Category: Personal Finance

PowerGrid InvIT IPO Opens For Subscription: Here’s Why You Should Subscribe

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What is an InvIT?

InvITs is a new investment instrument and a fund raising tool for the infrastructure developers. Investors can directly invest in small amounts in revenue-generating real estate projects that also go well with the ongoing cash requirements of developers. The move will help developers meet their project completion deadlines who otherwise falter attributing funding concerns. And for the investment made, you as an investor get a part of cash flows. Experts opine that the instrument is also likely to reduce funding pressure on the banking system.

Issue details:

Issue details:

Through the issue, the company aims to raise Rs. 7735 crore. The offer will include at least 10 percent of the outstanding units on a post offer basis.

Ipo opening date April 29, 2021

IPO closing date May 3, 2021

Issue price Rs. 99- 100 per equity share

Market lot 1100 shares

Minimum order quantity 1100 shares and in multiples of 1100 units thereafter. So minimum investment here shall be Rs. 1.1 lakh

The lead managers to the offer are ICICI Securities, Axis Capital, Edelweiss Financial Services, and HSBC Securities and Capital Markets (India). As for the company, IDBI Trusteeship Services is the Trustee, while PowerGrid Unchahar Transmission is the investment manager.

Issue objective:

Issue objective:

The proceeds of the issue will be utilized for providing funding to the initial portfolio assets for repayment of pre-payment of debt, including any accrued interest, availed by the Initial portfolio assets and for other general corporate tasks.

Following the utilisation of the offer proceeds, its consolidated borrowings and deferred payments net of cash and cash equivalents will be below 49 percent of the total value of assets, as prescribed by the InvIT Regulations.

Rating of the InvIT

Rating of the InvIT

PowerGrid InvIT has been rated as stable by ratings firms such as CARE Ratings Limited, ICRA Limited, and CRISIL Ratings Limited.

Valuations of Powergrid InvIT IPO:

IPO values the InvIT at 3.5 times its book value that seems a higher premium compared to its sponsor Power Grid Corp and IndiGrid InvIT. But, analysts believe higher valuations are justified because of the better return ratio of Power Grid InvIT that has a RoE of 25% in FY20 against 17% of Power Grid and IndiGrid’s 10%.

Brokerages’ take on the issue of PowerGrid Infrstructue Investment Trust

GEPL Capital said that the Power Grid has a monopoly status in the area of power transmission.With the government’s focus on renewable energy generation, we expect the transmission volumes to pick up and grow at a 9-10% CAGR over the next 5 years. So, GEPL Capital is advising investors to subscribe to the issue.

Return expectation:

Risk-averse investors can subscribe to the InvIT and expect an annual yield of 10-12 percent annually. The return typically shall be higher than the fixed deposit. “Investors preferring annuity-like income over growth can subscribe to the issue from a longterm perspective,” the Economic Times quoted Vikas Jain, analyst, Reliance Securities as saying. “Given expected cash flow by the company and 90% of net distributable cash flows to be distributed amongst the unitholders, dividend yield at upper price band comes at 11-12%, which appears to be healthy while any possible price appreciation will improve its overall returns,” Jain said.

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Sebi deepens fund managers’ skin in the game, BFSI News, ET BFSI

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Mumbai: Mutual funds will have to pay a part of the salary to its top employees in the form of units of the schemes they oversee. The Securities and Exchange Board of India (Sebi) said on Wednesday at least 20% of the salary, perks, bonus or non- cash compensation of these executives will have to be paid in the form of units of mutual fund schemes.

The regulator said the move is aimed to align the interest of the key employees with the unit holders of the mutual fund schemes. Key officials include a fund house’s chief executive officer, chief investment officer, fund manager, research analysts, chief operation officer among others.

“Having skin in the game is looked at positively by all investors, and the basic intent seems good,” said Kaustubh Belapurkar, Director (Fund Research), Morningstar India.

The new rule comes in the wake of a forensic report commissioned by Sebi which alleged that some of the top officials of Franklin Templeton and their family members withdrew a portion of their investments from some of six stressed schemes of the fund house just before they were shut for redemptions on April 23,2020.

The Sebi circular on Wednesday said units allotted to key employees would be clawed back in the event of “fraud, gross negligence or violation of code of conduct.” The rules become effective on July 1.

The regulator has excluded exchange traded funds, index funds, overnight funds and existing close ended schemes from the new rule.

Sebi said the compensation paid in the form of units should also be proportionate to the assets under management of the schemes in which the key employee has an oversight.

In case of compensation paid in the form of employee stock options, the date of exercising such option should be considered as the date of such payment, Sebi said. The compensation should be locked- in for a minimum period of three years or tenure of the scheme whichever is less.

Mutual fund industry officials are miffed with the new regulations. While some said the move could result in a flight of talent to independent fund management, others said it was unfair on the chief executive officers of mutual funds.

“The CEO will end up putting 20% of his post tax money across a large number of schemes irrespective of his needs, and that too locked in for three years,” said the CEO at a domestic fund house.

The regulator said fund houses should not allow any redemptions of the said units during the lock- in period. Besides, redemptions of such units should also not be allowed within the lock-in period in case of resignation or retirement before attaining the age of superannuation.

“In case of retirement on attaining the superannuation age, such units shall be released from the lock-in and the key employee shall be free to redeem the units, except for the units in close ended schemes where the units shall remain locked in till the tenure of the scheme is over.”

In the case of fund managers managing only a single scheme, 50% of the compensation can be by way of units of the scheme managed by the fund manager and the remaining can could be by way of units of those schemes whose risk value is equivalent or higher than the scheme managed by the fund manager, the circular said.



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No more kebabs for bitcoins as Turkey’s crypto-payment ban looms, BFSI News, ET BFSI

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ISTANBUL: Kebab chef Kadir Oner hoped to boost his new business by accepting payment in cryptocurrencies, but a ban by Turkish authorities will force him next month to fall back on payment methods as traditional as his spit-roasted meat.

Interest in cryptocurrencies has boomed in Turkey, where double digit inflation and a tumbling lira make them an attractive alternative investment, and Oner says that customers used them to settle between 5% and 10% of their bills.

“The world is adapting to the digital era and we have to get on board with it,” Oner said adding that crytopayments were easier than bank transactions and would have accounted for a growing slice of his doner kebab sales if allowed to continue.

But Turkey’s Central Bank sees dangers in the new practice, and on April 16 banned the use of cryptocurrencies and crypto assets for purchases from April 30, citing “irreparable” damage and transaction risks.

Authorities last week also launched investigations into possible fraud at two cryptocurrency exchanges, and the Central Bank Governor Sahap Kavcioglu said the Finance Ministry is working on wider regulations regarding cryptocurrencies.

Cryptocurrencies remain little-used for global commerce even as they become increasingly mainstream assets, although companies including Tesla Inc and travel site Expedia Group Inc do accept such payments.

In Turkey, businesses like hairdressers and small grocery shops started accepting payments out of convenience as they also held crypto coins, Altug Isler, the founder of the Kripto Teknik news website said.

If the sector were well regulated, there would be potential for more cryptocurrency transactions, he said, but the central bank had taken the “easiest option” by closing it all down.

“The ban has became a serious issue for the fintech firms working in this area and they have started taking the crypto payment ban to court,” Isler said. “I think the government will make an effort to bring regulations into the cryptocurrency market and loosen this ban.”

Trading volumes in Turkish crypto exchanges doubled on the weekend following the central bank ban on crypto asset payments compared to the previous weekend, according to data from U.S. researcher Chainalysis and trading data firm Kaiko shared with Reuters.

Cryptocurrency trading volumes often spike during periods of volatility, with short-term traders seeking to profit from swings in price. Many market players say this is a key attraction of the emerging asset.

PLANS SHELVED
In the covered halls of Istanbul’s 15th century Grand Bazaar, cryptocurrency exchange shop Cointral can no longer sell gold for cryptocurrencies, its founder Ugur Hakan Cakan said.

He also had to put on hold a new initiative for e-commerce websites offering crypto asset payments.

“We have been selling gold, real estate and we were preparing to launch a new service… but the project is shelved now with the new regulation,” Cakan said.

“I hope that this ban is a transition until the necessary regulations are put into implementation,” he said, adding that gold for cryptocurrency sales had been popular.

Chef Oner says he will survive the ban on cryptopayments, which had been used to purchase more than 1,500 of his kebabs since he opened in March, but he also hoped the move would be temporary.

“I am sure when the necessary legal regulations are made we will win back the customers we’ve lost due to this ban.”



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Sukanya Samriddhi Yojana: Current Deposit, Withdrawal, Interest & Tax Rules Explained

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Investment

oi-Vipul Das

|

Sukanya Samriddhi Yojana (SSY) is a government-sponsored small savings scheme designed for girl child. It was launched in 2015 as part of the Government initiative Beti Bachao, Beti Padhao campaign and can only be opened by the parents of a girl child under the age of ten at concerned post office and banks. A Sukanya Samriddhi Account is valid for 21 years, or until the girl child reaches the age of 18. The government declares the interest rate of SSY on a quarterly basis and hence the interest rate has been set at 7.6 percent per annum for Q1 (April-June) FY 2021-22. Apart from the interest rate and tax benefits, one of the main advantages of this scheme is that it can be transferred from one post office or bank to another. So coming back to the heading part here we will discuss about the deposit, eligibility, interest rate, tax benefits, process to open, withdrawal and tenure of this scheme.

Sukanya Samriddhi Yojana: Current Deposit, Withdrawal, Tax Rules Explained

Eligibility required to open an SSY account

Before opening a SSY account here are the required eligibility criteria that you need to consider:

  • An SSY account can only be opened by the parents or legal guardians of a girl child.
  • At the time of account opening, the girl child must be under the age of ten.
  • In the name of a girl child, only one account can be opened by her legal guardians or parents.
  • A family is only approved for two SSY accounts, one for each girl child in case of twins/triplets girls.

SSY Deposit Limit and Tenure

The Sukanya Samriddhi Account has a minimum annual contribution of Rs. 250 and an overall contribution of Rs. 1.5 lakh every fiscal year. From the date of account opening, you must contribute at least the minimum amount per year for up to 15 years. SSY has a maturity period until the girl child reaches the age of 21 or until she marries after reaching the age of 18. If an account holder fails to make the minimum deposit of Rs. 250 in a fiscal year then his or her SSY account is classified as a “Defaulted Account.” This account can be reopened before the 15-year period of its opening by contributing a minimum of Rs. 250 plus Rs. 50 for each defaulted year. After the age of 18, a girl child can manage her own account. After submitting the required documents to the concerned post office or bank where the account is maintained, she will be eligible to operate the SSY until she reaches the age of eighteen.

SSY Premature Closure Rules

In the event of the account holder’s death, the account can only be closed prematurely after 5 years. As a result, the PO Savings Account interest rate will apply from the date of death to the date of payment. Premature account closure is also possible in very critical conditions such as the account holder’s serious illness or the death of the guardian who managed the account. To do so, one must submit a specified application form, as well as a pass book and other documents, to the authorized Post Office or bank.

SSY Withdrawal Rules

After a girl child reaches the age of 18 or has completed the 10th standard, she can withdraw money from her account. The account holder is allowed to withdraw up to 50% of the available balance at the preceding fiscal year for marriage or higher education of the girl child. Withdrawals can be made in one lump sum or in instalments of up to once a year for a period of five years, according to the prescribed limit and actual fee/other charge conditions.

SSY Tax Benefits Rules

Deposits in SSY are classified as EEE (Exempt, Exempt, Exempt) status. This ensures that the investment principal, interest gained, and maturity amount are non-taxable. The tax-deductible benefit on the principal amount invested under Section 80C of the Income Tax Act, 1961 is up to Rs 1.5 lakh per year under the current taxation laws of the Sukanya Samriddhi Yojana.

Transfer of SSY account

The truth of the matter is that the Sukanya Samriddhi Yojana Account can be conveniently transferred from one bank or post office to another is one of its main advantages. You can easily transfer this small savings scheme from one post office or bank to the other. For the same you need to fill out the application form and submit it along with the required documents at the concerned post or bank.

Sukanya Samriddhi Yojana Interest Rate

In contrast to other government-backed tax saving schemes, SSY promises a higher fixed rate of return (currently 7.6% per year for Q1 FY 2020-21) and the rate is reviewed every quarter by the government. Because SSY is backed by the government, it offers assured returns. On a compounded annual basis, interest is determined on the deposit balance. The interest is determined on the lowest balance in the account between the close of the fifth day and the end of the month for the calendar month. At the end of each financial year, the interest will be credited to the account.



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RBI’s CEO tenure cap: Here’s how it will impact Uday Kotak; HDFC Bank, ICICI Bank, Axis Bank safe

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Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over.

The Reserve Bank of India’s (RBI) final guidelines on the tenure of bank MD, CEOs, or Whole Time Director (WTD) will apply to private lenders, small finance banks (SFBs), and wholly-owned subsidiaries of foreign banks. Under the new guidelines, the post of MD and CEO of a private bank cannot be held by the same individual for more than 15 years in one go. While, in the case of a promoter MD/CEO, the tenure will be capped at 12 years. RBI has noted that under special circumstances and at the discretion of the apex bank, the term for promoter CEO may be extended up to 15 years. “Banks such as HDFC Bank, ICICI Bank, and IndusInd Bank had a change at the helm in the recent past. However, banks like Kotak Mahindra Bank, DCB Bank, City Union Bank, Federal Bank, and RBL Bank have long-running tenures (+10 yrs) of the current MDs,” said Siji Philip and Dnyanada Vaidya, research analysts, Axis Securities.

RBI guidelines negative for Kotak Mahindra Bank

For Kotak Mahindra Bank and City Union Bank, the term extension has already been done till 2024 and 2026, respectively. Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over. However, he will continue to remain a stakeholder in the bank. Uday Kotak got reappointed on January 1, 2021, for a period of three years. “Hence, his tenure will now end on 1 Jan 2024 and he is not eligible for reappointment as he has already completed 15 years as the MD and CEO,” said Suresh Ganapathy, analyst at Macquarie Research in a note.

Banks to comply with RBI guidelines by Oct 1, 2021

Ganapathy also said that the second in line Dipak Gupta (current Joint MD) may not be eligible to succeed Kotak as the CEO as the 15 year cap applies for all whole-time directors (WTD) on the board. RBI circular also stated that the upper age limit for MD and CEO and WTDs in the private sector banks would continue and no person can continue as MD and CEO or WTD beyond the age of 70 years. Banks are permitted to comply with these instructions latest by October 01, 2021. It should be noted that banks with MD and CEOs or WTDs who have already completed 12 or 15 years as MD and CEO or WTD, on the mentioned date these instructions coming to effect, shall be allowed to complete their current term as already approved by the Reserve Bank.

Kotak Mahindra Bank shares were trading nearly 3 per cent higher at Rs 1,799 apiece on BSE in intraday deals on Wednesday. So far, a total of 46,000 shares have traded on BSE, while a total of 19.40 lakh shares have exchanged hands on NSE. RBI also clarified that the individual will be eligible for re-appointment as MD and CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions. “During this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly,” RBI said.

HDFC Bank, ICICI Bank, Axis Bank seem fine

According to Ganapathy, the CEOs of HDFC Bank, ICICI Bank and Axis Bank have plenty of time and can be the CEO for more than a decade as they were appointed as the CEO recently. HDFC Bank CEO took charge last year whereas ICICI Bank CEO took charge a couple of years ago. Similarly, Axis CEO also can be the CEO for more than a decade.

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Top Highest Dividend Yield Shares In India

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1. PNB Gilts

Considering the last market price of Rs. 51.15 per share and dividend declared of Rs. 3 and Rs. 4 for the financial year 21, the scrip offers the highest dividend yield of 13.7 percent. The company’s market capitalization stood at Rs. 929 crore.

2. Oil India:

2. Oil India:

For the FY 20, the oil drilling and exploration company declared a dividend of Rs. 10.6 per share. And for FY 21, it declared an interim dividend of Rs. 3.5. So at the current market price of over Rs. 117, the dividend yield comes to be over 9 percent. And now for the FY 2021, the dividend yield taking into account the dividend declared shall be just 3 percent.

3. Power Finance Corporation:

3. Power Finance Corporation:

The PSU sector lending company on March 19 declared an interim dividend of Rs. 8. Considering the last market price of Rs. 108.5, the dividend yield of the concern comes out to be 7.37 percent. The company has a good dividend track report and has consistently declared dividends for the last 5 years.

4. Balmer Lawrie Investment:

4. Balmer Lawrie Investment:

For the financial year ending FY20, the company declared a dividend of Rs. 35 per share and given the current price of Rs. 456.7 per share, it translates to a dividend yield of 7.6%. This scrip also has a good dividend track record history.

5. TV Today Network:

5. TV Today Network:

The dividend declared for the FY 21 has been Rs. 2.25 per share and at the current price, the dividend yield has been 7.8 percent. The company over the last five years has been consistently declaring dividends.

Taxation of Dividend Stocks In India

Taxation of Dividend Stocks In India

With effect from FY21, dividend is taxable in the hands of the shareholders and not in the hands of the company or mutual funds. Also, domestic companies and mutual funds are liable to withhold tax at 10 percent on dividend income paid to resident individuals in excess of Rs. 5000. But this rate amid the pandemic was reduced to 7.5% until March 31, 2021.

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HODL your horses, cryptos face possible hurdles ahead, experts say, BFSI News, ET BFSI

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Evolving rules, environmental concerns and competition from central banks threaten to undermine many of the world’s fast-growing crypto assets, crypto and macro experts said, while creating opportunities for those able to adapt.

Europe and the United States are both working on regulating digital assets and their providers – moves welcomed by investors, who hope the new ground rules will encourage institutional investors to plunge in.

Anatoly Crachilov, co-founder and CEO of Nickel Digital Asset Management, which manages assets worth $200 million, told the Reuters Global Markets Forum that regulatory uncertainty was a drag on the development of the crypto space.

He described the promise by the U.S. Securities and Exchange Commission‘s new Chairman Gary Gensler, to provide “guidance and clarity” to the market during his confirmation hearing in March, as a turning point.

For its part the European Commission‘s proposed “Markets in Crypto-assets,” or MiCA regulation, will regulate crypto-assets and their service providers in the European Union.

“It will be a new banking sector, with passporting possibilities,” digital asset trading solutions company H-Finance CEO Vytautas Zabulis said, referring to the prospect of EU-wide cryptocurrency trading licences.

Alongside the evolving regulatory framework, some countries, including China, Britain and Russia, are considering launching their own central bank digital currencies (CBDCs).

That is likely to be followed by legislation to tax gains, said Robert Carnell, chief economist and head of research at ING Asia. “That may be the death knell for these other cryptocurrencies, though central bank coins are on the up and up,” he said.

Zabulis said that if CBDCs were developed in a way that they were “easy to interact with,” most digital currencies used for settlements will likely lose their both their goal and value.

There was not a big argument for bitcoin becoming a settlement tool, Zabulis cautioned. “Blockchain technology is for that, so, CBDCs will be built on blockchain.”

Bitcoin BTC=BTSP traded around $54,000 following a 10% surge on Monday, driven by reports that JPMorgan Chase JPM.N is planning to offer a managed bitcoin fund.

CBDCs are expected to have a limited impact on Bitcoin in particular, due to its progressively limited supply, which is in contrast to traditional fiat systems, Crachilov said.

“No central bank currency, however digital, can offer scarcity at this stage, as its supply can be inflated by a respective central bank issuing entity,” Crachilov said.

If China saw bitcoin as a threat to its own planned digital currency, that could affect the whole industry, Zabulis said.

GREEN REVOLUTION?
Creating crypto assets leaves a heavy carbon footprint, and is being increasingly seen as environmentally unsustainable.

ING Asia’s Carnell said there was “a strong argument on environmental grounds for limiting crypto mining, or at least having them offset their wasteful practices.”

However, bitcoin enthusiast Raoul Pal said he was not worried about the “unsustainability narrative”.

Pal, founder and CEO of on-demand financial TV channel Real Vision, said he believed it would drive a “green revolution” because in the end that was “the only way to win”.

Nickel Digital’s Crachilov said his fund was seeing a higher demand for ESG-compliant cryptos. “The price competition drives miners towards the cheapest sources of energy — renewables are increasingly falling into this category,” he said.

Ethereum 2 will use “proof of stake versus proof of work,” H-Finance’s Zabulis said. “It means that it will drastically reduce the energy needed” to mine it.

Garrett Minks, chief technology officer at Delaware-based RAIR Technologies, said the idea is to “trade brute force electricity burning with fancier math”.



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7 Of the 17 New Listings In 2021 Trade Below Their IPO Issue Price

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oi-Roshni Agarwal

|

Even as the secondary market is able to hold on its mojo despite the second Covid 19 wave threat, it is the new listings that have lost their euphoria. Currently, as many as half of the new listings that debuted in 2021 are trading below their issue price.

7 Of the 17 New Listings In 2021 Trade Below Their IPO Issue Price

7 Of the 17 New Listings In 2021 Trade Below Their IPO Issue Price

Of the total 17 listings, 8 are giving negative returns while the others have been witness to double digit growth. And the former 8 IPO companies include Anupam Rasayan, Easy Trip Planners, Home First Finance, Craftsman Automation, Suryoday Small Finance, IRFC and Kalyan Jewellers

New listing stocks Issue price Issue listing date LTP
Kalyan Jewellers Rs. 87 March 26, 2021 Rs. 61.4
IRFC Rs. 26 January 29, 2021 Rs. 21.2
Suryoday Small Finance Bank Rs. 305 March 26, 2021 Rs. 247
Craftsman Automation Rs. 1490 March 25, 2021 Rs. 1305
Brookfield India Real Estate Rs. 275 February 16, 2021 Rs. 243.38
Home First Finance Rs. 518 February 3, 2021 Rs. 466.5
Easy Trip planners Rs. 187 March 19, 2021 Rs. 182.55

Why the lag in new listing stocks?

As per experts, the fall in Nifty from the highs scaled in February, Covid 19 situation, profit booking are some of the reasons behind the selloff in some of the IPOs that made their way to the bourses in the current year. Nonetheless, if there is seen earnings pick up, stocks can again gain buying traction.

What to remember for retail investors when considering IPO investment?

IPO investment is not just for listing gains and this has been mostly the call for IPOs that listed in FY21. “Some of the IPOs were listed at exorbitant valuations which weren’t justified, thus leading to a fall in prices. Investors are advised to take informed decisions on IPOs keeping their risk and liquidity needs in mind and avoid issues that are weaker from a fundamental perspective. Quality issues with favourable valuations can be added on dips,” Nirali Shah of Samco Securities told a business daily.

Investor should also understand business model of the company, product growth cycle, longevity of its products, companies’ position in a given market should be understood i.e. whether it has created a niche for itself or enjoys a dominant position, or is a first of its kind company in a particular space.

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Bajaj Finance consolidated net profit rises 42%

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To optimize cost of funds and to benefit from lower interest rate environment, the company had paid down Rs 7,500 crone to banks in the last two quarters. The cost of funds for Q4FT21 was 7.39% compared 8.37% in Q4FT20.

Bajaj Finance on Tuesday reported a 42% year-on-year (YoY) rise in consolidated net profits for the quarter ended March to Rs 1,347 crore on account of a drop in loan loss provisions to Rs 1,231 crore as against Rs 1,954 crore in Q4FY20.

The NBFC’s net interest income fell 0.5% to Rs 4,659 crore. Interest income reversal for the quarter was Rs 298 crore as compared to Rs 122 crore in Q4FY20.

The firm’s gross NPA was higher at 1.79% compared with 1.61% in Q4FY20 while the net NPA was at 0.75% compared to 0.65% in Q4FY20 .

Assets under management grew by 4% during Q4FY21. A diversified business model had enabled the company to revert to pre-Covid levels of AUM, the company said. New loans booked during the quarter was lower at 5.47 million as against 6.03 million in Q4FY20. Except auto finance, new loans origination across businesses had gone to pre-Covid levels. Customer franchise as of March 31, 2021 stood at 48.57 million as against 42.60 million as of March 2020. The company acquired 2.26 million new customers in Q4FY21 as compared to 1.85 million in Q4FY20.

Rajeev Jain, MD of Bajaj Finance, said, barring a national lockdown or extended lockdowns in three to four large GDP contributing states or another moratorium on loan repayment, the company was confident of delivering its long term guidance metrics in FY22.

Jain said at an investor presentation that the disruption in the first quarter could be reasonably mitigated in the balance three quarters of FY22. The company was watching the situation closely and taking appropriate action to navigate through this, Jain said.

Bajaj Finance long term guidance is to grow AUM in the corridor of 25% to 27%, profit growth in the corridor of 23% to 24% and gross NPA in the 1.4% to 1.7% range with net NPA at 0.4% to 0.7%

The company said it had done an accelerated write off in the quarter of Rs 1,530 crore due to Covid related stress and advancement of its write-off policy. After this write-off, the company still holds a management overlay and macro provision of Rs 840 crore and was covered for loans losses and provisions.

The company had a liquidity buffer of Rs 16,485 crore as on March 31, 2021. To optimise cost of funds and to benefit from lower interest rate environment, the company had paid down Rs 7,500 crore to banks in the last two quarters. The cost of funds for Q4FY21 was 7.39% compared 8.37% in Q4FY20.

“Most businesses had started disbursing 90-105% of last year’s volumes with incremental growth being observed every month,” Jain said. The company’s business transformation plan was on track and the company would be launching its omnichannel 3-in-1 financial services in a phased manner by August and September ’21 and this would help in accelerating market share, he said. The omnichannel model would enable customers to move between online to office and vice-versa in a frictionless manner.

The Bajaj Pay for consumers has gone live with the Bharat Bill Pay System and a fully functional UPI would go live by May 2021 after getting regulatory clearance. The insurance and investment marketplace apps would be going live between July and August ’21.
The company’s board recommended a dividend of Rs 10 per equity share of the face value of Rs 2 for FY21.

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Bitcoin Has Been Volatile With Gains And Losses: Here’s Why

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Personal Finance

oi-Roshni Agarwal

|

Bitcoin recovered its previous week’s losses and surged as much as 10% to settle at $54338. And was last seen trading at again above $53461 on Tuesday.

In the previous week, investors lost a huge $200 billion in a day as Biden’s proposed plan of increasing capital gains tax weighed.

Bitcoin Has Been Volatile With Gains And Losses: Here's Why

Bitcoin Has Been Volatile With Gains And Losses: Here’s Why

Now why the volatility in bitcoin price?

There are a few reasons that pushed bitcoin prices higher today and on Monday:

1. JP Morgan Chase & Co. to offer an actively managed Bitcoin fund:

JP Morgan Chase as per reports is preparing to offer an actively managed bitcoin fund to some of the clients as soon as this summer. This shall be another break from another passively managed funds of other companies. These funds enable investors to buy and hold bitcoin without getting themselves involved.

The move in fact marks a turnaround for JP Morgan as it has a history of crticising bitcoin. Earlier the CEO of JP Morgan also called Bitcoin as fraud and ‘worse than tulip bulbs’.

2. Elon Musk tweet on a Monday also influenced a sharp rally:

In its earnings call, Elon Musk of Tesla said the bitcoin market is a liquid market with an bright future. On Twitter Mush said, Tesla sold 10 percent of its holding in bitcoin to prove bitcoin liquidity as an alternative to holding cash on the balance sheet.

Further as per Zach Kirkhorn, Tesla’s CFO, Tesla will continue to gather bitcoin and will make bitcoin related announcements in the future. Tesla invested $1.5 billion worth of bitcoin in February..

After receiving endorsements from big investors, bitcoin on a year to date basis has rallied 80 percent. Also, companies from Bank of New York Mellon to Goldman sachs have extended their offerings around cryptocurrencies.

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