root – Page 62 – IFSCCodeof.in

5 Best Performing Technology (IT) Sector Funds To Consider for Long Term 2021

November 21, 2021 root Personal Finance

[ad_1]

Read More/Less

ICICI Prudential Technology Direct Plan

ICICI Prudential Technology Direct Plan-Growth is a medium-sized fund in its category, with assets under management (AUM) of 6,887 crores. The fund’s expense ratio is 0.79 percent, which is lower than the expense ratios charged by most other Sectoral-Technology funds.

The last one-year returns on ICICI Prudential Technology Direct Plan-Growth are 95.03 percent. It has returned an average of 28.25 percent per year since its inception.

Infosys Ltd., Tata Consultancy Services Ltd., HCL Technologies Ltd., Tech Mahindra Ltd., and Persistent Systems Ltd. are the fund’s top five holdings.

Tata Digital India Fund

Tata Digital India Fund Direct-Growth had Rs 3,842 crores in assets under management (AUM), making it a medium-sized fund in its category.

The fund’s expense ratio is 0.43 percent, which is lower than the expense ratios charged by most other Sectoral-Technology funds.

The 1-year returns for the Tata Digital India Fund Direct-Growth are 93.80%. It has returned an average of 27.89 percent per year since its inception.

The fund’s top 5 holdings are in Infosys Ltd., Tata Consultancy Services Ltd., Tech Mahindra Ltd., HCL Technologies Ltd., Persistent Systems Ltd.

The scheme aims to achieve long-term capital appreciation by investing at least 80% of its net assets in stock and equity-related securities of companies in India’s Information Technology sector.

Aditya Birla Digital India Fund

Aditya Birla Sun Life Digital India Fund Direct-Growth has assets under management (AUM) of 2,658 crores, making it a medium-sized fund in its category. The fund’s expense ratio is 1.02 percent, which is comparable to the expense ratios charged by most other Sectoral-Technology funds.

Aditya Birla Sun Life Digital India Fund Direct-Growth gains have been 82.34 percent during the last year. It has returned an average of 26.78 percent per year since its inception. Infosys Ltd., Tata Consultancy Services Ltd., Tech Mahindra Ltd., HCL Technologies Ltd., and Bharti Airtel Ltd. are the fund’s top five holdings. The majority of the money in the fund is invested in the Technology, Communication, Services, Consumer Durables, and Engineering industries.

SBI Technology Opportunities Fund

SBI Technology Opportunities Fund-Growth has assets under management (AUM) of 1,891 crores, making it a medium-sized fund in its category. The fund has a 2.27 percent expense ratio, which is higher than most other Sectoral-Technology funds.

SBI Technology Opportunities Fund’s 1-year growth returns are 80.20 percent. It has had an average yearly return of 16.61 percent since its inception. Infosys Ltd., Alphabet Inc Class A, HCL Technologies Ltd., Tech Mahindra Ltd., and Tata Consultancy Services Ltd. are the fund’s top five holdings. By investing in a diversified portfolio of equity and debt securities, the scheme aims to provide the investor with the chance for long-term financial appreciation.

Franklin India Technology Fund

Franklin India Technology Fund Direct-Growth is a medium-sized fund in its category, with assets under management (AUM) of 721 crores. The fund has a 1.47 percent expense ratio, which is higher than most other Sectoral-Technology funds.

Franklin India Technology Fund Direct has a 1-year growth rate of 55.86 percent. It has returned an average of 23.05 percent per year since its inception. Infosys Ltd., TCS Ltd., and HCL Technologies Ltd. are among the fund’s top five positions. The programme aims to achieve above-average capital appreciation by investing in high-quality, fast-growing information technology companies. When it comes to stock pricing, the Fund will take a bottom-up approach.

Disclaimer

[ad_2]

CLICK HERE TO APPLY

Check 3 Upcoming Corporate Actions Lined Up Next Week

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

1. Tide Water Oil Company (India) Ltd.:

Incorporated in 1928, the company is among the top players in the lubricant industry. Veedol lubricant brand is manufactured and marketed by the company. The company’s range of auto products includes engine oils, gear oils, transmission oils, coolants, and greases for automobiles. The company also offers products for industrial application including industrial oils, greases, and specialty products.

The company has a decent dividend track record and on November 12, 2021 it has announced an interim dividend of Rs. 20 per share (dividend %-1000%) and for the same the stock shall turn ex-dividend on November 22. For the Fy 21, the company declared a dividend of 6000% amounting to Rs. 300 apiece. Considering current market price of Rs. 1669 apiece on the NSE, the dividend yield comes to be 7.19%.

2. Morganite Crucible (India) Ltd.:

This is a small cap company from the cement-products and building materials segment. Formerly known by the name Greaves Morganite Crucible Limited, the company is based out of Aurangabad. The company is engaged in the manufacture and sale of crucibles and allied refractory products.

On November 12, the company announced a special dividend of Rs. 42 per share (dividend -840%) for which the ex-date is November 24. Between 2015-2021, the company has announced dividend 7 times.

3. Seacoast Shipping Services:

The company into ground freight and logistics services is again a small cap scrip with the latest m-cap of Rs. 602 crore. The company’s board meeting is scheduled to be held on November 24, 2021. In an exchange filing, the company informed that the meeting of the Board of Directors of the Company is scheduled on 24/11/2021, inter alia, to consider and approve the sub division of face value of equity shares of the company.

Disclaimer:

In the story, there are listed the various corporate actions to be carried out by these companies and is not a recommendation to buy into these company stocks. Stock market investment poses financial risk.

GoodReturns.in

[ad_2]

CLICK HERE TO APPLY

Banks need a tight framework, say experts

November 20, 2021 root Banking & Finance

[ad_1]

Read More/Less

Prime Minister Narendra Modi’s vision for banks to support start-ups by investing in ideas needs to be backed by a comprehensive framework from the Reserve Bank of India (RBI), say banking and finance industry experts.

In the absence of such a framework that would, among other things, cover aspects such as NPA recognition and treatment of start-up failures, public sector banks — which are into mostly asset-based lending — would not venture into supporting start-ups, experts feel.

The framework should be tight and well-thought-out to encompass all aspects of venture funding so as not compromise and expose the bankers if such investee ventures were to fail due to market forces. No banker would want to risk depositors’ money in new start-ups without safeguards. PM Modi had, earlier this week, told bankers to invest in ideas thrown up by the start-ups and support their growth.

Funding start-ups

“Start-up finance is nothing but venture capital finance. Venture capital has never been part of banking. In VC, the person who takes the risk profits if the venture succeeds and suffers losses if it does not. The present regulatory framework does not allow banks the same privilege. They do not profit if the investee venture profits but if it makes losses, the bank loses money. There is a big difference and PSBs definitely are not looking at funding start-ups”, a former chief executive of a PSB told BusinessLine. In PSBs, the monies are that of the depositors and not that of the banker, this expert pointed out.

Venture funding

There has to be a mechanism where the PSBs’ commercial banking activities are ring-fenced from their venture funding efforts, say experts. One way is to encourage banks to float their venture funding entities.

PSBs are presently not allowed to do direct equity investments in start-ups. At the most, they can set up vehicles that will do debt funding. Even here, except for large banks like State Bank of India, there has been very little activity by other PSBs. However, private banks have in the recent years been taking equity exposure in fintechs and other start-ups that they would like to partner with.

“Typically, a venture capital fund spreads its bet among a portfolio of start-ups and if one or two among, say ten, becomes a successful enterprise, it is able to recoup the losses made in other investee companies in the portfolio. That is how the world of venture capital works and it will not be easy for banks to replicate this given their less-than-optimal skillsets in evaluating enterprises even if regulations permit them to take equity bets in start-ups,” said a banking industry observer.

Srinath Sridharan, Corporate Advisor and independent markets commentator, said “This would need the banking sector under RBI’s leadership to come up with requisite framework which encourages entrepreneurship, ideas and reaps benefit for all the stakeholders and also offers solutions to any hesitancy factors”, he said.

[ad_2]

CLICK HERE TO APPLY

Leave a comment banks, banks investment in startups, PM Modi, startup investment, venture funding

Tax Query: Is tax audit needed for claiming loss from F&O trading?

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

Please let me know whether tax audit u/s. 44AB read with section 44AD is applicable for A.Y. 2021-22, for claiming loss from futures & options (derivatives) business of ₹1 lakh on turnover of ₹5 lakh and interest income of ₹7 lakh? Also, how to carry forward unabsorbed loss under ‘income from house property (self occupied)’ where interest on home loan exceeds ₹2 lakh as the system ignores excess interest while uploading ITR-3?

Tina B

For the purpose of analysing the applicability of tax audit requirement u/s 44AB of the Income-tax Act, 1961 (‘the Act’), the turnover is required to be determined. As per the guidance note on tax audit issued by the Institute of Chartered Accountant of India, turnover in case of dealing in futures and options shall include the following:

a) Total of favourable and unfavourable differences

b) Premium received on sale of options

c) In respect of any reverse trades entered, the difference thereon

As per the provisions of Section 44AB every person, carrying on business shall be required to get his accounts audited for such financial year by a Chartered Accountant before the specified date, if total sales, turnover or gross receipts (as applicable), in business exceed ₹1 crore in any previous year. The said limit of ₹1 crore is substituted with ₹10 crore in case the cash receipts do not exceed 5 per cent of the total sale/ turnover/ gross receipts and the cash expenditure does not exceed 5 per cent of the total payments.

As per the provisions of Section 44AD , in the case of an eligible assessee engaged in an eligible business (turnover not exceeding ₹2 crore and not into the business of plying, hiring or leasing goods carriages), a sum equal to 8 per cent (6 per cent in respect of amount received by way of A/c payee cheque/ A/c payee bank draft/ electronic clearing system) or a sum higher than the aforesaid sum shall be deemed to be the profits and gains of such business chargeable to tax under the head “profits and gains of business or profession”.

As per the guidance available on portal of income tax department, a person can declare income at lower rate (i.e. at less than 6 per cent or 8 per cent), however, if he does so and his income exceeds the maximum amount which is not chargeable to tax, then he is required to maintain the books of account as per the provisions of section 44AA and has to get his accounts audited as per section 44AB. In the instant case, since the income (being loss) from Future & Options is less than 8 per cent / 6 per cent and the total income chargeable to tax is exceeding the maximum amount not chargeable to tax, you would be required to be audited u/s 44AB of the Act .

Carry forward of unabsorbed loss on account of interest on housing loan: As per the provisions of Section 24(b), deduction on account of interest on housing loan in case of a self-occupied property is restricted to ₹2 lakh and hence loss under house property for a self- occupied property cannot exceed ₹2 lakh. Accordingly, any interest paid in excess of ₹2 lakh is neither eligible to be set-off against other heads of income nor allowed to be carried forward for future assessment years. Hence in the instant case, interest paid in excess of ₹2 lakh, shall not be allowed to be carried forward to the future assessment years.

The writer is a practising chartered accountant

Send your queries to taxtalk@thehindu.co.in

[ad_2]

CLICK HERE TO APPLY

Leave a comment futures and options loss, futures and options profit, income tax, tax on f&o trading, tax query

Why you need to merge your different EPF accounts

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

Did you know that having two Employee Provident Fund (EPF) accounts is against the rules? Whenever there is switch of job in pursuit of better opportunities or any other change, employees must get respective EPF accounts transferred to the new employer immediately. Also, such merger of accounts will ensure there is no gap in employment.

Why one account

The EPF rules are very clear that a single employee shall not have more than one EPF account or UAN.

While having two EPF accounts neither attracts penalty or punishment per se, it comes with certain crucial implications where the erstwhile UAN account will be tagged ‘dormant’ due to non-use and will fail to accrue any interest.

It is also important to ensure all accounts are merged for the purpose of availing income tax benefits. Withdrawal from EPF account is exempted from tax after 5 years of continuous service which is calculated from the date of joining the EPF scheme to the date of withdrawal.

The UAN (Universal Account Number) is a 12-digit number allotted by the Employee Provident Fund Organisation (EPFO) to every employee with a Provident Fund account.

Once allotted, an employee’s UAN remains the same irrespective of job changes. However, there may be various reasons for allotment of an additional UAN/ EPF account to an employee, which includes non-disclosure of existing UAN/ EPF account.

When an employee switches his job, he/she has to disclose his existing UAN and EPF account number (Member ID). If he/she does not give these details, the new employer opens a new EPF account for non-furnishing of “Date of Exit” by the previous employer. Every employer has to mention the date of exit of the employee in the ECR (Electronic Challan and Return) during the employer’s monthly filings with the EPF authorities.

Merging process

An employee can have two or more of his UAN / EPF accounts linked by either making a request for it personally or via email. You can contact the EPFO office by sending an e-mail to uanepf@epfindia.gov.in and informing the existing company about merging the old and new EPF accounts. The EPFO will verify your UAN numbers once they receive your application. Once verification is complete, the EPFO will merge and block your old UAN.

Alternatively, you can fill up and submit the EPF transfer Form 13 which is available with the EPFO (can be availed online or offline). The process is simple and easy and it takes a maximum of 20 days to reflect the merging of the accounts from the date of submission.

Apart from these two ways, the EPFO online portal provides an option of “One Employee – One EPF Account”. Upon selecting the same, the user will be permitted to submit request for merging his/her UAN accounts. You must enter your registered mobile number and UAN. You will then receive an OTP on your registered mobile number.

You can then view details of your old EPF account and initiate transfer of funds from your old EPF account to your new EPF account.

Note that, for merging of EPF accounts, an employee must have an active UAN which is linked to his/her existing EPF account, completed KYC by providing necessary details which would entail linking of email to Aadhaar, verification of PAN, Voter ID and bank details of the employee.

A new UAN must be assigned by the EPF office (EPFO) after KYC verification. The employee should wait for at least three days post activation of the new UAN prior to merging the EPF accounts.

The writer is Partner, Shardul Amarchand Mangaldas & Co.

[ad_2]

CLICK HERE TO APPLY

Leave a comment employee provident fund, EPF, epf account, epf uan, one epf number, one uan number, pf, uan, universal account number

Know about sub limits in health insurance policy

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

Covid-19 has made people aware that health emergencies can strike without warning. Further, with sky-rocketing medical costs, having adequate health insurance has become a necessity. Among the various factors that you must pay attention to while choosing health insurance, is sub-limits.

What they are

Sub-limit in health insurance refers to a monetary cap by an insurer on expenses against treatment of diseases/ illness, room rent and post-hospitalization and pre-planned medical procedure related expenditures. This means that the insurance company will only bear expenses up to a predetermined limit. Anything beyond that will have to be borne by the policyholder.

The sub-limit, however, varies across claims. It may be a certain percentage of the sum insured, or up to a certain specific amount. For instance, generally ICU fees and hospital room rent caps are typically 2% and 1%, respectively of the total sum assured. Further, many health insurers allow you to opt out of sub-limits for an additional premium. You can choose between the two options depending on your budget.

Sub limit types

Disease-specific: Most insurers have sub-limits on pre-planned medical treatments, in the form of a defined cost for procedures such as cataract removal, knee ligament reconstruction, kidney stone removal, tonsils, and sinus removal. The list of ailments and the treatment cost cap differs from one insurer to the next. The treatment sub-limit is not related to the sum assured, which means that even if a policyholder has a high amount assured, the sub-limit clause in the policy will prevent him from claiming all of his treatment expenses. For instance, if your policy has a 50% sub-limit clause on a certain medical procedure and your total sum insured is ₹5 lakh, you will be unable to claim more than ₹2.5 lakh for that treatment because of the sub-limit clause.

Room rent: This refers to the maximum rent or room category you are entitled to depending on your health insurance coverage. This is usually 1% of your entire insured. For instance, under a ₹10 lakh policy with a 1% sub-limit on room rent, the insurer will approve a hospital room with a maximum rent of ₹10,000 per day. If the room rent exceeds the set sub-limit, the policyholder will have to bear the rest of the cost.

There will be a cap on associated services such as physician consultation fees, anaesthetists’ charges, diagnostic tests too, because various hospital expenses are tied to the type of room one chooses and as per the sub-limit applicable on room rent.

Post-hospitalisation: In many circumstances, policyholders will be required to stay at home under medical supervision for a certain period after treatment. Many insurers cover post-hospitalisation charges with sub-limits, requiring policyholders to pay a portion of the cost.

When compared to a policy with sub-limits, health insurance policies with no sub-limits will have a higher premium. If you have a sub-limit cover, make sure that your medical expenses do not exceed the threshold level. So, before you buy a new health policy or renew an existing one, be sure to get one that covers you adequately.

The writer is Head- Health Insurance, Policybazaar.com

[ad_2]

CLICK HERE TO APPLY

Leave a comment health insurance sub limit, health plan sub limit, health policy, sub limits in health insurance

All you wanted to know about survival benefit

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

A call by an insurance agent left Prakash with some unanswered questions related to survival benefit. He posed them to his trusted financial advisor, Sangeetha.

Prakash: An agent called me about a child insurance plan. While pitching the product, he mentioned that survival benefit will be paid as a certain percentage of sum assured. Shouldn’t the survival benefit be larger?

Sangeetha: Survival benefit is similar to maturity benefit. In plans that offer survival benefit, it is a risk-free sum generally paid out as a share of sum assured, at intervals. Typically, 20-30 per cent.

Prakash: Okay. So, survival benefit and maturity benefit are two different things?

Sangeetha: Yes. Some people use the two terms interchangeably, adding to the confusion. Maturity benefit is paid out to the policyholder at the end of the policy term, when the policy matures. In case of survival benefit, the payment happens at the end of the premium payment term. There are many policies where the policy term is 20 years but premium payment is for 15 years. In these cases, the survival benefit may be paid after 15 years in phases, and not after 20 years.

Prakash: Which policies offer survival benefits?

Sangeetha: Savings plans can offer survival benefits, but not all of them do. It depends on the specific plan.

Prakash: Okay. The agent was pitching a money-back policy that pays out survival benefits at regular intervals.

Sangeetha: Money-back is a savings plan. Generally, payouts start after the premium payment term ends, and continue at regular intervals for a specific period.

Prakash: So, can I defer survival benefit?

Sangeetha: Some policies offer that option. In that case, the policyholder can get increased survival benefit i.e. deferred original survival benefit along with interest. If the increased survival benefit is not taken by the policyholder during the currency of the policy, it is paid out later along with maturity benefit.

Prakash: My friend was saying there is one policy that pays 103 per cent of premium as survival benefit. Is this possible?

Sangeetha: I know what you are referring to. But its not 103 per cent of all premiums paid. It is 103 per cent of one annual premium as survival benefit!

Prakash: Smart use of words! Any tax sop on survival benefit received?

Sangeetha: Like maturity benefit, survival benefit is exempt from income tax under Section 10 (10D).

Prakash: Cool. Now that I know how survival benefits work, I will keep an eye out for this feature.

[ad_2]

CLICK HERE TO APPLY

Leave a comment insurance maturity benefit, insurance survival benefit, life insurance plan, life insurance policy, maturity benefit, survival benefit

5 changes in the ombudsman scheme

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

The RBI recently launched an integrated ombudsman to strengthen the existing grievance redressal mechanism for consumers of banks, NBFCs and payment system operators. Here are five things that have changed for consumers relating to the ombudsman scheme.

Single-window coverage

Earlier customers had to approach either the Banking Ombudsman, Ombudsman for NBFCs, or the Ombudsman for Digital Transactions, depending upon who they wished to raise complaints against — whether they were grieved by a bank, NBFC or Non-bank System Participants (such as issuers of Pre-Paid Instruments). But now under the integrated ombudsman scheme, the earlier three ombudsman schemes have been unified into one.

Customers can now complain against any covered financial institution on the portal (https://cms.rbi.org.in), or email to (crpc@rbi.org.in) or send physical complaints to Centralised Receipt and Processing Centre of the RBI at Chandigarh, in a prescribed format. Additionally, a contact centre with a toll-free number – 14448 (9:30 am to 5:15 pm) – is also being operationalized in Hindi, English and in eight regional languages to begin with and will be expanded to cover other Indian languages in due course. The contact centre will provide information or clarifications regarding the alternate grievance redress mechanism of RBI and guide customers in filing a complaint.

Besides Non-Scheduled Primary Co-operative Banks with a deposit size of ₹50 crore and above have been added to the ambit of the integrated ombudsman now. The earlier schemes covered only all scheduled commercial banks, regional rural banks and scheduled primary co-operative banks (under the Banking ombudsman Scheme), all deposit taking NBFCs and non-deposit taking NBFCs with an asset size of ₹100 crore and above (under the Ombudsman Scheme for NBFCs) and non-bank system participants regulated by the RBI (under the Ombudsman for Digital Transactions).

Uniform jurisdiction

Hitherto customers were required to file their complaints under the correct scheme and with the correct ombudsman’s office, based on the territorial jurisdiction with reference to the branch of the entity being complained against, failing which the complaint would be rejected. Now apart, from integrating the schemes across regulated entities, the RBI has also done away with the jurisdiction of each ombudsman office.

The receipt of all complaints and initial processing shall be centralized at the office at Chandigarh, to impart efficiency in the process. The integrated ombudsman shall from now on act as a single point of contact for the aggrieved customer, compared to the erstwhile territorial and scheme based jurisdiction which was a usual ground for rejection of claims.

Wider grounds of complaint

Earlier the separate ombudsman schemes specified certain deficiencies in services, on which customers could lodge complaints with the ombudsman. With limited grounds of complaints specified, one could not complain against any grievance not listed under the erstwhile schemes. Now the integrated scheme defines ‘deficiency in service’ as the ground for filing a complaint, with a specified list of exclusions ( such as dispute between regulated entities or one involving an employer- employee relationship, or relating to any service not within the purview of the RBI). Henceforth, complaints would no longer be rejected simply on account of not being covered under the grounds listed in the scheme. Customers can now through the integrated scheme, seek redressal for any deficiency in service, if the same is not resolved to the satisfaction of the customer or not replied to, within a period of 30 days by the regulated entity.

No differential compensation

The erstwhile ombudsman schemes had specified limits on the compensation provided to the complainant. The Award under the schemes were limited to the amount arising directly out of the act or omission of the regulated entity or ₹20 lakh (in the case of banks or non-bank system participant), whichever is lower. The said limit was lower at ₹10 lakh in the case of the covered NBFCs, under the Ombudsman Scheme for NBFCs.

This differential treatment has now been streamlined under the integrated scheme. Now on, for any consequential loss suffered by the complainant, the Ombudsman shall have the power to provide a compensation up to ₹20 lakh. That apart, up to ₹1 lakh can also be awarded for the loss of the complainant’s time, expenses incurred and for harassment/mental anguish suffered by the complainant, as was available in the erstwhile schemes.

Appeal

The ombudsman schemes permitted customers to appeal against the award of an ombudsman or for the rejection of a complaint, to the appellate authority within 30 days. The appellate authority was vested with the Deputy Governor of the RBI in charge of the department implementing the erstwhile schemes.

Now under the integrated scheme, customers can file the appeal using the same portal. That apart, from now on the Executive Director in-Charge of the department of the RBI administering the Scheme, shall be the Appellate Authority.

[ad_2]

CLICK HERE TO APPLY

Leave a comment banking ombudsman, complaint to ombudsman, grievance redressal, ombudsman, rbi ombudsman

Should you invest in state govt. NBFC deposits?

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

Investing in fixed deposits of state government-owned entities may seem like shooting two birds – attractive returns and solid safety – with one stone. But it may not be so.

FDs from non-banking financial companies (NBFCs) such as the Tamil Nadu Power Finance and Infrastructure Development Corp. (TN Power Finance), the Tamilnadu Transport Development Finance Corp. (TDFC) and the Kerala Transport Development Finance Corp. (KTDFC) seem to be popular with investors. As of March 2020, TN Power Finance and TDFC had public deposits worth ₹5,900 crore and ₹794 crore, respectively.

What’s good, what’s not

Both TN Power Finance and TDFC offer an attractive 7 per cent (1-year) and 7.25 per cent (2-year) p.a. on their cumulative FDs. KTDFC offers 6 per cent p.a. on its same tenure deposits.

Despite their implicit government backing, the weak financials of these NBFCs as reflected in their subpar credit ratings do not inspire much confidence. The absence of DICGC’s (Deposit Insurance and Credit Guarantee Corporation) cover for such deposits, too makes them a risky bet.

Past credit events have taught us that even the highest AAA ratings must be taken with a pinch of salt. That means, one must be even more wary of lower-rated instruments. Both the TN Power Finance and TDFC FDs are rated MA-(Stable) by ICRA. Even this rating is supported by “ownership and the expected financial support from GoTN”.

TN Power Finance: According to an ICRA report dated Apr 2021, the NBFC provides loans only to the Tamil Nadu Generation and Distribution Corp. or TANGEDCO. This exposes it to concentration risk. As per the report, while the company’s net profitability improved in FY2020 and 9M 2021 compared to FY19 thanks to lower cost of deposits, the sustainability of this will depend on how much pricing flexibility it has with TANGEDCO. TN Power Finance reported net profit of ₹505 crore on an asset base of ₹39,488 crore in FY2020. Based on the latest available numbers, the company’s CRAR (capital to risk weighted assets ratio) was around 12 per cent as of March-end 2020. This must be raised to 15 per cent by March 2022 as directed by the RBI and may require equity infusions from the government as in the past.

TDFC: Based on another ICRA report dated Nov 2020, the NBFC provides loans to state transport undertakings (STUs) and had a CRAR of 15.3 per cent as of March-end 2020. This was a significant improvement from a year ago thanks to the government’s equity infusions. However, with Covid impacting the operations of STUs, TDFC’s capital adequacy could come under pressure. TDFC reported net profit of Rs. 12 crore on an asset base of ₹9,329 crore in FY2020.

Interest payment on deposits (public and others) accounted for 75 per cent and 95 per cent of TN Power Finance’s and TDFCs’ FY2020 revenues.

We were unable to find any financial statements for KTDFC or any credit ratings for its FDs. Attempts to access its website itself were not without trouble – with access being denied due to the website apparently being infected with malware! You can, however, search for ‘KTDFC interest rates’ to gain access to the website.

Safer avenues

Deposits from NBFCs unlike those from banks (including small finance banks) do not enjoy DICGC’ insurance cover. Under this, each bank depositor is insured for a deposit amount of up to ₹5 lakh to be disbursed in a time-bound manner in case a bank gets liquidated or is put under a moratorium. While investors may draw comfort from the implicit government guarantee for state-owned NBFCs, in the absence of any formal time-bound protection, deposit refunds in case of any financial trouble may get delayed.

FDs from financially stronger NBFCs and small finance banks (SFB) can be a safer alternative. Take for example, the two-year cumulative FD from Bajaj Finance that offers 6.10 per cent p.a. The deposits enjoy the highest rating – CRISIL’s FAAA/Stable and ICRA’s MAAA (stable). An NBFC with a diversified loan book, Bajaj Finance’s CRAR of 27.7 per cent is well above the mandated 15 per cent, providing adequate buffer against any future bad loans. Another option can be Equitas SFB’s 2 years 1 day deposit that offers 6 per cent p.a. The SFB has a well-diversified loan portfolio and at a CRAR of 22.2 per cent has a strong capital base.

[ad_2]

CLICK HERE TO APPLY

Leave a comment FD rates, fixed deposits, kerala govt deposits, nbfc fds, nbfc fixed deposits, state govt deposits, tamil nadu govt deposits

2 Best 5-Star Rated Dynamic Asset Allocation Funds For SIP In 2021

November 20, 2021 root Personal Finance

[ad_1]

Read More/Less

Should I start SIP In Dynamic Asset Allocation funds?

Based on the market movements, Dynamic asset allocation funds, also known as balanced advantage funds, actively manage their allocation towards equity and debt stocks. As a result, investing in these funds can give you a long-term wealth potential as well as a cushion against the downside in case of falling equity markets.

According to the performance report of ICRA Analytics Ltd, Dynamic Asset Allocation Funds marked a three-month return of 5.51 percent, a six-month return of 10.14 percent, a one-year return of 26.1 percent, a three-year return of 11.37 percent, a five-year return of 9.74 percent, and a ten-year return of 12.15 percent as of September 30, 2021.

With a minimal risk exposure, these returns can be a decent approach for investors in a falling market scenario to start SIP in Dynamic asset allocation funds with an investment horizon of at least 3 years or more.

According to the data of ICRA Analytics Ltd, In September 2021, mutual fund contributions under the Systematic Investment Plan (SIP) surpassed Rs 10,000 for the first time, totaling Rs 10,351 crore, rising 13% from June 2021. SIP AUM climbed by 8% in September 2021 after reaching the Rs. 5 lakh crore milestone in July 2021.

SIP AUM was Rs. 5.45 lakh crore at the end of the quarter, rising roughly 13% over the previous quarter. It accounted for 15% of total industry assets, while SIP accounts increased by 12% to 4.49 crore. Hence, we would like to suggest our readers stick to their SIPs or start SIP in Dynamic Asset Allocation Funds to welcome the takeaways into their portfolio like the power of compounding, rupee cost averaging, and low initial investment.

Edelweiss Balanced Advantage Fund Direct-Growth

Edelweiss Balanced Advantage Fund Direct-Growth returns of the last 1-year are 29.10%. Since launch, it has delivered 13.65% average annual returns, according to the data of the fund house as of 18 Nov 2021. The equity side of the fund is predominantly engaged in the financial, technology, energy, fast-moving consumer goods, and automobile sectors. ICICI Bank Ltd., Reliance Industries Ltd – PPE, National Bank For Agriculture & Rural Development, Infosys Ltd., and Nifty 50 are the fund’s top five holdings.

The fund has a 0.45 percent expense ratio, which is lower than most other funds in the same category. The fund now has a 59.90 percent equity allocation and a 20.09 percent debt exposure. As of 30 September 2021, Edelweiss Balanced Advantage Fund Direct-Growth has Rs 6,331 crores in assets under management (AUM), and the fund’s NAV was 39.35 crores as of 18 Nov 2021. Value Research has given the fund a 5-star rating, and you may start investing in it with Rs 500 SIP.

Performance as on 18 Nov 2021	Scheme	Scheme Benchmark CRISIL Hybrid 50+50 – Moderate Index	Additional Benchmark NIFTY 50 – TRI
Period	Return (CAGR)	Return (CAGR)	Return (CAGR)
1 Year	29.10%	23.56%	38.88%
3 Year	18.83%	16.09%	19.82%
5 Year	16.18%	13.59%	18.52%
Since Inception – Existing Plan	13.65%	9.41%	14.17%
Source: edelweissmf.com

Kotak Balanced Advantage Fund Direct Growth

Kotak Balanced Advantage Fund Direct has a one-year return rate of 19.96 percent. According to the date of the fund house as of 18.11.2021, it has generated 13.26% average annual returns since its inception. The fund has its equity allocation across the Financial, Metals, Services, Technology, Energy sectors. The fund’s top five holdings are GOI, ICICI Bank Ltd., Adani Ports and Special Economic Zone Ltd., and Infosys Ltd. The fund has a 0.45 percent expense ratio, which is lower than most other Dynamic Asset Allocation funds.

The fund now has a 78.73 percent equity allocation and a 21.27 percent debt exposure. Kotak Balanced Advantage Fund Direct-Growth had Rs 11,813.44 crores in assets under management (AUM) as of 30 September 2021, and the fund’s NAV was Rs 15.07 crores as of 18 November 2021. The fund has a 5-star rating from Value Research, and you can start SIP with Rs 500.

Tenors	Since Inception	Last 5 Year	Last 3 Years	Last 1 Year
Kotak Balanced Advantage Fund – Direct (G)	13.26%	–	15.02%	19.96%
Nifty 50 Hybrid Composite Debt 50:50 Index	13.49%	13.43%	15.69%	20.87%
Nifty 50 TRI	15.87%	18.54%	19.88%	38.88%
Performance as of 18.11.2021. Source: kotakmf.com

Disclaimer

The views and investment tips expressed by authors or employees of Greynium Information Technologies, should not be construed as investment advice 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 consult a professional advisor. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates, and authors do not accept culpability for losses and/or damages arising based on information in GoodReturns.in

[ad_2]