Author: root

3 SIP Mutual Funds To Consider Based On 5-Star Rating From Morningstar

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Axis Flexi Cap Fund

This fund has been accorded a 5-star rating from Morningstar. Let’s take a look at how the fund has performed over the last few years. This is a Flexi Cap fund, which means the fund manager has the choice to move money from largecap funds to mid and small cap funds and the other way round as well.

Returns from Axis Flexi Cap Fund

1- year 3-year, annualized 5-year, annualized
49.48% 17.22% NA

Other details of Axis Flexi Cap Fund

NAV Rs 18.61, growth
Assets under management Rs 8,566 crores
Investment strategy Equity
Risk Very high

Axis Flexi Cap Fund SIPs: For those willing to take risk

Axis Flexi Cap Fund SIPs: For those willing to take risk

Investors who are long-term investors and are willing to take a risk can go for these SIPs. An SIP started 3-years ago in Axis Flexi Cap Fund for Rs 10,000 every month is worth Rs 5.25 lakhs today. That is a remarkable set of returns from the fund. In fact, most of the equity funds from the Axis Mutual Fund stable have done well over the years.

It’s important to note that markets have gone from 33,000 points on the Sensex a year ago to 53,000 points. It is therefore not worth considering lumpsum at this stage and investors should stick to Systematic Investment Plans. Apart from Axis Flexi Cap Fund we are also recommending two other funds below for long term investors.

Quant Midcap Fund

Quant Midcap Fund

Quant Midcap Fund is a high risk investment, given that the fund invests invests in midcaps, which are volatile. However, if you go through the SIP route this is taken care off, as the law of averages applies.

Returns from Quant Midcap Fund

1- year 3-year, annualized 5-year, annualized
88.17% 23.52% 19.03%

Other details of Quant Midcap Fund

NAV Rs 109.56, growth
Assets under management Rs 110 crores
Investment strategy Equity
Risk Very very high

Quant Midcap Fund: A decent performer

Quant Midcap Fund: A decent performer

Quant Midcap Fund has been rated as 5-star by Morningstar. Investors can start a SIP in the fund with a sum of Rs 1,000 every month. The fund size is not too large and this gives the fund manager some flexibility when investing.

It’s advisable to start an SIP with a small sum at the moment, given that the markets are high and when the markets fall, you can increase the size of the SIP. This would be a good strategy for investors to adopt for Systematic Investment Plans, given that the Sensex is at 53,000 points. Quant Midcap Fund is an investment for those willing to take serious risk. If you do not have an appetite for the same, avoid this mutual fund scheme. We at goodreturns are not recommending any lumpsum investment at the moment, as the markets are overpriced.

SBI Small Cap Fund

SBI Small Cap Fund

This is another fund that is high risk, but, is rated 5-star by Morningstar. This fund has been a consistent performer and has given good returns over the last 1-year. Here are

Returns from SBI Small Cap Fund

1- year 3-year, annualized 5-year, annualized
88.28% 21.86% 21.03%

Other details of SBI Small Cap

NAV Rs 95.30, growth
Assets under management Rs 9,010 crores
Investment strategy Equity
Risk Very very high

SBI small cap fund: Invest small amounts

SBI small cap fund: Invest small amounts

The portfolio of SBI Small Cap Fund includes names like Elgi Equipments, V-Guard Industries, Carborundum Universal and Sheela Foam. The fund has given superb returns in the last 1-year. We suggest to invest small amounts at the current juncture and gradually increase the same, should the markets fall. If you redeem your units before a period of 1-year there is a charge of 1% that would be levied as load fees.

An SIP can begin with a sum of Rs 500 and investors need to hand-over 12 cheques for the purpose of investments.

Disclaimer

Disclaimer

Please note, investing in mutual funds is risky and investors should exercise caution. Please do adequate research. Neither Greynium Information Technologies, nor the author would be responsible for losses incurred based on the above article.



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Forcing minimum claim period of 1 year on bank guarantees wrong, says Delhi HC, BFSI News, ET BFSI

Banking & Finance

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In a ruling that will help infrastructure and construction companies, the Delhi High Court said forcing a minimum claim period of 12 months for bank guarantees is wrongful, rejecting interpretations that existing laws rendered shorter claim periods void.

Ruling on a petition filed by engineering conglomerate Larsen & Toubro Ltd against Punjab National Bank, a single-judge bench of the High Court observed, “It is clear that respondent No 1 (PNB) is erroneously of the view that they are in law mandated to stipulate a claim period of 12 months in the bank guarantee, failing which the clause shall be void under Section 28 of the Contract Act.”

The court directed the lender to take a relook at such agreements.

“It (Section 28) deals with the right of the creditor to enforce his rights under the bank guarantee, in case of refusal by the guarantor to pay, before an appropriate court or tribunal,” Justice Jayant Nath observed in a 43-page order issued on Wednesday. It does not deal with the claim period – a time within which the beneficiary is entitled to claim the guarantee.

Experts said the ruling will particularly benefit infrastructure and construction companies that need to issue bank guarantees while fulfilling contracts for government bodies and public sector undertakings.

“This decision will have far-reaching consequences because it will give both banks and companies the much-needed flexibility in entering into contracts related to bank guarantees,” said Ashish K Singh, managing partner of law firm Capstone Legal.

Anil Goel, founder and chairman of insolvency professional company AAA Insolvency Professionals, said, “Construction companies bidding for projects should have the flexibility to bank guarantee from banks. Multiple options to get it should help them bid for more projects and save costs substantially.”

L&T, in its petition, argued that PNB’s insistence on a bank guarantee (BG) for 12 months, due to misinterpretation of Section 28, has unnecessarily made the company liable to pay commission charges for such extended BG when the principal contract would be for a much shorter period.

Also, companies have to maintain collateral security – or margin money against which a bank guarantee is issued – for supporting an extended claim period, which affects their capability to do business by entering new contracts, L&T said.

Hemant Kumar, group general counsel of L&T, confirmed the passing of an order by the Delhi High Court but refused to divulge any details.

An email query to PNB remained unanswered as of press time Friday.

L&T had made the Indian Banks’ Association (IBA) and the Reserve Bank of India (RBI) parties in the case.

As per the court order, PNB’s stand is due to letters issued by IBA on December 12, 2018, to its member banks, stating that if a bank issues a claim period of less than one year on top of the guarantee period then such a bank guarantee would not have the benefit of Exception 3 to Section 28 of the Contract Act.

Exception 3, inserted as an amendment to the Act in 2013, allowed lenders to limit the period to make a claim up to one year, down from the minimum of three years provided under the Limitation Act.

BGs are provided on a case to case basis depending on banks and individual clients. The margin money varies, but normally it is about 10-20% of the bank guarantee amount, industry insiders said.



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Can’t wrap head around not having U.S. central bank digital currency, BFSI News, ET BFSI

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Federal Reserve Governor Lael Brainard laid out a range of reasons for “urgency” around the issue of developing a U.S. central bank digital currency, including the fact that other countries such as China are moving ahead with their own.

“The dollar is very dominant in international payments, and if you have the other major jurisdictions in the world with a digital currency, a CBDC (central bank digital currency)offering, and the U.S. doesn’t have one, I just, I can’t wrap my head around that,” Brainard told the Aspen Institute Economic Strategy Group. “That just doesn’t sound like a sustainable future to me.”

Fed officials are taking a deep dive into the digital payments universe, collecting public feedback on the potential costs and benefits as well as design considerations with a view to publishing a discussion paper in early September.

Fed Chair Jerome Powell in comments earlier this month described the analysis as a key step in accelerating the Fed’s efforts to determine if it should issue its own CDBC.

“One of the most compelling use cases is in the international realm, where intermediation chains are opaque and long and costly,” Brainard said on Friday.

But there are domestic reasons too for a U.S.-backed digital currency, she said: the dramatic rise in stable coins, a form of cryptocurrency pegged to a conventional currency such as the U.S. dollar but not backed by any government.

Stable coins could proliferate and fragment the payment system, or one or two could emerge as dominant, she said. Either way, “in a world of stable coins you could imagine that households and businesses, if the migration away from the currency is really very intense, they would simply lose access to a safe government-backed settlement asset, which is of course what currency has always provided.”

A CBDC could also help solve other problems, she suggested, including the difficulty during the pandemic of getting government payments to people without bank accounts, who also tend to be the very people who need the payments the most.



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Buy These 2 Banking Stocks For A 46% Upside, Says Motilal Oswal

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Rationale to buy the stock of Union Bank

The Brokerage has a “buy” on the stock of Union Bankwith a price target of Rs 55, which is higher by almost 46% from the current levels of Rs 37. According to the brokerage firm Union Bank reported healthy operating performance, supported by higher other income and improving margin trajectory, despite sluggish business growth. Domestic net interest margins expanded by 71 basis points QoQ to 3.11%.

Select valuation parameters for Union Bank from Motilal Oswal (estimates)

FY 2021-22 FY 2022-23
EPS Rs 7.9 Rs 11.8
Price to earnings 4.81 3.2
Price to book value 0.4 0.3
Price to a/bv 0.5 0.5

Union Bank: Operating performance showing signs of recovery

Union Bank: Operating performance showing signs of recovery

Union Bank reported a net profit of Rs 11.8 billion (+255% YoY), supported by higher treasury gains of Rs 11.1 billion and recovery from written of account of Rs 3.3 billion, even as total provisions stood elevated Rs 35 billion.

According to broking firm, Motilal Oswal slippages stood elevated (4.8% annualized), led by higher slippages in the MSME and two large corporate accounts slipping in 1QFY22.

“However, higher write-offs and up gradations aided stable asset quality on a sequential basis. SMA-2 overdue stood at 3.7% of loans, and restructured book stood at 2.7% of net loans. We conservatively estimate RoA/RoE of 0.6%/11.4% by FY23E. We resume coverage with a Buy rating,” the brokerage has said.

Buy the stock of Shriram City Union Finance

Buy the stock of Shriram City Union Finance

The brokerage also has a buy on the stock of Shriram City Union Finance, post the company’s quarterly numbers. According to the brokerage there has been no major deterioration in asset quality and the restructuring too has been minimal. The firm has noted that the Capital adequacy remained strong with Tier I at 30% (up 90bp QoQ).

Valuations matrix from Motilal Oswal for Shriram City Union, estimates

FY 21-22 FY 22-23
P/E 9.7 8.00
Price to book value 1.3 1.1
Dividend yield 1.4% 1.4%

Shriram City Union: Loan book muted

Shriram City Union: Loan book muted

“Loan book growth has remained muted, given the impact on disbursements (from lockdowns). However, liability-side and liquidity issues faced by the company immediately after the outbreak of the pandemic have now receded into the sidelines,” Motilal Oswal has said.

While cost of funds (calculated) declined 21 basis points sequentially to 8.9%, calculated yields (on AUM) stood at 19.7% (up 20 basis points QoQ). Spreads improved by 40 basis points QoQ to 10.8%.

“Despite a presence in vulnerable product segments like MSME, 2W, and Personal loans, asset quality performance has been encouraging, with minimal restructuring. With an equity infusion of Rs 2 billion from the parent, Shriram Housing will be looking forward to strong growth and carving out its niche in the Affordable Housing Finance segment,” the brokerage has said.

Disclaimer

Disclaimer

Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Investors should take care because the markets are near record highs.



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Insolvency and bankruptcy code: The new route to M&A

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For instance, Essar Steel India Limited was acquired by Arcelor Mittal India Pvt. Ltd. for Rs. 41,018 crores as against the outstanding dues of Rs. 49,473 crores.

By Hemant Batra

What was positioned by Indian law makers and policy wonks as the best antidote for rising non-performing assets (NPAs) of banks and financial institutions, resulting in a larger number of companies going into the liquidation process, has ended up being a successful rehabilitating and restructuring formula for these bankrupt companies. These distressed assets have become the new targets for bigger companies planning to grow through the organic route.

The rules and regulations framed under the Insolvency and Bankruptcy Code (IBC) have opened-up countless opportunities and prospects for merger and acquisition (M&A) deals in India. These opportunities have been used productively by companies and investors wanting to diversify into new businesses or expanding and consolidating their existing businesses.

After all, the statutory mandate or pre-requisite of the IBC is to provide a resolution or long-term sustainability of distressed assets of corporate debtors rather than take the liquidation route, which was kept as a solution of last resort. Then there are elements of concessions, adjustments and alterations under the Code, which can be exercised by owners, stakeholders, and creditors in specific cases to ensure that corporate restructuring is approved under the IBC, and results in the revival of the bankrupt entity.

Under the IBC, there are two principal avenues for mergers and acquisition (M&A) of assets. The first is the fast-track process, where the corporate debtor’s assets are unencumbered, meaning outside the ordinary course of business, like personal things such as books, vehicles etc. So, the new promoter takes over only the existing business with all its assets. Secondly, where the assets are encumbered or a part of the business, and the creditors have already initiated a corporate insolvency resolution process (CIRP) against the corporate debtor.

In the case of the former too the approval of a committee of creditors (CoC) becomes a precondition before any takeover, though it is a much faster process. In the case of the latter, the resolution plan crafted by the CIRP, may provide for transfer or sale of all or part of the assets of the corporate debtor to one or more persons, and substantial acquisition of shares, or the merger or consolidation of the corporate debtor with one or more persons. The resolution plan may also allow for divesting all or some parts of the corporate debtor’s assets through M&A action over a predetermined period following the successful conclusion of the CIRP.

As the saying goes, the devil is in the details. Thus, it is imperative to comprehend the specifics of the insolvency resolutions, and study the successful M&A, which have been concluded since December 2016, when the IBC came into existence, before taking any decision. According to official figures, the IBC has effectively rescued 308 corporate debtors as of December 2020 through resolution plans including M&A. These corporate debtors owed Rs. 4.99 lakh crore to the creditors. Under IBC, the creditors recovered Rs. 1.99 lakh crore, which was 193 per cent more than the realisable value of the assets.

The IBC has facilitated the recovery of NPAs by banks through the M&A route and corporate restructuring. Only a handful of cases accounted for a large proportion of public debts. The creditor banks commenced the resolution process of 12 large accounts in mid-2017. Their total recoverable dues stood at Rs. 3.45 lakh crore as against the low liquidation value of about one-fifth of the recoverable dues. Out of these 12 big corporations, nine qualified for lucrative M&A and fetched worthwhile recoveries from the banks’ perspective. For instance, Essar Steel India Limited was acquired by Arcelor Mittal India Pvt. Ltd. for Rs. 41,018 crores as against the outstanding dues of Rs. 49,473 crores.

Other big defaulting accounts like those of Bhushan Steel Limited, Bhushan Power & Steel Limited, Jaypee Infratech Limited, Alok Industries Limited etc. were also acquired by bigwigs like Vedanta Ltd. Monnet Ispat & Energy Limited, Reliance Industries Limited, NBCC (India) Limited etc. at very high value. These successful instances of M&A speak a lot about the efficiency and usefulness of the IBC.

The new route of M&A through distressed assets, however, is facing a few challenges. There are always challenges associated with bidding and acquisition of distressed assets. Valuations of such assets need to be adequately insulated from its erstwhile promoters and owners, who use proxies to either derail the bidding process, or jack up the valuations.

Further, despite the protection provided by the law regarding the marketability of assets, the Supreme Court judgement in the Ghanshyam Vs Edelweiss of April 2011, and the rule of no interference from any other civil court in respect of any action taken or to be taken with regard to any order passed by the Adjudicating Authority i.e. the National Company Law Tribunal, some acquirers and investors had to face some legal complications in their M&A objective.

For instance, the question of how the penalty for regularising any non-compliance of the previous management is being imposed on the new management still remains unanswered? Similarly, how the previous clearances/regularisation are supposed to be treated, still remain unclear.

Hence, in spite of all statutory assurances for smooth acquisition and corporate restructuring, the new entrants may have to keep in mind the significance of due diligence of the nature and status of assets, and also ensure that there is no overlap of any legal proceedings involving the assets of the promoters, especially quasi-criminal proceedings.

(The author is a Delhi-based corporate and public policy lawyer and counsel. Views expressed are personal and not necessarily that of Financial Express Online.)

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Varun Chopra, Eduvanz, BFSI News, ET BFSI

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-By Tarika Sethia & Ishan Shah

The ed-tech boom in India has grown multi-fold in the last two years and Varun Chopra of Eduvanz, funding education and skill seekers believes the time is good and the focus will be on tier-2, 3 & 4 cities.

Varun Chopra, Co-founder & CEO at Eduvanz believes that banks have slightly burnt their fingers in financing higher education loans and Eduvanz found a space to fund students who are looking to do courses in domestic universities in India.

Varun said, “The idea was that how everybody is creating financial entities around a certain specific sector or product like an auto loan, property loan, microfinance, etc. We wanted to be the lender for learners.”

Pandemic Impact

The pandemic has accelerated Eduvanz’s growth journey. Some of the key drivers Varun sees is the New Education Policy 2020 and UGC Policy where degrees can be given online which has never happened before in India. So students who are sitting out of tier 2,3,4 cities, now don’t have to come to Bombay and Delhi to get educated, backed by the high penetration of the internet across India.

Eduvanz sanctions loans to these students and becomes one point of contact. It also launched no-cost loans where students can buy laptops, mobile phones at 0% interest.

Varun said, “0% is just a small behaviour change of another way of buying products and paying later. So just like BNPL is picking up in the consumer sector. We’ve created products like study-now-pay-later. So this SNPL product is really making a difference for both the consumer and the education institutes because for educational institutes it is helping them meet the demand of the students and increasing their enrollment and for students, it is at zero cost, it’s very beneficial.”

The average ticket size is around Rs 1.8 lakh and the average tenure of 18 months, but it starts lending at as low as Rs 20,000 to Rs 25,00,000. It has tied up with over 200 universities across countries.

Courses in demand & Risks

Varun highlights that courses and skill sets related to the BFSI, Analytics, Digital Marketing, Blockchain are in demand and students are trying to build their careers in these sectors. A big shift is also being seen in how work from home has benefited these students to pursue courses beyond working hours.

Varun adds, “Employment is backed by quality education and skillsets. Most of these educational courses are also becoming hybrid today. Some of these models are becoming very effective and that is where the boom in education learning is happening in India.

25% of the borrowers are introduced to educational institutes where they don’t have any tie-ups. While they may not get a 0% loan but are able to get their education financed at a cheaper cost, explains Varun.

It has brought down its exposures which are impacted by the pandemic also with institutes where placements have gone down and there’s an employability risk which is determined by its internally created score called ’employability score’.

BFSI, IT & Technology are the key drivers for now.

Impact on Existing book

Varun said, there has been an impact but luckily we were part of the impact-based lending. So we have partnered with Michael Susan Dell foundations, where we get the coverage if the borrower is not able to pay back. However, our portfolio is extremely solid.

It claims that they are one of the best performing fintech with NBFC license with NPAs less than 0.7% in spite of two phases of severed Covid-19 waves. He added, “We have reduced a little bit of exposure on each impacted sector. We have tweaked how much exposure some of the institutes we can take. To be honest, I think we have been fortunate enough because most of the borrowers get employed. Even if there is a delay in getting employed, these guys have been able to kind of repay back over a period of time.”

New Avenues

Eduvanz has also started financing school fees for which it acquired a company called ‘clarity’ last year. It provides students mentorship and industry guidance. Varun said, “We are creating an entirely digital platform around it, where we have partnerships at schools and colleges. Students can talk to these industry veterans and understand good career opportunities and options.”

It has also partnered with companies like Apple to finance study-related equipment where borrowers may want a laptop to do their education. Varun adds, “So there’s a lot of focus on creating a whole lender for learners, not just finance a part of their education, but anything related to their learning, whether it is in mobile devices, insurance, laptops.”

We are lenders for learners: Varun Chopra, Eduvanz

In the last four years, it has collected huge amounts of data on institutes, sectors, consumers, employment trends which has enabled them to create innovative products.

In terms of credit demand, Varun said, “ In the last four months we have constantly hit the highest. There is an extreme amount of demand and we are disbursing close to Rs 40-45 crore per month, and we are planning to reach Rs 75 crore in two to three months. So that’s the immediate target.”

Fundraise & Growth

Eduvanz is looking for a series-B round closely and will be more like a growth capital to build strong technology infrastructure and products and create a strong distribution model for learners.

Varun adds, “The ed-tech boom has led to a new kind of quality education turning up and no sector has grown without the availability of finance, every sector is to be pushed by the financial sector. Being somewhere where we were one of the first ones, we hope to carry this torch of growth in upcoming times.”



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Top 10 Banks Offering Best Returns On 5-Year Tax Saving Fixed Deposits In 2021

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Investment

oi-Vipul Das

|

For investors with a low-risk profile, new investors, or senior citizens, fixed deposits (FD) are always the best to bet. It is an investment vehicle under the debt category that not only generates guaranteed returns but also allows tax benefits under section 80C, flexible tenure, and deposit insurance cover up to Rs 5 lakh by DICGC where depositors can claim their money within 90 days if their banks go under a moratorium.

Here we are talking about fixed deposits for 5-years where our readers, especially debt investors need to keep in mind that the tax benefits up to Rs 1.5 lakhs under section 80C will only apply if they stay invested for 5-years of lock-in period which simply states that they can not make a premature withdrawal. By summing up all these factors, here we have compiled the top 10 public sector, private sector, and small finance banks that are now promising higher returns on fixed deposits of up to 5 years or tax-saving fixed deposits of less than Rs 2 Cr.

Top 10 Small Finance Banks Offering Good Returns On 5-Year Tax Saving FDs

Top 10 Small Finance Banks Offering Good Returns On 5-Year Tax Saving FDs

When it comes to fixed deposits, small finance banks always offer higher returns to both regular and senior citizens compared to the leading private and public sector banks. But as a matter of concern for the safety of their deposits, let me remind the investors that they can enjoy the deposit insurance cover provided by DICGC across small finance banks also. For higher returns along with deposit safety, customers can open a fixed deposit account for 5-years in any of the below-listed small finance banks respectively.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.
1 Ujjivan Small Finance Bank 6.75% 7.25% 3 Years and 1 Day to 5 Years March 5, 2021
2 Jana Small Finance Bank 6.75% 7.25% 3 years to less than 5 years 07.05.2021
3 Fincare Small Finance Bank 6.75% 7.25% 59 months 1 day to 66 months 29 July, 2021
4 North East Small Finance Bank 6.50% 7.00% 1096 days to less than 1825 days April 19, 2021
5 Equitas Small Finance Bank 6.25% 6.75% 4 years 1 day to 5 years June 1, 2021
6 Suryoday Small Finance Bank 6.25% 6.50% 5 years June 21, 2021
7 Utkarsh Small Finance Bank 6.00% 6.50% 701 Days to 3652 Days July 1, 2021
8 Capital Small Finance Bank 6.00% 6.50% 1 Year to less than 5 Years June 3, 2021
9 AU Small Finance Bank 6.00% 6.50% 45 Months 1 Day to 60 Months June 23, 2021
10 ESAF Small Finance Bank 5.25% 5.75% 1821 days to 3653 days 02.05.2021
Source: Bank Websites

Top 10 Private Sector Banks Promising Higher Returns On 5-Year Tax Saving FDs

Top 10 Private Sector Banks Promising Higher Returns On 5-Year Tax Saving FDs

After small finance banks, private sector banks offer the best returns on fixed deposits to both regular and senior citizen investors. By keeping deposit insurance cover benefits and higher returns in mind, here we have compiled the top 10 private sector banks that are now promising higher interest rates on 5-year deposits.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.
1 RBL Bank 6.50% 7.00% 60 months July 2, 2021
2 DCB Bank 6.50% 7.00% 36 months to 60 months May 15, 2021
3 Yes Bank 6.25% 7.00% 3 years to less than 5 years June 3, 2021
4 IndusInd Bank 6.00% 6.50% Indus Tax Saver Scheme (5 years) July 23, 2021
5 IDFC First Bank 5.75% 6.25% 5 years May 1, 2021
6 Axis Bank 5.40% 5.90% 3 years to 5 years 22.06.2021
7 ICICI Bank 5.35% 5.85% 5 Years (80C FD) 21.10.2020
8 HDFC Bank 5.30% 5.80% 3 year 1 day- 5 years May 21, 2021
9 Bandhan Bank 5.25% 6.00% 3 years to less than 5 years June 7, 2021
10 Kotak Mahindra Bank 5.20% 5.70% 4 years and above but less than 5 years July 23, 2021
Source: Bank Websites

Top 10 Public Sector Banks Providing Best Returns On 5-Year Tax Saving FDs

Top 10 Public Sector Banks Providing Best Returns On 5-Year Tax Saving FDs

For deposit amounts of less than Rs 2 Cr, here are the top 10 public sector banks offering the best interest rates on 5-year fixed deposits to both regular and senior citizens in 2021.

Sr No. Banks Regular FD Rates Senior Citizen FD Rates Tenure W.e.f.
1 Union Bank of India 5.50% 6.00% 3 years to less than 5 years 09.07.2021
2 Canara Bank 5.50% 6.00% 3 years and up to 5 years 08.02.2021
3 State Bank of India 5.30% 5.80% 3 years to less than 5 years 08.01.2021
4 Punjab & Sind Bank 5.30% 5.80% 3 Years – 5 Years 16.05.2021
5 Bank of Baroda 5.25% 5.75% 3 years and up to 5 years 16.11.2020
6 Punjab National Bank 5.25% 5.75% above 3 year & upto 5 years 01.05.2021
7 IDBI Bank 5.25% 5.75% 5 years July 14, 2021
8 Indian Overseas Bank 5.20% 5.70% 3 Years and Above 09.11.2020
9 Indian Bank 5.15% 5.65% 5 years 05.02.2021
10 Central Bank of India 5.00% 5.50% 2 years and up to 10 years 10.07.2021
Source: Bank Websites

Story first published: Saturday, July 31, 2021, 13:35 [IST]



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China’s central bank says it will keep pressure on crypto market, BFSI News, ET BFSI

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China’s central bank vowed to maintain heavy regulatory pressure on cryptocurrency trading and speculation after escalating its clampdown in the sector earlier this year.

The People’s Bank of China will also supervise financial platform companies to rectify their practices according to regulations, it said in a statement on Saturday. Policy makers met on Friday to discuss work priorities for the second half of the year.

China launched its most intense crackdown on crypto trading and mining since 2017 in recent months, after a surge in Bitcoin and other tokens heightened authorities’ concerns over risks of fraud, money laundering and excessive energy usage. It also imposed a series of regulatory actions targeting monopolistic behavior at online payment platforms such as Ant Group Co. over the past year.

The central bank will act to prevent major financial risks and push to lower the number of high-risk financial institutions in key provinces, according to the statement. It will also accelerate its work to create a financial stability law, which was proposed by Deputy Governor Liu Guiping in March.

The PBOC reiterated that its prudent monetary policy will be flexible, targeted, reasonable and appropriate. It vowed to implement a good “cross-cyclical” policy design, a term widely interpreted to mean authorities will use a longer time frame when considering policy support and will avoid overstimulating the economy.



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3 Stocks That Sharekhan Has A Buy For Short To Medium Term

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Welspun India

Welspun India is among the world’s leading Home Textile solution providers. Broking firm Sharekhan has suggested buying the stock with a price target Rs 170, against the current market price of Rs 133.35

The company registered strong all-round performance on the back of strong international demand and low base of Q1FY2021. Revenue and operating profit grew by 84%/100% y-o-y, respectively, in Q1FY2022; PAT grew by 4.1 times.

Sharekhan estimates of Financials of Welspun India- Rs crores

FY 2022 (e) FY 2023 (e)
EPS 7.0 10.1
P/E 20.0 14.0
Price to book 3.4 2.8
Net profits 707 1012

Reasons why Sharekhan is betting on Welspun India

Reasons why Sharekhan is betting on Welspun India

The brokerage has revised upwards its earnings estimates for FY2022/FY2023 by 5.6% and 8.9%, respectively, to factor in higher-than-expected margins to incorporate the benefits of no-change in rate of RoSCTL scheme and higher sales volume from the home textile business.

“Market share gains in the home textile market in the US, higher demand from retail clients of Europe/UK coupled with strong growth in B2C business will drive the core home textile business in the near to medium term. Emerging business (including flooring) will add substantially to revenue over the next two to three years. Further, European Union removing GSP status of Pakistan can provide a level-playing field for domestic players. The stock is currently trading at 14 times its FY2023E earnings. We maintain our Buy rating on the stock with a revised target price of Rs 170,” the brokerage has said.

Maruti Suzuki

Maruti Suzuki

Sharekhan also has a buy on the stock of broking Maruti Suzuki and expects expect strong volume recovery ahead, which would improve revenue and profitability. The brokerage has set a price target of Rs 8587 and has placed a buy call on the stock of Maruti Suzuki.

Sharekhan estimates of Financials of Maruti Suzuki- Rs crores

FY 2022 (e) FY 2023 (e)
EPS 189.8 275.9
P/E 37.7 25.9
Price to book 3.9 3.5
Net profits 5734 8333

Maruti Suzuki: Strong growth ahead

Maruti Suzuki: Strong growth ahead

According to Sharekhan the company is likely to benefit from buoyant passenger vehicles demand, driven by rising demand in tier-2 and tier-3 cities and rural areas. “Maruti Suzuki is expected to sustain its dominant market share, aided by strong product portfolio and position, brand appeal, and ability to frequently launch new models,” the brokerage has said.

According to Sharekhan the company’s strong distribution network in the passenger vehicle segment and rural penetration are likely to drive strong revenue growth going forward.

“Maruti Suzuki would benefit from operating leverage, driven by robust volume growth. We expect its earnings to post a 40.4% CAGR during FY2021-FY2023E, driven by a 21.9% revenue CAGR and a 350-bps improvement in EBITDA margin. We expect Return on Capital Employed to improve to 16.8% in FY2023E from 13.6% in FY2020. We maintain our Buy rating on the stock with an unchanged price target of Rs. 8,587,” the brokerage has said.

Birlasoft Ltd

Birlasoft Ltd

Birlasoft Ltd provides digital and information technology consulting, services, solutions and products for organizations across industries, worldwide. Sharekhan has maintained a buy on the stock with a price target of Rs 500, against the current market price of Rs 408 on the stock.

Birlasoft estimates by Sharekhan in Rs

FY 2022 (e) FY 2023 (e)
EPS 16 18.8
P/E 25.4 21.7
Price to book 4.2 3.7
Net profits 456 534

Buy the Birlasoft stock, says Sharekhan

Buy the Birlasoft stock, says Sharekhan

According to Sharekhan, the management optimistic of a 15% y-o-y revenue growth in FY2022E, led by healthy deal pipeline, decent deal wins and strong growth in top accounts; EBITDA margin to sustain in Q2 despite wage revisions.

“We expect revenue and earnings to clock a 15% and 29% CAGR respectively over FY2021-FY2023E. We prefer stock given its healthy net cash balance and improving return ratios. We maintain a Buy on Birlasoft with a revised target price of Rs. 500, given its strong earnings growth potential, robust deal pipeline and strong demand environment,” the brokerage has said.

Disclaimer

Disclaimer

Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage houses are not liable for any losses caused as a result of decisions based on the article. Investors should take care because the markets are near record highs.



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2 SIPs To Consider For August, Rated 5-star By CRISIL And Value Research

Personal Finance

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Invesco India Midcap Fund

This fund is rated as 5-star by CRISIL. As the name suggests it is heavily invested in midcap stocks and hence a fall in the markets could make it a risky proposition.

Returns from Invesco India Midcap fund

1-year returns 3-year returns 5-year returns
66.67% 18.77% (annualized basis) 17.13% (annualized basis)

Other details of Invesco India Midcap fund

Assets under management Rs 1,706 crores
Launch date April 2007
NAV under growth plan Rs 81.70
SIP amount every month Rs 500

Invesco India Midcap Fund: Good for risk averse investors

Invesco India Midcap Fund: Good for risk averse investors

Invesco India Midcap Fund is good for those looking for SIPs, and willing to take substantial risks. Investors can start an SIP in Invesco India Midcap Fund with a small sum of Rs 1000. Invesco India Midcap fund has holdings in stocks like Gland Pharma, Endurance Technologies, Vinati Organics, Bharat Electronics, Gujarat Gas etc.

One can opt for the dividend as well as the growth plan under the scheme. The fund is well invested with 97.3% now in stocks, while the remaining is being held in cash. This fund is suitable for those willing to take a long-term view of things.

Our own belief is that the stock markets are overheated at the moment and the next 3-year returns are unlikely to be like the past, given that the markets have been scaling historic peaks.

Canara Robecco Bluechip Fund

Canara Robecco Bluechip Fund

This fund has been rated 5-star by several leading analysts and research agencies. It has been a consistent performer all these years. Let’s take a look at the performance of this fund.

Returns from Canara Robecco Bluechip Fund

1-year returns 3-year returns 5-year returns
44% 16.28% (annualized basis) 15.76% (annualized basis)

Other details of Canara Robecco Bluechip Fund

Assets under management Rs 3,308 crores
Launch date Aug 2010
NAV under growth plan Rs 38.52
SIP amount every month Rs 1,000

Canara Robecco Bluechip Fund: Do not invest a big amount in SIP

Canara Robecco Bluechip Fund: Do not invest a big amount in SIP

We suggest that you start with a small sum by way of SIP. At 53,000 points on the Sensex, the chances of the markets falling are brighter, than rallying significantly. We advocate a small sum now and when the markets fall, you can increase the amount of SIP. That would be a great strategy to adopt. Canara Robecco Bluechip Fund has investments in stocks like HDFC Bank, ICICI Bank, Infosys, Reliance Industries etc. Investors who have a long-term view should begin with small amounts.

This fund has investments in largecap stocks and almost 93.9% of the funds are invested. The fund is an open ended fund with a net asset value of Rs 38.51 under the growth plan and assets under management of a pretty decent Rs 3,308 crores.

Disclaimer

Disclaimer

Please note, investing in mutual funds is risky and investors should exercise caution. Please do adequate research. Neither Greynium Information Technologies, nor the author would be responsible for losses incurred based on the above article.



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