ICICI Prudential PMS Contra Strategy has celebrated its five-year anniversary. This investment offering from ICICI Prudential Portfolio Management Services takes a contrarian approach by investing in equity stocks that are currently out of favor in the market but are expected to perform well in the long run. The portfolio may also include stocks from sectors with high entry barriers, sectors experiencing consolidation, or companies in special situations.
Launched on September 14, 2018, ICICI Prudential PMS Contra Strategy has reported strong performance over the years. According to a statement, a lump sum investment of Rs 1 crore at the time of inception would have grown to approximately Rs. 2.4 crore by September 14, 2023, with an annualized return of 20%. In comparison, a similar investment in S&P BSE 50 TRI would have yielded an annualized return of 14%, reaching approximately Rs. 1.8 crore.
Anand Shah, Head of PMS & AIF Investments, highlighted the investment framework’s core belief that companies create wealth, not markets.
Over the past five years, the Contra Strategy has primarily focused on manufacturing and related sectors to generate alpha. The statement noted that manufacturing sectors such as metals, industrial products, and auto ancillaries, as well as manufacturing-related sectors like logistics, corporate banks, and utilities, presented attractive investment opportunities with reasonable valuations and strong earnings potential.
Additionally, the strategy’s decision to go underweight on Information Technology (IT), Consumer Goods, and the Pharmaceutical sector contributed to its strong fund performance.
ICICI Prudential PMS Contra Strategy’s success highlights the effectiveness of its contrarian approach and sector-focused investment strategy.
The Unique Identification Authority of India (UIDAI), responsible for India’s Aadhaar digital identification system, has refuted concerns raised by global rating agency Moody’s regarding the reliability of biometric authentication, privacy, and security features of Aadhaar.
UIDAI stated that Moody’s report did not provide any primary or secondary data or research to support the opinions expressed in it and made no attempt to verify the issues raised with the authority.
Moody’s report had expressed concerns about the reliability of biometric technologies, particularly in hot and humid climates, and mentioned service denials for manual laborers. It also suggested that decentralized identity (DID) solutions were being explored as alternatives to centralized ID systems like Aadhaar due to privacy and security vulnerabilities.
UIDAI countered these claims, stating that seeding Aadhaar in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) database did not require biometric authentication. Payments to workers under the scheme are made by directly crediting money to their accounts, bypassing biometric authentication.
UIDAI also emphasized that state-of-the-art security solutions, federated databases, and data encryption at rest and in motion were in place, along with certifications conforming to international security and privacy standards.
Aadhaar has played a crucial role in India’s Direct Benefit Transfer (DBT) schemes, saving the government INR 2.7 trillion by curbing leakages in welfare programs between FY15 and FY22. It is considered the foundational Digital Public Infrastructure (DPI) of India’s digital infrastructure. The recent G20 New Delhi Declaration welcomed the G20 Framework for Systems of Digital Public Infrastructure and India’s plan to create a Global Digital Public Infrastructure Repository (GDPIR), a repository of DPI shared by G20 members and others.
UIDAI’s response seeks to reassure the public and address concerns about Aadhaar’s reliability and security, emphasizing its importance in India’s digital ecosystem.
Leading co-working providers are expanding their offerings to include smaller seat flexi offices in tier 2 and 3 cities across India. These smaller flexi offices, typically ranging from 100 to 450 seats, are being established in cities like Coimbatore, Jaipur, Thiruvananthapuram, Lucknow, Madurai, Gulbarga, Jaisalmer, Nagpur, and small towns in Himachal Pradesh. The goal is to cater to corporate and SME clients who have downsized their office spaces during the pandemic.
Cheaper rents and better investment returns in these locations have driven the growth of flexible workspaces. With hybrid workplaces becoming the norm, companies are focusing on operational expenses (opex) rather than capital expenses (capex). Many of these smaller cities are home to a significant pool of talent in sectors like IT/ITES and BFSI, making them attractive locations for flexible office spaces.
In metro areas, flexi-space offices typically have capacities ranging from 2,500 to 40,000 seats, with rents ranging from Rs 4,000 to Rs 12,000 per seat depending on the location. In smaller towns, rents can be as low as Rs 90 per day to Rs 1,500 per month. Factors such as reverse migration, talent retention, and cost-cutting have contributed to the rise of flexible workspaces in these locations.
Flexible office spaces allow large corporates to reduce commercial rent expenses by 12-15%. While there are few organized players in tier 2 and 3 cities, this presents an opportunity for providers like Upflex. Awfis, another flexible office space provider, has a strong presence in tier 2 and 3 cities with 15 centers. These spaces offer access to high-quality office spaces in Grade A buildings at a fraction of the cost of traditional office rentals.
Large players in the flexible office space sector can accommodate as many as 40,000 seats in Grade A commercial buildings in major metros. In smaller towns, the range is typically between 100 and 400 seats, providing lite-office spaces. Real estate prices in these areas are relatively lower, making it easier for large providers to establish a presence.
According to Manish Agarwal, Senior Managing Director at JLL India, Flexi-office setups also serve as socializing points for employees in smaller cities who no longer need to travel to other cities for work.
Flexible office space providers offer fitted offices, high-speed internet, IT support, on-demand conference facilities, and even convert rentals into EMIs, providing higher rental yields and profit margins.
A report by Vestian predicts that flexible office space stock will increase by 52% by 2025 to reach 81 million sq ft due to strong demand from corporates. Flexible office space operators currently have 53.4 million sq ft in operations, with over 760,000 seats available across more than 1,000 centers. The flexible office sector is expected to constitute around 25% of overall office space absorption by 2025.
The Omaxe Group, a prominent real estate developer in the National Capital Region (NCR), has secured over 5 acres of prime land at Gumar Mandi Fountain Chowk in Ludhiana through a competitive bidding process conducted by the Rail Land Development Authority (RLDA).
The acquisition was finalized at a bidding amount of Rs 220 crore, highlighting Omaxe Group’s commitment to expanding its presence in strategically located areas connected to the national capital.
This land is located just a 5-minute drive from the railway station and bus stand, adjacent to Gumarmandi, and is situated in the heart of Ludhiana. Omaxe Group plans to utilize the acquired land for both residential and commercial development, offering a range of investment options. This development is expected to bolster the local real estate market.
Jatin Goel, Executive Director of Omaxe Group, expressed his excitement about the acquisition, emphasizing the company’s vision to create exceptional living and commercial spaces that transform the cityscape. This acquisition aligns with Omaxe Group’s strategy to strengthen its presence in key markets and contribute to the growth of Ludhiana’s real estate sector.
The Rail Land Development Authority (RLDA) is a statutory authority established by the Ministry of Railways in India to generate non-fare revenue from vacant railway land through its development and monetization.
Over the past decade, India has witnessed remarkable growth in the number of investors entering the mutual fund industry. As per data from AMFI (Association of Mutual Funds in India), the Assets Under Management (AUM) of the Indian Mutual Fund Industry has surged sixfold from Rs 7.66 trillion as of August 31, 2013, to Rs 46.63 trillion as of August 31, 2023. Additionally, the total number of folios as of August 31, 2023, reached 15.42 crore.
Despite this tremendous growth potential in the mutual fund industry in India, a significant number of investors are unaware of a crucial tool that can help them avoid losses— the Risk-O-Meter. This tool aids in understanding a fund’s risk, enabling investors to make informed decisions based on their risk appetites.
However, a survey conducted by Axis Mutual Fund found that 61% of respondents were not aware of what the Risk-O-Meter indicates. Furthermore, only 16% of those aware of the Risk-O-Meter and its indication of fund risk claimed to check it before making an investment. However, on a more positive note, 66% of investors expressed interest in understanding more about the Risk-O-Meter and its significance in making informed investment decisions.
The survey of over 1700 Axis Mutual Fund investors across India revealed several interesting trends:
Investors are increasingly recognizing the importance of investing their savings, buoyed by awareness campaigns by regulators, fund houses, and distributors.
Nevertheless, 59% of investors still consider past performance as a key criterion for investing in mutual funds.
Investors often tend to redeem their investments influenced by market noise, even though they understand the significance of long-term investing and compounding.
Data from AMFI indicates that 22.2% of equity investors remain invested for 12-24 months, with a total of 48.7% of equity investors redeeming their portfolios within two years or less.
While 89% of investors believe that understanding their “risk appetite” plays a role in choosing the right mutual fund, only 27% of investors said they actually considered their risk appetite before investing.
The survey revealed that 53% of investors are not very confident in assessing their personal risk, emphasizing the importance of considering individual risk profiles, financial goals, and needs.
The survey findings underscore the need to educate and inform investors about the concepts of risk, risk appetite, and tools like the Risk-O-Meter to make well-informed investment decisions. Ashish Gupta, CIO of Axis AMC, noted the importance of discussing risk and risk appetite, while B. Gopkumar, MD & CEO of Axis AMC, emphasized the industry’s role in enabling investors to make informed investment choices and assess associated risks.
Bandhan Mutual Fund has unveiled the Bandhan Retirement Fund, a new offering designed to assist investors in achieving their retirement objectives by aiming for long-term capital appreciation through a combination of equity, debt, and other instruments. The fund’s dynamic asset allocation strategy is intended to provide investors with exposure to potential equity market gains while safeguarding against potential downturns during market declines.
The New Fund Offer for the Bandhan Retirement Fund is set to open on September 28, 2023, and will close on October 12, 2023. Investors can access the fund through licensed mutual fund distributors, online platforms, or directly via the Bandhan Mutual Fund website.
Vishal Kapoor, CEO of Bandhan AMC Limited (Bandhan AMC), highlighted the importance of planning for retirement, especially given factors like rising life expectancy, increasing living costs, and surging healthcare inflation. He explained that conservative investors often struggle to beat inflation, potentially leading to insufficient funds to cover post-retirement expenses. Mutual funds can offer a flexible retirement planning option, allowing investors to use systematic investment plans (SIPs) and lump-sum investments to benefit from relatively higher growth potential.
The Bandhan Retirement Fund will adopt a model-based approach for dynamic asset allocation between equity and debt, designed to participate in market upswings while providing a cushion against market downturns. The fund also offers a systematic withdrawal plan (SWP) option to meet investors’ cash flow needs post-retirement. To encourage long-term investment and take advantage of compounding benefits, the fund will have a lock-in period of five years.
The equity component of the retirement fund will focus on high-quality companies with strong long-term growth potential and reasonable valuations. It will maintain a minimum equity holding of 65% and use hedged equity allocation to ensure eligibility for equity taxation. The debt portfolio will be diversified across various quality instruments, including government securities (GSec), state development loans (SDL), corporate bonds, and money market instruments.
Poonawalla Fincorp, a non-banking financial company (NBFC) under the Cyrus Poonawalla group, has secured approval from the Reserve Bank of India (RBI) to introduce a co-branded credit card in collaboration with IndusInd Bank.
The company plans to roll out this credit card within the next three months, according to a statement by Poonawalla Fincorp.
This strategic partnership is expected to bring about a new era of adaptable and versatile retail credit solutions.
Recent data from the RBI reveals a concerning trend of declining household savings among Indians, primarily attributed to rising inflation. Many individuals find themselves tapping into their savings to meet daily expenses. Emphasizing the importance of savings cannot be overstated, as they serve as a crucial means to manage current expenditures and prepare for unforeseen emergencies. Moreover, savings play a pivotal role in achieving future objectives such as education, marriage, and major purchases like homes and cars.
To safeguard your financial well-being and bolster your household savings, it’s imperative to implement effective investment strategies geared towards expense reduction, income augmentation, and prudent financial choices. An essential first step is to educate yourself about personal finance, including investment options, tax-saving tactics, and financial planning. Here are valuable tips to enhance your household savings:
Expense Tracking: Initiate the process by meticulously tracking your income and expenditures. Develop a monthly budget that clearly delineates your income sources and all recurring expenses. This systematic approach will illuminate areas where cost-cutting is feasible.
Trim Unnecessary Expenses: While not all expenses are frivolous, excessive and frequent spending on non-essential items can strain your financial situation. Scrutinize your spending habits, and identify areas for reduction, such as dining out less, curtailing impulse purchases, and eliminating superfluous subscriptions or memberships.
Automate Savings: Cultivate the habit of allocating a significant portion of your income into savings. Establish automated transfers to a dedicated savings account as soon as your salary is credited. This ensures that you set aside a portion of your earnings before the temptation arises to spend it.
Emergency Fund: Building an emergency fund is paramount. Aim to accumulate a reserve that can cover at least three to six months’ worth of living expenses. Such a fund acts as a financial buffer, shielding your savings from being depleted or incurring debt during unforeseen financial crises.
Invest Wisely: Consider channeling your savings into investment vehicles that offer superior returns compared to conventional savings accounts. Options like fixed deposits, mutual funds, or the stock market may provide better returns, but it’s vital to comprehend the associated risks.
Debt Management: High-interest debts can erode your savings. Prioritize settling credit card balances and high-interest loans promptly to minimize interest payments.
Income Augmentation: Explore opportunities to boost your household income. This may involve taking on part-time employment, engaging in freelancing, or initiating a small side business. Supplemental income can significantly bolster your savings.
Windfall Savings: Whenever you receive unexpected funds, such as bonuses, tax refunds, or gifts, contemplate allocating a portion of these windfalls to savings rather than succumbing to increased expenditures.
Resist Impulsive Purchases: Adopt a practice of deferred gratification and refrain from impulsive buying. When you desire an item, exercise restraint and give it some time before making the purchase to discern whether it’s a genuine necessity.
Adhil Shetty, CEO of Bankbazaar.com, advises, “Regularly review your budget and financial objectives. Adjust your savings and spending strategies as necessary to stay on course. Ensure you possess adequate insurance coverage to safeguard against unforeseen medical expenses, accidents, or property damage. This precautionary measure can prevent significant, unplanned expenses that deplete your savings.”
Navigating the complex terrain of financial markets and investment options has become increasingly challenging. Investors seeking quick returns are confronted with a plethora of choices. In this intricate landscape, real estate stands out as an investment avenue that offers relatively low risks for short-term ventures. Unlike other investment opportunities, real estate has a track record of stability, reliable returns, and reduced volatility.
In this article, we will explore the reasons behind real estate’s reputation as a low-risk option for short-term investments.
Tangible Asset and Intrinsic Value: Real estate’s classification as a low-risk investment is largely due to its tangible nature. Unlike stocks, bonds, or derivatives, real estate represents a physical asset with inherent intrinsic value. Land and properties serve practical purposes such as residential housing, office spaces, or commercial establishments, making them valuable beyond their financial profitability. This intrinsic value acts as a safeguard, mitigating the impact of market fluctuations and providing stability to real estate investments.
Market Stability and Predictability: The real estate market is known for its stability and predictability, making it an attractive choice for short-term investments. Unlike the stock market, which can be influenced by speculation and sentiment, real estate valuations depend on tangible factors like location, supply and demand dynamics, and local economic conditions. These factors change at a slower pace, allowing investors to make more informed decisions and reducing the risk of sudden and significant depreciation.
Limited Short-Term Volatility: Real estate values are less susceptible to short-term volatility compared to the stock market, where prices can fluctuate rapidly and dramatically. The illiquid nature of real estate transactions, which can hinder short-term speculative trading, contributes to this stability and results in a more gradual price trajectory.
Rental Income Generation: Real estate offers the advantage of generating ongoing income through rental payments. This consistent rental income provides a steady cash flow for investors, helping to offset expenses like mortgage payments, property management, and maintenance costs. This reliable income stream serves as a protective cushion during market downturns and uncertain economic periods, making real estate investments appealing to those seeking steady and dependable income in the short term.
Diversification and Risk Management: Diversification is a crucial strategy for managing investment risk. Real estate allows investors to diversify their portfolios beyond traditional financial assets, spreading risk across various sectors. By incorporating real estate into a short-term investment strategy, investors can reduce their exposure to the inherent volatility of stock and bond markets.
Real estate emerges as a practical and low-risk option for short-term investment due to its tangible nature, market stability, rental income potential, diversification benefits, and limited short-term volatility. While no investment is entirely risk-free, real estate provides a level of confidence and predictability that appeals to those seeking quick returns while avoiding significant market fluctuations. As with any investment endeavor, thorough research, careful analysis, and a deep understanding of local market conditions are essential for making informed decisions and maximizing returns from short-term real estate investments.
The Pension Fund Regulatory and Development Authority (PFRDA) has introduced the NPS Tier II Default Scheme exclusively for Government Sector subscribers. This new scheme offers an additional investment option to Government sector subscribers alongside the existing Scheme E/Scheme C/Scheme G investment options in NPS Tier II.
The NPS Tier II Default Scheme has been designed to provide flexibility and convenience, catering to the unique requirements of Government sector subscribers.
In a circular dated September 22, 2023, PFRDA specified that Government Sector Subscribers can continue with the Default Scheme under Tier II even when they switch their account to another sector.
Here are some benefits of the NPS Tier II account as per the circular:
Greater Flexibility: There is no mandatory annual contribution requirement for Tier II, allowing subscribers to open the account with a minimum contribution. There is no maximum limit on the amount that can be contributed under Tier II.
Easy Withdrawals: Tier II account holders can withdraw funds at any time, providing a convenient way to access savings when needed.
Seamless Transfer: Subscribers can transfer their funds to the primary pension account (Tier I) at any point. This feature ensures that investments remain adaptable to changing needs.
No Minimum Balance: There is no obligation to maintain a minimum balance in the NPS Tier II account, offering the freedom to contribute as desired.
Separate Nomination Facility: Subscribers have the option to nominate beneficiaries for Tier II accounts separately if required.
Default Investment Scheme: The Default Investment Scheme available in Tier I has been extended to Tier II accounts for Government Sector Subscribers. This simplifies the investment process, similar to Tier I, without requiring active selection of investment schemes or PFs.
Easy Onboarding: To join Tier II and opt for the Default Scheme, Subscribers need to provide consent or a request to the CRA through the associated nodal office. The CRA portal offers online and electronic modes of consent for Subscribers’ convenience.
For Government Sector Subscribers associated with Protean CRA, the account activation process for NPS Tier II can be completed on the Protean e-NPS website. If a subscriber already has Tier II and wishes to opt for the default scheme in Tier II, they can do so through the Scheme Preference Change option available in their login. The facility of Tier II under the default choice will soon be made available to subscribers associated with KFin CRA as well.
