TheEconomicTimesWealthMay92022

THE ECONOMICTIMES

THE CARDS CHALLENGING
THE CREDIT CARDS P10

www.etwealth.co | Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, New Delhi, Pune | May 9-15, 2022 | 24 pages | `8

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Why Should All you
buying you invest need to
gold in oil and know
makes gas sector about
little sense now? REITS
P5 P8 P12

PHOTOS: GETTY IMAGES & IMAGESBAZAARcover story

02 The Economic Times Wealth May 9-15, 2022

BEST
NPS
FUNDS

Find out which pension
fund manager has given
the best returns as also
which allocation is most
appropriate at this stage.

TBy Babar Zaidi to choose between the four categories–eq- investors spread their money across a The impact of equity exposure has even
he consistent rise in govern- uity, gilts, corporate bonds and alternative combination of funds. We have, therefore, pulled the returns of conservative inves-
ment bond yields and the result- investments. looked at blended returns of four different tors into the red.
ant fall in NAVs of bond funds is combinations of equity, gilt and corporate
worrying Devanshu Agarwal. While the Agarwals will have to remain bond funds. But while equity exposure has brought
“My parents are in their 50s, invested in the NPS, what they can do pain in the short term, it has proved boun-
and their NPS allocation is 60-70% in gilt is tweak the fund combination in their Aggressive investors are assumed to put tiful in the long term. Aggressive inves-
funds, 20% in corporate bond funds and the portfolio to minimise the impact of rising 60% of the corpus in equity funds, 20% in tors who bet heavily on equity funds have
remaining 10-20% in equity funds. Should interest rates. Gilt funds of the NPS hold corporate bond funds and 20% in gilt funds. made good gains (see table). The long-term
they continue with this allocation?” he bonds of slightly longer maturities than Balanced investors allocate 33.3% to each returns are in double digits and way above
asked ET Wealth last month. corporate bond funds. The average ma- of the three classes of funds. Conservative what other allocations have earned during
turity of bonds in gilt funds is 7.26 years, investors put only 20% in stocks, 30% in the same period. Ultra-safe investors who
Unfortunately for NPS investors like compared to 4.44 years of corporate bond corporate bonds and 50% in gilts. And ul- stayed away from equities may not have
the Agarwals, there is no way to escape the funds. Experts say that when interest rates tra-safe investors shun equities altogether suffered any losses in the short term, but
impact of rising bond yields or even the are rising, it is better to stay in shorter and put 40% in corporate bond funds and their long-term returns are 3-4 percentage
declining equity markets. Other market- duration bond funds to reduce the interest the balance 60% in gilt funds. points lower than those earned by aggres-
linked investment products such as Ulips rate risk. sive investors.
and pension plans from insurance com- Though investors can also allocate 5%
panies offer a liquid option where inves- The Agarwals will also find this week’s to alternate investment funds, we have not In the following pages, we identify the
tors can park their money to earn low but cover story useful. It examines the per- included that in the calculation. best performing funds for various types of
positive returns. The NPS does not have a formance of Tier I funds of the NPS and investors. We hope our research will help
liquid fund option, and investors are forced identifies the best pension funds. As in The returns are along expected lines. In you choose an appropriate asset mix for
earlier years, we have not looked at the per- the short term (6-12 months), the aggres- your NPS investments as also identify the
formance of individual schemes because sive and balanced portfolios have suffered best pension fund manager.
due to the downturn in the equity markets.

cover story

The Economic Times Wealth May 9-15, 2022 03

AGGRESSIVE Conviction in equities pays off

Short-term returns are down, but investors have earned double-digit returns in the long-term.

RETURNS (%)

PENSION FUND MANAGER 6 MONTHS 1 YEAR 3 YEARS 5 YEARS 3-YEAR SIP 5-YEAR SIP

Birla Sun Life Pension Scheme -2.40 11.13 12.04 - 12.24 10.85

HDFC Pension Fund -3.01 11.24 12.49 11.37 13.03 11.52

ICICI Prudential Pension Fund -2.75 11.85 11.88 10.84 13.25 11.29

Kotak Pension Fund -3.18 11.69 11.79 10.41 12.64 10.92
LIC Pension Fund 11.81 10.40 11.16
-2.25 12.39 13.42

SBI Pension Fund -2.71 11.34 11.20 10.44 12.24 10.67

UTI Retirement Solutions -3.00 10.79 11.31 10.35 12.58 10.69

AVERAGE -2.75 11.49 11.79 10.63 12.77 11.01

Allocation to equities can boost re- 20% Data as on 2 May 2022; Source: Value Research Shikha Malhotra
turns, but till four years ago, NPS
subscribers could invest no more Gilt funds PFRDA. The investment norms were re- 26, Gurugram
than 50% in equity funds. The PFRDA laxed a few years ago, allowing pension
raised this cap to 75% in 2018, allowing 60% ASSET 20% fund managers to look beyond the index She has just taken up her first job in a
younger investors like Shikha Malhotra MIX and invest in stocks in the F&O basket. large MNC. Given her age, she has a high
(see picture) to give their retirement sav- Equity Corporate But the stocks must have a market cap of risk appetite and is willing to take a
ings a bigger exposure to equity funds. funds bond funds at least `5,000 crore. higher exposure to equities.
However, the PFRDA does not want
older subscribers to bet too heavily on turns for the Aggressive portfolio, we Given this restriction, all NPS equity OUR Allocate the maximum
equities. After the subscriber turns 50, kept the allocation to equity funds at funds have nearly 90% allocation to the ADVICE 75% exposure to
the maximum equity exposure starts 60%. large-cap segment. Fund managers will equity funds. Put the
reducing by 2.5% every year. In 10 years, have to search for alpha in the mid-cap remaining 25% in
when the subscriber is ready to retire, It is noteworthy that there is not a territory, where stocks have a greater corporate bond funds.
the maximum exposure to equity funds huge variation in the returns earned potential to grow. But though mid-cap
is only 50%. While calculating the re- by the seven pension funds. Pension stocks outperform large-cap scrips in
fund managers have had to operate the long term, they are also more vola-
within the tight guidelines laid down by tile and prone to higher drawdown dur-
ing market downturns.

BALANCED Keeping eggs in all baskets

Spreading the corpus equally across all three categories has yielded stable returns.

RETURNS (%)

PENSION FUND MANAGER 6 MONTHS 1 YEAR 3 YEARS 5 YEARS 3-YEAR SIP 5-YEAR SIP

Birla Sun Life Pension Scheme -1.06 7.71 10.65 - 9.20 9.26
HDFC Pension Fund
-1.42 7.75 10.98 10.00 9.80 9.74

ICICI Prudential Pension Fund -1.31 8.11 10.45 9.58 9.80 9.45

Kotak Pension Fund -1.56 8.02 10.24 9.19 9.30 9.13
LIC Pension Fund -1.09 10.59
SBI Pension Fund -1.26 8.24 10.13 9.48 9.90 9.48 Anuj Razdan
UTI Retirement Solutions -1.53 10.00
7.77 9.39 9.20 9.13 45, Mumbai
AVERAGE -1.32 7.22 10.43
9.12 9.20 8.97 A senior manager in
7.83
9.46 9.49 9.31 a large company, he
draws a handsome
Data as on 2 May 2022; Source: Value Research salary but also pays a

Balanced investors who divided 33.3% ASSET 33.3% the NPS. high tax. His employer
their corpus equally across the MIX The market-linked NPS is very offers the NPS benefit
three asset classes have had the Equity Gilt funds but Razdan has not
best of both worlds. Equity exposure funds different from the EPF that offers opted for it.
has pushed up their long-term re- 33.3% assured positive returns. But his
turns, while gilt funds and corporate
bonds shored up their returns in the Corporate contribution to EPF was not fetching Opt for the
short term. The 3-5 year SIP returns bond funds any tax benefit while the contribution NPS benefit,
are better than what the EPF has to NPS is eligible for deduction under
given in recent years. which can
Sec 80CCD(2). This benefit is espe-
A stable performance is what help cut tax
many investors like Anuj Razdan (see cially useful for people in the higher
picture) are looking for. This senior
manager in a Mumbai-based com- tions to the Employees’ Provident income brackets. “If my company puts significantly.
pany wants to opt for the NPS benefit Fund. Besides the mandatory `15,500
after the new tax rule for contribu- contribution to the EPF every 10% of my basic pay in the NPS every OUR Spread the
month, Razdan used to put an addi- month, my annual tax will reduce by ADVICE corpus equally
tional `25,000 through the Voluntary almost `50,000,” says Razdan. If he across all
Provident Fund. Now that it will earn
taxable interest, Razdan is looking at puts in `50,000 more in the NPS under three fund
Sec 80CCD(1b), his tax will reduce by categories.
another `15,600.

cover story

04 The Economic Times Wealth May 9-15, 2022

CONSERVATIVE Equity exposure boosts returns

The thin sliver of equities in the portfolio has boosted returns in the long term.

RETURNS (%)

PENSION FUND MANAGER 6 MONTHS 1 YEAR 3 YEARS 5 YEARS 3-YEAR SIP 5-YEAR SIP
7.43 8.35
Birla Sun Life Pension Scheme -0.53 5.80 9.87 -
HDFC Pension Fund 7.87 8.70
-0.81 5.65 10.13 9.26
7.81 8.42
ICICI Prudential Pension Fund -0.74 5.99 9.67 8.92 7.43 8.21
7.87 8.58
Kotak Pension Fund -0.85 5.99 9.51 8.64 7.43 8.26
7.28 8.02
LIC Pension Fund -0.58 5.95 9.92 9.08
7.59 8.36
SBI Pension Fund -0.67 5.73 9.51 8.83

UTI Retirement Solutions -0.90 5.20 9.28 8.48

AVERAGE -0.72 5.76 9.70 8.87

Conservative investors, who en- 20% ASSET 50% Data as on 2 May 2022; Source: Value Research Damini Natarajan
trusted only 20% of their corpus to MIX
equity funds, have also fared well. Equity Gilt funds portfolios are expected to do well. The 39, Bengaluru
Their short-term returns have been im- funds average yield to maturity of NPS gilt
pacted, but long-term returns have been funds was 6.9% on 31 March when the She has a low risk appetite and is not
able to stay ahead of inflation. A 100% 30% 10-year government bond yield was comfortable with the volatility that
debt based portfolio will not be able to 6.83%. The government bond yield has comes with equities. So the entire NPS
beat inflation. If your investments are Corporate since shot up 60 basis points to 7.43%, corpus is in gilt funds.
not growing at the same pace as infla- bond funds so fresh purchases by gilt funds would
tion, you are actually losing money, increase the average yield to maturity.
though you don’t see it. corpus is devoid of equity exposure. So, while gilt fund NAVs might have OUR Equities can help beat
“Low returns don’t bother me. I just hate crashed last week, this may be a good ADVICE inflation. Go for the
This should be a wake-up call for in- the thought of losing money,” she says. time to start loading up on these funds Conservative Lifecycle
vestors like Bengaluru-based Damini At her age, she can afford to take a little now. NPS is a long-term investment and fund that will put
Natarajan (see picture) who don’t want risk and allocate about 15-20% of her funds usually hold bonds till maturity 20% in equities and
equity exposure. Natarajan has most NPS corpus to equity funds. because there is no redemption pres- progressively reduce
of her money in debt instruments and sure. The high yield to maturity would exposure every year.
insurance policies, and even her NPS While equity funds hold promise in translate into good gains from gilt and
the long term, even the corporate bond corporate bond funds.
funds and gilt funds in conservative

ULTRA SAFE Paying the price for staying safe

Rising interest rates depressed returns in medium term, though long-term returns are slightly better.

RETURNS (%)

PENSION FUND MANAGER 6 MONTHS 1 YEAR 3 YEARS 5 YEARS 3-YEAR SIP 5-YEAR SIP

Birla Sun Life Pension Scheme 0.48 3.24 8.83 - 4.94 7.06

HDFC Pension Fund 0.38 3.04 8.99 8.23 5.20 7.24

ICICI Prudential Pension Fund 0.34 3.18 8.60 7.98 4.94 6.91

Kotak Pension Fund 0.36 3.24 8.35 7.73 4.68 6.74

LIC Pension Fund 0.29 2.83 9.00 8.39 4.94 7.22

SBI Pension Fund 0.41 3.05 8.70 8.04 4.94 7.02

UTI Retirement Solutions 0.20 2.53 8.30 7.55 4.48 6.62

Shankar Deshpande AVERAGE 0.35 3.02 8.68 7.99 4.88 6.97

59, Pune Data as on 2 May 2022; Source: Value Research

Ready to retire this year, he wants to keep Ultra-safe investors with no ex- 40% ASSET 60% average maturity of bonds in gilt funds
his NPS corpus safe from market volatility. posure to equities are paying MIX is 7.26 years, compared to 4.44 years
He shifted out of equities last year and has the price of their obsession with Corporate Gilt funds of corporate bond funds. So corporate
put the entire corpus in gilt funds. safety. The hike in interest rates and bond funds bond funds will not suffer so much if in-
fall in bond prices have pushed the terest rates are hiked.
OUR Shifting out of equity funds average 3-year SIP returns below 5%. entire corpus in gilt funds.
ADVICE was a good move, but Even the 5-year SIP returns are not While he did the right thing by shift- To be fair, gilt funds have higher
gilt funds are not exactly very attractive. yields to maturity than corporate bond
safe. A better option is to ing out of equity funds, he should opt funds. But Deshpande is retiring this
shift into corporate debt But for some investors like Shankar for corporate bond funds instead of gilt year and may not remain invested for
funds which hold shorter Deshpande (see picture), an equityless funds. As mentioned earlier, corporate the long term to be able to benefit from
maturity bonds. portfolio is necessary. Deshpande is bond funds are holding bonds of shorter that higher yield. However, he could
retiring this year and cannot afford to maturities compared to gilt funds. The consider staying invested even after
expose his NPS corpus to the extreme retirement. Under the new rules, an in-
volatility of equity markets. He shifted vestor can stay invested in the NPS till
out of equities last year and has put the the age of 70.

guest column

The Economic Times Wealth May 9-15, 2022 05

The mistakes we make
by buying gold
The lure of gold was always pretty strong for Indians, but now there’s a
DHIRENDRA KUMAR marketing machine pushing it hard, says Dhirendra Kumar.
CEO, VALUE RESEARCH
Last week, it was Akshay Tritiya,
mysmteornieeys the festival which is associated
with buying gold. I could be wrong
Gold is somewhat but historically, the festival of
better than inflation, Akshay Tritiya as a gold buying oc-
casion was quite specific to some communi-
depending on ties and some parts of the country. I grew up
how you measure in a fairly traditional environment in North
inflation. But that’s India and had literally never heard the name
till I came across it in advertising by a bank,
about it. It just perhaps around 2007 or so. However, over
stores value—there these years, businesses offering various
investment products based on gold have sys-
is no meaningful tematically promoted the gold buying idea
appreciation. and now this is a fairly well-established day
to do so across much of the country.

Of course, treating gold as an investment
is almost hardwired into the Indian psy-
che. The interesting point is that while the
tradition was obviously entirely of buying
gold jewellery, the promotional push has
now subsumed every form of ‘paper gold’.
Investment apart, the logic of gold jewel-
lery as Streedhan in a patriarchal society is

Traditionally, gold is
supposed to do well when
the times are bad for
equities, thus functioning
as a kind of a hedge.

impeccable. However, things are a little dif- GETTYIMAGES
ferent now and I’m not sure whether gold has
the same characteristics as an investment ter than inflation, depending on how you ways been the sensible choice. Essentially,
any more. The rise of ‘paper gold’, which are measure inflation, but that’s about it. It there are two types of non-physical in-
gold-derived financial instruments, has con- just stores value—there is no meaningful vestment in gold available in India, Gold
verted gold into yet another financial asset. appreciation. ETFs/gold funds and Sovereign Gold
As the vast ocean of liquidity that is sloshing Bonds. Till 2015, before the bond scheme
around the world’s financial markets rises Traditionally, gold is supposed to do was introduced, ETFs and funds were the
and ebbs in response to financial crises, well when the times are bad for equities, best way to own paper gold but now, SGB is
wars and pandemics, so does gold. Which thus functioning as a kind of a hedge. This the better choice. It replicates the returns
is fine I guess because that’s the way things is true, sometimes, but it’s not a sureshot (positive or negative) of gold, but also pays
are now, and financialised gold products do thing in severe crises. you an interest of 2.5% per annum.
have many characteristics that are better as
investments even though they lack the pleas- The bottomline is gold is not a great Of course, do understand that I’m saying
ure that physical gold can provide. investment and no one should hold any sig- all this under duress, so to speak, just be-
nificant amount of gold for investment pur- cause people keep asking. Personally, I do
Still, I have never said a good word about poses. However, if you cannot completely not invest in gold, and I don’t think anyone
gold as an investment and am not going to break out of a few thousand years of pre- should but if you have to do it then SGBs
start today. The best I can say is that histori- conceived notions, and must necessarily are the least worst way of doing so.
cally, gold was a good store of value and some buy gold, then Sovereign Gold Bonds are
of that survives till today. However, it is not the best way of holding gold and jewellery Please send your feedback to
good as an investment. Over long periods is the worst. In fact, jewellery was never a [email protected]
of time, rising gold prices give an illusion great option. Even for physical gold, for in-
that the returns are good. For example, over vestment purposes, bullion coins have al-
about 40 years (from 1981 to 2021, 31 March
numbers), the price of gold has gone up 29
times, from `1,800 for 10 gm to `48,720. That
sounds amazing, doesn’t it? Well, over the
same period, the Sensex has gone from 173
points to 49,509. That’s 338 times! There is
no comparison, at all. Gold is somewhat bet-

review preview

06 The Economic Times Wealth May 9-15, 2022

NEWS IN BRIEF Stick to shorter duration
funds as rate hike cycle starts
Front running allegations
at Axis Mutual Fund Graded normalisation likely to give way to more aggressive tightening by the RBI.

Axis Mutual Fund has removed by Sanket Dhanorkar RBI has hiked interest rates 4.4
Viresh Joshi, head trader and for the first time since 2018
fund manager, from the fund After hemming and hawing for
management team of seven months, the central bank unexpect- RBI repo rate (%)
of its equity schemes. Deepak edly took the breaks off to kick-start
Agrawal, equity research ana- the rate hike cycle after an emergen- 64
lyst and fund manager, has also cy meet ahead of its regular policy review.
been removed from the man- Spooked by the persistent inflationary pres- 2 July 2018 22 May 2020 4 May 2022
agement team of three funds. sures, the RBI hiked the repo rates by 40 bps
According to sources, both and raised the CRR by 50 bps. This marks the policy announced,” said Madan Sabnavis, Compiled By ETIG Database. Data as on 5 May 2022.
the fund managers have been first rate hike since August 2018. What does Chief Economist, Bank of Baroda. Despite Source: Bloomberg.
sacked from the fund house af- this mean for debt fund investors? jump-starting the rate hike cycle, the central
ter allegations of front running. bank’s monetary stance still remains ac- This leaves debt fund investors with very
Sources say that Sebi has taken The sudden hawkish stance has caught commodative. “It is like saying your salary little wiggle room, even as it lends more clar-
cognisance of the matter and the the market by surprise. In its February has been increased, but you still remain ity on future trajectory of interest rates. The
sackings come after the probe policy review, the central bank had sounded underpaid,” said Sandeep Bagla, CEO, Trust 10-year government bond yield has already
was launched. almost dismissive of concerns around spi- Mutual Fund. spiked 25 bps to 7.38% in response to the rate
raling inflation. Even as the bond market hike. Investors can expect further rise in
Bitcoin-backed loan had expected a rate hike or shift away from What this shift means is that the earlier bond yields, as bond prices come under pres-
accommodative policy stance at the time, the graded normalisation of monetary condi- sure. Market experts caution investors from
Goldman Sachs has offered its RBI had chosen to downplay inflation and tions is likely to give way to a more aggres- putting incremental money in long duration
first Bitcoin-backed loan, ac- keep policy unchanged. The status quo was sive, front-loaded tightening by the RBI. funds. Stick to shorter duration or accrual
cording to a Bloomberg report. retained in April, with only a mild change in Akhil Mittal, Senior Fund Manager-Fixed funds for now. Edelweiss AMC said in its
The Bitcoin-backed lending tone hinting at withdrawal of policy accom- Income, Tata Mutual Fund, said, “We think note that investors with long-term fixed
facility will allow borrowers to modation. What has forced RBI’s hand now RBI is uncomfortable on the developing in- income allocation should probably wait and
collateralize Bitcoin for a cash is the persistence of high crude oil prices flation trajectory and doesn’t want to be too allocate a portion of their surplus (25%) after
loan. amid continued uncertainty over the Russia- much behind the curve. This also means we the June policy outcome and keep allocating
Ukraine war. The resulting sustained infla- could possibly look at front loading of policy 25% each after subsequent policy outcomes
Edible oil tax tionary pressure globally risked putting the reversal rather than a calibrated and gradu- in Target Maturity Bond ETFs / Bond Index
RBI well behind the curve in keeping up with al approach.” Market experts expect another Funds maturing in 5 to 10-year residual ma-
India is planning to cut taxes inflation. Further, the US Federal Reserve’s rate hike in the upcoming June policy re- turities. This should help them average out
on some edible oils to cool the expected policy rate hike was also a factor, view, with more hikes coming through later. their investments and earn attractive tax-
domestic market after the war as the narrowing corridor between Indian An Edelweiss AMC note said bond market adjusted returns if they remain invested till
in Ukraine and Indonesia’s ban and US interest rates would lead to flight of participants expect the RBI to raise the repo maturity. Axis MF maintained that a “bar-
on palm oil exports sent prices capital away from the domestic bond mar- rate to 5.15%, a pre-pandemic level, quickly bell” strategy of holding a higher proportion
skyrocketing. India, the world’s ket. “The front-loaded out-of-turn rate hike and aim to complete the policy rate normali- of cash (money market instruments, floating
top importer of vegetable oils, strengthened the view that urgency from zation process by December 2022. That sug- rate bonds etc) with a relatively small pro-
is looking to cut the agriculture the MPC end has increased to do policy catch gests further rate increases of 75 bps or more portion in long bonds (beyond 5 years) was
infrastructure and development up,” said Madhavi Arora, Lead Economist, in the near term. its preferred portfolio stance.
cess on crude palm oil imports. Emkay Global Financial Services.

Wiki no to crypto aid “The overarching focus on inflation is
significant as it goes back to the normal
Non-profit Wikimedia that runs mandate of the MPC which is to curb infla-
Wikipedia announced it would tion as growth seems to be better placed
no longer accept cryptocurren- today. But not tackling inflation now,
cy donations. The decision has growth can be jeopardized. This will be the
been taken after receiving the main message from the so-called interim
responses from Wikipedia vol-
unteers. In order to implement
the new measure the organiza-
tion will close its BitPay account
which will remove the ability to
directly accept cryptocurren-
cies as donations.

Sell in May adage no longer true on Dalal Street

The adage: “Sell in May and go away!” is a 6.5 % rise in May 2021. During the year month of May, Prabhakar said. “If May is
losing its relevance on Dalal Street, sug- 2015-17, the fifth calendar month recorded a a bad month, investors sell in April, which
gests data. In the last one decade, there surge of 3-4%each year. makes the performance of May better.
have been only two instances when Nifty50 Traditional data does not work in the cur-
has delivered negative returns in May. The traditional performance has rent market.”
changed as such phrases have become a
Although various studies have validated common proverb on the Street. Markets do Even if we stretch the period of study to
this theory, a majority of market experts not react to them much now, said experts. the last 15 years, then the month of May has
say this adage, nowadays, is nowhere A.K. Prabhakar, Head of Research, IDBI delivered negative returns only five times.
close to the reality. According to data from Capital said ‘Sell in May and go away’ be- In 2009, the index rose more than 28 % dur-
AceEquity, Nifty50 index has delivered came a proverb after May turned out to be a ing May, when UPA-II came to power.
negative returns in Covid-19 hit 2020 and, bad month for global equity markets after
prior to that in 2012. On the other eight oc- 1990. “However, in the last 10 years, there Interestingly, in the all election years,
casions, the NSE barometer has ended the has not been a correction as there was ear- Nifty50 has delivered positive performance
month on a positive note. lier,” he added. in the month of May. Experts said that in-
line results in the general elections boosted
In May 2014, it rallied 7.97%, followed by Now, the selling does not happen in the the morale of the Street. —Pawan Nahar

review preview

The Economic Times Wealth May 9-15, 2022 07

Land in Metaverse? Learn about taxes

Sby Naveen Wadhwa contribute to the appreciation in value. The merce business. These virtual lands can Similarly, if a resident person hosts an
inger Daler Mehndi, reportedly the same logic goes with NFT. Nike launched either be purchased from the marketplace event in Metaverse, the income shall
first Indian to purchase land in the 20,000 virtual sneakers, out of which 98 were or be taken on rent from owners. be taxable as business income or re-
Metaverse, has named it ‘Balle Balle limited edition. Someone paid $130,000 for a siduary income.
Land’ and plans to host films and pair of virtual Nike sneakers. Such rental income shall not be taxed un-
concerts on it. This virtual property is slat- der the head of income from house property. Sale of virtual land
ed to soon have a Daler Mehndi Store, which The lands in the Metaverse are measured It will be taxed under the head of income
will sell merchandise as Non-Fungible in tiles, which is the smallest measurable from other sources or business income. The Land in Metaverse is an NFT. Thus,
Tokens or NFTs. In case you too want to buy unit and cannot be broken down. Every tile obligations to maintain books of accounts the income arising from its transfer
land in the Metaverse and profit from it then has a unique address (Block Id) and geoloca- and get them audited shall also apply. shall be taxable under Section 115BBH
you should know that your income from the tion in the form of longitude/latitude, mak- of the Income-tax Act, 1961, provided
virtual land will be taxed in the real world. ing it non-fungible. As each tile is uniquely Rorunhnoisntigneg-aconmevmeenrtce business the government notifies this land as
identifiable in the Metaverse, it is sold as an an NFT for the purpose of this sec-
The Metaverse is a virtual universe or a NFT. Now let’s talk about the taxability of Any income from running an e-commerce tion. It is not clear why, unlike crypto
parallel digital world where avatars of hu- each income. business in the Metaverse shall be charged assets, only notified NFTs will be
man beings will be present through technol- to tax the way an ordinary business income considered Virtual Digital Assets
ogy. In this world, one can shop, buy, roam Renting virtual land is taxed. The taxpayer can claim a deduction (VDAs). The income arising from the
around and potentially do everything that for all expenses incurred wholly and exclu- transfer of VDAs shall be taxed at 30%
he/she can do in real life. Many companies Entities would need the land in the sively in connection with such business. plus surcharge and cess. Such income
are creating many Metaverses for entertain- Metaverse to host events or run an e-com- shall be computed without deduction
ment, education, and business. of any direct or indirect expenditure,
except the cost of acquisition of the
In this digital economy, entities will be VDAs, if any. Further, any loss aris-
able to sell goods, services or NFTs, and all ing from the transfer of a virtual land
these transactions will be validated with shall not be allowed to set off against
blockchain technology. Companies will any other income.
need space in this virtual world to showcase
their products or host events. And that If the government does not notify
space will be the virtual land. The global the virtual land as VDA, the income
metaverse real estate market is expected to from its transfer shall be taxable at
grow at a CAGR of 31.2% during 2022-2028. rates as applicable in case of transfer
of a normal capital asset. Virtual
Why buy land in Metaverse? land held for more than 36 months
shall be treated as long-term capital
Just like physical land, each Metaverse assets, and income arising from such
will have a limited supply of land. As the transfer shall be taxable at 20% after
rule of economics says, rarity and scarcity indexation of the cost of acquisition.

product Pay rise expectation high Central Bank to shut
launches amid rising cost of living
many branches
:: Insurance Working professionals in India have “Many workers believe they are
high expectations of being given a pay due for a raise after going through Central Bank of India plans to shut 13% of
Canara HSBC Oriental Bank of Commerce Life rise this year and are ready to push the tough pandemic, and with spiral- its branches to improve its financial
Insurance has launched iSelect Smart360 their employers to get it, as the cost of ing inflation creating a cost of living health, which has been under pressure
Term Plan, a flexible term plan that is suit- living rises sharply for many, accord- crisis,” said Rahul Goyal, MD - ADP for several years. The bank is looking
able for all life stages. Buyers can choose ing to a survey. India. “In today’s tight labour market, to reduce the number of branches by
from three plan options: Life Secure offer- where retaining a secure and stable 600 by either shutting down or merg-
ing life cover, Life Secure with Income of- In India, 86% of the over 1,600 white ing loss-making branches by the end
fering survival income benefit in addition collar and blue collar profes- trained workforce is more im- of March 2023, according to the copy of
to life cover and Life Secure with Return of sionals surveyed are portant than ever, employ- a document reviewed by Reuters. The
Premium that offers return of premium on prepared to request a ers should keep this in more than 100-year old lender current-
outliving policy term along with life cover. raise, shows the sur- mind,” he added. ly has a network of 4,594 branches.
vey by ADP Research Women are just
ICICI Prudential Life Insurance has Institute. as inclined to re-
launched ICICI Pru Guaranteed Pension quest a pay rise as
Plan Flexi, a regular premium annuity The findings men (both at 76%).
plan. Buyers can make regular contri- come at a time when Those who classify
butions to build a savings corpus and the cost of living themselves as es-
receive life-long pension. There are is rising rapidly in sential workers are
seven options to choose from. With the many parts of the more likely to do so
Accelerated Health Booster option, world amid high global than those who describe
the customer gets additional payout inflation and after two themselves as non-essential
on being diagnosed with difficulties in years of pandemic related
performing activities of daily living. disruption to jobs. workers.
The Booster Payout option provides Around six in 10 workers expect to
five lump sum payments in addition to Globally, more than three quarters get a pay rise in the next 12 months and
annuity. of workers (76%) say they are likely to more than 43% expect a promotion.
ask for a pay rise if they feel they de- This despite only a third expecting to
Bajaj Allianz Life Insurance has announced serve one, according to the “People at be given any increased responsibility,
the launch of Bajaj Allianz Flexi Cap Fund. Work 2022: A Global Workforce View” and 15% who think they will have a for-
The fund will be available with all the major survey that reached out to almost mal review. —Rica Bhattacharyya
Ulips offered by the company, and provide 33,000 workers in 17 countries.
investors with the opportunity to diversify
their portfolio across market cap segments.

stocks

08 The Economic Times Wealth May 9-15, 2022

High energy prices to help oil
and gas sector in fourth quarter

Producers to gain from higher prices, refiners from inventory gains, but consuming units face cost pressures.

Tby Sameer Bhardwaj GETTYIMAGES
he fourth quarter of
2021-22 witnessed a Upstream companies
significant jump in oil
and natural gas prices. Major upstream companies like ONGC, Oil India, and Reliance Industries will benefit due to the surge in oil and gas prices as it improves their
While the upstream net realizations. Net realizations refer to the price at which the company sells oil and gas in the open market after subtracting subsidies.
companies (also known as oil and
gas producers) and downstream ONGC 12-MONTH CURRENT 1-YR UPSIDE Oil 12-MONTH CURRENT 1-YR UPSIDE
companies (also called the oil re- FORWARD PRICE (`) TARGET POTENTIAL India FORWARD PRICE (`) TARGET POTENTIAL
finers & marketers) will benefit, PRICE (`) PRICE (`)
gas consumers like city gas distri- PE 156.40 38.6% PE 219.70 29.9%
bution companies will face mar- 216.83 285.29
gin pressures due to an increase 4.6 5.0
in their operational costs.
Analysts’ Recommendations Analysts’ Recommendations
The Brent crude averaged
$97.9/barrel during the fourth BUY HOLD SELL BUY HOLD SELL
quarter of 2021-22 and gained
69.8% y-o-y between 31 March 23 2 4 14 4 3
2021 and 31 March 2022. The
Brent crude futures hit over $139/ THE COMPANY is expected to on ONGC due to expectations 220 Oil India Vs Benchmarks Oil India
barrel in the first week of March report over 62% y-o-y jump in of sustainability of higher oil 200
2022, which was a multi-year standalone reported net profits prices. The increase in retail 180 182.7
high. The international spot in the fourth quarter, accord- prices by OMCs reduces the risk 160
LNG (liquefied natural gas) as ing to Bloomberg consensus of subsidy or under-recoveries. 140 S&P BSE
measured using the Japan Korea forecasts. Brokerage reports 120 Oil & Gas
Marker (JKM) averaged $30.8/ from Motilal Oswal and Kotak The stock trades at reason- 100
mmbtu (metric million British Securities expect a 70-76% y-o-y able valuations with 12 months 131.1
thermal units) in the fourth jump in net oil realisations. A JP forward PE at over 46% discount 80
quarter of 2021-22 and jumped Morgan report remains bullish compared to BSE Oil & Gas Index, 3 May 2021 S&P BSE
over 5 times (405% y-o-y) between according to Bloomberg data. Sensex
31 March 2021 and 31 March 2022, 180 ONGC Vs Benchmarks THE COMPANY is expected to
according to Bloomberg data. 170 ONGC report over 94.6% y-o-y jump in 116.9
160 standalone reported net profits
On the other hand, do- 150 145.3 in the fourth quarter, according 2 May 2022
mestic natural gas prices 140 to Bloomberg consensus fore-
under the Government of 130 S&P BSE casts. The company is the key net oil realizations in the fourth
India’s Administrative Price 120 Oil & Gas beneficiary of the increase in quarter of 2021-22.
Mechanism (APM) were revised 110 oil and gas prices. Motilal Oswal
upwards by 62% for the second 100 131.1 and Kotak Securities expect 65- HDFC Securities estimates
half of 2021-22. The APM prices 71% y-o-y growth for Oil India in that every $10/barrel change in
were further increased by 110% 90 S&P BSE net oil price realization impacts
in April 2022, which is applicable 3 May 2021 Sensex Oil India’s 2022-23 earnings by
for the first half of 2022-23. 7.7%. Valuations are reasonable
116.9 with 12 months forward PE at
International oil prices surged over 41% discount compared to
on OPEC production cuts, pros- 2 May 2022 BSE Oil & Gas Index.
pects of global economic recovery
post the Covid-19 lockdowns and
Russia-Ukraine tensions. On the
other hand, the international
spot LNG prices have risen in the
past few months due to increased
gas demand during winter season
in the northern hemisphere, and
supply disruptions.

The surge in international gas
prices also led to an increase in
domestic gas or APM prices. This
is because the domestic gas price
is determined using a formula
that takes into account the prices
of international gas benchmarks
from Canada, the UK, Russia, and
the US.

stocks

The Economic Times Wealth May 9-15, 2022 09

Downstream companies

Increased oil prices will help major down- at $7.8/barrel in the fourth quarter. The earns by refining a barrel of crude oil. fourth quarter will be dragged by forex
stream players to report significant inven- GRMs are helped by improvement in prod- A crack is the price difference between losses and decline in marketing margins.
tory gains as the inventory will be sold at a uct cracks that jumped over 400% y-o-y. In petroleum products and the input, which is According to Emkay, marketing margins on
higher price compared to the price at which addition, India’s overall petroleum products crude oil. Falling or weak crack leads to a petrol and diesel have turned negative in
it was purchased. consumption grew in the fourth quarter of decline in core GRMs of refineries whereas the fourth quarter and stood at -`0.2/litre
2020-21 both q-o-q and y-o-y. Petroleum a stronger crack improves the core GRM. and -`1.9/litre respectively. In the fourth
There will also be refinery gains. The products demand stood at 54.6 MMT. quarter of 2020-21, such margins were at
benchmark Singapore gross refining mar- However, despite improved GRMs and `3/litre and `2.8/litre.
gins (GRMs) have jumped to a 4-year high GRMs measure how much a company inventory gains, OMCs’ performance in the

Indian Oil Bharat Petroleum Hindustan Petroleum

12-MONTH CURRENT 1-YR TARGET UPSIDE THE COMPANY is expected to report over a 50% y-o-y 160 Hindustan Petroleum Vs Benchmarks S&P BSE Oil
FORWARD PE PRICE (`) PRICE (`) POTENTIAL decline in net profits in the fourth quarter of 2021-22, & Gas
according to Motilal Oswal and Kotak Securities esti- 150
6.6 126.65 150.31 mates. Details on EoI (expression of interest) submitted 131.1
by various parties for BPCL’s privatization in 2022-23 140
will be the key monitorable for BPCL. S&P BSE
Analysts’ Recommendations 18.7% 130 Sensex

120 116.9

BUY HOLD SELL 110 HPCL

27 6 2 12-MONTH CURRENT 1-YR TARGET UPSIDE 100 115.5
FORWARD PE PRICE (`) PRICE (`) POTENTIAL
90
8.4 366.40 478.31
160 Indian Oil Vs Benchmarks Indian Oil 3 May 2021 2 May 2022
150
140 138.3 Analysts’ Recommendations 30.5% THE COMPANY’S fourth-quarter net profit is expected to
130 decline 68% y-o-y, according to consensus estimates by
120 S&P BSE Oil BUY HOLD SELL Bloomberg. The company ramped up its refinery utiliza-
110 & Gas tion rate post completion of its Mumbai refinery expan-
100 33 3 1 sion which will help improve its through put (refining
131.1 capacity) says Motilal Oswal. Higher capex and execution
90 140 Bharat Petroleum Vs Benchmarks S&P BSE Oil risk at Visakhapatnam refinery remain huge concerns.
3 May 2021 S&P BSE & Gas
Sensex 130
131.1
116.9 120 12-MONTH CURRENT 1-YR TARGET UPSIDE
S&P BSE FORWARD PE PRICE (`) PRICE (`) POTENTIAL
2 May 2022 Sensex
5.4 272.30 354.62
THE COMPANY is expected to report lower net profit in 110 116.9
the fourth quarter. Profit is expected to fall 14.9% y-o-y.
According to HDFC Securities, higher inventory gains and 100 BPCL
refining margins could moderate pressure on marketing
margins. The report lists volume recovery, auto fuel price 90 88.1 Analysts’ Recommendations 30.2%
hikes, recovery in refining margins, petrochem margins,
and inventory gains as key drivers for the company. 80 BUY HOLD SELL

70 29 7 1

3 May 2021 2 May 2022

City Gas Increase in domestic and international has been temporarily reduced by the decline between 16-48% y-o-y.
Distribution (CGD) gas prices could impact the margins government. The shortfall of the APM “Profit margins on CNG and PNG
of CGD companies. Though these get gas supplies is replaced by costly spot
priority allocation of cheaper APM LNG, which leads to increase in gas segments will witness pressure due
(relative to LNG) for CNG and PNG costs per unit. Motilal Oswal expects to lag in allocation of domestic gas
(domestic) segments, such allocation EBIDTA/SCM of CGD companies to and healthy growth in sales leading to
dependence on spot LNG,” says ICRA.

Indraprastha Gas Mahanagar Gas Gujarat Gas

IGL IS expected to report a 1.1% y-o-y jump in net prof- 160 Mahanagar Gas Vs Benchmarks S&P BSE Oil 12-MONTH CURRENT 1-YR TARGET UPSIDE
its. The growth will be aided by improvement in volumes 140 & Gas FORWARD PE PRICE (`) PRICE (`) POTENTIAL
and gas realisations. Higher realisation could partially
mitigate impact of an increase in gas costs in the fourth 131.1 22.5 496.25 643.48
quarter. Analysts believe the company’s wide geographi-
cal coverage and government initiative to increase natu- 120 S&P BSE Analysts’ Recommendations 29.7%
ral gas consumption will be key growth catalysts. Sensex
BUY HOLD SELL
100 116.9

12-MONTH CURRENT 1-YR TARGET UPSIDE 80 Mahanagar 19 2 9
FORWARD PE PRICE (`) PRICE (`) POTENTIAL Gas
60 Current price as on 2 May 2022. BSE Oil & Gas 12M Forward PE: 8.58.
17.3 350.45 495.43 3 May 2021 67.8 BSE Sensex 12M Forward PE: 22.1 Source: Bloomberg.

2 May 2022

Analysts’ Recommendations 41.4% THE COMPANY’S net profit is expected to decline over 150 Gujarat Gas Vs Benchmarks S&P BSE Oil
33% y-o-y in the fourth quarter of 2021-22, according to 140 & Gas
BUY HOLD SELL Bloomberg consensus estimates. Nirmal Bang expects a 130
191.3% y-o-y rise in gas cost/SCM which would result in 131.1
a fall in EBITDA and PAT. Analysts like Mahanagar Gas
26 4 4 due to its robust return ratios, debt-free balance sheet, 120 S&P BSE
and consistent dividend payouts.
140 Indraprastha Gas Vs Benchmarks 110 Sensex
100
116.9

130 S&P BSE Oil 90 Gujarat Gas
& Gas
120 12-MONTH CURRENT 1-YR TARGET UPSIDE 80 93.3
131.1 FORWARD PE PRICE (`) PRICE (`) POTENTIAL 3 May 2021
110 2 May 2022
S&P BSE 9.6 771.10 1,024.96
100 Sensex GUJARAT GAS will be worst hit as it caters mostly to
industrial and commercial segments. The company has
90 116.9 reduced supply of gas to industrial consumers to cut its
dependence on spot LNG. Availability of alternative fuels
80 IGL Analysts’ Recommendations 32.9% like propane or LPG creates a volume risk to Gujarat Gas.

70 70.0 BUY HOLD SELL ICICI Direct, Motilal Oswal, and Nirmal Bang expect
over 55% y-o-y decline in net profits in fourth quarter.
60 24 5 3

3 May 2021 2 May 2022

banking

10 The Economic Times Wealth May 9-15, 2022

GETTYIMAGES

All you need to know
about challenger cards
For young users, challenger cards are a stepping stone to high limit and more expensive credit cards.

Rby Anand J. creditworthy enough by banks to issue technically credit cards. The industry robust annual growth of 22% since 2016.
aj Savla, 22, was offered a Slice credit cards. And this is where fintech likes to call them challenger cards.
‘credit card’ in June last year players have spotted a big opportunity. What’s driving this growth?
during his final year at IIT Credit cards are issued with a credit BIN
Bombay. As a student with no Growing popularity of (bank identification number) and are used One of the key reasons for the spectacular
income, there were not many challenger cards to identify the bank that issued the card growth is that digital data is now being
credit options for him. An avid observer apart from its security features. Neither captured and absorbed into credit data
of the Indian startups ecosystem, Savla, Over the past two years, cards issued by Slice nor Uni uses credit BIN. Since and even incorporated into credit scores
who grew up in Mumbai, was keen to try fintech firms such as Slice, OneCard, and only banks are allowed to issue cards over the past six-seven years. With mobile-
out Slice. Uni have seen good success. Some of these in India, these fintechs have to partner based KYC embedded in the payment pro-
are not necessarily credit cards, according with them as well as the technology stack cess and linked to the respective Aadhaar
Good cashbacks on food-delivery app to the RBI, but rather prepaid cards with a infrastructure that connects the two such cards, every consumer is tagged and iden-
Zomato, fast-food giant McDonald’s, and credit line — the repayment for which, too, as M2P, Zeta and Setu. tified. This makes underwriting easier
other popular restaurants meant that does not follow the credit-card model. and understanding the creditworthiness
Savla’s potential savings through the card On average, the fintech firms have to- of customers better through multiple pay-
would be substantial. Hence, he decided For instance, Slice and Uni are offering gether issued around 2 million cards on ment patterns.
to start off with a low credit limit of customers the option of paying the due a monthly basis during this year. This is
`20,000 and was soon making at least two amount free of interest in three months much higher than the 1.3 million-1.5 mil- According to RBI data, India has close to
payments every week. instead of the regular 45-days cycle lion credit cards issued by traditional lend- 72 million credit cards. An underpenetrat-
followed by traditional credit cards. ers during the first two months of calendar ed market with only 35 million unique ac-
Customers like Savla are not considered 2022. This is despite the fact that bank tive credit-card users, the Indian market
Barring OneCard, the others are not credit cards have on average registered a has huge untapped potential.

banking

The Economic Times Wealth May 9-15, 2022 11

“If one looks at private banks such as The credit card ecosystem revolving credit is similar to that of banks.
Axis, ICICI and HDFC, the number of Meanwhile, for customers like Savla,
credit cards is roughly one-fourth of their 72 35-40 50 1.3-1.5
debit-card disbursal, whereas, for top PSU million million checking what offers are available and
banks, it is often less than 10%. If you look million million where before heading out for an evening
at savings and fixed deposits of PSU banks, No of unique No of credit with friends is increasingly becoming
there is clearly a large market and these No of credit credit card Credit cards cards issued cumbersome.
private cards are tapping those,” says cards in issued by HDFC every month
Shishir Mankad, head of financial services India users Bank, Axis Bank, A couple of bankers say that
at consulting firm Praxis Global Alliance. ICICI Bank and delinquencies at fintechs are in the high
single-digits as compared with 2%-3%
The credit penetration in India is just SBI together for mainstream banks. “It is sub-prime
10%, while it is at 66% in the US and the lending, but that does not mean you don’t
UK. Even Brazil’s penetration rate is at a 2.1 1.8-2 10% 3.8 66% make money. But the current business
respectable 30%. models of high cashbacks do not. Unlike
No. of million Overall credit No of credit Overall credit us, their cost of capital is high, and in
“India can easily have 200 million-250 many cases, double that of ours,” says a
million [credit cards] over the next four- credit cards No of chal- penetration cards per penetration banker who heads the cards division at a
five years, and this cannot be serviced lenger cards private sector bank.
by banks alone. The demand might per user in issued every in India user in the US in the US
come for innovative products similar to OneCard is positioning itself as a
what fintechs are offering,” says Murali India month premium-metal card which targets
Nair, president for banking, Indian affluent customers who want to add it to
subcontinent, at banking-technology Chachra of 8i Ventures points out means that the card issuers’ profits go their existing credit cards. But Slice card
platform Zeta. that banks charge punitive interest down as some of the benefits come from has been around since 2019, and has been
for revolving credit, whereas fintech using the same card at multiple merchants aggressive in attracting youngsters and
Vikram Chachra, the founding partner firms have brought in transparency and rather than being used for a single purpose people beginning their careers. With
at 8i Ventures and an investor in M2P and competition to this space. He adds that for which it was acquired. limited data, it is too early to say whether
Slice, says that the existing credit card customers will increasingly look at fintech these cards are going to be profitable or
model adopted from the Western world firms for revolving credit while deploying As long as most customers pose an NPA risk.
is old and outdated as it looks at banking bank cards for merchant cashbacks, make repayments, card
data. He adds that a lot of customers’ thereby reducing the profitability of companies prefer The startups are exercising caution to
payment data is not captured by the banks’ business model. those who opt for avoid such an outcome. Just like banks,
banking system today. “Banks want revolving credit. they also start with low credit lines,
to know your financial capacity while The biggest challenge for these fintech starting at as low as `2,000, which could go
fintechs look at customer intent and card players is customers moving on to However, the biggest competition to up to `10 lakh as the customers use their
honesty. It looks, feels, and works like a greener pastures. Savla, now just nine these fintech firms comes from co-branded cards more and pay the dues on time.
credit card — but better. The lucrative months into his first job at a financial credit cards, especially those by New Age
credit card business has run far too long institution, has three credit cards — one consumer-Internet platforms. Over the “Since these cards start with low credit
without being disrupted,” he says. each from Axis Bank, SBI Cards, and last three years, co-branded credit cards limits — like `2,000-`5,000 — even if the
HDFC Bank. such as Amazon Pay and MakeMyTrip default rate is high, the losses will not
Credit cards as money- from ICICI Bank, Flipkart and Vistara be substantial. Meanwhile, they under-
spinners “I have two free flight tickets from from Axis Bank, and Paytm and Times stand the creditworthiness with a bit of
Axis Vistara credit card after reaching from HDFC Bank have been the major risk and losses funded by venture capital
Revolving credit, or when customers the milestone. I am trying to spend the ones in India. In fact, almost 45-50% of all and understand an `20,000 crore market,
pay only the minimum due and the required minimum on SBI Cards and credit cards issued by ICICI Bank have which if captured, can be huge,” says
outstanding amount is paid with interest, HDFC Bank credit card so that my annual been under Amazon Pay since its launch Madhusudanan R, co-founder and CEO,
is where banks make money. For the top charges will be waived off. For large- and one third of all Axis Bank credit cards M2P.
five credit card issuers in the country, ticket purchases like my iPhone, SBI and have been the Flipkart ones. Both Amazon
the revolving rate (or the percentage of HDFC were offering more than `5,000 in and Flipkart credit cards have more than 2 The bottom line
borrowers who do not pay the full amount) cashbacks. Slice offers `100-200 cashback million customers.
is around 45-50%. At an annualised for food orders, which does not offer as Fintech players’ asset-light model with
interest rate of around 42-45%, this helps much value to me as of now. Slice is for low- Increasingly, most credit cards also only a few employees means that their
banks earn an effective margin of 22-25% income people and as one moves up in the offer no-cost EMI, blunting the impact of customer service often falls short of
on their credit cards business through income bracket, the value proposition goes paying the lump sum on the due date. Since customer expectation. The customer
direct means. They also earn merchant down drastically,” he says. these cards pretty much target the same reviews for Slice on Google Play suggest
commissions and interchange apart from tech-savvy customers of challenger cards that a large number of customers are not
the incentives from card-tech platforms. Globally, consumers own multiple and have a higher value proposition, Slice happy with the startup. Currently, one of
credit cards. In the most developed and Uni cards’ main value proposition is the biggest advantages of these platforms
Some of these cards have joining fees credit card markets such as the US, this often reduced to the one-third payment, is the speed at which they issue cards
and annual charges though most popular number stands at around four. In India, which is not always the best case for a long- through the digital and mobile-first model.
ones these days don’t levy these in a bid it is estimated to be around 2.1. In the term play, especially if the percentage of
to attract more customers. For most US, everyone has a credit card each from “It’s a valuation game for fintech firms
private-sector banks, there is always an their bank, Walmart, and airline, besides as of now. Get as many customers on the
opportunity to cross-sell products such a couple of other cards that are used platform and then try to sell several things
as EMI for large credit card purchases, specifically for maximising rewards. This on the app. This is the same method all
personal loans on credit cards, and other fintech players have deployed. We have
offerings. Fintech firms, too, are hoping to not seen much success with monetising
make money on such schemes. these models so far,” says the head of cards
business of the private sector bank quoted
As long as most customers make earlier.
repayments, card companies prefer those
who opt for revolving credit. In fact, if Since stickiness is poor in this target
a particular card has more premium group, banks don’t believe in catching
customers with high disposable income them young. They know people like
who pay the full outstanding amount on Savla will come to them if their value
time, it makes money only on interchange. proposition is strong. “We see these
This would actually make credit cards a startups as doing our hard work. Once
loss-making business. When a customer they identify creditworthy customers, we
opts for revolving credit, at Uni or Slice, can attract those people with a better value
the purchases through such cards are not proposition. Our cards business is also a
eligible for cashbacks or reward points. lean and tech-focused business,” he adds.
However, the practice is different in banks.
Please send your feedback to
[email protected]

real estate

12 The Economic Times Wealth May 9-15, 2022

Bet on REITs
for play on
realty revival

With India one of the more
affordable office markets in the
world, potential for growth is high.

GETTYIMAGES

Aby Sanket Dhanorkar Embassy REIT enjoys superior metrics ing rentals. Nearly 85% of its office space
fter a pandemic-led lull of two is in Bengaluru and Pune. Meanwhile,
years, demand for commercial Completed area (msf) Brookfield Embassy Mindspace Mindspace Business Parks REIT has
spaces is rebounding strongly. Total area (msf) India REIT REIT REIT a committed occupancy of 84.6% as of
With employees coming back Committed occupancy (%) 33.6 24.2 December 2021 spanning 24.2 msf of com-
in increasing numbers every Top 10 tenants as % of rentals 13.9 42.6 31.3 pleted office space. 81% of this office space
week, leasing of prime office space is kick- In-place portfolio rentals (`/psf/month) 18.6 87 84.6 is located in Mumbai and Hyderabad.
ing into higher gear. For those looking to 83 39.4 37 Brookfield India REIT’s 14 msf of leasable
bet on the revival in realty, this could be 68 74 59 space—largely in NCR and Kolkata—is
a good entry point into listed real estate 62 83% rented out. There is enough scope for
investment trusts (REITs). occupancy rates to go up further for all
2021 onwards has temporarily delayed the Data as of December 2021. Source: ICICI Securities. three players.
REITs are a new investment avenue that recovery in office leasing by a quarter,
pool money from retail and institutional analysts expect this trend to reverse from And yet, employees’ costs in India are However, there are some potential risks
investors to own and operate income- April. The improved pace of vaccinations estimated to be only 20-25% of comparable lying ahead. All three REITs have signifi-
generating commercial assets. These across India, recall of employees to of- cost for employees in the leasing com- cant leases coming up for expiry in 2022-23.
allow even smaller investors to invest in fices and gradual pick-up in international pany’s country of origin. Companies in the If renewals drop and vacancies rise amid
Grade A office spaces at lower ticket sizes. travel are likely to lead to uptick in office IT-ITES sector retain lead in office occu- further Covid-led disruptions, yields from
Currently, three REITs are operational in leasing. “We expect net absorption to rise pancy with 35-40% share. The aggressive REITs will be at risk. Further, the expect-
India—Embassy Office Parks, Mindspace from April 2022 onwards and estimate net growth and hiring plans of leading IT ma- ed uptick in interest rates is a big risk, giv-
Business Parks and Brookfield India. absorption of 26.8 msf in 2022 and 30 msf in jors bodes well for office space absorption en its depreciative impact on asset values,
REITs are mandated by SEBI to invest 80% 2023,” observe analysts at ICICI Securities. in the country. Further, co-working spaces warns Azeez. In this scenario, he reckons
of their portfolio into pre-leased assets. Embassy Office Parks REIT, the first listed that have emerged as another significant investors would be better off investing in
These are further required to distribute real estate investment trust, has doubled driver over 2018-21, will continue to see a REIT that is newly set up rather than an
90% of the income to their investors, ei- its leasing guidance to 5 million sq ft for demand going ahead given the focus on existing REIT, as it will allow for captur-
ther in the form of dividends or interest, 2022-23, on the back of new leases and back- cost optimisation by occupiers. “The need ing higher rental yields.
or both. These REITs faced the brunt of to-office shift for employees. for office space will pick up as economic ac-
the shift to work-from-home environment tivity reverts to normal,” reckons Feroze The minimum amount that a small
in 2020 and 2021 when the pandemic was Analysts remain confident about poten- Azeez, Deputy CEO, Anand Rathi Private investor can put in a REIT is `50,000
wreaking havoc. After record leasing ab- tial for commercial realty given that India Wealth. during the IPO or equivalent to value of
sorption activity of 42 million sq ft in 2019, remains one of the more affordable office 200 units when buying on the exchanges.
the last two years saw net absorption drop markets in the world. Average rentals for Put together, the prospects appear Any rental, dividend or interest income
to 20 msf—a sharp 50% decline from 2019. Grade A office markets in peripheral or bright for the listed REITs in the coming earned by the REIT is taxable in the hands
suburban micro-markets in the country years, making them a good investment of the investor at the applicable slab rate.
However, according to Cushman and hovers around $ 1 (`76) per sq ft per month. proposition. ICICI Securities analysts The trust deducts tax (TDS) on such
Wakefield, 2022 has started on a bright Further, India’s unique strength in terms expect the three REITs to offer distribu- receivables at 10%. Meanwhile, capital
note with net absorption across India’s of high quality pool of talent with over two tion yields of 6-7% over 2023-24 along with gains arising from sale of REIT units are
top seven cities rising 65% y-o-y to 6 msf in million students in science, technology, 3-17% capital appreciation. Embassy treated at par with equity in terms of the
January-March 2022 inspite of Omicron engineering and mathematics graduating Office Parks REIT is the biggest of the tax rates. Short-term gains are taxed at
related disruptions. The absorption was each year remains a big draw for MNCs. three, with 33.6 msf of leasable office space 15% and long term gains in excess of `1
driven by the infusion of new supply of in its portfolio. It also enjoys the highest lakh in a year at 10%. However, the period
14 msf of which a significant portion was occupancy with 87% of its assets fetch- of holding the asset, for classification as
pre-committed. The quarter also saw pre- long term or short term, is that of debt and
commitments of 3.2 msf for larger transac- not equity (3 years).
tion sizes which augurs well for a recovery
in the remainder of 2022. While the global Please send your feedback to
surge in Omicron cases from December [email protected]

financial planning

The Economic Times Wealth May 9-15, 2022 13

How to run a small business

From sourcing capital to monitoring performance, your business needs hard work, says Uma Shashikant

Should I mortgage my house to fund GETTY IMAGES tory, funding of any kind will be tough. You
my business? This is the question a cannot raise angel funding or any other
UMA SHASHIKANT relative asked and a longish discus- of business. Know that number as the money long term capital without audited verifiable
IS CHAIRPERSON, CENTRE sion ensued. This young boy had needed to keep the sales rolling. business numbers.
studied commerce and had also com-
FOR INVESTMENT pleted a course for small business strategy at Second, negotiate with both seller and Sixth, do not borrow from friends and
EDUCATION AND LEARNING a management school. But applying theories buyer to achieve a close match. If the buyer family. It is always tempting to seek funds
to practice and transitioning from concept to pays in 90 days, and the seller can’t wait be- from sources that are easy to tap. But such
Separate business application are always challenges. yond 60, the business needs 30 days funding. funding does not come with accountability.
assets from family The credit both parties offer and ask depend If you are serious about your business and
assets. Do not indulge A business must begin with own funds and on the market conditions and competition. like it to be a steady source of profit for you,
the family with graduate to seeking external funding. That is Explore the possibility of negotiating a better you need to keep your eyes on the price,
expensive spends a smarter choice. If the idea is good and if the deal. Would the seller offer a better credit pe- margin and be willing to pay the cost of
from business entrepreneur shows promise, there are angel riod for a higher price? Would the buyer pay funds. That keeps the responsibility for the
profits. That creates investors that will find it worthwhile to fi- earlier with a discount? Would the buyer be business choices higher. Easy money is a
a seamless flow of nance a business. It is a win-win as it ensures willing to pay an advance? Can a milestone trap for taking undue risks and skipping
money in your mind a good return on their money while support- based payment structure be set up? needed diligence and process.
that makes you feel ing a new business.
entitled to do into the Third, examine the buyer profile to see if Seventh, do not mix your personal life
family assets during But it is not easy to raise money. We are not there is enough diversity. Large buyers will and business. Staking your house, assets
times of need. talking about small businesses with a great mostly have process driven payment of bills and jewellery for a business is too much of
idea that will make it worthwhile for the that take a certain amount of time. Some risk your family will have to bear. Separate
formal funding market to be interested. We buyers may take too long to pay. Except for the business assets from family assets. Do
are talking about a small operation in a small following up and persuading them, there isn’t not indulge the family with expensive gifts
city, a sole proprietorship. So we don’t need a much choice about speeding up payments. and spends from business profits. That cre-
shark tank approach of stake sale and getting Depending too much on a few large buyers ates a seamless flow of money in your mind
the investor interested in the idea. might make it even acute. that makes you feel entitled to do into the
family assets during times of need.
That does not mean the business is not gen- Fourth, seek working capital accommoda-
erating value or profit. We have millions of tion. Banks, NBFCs and other smaller finan- Eighth, build some assets for the busi-
businesses that operate at a micro level, man- cial companies may be willing to discount ness. Even if it is a trading business that
aged mostly by own funds. These businesses the bill and make a loan. This is one of the needs no capital investment. Ploughing
are routinely starved of working capital. most common categories of loan available to back the profits to create assets in invest-
They also struggle to find the scale they can suppliers of goods. The rate of interest is also ments in treasury products like deposits,
operate at, and any expansion needs money. a benchmark for the extent of margins your bonds, liquid funds. It would be easier to
In this case, the entrepreneur is seeking per- business must make. If money is available borrow against these assets when in need.
sonal assets to fund business expansion. I had at 14% and your margin is higher at 20% you In an extreme emergency these assets can
to put out my list for his consideration. can finance the working capital of your busi- be liquidated and rebuilt.
ness and expand it if you get funding against
First, estimate your working capital needs. your bills. Ninth, expand the business keeping in
His is a distribution business where one buys mind the financing requirements that will
some goods and sells it to another market. Fifth, ensure that the business records are kick in. It might feel great to get a large
The buying orders are placed after the sale in place. Even if it is a small sole proprietor- order from a large client. Getting that
is closed with the customer. How soon the ship business, have a bank account for the account might seem prestigious and the
seller needs the money and how fast the cus- business. Ensure all receipts and payments steady order book might be just the leap you
tomer will pay determine the working capital are recorded. Have a system for invoicing and needed. Make sure you are prepared to wait
needs. Estimate this for the annual volume tracking. Pay the applicable taxes. Disclose the payment delays and have the funding to
all information and file returns. Without sustain it.
knowing your business numbers with his-
Tenth, build and monitor performance
metrics for your business. Know the exact
days of aging of your creditors and your
debtors. Know the rates of growth in rev-
enue and its seasonality. Know the mar-
gin and the costs, and diligently account
for them. Set yourself to standards that
you will measure and perform to. Many
businesses have failed from celebrating
revenue without considering the impact
delayed payments and mounting costs can
have on their survival.

Entrepreneurship is such a common and
widely prevalent feature in India. We cele-
brate our ability to spot an opportunity and
make a business out of it, however small. Be
cautious to not overdo native wisdom and
common sense in running a business. Not
everyone knows intuitively how to keep a
business afloat. It can be punishing to learn
the hard lessons.

Please send your feedback to
[email protected]

financial planning

14 The Economic Times Wealth May 9-15, 2022

Getting PAPER WORK
finances :: Saving LTCG on
in place
to buy a purchase of house
house
Gain or profit made from sale of
GETTY IMAGES an asset is termed as capital gain
and this is taxable as per provi-
Before taking on a big-ticket expense like buying a home, draw up a budget. sions of the Income Tax Act. If
the asset has been held beyond
Sarthak is a 35-year-old Sarthak must be sure that he’s financially adequate to meet his family’s living require- a stipulated holding period (12
architecture consultant ready to make the long-term commit- ments for at least 8-10 years and he must be months in case of equities, 3
in Delhi. Having moved ment that buying a house entails. It may willing to stretch to make that happen. On the years in case of debt securi-
from a small town, he require him to change his spending and other hand, he must be wary about going beyond ties, 3 years in case of land/
and his wife are consid- saving habits, at least in the immediate future. the budget too because he will also have to fund house/property), then the gain
ering buying a house To make the change as comfortable as possible, other costs related to the acquisition such as the calculated on the same is termed
now that his income is he must first decide a budget for the house that broker charges, stamp duty and registration as long term capital gain. There
stable and he expects he is looking for. This will depend upon the level fees as well as expenses related to furnishing are certain provisions under the
to stay in Delhi for the of EMI obligation that he will be able to service. the house. Any overrun on the budget will put income tax laws that provide for
foreseeable future. This Drawing up a household budget that will consid- pressure on his income now and in the future. ways in which the tax on long
is an huge financial er his expanded income in the future, inflation term capital gains can be saved.
decision which will as well as higher expenses as his family grows, Once Sarthak has fixed his budget, he must
have repercussions on is an efficient way of doing this. shop around for good loan terms and get a prior Sale of house
Sarthak’s money situa- loan approval so that he does not lose out on
tion for years. He wants The other immediate requirement that he his preferred home just because the finances On sale of a
to make sure that the must be ready for financially will be the down were not in place. He must look for options in property, if the pro-
financial aspects of payment that he will be expected to make by structuring the loan which will suit him, such ceeds are invested in purchase
acquiring the house are housing finance companies at 15% to 20%of the as step-up loans which will allow him to pay or construction of a house, the
dealt with smoothly. cost of the house. Sarthak must arrange this higher EMIs later in the loan tenure when his long term capital gain on the sale
sum from the savings and investments that income is higher. Similarly, he must start liq- of property is exempted. The
he has made over the years. It is important for uidating his investments that are going to fund purchase of property can happen
Sarthak to find the balance between taking on a the down payment and move the money into a year before the sale of prop-
commitment that will put too much pressure on liquid investments that he can easily access erty or two years after the sale.
his income and going that extra mile in cutting without any delay or loss in value. Doing all this Alternatively, one can invest in
back on expenses to acquire an appreciating will ensure that Sarthak is ready to deal with infrastructure bonds notified by
asset. The house that he is considering must be this milestone in his financial life. the government. These invest-
ments have a lock-in period.
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta. Sale of other
long term assets
smart things to knowIt is a type Home or home owners’ insurance
This provision is ap-
2 4of property It provides cover It protects your This type Many policies plicable to sale of assets held for
for appliances, house against of policy is come with long term as per tax laws, other
insurance whichfurniture and fix-damages due available for a riders like than a house, eg. shares, mutual
covers thetures and jewelleryto natural term of 1 year temporary funds, commercial building,
house structuredepending upon thecalamity like or even for a resettlement land, jewellery, machinery. If
and the content fire, storms cover or loss the proceeds received from such
or floods and sale are invested in purchase or
1 3 5ofprivateresi- against bur- construction of a new residential
property, then the tax on capital
gains is exempted.

Set off provisions

Long term capital
loss can be set off
against long term
capital gains made by
the tax payer in that year.

:: Points to note

z If the property purchased is
outside India, the above exemp-
tions will not be applicable.

z It is advisable to take the
advice of a tax consultant
before carrying out above
mentioned transactions.

dences. coverage selected. glary or theft. longer tenure. of rent cover.

SMART STATS The Economic Times Wealth
May 9-15, 2022
ET WEALTH TOP 50 STOCKS
In This Section

MUTUAL FUNDS - P16
LOANS AND DEPOSITS - P18
ALTERNATE INVESTMENTS- P19

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result
of this is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.

RANK PRICE ` GROWTH%* VALUATION RATIOS RISK R AT I N G
No. of Consensus
Current Previous Stock Net Div Downside Bear Analysts Rating
Rank Rank Price Revenue Profit PE PB Yield PEG Risk Beta

Steel Authority of India 11 94.10 47.79 102.94 9.45 0.86 8.75 0.10 1.92 1.38 29 4.17 1 Fast growing stocks
NCC
Coal India 24 65.20 40.91 88.23 15.27 0.79 1.19 0.18 1.68 1.21 20 4.95
NTPC
UPL 36 185.85 28.30 39.43 9.09 3.16 9.34 0.23 1.51 0.74 27 4.26 Top 5 stocks with the highest
Orient Cement revenue % growth over the
Dr Reddy's Laboratories 45 158.40 28.08 26.78 10.51 1.22 4.51 0.38 1.11 0.84 28 4.82 previous year
IndusInd Bank
Hero MotoCorp 57 823.25 25.87 54.12 21.93 3.01 1.21 0.30 1.29 0.89 30 4.53 Steel Authority 48
Embassy Office Parks 68 128.30 35.68 64.68 12.44 2.04 1.15 0.19 1.65 1.31 15 4.53 of India 47
City Union Bank Indoco
CESC 7 11 3,963.80 24.31 81.56 34.57 3.78 0.63 0.44 1.16 0.60 44 4.66 Remedies
Bandhan Bank
89 936.80 17.94 50.83 15.76 1.58 0.51 0.29 1.60 1.50 52 4.69 Tata Power Co 44
Indoco Remedies V-Guard 43
9 12 2,501.65 24.17 43.34 20.78 3.04 3.94 0.49 1.15 1.01 51 3.98 Industries 42
Zee Entertainment 10 10 384.74 19.57 76.93 55.90 1.40 5.71 0.65 0.93 0.38 16 4.69 Cera
Maruti Suzuki India Sanitaryware
Birlasoft 11 15 130.15 18.85 52.87 16.46 1.67 0.38 0.31 1.21 1.10 28 4.54
ITC
Cipla/India 12 13 84.20 22.46 18.68 8.34 1.12 5.38 0.47 1.33 0.82 18 4.89
Vedanta
Cholamandalam Invest. 13 14 320.60 34.77 86.64 23.78 3.01 0.31 0.30 1.73 1.25 28 3.96 2 Least expensive stocks
Balrampur Chini Mills Top 5 stocks with the lowest
TVS Motor Co 14 17 369.90 47.45 116.89 36.35 4.40 0.41 0.31 1.69 0.61 10 4.40 price-earnings ratio
Zensar Technologies
JK Lakshmi Cement 15 19 244.35 17.06 63.76 29.27 2.32 1.03 0.31 1.92 1.50 24 4.46
Bharat Electronics
Endurance Technologies 16 -- 7,407.65 26.82 108.76 57.60 4.04 0.61 0.60 1.28 1.10 52 4.02 Vedanta 7.82
Power Grid Corp of India
Hindustan Zinc 17 21 415.65 40.91 76.06 35.16 5.16 0.99 0.45 1.83 1.74 12 4.75 CESC 8.34
EPL
Transport Corp of India 18 20 262.05 27.13 29.64 24.28 5.30 4.04 0.82 1.07 0.81 35 4.43 Coal India 9.09
Sun TV Network 19 23 948.40 24.05 42.09 32.11 4.21 0.52 0.77 1.02 -0.08 45 4.42 9.45
Tata Power Co Steel 10.51
DLF 20 3 405.20 4.31 28.30 7.82 2.25 6.71 0.27 1.99 0.65 18 4.00 Authority of
KNR Constructions India
Cera Sanitaryware 21 24 715.30 40.78 79.28 38.39 6.08 0.28 0.45 1.69 1.32 36 4.31 NTPC
Sudarshan Chemical
Jyothy Labs 22 27 437.55 19.27 52.44 19.49 3.51 0.57 0.34 1.96 0.82 10 4.90
Coforge
Alkem Laboratories 23 18 631.05 25.41 113.88 50.16 7.79 0.60 0.41 1.32 1.13 47 3.98 3 Best PEGs
Alembic Pharmaceuticals Top 5 stocks with the least
Glenmark Pharmaceuti. 24 30 310.10 34.05 47.61 22.81 2.92 1.28 0.58 2.06 1.92 16 4.25 price-earnings to growth ratio
Bajaj Auto NCC Coal India
Ajanta Pharma 25 22 415.80 24.60 22.85 12.04 2.33 0.90 0.53 1.52 0.94 24 4.54
Cyient
Emami 26 33 234.90 26.35 30.25 26.82 5.09 1.82 0.89 1.46 1.14 29 4.62
Mphasis
Lupin 27 36 1,235.40 38.35 46.68 32.64 4.76 0.50 0.71 1.42 0.73 24 4.25
Zydus Wellnes
V-Guard Industries 28 26 233.75 9.23 11.58 14.20 2.37 7.26 0.76 1.07 0.43 27 4.52

29 34 311.00 19.62 30.92 13.86 3.89 5.70 0.38 1.37 0.57 20 2.80 0.10 0.18 0.19 0.23 0.27
30 28 166.35 25.39 27.09 22.04 3.11 2.51 0.62 1.31 1.05 15 4.47

31 31 719.90 37.06 112.61 36.13 4.55 0.77 0.31 2.31 1.78 10 4.10 Steel Authority Orient Vedanta
of India Cement
32 29 462.95 29.53 18.11 11.90 2.57 2.99 0.66 1.29 1.00 19 4.05
4 Income generators
33 32 247.50 44.31 133.41 62.99 3.51 0.63 0.64 1.91 1.59 25 2.68 Top 5 stocks with the highest
34 35 340.00 28.01 94.61 78.82 2.44 0.57 0.80 1.88 1.99 23 4.48 dividend yield (%)

35 39 259.70 39.34 31.51 18.30 3.79 0.09 0.66 1.47 1.22 27 4.52

36 40 4,058.00 41.78 87.85 52.90 6.11 0.32 0.61 1.45 0.89 16 4.31 Coal India 9.34

37 38 497.10 40.46 28.00 24.65 4.68 1.19 0.89 1.41 0.90 10 4.80 Steel Authority 8.75
38 41 153.00 28.62 21.92 27.18 3.79 2.71 1.15 1.05 0.57 18 4.50 of India 7.26
Power Grid
39 42 4,171.60 33.06 53.11 40.88 9.36 1.28 0.80 1.84 1.40 29 4.10 Corp of India

40 43 3,169.80 31.44 21.91 24.07 5.17 1.10 1.14 0.99 0.39 23 4.48 Vedanta 6.71

41 - 729.70 10.60 37.17 26.44 2.75 1.91 0.73 1.32 0.48 18 3.22 Embassy Office 5.71
Parks
5 Least risky
42 45 418.55 19.15 24.65 12.25 1.68 0.59 0.46 1.35 0.73 21 3.62 Top 5 stocks with the lowest
43 47 3,523.90 13.15 8.40 16.41 3.39 4.00 1.60 1.00 0.66 54 4.13 downside risk
44 46 1,754.70 28.48 26.13 23.42 5.13 0.54 0.89 1.20 0.69 14 4.64 Bajaj Auto
45 - 22.31 13.84 18.31 3.07 3.11 1.42 1.39 0.74 21 4.48
872.20 Zydus Wellnes

46 48 483.80 23.53 72.51 47.38 12.22 1.65 2.29 1.16 0.31 31 4.58

47 - 2,693.15 23.26 26.64 35.23 7.26 2.42 1.36 1.56 1.37 33 4.67 0.93 0.96 0.99 1.00 1.02

48 50 726.35 20.04 27.11 27.08 2.39 0.89 0.95 1.40 0.91 43 3.16

49 49 1,661.95 21.28 63.79 85.72 2.33 0.30 1.48 0.96 0.73 13 4.69 Embassy Alkem Cipla/India

50 - 210.55 42.96 37.38 44.15 7.34 0.58 1.40 1.20 0.78 24 4.08 Office Parks Laboratories

*REVENUE AND NET PROFIT GROWTH IS BASED ON CONSENSUS ANALYSTS' EXPECTATIONS. NR: NOT IN THE RANKING. DATA AS ON 5 MAY 2022. SOURCE: BLOOMBERG SEE DOWNSIDE RISK AND BEAR BETA COLUMNS
IN THE ADJACENT TABLE.

smart stats

16 The Economic Times Wealth May 9-15, 2022

ETW FUNDS 100 LAGGARDS & LEADERS

BEST FUNDS TO BUILD YOUR PORTFOLIO Taking a long-term view of fund returns, here is a list of 10
funds in each category—five leaders (worth investing) and
ET Wealth collaborates with Value Research to identify the top-performing five laggards (that may be a drag on your portfolio).
funds across categories. Equity funds and equity-oriented hybrid funds are
ranked on 3-year returns while debt-oriented hybrid and income funds are LAGGARDS LEADERS
ranked on 1-year returns.
Equity: Large-cap 5-year returns

Value Research Net Assets RETURNS (%) Expense 7.06 18.11
3-Year 5-Year Ratio (%)
Fund Rating (` Cr) 3-Month 6-Month 1-Year JM Focused Fund Nippon India ETF NV20

EQUITY: LARGE CAP  6,647.28 -7.51 -9.33 11.27 16.01 13.39 1.86 16.01% 7.47 17.94
 4,131.79 -6.45 -8.59 13.77 14.45 11.65 1.99
Canara Robeco Bluechip Equity Fund  9,848.89 -7.5 -9.2 14.2 14.41 11.98 2.04 THE 3-YEAR Taurus Largecap Equity Fund Kotak NV 20 ETF
Kotak Bluechip Fund  1,305.83 -6.18 -8.21 13.08 14.28 11.25 2.17 RETURN OF
UTI Mastershare Fund  35,702.21 -8.02 -12.09 13.47 13.91 1.52 CANARA 7.61 17.8
Baroda BNP Paribas Large Cap Fund  -5.06 -6.88 8.7 13.42 0.29 ROBECO
Axis Bluechip Fund  519.06 -4.69 -6.32 16 13.38 — 0.31 BLUECHIP IS DSP Top 100 Equity Fund ICICI Prudential NV20 ETF
ICICI Prudential Sensex Index Fund  6,881.56 -4.6 -6.21 15.96 13.34 13.25 0.35 THE HIGHEST
UTI Nifty Index Fund  -5.02 -6.85 15.62 13.2 13.18 0.4 IN ITS 8.28 14.31
IDFC Nifty Fund  402.39 -4.72 -6.37 16.01 13.11 13.77 0.4 CATEGORY.
HDFC Index Fund  3,311.67 -6.29 -8.12 15.79 13.08 13.04 1.59 Indiabulls Bluechip Fund LIC MF Exchange Traded
HDFC Index Fund Nifty 50 Plan  5,659.74 -5.05 -6.92 14.73 13.06 12.39 0.66 22.67%
Mirae Asset Large Cap Fund  31,929.34 -5.01 -6.88 15.94 12.64 13.43 0.59 8.57 14.3
Nippon India Index Fund 15.4 13.32 THE 3-YEAR
Tata Index Sensex Fund 269.38 RETURN Navi Large Cap Equity HDFC Sensex ETF
132.92 22.85 OF QUANT
EQUITY: LARGE & MIDCAP 15.08 LARGE AND Equity: Flexi Cap 5-year returns
23.63 MID CAP IS
Quant Large and Mid Cap Fund  79.08 -2.81 1.5 17.39 22.67 13.02 2.31 THE 5.75 18.47
Mirae Asset Emerging Bluechip Fund  21,932.38 -7.04 -8.99 16.33 19.97 15.21 1.66 HIGHEST
SBI Large & Midcap Fund  -3.67 -2.59 16.31 17.58 13.65 2.17 IN ITS Motilal Oswal Flexi Cap Parag Parikh Flexi Cap Fund
Canara Robeco Emerging Equities Fund  6,384.46 -7.31 -8.57 17.37 12.27 1.84 CATEGORY.
Edelweiss Large & Mid Cap Fund  12,994.20 -6.59 -7.96 17.42 16.95 13.53 2.14 6.71 18.05
Kotak Equity Opportunities Fund  -4.18 -3.87 14.78 16.62 12.14 1.82
1,270.30 16.06 Taurus Flexi Cap Fund Quant Flexi Cap Fund
EQUITY: FLEXI CAP 9,454.83 23.67
10.44 7.18 15.57
Parag Parikh Flexi Cap Fund 13.96
PGIM India Flexi Cap Fund 17.74 Nippon India Retirement IIFL Focused Equity Fund
IIFL Focused Equity Fund 15.03
HDFC Retirement Savings Fund Equity Plan 16.12 7.22 15.18
UTI Flexi Cap Fund 8.65
Sundaram Focused Fund 11.72 LIC MF Flexi Cap Fund SBI Focused Equity Fund
Union Flexi Cap Fund 6.79
Canara Robeco Flexi Cap Fund 8.12 14.85
SBI Focused Equity Fund 23.64
DSP Flexi Cap Fund 22.56 IDFC Flexi Cap Fund UTI Flexi Cap Fund
Axis Flexi Cap Fund 21.34
Axis Focused 25 Fund 25.75 Equity: Mid-cap 3-year returns
17.05
EQUITY: MID CAP  21,768.48 -5.82 -7.74 19.39 23.08 18.47 1.79 13.7 31.23
 4,082.87 -9.59 -11.12 22.06 14.44 2.14
PGIM India Midcap Opportunities Fund  2,824.37 -9.57 -9.73 29.63 20.18 15.57 1.93 Franklin India Prima Fund PGIM India Midcap Opportunities
Kotak Emerging Equity Fund  2,098.57 -3.18 -3.93 29.07 18.65 13.79 2.04
Edelweiss Mid Cap Fund  -9.25 -13.92 33.44 17.92 14.85 1.84 14.22 30.12
Nippon India Growth Fund  24,898.96 -7.58 -8.97 22.97 17.35 13.36 2.41
Axis Midcap Fund  694.19 -6.1 -9.29 17.1 12.89 2.37 Sundaram Mid Cap Fund Quant Mid Cap Fund
Invesco India Mid Cap Fund  -8.33 -9.45 29.56 16.13 13.75 1.91
 1,017.71 -7.74 -11.7 14.35 15.94 15.18 1.86 14.61 24.35
EQUITY: SMALL CAP  7,256.26 -9.61 -12.7 15.5 15.39 11.65 1.9
 24,904.92 -8.78 -12.61 16.28 14.74 1.72 L&T Midcap Fund SBI Magnum Midcap Fund
Kotak Small Cap Fund  7,661.37 -8.2 -14.88 13.72 — 1.64
Axis Small Cap Fund 10,848.49 28.29 12.38 14.84 23.35
Nippon India Small Cap Fund 19,559.61 14.55
SBI Small Cap Fund 24.37 IDBI Midcap Fund Kotak Emerging Equity Fund
15.75
EQUITY: VALUE ORIENTED 14.54 16.21 22.86
20.41
SBI Contra Fund 16.8 DSP Midcap Fund Edelweiss Mid Cap Fund
UTI Value Opportunities Fund 14.67
Invesco India Contra Fund  4,887.32 -8.8 -8.17 16.81 31.23 16.28 2.13 31.23% Equity: Small-cap 3-year returns
Kotak India EQ Contra Fund  18,634.65 -1.44 -1.57 12.03 23.35 14.3 1.72
 -4.62 -6.63 7.07 22.86 14.23 2.05 THE 13.55 Quant Small Cap Fund 38.56
EQUITY: ELSS  1,919.99 -4.08 -6.07 21.48 14.31 1.76 3-YEAR
 12,015.01 -5.81 -9.27 21.4 17.35 1.63 RETURN OF Aditya Birla Sun Life 33.97
Quant Tax Plan  17,644.76 -7.08 -7.98 19.8 13.63 2.2 PGIM INDIA
BOI AXA Tax Advantage Fund MIDCAP 17.72 BOI AXA Small Cap Fund
IDFC Tax Advantage (ELSS) Fund 2,261.71 OPP IS
Mirae Asset Tax Saver Fund THE HIGH- Franklin India Smaller
Canara Robeco Equity Tax Saver Fund EST IN ITS 31.97
Union Long Term Equity Fund CATEGORY. 17.76
DSP Tax Saver Fund  7,235.82 -3.62 -2.71 31.97 17.19 1.85 Kotak Small Cap Fund
JM Tax Gain Fund  9,052.05 -5.35 -0.6 29.06 19.1 1.95 HDFC Small Cap Fund
Kotak Tax Saver  19,213.95 -4.4 1.68 28.36 17.32 1.69 31.97
Invesco India Tax Plan  11,576.50 -4.2 -2.24 25.93 18.93 2.03 18.51
Axis Long Term Equity Fund Canara Robeco Small Cap Fund
HSBC Small Cap Equity Fund
29.22
21.64
 4,209.23 -2.29 -0.28 22.21 14.43 2.11 Edelweiss Small Cap Fund
 6,615.19 -7.39 -8.01 15.49 12.26 1.98 Sundaram Small Cap
 8,725.80 -7.14 -8.33 15.08 13.15 2.04
 1,255.46 -5.11 -6.02 14.81 13.86 2.32 Hybrid: Aggressive 5-year returns

 1,166.17 -3.32 0 33.53 21.92 2.62 33.53% 5.53 18.94
 592.77 -6.27 -8.41 23.12 15.9 2.45
 -4.77 -2.96 19.25 14.47 1.96 THE 3-YEAR LIC MF Children's Gift Fund Quant Absolute Fund
 3,715.97 -6.09 -7.67 18.73 15.83 1.85 RETURN OF
 11,790.17 -8.16 -9.56 18.23 14.9 2.14 QUANT TAX 5.62 14.02
 -4.82 -7.74 17.66 12.42 2.54 PLAN IS
 3,586.39 -6.08 -6.99 17.06 12.73 1.92 THE HIGH- Nippon India Equity Hybrid ICICI Prudential Equity
 492.13 -8.32 -11.83 16.03 12.3 2.45 EST IN ITS
 -5.99 -3.97 15.92 11.91 2.23 CATEGORY. 6.03 13.6
 9,872.41 -10.51 -11.7 14.22 12.27 2.27
 67.53 -8.08 -14.03 13.83 12.75 1.54 IDBI Hybrid Equity Fund BOI AXA Mid & Small Cap

2,696.29 6.62 12.31
1,897.03
32,052.74 LIC MF Equity Hybrid Fund SBI Equity Hybrid Fund

6.63 11.54

PGIM India Hybrid Equity HDFC Children's Gift Fund

ANNUALISED RETURNS IN % AS ON 4 MAY 2022.

smart stats

The Economic Times Wealth May 9-15, 2022 17

ETW FUNDS 100 Net Assets RETURNS (%) Expense 1 Top 5 SIPs
(` Cr) 3-Month 3-Year 5-Year Ratio Top 5 equity schemes based
Value Research 6-Month 1-Year on 10-year SIP returns
Fund Rating

HYBRID: EQUITY SAVINGS  413.34 -1.96 -3.14 11.25 11.15 8.02 2.37 Nippon India Small Cap Fund 24.31
 321.42 -1.6 -1.68 7.8 9.16 8.43 2.07 SBI Small Cap Fund 24.13
Mahindra Manulife Equity Savings Dhan Sanchay Quant Tax Plan 23.52
Edelweiss Equity Savings Fund  1,786.78 -0.17 0.58 10.7 9.13 8.48 2.13 Kotak Small Cap Fund 21.68
Mirae Asset Emerging Bluechip 21.50
Kotak Equity Savings Fund

HYBRID: AGGRESSIVE (EQUITY-ORIENTED)  255.80 -0.76 1 23.38 26.62 18.94 2.31 26.62% SIP: SYSTEMATIC % ANNUALISED RETURNS
 19,273.66 -1.29 1 28.95 18.35 14.02 1.87 INVESTMENT PLAN AS ON 4 MAY 2022
Quant Absolute Fund  -2.92 -2.41 15.11 16.48 11.15 1.97 THE 3-YEAR
ICICI Prudential Equity & Debt Fund  2,511.55 -4.92 -6.46 10.29 14.63 11.49 2.28 RETURN
Kotak Equity Hybrid Fund  774.85 -3.83 -4.91 14.34 14.09 11.54 2.11 OF QUANT
Baroda BNP Paribas Aggressive Hybrid Fund  -5.91 -6.39 10.99 13.81 11.38 1.86 ABSOLUTE
HDFC Children's Gift Fund  5,384.78 -7.41 -7.31 12.71 13.71 11.29 2.39 FUND IS THE
Canara Robeco Equity Hybrid Fund  7,663.11 -2.29 -3.48 14.28 13.65 12.31 1.52 HIGHEST
Axis Children's Gift  -7.3 -9.27 7.48 13.08 9.77 1.85 IN CATEGORY.
SBI Equity Hybrid Fund  716.80 -6.59 -8.23 12.31 12.67 2.18
DSP Equity & Bond Fund  50,866.54 -4.65 -5.52 10.96 12.65 — 2.55 2.48%
Axis Equity Hybrid Fund  -4.85 -6.28 12.12 12.52 10.75 1.81
HDFC Retirement Savings Fund - Hybrid Equity Plan 7,466.09 11.5 THE 1-YEAR
Mirae Asset Hybrid Equity Fund 1,896.44 RETURN OF
ABSL INCOME
802.45 FUND IS
6,657.77 THE HIGH-
EST IN ITS
HYBRID: CONSERVATIVE (DEBT-ORIENTED)  86.73 -1.31 1.13 13.74 10.89 9.65 1.24 CATEGORY. 2 Top 5 MIPs
 5,771.94 -1.02 -0.37 9.25 10.55 7.64 1.11 Top 5 MIP schemes based on
SBI Magnum Children's Benefit Fund - Savings Plan  1,422.05 -1.22 -1.54 8.33 11.11 8.42 1.79 3.36% 3-year SWP returns
SBI Conservative Hybrid Fund  3,304.12 -0.88 -0.49 7.52 8.96 8.32 1.83
Kotak Debt Hybrid Fund  1,110.43 -1.5 -1.2 5.6 9.73 7.75 1.81 THE 1-YEAR Kotak Debt Hybrid Fund
ICICI Prudential Regular Savings Fund  -1.46 -1.67 4.01 7.32 6.31 2.42 RETURN SBI Magnum Children's Benefit
Canara Robeco Conservative Hybrid Fund 146.98 OF ADITYA SBI Conservative Hybrid Fund
HDFC Retirement Savings Fund - Hybrid Debt Plan BIRLA SUN
LIFE SHORT
DEBT: MEDIUM- TO LONG-TERM  1,593.69 -0.4 -0.38 2.48 7.62 6.67 0.9 TERM FUND 10.81
 1,865.32 -0.73 -1.2 1.71 6.66 5.96 1.75 IS THE HIGH- 10.46
Aditya Birla Sun Life Income Fund  1,651.73 -0.48 -0.84 1.53 7.74 6.72 1.47 EST IN ITS
Kotak Bond Fund  2,904.73 0.11 -1.01 0.92 6.94 6.42 1.18 CATEGORY. 9.81
SBI Magnum Income Fund
ICICI Prudential Bond Fund Expense as on 31 Mar 2022
Returns as on 4 May 2022
DEBT: MEDIUM-TERM Assets as on 31 March 2022 Canara Robeco Conservative
Rating as on 30 April 2022
Axis Strategic Bond Fund  1,860.91 0.2 0.72 3.63 6.64 6.87 1.08 9.33
ICICI Prudential Medium Term Bond Fund 8.86
HDFC Medium Term Debt Fund  6,858.00 0.29 0.29 3.3 7.59 6.82 1.43
SBI Magnum Medium Duration Fund
 4,047.16 -0.43 -0.12 2.95 6.86 6.53 1.29 Axis Regular Saver Fund
DEBT: SHORT-TERM
 10,362.21 -0.39 -0.11 2.59 7.85 7.37 1.22
Aditya Birla Sun Life Short Term Fund
Nippon India Short Term Fund  8,427.08 0.46 1.02 3.36 7.15 6.91 1.08 S W P : S Y S T E M AT I C % ANNUALISED RETURNS
Axis Short Term Fund  7,460.65 0.18 0.78 3.2 6.87 6.52 1.15 WITHDRAWAL PLAN AS ON 4 MAY 2022
HDFC Short Term Debt Fund  10,349.60 0.34 0.95 2.99 6.89 6.77 0.98
ICICI Prudential Short Term Fund  14,636.40 0.18 0.6 2.93 7.22 7.1 0.74 3 Large & Midcap:
 18,376.35 0.47 0.52 2.93 7.1 6.79 1.13 Cash holdings
DEBT: DYNAMIC BOND
 528.40 -0.36 -1.1 6.01 6.94 5.01 1.72
HDFC Dynamic Debt Fund
IIFL Dynamic Bond Fund  689.39 -0.06 0.79 4.27 6.24 6.46 0.5 10.08
Kotak Dynamic Bond Fund
ICICI Prudential All Seasons Bond Fund  2,274.52 -0.27 -0.31 2.65 7.29 7.25 1.2
Quantum Dynamic Bond Fund
Axis Dynamic Bond Fund  6,062.23 0.41 -0.15 2.48 7.66 7.23 1.37 6.94 6.91

DEBT: CORPORATE BOND  85.64 0.56 0.35 2.25 6.97 6.41 0.73 5.18 4.89

ICICI Prudential Corporate Bond Fund  2,467.26 -1.18 -1.9 0.47 7.19 6.61 0.66
Aditya Birla Sun Life Corporate Bond Fund
Kotak Corporate Bond Fund - Standard Plan  16,857.66 0.73 0.77 3.27 7.17 7.01 0.6 Quant Baroda ICICI Pru- Kotak Canara
HDFC Corporate Bond Fund  15,461.21 0.4 0.91 3.22 7.55 7.41 0.46 Large and BNP Pari- dential Equity Robeco
 11,677.20 0.2 0.73 3.2 6.71 6.99 0.65 Mid Cap bas Large Large & Opportu- Emerging
 23,609.85 -0.12 0.12 2.64 7.38 7.23 0.6 Fund & Mid nities Equities

Did not find your fund here? All equity funds ranked on 3-year returns. Debt funds ranked on 1-year returns. Cap

% OF ASSETS AS ON 31 MAR 2022

Log on to www.wealth.economictimes.com for an exhaustive list.

Methodology EQUITIES (figures over the past one year) FUND 4 Debt: Ultra short duration.
RAISER Lowest expense ratio
The Top 100 includes only those funds that have a 5- or Large-cap: Mostly invested in large-cap companies.
4-star rating from Value Research. The rating is determined Multi-cap: Mostly invested in large- and mid-cap `2 LAKH 0.42 0.45 0.49
by subtracting a fund’s risk score from its return score. companies. CRORE
The result is assigned stars according to the following Mid-cap: Mostly invested in mid-cap companies. 0.39 0.40
distribution: Small-cap: Mostly invested in small-cap companies. AUM mark has been
Tax planning: Offer tax rebate under Section 80C. breached by ETFs and
 Top 10% International: More than 65% of assets invested abroad. index funds tracking the
Income: Average maturity varies according to objective.
 Next 22.5% (Not covered Gilt: Medium- and long-term; invest in gilt securities. Nifty 50 index.
 Middle 35% in ETW Funds Equity-oriented: Average equity exposure more
 Next 22.5% 100 listing) than 60%.
Debt-oriented aggressive: Average equity exposure
 Bottom 10% between 25-60%.
Debt-oriented conservative: Average equity exposure
Fixed-income funds less than 18 months old and equity funds less than 25%. L&T Ul- LIC MF Baroda IDFC Ul- Aditya
less than three years old have been excluded. This ensures Arbitrage: Seek arbitrage opportunities between equity tra Short Ultra BNP tra Short Birla Sun
that all the funds have existed long enough to be tracked for and derivatives. Term Short Paribas Term Life Sav-
consistency of performance. Given the focus on long-term Asset allocation: Invest fully in equity or debt as per Fund Term Ultra
investing, liquid funds, short-term funds and FMPs are not market conditions. ings
part of the list. For the same reason, we have considered only
the growth option of funds that reinvest returns instead of % AS ON 31 MARCH 2022
offering dividends that increase the NAV of funds.
% EXPENSE RATIO IS CHARGED ANNUALLY.
Despite these rigorous filters, the list includes 2/3 funds of METHODOLOGY OF TOP 100 FUNDS ON
each category to maximise choice from the best funds. W W W.W E A LT H . EC O N O MI C T IM E S .C O M
The fund categories are:

loans and deposits

18 The Economic Times Wealth May 9-15, 2022

LOANS & DEPOSITS
ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.

Top five bank FDs HOME LOAN RATES

TENURE: 1 YEAR Interest rate (%) What `10,000 With effect from October 2019, all banks have made the transition to
RBL Bank compounded qtrly will grow to external benchmarks for pricing new home loans. Most banks have
Indusind Bank picked the RBI repo rate as the external benchmark.
Bandhan Bank 6.25 10,640
IDFC First Bank 6.00 10,614 REPO RATE: 4%
DCB Bank 5.75 10,588
5.75 10,588 FOR SALARIED FOR SELF EMPLOYED (%)
5.55 10,567

TENURE: 2 YEARS 6.50 11,376 BANK RLLR (%) FROM (%) TO (%) FROM (%) TO (%) WEF
Indusind Bank 6.50 11,376
RBL Bank 6.25 11,321 Bank of Maharashtra 6.80 6.40 7.80 6.65 8.30 10 Feb 2022
Bandhan Bank 6.25 11,321 Bank of Baroda
DCB Bank 5.75 11,210 Punjab & Sind Bank 6.90 6.90 8.75 7.00 8.85 5 May 2022
IDFC First Bank Bank of India
12,134 Punjab National Bank 6.60 6.50 7.35 6.65 7.60 18 Oct 2021
TENURE: 3 YEARS 6.50 12,063 Kotak Mahindra Bank 6.85 6.50 8.20 6.50 8.35 8 Nov 2021
Indusind Bank 6.30 12,045 Union Bank of India 6.50 6.50 7.65 6.55 7.80
RBL Bank 6.25 12,045 IDFC First Bank 6.60 6.60 7.10 6.65 7.20 27 Jan 2022
Bandhan Bank 6.25 11,956 Canara Bank 6.80 6.60 7.35 6.60 7.40
DCB Bank 6.00 ICICI Bank 6.50 6.60 8.80 6.80 9.40 7 Feb 2022
IDFC First Bank 13,804 Axis Bank 6.90 6.65 8.90 6.65 8.90 7 April 2021
13,669 IDBI Bank 8.10 6.70 7.40 6.80 7.55
TENURE: 5 YEARS 6.50 13,635 HDFC Bank 6.75 6.75 7.10 6.90 7.20 1 Oct 2021
Indusind Bank 6.30 13,635 Indian Bank 6.75 6.75 8.40 6.85 9.90 24 Sept 2021
RBL Bank 6.25 13,336 SBI Term Loan 6.95 6.75 7.65 6.75 7.65
DCB Bank 6.25 Central Bank of India 6.80 6.80 7.25 6.95 7.40 1 July 2020
IDFC First Bank 5.80 J & K Bank 6.65 6.80 7.15 7.15 7.50
Karur Vysya Bank Indian Overseas Bank 6.85 6.85 7.30 6.85 7.30 1 May 2021
UCO Bank 6.95 6.95 7.35 6.95 7.35 15 Dec 2020
Top five senior citizen bank FDs SBI Max Gain 6.85 7.05 7.30 7.05 7.30 1 March 2022
Karur Vysya Bank 6.90 7.15 7.25 7.15 7.25 1 July 2020
TENURE: 1 YEAR Interest rate (%) What `10,000 6.65 7.15 7.50 7.25 7.65 27 May 2020
RBL Bank compounded qtrly will grow to 7.05 7.15 9.35 7.15 9.35 1 May 2021
Bandhan Bank 7 Aug 2021
Indusind Bank 6.75 10,692
IDFC First Bank 10,666
DCB Bank 6.50 10,666
10,640
6.50 10,619

6.25

6.05

TENURE: 2 YEARS 7.00 11,489 Your EMI for a loan of `1 lakh
Bandhan Bank 7.00 11,489
Indusind Bank 7.00 11,489 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
RBL Bank 6.75 11,432
DCB Bank 6.25 11,321 @ 7% 1,980 1,161 899 775 707
IDFC First Bank
@ 8% 2,028 1,213 956 836 772

TENURE: 3 YEARS 7.00 12,314 @ 9% 2,076 1,267 1,014 900 839
Bandhan Bank 7.00 12,314
Indusind Bank 6.80 12,242 @ 10% 2,125 1,322 1,075 965 909
RBL Bank 6.75 12,224
DCB Bank 6.50 12,134 FIGURES ARE IN `. USE THIS CALCULATOR TO CHECK YOUR LOAN AFFORDABILITY.
IDFC First Bank FOR EXAMPLE, A `5 LAKH LOAN AT 12% FOR 10 YEARS WILL TRANSLATE INTO AN EMI OF `1,435 X 5 = `7,175

TENURE: 5 YEARS Post office deposits Interest (%) Minimum Maximum Features Tax
Indusind Bank investment (`) investment (`) benefits
RBL Bank 7.00 14,148
DCB Bank 6.80 14,009 Sukanya Samriddhi Yojana 7.60 250 1.5 lakh p.a. One account per girl child 80C
IDFC First Bank 6.75 13,975
Axis Bank 6.75 13,975 Senior Citizens' Savings Scheme 7.40 1,000 15 lakh 5-year tenure, minimum age 60 yrs 80C
6.50 13,804
Public Provident Fund 7.10 500 1.5 lakh p.a. 15-year tenure, tax-free returns 80C

Top five tax-saving bank FDs Kisan Vikas Patra 6.90 1,000 No limit Can be encashed after 2.5 years Nil

Interest What `10,000 5-year NSC VIII Issue 6.80 1,000 No limit No TDS 80C
rate (%) will grow to Time deposit 5.5-6.7 1,000 No limit
TENURE: 5 YEARS AND ABOVE Single 4.5 lakh Available in 1, 2, 3, 5 year tenures 80C#
Indusind Bank 6.50 13,804 Post Office Monthly Income 6.60 1,000 Joint 9 lakh
RBL Bank 13,669 Scheme No limit 5-year tenure, monthly returns Nil
DCB Bank 6.30 13,635 5.80 100 No limit
IDFC First Bank 13,635 Recurring deposits 4.00 500 5-year tenure, monthly returns Nil
Karur Vysya Bank 6.25 13,402 Savings account
Data as on 5 May 2022 5-year tenure Nil
6.25

5.90

ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP `10,000 interest tax-free Nil
( E T I G D B @ T I M E S G R O U P.C O M )
# Benefit available only for 5-year deposit

market watch

The Economic Times Wealth May 9-15, 2022 19

ALTERNATIVE INVESTMENT
RETURNS MONITOR

The scope and attractiveness of alternative investments is increasing. Here’s a weekly tracker of returns from such investments. But don’t
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.

Gold (995) (`) Silver (`) Platinum ($/troy ounce) WTI Crude ($/barrel)

46,566 51,580 68,835 63,331 1,228.53 993.7 65.63 107.81

5 MAY 2021 5 MAY 2022 5 MAY 2021 5 MAY 2022 5 MAY 2021 5 MAY 2022 5 MAY 2021 4 MAY 2022
PRICE OF 10 GM GOLD PRICE OF 1 KG SILVER

CHANGE 0.51% 1 WEEK -1.45% 1 WEEK 7.84% 1 WEEK 2.33%
10.77% 1 YEAR -8% 1 YEAR -19.11% 1 YEAR 64.27%
X 1 WEEK

X 1 YEAR

PENNY STOCKS UPDATE

Penny stocks as a recommended non-traditional investment? Not exactly. ET WEALTH
neither has the expertise nor does it recommend investing in such stocks. But since the
relatively ‘low’ cost of investment attracts some investors to penny stocks, we provide
a weekly snapshot of this most volatile and uncertain type of stock investing.

Top price gainers Top volume gainers

MARKET 1-WEEK (%) 1-MTH (%) 1-MONTH AVG 1-MONTH AVG MKT CAP MARKET 1-WEEK (%) 1-MTH (%) 1-MTH AVG 1-MONTH AVG MKT CAP
STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR) STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR)

Impex Ferro Tech Ltd. 7.09 17.38 138.72 2.35 1,467.01 62.34 Sagar Productions Ltd. 3.55 11.99 21.58 0.53 50,033.39 14.24
Gold Line International 1.85 20.13 134.18 26.2 461.33 96.39 Croissance Ltd. 4.14 -18.18 -48.57 1.86 2,144.56 28.36
Quadrant Televentures 1.74 12.26 417.15 106.54 Impex Ferro Tech Ltd. 7.09 17.38 138.72 2.35 1,467.01 62.34
Zenith Steel Pipes 6.02 20 132 6.72 1,044.7 85.65 Gujarat Cotex Ltd. 9.07 120.68 0.94 1,061.78 12.92
Gujarat Cotex Ltd. 9.07 9.85 122.14 0.94 12.92 Zenith Steel Pipes 6.02 7.46 122.14 6.72 1044.7 85.65
Pro Fin Capital Services 9.08 7.46 120.68 3.09 1,061.78 192.5 Amit International Ltd. 7.33 9.85 29.28 0.68 885.54 13.89
Ballarpur Industries Ltd. 2.14 21.07 48.62 428.07 276.8 Swadeshi Polytex Ltd. 7.79 -11.04 65.04 0.08 620.79 30.38
Ramchandra Leasing 2.43 17.58 84.93 10.92 12.44 Nivaka Fashions Ltd. 3.51 -18.43 0.85 497.73 36.05
Swadeshi Polytex Ltd. 7.79 -9.67 81.36 3.4 56.65 30.38 Gold Line International Fi 1.85 -18.18 -55 26.2 461.33 96.39
BLS Infotech Ltd. 6.31 -18.43 81.34 0.08 620.79 439.43 Pro Fin Capital Services 9.08 20.13 134.18 3.09 428.07 192.5
-18.26 65.04 16.16 100.57 21.07
51.68 84.93

Top price losers Top volume losers

Zee Learn Ltd. 7.28 -19.2 -49.13 9.93 26.58 237.4 Housing Development 6.5 -11.56 -18.24 5.85 -58.3 308.1
Croissance Ltd. 4.14 -18.18 -48.57 1.86 2,144.56 28.36 SREI Infrastructure Fin 5.13 -8.72 -12.9 2.42 -57.34 258.09
KBC Global Ltd. 6.64 -47.09 28.24 408.36 Tuni Textile Mills Ltd. 3.52 1.44 5.12 -55.29
Future Consumer Ltd. 2.84 -7.26 -44.75 85.08 106.79 564.32 Reliance Naval & Engi. 3.19 -4.78 -19.63 5.51 -53.68 45.97
Future Market Networks 4.99 15.92 -41.71 1.09 49.82 28.71 Sword-Edge Commercials 0.74 -2.63 -12.6 28.16 -53.67 235.29
Future Enterprises Ltd. 3.91 -26.94 -40.21 9.32 177.89 Orchasp Ltd. 5.92 -11.9 -6.33 1.51 -51.39
Seacoast Shipping Serv. 8.12 -15.18 -36.11 29.63 110.45 273.4 Madhav Infra Projects 4.76 0.42 -18.9 3.89 -50.67 16.07
Visesh Infotecnics Ltd. 0.76 -3.91 -35.04 224.14 -39.06 286.85 GCM Securities Ltd. 3.22 -7.21 1.77 -49.52 58.58
ARC Finance Ltd. 2.18 -11.63 -31.23 261.81 61.88 110.07 Mcnally Bharat Engine. -10.56 1.04 121.95
Evexia Lifecare Ltd. -18.05 -30.77 66.68 11.33 167.21 Unitech Ltd. 5.2 -14.61 -17.86 14.41 -45.2 61.18
5.4 -4.93 183.73 2.11 -12.75 -41.83 95.76
93.74 0 552.04
-9.83

THE STOCKS HAVE BEEN SELECTED USING THE FOLLOWING FILTERS: PRICE LESS THAN `10, ONE-MONTH AVERAGE VOLUME GREATER THAN OR EQUAL TO 1 LAKH AND MARKET
CAPITALISATION GREATER THAN OR EQUAL TO `10 CRORE. DATA AS ON 5 MAY 2022. SOURCE: ETIG DATABASE AND BLOOMBERG.

mutual funds

20 The Economic Times Wealth May 9-15, 2022

AXIS MIDCAP

Worthy pick over market cycles
ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals
of the fund, its portfolio and performance to help you make an informed investment decision.

HOW THE FUND HAS PERFORMED Top 5 sectors in portfolio (%)

Point-to-point returns (%) BASIC Financial 15.53
FACTS
FUND BENCHMARK CATEGORY AVERAGE Technology 15.34
DATE OF LAUNCH
Services 10.38
18 FEBRUARY 2011
20.29 20.04 21.40 22.64 20.31 17.35 Materials 8.97
17.05 CATEGORY Consumer 7.94
13.91 Discretionary
11.86 EQUITY

TYPE The fund runs large positions in financial
and technology businesses.
MID CAP
1-YEAR 3-YEAR 5-YEAR
AS ON 4 MAY 2022 AUM*
The fund has lagged the index and peers over the Top 5 stocks in portfolio (%)
past year, but retains outperformance over 5 years. `17,645 crore
Cholamandalam
BENCHMARK Investment 4.82

S&P BSE 150 MIDCAP ICICI Bank 3.73
TOTAL RETURN INDEX
Rolling returns (%) FUND BENCHMARK Trent 3.25
WHAT IT
1-YEAR 22.95 COSTS Bajaj Finance 3.23

21.00 NAV** Coforge 3.05
GROWTH OPTION
19.63 The fund is well diversified and retains
`64.32 modest positions even in its top bets.
3-YEAR
IDCW
14.37
`31.41
18.12 Recent portfolio changes
MINIMUM INVESTMENT
5-YEAR 14.49 New Entrants
`5,000 Gujarat Fluorochemicals, TVS Motor Company,
The fund’s long term track record indicates Vedant Fashions, Fortis Healthcare, Linde India,
healthy outperformance across time frames. MINIMUM SIP AMOUNT Oberoi Realty.

AS ON 4 MAY 2022 `500 Complete Exits
Tata Consumer Products, FSN E-Commerce
The above figures denote daily average rolling return over the past decade for relevant time frames. EXPENSE RATIO*** (%) Ventures, Indiamart Intermesh, Indigo Paints,
Medplus Health Services.
WHERE THE FUND INVESTS 1.63

Portfolio asset Fund EXIT LOAD
allocation style box
For units in excess of 10%
Equity 88.48% Growth Blend Value of the investment,1% will
Large-cap 35.21% be charged for redemption
Mid-cap 63.70% INVESTMENT STYLE
Small-cap 1.09% within 365 days
Debt & Cash 11.52%
*AS ON 31 MARCH 2022
The fund retains heavy presence in large- **AS ON 4 MAY 2022
caps, apart from its mid-cap focus.
***AS ON 31 MARCH 2022

Small Medium Large How risky is it?
CAPITALISATION
Fund Category Index
23.34 24.63
Standard Deviation 18.79

Sharpe Ratio 0.98 0.80 0.85

MAFNUANGDER Mean Return 22.01 22.23 24.55

SHREYASH DEVALKAR BASED ON 3-YEAR PERFORMANCE.

TENURE: 5 YEARS, 5 MONTHS The fund boasts a superior risk-return
profile compared to most of its peers.

Source: Value Research

YShoouuld This mid-cap fund retains a preference is for businesses stocks two years ago to around downside performance but
Buy heavy presence in large-caps that either have leadership 60 as more businesses started does tend to underperform in
unlike many peers. This is position within a niche area participating in the earnings momentum driven markets like
owing to the strict emphasis on or challenge bigger rivals in uptick amid economic recovery. in 2021. It remains a worthy
quality in the fund manager’s a larger arena. The portfolio Owing to its distinct style, the pick over complete market
stock selection approach. His size has expanded from 35-40 fund boasts a much superior cycles.

pick of the week

The Economic Times Wealth May 9-15, 2022 21

Shriram CU Fin: Strong growth potential

Robust asset quality, merger benefits, and strong balance sheet to support future performance.
Healthy fee income, lower credit costs and improved
disbursements supported the operational perfor- Third, momentum in AUM growth will help improve asset Fundamentals
mance of the company in the fourth quarter of 2021- quality. It is expected that AUM will grow at a CAGR of 21%
22. The total income and PAT grew 13.7% and 7.6% over 2021-22 and 2024-25 and credit costs will be in the 2.5-2.6% ACTUAL CONSENSUS
y-o-y and 0.4% and 3.7% q-o-q respectively. range in 2022-23. The cost of funding (CoF) is also steadily ESTIMATE
coming down. The management also aims to reduce its cost
Other metrics like collection efficiency, AUM, asset qual- to income ratio from 45% in 2022-23 to 39-40% in 2024-25. The 2021 2022 2023 2024
ity and financial health also improved in the fourth quarter. company has sufficient liquidity and adequate provisions that 5,622.00 6,345.84
Changes in product mix with the increased share of personal strengthen its balance sheet. Four, the company will be able Revenue (` cr) 1,381.77 1,457.61 4,510.28 5,206.58
EBITDA(` cr) 1,010.94 1,086.19
Net Income (` cr) 2,777.52 3,293.78

1,386.54 1,621.50

loans and gold have supported yields to manage its net interest margins Basic EPS (`) 153.16 164.57 207.27 245.57

in the fourth quarter. Analysts’ views 13 despite rate hikes as none of its bor- Valuations PBV PE DIVIDEND
Analysts are bullish on the com- rowings are linked to the repo rate. 10.35 54.37 YIELD (%)
1 Buy Its housing finance subsidiary has Bajaj Finance Ltd. 3.13 12.07
pany due to multiple reasons. First, some loans linked to MCLR, how- Muthoot Finance Ltd. 1.95 16.44 0.16
the prospective merger of Shriram Hold ever, such loans are re-priced an- Aditya Birla Capital Ltd. 1.40 30.28 1.65
City Union Finance with Shriram nually. The impact of the rate hike Mahindra & Mahindra Fina. 2.79 19.52 0.00
Transport Finance will help improve will not be felt immediately. Sundaram Finance Ltd. 0.45
its gold loan network. The manage- 0.93
ment expects the number of branches The stock has performed at par

that offer gold loans to increase from with the industry benchmark in Brokerage calls TARGET
700 to 2,500 in the next 18 months and the last one year but has underper- PRICE (`)
the gold loan portfolio to increase formed the market benchmark. RECO DATE RESEARCH HOUSE ADVICE

from `4,010 crore to `15,000-20,000 2 May 2022 Kotak Securities Buy 2,600

crore in next five years. Analysts be- Selection Methodology: We pick 2 May 2022 Antique Stock Broking Buy 2,075

lieve that the merger may not provide The current demand environment is helping up the stock that has shown the 2 May 2022 Spark Capital Advisors Buy 2,089
significant synergies but the merged Macrotech, that has built the roadmap for mitigating maximum increase in ‘consensus 1 May 2022 Motilal Oswal Securities Buy 2,150
entity will be strong. the risk of higher mortgage rates. Thanks to market analyst rating’ during the past 2,700
share consolidation, the company can also pass on month. The consensus rating is 1 May 2022 Emkay Buy
The merger will also help subsidi- increased construction costs. All these factors have arrived at by averaging all analyst 100.6
ary Shriram Housing Finance as it recommendations after attribut- Relative performance
will provide access to 3,000 branches made Macrotech a favourite of analysts.

of the merged entity across India. It ing weights to each of them (ie 5 for 100 MARKET PRICE: `1,665.60 100.6

currently operates with 103 branches. The housing finance strong buy, 4 for buy, 3 for hold, 2 for sell and 1 for strong sell) SENSEX
subsidiary will be well-positioned to deliver healthy loan and any improvement in consensus analyst rating indicates 114.4

growth in the affordable housing finance post the merger. that the analysts are getting more bullish on the stock. To

Second, the fees and commission that the company derives make sure that we pick only companies with decent analyst

from cross-selling and distribution of insurance products are coverage, this search will be restricted to stocks with at least

likely to improve its net profits going forward. It has obtained 10 analysts covering them. You can see similar consensus ana- 5 MAY 2021 SHRIRAM CITY UNION FINANCE ET NBFC 5 MAY 2022
the corporate broking license from Irdai and it is selling prod- lyst rating changes during the past week in ETW 50 table.

ucts of multiple insurance companies. —Sameer Bharadwaj Shriram City Union Finance is compared with ET NBFC. Stock price and index
values normalised to a base of 100. Source: ETIG and Bloomberg.

WHAT EXPERTS ADVISE
BUY
*STOCK PRICES AS ON 5 MAY

STOCK RESEARCH ADVICE STOCK 1-YEAR TARGET POTENTIAL COMMENT
HOUSE PRICE* (`) PRICE (`) UPSIDE (%)

Axis Bank Motilal Oswal Buy 780 930 19.23 Maintain buy as the net earnings jumped sharply in the fourth quarter supported by lower provi-
Persistent Systems Anand Rathi Buy 4,288 4,980 16.14 sions. Asset quality continues to improve helped by higher recoveries.
UltraTech Cement Yes Securities Buy 6,630 8,670 30.77 Upgrade to buy on expectations of EBITDA margin expansion and company's ability to improve
Titan Buy 2,387 2,775 16.25 TCV growth. For last 8 quarters, the company's revenue growth was ahead of industry growth.
Supreme Industries Emkay Buy 1,934 2,853 47.52 Retain buy due to strong cement demand from infra, housing and rural sectors, and falling net debt/
IDFC First Bank Centurm Buy 40.00 EBITDA. Upcoming capacities will lead to strong revenue and volume growth.
ICICI Direct 40 56 Maintain buy on expectations of encouraging Q1 led by uninterrupted wedding/festive sales
after two years of lockdowns. Aggressive expansion plans and growth visibility in eyewear
segment will improve performance.
Maintain buy due to the growth potential of plastic piping given strong demand for agri pipes and
govt focus on various water and sanitation programs. Stock trading at a significant discount.
Rate buy as the company reported healthy operational performance in the fourth quarter. Strong
earnings and return ratios are expected going forward given its focus on retail and guidance on
lower credit costs.

SELL RESEARCH ADVICE STOCK 1-YEAR TARGET POTENTIAL COMMENT
HOUSE PRICE* (`) PRICE (`) DOWNSIDE (%)
STOCK

PNB Housing Finance Nirmal Bang Sell 391 362 -7.42 Downgrade to sell due to weak performance in the fourth quarter as evident from decline in
loan book growth.

your queries QA& I am 34 and my current CTC is `18 lakh. I live with my wife
and 6-year-old daughter. I invest `9,000 through SIPs every
22 The Economic Times Wealth May 9-15, 2022 Our panel of experts will answer
questions related to any aspect month, mostly in large-cap, multi-cap and mid-cap funds.
Is it wise to invest in State Develop- of personal finance. If you have My portfolio is worth `10 lakh. My company’s shares are
ment Loans? How is the interest a query, mail it to us right away. listed abroad and I invest `1 lakh per year in them under
ESOP. My PPF contribution is `20,000 per year. I contribute
paid? Is it on maturity or every six QUESTION OF THE WEEK
months? What are the pros and cons? `10,000 a month to NPS. I have term insurance for five
I am 63 and my wife is 62. We do not times my CTC. I pay an endowment premium of `50,000
State Development Loans (SDL) are bonds have children. We have investments of every year with the last of the premiums due next year. I
issued by state governments to fund their `25 lakh in MFs, `1 crore in Ulips and `10 also have endowment policies with a premium of `35,000
fiscal deficit. They usually have a maturity lakh in FDs. We live in our own house per annum for my child and spouse. I buy stocks worth `1.5
of 10 years and pay interest at half-yearly and have no liabilities. We have medical lakh to `2 lakh every year and hold about `15 lakh worth
intervals. They are deemed ‘risk-free’ as of shares. We have health insurance of `10 lakh covering
they enjoy implicit sovereign guarantee insurance of `20 lakh each. I have three of us at `15,000 per annum. PF contributions are pro-
status, and usually help investors earn high- recently sold a house which had been on gressing without hiccups, and I haven’t withdrawn any-
er yields than central government securi- rent. I want to reinvest the sale proceeds. thing since I started working nine years ago. Besides, I also
ties (G-Secs). They attract investment inter- The investable corpus is `1.5 crore. From make small contributions of `10,000-20,000 in Sukanya
est from mutual funds, insurance compa- this, I want a monthly income of `1 lakh Samriddhi Yojana. Currently, I stay in a rented apartment
nies, etc. However, risk-averse individual and corpus growth. My risk appetite is
investors could also consider investing in and have no other liabilities. Am I on the right track?
these instruments. Investors could either low to medium. Please help me.
purchase them in auctions conducted by the To check if you are investing enough, all the financial goals
RBI or via the RBI managed NDS-OM elec- Given your age profile and risk appetite, and such as daughter’s education, house purchase, child’s mar-
tronic trading system. Interest on these since `1.25 crore of your current corpus is al- riage, and retirement corpus need to be quantified. A sim-
bonds is taxed at the marginal rate of tax ready in market linked instruments, I would sug- ple way to calculate the future requirement for these goals
paid by the assessee. Investors must be gest a 65:35 split in fixed income and equity for is to decide the amount in the present date and then adjust
aware that they may face issues like lack of your overall corpus. As a first step move your it for inflation for the time till that goal. Once you know the
liquidity on rare occasions. While there is an Ulip corpus to equity mutual funds. Mutual funds target amount, investment required per goal can be
implicit guarantee, neither the central gov- are, in general, more efficient, transparent and checked. Here’s an estimate of how much will be generated
ernment nor the RBI provides any explicit liquid compared to Ulips. Split your equity fund from the mentioned investments. Considering 11% CAGR in
or overt guarantee regarding portfolio among large-cap, index and flexi-cap the next 12 years (when your daughter goes to college),
timely payment of interest funds in the ratio of 35:35:30. You can consider your present SIPs and lump sum will generate a sum of `64
and / or principal. the direct plans HDFC Index Sensex, Mirae Asset lakh. If the SIP is continued till retirement, then another `38
Large Cap or Axis Bluechip, and Parag Parikh lakh will be accumulated. With an overall investment of
Jayant R. Pai Flexi Cap or PGIM India Flexi Cap Fund. Allocate `2.5 lakh in stocks (including ESOPs) and current stock
the sale proceeds of `1.5 crore in the following holdings, a corpus of `5.8 crore will be built in 26 years (till
Chief Marketing Officer, fixed income instruments: Invest `15 lakh each retirement) assuming 11% CAGR, while the NPS contribu-
PPFAS Mutual Fund in SCSS in your and your spouse’s name and `9 tion will be close to `1.5 crore assuming 10% returns. Do
lakh in POMIS jointly with your spouse (maxi- ensure that your investments increase with increments in
My wife and I are both 45 and want to retire mum allowed limit for both). This would add up salary. Create a separate bucket to take care of the down
in a year. We have a combined income of to `39 lakh. Invest `50 lakh in FDs of banks of- payment to reduce loan amount while buying a house.
fering highest FD slab of rates 7%-7.5% p.a. to
around `10 lakh per month. Our children’s senior citizens. Opt for the monthly/quarterly Whenever a home loan is taken in future, do reas-
education is already planned for via equity interest payout option as per the product and sess your life cover and, if needed, take an ad-
need. You could consider investing remaining ditional term plan. Always maintain a contin-
mutual fund investments. We have term proceeds—`61 lakh—in HDFC Life New Immedi- gency fund equivalent to one year’s ex-
insurance which we plan to stop. We have a ate Annuity Plan with Joint Life Annuity option penses in a sweep-in FD or liquid fund.
health cover of `25 lakh. We own the house offering 100% annuity to second annuitant with
in which we plan to live. Our retirement cor- or without Return of Purchase Price. Based on Prableen Bajpai
pus consists of EPF of `2.5 crore and equity your age, the annuity should generate a guaran-
teed monthly income of about `33,000-35,000 Founder, FinFix® Research & Analytics
and equity mutual fund investments of per month till the survival of your joint annui-
about `3 crore. We will need `2 lakh per tant. Thus, your overall fixed income allocation I am 44 and invest `50,000 per month in MFs. My two
month in our retirement days. Please sug- goals are my son’s education and building a house. My
(including existing bank FDs) would son is three and I have already bought land. My SIPs are
gest a good way to deploy the corpus. help you generate a monthly in- in Axis Bluechip, DSP Liquid, DSP Dynamic Asset Alloca-
come of `90,000-95,000 per tion, HDFC Large & Midcap, Kotak Flexicap, Mirae Asset
Investment should be allocated across month while your equity Emerging Bluechip, Parag Parekh Flexicap, Parag Parakh
guaranteed government schemes, debt fund portfolio would help Liquid and PGIM India Global Equity Fund. My portfolio
and equity mutual funds. You should re- generate higher returns is worth `16 lakh. How much can I accumulate by 2031?
main invested in EPF as other fixed return over the long term.
instruments offer lower interest rate; and Assuming 12% CAGR, you will accumulate a corpus of `96
withdraw EPF corpus in tranches. With FD Naveen Kukreja lakh over the next nine years. Your current corpus of `16
returns in range of 5-6% and low interest lakh will grow to `44 lakh, hence cumulatively the total
regime, it is advised to remain invested in CEO and Co-Founder, corpus will be `1.4 crore. You may consider switching all
mutual funds with 50:50 mix of hybrid ag- Paisabazaar.com your SIPs to pure equity-oriented funds. You may divide
gressive funds and equity funds, through the total monthly SIP amount equally among HDFC Large
STP route. Emergency fund should be cre- & Mid Cap, Axis Growth Opportunity, Mirae Asset Emerg-
ated of around `30 lakh with investment ing Bluechip, Parag Parikh Flexi Cap, Nippon India Multi
in liquid funds and FDs. Immediate annuity Cap, Kotak Emerging Equity, PGIM India Mid Cap Opportu-
plans also offer attractive annuity options nity and IDFC Sterling Value Fund. This way your portfolio
and generate monthly income. Monthly in- will be diversified across category, geography and AMCs.
come and systematic withdrawal will help Review your portfolio at least once a year
you in generating required income. You and increase the monthly SIP amount
should review your portfolio every 3 years whenever your income increases.
and re-align basis investment eligibility in
Sanjiv Bajaj
schemes like SCSS, PMVVY and
other government schemes. Joint Chairman & MD, Bajaj Capital
Health cover should be in-
creased. Ask our experts

Raj Khosla Have a question for the experts?
[email protected]
Founder and Managing
Director, MyMoneyMantra.com

mutual funds

The Economic Times Wealth May 9-15, 2022 23

Hike SIPs by 10% every year PORTFOLIO
to reach ambitious goals DOCTOR

Aniruddh Mittal is investing for his son’s goals and his retirement. Here’s what the doctor advised: Not many ARINDAM
investors
PORTFOLIO GOALS 1 2 3 know
CHECK-UP whether
CHILD’S EDUCATION: 8 years CHILD’S MARRIAGE: 17 years RETIREMENT INCOME: 19 years they have
Investing in well PRESENT COST: `50 lakh PRESENT COST: `20 lakh PRESENT COST: `1.24 crore invested in
chosen equity funds FUTURE COST: `1.07 crore FUTURE COST: `63 lakh FUTURE COST: `4.48 crore the right
for past 2-3 years. funds and if their
FUND NAME AMOUNT EXISTING RECOMMENDED ACTION NEW SIP fund portfolio is on
All funds are good INVESTED (`) SIP (`) (`) track. The Portfolio
but needs to in- Doctor assesses the
crease investments. Canara Robeco Flexi Cap 67,836 7,500 Continue SIPs in this outperforming flexi-cap fund. 7,500 health of the fund
Increase amount by 10% every year. portfolio, examines the
SIPs must also be schemes and their
hiked 10% every DSP Midcap 36,001 7,500 Continue SIPs in this outstanding mid-cap fund. Hike 7,500 suitability with regard to
year to reach goals. amount by 10% every year. the goals and, if
required, recommends
Portfolio has too 1 Axis Bluechip 59,607 4,500 Continue SIPs in this large-cap fund and hike 7,500 corrective measures. The
many small and amount to `7,500. Increase by 10% every year. advice given is based on
midcap funds. Be the performance of the
ready for volatility. Motilal Oswal Nasdaq 100 FOF 18,903 3,000 Continue SIPs in this overseas fund. Increase SIPs to 7,500 funds, the risk profile of
`7,500 and hike by 10% every year. the investor as well as
his financial goals.
PGIM India Flexicap 1,21,358 5,000 This flexi-cap fund has done well. Hike SIPs to 10,000
`10,000 and increase by 10% every year.

Note from Kotak Flexicap 21,363 3,000 Fund performance is down. Switch to PGIM India 0
the doctor Flexicap to streamline portfolio.

Don’t buy too many Axis Small Cap 9,423 3,000 Continue SIPs in this promising small-cap and 5,000
funds. Just 4-5 funds increase amount to `5,000. Hike SIPs by10% annually.
are enough.
2 Invesco India Midcap 42,145 5,000 Continue SIPs in this stable mid-cap fund. Increase 5,000
amount by 10% every year.

Buy life insurance for Axis Gold Fund 15,672 2,000 These investments in paper gold will act as a hedge 2,000
yourself to safeguard against uncertainty and inflation. Continue investing.
family’s financial future.
PGIM India Midcap Oppn 0 0 Start SIPs of `10,000 in this outstanding mid-cap 10,000
fund. Hike amount by 10% every year.

Review investments 3 Provident Fund and PPF 8,51,533 Continue contributing in the PPF and Provident 28,000
and rebalance at least
once in a year. 18,000 Fund. Start VPF of `10,000 per month. Do not with- Assumptions used
in the calculations
draw before retirement.

Reduce risk when goal NPS 25,800 4,000 Continue contributions to this low-cost scheme. 4,000
is near so that you don’t Increase amount by 5% every year.
miss the target.
TOTAL `12,69,641 , `62,500 The goals can be reached using the mutual `94,000 INFLATION
funds marked in the same colour.

Education For all
expenses other goals
Prune targets to realistic levels
10% 7%

Dinesh Parmar is saving for his daughter’s goals and his retirement. Here’s what the doctor says: RETURNS
Equity funds Debt options
1 2 3 4 5
GOALS 12% 8%
EMERGENCY FUND: DAUGHTER’S DAUGHTER’S POST- DAUGHTER’S RETIREMENT INCOME:
PORTFOLIOS
3 years GRADUATION: 17 yrs GRADUATION: 20 yrs MARRIAGE: 25 years 27 years ANALYSED BY

CURRENT NEED: PRESENT COST: PRESENT COST: PRESENT COST: CURRENT NEED: RAJ KHOSLA,
Managing Director
`7 lakh `3 lakh `4 lakh `8 lakh `1 crore (`50,000 a month) and Founder,
FUTURE NEED: `8.5 lakh FUTURE COST: `15 lakh FUTURE COST: `26 lakh FUTURE COST: `45 lakh FUTURE COST: `6.4 crore MyMoneyMantra

FUND NAME AMOUNT EXISTING RECOMMENDED ACTION PORTFOLIO WRITE
INVESTED (`) SIP (`) CHECK-UP TO US
1 Fixed deposits and savings bank FOR HELP
1,50,000 0 Shift to a liquid fund for better returns and tax efficiency. Start Investing in equity funds
2 Nippon India Small Cap 94,000 SIPs of `15,000. for past three years. If you want your portfolio examined,
81,000 write to [email protected]
3 HDFC Mid-Cap Opportunities 30,500 1,500 Continue SIPs in this outperforming small-cap fund. Hike by 5% Child goals are easy to with “Portfolio Doctor” as the subject.
50,000 every year. achieve with small Mention the following information:
Parag Parikh Flexi Cap increases in SIPs.
4 3,00,000 1,500 Performance has been patchy. Shift to PGIM India Midcap and z Names of the funds you hold.
9,300 hike SIPs by 5% every year. Retirement target of z Current value of the investment.
Gold funds `70,000 per month cut z If you have SIPs running in any
1,28,000 2,000 Continue SIPs in this outperforming fund. Hike amount by 5% to `50,000.
Direct stock investments 0 every year. of them.
Review mutual fund z The financial goals for which you
Kotak NASDAQ 100 FOF `8,42,800 0 Keep investing `1,000 every month to save for daughter's portfolio at least once a
5 marriage. year. Change if any invested.
fund’s performance z How much you need for each
PPF and Provident Fund 0 Keep close eye on the stock in portfolio. Consider shifting to slips.
mutual funds. financial goal.
NPS Reduce risk when goal is z How far away is each goal.
1,500 Continue investing in this US focused fund. Increase SIP by 10% near so that you don’t
TOTAL every year. miss the target.

32,000 Reduce monthly contribution by `15,000 to build emergency
fund and invest in NPS. Don't withdraw before retirement.

0 Start SIPs of `5,000 in this low cost, tax saving option to save
for retirement. Hike by 10% every year.

`38,500

your feedback & more...

24 The Economic Times Wealth May 9-15, 2022

Readers’ response, online and in print, to ET Wealth stories has been enlightening.

We pick some that add information and perspective to our articles from previous issues.

This refers to the cover story, ‘High Answers for the disappearing, the earlier people
inflation: Where to invest now’. small investor internalise the message in the
Our traditional wisdom suggests article, the better it is for their
investing in gold, irrespective of The cover story, ‘High inflation: Where to financial well-being. Negative
inflation or recession. Gold reserves invest now’, addressed questions of ordinary interest rates are here to stay for
in households and with corporates far investors. The story showed how inflation led a long time, and that would have a
surpass government reserves. Global to uncertainty and volatility in the market. devastating impact on the wealth of
equity exposure is highly risky post Inflation is like termite. It erodes the value of the traditional FD/debt/real estate-
pandemic and in the middle of the money both for individuals and the economy. oriented savers.
Russia-Ukraine war. Investments But, surprisingly, inflation has some positive Sanjay Sacheti
should be in gold, property, own effects on sales. People rush to buy cars and
business if any, and equity or mutual gadgets the moment manufacturers announce Excellent article, I can vouch for
funds, in that order. imminent price rise. equity as an asset class that beats
Vinod Johri inflation at all times having invested
Amitava Bhattacharya and remained invested for over a
Sovereign gold bonds give 2.5% decade through multiple cycles.
interest and gains are tax free if held gold in physical form and get cheated by months, inflation has left a hole in many Sudip Roy
till maturity. But the biggest problem is jewellers who tamper with quality and pockets. Our investments must beat
that if at the end of maturity period, gold levy high making charges. Safe keeping inflation, and that cannot happen with This refers to the article, ‘Do you
prices are low then also you are forced of physical gold is another headache. Gold debt-based securities. Equity alone will be need multi-cap funds?’ The article
to sell it. Physical gold coins are better bonds are okay for investment. effective combating inflation. explains the difference between
in this sense because you can hold them Vedantham Sheshashar Manish Rakesh Verma multi-cap and flexi-cap funds.
and sell when market cycle goes up. The difference now is clear. Both
S.S. This refers to the article, ‘The obvious With post retirement lifespan getting kinds of funds will coexist and the
solution to inflation woes’. In the past few longer, and family support systems investor can choose between either
Value of gold remains same. It is value as both have distinctive ways of
of money that depreciates. Investing allocating resources.
in gold is an option. But do not buy Anjum Samel

REALTY Premium Ahmedabad location
The area is home to luxury apartments, standalone houses and high-end commercial complexes.
HOT SPOT

LOCALITY SNAPSHOT Supply by BHK
69%
CG ROAD, AHMEDABAD
22%
CG Road is a premium commercial and residential location in east Ahmedabad 9%
Prominent localities in vicinity include Law Garden, Paldi, Usmanpura and Ambawadi
Hosts mix of luxury apartments, residential houses, commercial complexes by well-known developers 2 BHK 3 BHK 4 BHK
Excellent connectivity to city centre and airport via Chimanlal Girdharlal Road, 120 Feet Ring Road and Netaji Road
Social infrastructure: HCG Hospitals, Nidhi Multispeciality Hospital, Gujarat University, CG Square Mall and Ahmedabad Central Mall Consumer preference
by budget (`)
PRICE RANGE: `4,130-8,100/- psf DISTANCES: SVP Internatioanl Airport: 13 km Railway Station: 6 km NH-228: 3 km
10%
LOCALITY VALUES
2 BHK 26% 27% Below 75 lakh
1,110 sqft Mithakhali 75 lakh-1 crore
132 FNeHe-t22Ri8ng Road Naranpura 17% 1-1.25 crore
`66 Ri1n2g0RFoeaedt Usmanpura Price (`/sqft): 5,000-7,000 20% 1.25-1.5 crore
*Rent (`/month): 20,000-30,000 Above 1.5 crore
lakh (avg) SVP Stadium
CG Road Naranpura Consumer preference
3 BHK Ahmedabad CG Road by saleable area (sf)
2,000 sqft Price (`/sqft): 4,600-7,200
Navrangpura Sabarmati River *Rent (`/month): 18,000-27,000
`1.22 IIM Mithakhali
CG Road Navrangpura 14% 9%
crore (avg)
Gulbai Tekra Law Garden Price (`/sqft): 5,500-8,000 Below 1,500
4 BHK Ambawadi *Rent (`/month): 20,000-35,000 1,500-2,000
2,900 sqft 13% 39% 2,000-2,500
Gulbai Tekra 25% 2,500-3,000
`1.90 Paldi Above 3,000
Price (`/sqft): 5,500-8,000
crore (avg) *Rent (`/month): 18,000-30,000

Note: Map not to scale *3 BHK Rent (INR/month)

Schools 15+ Hospitals 15+ Restaurants 15+ Banks 15+ Grocery Stores 15+ Petrol Pumps 10+ In dia’s No. 1 P ropert y Sit e

The Economic Times Wealth is available at an invitation price of `8/issue. To book your copy, contact your newspaper vendor or call 011 - 39898090; Email: [email protected]; SMS ETWS to 58888

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this, if any omission, inaccuracy or printing errors occur with regard to the data contained in this newspaper, The Economic Times Wealth will not be held Phone: 011-23322000, Fax: 011-23323346 and printed by him at The Times of India Press, 13 & 15/1, Site IV, Industrial Area, Sahibabad, UP. Regd.
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