June 16, 2014

Volume 8

Issue 3

News

National 1

International 3

Rates and Graphs 5 Contemporary Articles Simplification of KYC Norms 7 Buzzword 8 Debate International Trade 9 Stock Watch ING Vysya Bank Ltd 10 Investor’s Check IPO 13 Alumni Speak 15 Campus Buzz 17 Commodity Crude Oil 17 Scam Saradha Scam 19 Did You Know? 20 Financial Services Industry Analysis 21 Quiz 25 Crossword 26

INDEX

repositories and provide policyholders with an

option to hold policies in electronic form in the short

run and making it mandatory to issue policies in

dematerialized form by the end of this year. Last

year, the insurance regulator had licensed five

companies to provide insurance repository services.

Insurance repositories are the equivalent of

depositories in the capital markets. Just as an

investor needs to open a one-time depository

account, the repository requires policyholders to

open an e-insurance account free of charge. It will

be beneficial to insurance companies as much of the

back office work of sending reminders and

maintaining records would be undertaken by the

repository. Whereas for customers the advantage is

of undergoing the KYC procedure only once and

subsequent purchases can be done on the basis of the

information already stored with the repository.

India imposes anti-dumping duties on solar cell

imports

The Directorate General of Anti-Dumping (DGAD)

has imposed dumping duty on solar gear imported to

India, of upto $0.48 per watt from the US, $0.81 per

watt from China, $0.62 per watt from Malaysia and

$0.59 per watt from Taiwan. The domestic manufac-

turers of solar cells have alleged in their application

filed to DGAD in 2012 that the above-mentioned

countries are exporting solar equipment in India at

very low prices due to which the local industry is

affecting. Due to cheap imports, major players of the

Indian solar manufacturing industry have either shut

down their manufacturing facilities or have reduced

over half of their capacity. As a matter of fact, more

than 70% of the solar power projects in India are

built on imported content, most of it coming from

China.

RBI asks urban co-operative banks not to lend to

government entities

Over 30 entities under SEBI lens for unusual

trading

To prevent possible manipulations and excess

volatility in stock trading in the wake of Lok Sabha

Election results, the Securities and Exchange Board

of India (SEBI) had made elaborate mechanism to

keep a close tab on the market. This was fruitful as

more than 30 entities including brokers and high net

worth individuals have come under its scanner for

unusual trading on the election result day. A prelimi-

nary inquiry has been initiated to ascertain whether

these entities indulged in suspicious transactions

from its Integrated Market Surveillance System

(IMSS). Also, data is being collected from the

exchanges and the clearing corporations to

understand whether the price movements are linked

to the outcomes in various constituencies.

IRDA plans for policies in demat form

The Insurance Regulatory and Development Author-

ity (IRDA) will make it mandatory for life insurance

companies to link up their system to insurance

NATIONAL NEWS

1

MAYANK KAUSHIK

IV MBA F2

4

4

In a letter written to CEOs of Urban Co-operative

Banks (UCB), the Reserve Bank of India (RBI)

advised them not to sanction big loans of public

sector companies as it is not their duty and dilutes

their co-operative character, but RBI has not defined

the bracket of such big loans. The central bank also

said that UCBs should focus on providing small

value loans to middle and lower income groups,

farmers and small businessmen. This move of RBI

will help in the movement of funds to the target

audience but also hamper the growth of those banks

which are following sound policies in deploying

their resources to PSUs for short term to improve

their earnings.

DMIC Trust to provide ` 6k crore for 2 industri-

al cities

The Delhi Mumbai Industrial Corridor (DMIC)

Trust will provide ` 3,000 crore each for the launch

of trunk infrastructure in two industrial cities of

Dholera and Shendra-Bidkin this year as construc-

tion work on the Dholera Special Investment Region

Gujarat and Shendra-Bidkin Industrial Park

Maharashtra will start early next year. Work

at Dholera would begin from a 22 sq km activation

zone to expand the industrial region development as

part of DMIC in Gujarat, while 32 sq km of land

has already been acquired for the Shendra-Bidkin

development. Special purpose vehicles, each of a

50:50 partnership between the government of India

and the state governments, were being formed for

the development of the cities. Three more cities

would be launched within one year which is the

Greater Noida Township, Global City in Gurgaon

and the integrated township of Vikram Odyogpuri.

The DMIC mega development was resonating

among investors across the world because it is a

unique model for industrialising the economy.

FDI in services sector drops 54% in 2013-14

According to data released by the Department of

Industrial Policy and Promotion, foreign direct

investment in the services sector declined by about

54 per cent year-on-year basis to $2.22 billion in

the fiscal year 2013-14. The services sector which

accounts for 60% of India’s GDP and includes

banking, insurance, outsourcing, R&D, courier and

technology testing, had received FDI worth $4.83

billion during 2012-13. Foreign investments are

considered crucial for India, which needs about

$1 trillion in the 5-year Plan period ending March

2017 to overhaul infrastructure such as ports,

airports and highways and boost growth. The decline

in foreign investments could affect the country's

balance of payments and the rupee. Overall foreign

inflows into the country grew by 8 per cent to

$24.29 in the last fiscal as against $22.42 billion in

2012-13.

India’s trade deficit with China increased to $9

billion

China's trade with South Asian nations including

India has touched a whopping USD 100 billion even

as the deficit in trade between India and China

neared $ 9 billion in the first four months of this

year. The India-China trade topped much of the $

100 billion as the bilateral trade totalled $ 65.47

billion in 2013 with trade deficit mounting to $

31.42 billion. According to latest figures from

China's customs, the total volume of the trade from

January to April this year amounted to $ 21.98

billion.

2

5

5

Oil prices climb again amid escalating violence in

Iraq

Crude oil prices rose to new nine-month highs on

13th June 2014 due to concerns persisted that an

insurgency in Iraq could disrupt oil exports from the

second-largest OPEC producer. The surge in both

Brent and U.S. crude prices, up about $4 this week,

lost some momentum on 13th June 2014 as the

market waited to see if the conflict in Iraq would

threaten oil refineries south of Baghdad. Brent

futures gained 39 cents to settle at $113.41 per

barrel, the highest since Sept. 9. U.S. crude oil

gained 38 cents to settle at $106.91 per barrel, the

highest level since Sept. 18. The spread between the

two benchmarks closed at $6.50.Brent was set to

gain more than 5 percent this week, the biggest

weekly rise since last July, while U.S. crude was on

track for its biggest weekly jump since December.

The International Energy Agency played down fears

over the possible loss of oil exports from Iraq in its

monthly Oil Market Report

Hong Kong's financial hub braces for possible

shutdown over protest

Multinational companies and financial institutions in

Hong Kong are drawing up emergency plans in the

event of a partial shutdown of the financial hub's

business district this summer due to a planned

pro-democracy protest. Activists have threatened to

lock down the Central area of Hong Kong, home to

some of Asia's biggest companies and banks, as part

of a campaign for the right to choose candidates

for a poll in 2017 to elect Hong Kong's next

leader. Concerns about growing discontent and the

threatened closure of city's business district by the so

-called Occupy Central activists have prompted

companies and financial authorities to prepare for

the worst. Protesters have demanded full democracy

in 2017, with a key condition being the open

nominations of candidates so that anyone, including

China critics, can run for office. The potential

impact on the Hong Kong stock exchange, Hong

Kong Exchanges and Clearing on the harbor front

fringe of Central, would be minimal even if the

protests spread to its doors, with 0.16 percent of

turnover carried out on the actual trading floor

Copper market on alert for LME inventory

influx amid China probe

Thousands of tons of "invisible" copper now being

hurriedly ushered out of some Chinese warehouses

may remain out of sight for months longer, as banks

and traders seeking safer havens for their metal opt

out of the London Metal Exchange network. The

fear of fraudulent financing at some storage depots

in Qingdao port has prompted some banks and mer-

chants to cut credit for financing deals or relocate

metal to better-known warehousing firms, including

some in South Korea and elsewhere that are part of

the LME's vast system .The uncertainty over how

INTERNATIONAL NEWS

3

PRIYA THOMAS

IV MBA F1

6

6

much metal is being moved, and where it will end

up, is the subject of frenzied speculation as banks

scramble to assess their exposure to the alleged

fraud, which has roiled the global copper market

over the past week. The size of unreported copper

stockpiles in China has been a source of mystery and

confusion for years, particularly as the country's

booming credit market has created pent-up demand

for metal imports as collateral against loans. LME

stocks are below 170,000 tons for the first time since

2008 and cash prices were as much as $100 higher

than forward prices last month.

World Bank cuts growth outlook as Ukraine

weighs

The World Bank trimmed its global growth

forecast, saying a confluence of events, from the

Ukraine crisis to unusually cold weather in the

United States, dampened economic expansion in the

first half of the year. The poverty-fighting institution

predicted the world economy would grow 2.8

percent this year, below its prior forecast of 3.2

percent made in January, but it expressed confidence

activity was already shifting to more solid footing.

The World Bank expects growth to quicken later this

year as richer economies continue their recovery. It

kept its global growth forecasts for the next two

years unchanged at 3.4 percent and 3.5 percent,

respectively. The forecasts assume tensions in

Ukraine will persist this year but won't worsen. An

escalation in the crisis could further shake global

confidence, prompting firms to postpone invest-

ments and crimping growth in developing

economies by as much as 1.4 percentage points

under the worst-case scenario, the bank said. The

World Bank also fretted about the possibility of

financial volatility in emerging markets once the

U.S. Federal Reserve starts to raise interest rates,

mopping up some of the liquidity glut in global

markets.

World stock markets up near record high; low

yields help

Global equity markets edged higher, boosting a

gauge of world stock performance to near an all-time

high, as low interest rates bolstered sentiment even

as U.S. Treasury yields rose. Wall Street's Dow

industrials and benchmark S&P 500 closed at

all-time peaks, with the latter rising to its seventh

record close in eight trading sessions. Peripheral

European bond yields set record lows, with S&P's

upgrade of Ireland's credit pushing it to a record low

of 2.39 percent. Spanish 10-year yields fell below

those of U.S. Treasuries for the first time since April

2010, and Italian five-year yields were also below

U.S. equivalents. The Dow Jones industrial average

closed up 18.82 points, or 0.11 percent, to 16,943.1.

The S&P 500 gained 1.83 points, or 0.09 percent, to

1,951.27 and the Nasdaq Composite added 14.844

points, or 0.34 percent, to 4,336.243. Among major

currencies, the dollar continued to benefit from

rising U.S. Treasury yields. The dollar index was up

0.28 percent. The euro drifted as low as $1.3583.

The euro last traded down 0.37 percent at 1.3591

against the dollar.

4

7

7

GRAPH

RATES AND GRAPHS

5

Rate Repo 8.0 Percent

Reverse Repo 7.0 Percent

Marginal standing facility 9.0 Percent

Call rate 6 to 8.25 Percent ( 14th June 2014)

Inflation +8.28 Percent for May 2014

Forex Reserve $ 312.59 Billion as on 7th June 2014

91day T-Bill 8.25 Percent

IIP 3450 Percent (increase) for May 2014

90 GS 2019 8.09 Percent (indicative YTM)

NIVEDITA PALLAVI

IV MBA F2

57.5

58

58.5

59

59.5

60

13-May-14 19-May-14 25-May-14 31-May-14 06-Jun-14 12-Jun-14

Rs/$

Rs/$

22500.00

23000.00

23500.00

24000.00

24500.00

25000.00

25500.00

13-May-14 19-May-14 25-May-14 31-May-14 06-Jun-14 12-Jun-14

Gold(per 10 gram in Rupees)

Gold(per 10 gram in Rupees)

8

8 6

98.00

100.00

102.00

104.00

106.00

108.00

13-May-14 19-May-14 25-May-14 31-May-14 06-Jun-14 12-Jun-14

Oil(perbbl)$

Oil(perbbl)$

6800.00

7000.00

7200.00

7400.00

7600.00

7800.00

22500.00

23000.00

23500.00

24000.00

24500.00

25000.00

25500.00

26000.00

13-May-14 19-May-14 25-May-14 31-May-14 06-Jun-14 12-Jun-14

Sen

sex

Nifty and Sensex

Sensex Nifty

Nif

t

6,800.00

7,000.00

7,200.00

7,400.00

7,600.00

7,800.00

0

5,000,000

10,000,000

15,000,000

20,000,000

13-May-14 19-May-14 25-May-14 31-May-14 06-Jun-14 12-Jun-14

Op

en

Inte

rest

Future Rates and Open Interest

Open Interest FutureRates

Futu

re R

ate

s

9

9

The current emphasis on documents gives customers

significant problems while opening new accounts.

While heavy KYC norms are in order to comply

with Anti-Money Laundering (AML) Standards/

Combating of Financing of Terrorism (CFT)/

Obligations under Prevention of Money Laundering

Act (PMLA), 2002 etc, the next step will be for the

banks to move in for transaction monitoring to en-

sure that the flows are being used for legitimate pur-

poses, as recommended by FATF and the Mor Com-

mittee as well.

KYC (Know Your Customer) is a verification

process in order to identify the clients. It has two

components - identity and address. While the identi-

ty remains the same, the address of the person might

change; hence the banks are required to update

the record of an account holder. Considering the

problems faced by the people while submitting

current/ permanent address proofs, the RBI has

decided to simplify the rigorous Know your

Customer (KYC) norms by relaxing the address

proof requirements for opening bank accounts. The

matter has since been examined in the light of

amendment to the Prevention of Money Laundering

Rules (Maintenance of Records), 2005, and accord-

ingly it has been decided to simplify the requirement

of submission of ‘proof of address’ as follows:

1. Henceforth, customers may submit only one

documentary proof of address (either current or

permanent) while opening a bank account or

while undergoing periodic up-dation. In case the

address mentioned as per ‘proof of address’

undergoes a change, fresh proof of address may

be submitted to the branch within a period of six

months.

2. In case the proof of address furnished by the

customer is not the local address or address

where the customer is currently residing, the

bank may take a declaration of the local address

on which all correspondence will be made by the

bank with the customer. No proof is required to

be submitted for such address for correspond-

ence/local address. This address may be verified

by the bank through ‘positive confirmation’ such

as acknowledgment of receipt of

(i) letter, cheque books, ATM cards;

(ii) telephonic conversation;

(iii) visits; etc. In the event of change in this

address due to relocation or any other reason,

customers may intimate the new address for

correspondence to the bank within two weeks

of such a change.

The report claims, quoting RBI, that in 2006, around

15 crore Indian households did not have bank

accounts. So, for instance, if each household had

four members, then the number of people without

bank account were around 60 crore. And

According to the 2011 Census of India, about 69%

of India’s 1.21 billion population live in rural areas.

However, higher unemployment rate prompts people

to shift base to urban centres in search of livelihood,

forcing them to change residence.

In December, 1976, RBI had allowed banks to open

accounts (fixed and savings deposit) for minors,

with their mothers as guardians, subject to certain

safeguards. In 1989, the facility was extended to

recurring deposits

The Reserve Bank of India (RBI) recently al-

lowed minors aged more than 10 years to open and

operate savings bank accounts independently.

Taking into account their risk management

systems, banks, however, can fix limits in terms of

SIMPLIFICATION OF KYC NORMS

7

MARIA LISBEL

IV MBA F1

10

10

easier for customers. This will also help them

achieve the goal of financial inclusion which is the

top agenda of Indian finance in 2014.

“By January 1, 2016, each Indian resident, above the

age of 18 years, would have an individual,

full-service, safe, and secure electronic bank

account,” the Nachiket Mor committee report had

said in its recommendations to RBI. In the event of

change in this address due to relocation or any other

reason, customers may intimate the new address for

correspondence to the bank within two weeks of

such a change, the central bank said.

It is important that these orders go through right

down to the branch staff and BC agents. Often

orders passed by the RBI are not communicated

effectively to the last mile, thus loosing the desired

impact / result.

the minimum age and the amount up to which

minors may be allowed to operate the deposit

accounts. They can also decide the documents

required to open such accounts. The central bank's

directive also allows banks to offer additional

banking facilities to minors. These include internet

banking, automated teller machines/debit cards and

cheque book facilities, subject to the conditions that

these accounts aren't overdrawn and always maintain

a certain credit balance. The central

bank has said its latest step will promote financial

inclusion and bring uniformity among banks in

opening and operating minors' accounts.

As the process becomes more user-friendly, the

number of account-holders is likely to increase

because the complex process till now has been a

barrier to entry. RBI has taken this decision to ease

the process of account opening and make the norms

8

BUZZ WORD

SANDIPA DAS IV MBA F2

GENERIC SECURITIES

Generic securities are backed by recently issued loans or mortgages within the last calendar

year. Typically its value is slightly lower than that of a security whose backing is older than

one year. Securities over a year old are called seasoned securities. The generic securities are

priced lower because of high risk associated with it and may tend to be more attractive to the

investors and are traded for less than one year. This is mainly because these securities have

not been long enough in market to establish a stable reputation as a security and also

because the incidence of default on these types of debt obligations is traditionally

understood to be higher during the first twelve months post issuance. A generic security

does not yet have a history that potential investors can look to for past performance rating as

a seasoned security does. However, as they are valued less by investors, generic securities

are less expensive to purchase. Once the payment of debt is made the confidence in loans

and mortgage placed as generic securities in increased resulting in the increase in its value

and later is considered as seasoned or stable.

11

11

Advantages:

A country may import things which it cannot

produce: International trade enables a country to

consume things which either cannot be produced

within its borders or production may cost very high.

Therefore it becomes cost cheaper to import from

other countries through foreign trade.

Maximum utilization of resources: International

trade helps a country to utilize its resources to the

maximum limit. If a country does not takes up

imports and exports then its resources remain unex-

plored. Thus it helps to eliminate the wastage of

resources.

Benefit to consumer: Imports and exports of differ-

ent countries provide opportunities to the consumer

to buy and consume those goods which cannot be

produced in their own country. They therefore get a

diversity in choices.

Reduces trade fluctuations: By making the size of

the market large with large supplies and extensive

demand international trade reduces trade fluctua-

tions. The prices of goods tend to remain more

stable.

Fosters International trade: International trade

fosters peace, goodwill and mutual understanding

among nations. Economic interdependence of

countries often leads to close cultural relationship

and thus avoid war between them.

Disadvantages

Import of harmful goods: Foreign trade may lead

to import of harmful goods like cigarettes, drugs etc.

Which may run the health of the residents of the

country. E.g. the people of China suffered greatly

through opium imports.

It may exhaust resources: International trade leads

to intensive cultivation of land. Thus it has the

operations of law of diminishing returns in agricul-

tural countries. It also makes a nation poor by giving

too much burden over the resources.

Over Specialization: Over Specialization may be

disastrous for a country. A substitute may appear

and ruin the economic lives of millions.

Danger of Starvation: A country might depend for

her food mainly on foreign countries. In times of

war there is a serious danger of starvation for such

countries.

It may lead to war: Foreign trade may lead to war

different countries compete with each other in

finding out new markets and sources of raw material

for their industries and frequently come into clash.

This was one of the causes of First and Second

World War.

9

DEBATE :: INTERNATIONAL TRADE

GAURAV VIDYARTHI

IV MBA F2

NEENU SUNNY

IV MBA F2

12

12

About the company

ING Vysya Bank Limited is formed with

collaboration of erstwhile Vysya Bank Ltd.,

a premier bank in Indian Private Sector and

a global financial power house of Dutch origin

ING in October 2002.

It was included in global systemically important

banks in the year 2012.

In 2012 according to the Fortune Global 500,

ING was the world's largest banking/financial

services and insurance conglomerate by revenue

with gross receipts exceeding a total of $150

billion p.a. This is also the world's 18th largest

corporation by revenue of the group.

In the year 2013 ING has served over 48

million individual and institutional clients in 40

countries and more, with a worldwide workforce

more than 75,000.

ING Vysya Bank deals with:

Corporate banking

Commercial banking

Treasury management

Retail banking

Rural banking

Private banking

Recent news

ING Vysya Bank Ltd has informed that from

June 13, 2014 to June 24, 2014 (both days

inclusive) the Register of Members & Share

Transfer Books of the Bank will remain closed

for the purpose of Payment of Dividend &

Annual General Meeting (AGM) which is to be

held on June 24, 2014.

It has reported an 18 percent decline in profit

after tax (PAT) due to exceptional loss on

retirement benefits in the fourth quarter.

ING Vysya bank’s asset quality worsened during

the quarter and provisions rose to 21% Y-o-Y.

The Bank at its meeting held on April 29, 2014,

has recommended a dividend of 60% i.e.

Rs 6 per equity share of Rs 10 each, for the year

10

STOCK WATCH :: ING VYSYA BANK LIMITED

SANDIPA DAS

IV MBA F2

VAIBHAV RAINA

IV MBA F2

Stock performance of Infosys for last 6 months

13

13 11

Company’s financial figures and estimates

Ratio ( Standalone ) Mar 2014 Mar 2013 Mar 2012

Operational & Financial Ratios

Earnings Per Share (Rs) 34.9 39.6 30.4

DPS(` ) 6.0 5.5 4.0

Dividend payout (%) 17.2 13.9 13.2

Margin Ratios

Yield on Advances 14.5 15.3 13.4

Yield on Investments 8.7 7.3 7.8

Cost of Liabilities 6.8 6.9 6.5

NIM (%) 3.0 2.9 2.7

Interest Spread 7.7 8.4 7.0

Performance Ratios

ROA (%) 1.1 1.2 1.1

ROE (%) 11.4 14.6 14.3

Growth Ratio

Net Profit Growth 7.3 34.3 43.2

BVPS Growth 26.5 13.2 24.0

Advances Growth 12.8 10.6 21.7

EPS Growth (%) -11.9 30.2 15.4

Liquidity Ratios

Credit/Deposits (%) 86.9 76.9 81.6

Interest Expended / Interest earned (%) 66.3 68.4 68.7

Interest income / Total funds (%) 8.6 8.9 8.2

Interest Expended / Total funds (%) 5.7 6.1 5.6

Net Interest income / Total funds (%) 3.0 2.9 2.7

CASA (%) 33.4 32.5 34.3

Assets Quality

Gross NPA 2629545.0 1213919.0 1495129.0

Net NPA 1020037.0 91000.0 524922.0

Net NPAs (funded) to Net Advances (%) 0.3 0.2 0.2

14

14 12

Peer Comparison

Name Last Price Market Cap.

(` . cr.)

Net Interest

Income

Net Profit Total Assets

HDFC Bank 815.25 196,287.44 41,135.54 8,478.40 491,599.50

ICICI Bank 1,486.30 171,857.60 44,178.15 9,810.48 594,641.60

Axis Bank 1,973.60 92,985.37 30,641.16 6,217.67 383,244.89

Kotak Mahindra 902.75 69,543.38 8,767.12 1,502.52 87,585.34

IndusInd Bank 545.30 28,709.82 8,253.53 1,408.02 87,025.94

Yes Bank 579.95 24,033.56 9,981.35 1,617.78 109,015.79

ING Vysya Bank 661.20 12,510.83 5,205.22 657.85 60,413.23

Federal Bank 126.70 10,836.84 6,946.08 838.89 60,626.78

Among banking stocks ING-Vysya has been one of

the best performing stock for the past 3 months.

While there has been an overall 3% decline in the

Bankex, Ing-Vysya has given the investors a return

of 11%.

It is among the few notable exceptions among the

private sector banks to log a positive return while

State Bank of India and Bank of India are the only

stocks from the public sector which have risen by

2% and 3% respectively in the same period.

Analyzing the performance of ING Vysya for past

1 year reveals the the stock went through its worst

in Aug-2013 and has been able to recover to its

previous price in less than a year. In Aug-2013 the

pice was ` 429 where as nowadays it is trading

around 635-640 range and with the new govern-

ment encouraging more investment the stock can be

seen to be gaining in the near forseeable future.

Hence it is a Buy/Hold call for Ing-Vysya.

Highlights

ING Vysya Mobile app released for Windows

Phone

Mid-corporate drive up NPLs; SME, consumer

book stand firm

Customer asset growth intact at 18% YoY

Main reason for ING’s stock and banking sector

as a whole doing well can be attributed to the new

stable central government..

Reference

Retrieved from http://www.moneycontrol.com/news/

announcements/ing-vysya-bank-fixes-book-closure-for-

dividendagm_1082643.html?utm_source=ref_article

Retrieved from http://

articles.economictimes.indiatimes.com/2013-03-14/

news/37713736_1_bank-stocks-ing-vysya-axis-bank

ended on 31st March 2014, but this decision is subjected to the approval of the shareholders at the ensuing

Annual General Meeting and of the Regulatory Authorities. We can see that the NIM is in line with the

industrial standards and lies in between 3-3.5%, ROA and ROE are also within the banking industry standards.

The credit to deposit ratio for 2014 is comparatively high which indicates that the bank is lending aggressively.

The CASA % is low which shows that the bank is more into whole sale lending which brings more volume but

comparatively less of profit.

15

15

The Security & Exchange Board of India (SEBI) is

likely to announce new norms for Initial Public

offering, as the market there are signs of market

recovery. The market has continued to scale new

highs, as FIIs pumps in $1.2bn & investors are

hoping the new government having a majority at the

centre will revive the investment & also provide

investment. Under the current regulation, a company

has to divest at least 25 per cent of its stake if its

valuation is below ` .4000 cr while the companies

with market capitalization of more than ` .4000 cr.

has to divest only 10 per cent in the public

issue which has resulted into companies trying to

exaggerate their market cap because the rule made

the companies with less market cap to offload more

shares than with the high marketcap. The right to

offload 10 percent of their post issue capital instead

of 25 per cent means that only 10 percent is availa-

ble for the retail investor now instead of 25 percent

available before. The company will have more of the

capital with them now, which can be offered to

institutional investors. For a public issue the number

of institutional investors forms a major chunk of the

total investors, while retail investors form a small

portion of the total investors. Sometimes issues gets

oversubscribed by the institutional investors and

undersubscribed by retail investors. Therefore with

15 percent more of post-issue capital available

to them they can have more subscriptions and

allotment.

SEBI is also planning to raise anchor investors quota

in public issue which is 15 per cent under current

regulation to boost institutional investors. Anchor

investors are those institution that invest in IPO’s

days before their opening and have their investments

locked in for 30 days from the date of allotment.

SEBI is also planning to bring large scale changes to

OFS, which was introduced in 2012. Generally this

route was used by promoters to divest their stake to

comply with the minimum public shareholding

requirement. Prime Database says India Inc. has

raised equity capital worth at least ` 50,000 crore

in the previous two financial years, a large portion

of it via U K Sinha, chairman, SEBI, said they are

INVESTORS CHECK :: IPO

PRAVEEN KUMAR SINGH

IV MBA F1

13

The market has continued to

scale new highs, as FIIs pumps

in $1.2bn & investors are

hoping the new government

having a majority at the cen-

tre will revive the investment &

also provide investment.

IPO

16

16

14

working on guidelines through which institutional

investors which are not promoters but have a sig-

nificant holding in a company might be able to access

the OFS route.”

Security Type Equity

Issue open date June 9, 2014

Issue Close Date June 13, 2014

Issue Size( No. Of shares) 39,78,000

Issue Price Cash at Par 41 (Face value Rs10)

Listing on BSE SME

Issue reserved for Market Makers 2,01,000 (5.05% of the Issue size)

Proportion of offer to Public (Net Issue) 37,77,000(94.95% of the Issue Size)

(50% of Net Issue to Retail investors &

50% of Net Issue to other investors)

Pricing Method Fixed Price

Minimum allotment (shares) 3,000

Allotment Lot 3,000 equity shares & in multiple of 3,000

equity share thereafter

Trading Lot 3,000 Equity Shares

Lead Manager GUINESS CORPORATE ADVISORS PVT.

LTD.

Registrar LINK INTIME INDIA PVT. LTD.

*Note: 50 per cent of the shares offered are reserved for the applicants below Rs.2 lac &

the balance is for the higher amount applications.

17

17

Can you through some light on the job profile

and the role you play in your organization?

Firm: Ernst & Young LLP (EY)

Designation: Associate Consultant, Risk Advisory

Services (RAS)

Location: UB City, Bangalore. Most work is out of

client place and hence my reporting is mostly at

client place.

Role Played: I’m part of a team which delivers

solution to the clients of Ernst & Young in identify-

ing and mitigating risk involved in their business

processes. The business processes for which we

provide solution include internal processes such as

payroll, warehousing, procurement etc.

The job role is challenging, exciting and non-

monotonous.

What scope is there for our young finance

professionals in the service industry?

Tremendous opportunity to join and grow in the firm

and this role. All the big 4 firm’s along with several

other well recognized organization are in the

business of risk advisory. Moreover such firm’s

provide immense opportunity to grow within the firm

since there is opportunity for internal job postings

provided employees meets the requirements.

There are several opportunities to be posted across

the country and overseas since depending on the

client for whom you would be working.

How has MBA proved to be fruit full for you?

MBA at CUIM has imbibed among all its students

the importance of discipline. This profession

demands discipline/confidence from the employees

which I have inculcated during my course at CUIM.

What important attributes should an MBA from

Finance have?

Important attributes for an MBA Finance:

Discipline

Timeliness

Attention to detail

At most important Common Senseand Hones-

ty.

One of the most important and essential skill

that you would require is MS Excel. This skill

is a survival tool for any MBA Finance

student. I would urge the finance students of

CUIM to take up self-learning along with the

coaching provided by CUIM under the

guidance of Prof. TS Ramachandran.

How did MBA from Christ helped you achieve

your goals in life?

MBA in itself is not a key to success in life; it

requires efforts from the student to make the most

out of CUIM course.

MBA provided me a platform where I took

ALUMNI SPEAK :: VIVEK KUMAR SULTANIA

MALLIKA JAIN

IV MBA F1

15

18

18

part in various debates, classroom discus-

sions, presentation which improved my

personal and group communication skills.

Being class representative in first year

enhanced my leadership skills. I opted not

take the CR responsibility in year 2 so that I

could focus on placement, which worked

well for me (considering I had zero day

placements).

Organizing Farewell (for batch of 2011-13),

Back to School (for batch of 2013-15) Altus

(2013-14), Ushus (volunteer in 2012 and

POC in 2013), corporate interface (co-

coordinator and speaker), Economic Num-

bers (Commodities and Inflation) – all of

these

Along with tight scheduled CUIM curricu-

lumcumulatively helped my people skill,

organizing skills and time management

capabilities.

To what extent do assignments prepare one in

practical scenario?

Assignments may or may not have a direct impact

depending on the job role that an individual

gets into. For instance a proposal presentation for

the senior management of a client was being

prepared and I was benefitted from the numerous

presentations that I/our team made as part of my/our

assignment/CIA.

What are you doing to ensure that you continue

to grow and develop in the industry or your

organization?

Work-hard. Prepare a more strategic and SMART

(hoping you know the abbreviation of SMART) plan

for my future growth/aspirations.

Additional courses that you will suggest to our

young MBAs?

CIMA and CFA. Before you take up this course do a

personal introspection IF you can do justice to the

course you intend to take up? Know your limitations

and capabilities before registering for any addition-

al course. (Disclaimer: I have not pursued any of the

courses mentioned above)

What is the best thing that happened to you or

you did in Christ??

Seizing every opportunity that Christ gave, and trust

me Christ provides you several opportunities to

learn and grow.

How is the professional world different from the

life in MBA?

It is very similar.

A message for Christites

I have included all my messages for Christites in the

above questions.

In case of any query or assistance feel free to write

to me on ‘pavan.s@mba.christuniversity.in’. I do not

assure a prompt reply but I assure you a reply.

Good Luck !

16

Work-hard. Prepare a more strategic and SMART (hoping you know the abbreviation of SMART) plan for my future growth/aspirations.

19

19

On 13th June 2014, a corporate interface was

arranged for the finance students of CUIM and other

colleges such as St. Josephs, IFIM, Krishnanidhi, etc

on placements, which was addressed by officials of

KPMG India which included Mr. Pramath Nath,

Manager Human Resource Department, Mr. Partho

Bandhopadhyay, MD - KPMG Global Delivery

Center and Mr. Max Carrier, National Partner-in-

charge KPMG and Global Delivery Center. The

event started with a general presentation on KPMG

by Mr. Partho. He also played a video which showed

the achievements of the company over the years.

After the presentation, he requested Mr. Max to take

over. Mr. Max had an informal talk with everyone

present by walking through the aisles and interacting

with the gathering. He was then open for questions.

There were a lot of questions posed and he answered

all of them. After the Q&A round the KPMG team

played another video, which highlighted the

strengths of KPMG. With this the presentation by

the KPMG team came to an end. The guests then

moved for high tea and the session came to a close.

On 6th June 2014, the finance department of CUIM

conducted a session with the Placement

Co-ordinator Ms. Jolly Joseph on “Overview of

Placements of Batch 2012-14”. The event started

with a presentation by the Placement Committee

which highlighted the Job Profile offered to the

students, various Rounds conducted by different

companies, kind of questions asked in the Personal

Interview, the annual Packages offered and the

Suggestions from the committee. It was followed by

a Q&A session with the placement co-ordinator.

Afterwards, the Contemporary Issue team gave a

presentation on the changes that have come in the

latest Monetary Policy Review by RBI and its effect

on the economy. This presentation was really very

helpful for the students as it gave them a crisp and

concise follow-up of the Monetary Policy Review.

This session was followed by a finance quiz

which was conducted by the Economic Numbers

Committee. Questions were based on the current

happenings in the economy and were relevant to

finance. The audience participation was also

commendable.

CAMPUS BUZZ

MALLIKA JAIN

IV MBA F1

17

20

20

Crude oil is a complex compound of various

hydrocarbons found in the uppermost layer of the

earth's crust. It is often regarded as the “Mother of

all Commodities” because of its importance in the

manufacturing of a wide variety of things. Crude oil

accounts for almost 35% of the world's primary

energy consumption.

According to an estimate, more than 82% of the

world's proven oil reserves are located in OPEC

Member Countries, with most of OPEC oil reserves

in the Middle East, estimated to 66% of the OPEC

total. OPEC Member Countries have made great

additions to their oil reserves in past years. As a

result, OPEC's proven oil reserves currently stand at

1,200.83 billion barrels.

Major uses of Crude Oil

Crude Oil’s primary use is as a raw material to be

processed by refineries into gasoline, diesel fuel, and

airplane fuel. In ancient times American Indians

used it as medicine, and for many years it was used

to coat the bottoms of boat and to coat skins to make

them waterproof.

One of the byproducts of refining petroleum is used

as a major source of fuel for cement kilns that

produce cement that eventually becomes concrete.

Crude oil is used to produce fuel for cars, trucks,

airplanes, boats and trains. It is also used for a wide

variety of other products including asphalt for roads,

lubricants for all kinds of machines; plastics for toys,

bottles, food wraps, among others.

News about Crude Oil

Crude oil futures gained momentum on Friday,

traded nearly nine-month highs after concerns over

violence in Iraq continued to fuel worries of real

supply disruptions in the region. Oil prices increased

after Iraqi insurgents linked to al-Qaeda reportedly

took full control of the northern oil city of Kirkuk on

Thursday and moved closer to the capital, Baghdad.

Meanwhile, market researchers were also eyeing the

release of U.S. data on producer price inflation and a

preliminary report on consumer sentiment from the

University of Michigan. Resulting of all these oil for

August delivery climbed 0.78% to trade at $113.30 a

barrel.

Overall there is a good future for the Crude oil

futures and experts are suggesting buying it.

Current performance of Crude Oil in the Com-

modity Market

Crude Oil is currently being traded with a spot price

of ` 6320/BBL (13th June 2014)

The prices in MCX for Crude Oil futures are:

` 6383/BBL for 21st July 2014

` 6353/BBL for 19th August 2014

` 6311/BBL for 19th Sep 2014

COMMODITY :: CRUDE OIL

ABHISHEK SURYARAJ

IV MBA F2

18

21

21

Saradha scam is a financial scam which took place

in the state of west Bengal and came to light in April

2013. Saradha group was running various kinds of

collective investment scheme (CIS) in the eastern

regions of India. The amount involved in this scam

is around Rs. 2460 crores. The scam was caused due

to the sudden fall of the Ponzi scheme being run by

the Saradha group. Ponzi scheme refers to a scheme

where returns are paid to the investor out of the new

capital rather than the profits generated by the

scheme in which the investor has invested. It is also

characterized by the offering of the abnormally high

returns by the concerned organization.

In this scam, the investors who invested in the

scheme did not have much idea regarding the true

nature of the investments. They were only promised

higher returns after a fixed period of time. Saradha

group was using the money put in by the new inves-

tors in order to pay off the older investors .The mon-

ey kept rotating and an illusionary business was be-

ing created. It carried its business against several

norms of SEBI (Securities and Exchange Board of

India). The group was also charged with the allega-

tions of money laundering as well as various other

financial irregularities, by its investors. As per the

depositors, companies were making prompt pay-

ments during the first year of the scheme. Problems

started arising from the month of January 2013.

However, Sudipto Sen, Chairman and Managing Di-

rector of Saradha group, tried to pacify the uneasy

investors at that point of time. But, he could not do

that for very long as the scam broke out fully in the

month of April, hurting the sentiments of around 1.7

million depositors. Hence, the key people associated

with the Saradha group namely Sudipto Sen as well

as Debjani Mukhopadhdhay (Director of Saradha

group) were soon arrested.

It was also found that many politicians of West Ben-

gal were benefitted by the schemes of the Saradha

group. They openly used to ask public to invest in

the Saradha group as they were also getting favors

from the same. Sudipto Sen wrote a letter to the CBI

in which he admitted that huge amount of money

was spent on the politicians. It is believed that the

group survived for such long time because of the

involvement of political leaders.

An enquiry commission was formulated by the gov-

ernment of West Bengal to investigate into this

scam. Steps were also taken by the government in

order to pay the low income investors. Hence, a fund

of Rs 5 billion was set up for the same purpose.

Recently, CBI decided to form a SIT (Special Inves-

tigation Team) to bring all the deeper aspects of the

scam. The role of the regulators like SEBI, Registrar

of Companies as well as RBI would be analyzed as

the scam took place under their jurisdiction.

SCAM :: SARADHA SCAM

19

PRAGYA TAMRAKAR

IV MBA F2

22

22

Foreign direct investment (FDI) is a direct invest-

ment into production or business in a country by an

individual or company of another country, either by

buying a company in the target country or by

expanding operations of an existing business in that

country. Foreign direct investment is in contrast to

portfolio investment which is a passive investment

in the securities of another country such as stocks

and bonds.

In simple sentence the investing company may make

its overseas investment in a number of ways - either

by setting up a subsidiary or associate company in

the foreign country, by acquiring shares of an

overseas company, or through a merger or joint

venture. The accepted threshold for a foreign direct

investment relationship, as defined by the OECD, is

10%. That is, the foreign investor must own at least

10% or more of the voting stock or ordinary shares

of the investee company.

Types of FDI are:

Horizontal FDI

Platform FDI

Vertical FDI

An example of foreign direct investment would be

an American company taking a majority stake in a

company in China. Another example would be a

Canadian company setting up a joint venture to

develop a mineral deposit in Chile.

FDI in India

Foreign investment was introduced in 1991 under

Foreign Exchange Management Act (FEMA), driven

by then finance minister Dr.Manmohan Singh. As

Singh subsequently became the prime minister, this

has been one of his top political problems, even

in the current times. India disallowed overseas

corporate bodies (OCB) to invest in India. India

imposes cap on equity holding by foreign investors

in various sectors, current FDI limit in aviation

sector is maximum 49%.

Starting from a baseline of less than $1 billion in

1990, a 2012 UNCTAD survey projected India as

the second most important FDI destination (after

China) for transnational corporations during 2010–

2012. As per the data, the sectors that attracted

higher inflows were services, telecommunication,

construction activities and computer software and

hardware. Mauritius, Singapore, US and UK were

among the leading sources of FDI. Based on

UNCTAD data FDI flows were $10.4 billion, a drop

of 43% from the first half of the last year.

DID YOU KNOW:: FOREIGN DIRECT INVESTMENT

GAURAV VIDYARTHI

IV MBA F2

20

The sectors that attracted higher inflows were services, telecommunica-tion, construction activities and computer software and hardware. Mauritius, Singapore, US and UK were among the leading sources of FDI.

23

23

Introduction

Private equity is a broad term that refers to any type

of equity investment in an asset in which the equity

is not freely tradable on a public stock market. Pri-

vate Equity securities are the stocks in companies

that have not been listed on any stock exchange.

Private Equity (PE) can be defined as follows: Pri-

vate equity provides equity capital to enterprises not

quoted on a stock market. Private equity can be used

to develop new products and technologies, to expand

working capital, to make acquisitions, or to strength-

en a company‘s balance sheet. It can also resolve

ownership and management issues. A succession in

family-owned companies, or the buyout and buying

of a business by experienced managers may be

achieved using private equity funding. Venture capi-

tal is, strictly speaking, a subset of private equity and

refers to equity investments made for the launch,

early development, or expansion of a business.

Overall, 2013 saw deal values rising, but it was a

difficult year for private equity in India, as both fund

-raising and exits proved to be challenging. The

tough macroeconomic situation and the slower-than-

expected pace of exits are forcing several market

participants to get back to the drawing board and

rework their strategy. PE funds are sharpening their

focus on the best-quality deals based on their invest-

ment philosophy and are investing in relationships

with promoters and management teams to conclude

at reasonable valuations. In addition, the emphasis

on value creation after the acquisition has gained

more importance. The PE industry anticipates that

favourable results of the general elections will spur

FINANCIAL SERVICE INDUSTRY ANALYSIS :: NON LIFE INSURANCE SECTOR

21

MAYANK KAUSHIK

PRAVEEN SINGH

NIVEDITA PALLAVI

PRAGY TAMARAKAR

VAIBAV RAINA

MALLIKA JAIN

a series of economic initiatives and lead to policies

that will promote further investment in multiple

sectors to boost both short- and long-term growth.

The year 2013 presented many challenges to the

private equity industry in India but the industry

seems to be coming out of adolescence. While pro-

spects for 2014 seem tough, there is the potential

for recovery to accelerate if all industry participants

work together. We believe private equity and ven-

ture capital investors should continue to be excited

about opportunity in India. PE and VC are critical

to foster entrepreneurship in the country and help

Indian companies professionalise and scale up rap-

idly, thereby unlocking the true potential of India.

Regulatory environment

The regulatory framework of Private equity consists

a lot of recent changes which can be summarized as

below:-

General Anti avoidance rules(GAAR)

GAAR was introduced in India in the union

budget of 2012-13. It is basically a framework

to minimize the avoidance of tax. Through this,

the revenue authorities get empowered to deny

unreasonable tax benefits. It focuses especial-

ly investors trying to route investments through

Mauritius route. Majority of the private equity is

invested in India through the route of Mauritius.

Hence these rules are likely to have a great im-

pact on the private equity.

FDI guidelines

In Private equity, the foreign investor group

puts up the money in the unlisted shares of the

companies. Around 80% of funding comes from

overseas investors. Hence the laws relating to

foreign direct investment and foreign institu-

tional investment are having a great impact on

private equity.

24

24 22

Retrospective taxation

The retrospective taxation policies and the

amendments introduced by the government have

a huge impact of private equity funds and it rais-

es the concerns of the investors regarding their

funds.

Thus, the regulatory environment of the private eq-

uity remains mostly in the hands of the government

and the taxation authorities who make policies and

changes with respect to taxes and foreign invest-

ments. In India, there are always problems with the

dynamic and unclear regulatory changes affecting

the private equity. Hence, government should focus

on bringing clarity regarding such norms.

Key Success Factors

The Growth in Value of Private Equity lays around

four factors:

Careful and selective buying

Private Equity investors are very selective and

fine researched while taking the choice to pur-

chase a business. Good preparation, sector focus

and strength of relationship with target man-

agement are vital factors that cite winning a

deal.

Driving delivery of the business plan

The success depends on growing the value of

the business that is bought. The focus on de-

veloping the best plan for the business and

subsequent execution of the plan, are the most

common catalysts for faster growth.

Management and incentives

Judgements about the quality and capability

of management to execute plans are important

decisions that Private Equity investors make.

Increasing the share of equity and widening

incentives are vital success factors for attract-

ing, retaining, and motivating the best talent.

Selling well

Value is realized for Private Equity investors

when businesses are sold. Private Equity in-

vestors have well-developed sales skills.

Rank Name of the firm Headquarters Capital Raised as of May

2013

1 TPG Capital United States, Fort Worth $ 35.73

2 Carlyle Group United States, Washington, D.C. $ 32.82

3 The Blackstone Group United States, New York $ 29.56

4 Kohlberg Kravis Roberts United States, New York $ 28.41

5 Warburg Pincus United States, New York $ 26.00

6 Goldman Sachs United States, New York $ 24.63

7 Advent International United States, Boston $ 23.06

8 Apollo Management United States, New York $ 22.07

9 Bain Capital United States, Boston $ 19.36

10 CVC Capital Partners United Kingdom, London $ 17.99

Major Players in Private Equity Industry

25

25 23

Recent Global Trends

A study conducted by Price Waterhouse copper

(PwC) says the private equity sector will rediscover

optimism as the facts that the number of exits in the

year 2013 for PE player remained constant com-

pared to previous year. PE sector expects the Euro-

pean deal market for the private equity to get better

in 2014 wherein 68% of the international fund &

58% of German funds anticipates the number of new

investments to increase in 2014.

Operational improvements & “Buy & Build” were

on top of the premeditated plans in 2013 & will con-

tinue to be the strategic focus in 2014. A buy and

build strategy is typically deployed by private equity

to generate value and increase their returns. It entails

buying a platform company with established man-

agement and systems, and leveraging off this com-

pany to acquire subsequent tuck-in acquisitions. Buy

and build strategies are becoming more common in a

slower economy as private equity groups seek to im-

prove returns. This is because organic growth and

operational efficiency may not be enough to gener-

ate s significant pop on liquidity.

Robust public equity and debt markets are helping to

boost asset sales, enabling PE firms to return capital

to their limited partners and facilitating new rounds

of fund-raising. But high asset valuations and vola-

tile capital markets handicap PE deal making, and

competition for deals remains aggressive. Also,

slowing economic growth has taken some of the lus-

tre off the once-hot emerging markets.

The impact of global macroeconomic changes is re-

flected in the increased deal activity. Global buyout

value has gone up 22% in 2013, led by North Ameri-

ca and Europe, which experienced growths of 24%

and 36%, respectively. On the other hand, much of

the Asia-Pacific region experienced a decline in PE

activity, except Korea &India which even though

experienced its own set of economic troubles, start-

ing with a gaping fiscal deficit, persistently high in-

flation, currency depreciation and pessimism among

businesses and consumers, economy managed a

GDP growth of 4.7% during 2013which showed

strong growth in deal values. In India, overall deal

volume grew by 26%, with an increase in deal value

of 16% ending the year at $11.8 billion.

To push the amount of PE capital invested into a

higher orbit would require a major revival of public-

to-private deals that dominated PE’s last cyclical

peak and have been so notably absent since then.

Between 2004 and 2007, public-to-private buyouts

accounted for 90% of the increase in total buyout

deal value. Since 2007, the end of “take private”

deals contributed to 83% of the drop in deal value.

Deal activity in India was robust in 2013 as funds

invested grew at 16% and the number of deals

jumped by 26%, driven by IT and ITES, healthcare

and BFSI. The average PE deal size increased signif-

icantly from $35 million in 2012 to $41 million in

2013, fuelled by a growing number of large deals;

GPs expect this trend to continue. The top 25 deals

constituted 55% of total PE deal activity in

2013.Competition for deals is increasing, especially

as sovereign wealth funds &strategic players get

more interested in deals. However, valuations seem

to be rationalising as PE funds become more selec-

tive in deal evaluation and stick to their investment

philosophy.

Western Europe remains the most attractive region

for the private equity investments & Asia as well as

Central & Eastern Europe is to become more attrac-

tive in business investment.

Key Skills Required

Evaluation skills are important for anyone working

in business management. Both supervisory tasks and

overall business operations require solid evaluation

skills and an MBA degree can prepare you with

these skills.

Strong quantitative and financial skills

Team player

Handle multiple tasks/multiple bosses

Ability to analyze diverse information and for-

26

26

mulate recommendations quickly

Ability to synthesize large amounts of data into

small manageable chunks and then communi-

cate these chunks both written and verbally

Willingness to take risks, deal with uncertainty

and accept occasional failure

Ability to perform well under pressure

Ability to take criticism lightly Aggressiveness,

strong internal motivation and ambition

Scope of MBA Finance

MBA finance professionals get employment in in-

vestment banks, corporations, and securities firms.

Some of the top financial job responsibilities held by

MBA finance are

Financial Analysts and planner

Corporate Controllers

Chief Financial Officers (CFO)

Risk and Insurance Managers

Investment Banking Associates

Investment Sales Associates and Traders

Credit Managers

portfolio manager

financial reporting analyst

international controller

mutual fund analyst

director of investor relations

procurement specialist

Key Skills Required

24

Name of the Course/Certificate

Description Fees URL

Venture Capital and Private Equity Fi-nance

This certificate program from BSE India Training Institute provides an overview of the Venture Capital/Private Equity Industry, Regulato-ry Framework, Types and Role of Venture Capitalist, Exit Routes, etc.

Rs.8,824/- http://www.bseindia.com/training/venture.asp

Private Equity Pro-gram: Impact Invest-ing Through PE

This program is provided by inter-national faculty and covers a range of venture capital / private equity financing activities, focus-ing in particular on a variety of later stage deals-from both the owner-manager’s and the in-vestor’s point of view.

Rs. 1,40,000 + Tax-es

http://www.isb.edu/cee/open-enrollment-programme/private-equity-programme

27

27

1. In the world of trade and commerce what is

special about the commissioning of Monte

deiPaschisi Siena in Italy in 1742?

2. This term is derived from the Greek word

'Oikanomia' means "House Management".

What is it?

3. Name the term used for depreciating a compa-

ny's intangible assets?

4. What is known as the cost of living index

which represents the goods and services

purchased by consumers?

5. What is known as "Green shoe Option" or

"Overallotment"?

6. Royal & Sun Alliance recently re-entered, after

29 years, to Indian financial market and it is

the first foreign insurance company started

operations here through a joint venture with an

Indian company. Name the company?

7. He is the pioneer in mutual fund industry and

often referred as the Father of Index Fund

investing. He created the first S&P 500 Index

fund. Identify this famous person?

8. In Indian economic scenario what significant

reform was introduced by the Indian

Government on April 1, 1957?

9. Name the first private sector corporate

launched the gold fund in India?

10. What is the exchange rate of one currency for

another over a fixed period of time called?

11. Who is the new CEO and MD of Infosys?

12. Perpetual bonds are bonds with Zero maturity.

Is it a correct statement?

13. What is a life Cycle fund?

14. Who coined the term "Generation X"?

15. Which company coined the term "Born Global"

firms in the year 1993?

QUIZ

25

ABHISHEK SURYARAJ

IV MBA F2

PAVAN L

IV MBA F1

Answers of May edition

1. Pd. Jawaharlal Nehru

2. True

3. Central Statistical Body

4. Delhi-NCR

5. 25% and 10%

6. FDI limits across various sectors

7. ` 17 and ` 23

8. WPI

9. 1955

10. 113 in 1979

11. The four fears are: Fear of being wrong, Fear of losing

money. Fear of missing out, Fear of leaving money on the

table.

12. Antwerp, Belgium

13. Open Outcry

14. John Landis

15. Yes; we usually hear about the illegal kind of insider

trading, but it can be legal. Employees buy and sell stock

in the companies they work for all the time, and that's

technically insider trading.

28

28

Across

2. A method of sale that allows for partial deferral

of any capital gain to future taxation

years.4.Income that is received by a business but

not immediately reported as income.

6. A type of long-term, typically for commercial

property, lease in which the payments are

variable and adjusted periodically to reflect

changes in the property's appraised value or

changes in a certain publicized benchmark rate.

11. The risk of receiving lower or negative returns

early in a period when withdrawals are made

from the underlying investments.

12. Security that is tradable but originally posed no

cost to the seller.

13. A special category of balanced, or as set-

allocation, mutual fund in which the proportion-

al representation of an asset class in a fund's

portfolio is automatically adjusted during the

course of the fund's time horizon.

14. A term used to identify a foreign bond issued in

Spain by a company that is not domiciled in

Spain.

Down

1. An investment fund that manages money from

investors seeking private equity stakes in startup

and small- and medium-size enterprises with

strong growth potential.

3. The most recent price at which an investment

has traded.

5. A chart that displays the high, low, opening and

closing prices for a security for a single day.

7. A type of risk that a fund or managed portfolio

creates as it attempts to beat the returns of the

benchmark against which it is compared.

8. Newly public companies that want to raise more

money tend to issue this type of stock.

9. A loan program that provides low-interest

student loans to undergraduate and graduate

students who demonstrate exceptional financial

need.

10. A tax that takes a larger percentage from

low-income people than from high-income

people.

CROSS WORD

26

NEENU SUNNY IV MBA F1

ANSWERS

ACROSS DOWN

2. INSTALLMENT SALE 1.VENTURE CAPITAL FUNDS

4. DEFERED CREDIT 3. QUOTED PRICE

6. GRADUATED LEASE 5. CANDLE STICK

11.SEQUENCE RISK 7. ACTIVE RISK

12. NIL PAID 8. EURO EQUITY

13. LIFE CYCLE FUND 9.PERKINS LOAN

14.MATADOR BOND 10. REGRESSIVE TAX

11. SEQUENCE RISK

29

29

30

30

About Us

Chaanakya is the official Finance Magazine of Wealth Incorporation, the Finance Club. It is released monthly.

Its objective is to keep each & everyone abreast with the activities and events of the world of finance.

Christ University, Hosur Road, Bangalore - 560029,

Karnataka, India Tel: +91-80-4012 9531/9532

Fax: +91-80-4012 9000 Website: www.christuniversity.in

Please mail your valuable reviews and feedbacks at

chaanakya@mba.christuniversity.in

(For Private Circulation Only)

CHAANAKYA