Category: Personal Finance

Union Bank of India reports Rs 1,330-crore net as asset quality improves

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Rajkiran Rai G, MD and CEO, said: “There has not been any significant impact on the recovery in April and May, the impact should be in the range of 2-3%. We are expecting a credit growth of 8-10% in FY22.”

Union Bank of India on Monday reported a net profit of Rs 1,330 crore for the March quarter (Q4FY21), compared with a loss of Rs 7,157 crore during the same quarter last year. The lender was back in the black due to a growth in other income and lower provisioning.

Total provisions declined 64% year-on-year (y-o-y) and 16% sequentially to Rs 3,850 crore. The net interest income (NII) declined 9% y-o-y to Rs 5,403 crore.

The non-interest income grew 50% quarter-on-quarter (q-o-q) and 23% y-o-y to Rs 4,551 crore, mainly on account of recovery in the written-off accounts. Overall, the net profit for FY21 stood at Rs 2,906 crore, compared to a net loss of Rs 6,613 crore during FY20.

Rajkiran Rai G, MD and CEO, said: “There has not been any significant impact on the recovery in April and May, the impact should be in the range of 2-3%. We are expecting a credit growth of 8-10% in FY22.”

The net interest margins (NIM) improved 55 basis point (bps) y-o-y and 58 bps sequentially to 2.4%.

The asset quality improved during the quarter under review. The gross non-performing assets (NPAs) ratio improved 154 basis points to 13.74%, compared to reported pro forma gross NPAs of 15.28% in the previous quarter. Similarly, the net NPAs ratio improved 40 basis points to 4.62%, from 5.02% in the December quarter.

“The bank expects a recovery of Rs 13,000 crore during FY22,” Rai said. The lender has also identified accounts worth Rs 7,800 crore for sending to National Asset Reconstruction Company (NARCL). Overall, the banking industry may have identified accounts close to Rs 89,000 crore for sending to NARCL in phase 1, Rai, who is also chairman of the Indian Banks’ Association, said.

Advances declined 2% y-o-y to Rs 6.5 lakh crore. Retail lending portfolio, however, increased 10% y-o-y to Rs 1.25 lakh crore. Advances to agriculture grew 12% y-o-y to Rs 1.2 lakh crore.

Deposits grew 6% y-o-y and 5% q-o-q to Rs 9.23 lakh crore. Current account savings account (CASA) grew 13% y-o-y and 7% q-o-q to Rs 3.35 lakh crore. The capital adequacy ratio (CAR) remained at 12.56%, with CET1 ratio of 9.07% at the end of March 2021.

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4 Top Stock Market Themes To Invest In As India Begins To Reopen Post Covid Second Wave

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Why the Indian stock markets remained unperturbed during Covid 19 second wave?

Even as if we are amid the second Covid 19 wave with least number of cases being now reported of over 1 lakh per day as per the health ministry, just today we saw Nifty scaling new high of 15,739 and broader markets outperformed with both Nifty Midcap 100 as well as Nifty Small Cap 100 clinching new highs.

In just four trading sessions of June month, FIIs or foreign institutional investors made an infusion of Rs. 8000 crore into the Indian markets.

Samir Arora, founder and Fund manager at Helios Capital Management in an interview with CNBC said the limited impact due to Covid 19 second wave on the market is seen as the vaccination process is currently underway across the length and breadth of the country and in a matter of say another few months most city dwellers can be vaccinated and now this Covid situation thing is more to do with personal precaution. He further went up to say that serious market impact won’t be felt only because the end otherwise is quite visible. And the confidence in this end comes from the fact that even as second and third wave is happening across the world, no where it has been reported that people who have been fully vaccinated are having large number of case or are these cases that are being hospitalized etc., ……’, added Mr. Arora.

How should you approach the market as Nifty is near its all time high and Indian economy begins to open?

How should you approach the market as Nifty is near its all time high and Indian economy begins to open?

Now as the Indian economy begins to re-open and will gear up with all its vigour to make up for the long stretch of lockdown phase spanning a month or even longer in some Indian cities, here we suggest some sector themes you can bet on going from here:

1. Entertainment theme:

Even as the air around re-opening of multiplexes is made clear in respect of some of the cities say for instance in Mumbai, multiplex as well as single screen shall remain shut, under Level 3 rules, we have seen the stock of multiplex owner PVR and Inox Leisure performing handsomely.

Performance of PVR and Inox Leisure of late and their prospects going ahead:

PVR performance:

Over the last month while the stock of PVR has gained nearly 25 percent, Nifty has gained just 8 percent in comparison. And while YTD gains for Nifty have been 12%, PVR scrip has gained just 5 percent during the same time.

Chart indications for the PVR stock: The stock of PVR after being on a decline for almost 1.5 months until April 19, 2021, is showing a trend reversal and is now on a continuing upmove, with the scrip just 12.96 percent away from 52-week high of Rs. 1591.9.

Inox Leisure performance:

Similarly, Inox Leisure during the last month has outperformed Nifty with returns of almost 19 percent, while Nifty during the same time gained just 8%. Considering the close of December 31 of Rs. 282.30, the stock has offered YTD gains of over 12 percent, which are very much in line with Nifty returns during the same period.

Chart indications for the Inox Leisure stock:

The similar trend line of a continuing upmove is visible for Inox Leisure after a period of sustained losses for the stock.

Momentum in Media & Entertainment stocks despite record losses:

Momentum in Media & Entertainment stocks despite record losses:

Even as the check box for quarterly numbers did not ticked for both of these companies which reported record loss for the March ended quarter, bets on reopening of these cinema units are driving the stocks higher in price, plus higher liquidity and positive cues from global multiplex industry are also creating a favourable spot.

Similarly in the space one can also bet on stocks like Imagicaaworld Entertainment as the country’s largest themed entertainment park will also see its re-opening as and when the curbs are lifted, helping the business to return to normalcy. Last the stock closed higher at Rs. 7.75, while its 52-week high is Rs. 8.7. Bullish momentum is seen for the stock as the stock trades above its short, medium and long term averages.

2. Mall operator and developer firms including Phoenix Mills, DLF:

2. Mall operator and developer firms including Phoenix Mills, DLF:

Phoenix Mills is the country’s top mall developer and operator firm in the country. Peer companies for the firm are Macrotech Developers, DLF, Godrej Properties, Oberoi Realty among others. On Friday (June 4, 2021), stock of Phoenix Mills hit a fresh 52-week high of Rs. 884.9 per share on the NSE. Chart suggests upmove pattern in the scrip.

Bet on reopening hopes as well as positive global cues are making the stocks in the space to rally. Also, given the sound sales prospects for the real estate sector as a whole for FY22 is another major driver boosting the scrip of these construction and contracting- real estate stocks.

3. OMC companies:

3. OMC companies:

As it is with the rise in international crude rates, which is close to $72/bbl for brent crude (as of June 4, 2021 closing price), fuel rates in India have surged phenomenally and for some cities have even gone higher than Rs. 100 per litre for petrol and now as the demand for fuel for mobility shall gain traction, we may see these stocks performing well going ahead.

Shares like BPCL which is a divestment bound scrip is already doing good with last 1-month performance at close to 13.5% against Nifty’s gain of 8 percent.

4. Hospitality stocks

4. Hospitality stocks

As the lifts are being lifted across the nation, we may see traction in hospitality stocks such as both from the hotel space as also aviation and related sectors. Also, in its RBI bi-monthly policy outcome on Friday, the centre announced special loan schemes for these sectors as categorised within the contact intensive sectors.

For stocks like Indian Hotels experts suggest an ‘Accumulate’ call as and more so when we get it cheaply.

Other stocks such as Interglobe Aviation is also recommended owing to its competitive strength in the industry when compared to similar peers such as Spicejet. So as and when there is recovery and the industry sees revival, the stock shall do good.



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Check Conditions To Make Premature Exit From PPF

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Investment

oi-Vipul Das

|

Because of its mix of safety and guaranteed returns, the PPF account, or Public Provident Fund scheme, is among the most popular long-term small savings schemes of India Post. You can open a PPF account at any bank or post office by making an initial contribution of Rs 500 only. Every quarter, the interest rate on PPF is modified. At present, the interest rate is capped at 7.1% that is fully exempted from income tax under section 80C. PPF has a long maturity duration or tenure of 15 years which makes it a long-term investment product in nature. However, under some circumstances, an account holder can close his or her account before the maturity date. The PPF withdrawal rule states that a PPF subscriber can close the account if specific requirements and criteria are met, and the account has been open for at least five years. So let’s talk about the conditions and rules to make a premature exit from PPF in case of emergencies.

Check Conditions To Make Premature Exit From PPF

PPF Premature Exit Rules

If the account holder, spouse, or dependent children are identified with a life-threatening disease, the whole money in the PPF account can be withdrawn. The closure of a PPF account is also permitted if the account holder requires funds for higher education for himself or his or her children. Not only that, but one can also close a PPF account if their residence status changes. Premature PPF account closure results in a 1% PPF interest rate deduction from the amount. The interest will be deducted from the day the account was opened/extended, whichever comes first.

On the aforesaid criteria, the account can be closed by submitting the appropriate form along with the passbook to the appropriate post office or bank. Only when the PPF account has been open for five consecutive financial years, it can be closed prematurely. In the event that the PPF account holder dies, the nominee is entitled for a complete withdrawal of the amount, even if the account is less than five years old. The account will be closed if the account holder dies, and the nominee or legal heir(s) will not be permitted to continue making contributions to the account.

PPF interest will be paid until the end of the preceding month in which the account is closed if it is closed due to the death of the account holder. On an application to the concerned bank branch or post office using Form-5, an account holder or the guardian of a minor or person of unsound mind can make his or her account closed prematurely.

Story first published: Monday, June 7, 2021, 17:22 [IST]



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Big Update: SBI Customers Need To Do This On Or Before June 30

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Steps to link PAN with Aadhaar card

Visit the e-filing portal of the Income Tax Department and click on the ‘Link Aadhaar’ section.

Now enter your PAN number, Aadhaar number and name.

Now enter the CAPTCHA code and click on the ‘Link Aadhaar’ option to complete the process.

The income tax department will cross-check your name, date of birth, and gender against your Aadhaar records before linking it with PAN.

Upon successful linking, a pop-up message will appear on your device screen stating that your Aadhaar has been successfully linked to your PAN.

Steps to link PAN with Aadhaar through SMS

By sending an SMS, you can link your PAN to your Aadhaar number. The steps listed below must be followed for the same:

  • Type UIDPAN and send it to 67678 or 56161.
  • Upon successful authentication of both documents, you will get a confirmation message on your registered mobile number.
  • To use the SMS facility to link Aadhaar with PAN your mobile number should be registered with Aadhaar Card.

Steps to check the status of PAN-Aadhaar link

Steps to check the status of PAN-Aadhaar link

  • Visit www.incometaxindiaefiling.gov.in and click on the ‘Link Aadhaar’ option under the Quick Links section.
  • Now you will be redirected to a new page where you need to click on “Click here to view the status if you have already submitted link Aadhaar request”. The status of your Aadhaar-PAN will be displayed on the website once you click this link.
  • If you can’t locate the result, you can use the form on the same page to link your PAN and Aadhaar card.

Steps to check status via SMS

You can also check the status of PAN-Aadhaar linking via SMS, to do must have your Aadhaar-registered mobile number.

  • Type 12-digit Aadhaar number, space, and enter the 10-digit PAN number and send it to 567678 or 56161 from your registered mobile number.
  • Upon successful authentication, you will receive the result via SMS on your mobile number.

What if you don’t link your PAN with Aadhaar on or before June 30, 2021?

What if you don’t link your PAN with Aadhaar on or before June 30, 2021?

PAN is required for a variety of financial operations, such as the establishment of bank accounts, cash deposits, Demat account establishment, real estate transactions, investing in mutual funds or stocks and so on. The tax department would be able to maintain track of taxable transactions by linking Aadhaar and PAN cards. As a result, the department will have a complete database of all financial transactions that will be subject to taxation for a particular individual. Another rationale for linking PAN and Aadhaar is to limit the number of people or companies that apply for duplicate PAN cards. By successful Aadhaar-PAN linking, the Income Tax Department would be able to identify an individual’s identity through his or her Aadhaar card, and then have records of all financial transactions performed through the associated PAN card. The tax department would be able to discover and take remedial action if there are multiple PAN cards issued under the same name or if one fails to connect your PAN card with your Aadhaar card by June 30, 2021. As a result, you may face a penalty from the Income Tax Department. Not only will you face a penalty of up to Rs 1,000, but your PAN will also be revoked, which may lead to unwanted interruptions in activities made using your bank account.



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List Of Govt Banks Likely To Be PrivatisedIn India

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Why is the government looking for Privitisation of Banks?

Privatization of banks simply means that the central government is less engaged and direct in the day-to-day operations of the banks. In effect, the federal government’s majority interest in the PSB will be offloaded in favour of private investors. For banks, this means increased market competition and reduced to minimal financial reliance on government assistance. For a long time, it has been widely reported that some state-owned banks are not working to their full potential due to a variety of factors, and are largely reliant on financial assistance from the central government.

Instead of continuing to put pressure on banks to re-capitalize them at regular intervals, the central government could better use those funds for poverty alleviation and other public programmes if it pursued a privatisation campaign.

List of Govt banks likely to be privitised

List of Govt banks likely to be privitised

According to sources close to the situation, the Bank of Maharashtra and the Central Bank are the top two possibilities for privatisation, though the Indian Overseas Bank may also be considered this year or later.

Furthermore, United India Insurance, which has a superior solvency ratio than the other two general insurers, may be picked as a candidate for privatisation, according to sources. However, financial sector experts argue that Oriental Insurance, which has the lowest solvency ratio of the three, maybe preferred because it has no international activities and may find it easier to attract a private investor.

NITI Aayog had targeted the six state-run lenders that were not involved in the merger attempt a few years ago.

Only six banks are eligible for privatisation:

  1. UCO
  2. IOB
  3. Central Bank
  4. Bank of Maharastra
  5. Punjab and Sind Bank
  6. Bank of India.

This list was used to make the decision. According to sources close to the situation, the Bank of Maharashtra and the Central Bank are the top two possibilities for privatisation, though the Indian Overseas Bank may also be considered this year or later.

It was of the opinion, however, that the better-off entities would attract more interest, resulting in IOB and Central Bank being shortlisted. The two companies are worth roughly Rs 44,000 crore based on current share prices.

These two names have been nominated for privatisation by the government’s think tank, NITI Aayog. According to the Times of India, the Bank of India (BoI) could potentially be a prospective sale target.

When it comes to privatisation, the terms Bank of India (BoI), IOB, Bank of Maharashtra, and Central Bank come up frequently. We will have to wait for the official announcement to find out which banks will be privatised.

What happens after privatization of Public Sector Banks (PSBs)?

What happens after privatization of Public Sector Banks (PSBs)?

The new administration of the private firm after privatisation is typically believed to be profit-oriented. In addition, once privatised, management will work to eliminate nonperforming assets (NPAs). There is a possibility that banks would be pushed to rethink their retail business. The danger is that once privatised, there will be opportunities to keep lucrative branches while eliminating others that are suffering. This may necessitate a full re-evaluation of the bank’s personnel resources. Customers can expect a privatised bank’s baking services to improve as a result of competition from other private sector banks.



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Importance of Claim ID For Making NPS Withdrawal After 60 Years of Age

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Importance of Claim ID for making online claims

  • Claim ID is required if the subscriber desires to file a withdrawal request in the online mode in case of Superannuation/Premature exit.
  • Claim ID will be issued six months prior to the date of superannuation or reaching the age of 60 for superannuating subscribers. For all such circumstances where a Claim ID has been generated, Nodal Offices will be able to initiate a withdrawal request in the CRA system.
  • If the subscriber initiates the withdrawal request, the Nodal Office shall authorise it in the CRA system.
  • In the event of an early or pre-mature exit, the Nodal Office must generate a Claim ID for the subscriber in order for them to file an online request.
  • Claim ID is not required if the Nodal Office initiates the withdrawal request on behalf of the subscriber.
  • If a subscriber attempts to issue a withdrawal request with a Claim ID that has not been generated, a notification will be displayed stating that the subscriber is not permitted to make any withdrawal requests.
  • Only once the Nodal Office generates the Claim ID, the subscriber can submit a withdrawal request in the CRA system.
  • The subscriber will be asked to validate the details entered. The request will be logged into the CRA system once it has been confirmed. On the successful filing of a withdrawal request, the CRA system will generate a Claim ID and an Acknowledgement Number.

How NRIs Can Open NPS Account Online?

Generation of Claim ID by Nodal Office

Generation of Claim ID by Nodal Office

For all subscribers who will retire in the next six months, CRA will issue and disseminate Claim IDs. The Nodal Office can record withdrawal requests owing to superannuation/exit at 60 years only using these Claim IDs. The Claim ID can be generated by the Nodal Office for a subscriber who has submitted premature exit or a subscriber who has expired and the claimant has requested withdrawal so that they can make the online request. The following is the procedure for the Nodal Office to generate a Claim ID:

  • By logging into the CRA System using the User ID and I-Pin, the Nodal Office can issue Claim ID for Superannuation, Premature Exit, and withdrawal requests for death cases.
  • When a user visits the CRA website, they should go to the ‘Exit Withdrawal Request’ option and then to the ‘Initiate Generate/Cancel Claim ID’ section.
  • In the specified field, the user will enter the subscriber’s PRAN.
  • From the dropdown menu, the user will choose Death, Premature Exit, or Exit at 60/Superannuation as the withdrawal option or type.
  • The request will be submitted by a Nodal Office user, and an Acknowledgement Number will be issued.

Approval of request

Approval of request

  • Using a second User ID and I-Pin, another Nodal Office User will enter into the CRA system (www.cra-nsdl.com).
  • The user must choose the ‘Authorise Generate/Cancel Claim ID’ option.
  • The ‘Claim ID’, ‘Acknowledgement No.’, or ‘PRAN and Date Range’ will be required to enter by the user.
  • The user will authorise the request by clicking on the ‘Acknowledgement No.’ After authorising the request, a Claim ID will be issued for the PRAN.

Exit options from NPS at the time of superannuation or at the age of 60

Subscribers have the option of stay invested in NPS for up to 70 years or exiting NPS. At the time of superannuation or at the age of 60, subscribers of NPS have the following options:

Continuation of account and stay invested: Subscribers can continue to contribute to their NPS account until they reach the age of 70 and receive a tax benefit on their contributions.

Suspension of withdrawal: Up to the age of 70, a subscriber can postpone his or her withdrawal and remain invested in NPS. Subscribers can choose to delay only lump-sum withdrawals, annuity, or both lump-sum withdrawal and annuity.

Can start receiving pension: Subscribers can exit NPS if they do not want to continue/defer their account. He or she can submit an exit request online and, will be allowed to start receiving pension if the NPS exit rules are followed.



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4 Best Corporate Bond Funds Better Than Bank FDs

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What are corporate bond funds?

Corporate bond funds, also known as non-convertible debentures, are debt funds that invest at least 80% of their capital in corporations with the best credit ratings. The credit ratings offered by rating organisations such as CRISIL or Value Research can be used to assess the safety of corporate bonds. AAA-rated companies are the safest and have the lowest credit risk compared to AA-rated companies. Because Corporate Bond Funds invest primarily in high-rated instruments, their credit risk is lower than that of other debt funds. Corporate Bond Funds have consistently outperformed other debt categories even amid the current financial market turmoil. In the previous year, corporate bond funds have provided an average return of nearly 7%. Their three and five-year average returns are over 8% and 9%, respectively. Which is unquestionably better than the interest rates on FDs offered by major banks like SBI, HDFC. Axis and ICICI.

4 Best Corporate Bond Funds In Terms of Returns

4 Best Corporate Bond Funds In Terms of Returns

Because Corporate Bond Funds are well known for medium duration investment tools, you need to invest for at least two to three years to earn greater returns than bank FDs. The best four corporate bond funds to invest in 2021 are listed below.

Bond Funds 1 Year Returns 3 Year Returns Value Research Rating
Aditya Birla Sun Life Corporate Bond Fund 7.99% 9.45% 5 star
ICICI Prudential Corporate Bond Fund 7.47% 9.15% 5 star
Kotak Corporate Bond Fund 6.90% 8.43% 4 star
Axis Corporate Debt Fund 9.09% 8.92% 3 star
Source: Groww

Aditya Birla Sun Life Corporate Bond Fund

Aditya Birla Sun Life Corporate Bond Fund

The fund presently has Rs 23,971 crore in asset under management (AUM) and a NAV of Rs 87.13 as of June 4, 2021. National Bank For Agriculture & Rural Development, Rural Electrification Corp. Ltd., Housing Development Finance Corp. Ltd., HDB Financial Services Ltd., Madhya Pradesh State are among the fund’s top holdings. The Aditya Birla Sun Life Corporate Bond Fund’s direct plan has an expense ratio of 0.46 per cent. The Aditya Birla Sun Life Corporate Bond Fund has a Value Research rating of 5 stars, indicating that it has the potential to outperform the returns of bank FDs.

ICICI Prudential Corporate Bond Fund

ICICI Prudential Corporate Bond Fund

ICICI Prudential Corporate Bond Fund Direct Plan Growth is a debt mutual fund scheme of ICICI Prudential Mutual Fund. The fund presently has Rs 19,706 crore in asset under management (AUM) and a NAV of Rs 23.77 as of June 4, 2021. GOI, National Bank For Agriculture & Rural Development, Housing Development Finance Corp. Ltd., Rural Electrification Corp. Ltd., and LIC Housing Finance Ltd. are among the fund’s top holdings. The fund has an expense ratio of 0.27%. Value Research has given this fund a five-star rating, indicating that it can prevent losses and provide good returns during market downturns.

Kotak Corporate Bond Fund

Kotak Corporate Bond Fund

Kotak Corporate Bond Fund Standard Growth is Kotak Mahindra Mutual Fund’s debt mutual fund product. The fund presently has Rs 9,310 crore in assets under management (AUM) and a NAV of Rs 2934.42 as of June 4, 2021. State Bank of India, Rural Electrification Corp. Ltd., Reserve Bank of India, Tata Capital Financial Services Ltd., and Tamilnadu State are among the fund’s top holdings. The fund has a 0.66 per cent cost ratio and a 4-star rating from Value Research. Even if the fund’s rating is satisfactory, the fund’s three-year, five-year, and ten-year returns are all higher than the category average returns.

Axis Corporate Debt Fund

Axis Corporate Debt Fund

Axis Corporate Debt Fund Direct Growth is an Axis Mutual Fund’s debt scheme. As of June 4, 2021, the fund has Rs 4,089 crore in assets under management (AUM) and a NAV of Rs 13.75. National Bank For Agriculture & Rural Development, State Bank of India, Motherson Sumi Systems Ltd., India Infradebt Ltd., and Tata Capital Ltd. are among the fund’s top holdings. Value Research has given the fund a three-star rating and the expense ratio of this fund is 0.24%. This suggests that the fund has delivered respectable returns, but the stability with which it has done so is questionable. You can invest in this fund if you don’t mind being dissatisfied amid periods of poor returns.

Should you invest?

Should you invest?

Individuals seeking a low-risk, short-term investment option can simply pick corporate bond funds with a shorter maturity period. Corporate debt funds have a lower risk profile than equity funds, and they offer high liquidity at the time of emergency. Corporate bond funds provide much better returns than other debt securities. Corporate debt instruments may anticipate average yields of 8-10 per cent, whilst bank FDs will currently only have an average return of 5 to 5.5 per cent. Long-term capital gains tax of 20% with indexation is available if you invest in Corporate Bond Funds for more than three years. Because FD returns are taxed according to income tax slabs, corporate bonds are a good adjunct to FDs for investors in the higher tax bracket. As an outcome, you can employ Corporate Bond Funds in your debt portfolio because these funds may deliver consistent returns with little risk exposure and substantial post-tax returns.

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. 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



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Investing In Dividend Stocks? Pros And Cons Of Investing In Stocks That Offer Dividends

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Investing in stocks that offer Dividends

Dividend-paying stocks are advantageous to shareholders. This is due to the fact that investors can get a regular income from their equity investment while continuing to retain the shares in order to profit from additional share price appreciation. Dividends are money in your pocket as the stock market rises and falls. Check upcoming dividends to watch out for in June 2021.

Companies that have a track record of paying regular dividends year after year tend to be better managed because they are conscious that they must provide cash to their shareholders four times a year. Companies with a lengthy history of paying dividends are often large-cap, well-established companies.

Investing in stocks without Dividends

Investing in stocks without Dividends

Why would anyone want to put their money into a business that doesn’t pay out dividends? In reality, there are a number of advantages to investing in equities that do not pay dividends. Companies that do not pay dividends on their stock often reinvest the money that would have gone to dividend payments towards the company’s expansion and overall growth. This suggests that their stock prices are likely to rise in value over time. When the investor’s shares are ready to be sold. Dividends are paid on particular dates, one should know different dates related to the dividends.

Companies that don’t pay dividends may use the money from future dividend payments to buy back stock on the open market, which is known as a “share buyback.” If fewer shares are available on the open market, the company’s earnings per share (EPS) should potentially rise.

Pros of investing in Dividend Stocks

Pros of investing in Dividend Stocks

Passive Dividend Income Stream

Dividend stocks are stocks that provide cash dividends to their shareholders. It’s one of the ways dividend investors profit. Most investors like dividend stocks because they can give a consistent stream of income with little or no effort, similar to interest from a bank account but with a higher potential for profit.

Reinvestment of Dividend

When you utilize your dividend profits to buy more shares of a company’s stock, you’ll make more money because each share you buy generates its own regular dividend distribution. Dividends from stocks can be used to acquire other equities, allowing you to realize the benefits of dividend reinvestment. If you wish to diversify your portfolio, you can utilize that money to invest in alternative investment alternatives such as bonds, gold, and so on.

Advantages of investing in Dividend Stocks

Advantages of investing in Dividend Stocks

Dividends protect against bad markets

Many of your favourite stocks’ share prices may decline during a bear market or a correction. As a result, you might not be able to profit from stock capital appreciation. Even if your portfolio is down, you can still get a nice dividend income provided you have the correct dividend stocks in your portfolio. These 5 Dividend Stocks provided capital appreciation higher than Nifty.

Dividends are low risk

Dividend stocks are typically issued by significant companies that operate in a certain economy. Such businesses already have a substantial market presence, which helps to mitigate the risk component. Due to a largely retained profit foundation, unfavorable market swings have little impact on the productive potential of such businesses.

Dividends provide double income

If your invested stock increases by 30% in the next three years and you earn a 3% dividend return from the same investment, the overall earnings are far more than the capital appreciation alone. When compared to investing in companies that do not pay dividends, you can make twice as much money here.

Cons of dividend stock investing

Cons of dividend stock investing

Capital gains

Dividend stocks do not result in capital gains for investors because the unit stock values of such large-cap firms do not fluctuate much with stock market volatility. As a result, such shares are not ideal for short-term investment objectives, as price fluctuations between such time periods are minor.

Dividend stocks can expensive

Large-cap enterprises, such as industry giants and global enterprises, are the most common issuers of shares connected with regular dividend payouts. As a result, the securities issued have a high value. Furthermore, because most people like to hold on to such shares after purchasing them, finding a buyer in the market may be difficult.

Disadvantages of dividend stock investing

Disadvantages of dividend stock investing

Dividend Cuts

The worst-case scenario is this, Dividends are not a contractual duty, and a firm may choose to reduce dividends at any time. Furthermore, when a corporation reduces dividends, the stock price drops dramatically because the public perceives it as a negative sign. As a result, dividend investors may be in for a double whammy.

High dividend payout risks

A high dividend distribution indicates that the company is paying out a significant amount of its income to its shareholders. For instance, if a corporation makes a profit of Rs 100 crores in a financial year and pays out Rs 85 crores in dividends, the dividend payout ratio is 85%.

Who should consider investing in Dividend Stocks?

Who should consider investing in Dividend Stocks?

Investing in dividends is not a strategy that investors should take lightly. This method necessitates a significant amount of time and research, and it carries the same hazards as other types of investment. However, understanding the benefits and drawbacks of dividend investing is a solid starting point for determining whether or not this popular and rapidly increasing style of investing is suited for you. Equity shares that pay out large dividends on a regular basis are appropriate for investors searching for long-term investments with a high level of corpus security. Such shares might be included in the portfolios of novice investors looking for other ways to achieve larger returns through the stock market. Dividend stocks are generally less hazardous than non-dividend stocks, but before attempting to use them as part of your investment portfolio strategy, you should familiarise yourself with both the benefits and drawbacks of dividend investing.



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New Income Tax E-filing Portal Goes Live Today: Know All

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Personal Finance

oi-Roshni Agarwal

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Just as the advanced and more taxpayer-centric income tax e-filing portal has been launched today at precisely 6 am Indian time, we provide you with first-hand experience of the highly important tax portal.

New Income Tax E-filing Portal Goes Live Today: Know All

New Income Tax E-filing Portal Incometax.gov.in Goes Live Today: Know All

www.incometax.gov.in

Aiming to provide seamless and highly convenient platform the site entails features including:

On the main page 4 services are flashing saying:

1. View guided tour of the new portal: The all new feature that makes e-filing ITR easier.

2. Update your profile

3. Submit grievances

4. File your ITR- Access the pre-filled form, easy to use offline utility and wizard to file your ITR.

Further more under the services section the portal of the income tax dept offers all such services including:

1. e-verify your ITR

2. Link Aadhaar to PAN

3. Know about your PAN- Aadhaar linking

4. e-pay tax

5. Track status of e-filed return

6. Verify your PAN

7. Know TAN

8. Then there is a link that will take us out of the income tax portal and take us to webiste of other parties. Such links are provided only for the convenience of the client and e-Filing Portal does not control or endorse such websites, and is not responsible for their contents.

Along side Our Services, there are tabs saying:

Our Success enablers- Herein the dept. has mentioned the number of individual registered users and e-verified ITRs for AY 20-21.

News and e-campaigns

Things to know

Taxpayer voices

Our committed taxpayers

Pertinently, the previous income tax filing portal incometaxindiaefiling.gov.in has been rendered inactive ever since June 1 until June 6, 2021 for migration to the new system. It has been advised to taxpayers that they get their DSCs registered afresh on the e-filing portal from June 7, 2021 as the previous data cannot be extracted for security reasons.

The department has sought the patience of all stakeholders including taxpayers as familiarity with the new portal shall take time as it is a major transition.

Changes in ITR forms that you should know for filing ITR of FY 2020-21

Note soon after its launch the site seem to have hit a technical snag.

GoodReturns.in



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Average 13 lakh new demat accounts added every month since April 2020, BFSI News, ET BFSI

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MUMBAI: Amid near-record rally in the equity markets during the pandemic-ravaged FY21, brokerages have added on an average 13 lakh new demat accounts every month since April last year, taking the overall retail investor headcount to record 6.97 crore as of May 31 this year, according to BSE data.

After the bloody March 2020, when the bourses tanked about 35 per cent in a single month after the WHO declared COVID-19 as a global pandemic, the market was on a song from June.

The markets ended the year to December with a 15 per cent gains and the fiscal year to March with a historic 68 per cent, the second best in its history after an 80 per cent in 2008-09 after taking 40 per cent due to the global financial crisis in the previous year.

Brokerages and exchanges on an average added 12-15 lakh new investors every month in the past 14 months, taking the total to 6.97 crore, BSE Chief Executive Officer Ashish Kumar Chauhan told PTI.

He added that 40 per cent of the new demat accounts were added by the BSE brokers.

As of May 31, there were over 6.9 crore demat accounts in the country. Of this, about a quarter of them are from Maharashtra, followed by Gujarat with 85.9 lakh accounts, according to the investor data available with the BSE as of May 31.

“The BSE has added almost 40 per cent more investor accounts aggregated for all members in the past 15 months. To be precise, between March 2020 and end-May 2021,” Chauhan said.

The pace of investor accounts even on a larger base suggests that automation and mobile trading are taking investments in stocks and mutual funds to nooks and corners of the country, he added.

After Maharashtra and Gujarat, which traditionally have been leading the market when it comes to investors and investment, the third is UP with 52.3 lakh investor accounts (very small compared with the state’s huge population of about 20 crore), fourth is Tamil Nadu with 42.3 lakh accounts, and the neighbouring Karnataka is closely behind with 42.2 lakh ranking fifth.

Bengal comes next with 39.5 lakh at the sixth slot, followed by Delhi (37.3), Andhra (36), Rajasthan (34.6), MP (25.7), Haryana (21.2), Telegana (20.7), Kerala (19.4), Punjab (15.2), and Bihar (16.5).

Excluding Assam, which has 7.6 lakh demat account holders, all other northeastern states together have under 1.70 lakh accounts.

The tiniest territory Lakshadweep has the lowest number of demat account holders at just about 480, following Andaman & Nicobar with 9,700 accounts, according to the BSE data.

But, a vast majority of these accounts are inactive. An industry study in March 2020 said only a fourth of then 4 crore accounts were active.

According to Sebi guidelines, a demat account that has not been operated for a year is considered inactive.

During the financial year 2021, the Sensex zoomed a massive 20,040.66 points or 68 per cent, while Nifty skyrocketed 6,092.95 points or 70.86 per cent despite the pandemic blues. This was considerable as it came a negative return of 30 per cent in 2019-20.

The FY21 rally was the best after the FY09 rally when it skyrocketed 80 per cent after tanking 40 per cent, following the global financial crisis that began in September 2007.

The massive rally in the market was driven by record foreign investments pumping in a net record of USD 35 billion into the equities in the fiscal.

Even after that, in the first four days of June, they pumped in Rs 8,000 crore. The latest inflow comes following a net withdrawal of Rs 2,954 crore in May and Rs 9,659 crore in April.

Prior to April’s outflow, FPIs had been infusing money in equities since October. They invested over Rs 1.97 lakh crore in equities between October 2020 and March 2021. This included a net investment of Rs 55,741 crore in the first three months of this year.

So far this year, overseas investors have put in a net sum of Rs 51,094 crore into equities. However, they pulled out Rs 17,300 crore from debt securities, according to data from the depositories.



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