named after the investment strategy, which is primarily focused on building a portfolio that invests in any of the top 150 stocks ranked by market capitalization.

The majority of the money in the fund is invested in the financial, technology, construction, energy, and healthcare industries. Infosys Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Reliance Industries Ltd., and Tata Consultancy Services Ltd. are the fund’s top five holdings.

A three-year SIP in a fund for Rs 10,000 per month is now worth Rs 5.7 lakhs, a profit of Rs 2.1 lakh. Morningstar, Value Research has given the fund a 5-star rating. This fund is ranked first among large-cap mutual funds by CRISIL.

IDBI India Top 100 Equity Fund

IDBI India Top 100 Equity Fund

The IDBI India Top 100 Equity Fund Direct-Growth manages assets of 486 crores (AUM). The fund charges a 1.35 percent expense ratio, which is more than most other Large Cap funds.

The 1-year returns for the IDBI India Top 100 Equity Fund Direct-Growth are 57.22 percent. It has generated an average yearly return of 15.44% since its inception.

The scheme aims to provide investors with long-term capital appreciation prospects by investing primarily in large-cap equity and equity-related products.

The financial, technology, energy, services, and healthcare sectors account for the majority of the fund’s holdings. Reliance Industries Ltd., HDFC Bank Ltd., Infosys Ltd., ICICI Bank Ltd., and Housing Development Finance Corpn. are the fund’s top five holdings. Ltd.. This fund is ranked first among large-cap mutual funds by CRISIL.

A three-year SIP in a fund for Rs 10,000 per month is now worth Rs 5.63 lakhs, a profit Rs 2.03 lakh. CRISIL has ranked number 1 among large-cap mutual funds.

Franklin India Bluechip Fund

Franklin India Bluechip Fund

The Franklin India Bluechip Fund-Growth manages assets worth 6,464 crores (AUM). The fund’s expense ratio is 1.88 percent, which is higher than the expense ratios charged by most other Large Cap funds.

Franklin India Bluechip Fund’s 1-year growth returns are 57.87 percent. It has returned an average of 20.23 percent every year since its inception. This fund is ranked first among large-cap mutual funds by CRISIL.

ICICI Bank Ltd., State Bank of India, Axis Bank Ltd., Infosys Ltd., and Larsen & Toubro Ltd. are the fund’s top five holdings.

By actively managing a portfolio of equities and equity-related instruments, the scheme aims to achieve long-term financial appreciation. The Scheme will invest in a variety of companies, with a preference for large-cap firms.

A three-year SIP in a fund for Rs 10,000 per month is now worth Rs 5.38 lakhs, a profit Rs 1.78 lakh. CRISIL has ranked number 1 among large-cap mutual funds.

Disclaimer

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advise to buy or sell stocks, gold, currency or other commodities. Investors should certainly not take any trading and investment decision based only on information discussed on GoodReturns.in We are not a qualified financial advisor and any information herein is not investment advice. It is informational in nature. All readers and investors should note that neither Greynium nor the author of the articles, would be responsible for any decision taken based on these articles. Please do consult a professional advisor.



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HDFC Life acquires Exide’s insurance arm for Rs 6,687 crore, BFSI News, ET BFSI

Banking & Finance

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MUMBAI: HDFC Life has agreed to buy Exide Life Insurance for Rs 6,687 crore, of which Rs 726 crore would be paid in cash. The rest would be paid by issuing 8.7 crore shares of HDFC Life to the target company’s parent. This makes it the biggest insurance M&A deal in India.

Announcing the acquisition, HDFC Life Insurance CEO Vibha Padalkar said that the core reason behind the deal was its decision to grow its proprietary distribution channel. HDFC Life has developed scale largely on the back of the distribution strength of HDFC Bank. While initially banks were allowed to sell policies of only one company, Irdai has relaxed the rule in recent years.

“Adding 40% to our agency force would have taken 2-3 years. Today, our propriety channel is 15% of our business and we want to increase that to 30-35%. If you look at other parts of Asia, the proprietary channels dominate. Over a period of time, the reliance on bancassurance has gone down and companies have built their tied agency model. That is the core of this deal… to grow our own proprietary channel,” said Padalkar.

The acquisition will add 10% to HDFC Life’s embedded value (EV) — a measure for the worth of a life company that takes into account future earnings from policies that the company has issued. The acquisition price is less than 2.5 times the EV of Exide Life. Also, given that Exide Life has a sound solvency position of 225%, it will add to HDFC Life’s solvency. However, the cash payout, when it happens, will have a 15% impact on solvency margins.

“There is an advantage if one is trading at expensive valuations. Acquiring a company using your stock becomes less onerous and less of a drag…so, HDFC Life, trading at about 6x trailing EV, used largely its stock, resulting in just 4% dilution and got Exide life which added 10% to EV,” said Macquarie Capital research analyst Suresh Ganapathy.

According to Padalkar, the company has a good deal as the average valuation of listed and proxy listed companies (excluding HDFC Life) is 3.5 times their EV, while the deal values Exide Life at less than 2.5. She said that the business would complement that of HDFC Life in terms of geographical distribution as well, since Exide Life is present in tier-3 cities where the acquirer is yet to make inroads.

She said that the company was open to more acquisitions as long as it had a credible distribution, a decent sized EV and strong risk management in its DNA. Padalkar said that the first stage of the transaction — turning Exide Life into a wholly owned subsidiary — would take place by December-January. Thereafter, she expected consolidation to take 8-9 months.

Exide Life Insurance has its origins as ING Vysya Life Insurance. The company lost both its original promoters — ING, which decided to exit a few years after the global financial crisis in 2013, and Vysya Bank which was acquired by ING and later by Kotak Mahindra Bank. After ING’s exit, the Rajan Raheja-owned auto battery-maker Exide became the owner of Exide Life Insurance. The company was seen to be an acquisition target for several years as it had not managed to achieve scale. Exide on Friday informed the stock exchanges that the total investment of the company in the life subsidiary was Rs 1,679 crore.



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South India’s first currency museum opens in Bengaluru, BFSI News, ET BFSI

Banking & Finance

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BENGALURU: From a pre-Independence era currency note with a message for the British to ‘Quit India’, to a much recent political message, ‘Jai Telangana’, scribbled on a demonetised Rs 1,000 note, a new museum in the city houses them all.

Businessman Rezwan Razack on Saturday unveiled the Museum of Indian Paper Money at Prestige Falcon Towers on Brunton Road. This is the second such museum in the country; the first was established by RBI in Mumbai.

Filled with paper notes that evolved in the country even before the British Rule, the museum has over 700 artefacts collected over a span of 20 years. It also houses artefacts contributed by several numismatists.

The museum was conceptualised three years ago, and a team worked to ensure it matched international standards. It has a special lighting system and data-logging facility in each of the exhibit sections. The exhibits are placed in a temperature and humidity-controlled environment to make sure the paper does not wither.

“If we ask our elders for an old coin, they can easily produce one. But not a currency note, which is tougher to maintain. This museum ensures that history is preserved through paper notes. Visitors will get to witness how the country changed through the years,” Razack told reporters.

Curated in chronological order, the currency includes early notes of private and presidency banks, uniface notes of Colonial India, portrait notes of British monarchs and the recently released ones. One of the oldest notes is from 1812 and another is a high-denomination note of Rs 10,000. Razack said, “Every note tells a story. One was given to me by a Portugal man who contacted me through email. It took me over six months to get it.”

A Hyderabad Rs 10 note which was lost in a shipwreck in 1932 and was salvaged later was the cynosure of all eyes on Saturday. It is autographed by the team of rescuers belonging to an Italian vessel.

Bazil Shaikh, author and former RBI secretary, said the museum is comprehensive when it comes to documentation and research. The museum will have orientation panels for kids and a souvenir shop; it will have an online presence. Entry fee is Rs 100.

SLICES OF HISTORY: The oldest currency note on display at the Museum of Indian Paper Money is from 1812; (inset) Rs 50 and Rs 500 notes issued by Portugal in Goa in 1924



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Experian CEO Singhal to head SVC Co-operative Bank, BFSI News, ET BFSI

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Mumbai: Mumbai-headquartered SVC Co-operative Bank has appointed Ashish Singhal as its new MD. Singhal replaces Ajit Venugopalan, who retired on August 31, 2021.

Singhal has over 25 years of experience in the financial sector including with GE Capital TFS, Standard Chartered and ICICI Bank in various roles. Before joining SVC Bank, Singhal was the MD & CEO of Experian Credit Information Company.

“SVC Bank is fast evolving into a new-age phygital bank and Singhal will lead this transformation,” the bank’s chairman Durgesh S Chandavarkar, said.

“Banking industry is on the cusp of transforming itself and I look forward to strengthening the brand and franchise of SVC Bank by enhancing value creation for our customers, shareholders and employees,” said Singhal.

The 15-year old co-operative bank has a presence across 11 states. The bank ended FY21 with a total business of Rs 29,659 crore and a net profit of Rs 150 crore. Its deposits grew to Rs 17,331 crore from Rs 16,500 in the previous financial year. While total advances grew to Rs 12,328 crore as against Rs 11,608 crore. It is one of the few co-operative banks to have an authorised dealer Category I License from the RBI.



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DBT, no common IFSC for Kerala Bank cause delay, BFSI News, ET BFSI

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A combination of two factors, the Centre’s decision to disburse crop insurance claims under direct benefit transfer (DBT) mode and delay in Kerala Bank getting its own IFSC code, are delaying the delivery of insurance claims of about 20,000 farmers across the state.

About Rs 21 crore to be disbursed to farmers as insurance claims for 2019-20 was returned by the insurance company as the farmers were unable to submit their account numbers and matching IFSC codes. Claims of Rs 70 crore are pending for 2020-21.

The farmers were getting compensation for crop loss due to adverse weather or other factors under Pradhan Mantri Fasal Bima Yojna (PMFBY). Most farmers (60-80%) have their accounts in primary agriculture cooperative societies (PACS). Earlier, the farmers were made to open mirror accounts in district cooperative banks (DCBs), and agriculture insurance company (AIC) of India was allocating the lumpsum amount of the total claims from a district to the DCB there. The DCB would then transfer the claim amount to the farmers through the mirror accounts. The DCBs were then giving utilisation certificates to AIC .

However, with Centre’s decision to enforce DBT, indirect transfer of insurance claim amounts became impossible. While trying to upload the claims in the DBT portal, the farmers submitted their account number in PACS and the district cooperative bank’s IFSC code. However, their claims bounced as these two data did not match. The compensation to farmers has not been disbursed for the last two years, said K K Kochumuhammed, president of Kole Karshaka Sangam.

Besides, Kerala Bank, formed by merging 13 DCBs, was yet to get a common IFSC code. “Once our software integration is over we will get a common IFSC code. We have requested AIC to retain the earlier practice till then, and clear the pending claims,” said Anita Abraham, DGM, Kerala Bank.

“We had a video conference on Thursday with Union agriculture ministry officials, and requested them to defer DBT implementation till the amalgamation process of DBCs and Kerala Bank are completed, and they have responded positively,” said George Alexander, additional director of agricultural department.



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5 Agriculture Input Stocks To Buy For Good Returns As Suggested By Sharekhan

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Agri stocks witnessed pressure on margin owing

According to Sharekhan, a major percentage of the raw material price increase was passed on to end customers, which helped to maintain gross margin, agri input companies within our coverage saw margin pressure due to higher export freight costs. Fertiliser firms like Coromandel International, on the other hand, saw their profits improve as a substantial increase in fertiliser subsidies on DAP offset a rise in phosphatic prices. Our coverage universe’s revenue growth was decent, at 11.1 percent y-o-y, thanks to robust export performance, albeit domestic revenues were impacted by the delayed and irregular monsoon. Coromandel International and Sumitomo Chemical India reported better-than-expected earnings growth in Q1FY22.

Outlook on Agriculture Input Stocks

Outlook on Agriculture Input Stocks

According to Ministry of Agriculture figures, the monsoon was 8% lower between June 1 and August 20, resulting in 1.55 percent less sowing area in the current kharif season. Sowing is expected to grow as the monsoon season progresses and MSPs rise, resulting in increased crop prices.

Sharekhan believes that this would aid domestic agro-chemical companies in reporting significant growth (the monsoons in August and September 2021 will be critical for domestic focused agri-input operators’ earnings), while favourable sourcing strategies of global companies would promote market share gains in the exports category. The aforementioned elements, as well as the large possibility from off-patent items, are likely to fuel robust growth for telecommunications.

Bullish on Agriculture Input Stocks

Bullish on Agriculture Input Stocks

In the fertiliser space, Coromandel International reported strong numbers due to improved DAP margins despite a decline in total phosphatic fertiliser (DAP + complex fertiliser) sales volumes by 6.2% y-o-y to 7.8 lakh tonnes. Overall, margins were weak due to higher freight cost. The RM cost was mostly passed on to final customers which protected the gross margins of most of the companies in this space, says the brokerage.

“Coromandel International saw stable margins on the back of sharp hike in fertiliser subsidy on DAP, inventory gains, and benefit of backward integration. Overall, agri-input companies under our coverage reported earnings growth of 22.6% y-o-y supported by decent revenue growth and higher realisations due to a better product mix,” the brokerage has said.

5 Agriculture Input Stocks To Buy For Good Returns As Suggested By Sharekhan

5 Agriculture Input Stocks To Buy For Good Returns As Suggested By Sharekhan

Company Current Market Price Rating Target Price
Coromandel International Rs 799.30 Buy Rs 1,070
Insecticides (India) Rs 754 Buy Rs 900
PI Industries Rs 3,410 Buy Rs 3,900
UPL Rs 751 Buy Rs 930
Sumitomo Chemical Rs 420 Buy Rs 500

Key Risks

Key Risks

Agri-input firms’ earnings may be impacted by lower-than-expected sowing for the Kharif Season and higher raw material prices.

Leaders for Q1FY22: Coromandel International, Sumitomo Chemical India.

Preferred Picks: Coromandel International, PI Industries, and Sumitomo Chemical India.

Disclaimer

The above stocks are based on the report of Sharekhan. Investing in stocks is risky and investors should do their own research. The author, the brokerage firms or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as are at record peaks. Please consult a professional advisor.



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Macquarie Capital, BFSI News, ET BFSI

Banking & Finance

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Private lender HDFC Bank is expected to more than double its technology spends as it improves digital capabilities in line with global peers. The bank could also see rise in cost to income ratio by 3-4% as it looks to compete with tech companies.

“Currently technology spends as a % of opex is around 8-9%, this in our view, will double to 18-20% if management is going to significantly increase investments and is in line with some global peers,” said Suresh Ganapathy, associate director, Macquarie Capital. “Cost/Income ratio may go up from current 36% to 39-40%.”

Ganpathi added that the focus is to decouple monolithic legacy backend systems; improve digital capabilities and UI/UX (user interface), partner with Fintechs and enhance customer offerings.

Analysts are viewing the bank’s renewed focus on technology as a positive step in maintaining and possible improving their market leadership across payments, cards and various lines of businesses. Hiring also will be accordingly tailored to get more tech people giving them a conducive open working environment.

As per Macquarie’s sensitivity analysis, increase in tech expenditure and eventually cost-income ratio can impact its FY22-24E (estimated) earnings estimate by nearly 8%.

HDFC Bank recently partnered with India’s largest fintech company PayTM for payments, lending and point of sale solutions and are likely to get into more such partnerships with many Fintechs in future.

“The bank continues to be a leader in giving EMI-based products at the point of purchase outlets,” Ganapathy said. “When it comes to credit, the bank will be calling the shots and apart from their own strict underwriting criteria, the bank will also use additional surrogate data provided by the Fintechs.”



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Rana Kapoor’s wife, daughter get interim relief, BFSI News, ET BFSI

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A special Central Bureau of Investigation (CBI) court Saturday granted interim bail to the wife and daughter of promoter of Yes Bank Ltd (YBL), Rana Kapoor who is jailed in the alleged fraud caused to the private bank.

While the CBI is probing him on corruption charges, the Enforcement Directorate (ED) is investigating him in multiple cases of alleged money laundering.

In August, this year, CBI filed its supplementary chargesheet against Kapoor, his family members and four former junior employees of the bank in connection with the corruption case registered with the CBI pertaining to the loans given to DHFL.. The accused were summoned and the hearing in the said matter was scheduled for today.

Advocate Vijay Aggarwal and Advocate Rinku Garg, filed a bulky regular bail applications for Bindu Kapoor and Radha Kapoor, running into around 250 pages. The prosecution sought time to reply to the plea. The court has adjourned the matter to September 8.

Advocate Aggarwal argued before the court that his clients were charge-sheeted by the CBI without arrest and that in view of the latest judgment passed by the Supreme Court of India just two days back in Aman Preet Singh v/s CBI, his clients deserved to be granted bail.

He further argued that the court had already exercised the discretion of issuing summons to his clients, which clearly shows no need for the arrest of his clients. He contended that his clients were granted regular bail in December, 2020 by a special PMLA court in the said matter, “…which clearly shows that there were no chances of his clients absconding or tampering with evidence. Bindu Kapoor is a housewife and that Radha Kapoor Khanna had two young children so his clients shall be duly available to attend the trial”.

CBI’s counsel stated that the bail applications filed were bulky in nature and sought time to reply to it.

The court, after granting interim bail to Bindu Kapoor and Radha Kapoor Khanna, has kept the matter for reply by September 8.

According to the CBI’s first chargesheet filed last year, in June 2018, Kapoor, then the head of Yes Bank’s management credit committee, sanctioned a loan of Rs 750 crore on an application by the DHFL promoters in the name of Belief Realtors Pvt Ltd. for development of a Bandra Reclamation Project. This amount was advanced to RKW Developers, a company controlled by Dheeraj Wadhwan although the bank’s risk management team had pointed out multiple and serious issues in the proposal.

The agency’s probe revealed that the loan of Rs 750 crore was not utilised for the stated purpose.

Simultaneously, Kapil Wadhawan is said to have paid a kickback of Rs 600 crore to Kapoor and his family members in the garb of a builder loan from DHFL to DOIT Urban Ventures (India) Private Ltd. (DUVPL). Roshini Kapoor is one of the directors of DUVPL.

After deducting a processing fee, an amount of Rs 632 crore was transferred to RKW Developers. This amount was then routed to other entities controlled by the Wadhawans – KYTA Advisors and RIP Developers – to settle a loan obtained from DHFL for the same Bandra Reclamation Project in November 2015.



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UCO Bank partners with Fisdom to offer wealth management solutions

Banking & Finance

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This partnership aims at augmenting the bank’s customer value proposition by making high-quality wealth management services accessible, affordable and truly digital.

Public Sector lender UCO Bank has partnered with Finwizard Technology, which runs Fisdom, to offer wealth management products and services, beginning with mutual funds, through the bank’s mBanking — Plus App — to its thirty million customers. This partnership aims at augmenting the bank’s customer value proposition by making high-quality wealth management services accessible, affordable and truly digital.

The collaboration between Fisdom and Uco Bank will focus on enabling large-scale facilitation and distribution of all mutual fund schemes through the bank’s network of over 3,000 branches and all digital platforms, the Kolkata-based lender said.

On the occasion, Atul Kumar Goel, MD & CEO, Uco Bank, said, “Our aim has always been to continuously create greater values for our customers. With these new tie-ups we would now be offering a much wider range of wealth products. We intend to deliver greater value through customer beneficial offerings both in terms of ease of convenience, and their features.”

Subramanya SV, co-founder and CEO, Fisdom, said, “We are delighted to partner with Uco Bank and enhance wealth management experience for its customers. The evolved acceptance of the wealth products has created a systemic change among the customers to adapt the service and products we have to offer.”

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All you wanted to know about bumper-to-bumper insurance

Personal Finance

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Shyam, who is on the verge of buying a car, finds himself discussing more about car insurance than the car itself.

Manohar: So Shyam have you finalised the car you want to buy?

Shyam: Yes, but that seems far easier than deciding on an insurance plan to go with it. The dealer informs me that something called ‘third party’ insurance is mandatory and now a new bumper-to-bumper cover is all over the news.

Manohar: Yes, the Madras High Court has issued an order mandating bumper-to-bumper insurance cover every year, apart from providing cover for the driver, the passengers and the owners of the vehicle for five years. These are to be purchased over and above the third party insurance.

Shyam: How are they different from each other?

Manohar: Well first, you must be aware of mandatory third party insurance which provides cover against liability from damage to third parties. Most motor insurance policies have add-ons available to insure the driver, the owner and the passengers in line with the court order.

Specifically, personal accident policy covers the owner-driver, the paid driver and the passengers.

Shyam: Then, what is bumper-to-bumper cover?

Manohar: In the current parlance, bumper-to-bumper cover is also known as zero depreciation cover. This add-on allows you to cover the parts of a car, except tyres and batteries, against damage. And as the name suggests, no depreciation will be charged onthe value of the car while deciding on the claim amounts.

Any claim without a zero depreciation add-on is settled by adjusting for the wear and tear of the part captured by the depreciation charge. This makes the cost of replacing that part higher. Bumper-to-bumper insurance can land a claim amount closer to the actual value without depreciation. However, this policy does not cover engine damage caused by water ingress and oil leakage.

Shyam: So, what should one expect?

Manohar: Well since the order has been passed only recently, there is not much clarity on how it will be implemented.

The court itself has placed the order on hold as insurers asked for time to design an appropriate product. For one, the issue of buying the cover upfront for five years has to be clarified. The pricing and the availability of such a comprehensive product too will be something to watch out for.

Shyam: Seems like we have to wait and watch for more clarity on this.

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