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» how to invest 25 lakhs at age of 59 and 35 (porfolio management)
how to invest 25 lakhs at age of 59 and 35 (porfolio management)
This is a research report on
how to invest 25 lakhs at age of 59 and 35 (porfolio management)
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1646 views, 0 comments, Last Update: Aug 3, 2012.
PORTFOLIOS MANAGEMENT OF MR. A
There are different investment avenues are available for Mr. A such as fixed deposits, post offices schemes, pension plans, life insurance policies, gold ETFs etc. as Mr. A’s age is 59 and is on the verge of retirement.Therefore he will not be able to take more risk.so I could him to invest more of his money in fixed plans which are risk free which could generate fixed income in his olden days in future. There are many income plans are available to generate income after retirement such as pension plans of insurance companies i.e LIC’s pension plans, HDFC’s pension plans, etc. The following are the divisions of MR.A for 25 Lakhs. 1.) Fixed deposits of banks. 2.) Post offices schemes. 3.) Pension plans. 4.) Life insurance policy
A Fixed Deposit (also known as FD) is a financial instrument provided by Indian banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. The account which is opened for a particular fixed period by depositing particular amount of money is known as fixed deposits. Benefits of FDs 1.) A fixed deposit encourages savings habit for a longer period of time. 2.) FD’s enables the depositors to earn a high interest rate. 3.) On maturity the amount can be used to make purchases of assets. 4.) The depositor can get loan easily against the deposits.
Foreign Banks in India
BANK NAME / DURATION Barclays Citibank DBS Deutsche Bank HSBC Scotia Bank Standard Charted The Royal Bank of Scotland 1 - 2yrs 8.75 9.00 8.75 7.25 9.00 8.25 8.00 8.25 2 - 3yrs 9.25 8.75 9.00 7.50 8.10 8.25 8.25 7.75 3 - 5yrs 9.00 8.75 9.00 7.50 7.50 8.25 8.25 7.75
Indian Banks - Public Sector
BANK NAME / DURATION Allahabad Bank Andhra Bank Bank of Baroda Bank of India Bank of Maharashtra Canara Bank Central Bank of India Corporation Bank Dena Bank IDBI Bank Indian Bank Indian Overseas Bank Oriental Bank of Commerce 1 - 2yrs 9.00 9.40 9.00 9.00 9.30 9.50 9.25 9.50 9.60 9.50 9.25 9.25 9.60 2 - 3yrs 9.00 9.40 9.00 9.00 9.30 9.25 9.00 9.50 9.25 9.50 9.25 9.25 9.25 3 - 5yrs 8.75 9.00 8.50 8.50 9.00 9.00 9.05 9.25 9.25 9.50 9.00 9.25 9.25
Punjab & Sind Bank Punjab National Bank State Bank of Bikaner&Jaipur State Bank of Hyderabad State Bank of India State Bank of Mysore State Bank of Patiala State Bank of Travancore Syndicate Bank UCO Bank Union Bank of India United Bank of India Vijaya Bank
9.60 9.25 9.25 9.40 9.25 9.50 9.50 9.50 9.55 9.50 9.25 9.25 9.25
9.25 9.25 9.25 9.25 9.25 9.25 9.25 9.50 9.50 9.25 9.25 9.25 9.35
9.50 9.25 9.50 9.25 9.25 9.25 9.25 9.50 9.25 9.25 9.25 9.35 9.00
Indian Banks - Private Sector
BANK NAME / DURATION 1 year < 2 years 2 years < 3 years 3 years < 5 years Axis Bank City Union Bank Development Credit Bank HDFC Bank ICICI Bank IndusInd Bank ING Vysya Bank Karnataka Bank Kotak Bank Tamilnad Mercantile Bank The Catholic Syrian Bank The Dhanalakshmi Bank The Federal Bank The J & K Bank The Karur Vysya Bank The Lakshmi Vilas Bank The South Indian Bank Yes Bank 9.25 10.00 8.00 9.00 8.25 9.00 9.50 9.75 9.25 10.25 9.50 9.00 9.80 9.25 10.00 10.50 9.75 9.25 8.50 9.75 8.25 9.25 8.50 8.75 9.25 9.50 9.25 9.75 9.75 9.00 9.50 9.50 9.75 9.75 9.25 8.75 8.50 9.75 8.50 8.25 8.75 8.75 9.00 9.50 9.25 9.75 9.50 8.75 9.25 9.00 9.50 9.50 9.25 8.75
So, I could recommend him to invest the money in FD’s for short term as well as for long terms. The amount that the investor should invest in FD’s is 8, 00,000 A.) 6,00,000 for short term (1-2 yrs.’) B.) 2, 00,000 for long term (3-5yrs). The bank in which MR.A has to invest is Lakshmi vilas bank (private bank), Dena bank (public bank), or Citi bank(foreign bank) for short term (1-2 yrs.).Because it gives the highest returns.and for long terms (3-5 yrs.) that is city union bank, IDBI bank and Barclays.
The post office operates as financial institutions. It collects small savings of the people through savings bank accounts facility. Postal savings bank schemes were popular in India for a long period as banking facilited were limited. Postal schemes provide the individual with stable return, security and safety of money. Indian post office fixed deposit interest rates
? ? ? ? ? ?
The interest rate for a fixed deposit of one year is 7.5% per year at Indian post office. The interest rate for a fixed deposit of two year is 8% per year at Indian post office. Minimum and maximum deposit The minimum amount should be rs.200 in order to open a fixed deposit account. There is no limit for maximum amount. But note that the amount deposited should be multiple of 200. So, I could recommend him to invest 5, 00,000 in pot offices schemes.
Pension plans are those plans which provide regular income after the retirement to the individual .There are different companies which
provides the pension plan such as LIC, SBI life insurance, MAX New YORK Life insurance etc.
SBI Life - Lifelong Pension Plus
Key features You have complete freedom to avail of a Pure Pension option or get the added advantage of insurance protection. Choice of Add on Covers ,thus meeting your additional requirements at a nominal cost •Term cover •Total Permanent Disability(TPD) cover due to •Accident OR •Accident and Sickness ? Complete Transparency: You will know how your premiums are growing each step of the way. At the end of each financial year, the fund will be credited with investment income based on the investment return earned. ? Guaranteed Additions of 10% of Annual Premium on 15th policy anniversary & 10% of Annual Premium on every 5th policy anniversary thereafter in case of Regular Premium policy whereas for Single Premium policy, 1% of Single Premium on 15th policy anniversary & 1% of Single Premium on every 5th policy anniversary thereafter. ? Choose Single or Regular payment, as per your need. ? Option to Prepone or Postpone the Vesting Age
Age at Entry* Age at Maturity/Vesting Policy Term Premium Modes Annualized Premium Amounts (X 100)
Min: 18 years Minimum: 40 years Minimum : 5 years
Max: 65 years Maximum: 70 years Maximum : 40 years
Yearly / Half-yearly / Quarterly / Monthly/Single Min Regular Premium 7,500 Single Premium 50,000 Max No limit No limit Rs
Additional Contribution Amount (in x100) Guaranteed Additions**
Min Rs. 2,000 Max: No Limit Regular Premium: 10% of the Annual Premium on 15th policy anniversary and 10% of Annual Premium on every 5th policy anniversary thereafter. For Single Premium: 1% of the single premium on 15th policy anniversary and 1% of single premium on every 5th policy anniversary thereafter.
maturity/vesting ? Maturity Benefit: The fund value payable on can be utilized as follows: •Purchase Annuity Plan for the entire amount. •Commute up to one third of Fund Value as lump sum and the balance can be used for the purchase of annuity. ? Death Benefit: In the unfortunate event of death, the accumulated fund value will be paid to the nominee or legal heir. Term cover sum assured if opted for is also payable and the policy terminates thereafter. ? Add-on Cover Benefits: •Term Cover: In the event of death when this benefit is in force (before the life assured completes 65 years of age or during the benefit term if there is no unpaid premium), the nominee would be paid an
amount equal to benefit Sum Assured. •Total Permanent Disability Cover (Accident): If the policyholder has taken this cover and during the tenure of Policy in the event the insured becomes incapacitated and as a result not able to earn an income from any work, occupation or profession for the rest of his/her life, then the sum assured will be paid, •Total Permanent Disability Cover (Accident & Sickness): This cover option benefit is payable when. If the policyholder has taken this cover, then in case of a state of total, permanent and irreversible disability exists as a result of an accident or disease and the life insured is rendered permanently incapable of earning an income from any occupation whatsoever, the sum assured will be paid. Please Note: Either of the Total Permanent Disability (TPD) covers can only be availed if Term Cover has been opted. The amount that MR.A should invest is Rs.10,00,000 in pension plans of SBI lifelife long pension plans
Life insurance policy
Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary sum of money (the "benefits") upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment. The policy holder typically pays a premium, either regularly or as a lump sum. Other expenses (such as funeral expenses) are also sometimes included in the premium. The advantage for the policy owner is "peace of mind", in knowing that the death of the insured person will not result in financial hardship for loved ones. Life policies are legal contracts and the terms of the contract describe the limitations of the insured events. Specific exclusions are often written into the
contract to limit the liability of the insurer; common examples are claims relating to suicide, fraud, war, riot and civil commotion. Life-based contracts tend to fall into two major categories:
Protection policies – designed to provide a benefit in the event of specified event, typically a lump sum payment. A common form of this design is term insurance. Investment policies – where the main objective is to facilitate the growth of capital by regular or single premiums. Common forms (in the US) are whole life, universal life and variable life policies.
SBI Life - Shubh Nivesh
Introduction: SBI Life - Shubh Nivesh is an Endowment product with an option of Whole Life coverage. The basic purpose is to provide Savings, Income and Insurance Cover to you and your family. Not only you can save regularly for your future but you also have the flexibility to receive the maturity amount as a lump sum or as a regular income for a chosen period, depending upon your needs. Key Features: • A unique Savings cum Insurance Plan with the flexibility of Whole Life option as an add-on • Triple benefits of Wealth Creation, Regular Income and Insurance Cover under a single plan • Convenience of premium payment options - Single Premium and
Regular Premium • Comprehensive risk coverage through 3 Riders: • SBI Life - Preferred Term Rider (UIN:111B014V01) • SBI Life - Accidental Death Benefit Rider (UIN:111B015V01) • SBI Life - Accidental Total & Permanent Disability Rider (UIN:111B016V01) • Option to receive the Basic Sum Assured at regular interval over a stipulated time period of 5/10/15/20 years. • Tax benefits as per prevailing norms under the Income Tax Act, 1961 How does it work? SBI Life – Shubh Nivesh has two options: Endowment Assurance: The base plan is a traditional endowment plan with simple reversionary bonuses which accrue till the end of the endowment term. The sum assured with all accrued bonuses will be paid on death during the endowment term or survival till the end of the endowment term. Whole Life Endowment: The policyholder has to opt for the Whole Life Endowment option at the proposal stage itself, wherein the sum assured along with the accrued bonus till the end of the endowment term will be paid to the policyholder, and an amount equal to the basic sum assured will be paid on the life assured attaining 100 years of age or on the death of the life assured, if earlier. Benefits: • Maturity Benefit: Depending upon the plan option chosen: • Endowment Assurance (i.e. if Whole Life option is not taken): • After completion of endowment term, the Basic Sum Assured + vested Simple Reversionary Bonus is paid • If Deferred Maturity Payment option has been chosen, the accrued bonus will be paid on the date of maturity and the policyholder
may choose to receive the sum assured in regular installments over the next 5/10/15/20 years. • Whole Life Endowment (i.e. Whole Life option is taken): • After completion of endowment term the Basic Sum Assured + vested Simple Reversionary Bonus is paid. • If, Deferred Maturity Payment option has been chosen, the accrued bonus will be paid on the date of maturity and the policyholder may choose to receive the sum assured in regular installments over the next 5/10/15/20 years. • An amount equal to the basic sum assured will be paid on the life assured attaining 100 years of age. • Death Benefit: In the unfortunate death of the Life Assured, depending upon the plan option chosen: • Endowment Assurance (i.e. if Whole Life option is not taken): • Death before the completion of Endowment term: Sum Assured + Simple Reversionary Bonus (if any) is paid to the nominee • Deferred Maturity Payment Option has been availed and death happens after the completion of Endowment term: The Balance amount of the Deferred Maturity Payment Option, if any would continue to be paid to the legal heirs till the end of the stipulated period as chosen • Whole Life Endowment (i.e. if Whole Life option is taken) : • Death before the completion of Endowment term: • Sum Assured + Simple Reversionary Bonus (if any) is paid to the nominee • Death after the completion of the endowment term up to 100 years of age: • Sum Assured under the Whole Life coverage is paid to the nominee. • If deferred Maturity Payment Option has been availed and death
happens after the completion of Endowment term but before the receipt of the final installment under the deferred payment option, the basic sum assured under the Whole Life coverage is paid to the nominee and the balance amount of the Deferred Maturity Payment Option, if any would continue to be paid to the nominee till the end of the stipulated period as chosen • Other Benefits • Deferred Maturity Payment Option: You have the option to avail the sum assured as regular payouts over a stipulated period of 5/10/15/20 years. The amount of regular income payable will be quoted based on the rates available at that time
Shubh Nivesh at a Glance:
Minimum Entry Age Maturity Age Policy Term Sum Assured 18 years 23 years 5 years Rs.75,000 Maximum 60 years 65 years 30 years No limit
MR.A’s portfolios (25,00,000)
Fixed deposits of banks Post office schemes Pension plans Life insurance policy
Amount 8,00,000 5,00,000 10,00,000 2,00,000
% of assets
32% 20% 40% 8%
PORTFOLIOS MANAGEMENT OF MR. B
Mr. B has the wide scope to maximum returns from 25 lakhs. There are different investments avenues are available such as shares, mutual funds, NCD’s etc. As he is younger and has the ability to take more risk because he has 25 years for retirement and to make profits from investment compared to Mr. A The following are the division of investment for MR.B
1.) 2.) 3.) 4.)
Shares Mutual fund Real estates NCD’s
Joint stock companies collect their long term/fixed capital by issuing shares (equity& preference).This is called stock financing. Shares constitute the ownership securities and are popular among the investing class. Investment in shares is risky as well as profitable. Public invest in blue chips shares which are financially sound companies shares. They get returns in the form of dividend, capital appreciation etc.
1.)LIC housing finance
(LICHF) is one of the largest housing finance companies in India promoted by LIC. The main objective of the company is to provide long-term finance to individuals for purchase/reconstruction of new/existing flats. We are positive on the company owing to the fundamental improvement in earnings from FY13E onwards benefiting from re-pricing and higher developer loan build up. The company’s net profit is likely to grow at 29.9% CAGR over FY12-14E. Valuations LIC Housing operates in the mortgage financing business where growth and asset quality have proven to be healthy in the last few years. LIC Housing is one of the top players in this mortgage market with a 10% market share. Driven by strong disbursement and focus on asset quality, LIC Housing is well positioned to deliver sustainable and profitable growth. Moreover, the company has already proved its worth by reporting an excellent track record of profitability and building up a healthy balance sheet.Healthy asset quality and prudent provisioning policy makes LIC Housing better placed compared to its peers in the housing financing space. Going forward with improvement in the company’s operating performance, the return ratios are set to improve. We believe that the current valuations of 2.06x FY13E and 1.72x FY14E P/BV are attractive. MARKET CAP (RS CR) 12,578.73
P/E 14.20 BOOK VALUE (RS) 112.59 DIV (%) 180.00 INDUSTRY P/E 21.04 % EPS 17.55 DIV YIELD.(%) 1.44 FACE VALUE (RS) 2.00
Current price = 249 Target price = 310 Shares = 200 Amount invested = 49800
ITC's 1QFY13 results were in line with Adj PAT growth of 20.2% at INR16b. ITC has posted 12th consecutive quarter of 20%+ PAT growth. Cigarette volume growth at ~1.5%. Margins expanded 260bp YoY on account of price increase, reduction in staff costs and other expenditure. FMCG losses declined to INR388m; margin improved despite increased pace of new launches. Revenue traction was strong at 23% led by healthy volume growth and off take across categories. We note that despite series of tax hikes, ITC's performance in cigarettes remains robust and displays pricing power.The company has again delivered 20%+ EBIT growth in cigarettes with 260bp EBIT margin expansion. We remain positive on the long term opportunity in ITC due to sustainable volume growth and strong pricing power in cigarette business - ITC has posted 15% cigarette EBIT CAGR since 2004 despite several tax shocks during the period. We are factoring 2% volume growth in cigarettes for FY13; we estimate 15.3% EBIT CAGR and 17% PAT CAGR over FY12-14. The stock trades at 26.9x FY13E and 22.8x FY14E EPS.We remain positive on the long term opportunity in ITC due to sustainable volume growth and strong pricing power in cigarette business - ITC has posted 15% cigarette EBIT CAGR since 2004 despite several tax shocks during the period. We are factoring 2% volume growth in cigarettes for FY13; we estimate 15.3% EBIT CAGR and 17% PAT CAGR over FY12-14. The stock trades at 26.9x FY13E and 22.8x FY14E EPS.
MARKET CAP (RS CR) 199,273.12 P/E 30.99 BOOK VALUE (RS) 23.92 DIV (%) 450.00% INDUSTRY P/E 31.63 EPS 8.21 PRICE/BOOK 10.64 DIV YIELD.1.77% FACE VALUE (RS) 1.00
Current price = 254.40 Target price =300 Shares = 200 Total invested = 50880
3.) AMBUJA CEMENT
Ambuja Cements' 2QCY12 performance is above estimates with EBITDA of INR7.2b driven by above estimated realizations and in-line cost. Key highlights: Volumes grew 6.5% YoY (-9% QoQ) to 5.63MT clinker. Realization improved by 7% QoQ (10.7% YoY) to INR4, 556/ton (v/s est. INR4, 380/ton). Net sales improved by 18% YoY (-3% QoQ) to INR25.7b (v/s est INR25.5b). EBITDA/ton improved by ~INR80 QoQ to INR1,283 in 1QCY12 (v/s est INR1,138). Costs were largely in-line with estimates, as higher than freight and other expenses were offset by lower than estimated fuel cost. EBITDA grew 23% YoY (-3% QoQ) to INR7.2b (v/s est INR6.6b) and margins were flat QoQ (+30bp YoY) at 28.2% (v/s est 26%). Adj PAT grew 35% YoY (-8% QoQ) to INR4.7b (v/s est INR4.3b). The board has announced interim dividend of INR1.4/sh (v/s INR3.2/sh for CY11)." We are upgrading our EPS for CY12 by 8% to INR11.7 and CY13 EPS by 5% to INR13.3, to factor in higher than estimated realizations. We are factoring in volume CAGR of 9.2% (v/s 11% earlier) in CY12-13. We are modeling in realization improvement of ~INR21/bag in CY12 (~INR7/bag lower than 2QCY12 level) and INR10/bag in CY13. The stock trades at 13.5x CY13E EPS, 7.5x EV/EBITDA and USD150/ton. MARKET CAP (RS CR) 199,273.12 P/E 30.99 BOOK VALUE (RS) 23.92 DIV 450.00% INDUSTRY P/E 31.63 EPS 8.21 P/C 27.96 PRICE/BOOK 10.64 DIV YIELD 1.77% FACE VALUE (RS) 1.00 Current price = 180.50 Target price = 210 Shares = 200 Invested = 36,100
HDFC Bank’s advances have once again grown steadily by 21.6% yoy to Rs.2,13,300 crore with retail loans growing 33% yoy to Rs. 1,11,900 crore, while corporate loans grew by 10.7% yoy (15% qoq) to Rs 1,01,500 crore. The corporate loan book has looked up after many quarters of muted growth and the revenue share of this segment has increased by 240 bps to 47.6%. Growth in the deposits was exemplary at 22% (with deposits rising to Rs 2, 57, 500 crore) with strong growth in term deposits (29% yoy to Rs 1, 39,200 crore) leading to a 244 bps dip in CASA to 46.0% (although CASA was up 14.2% incrementally). The sharp growth in term deposits has been due to strong NRE flows. The bank added 430 new branches and this has enabled it to withstand competition from peers who have been offering higher savings rates post de-regulation. NII at Rs 3,484.1 crore (+ 22.3% yoy) was driven by strong loan growth, stable NIMs of 4.3% (+10 bps) and high CD ratio. Yield on assets were up 35 bps qoq to a healthy 11.9%. The big surprise was the sharp spurt in other income by 37% yoy to Rs 15,295 crore with fee income growing by a strong 24% yoy driven largely by the retail segment. Compared to last year’s loss of Rs 41.3 crore, trading gains stood at a healthy Rs 66.5 crore while currency gains were higher at Rs 320 crore. Cost to income ratio was flat at 48.5%. We expect the cost to income ratio to be higher in the near term as full operational costs of new branches are recognised. Asset quality continues to remain comfortable with both Gross and net NPLs at 1.0 and 0.2% respectively. Restructured loans constitute 0.3% of gross advances. Without inclusion of Q1FY13 PAT, HDFC Bank remains adequately capitalized at 15.5% (100 bps qoq) with Tier I CAR is at 10.9%.” HDFC Bank has reported a strong performance which was marked by strong credit and deposit growth, stable NIMs, aggressive network expansion and steady asset quality and margin accretion. The strong growth in advances seems to suggest that the bank should be able to grow its loan book at a healthy +22% over FY1314. MARKET CAP (RS CR) 137,644.59 P/E 25.03 BOOK VALUE (RS) 127.03 DIV (%) 215.00% INDUSTRY P/E 10.17 EPS 23.34 P/C 22.78
PRICE/BOOK 4.60 DIV YIELD.(%) 0.74% FACE VALUE (RS) 2.00 Current price = 584.25 Target price = 610 Shares = 200 Invested = RS. 116,850
Infosys reported one of the sharpest declines in realization, since the Lehman crisis. The realization dip in Q1FY13 was attributed to cross-currency (0.7%), revenue writeback (0.9%) and portfolio shift (~0.4%). On a like-to-like basis, pricing declined by ~1.7% QoQ compared to TCS’ 1.06% QoQ. We expect weakness in pricing to persist due to: 1) Aggressive marketing to grab the market share 2) Commoditized businesses have no nuances to offer to clients. However, the pricing cut may or may not always be accompanied by volume growth. Attributing realization dip to one particular reason is tough as there are multiple moving parts to its calculation. However, different reasons for pricing decline could impact volume growth differently. Infosys’ management highlighted vendor consolidation as one of the key trends in the market. The process of vendor consolidation is generally accompanied by pricing discount to grab market share from competition. The vendor consolidation process impacts the overall portfolio pricing; however, it is also accompanied by volume growth. We see this as one of the possible outcomes of Infosys’ current pricing discount. Infosys’ portfolio is geared towards a discretionary spend, which is currently witnessing weakness. As low-realization services like IMS, BPO and ADM contribute to growth, the shift in portfolio results in lower blended realization. This may not result in any change in volume expectation as the growth from different services follow different cycles. Any change in strategy for Infosys to grab market share away from peers at lower realization would be disruptive to the competitive landscape. Infosys’ management highlighted the opportunistic exploitation by clients to lower the rates. We expect this to put structural pressure on realization and disrupt the competitive landscape. However, this
could result in volume growth with a lag. Infosys is currently trading at 11.3x FY14E earnings estimate, a trough valuation at which it traded post Lehman crisis. MARKET CAP (RS CR) 137,644.59 P/E 25.03 BOOK VALUE (RS) 127.03 DIV (%) 215.00% INDUSTRY P/E 10.17 EPS 23.34 P/C 22.78 PRICE/BOOK 4.60 DIV YIELD.(%) 0.74% FACE VALUE (RS) 2.00 Current price = 2148.85 Target price = 2800 Shares = 100 Invested = 214,885
Shares porfolios (5,00,000) particulars LIC housing finance ITC Ambuja cement HDFC Bank Infosys amount 49800 50880 36100 116850 214885 % of assets 9.96 10.176 7.22 23.37 42.977
A mutual fund is a type of professionally-managed collective investment scheme that pools money from many investors to purchase securities. While there is no legal definition of mutual fund, the term is most commonly applied only to those collective investment schemes that are regulated, available to the general public and open-ended in nature. Hedge funds are not considered a type of mutual fund. The term mutual fund is less widely used outside of the United States. For collective investment schemes outside of the United States, see articles on specific types of funds including open-ended investment
companies, SICAVs, unitized insurance funds, unit trusts and Undertakings for Collective Investment in Transferable Securities. ? .DSPBR Top 100 equity Reg NAV = 97.44 Fund size = 3,241.88 3 years = 11.97 % 5 years = 7.57 % ? Franklin India Bluechips NAV = 209.63 Fund size = 4,565.20 3 years = 13.94 % 5 years = 7.09 % 10 years = 24.77% ? HDFC Equity Nav = 258.89 Fund size = 9,718.17 3 years = 17.04 % 5 years = 8.52% 10 years = 27.58% ? HDFC TOP 200 NAV = 199.34 3 years = 13.61 % 5 years = 9.79 % 10 years = 28.07 % Fund size = 11,189.82
Mutual fund portfolio(500,000)
Schemes DSPBR Top equity reg Franklin India HDFC Equity HDFC TOP 200 Nav * units 97.44*1000 209.63*500 258.89*750 199.34*500 Amount invested 97,440 104,815 194,197.5 99,670
Investment in gold and silver (2,00,000)
In India, there is attraction for gold and silver since the early historical period. They are used for making ornaments and also for investment of surplus funds over a long period. There is also a general tendency to purchase gold or silver ornaments as and when surplus money is available. The gold prices are in increasing rapidly so there is an capital appreciation for the gold and silver.
Advantages of investment in gold and silver ? Gold & silver are useful as a store of wealth. ? Both the metal are highly liquid. ? Its provides immediate liquidity. ? Its provides capital appreciation.
Current price of gold = RS.29, 793/10 gms Weight = 30 grams Amount invested = 89,379
Current price = RS. 53231/kg Weight = 2 kgs Amount invested = 106,462
REAL Estates (12,00,000)
Real estate is "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing.”
Investing in mumbai’s suburbs
Kalyan is a satellite town of Mumbai, lying 54 km to the south. Kalyan is characterised by hills and green areas. Kalyan comes under the governance of Kalyan Dombivili Municipal Corporation. Kalyan has been developing fast in both residential and commercial sectors. Kalyan owes its growth to its proximity to Mumbai and location at the junction of south, and east bound railway lines. Another reason for Kalyan’s growth is the industrial areas such as Dombivili, Murbad, Badlapur and Tarapur. Also a number of car spare part manufacturing factories and rice mills are here. Kalyan is mostly populated by middle class people. Kalyan has quality infrastructure facilities. Local train running on Mumbai-Karjat and Mumbai-Kasara tracks pass through Kalyan. Educational facilities are very good. Many major convent schools are here. KDMC (Kalyan Dombivili Municipal Corporation) is doing a lot to improve the infrastructure. KDMC has computerized its operations and created citizen facilitation centres for providing better services to the public. It is one of the few IT enabled municipal corporations in India. People, mainly from Dadar, Girgaon and nearby suburbs are shifting to Kalyan and Dombivili. Although Kalyan is more known as residential area, many commercial projects are also coming up. Mumbai builders are concentrating on Kalyan and
developing several residential and commercial projects. Plenty of land is available here, since factories in these areas have been shifted to other industrial areas. Residential: Kalyan is ideal residential area for middle class people. The residential property rates are in the range of Rs 900 to Rs 1200 sq.ft, while rental rates are in the range of Rs 2.5 to Rs 6 per sq.ft pm, approximately. These affordable prices, educational and medical facilities are attracting to buyers to stay here. With all the advantages, Kalyan is also ahead in entertainment. More than 12 cinema halls and drama theatres are here. Residential projects like Godrej Hills by Godrej, Lok Surbhi, Lok Udyan, Lok Vatika by Lok Group, Yogi Dham by Ajmera are in the progress in Kalyan. Also Deshmukh Brothers, D.S.K Group, Mantri Group, Ravi Constructions are also involved in developmental activities. Commercial: The commercial market in Kalyan is also picking up. The areas adjacent to the roads near Kalyan railway station are the important commercial area. Mahavir Shopping complex, Jojwala complex and Sreedevi complex are some of the famous shopping centres. Besides, several small and medium size shops and hotels are also present. The commercial property rates are in the range of Rs 1500 to Rs 3500 per sq.ft., whereas the rental rates are in the range of Rs 12 to Rs 35 per sq.ft pm.
NON CONVERTIBLE DEBENTURES (100,000)
Nirmal Bang has come out with its report on Shriram Transport Finance Company NCD with a subscribe recommendation. Shriram Transport Finance Company Ltd (STFC) is one of the largest asset financing NBFCs in India incorporated in 1979. Primarily engaged in financing Commercial Vehicles purchases of small truck owners and first time users, STFC commands 8-10% market share in new CV finance and ~25% share in the pre-owned CV space. STFC is a part of the "SHRIRAM" conglomerate which has significant presence in financial services like commercial vehicle financing business, consumer finance, life and general insurance, distribution of financial products such as life and general insurance products and units of mutual funds. In addition to this, the STFC is also present in non-financial services business such as property development, engineering projects and information technology. As on March 31, 2011 STFC has 488 branches and 16,919 employees. The assets under management have grown
at a CAGR of 31.5% from Rs. 12,092.8 crs in FY07 to Rs. 36182.6 crs in FY11. The company enjoys one of the best NIMs (10.6% in FY11) in the financial services space due to its presence in lesspenetrated and therefore higher-yielding segments. With robust credit appraisal mechanisms and effective monitoring of collections, STFC has historically maintained its loan loss below 2% of its asset base. Consequently, ROE has been maintained at 25-30%. Objects of the Issue The funds raised will be used for various financing activities including lending and investments, to repay existing loans and for business operations and working capital requirement. CARE and CRISIL Rating The long term debt instruments of the company enjoy ratings of CARE AA+ from CARE, AA/Stable from CRISIL and AA from Fitch. Short term debt instruments have ratings of F1+ from FITCH and P1+ from CRISIL. The proposed NCD issues have been rated AA/Stable by CRISIL which indicates high safety for timely payment of interest and principal on the NCDs. CARE has given rating of AA+ which indicates high safety for timely servicing of debt obligations. Capital Adequacy The capital adequacy ratio of STFC in FY11 is 24.85% as compared to RBI requirements of 12% indicating a healthy liquidity position. Tier I ratio stood at 16.65% in FY11. Asset quality STFC has maintained robust asset quality across several business cycles, marked by average credit losses of less than 2%. Gross NPAs stood at 2.4% and Net NPAs stood at 0.4% in FY11. Debt to equity ratio The debt-equity ratio prior to this Issue is 4.16 times which is based on a total outstanding consolidated debt of Rs 20181.7 crs and consolidated shareholder funds amounting to Rs 4856.41 crs as on March 31, 2011. The debt equity ratio
post the Issue, (assuming subscription of NCDs aggregating to Rs 1000 crs) would be 4.36 times. Recommendation: We believe that the NCD from Shriram Transport Finance Company Limited (STFC), which is one of the largest NBFCs in India, is a good investment opportunity for investors as the returns are higher as compared to bank fixed deposits. The interest rate of 11%-11.6%, offered by this issue is higher than the rates offered by the commercial banks on their fixed deposits. The CARE AA+ rated issue along with the creditworthiness of the issue and liquidity provided are some of the advantages which come with the issue. Moreover, as compared to the recently listed NCDs of SBI Capital and Tata Capital Yield to Maturity (YTM) on STFC NCDs is much higher. LIFE INSURANCE (1,00,000) LIC’s single premium policy- Jeevan Nischay Life Insurance Corporation of India has always been sensitive to the needs of the customers. At LIC, innovation and the restructuring of the product portfolio are done regularly with a view to match people’s changing preferences and rising aspirations. Our policy holders are of utmost importance to us. We launch Jeevan Nischay, a single premium policy with guaranteed maturity benefits exclusively for our existing policy holders. The policy is an extension of the relationship our policyholders enjoy with us and is aimed at reassuring them that we care for our customers. Jeevan Nischay is a close Policy Term ended plan wherein a person 5 years can take policy on his/ her own life by paying single premium only once at the start of the policy. Assured maturity benefits equal to the Maturity Sum Assured are pre-defined. The specimen
Maturity Sum Assured per Rs. 1000/- single premium is given below for some ages and terms: Age at entry 30 1256 40 1249 50 1226
1409 1400 1369
1715 1699 1645
In addition to the assured maturity benefits, there is provision for the loyalty additions. Depending upon the Corporation’s experience, the policy will be eligible for Loyalty Addition on death during the last policy year or on the Life Assured surviving the stipulated date of maturity at such rate and on such terms as may be declared by the Corporation. Death benefit under the policy is equal to five times the single premium if death is within first year of taking the policy. In case of the death in subsequent years, the death benefit is equal to the maturity sum assured. In case of the death in last year of the policy, death benefit is equal to the maturity sum assured with declared loyalty additions, if any. Basic eligibility conditions for taking Jeevan Nischay are as follows: Minimum age at entry : 18 years (completed) Maximum age at entry : 50 years (nearest birthday) Policy term: 5, 7 and 10 years Minimum Single Premium : Rs. 10,000/Maximum Single Premium : Rs. 10, 00,000/- (Premium shall be in multiples of Rs.1, 000/-) Maximum Basic Sum Assured (First Year Death Benefit) : Lower of- Rs. 50, 00,000, and 50% of total Sum Assured (total death benefit) under all existing in force policies If premium amount is Rs. 25,000 or more, the policyholder will receive higher maturity sum assured due to available incentive. Loan is available under this policy. Policyholder can surrender the policy after one year of commencement of the policy. Also, if the policyholder is not satisfied with the terms and conditions of the policy, he/ she has the option of taking refund within 15 days. The distinct advantages of Jeevan Nischay are: Single Premium policy. Guaranteed Maturity benefits with provision of loyalty additions.
Plan is exclusively for LIC policyholders. Wide range of policy terms options. As such Jeevan Nischay is the exclusive plan for LIC policy holders looking for lump sum investment with guaranteed returns.
MR.B’s portfolios (25,00,000)
Particulars Shares Mutual fund Gold and silver Real estates NCD’S Life insurance policy Amounts 05,00,000 05,00,000 02,00,000 11,00,000 01,00,000 01,00,000 % of assets 20% 20% 08% 44% 04% 04%
From these two clients we get know to that investment in early helps the individual to take more risk and these helps to get better returns for the investment. To use more investment venues we should have to invest the money as early as possible to get maximum returns from our investment.
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