Combat Volatility like a pro with Mahindra Manulife Arbitration Yojana mutual fund

Who would have thought that a majority of Indian PSU banks would be trading below Rs 50? Who would have predicted that Pharma shares would be touching sky high within a few months? There were only a few market gurus who could predict the unprecedented move of RIL in just 50 days. Analysing our sensitive stock market in tough especially in the unprecedented & unseen times like these. But investing must not stop as Ups & Downs are a part of our lives as well as markets.

Market analysts rely on INDIAVIX index during such strange times. Basically its an index which charts the future trajectory of the market cycle. When the lockdown was announced, the INDIAVIX index jumped from 10 to 80 within a fortnight. As they say, only 5% of investors make the most of such occurrences and the rest 95% end up losing their hard earned money. The damage was such that most investors even today think twice before averaging their pre-covid investments. People who traded each minute, each day during the market hour were afraid to check their trading portals.

It’s funny when they say, “When the bulls climb they take the stairs & when the bears fall they jump through the window”. The general perception was so skewed that when the market media cried a No Buy on a certain stocks and funds there were investors who took a leap of faith & made it big!

Are you aware that there is a mutual fund which can make money on both rise and fall of the market cycle? Mahindra Manulife Arbitrage Yojana is an open ended scheme for investment in arbitrage opportunities available in equity, derivatives, debt and invIT markets. Arbitrage Mutual Funds are moderately low risk investment that can generate you an income through arbitrage opportunities in cash and derivative segment. Volatility gives an investor more opportunity in cash & futures/options market. Arbitrage Mutual Funds though they invest in equity are generally considered as safe investment pick and investors making loss in this kind of investment is yet unheard of.

Depending the upon the market conditions, Mahindra Manulife Arbitrage Yojana can hedge the risk by switching between Debt & Equity investment. At times a stock is available at different prices in two exchanges. For instance, stock A is trading at Rs 1000 on NSE & Rs 950 on BSE at the same time, then the spread of Rs 50 between both exchanges acts as your profit.

Another strategy that is often used by fund managers is cash & carry arbitrage. For example, buy stock B at Rs 1000 in spot market and sell the same contract of stock B in futures market at Rs 1020 with a lock-in profit of Rs 20. It is one of the least volatile hybrid schemes that is suitable for investment across market cycles.

What differentiates Mahindra Manulife Arbitration Yojana from other liquid funds is that when you exit the fund, the credit is reflected in your account the very next day. Being an equity based fund hybrid arbitrage mutual fund, the market position gets closed immediately giving investors an instant margin facility. The scheme offers better tax efficiency on returns compared to other short-term debt funds. Also, there’s no exit load after the period of 30 days.

It’s a win-win-win situation wherever the market heads. Mahindra Manulife Arbitration Yojana is best suited for investors who are looking out for Short Term investment parking pool with investment period varied from 1 month to 6 months.

The NFO opens for subscription on August 12 and closes on August 19. The scheme will reopen for continuous sale and repurchase from August 25.

Investors can invest online in the scheme from here.

Mahindra Manulife Arbitration Yojana MF scheme details

Fund House: Mahindra Manulife Mutual Fund

Issue opens: 12 August 2020

Issue close: 19 August 2020

MF category: Hybrid

Type: Open ended

Minimum Investment: Rs 1,000

Exit Load: Nil, after 30 days.

Plans: Growth, Dividend

Benchmark: Nifty 50 Arbitrage Index TRI

Riskometer: Moderately Low

Fund Managers: Srinivasan Ramamurthy & Rahul Pal

Disclaimer: Investment subject to market risk. Please consult your financial advisor before investing.

ADNOC, Adani, BASF and Borealis sign MoU for Chemical Complex in Mundra, Gujarat.

ADNOC, Adani, BASF and Borealis vow to invest $4 billion for Propane DeHydrogenation Unit at Mundra, Gujarat.

Abu Dhabi National Oil Company (ADNOC), Adani Group, BASF SE and Borealis AG have signed a Memorandum of Understanding (MoU) to engage in a joint feasibility study to further evaluate a collaboration for the establishment of a chemical complex in Mundra, Gujarat, India. This is the next step of BASF’s and Adani’s investment plans as announced in January 2019. With the inclusion of ADNOC and Borealis as potential partners, the parties are examining various structuring options for the chemical complex that will leverage the technical, financial and operational strengths of each company. The total investment is estimated to be up to $4 billion.

The collaboration includes evaluating a joint world-scale propane dehydrogenation (PDH) plant to produce propylene-based on propane feedstock to be supplied by ADNOC. Propylene will be partially used as feedstock for a polypropylene (PP) complex, owned by ADNOC and Borealis, based on proprietary state-of-the-art Borealis Borstar technology.

The PP complex will be the first overseas production joint investment by ADNOC and Borealis as part of a strategic framework with their current joint venture Borouge. Furthermore, propylene will be the key raw material for the previously announced acrylics value chain complex comprising glacial acrylic acid (GAA), Oxo-C4 (butanols and 2-ethyl hexanol), butyl acrylate (BA) and potentially other downstream products as part of a joint venture of BASF and Adani in which BASF holds a majority.

The chemical complex in Mundra is intended to be entirely supplied from renewable energy resources. The partners are evaluating co-investment in wind and solar park with the plans at an advanced stage of development. If realized, this would be the world’s first CO2-neutral petrochemical site to be fully powered by renewable energy, fully in line with the partners’ commitment to sustainability and energy efficiency.

Commenting on the MoU signing, Dr. Sultan Al Jaber, UAE Minister of State and ADNOC Group CEO, said: “This exciting collaboration is in line with ADNOC’s strategy to foster mutually beneficial partnerships. As a value-adding partner, ADNOC will play a crucial role as the propane feedstock supplier to this project. As the fastest growing global energy market, India is crucial to  our international growth ambitions in the downstream sector. As such, this project allows ADNOC  and its partners to capture the promising growth in the Indian polyolefins market.”

Gautam Adani, Chairman of the Adani Group, stated: “We are very pleased to collaborate with our international partners to establish a Chemical Manufacturing Complex at Mundra Port. We stand committed to the ‘Make in India’ initiative and serve the larger purpose of aligning growth opportunities with creation of goodness for the nation.”

“BASF remains committed to investing in India’s growth. We will play a key role in driving this joint collaboration which is also pioneering in terms of sustainability.  We look forward to working together with our partners in establishing a chemical cluster in Mundra and to supplying the Indian market with high-quality downstream products,” said Dr. Martin Brudermueller, Chairman of the Board of Executive Directors of BASF SE.

Alfred Stern, CEO of Borealis, added: “This partnership is a unique opportunity to strengthen our PP presence in India with proprietary Borealis Borstar PP technology and to create value and tangible benefits through innovation for customers across multiple industries.”

The partners aim to finalize the joint feasibility study by the end of Q1 2020. Production is intended to commence in 2024. Adani has allied infrastructure like sea port, airport and highway connectivity near the proposed unit. The designated site is planned at Mundra port in Gujarat, India, and the products are predominantly for the Indian market, serving a wide range of local industries, including construction, automotive and coatings.

Tamal Bandyopadhyay’s HDFC Bank 2.0 book narrates the Puri legacy.

Indian banking industry is not in the pink of health now but that’s largely the story of the government-owned banks. If we look at the private sector, barring a few odd banks which are not the best examples of corporate governance, over the last three decades, the industry has witnessed phenomenal growth with consumerism. The privitisation push in 1991 was a defining moment for the financial sector in India. What we have achieved today would not have been possible without India’s private sector banks like HDFC Bank. It is a child of economic liberalisation.

In the 1990’s, talking about banks as dinosaurs, Bill Gates of Microsoft famously said, “We need banking, but we don’t need banks anymore”. Three decades later, a bank is still relevant and will continue to do so if it’s willing to reinvent itself to be in sync with the changing milieu where it operates – by embracing digitalisation.

From a nimble start-up in 1995 to India’s most valuable banking brand, HDFC Bank has a made  gigantic strides into the world of digital banking under the leadership of Mr Aditya Puri. In a sector marred by controversies, Mr Puri has not just been the longest serving chairman of any bank globally but the face of a world class bank in India. Tamal Bandyopadhyay’s latest book “HDFC Bank 2.0: From Dawn to Digital” narrates this unique story of the  transformation of India’s most valued lender from a life cycle bank to a lifestyle bank. 

For starters, let me remind you that this book is not a sponsored project. It chronicles the HDFC Bank story warts and all. While highlighting the bank’s unique features, Tamal also criticises the unforgivable mistakes done by HDFC Bank during this journey through his unparalleled  writing skills. 

One of the key reasons why Indian banks were largely unaffected  during the Global Financial Crisis of 2009 was the fact that they were truly connected with their roots. During that  period, Mr Puri had guided HDFC Bank to add branches and ATM network in tier three cities and rural areas. The expansion drive created the credit card, auto and home loan boom. The book describes how  a bank reaching out to person for a loan – and not  the other way round - creates a new sense of trust in the aspirational class of India.

The era of Digital Disruption

Mr Puri believes that digitalisation and disruption are intertwined. Whenever there’s change, people tend to panic but if handled correctly, it can open up new beginnings. HDFC Bank saw this transformation ahead of others. During his Silicon Valley trip in 2014, Mr Puri saw how the fintech companies – the new kids on the  tech block – were venturing into fund transfers, mobile banking and shopping. They could build products that could give instant loan with slick user interface on their phones. Home grown fintech innovations like the United Payments Interface (UPI) were set to transform the way we Indians bank.

“Why don’t we disrupt ourselves instead of waiting to be disrupted by fintech companies? Why can’t we give a loan in 10 seconds? Why can’t we invent something to transfer money in just a click? HDFC Bank aspires to become a financial marketplace. It wants to be India’s Alibaba or Netflix when it comes to banking”. - Mr Aditya Puri, Chairman & Managing Director, HDFC Bank.

HDFC Bank first tied up with Chillr, an app which sends money over the phone using a UPI technology. A BharatQR code-based payments service named PayZapp is popular in many stores. The bank has also used AI for many applications like chatbots and social media interactions. Indigenously developed IRA robots have been deployed at several branches to solve customer queries. 

While adopting this technological shift, there were times when the bank failed on the customer front. For instance, the HDFC bank app crash in November 2018 became a hot topic in the media and  the bank was subjected to national outrage and ridicule. The book – “HDFC Bank 2.0: From Dawn to Digital” – clinically  chronicles the journey over the years.

About the book

Tamal Bandyopadhyay’s HDFC Bank 2.0: From Dawn to Digital is published by Jaico Publishing House. The book was launched by Rajnish Kumar, Chairman, State Bank of India at Nehru Centre, Mumbai. Aditya Puri, Managing Director, HDFC Bank Ltd  and many  luminaries in the financial services industry were present there. Tamal Bandyopadhyay is an author, columnist and keen watcher of banking and finance. His Banker’s Trust column, which now appears every Monday in Business Standard, is the most popular column on banking and finance with over half a million followers on the Linkedin platform.

“Tamal combines his financial knowledge, eye for detail, and an excellent storytelling style to create a vivid portrait of India’s most valued bank and its path to future” - Nandan Nilekani, Co-foundar & Chairman, Infosys & founding chairman of UIDAI, has written in his forward to the book.

HDFC Bank 2.0: From Dawn to Digital (ISBN: 978-93-88423-35-9) are now available at Crossword, Amazon, Flipkart and other leading book stores.

BSE launches 'BSE stAR MF' Android app for its mutual fund platform

BSE StAR MF, India's largest Mutual Funds Distributor platform, launched its mobile app - ‘BSE StAR MF’ at BSE International Convention Hall, Mumbai. The newly-launched app would look at enabling more participation from Mutual Fund Distributors (MFDs) by helping them process transactions on the go! The app would further ease the process of purchase and redemption of mutual fund units on behalf of their clients.

BSE StAR MF Mobile app supports real-time client registration and paperless transactions, creates and uploads mandate for SIPs, generates the basket of multiple of orders, tracks and allows the distributor to analyse his business at his fingertips.

In April 2019, the platform processed 42.6 lakh transactions. In FY2018-19, BSE StAR MF crossed 3.5 crore transactions witnessing 111% growth as compared to 1.70 crore transactions in FY2017-18.

Commenting on the launch of BSE StAR MF app, BSE MD & CEO, Ashishkumar Chauhan said, “BSE StAR MF platform has become a benchmark for the fintech industry in India by e-enabling more than 24,000 direct IFAs and 200,000 indirect IFAs to automate end to end processes in their front and back offices. The launch of the app would further provide the comfort of doing business to our 24,000 members. This app would not only increase their productivity, but would also enable IFAs to take their business anywhere, anytime. BSE StAR MF has seen more than 100% year on year growth every year for the last 10 years consistently. With the launch of the app, we look forward to help IFAs grow their business and retain the No. 1 position in the online MF distribution platform segment. This mobile application will also be provided to individual investors shortly.”

Overall, the superior support system and distribution reach of BSE StAR MF has enabled the platform to grow exponentially with the registered distributors soon to touch 24,000 in India. The launch of the StAR MF app is expected to further increase the number of distributors significantly. In the future, the app aims to support online video KYC to onboard new investors.  The BSE StAR MF app can be downloaded from the Google Play Store. Once the app is downloaded, the sign up can be done by providing the member identification number.

Source: Press Release.

Cashkrupt Pakistan receives $6 billion bailout from International Monetary Fund.

Security at China owned Port of Gwadar, Balochistan.

Failed economic policies, sponsorships for Islamic terror, high inflation and active corruption at all stages of government has taken down India's enemy neighbour, Pakistan at its knee. Pak PM Imran Khan has put the onus of degrading economic position on former PM Nawaz Shariff. The much touted economic corridor of prosperity, CPEC, has turned into an economic nightmare for taxpaying Pakistani citizens. For instance, the Chinese owned Gwadar Port in Balochistan rarely has any shipping calls. China has assured continuous economic help for the fulfillment of CPEC, as of now. After personally escorting Saudi King, Pakistan has received moratorium for deferred oil payments for one year. But this was not enough to save Pakistan's depleting economic reserves.

In April 2019, the finance minister of Pakistan requested the 13th bailout since the 80s from International Monetary Fund (IMF). In response to a request by the Pakistani authorities, an International Monetary Fund (IMF) mission led by Mr. Ernesto Ramirez Rigo visited Islamabad, Pakistan from April 29 to May 11 to discuss IMF support for the authorities’ economic reform program.

The Pakistani authorities and the IMF team have reached a staff-level agreement on economic policies that could be supported by a 39-month Extended Fund Arrangement (EFF) for about US$6 billion. This agreement is subject to IMF management approval and to approval by the Executive Board, subject to the timely implementation of prior actions and confirmation of international partners’ financial commitments. The program aims to support the authorities’ strategy for stronger and more balanced growth by reducing domestic and external imbalances, improving the business environment, strengthening institutions, increasing transparency, and protecting social spending.

At the end of the visit, the IMF representative Mr. Ramirez Rigo made the following statement:

"Pakistan is facing a challenging economic environment, with lackluster growth, elevated inflation, high indebtedness, and a weak external position. This reflects the legacy of uneven and procyclical economic policies in recent years aiming to boost growth, but at the expense of rising vulnerabilities and lingering structural and institutional weaknesses. The authorities recognize the need to address these challenges, as well as to tackle the large informality in the economy, the low spending in human capital, and poverty. In this regard, the government has already initiated a difficult, but necessary, adjustment to stabilize the economy, including thorough support from the State Bank of Pakistan. These efforts need to be strengthened. Decisive policies and reforms, together with significant external financing are necessary to reduce vulnerabilities faster, increase confidence, and put the economy back on a sustainable growth path, with stronger private sector activity and job creation."

"The EFF aims to support the authorities’ ambitious macroeconomic and structural reform agenda during the next three years. This includes improving public finances and reducing public debt through tax policy and administrative reforms to strengthen revenue mobilization and ensure a more equal and transparent distribution of the tax burden. At the same time, a comprehensive plan for cost-recovery in the energy sectors and state-owned enterprises will help eliminate or reduce the quasi-fiscal deficit that drains scarce government resources. These efforts will create fiscal space for a substantial increase in social spending to strengthen social protection as well as in infrastructure and human capital development. The modernization of the public finance management framework will increase transparency and spending efficiency. Provinces are committed to contributing to these efforts by better aligning their fiscal objectives with those of the federal government."

"The forthcoming budget for FY2019/20 is a first critical step in the authorities’ fiscal strategy. The budget will aim for a primary deficit of 0.6 percent of GDP supported by tax policy revenue mobilization measures to eliminate exemptions, curtail special treatments, and improve tax administration."

What Next?

The State Bank of Pakistan has assured the IMF that it will focus on reducing inflation, which disproportionately affects the poor, and safeguarding financial stability. A market-determined exchange rate will help the functioning of the financial sector and contribute to better resource allocation in the economy.

While a $6 billion bailout comes as a breather for tumbling Pakistan. The question arises that till when will this $6 billion help last. Will Pakistan stop the financing of Jihad for the moment at least to avoid the hanging sword of Paris based FATF? Any adventure with the world's fastest growing economy, India could spell doomsday for Pakistan at this very moment.

- Chaitanya Kulkarni

Source: IMF.

Philippines based Atlantic Gulf and Pacific company bags 9 licenses in 10th City Gas Distribution bidding.

Atlantic Gulf & Pacific Company of Manila (AG&P), a leading global gas logistics company, has emerged as a dominant LNG player in South India, securing nine licenses in the 10th round auction of City Gas Distribution (CGD) concessions by the Petroleum & Natural Gas Regulatory Board (PNGRB). AGP will provide piped gas in 9 districts of South India and will establish more than 1000 CNG stations.

AG&P is only one of two foreign companies to secure the coveted agreements to deliver natural gas directly to the residential, commercial, industrial and transport sectors in some of India’s most densely populated states. AG&P’s 25-year exclusive rights cover natural gas pipelines to residential users, supply for commercial establishments and CNG stations for cars, buses and trucks in Andhra Pradesh, Tamil Nadu, Kerala, Karnataka and Rajasthan.

The districts are home to the automobile, chemical, fertilizer, glass, steel, ceramics, food and pharmaceutical industries as well as major commercial centres. AG&P will build compressed natural gas stations, supported by steel pipelines and delivery of LNG by truck. Through its CGD networks, AG&P will bring significant foreign direct investment and generate direct and indirect employment across the country. The construction and operation of AG&P’s CGD networks will create thousands of local jobs. Like all AG&P employees, these workers will be trained to the highest international standards of safety and technical excellence.

The cheaper supplies of natural gas will be made available by the Honourable Government of India for domestic and vehicular needs. The commercial and industrial sector needs will be secured through uninterrupted imported LNG supplies, channelled through commissioned and upcoming LNG terminals.

“AG&P Group, a 119-year young multinational, with operation headquarters in Manila, Philippines has arrived in the Indian sub-continent with a vision of supporting the growth and development of India’s ever-growing energy needs and to touch the lives of millions of people. As a global player, we understand and value the responsibility and commitment entrusted to us for shouldering the infrastructure development to meet these energy needs with international best practices in safety, technology, conserving the environment, efficient and cost-effective energy solutions,” - Mr. PPG Sarma, Managing Director, City Gas Distribution & Logistics.

List of cities/districts

Andhra Pradesh: Anantapur, Cuddapah, Nellore, Chittoor.

Karnataka: Kolar, Bagalkot, Kopal, Raichur, Chikmaggaluru, Hassan, Kodagu, Gulbarga, Vijaypura, Mysure, Mandya, Chamarajnagar, Uttara Kannada, Haveri, Shivamogga.

Tamil Nadu: Vellore, Ramanathapuram, Kanchipuram.

Kerala: Alapuzzha, Trivandrum, Kollam

Rajasthan (North West India): Barmer, Jaisalmer and Jodhpur.

Once operational, AG&P’s CGD networks will accelerate industrialization, drive further economic development and overall, improve the quality of life of millions of Indians, while helping lay the foundations for the delivery of India’s goal of a clean energy future. 10th CGD bidding will bring clean cooking fuel and cheap CNG in 50 districts of India which would further enhance safe cooking and viable transportation.

- Press Release.

India will remain one of the fastest-growing major economies in the world - Asian Development Bank

Gurugram, India.

Global lender, Asian Development Bank has predicted 7.2% GDP Growth for India in the fiscal year 2019. Strong domestic demand would ensure that India will be the fastest growing economy in the world.

Recent policy measures by the Modi government will improve the investment climate and boost private consumption and investment will help India to lift economic growth in the next two fiscal years, according to a new report from the Asian Development Bank (ADB).

In its Asian Development Outlook (ADO) 2019, ADB projects gross domestic product (GDP) growth in India to rise to 7.2% in fiscal year (FY) 2019 and reach 7.3% in FY2020, reversing two years of declining growth as reforms to improve the business and investment climate take effect.

“India will remain one of the fastest-growing major economies in the world this year given strong household spending and corporate fundamentals,” said ADB Chief Economist Mr. Yasuyuki Sawada. “India has a golden opportunity to cement recent economic gains by becoming more integrated in global value chains. The country’s young workforce, an improving business climate, and a renewed focus on export expansion all support this.”

Income support to farmers, hikes in procurement prices for food grains, and tax relief to tax payers earning less than Rs 500,000 will boost household income. Declining fuel and food prices are also expected to provide an impetus for consumption. An increase in utilization of production capacity by firms, along with falling levels of stressed assets held by banks and easing of credit restrictions on certain banks, is expected to help investment grow at a healthy rate.

Downside risks to growth include a higher-than-expected moderation in global demand and a potential escalation of trade tensions. Lower-than-targeted tax revenues or a delay in strengthening bank and corporate balance sheets could also undermine economic expansion.

Consumer price inflation is expected to rise to 4.3% in FY2019 and 4.6% in FY2020 as food costs increase slightly and domestic demand strengthens. Given that inflation is expected to average around 4.0% in the first half of FY2019, the central bank would have some room for lowering policy rates.

Imports are expected to rise mainly due to stronger domestic demand while a growth slowdown in India’s key export destinations would dent export growth. The current account deficit is expected to widen a bit to 2.4% of GDP in FY2019 and 2.5% of GDP in FY2019. The deficit is expected to be financed comfortably by capital flows, given that India has emerged as an attractive destination for foreign investment.

A key factor driving India’s persistent current account deficit is its tepid export performance compared to other East and Southeast Asian economies. India’s export performance could benefit from greater participation in global value chains (GVCs). Lower trade costs, improved infrastructure quality, and enhanced worker skills could help India integrate more with GVCs. Global experience suggests that enhanced GVC participation is also associated with other development goals that India strives to achieve such as higher economic growth, an increase in the share of manufacturing in GDP, and faster job creation.

Popular schemes like PM Kisan Yojana may enhance domestic consumption further. India is today a bright spot in the world economy and it would continue to remain so with a high GDP growth rate.

Siemens Financial Services to invest in 200MW Poovani Wind Power Project.

A definitive agreement has been signed between the parties for equity investment. First investment by Siemens Financial Services (SFS) in a wind farm in Asia. The project involves installation of 100 units of Siemens Gamesa Renewable Energy’s SG 2.0 - 114 wind turbines in Tamil Nadu. The project forms part of Solar Energy Corporation of India Limited (SECI) Wind Power Tranche II.

Greenko Group, India’s leading renewable energy player, has signed an agreement with Siemens Financial Services (SFS), the financing arm of Siemens AG, for an equity investment in its Poovani Wind Power project. The project is being developed in the state of Tamil Nadu and is backed by Solar Energy Corporation of India Limited (SECI), Central Public Sector Undertaking under the Ministry of New and Renewable Energy, Government of India.

As per the agreement, SFS has agreed to take a 46% equity stake in the 200 MW wind power project. Siemens Gamesa Renewable Energy is involved in installing the entire infrastructure for the wind farm, including supply, erection and commissioning of 100 units of SG2.0 – 114 wind turbines with a hub height of 106 m, specifically designed for low wind sites in India.

Commenting on the development, Mr. Anil Kumar Chalamalasetty, Chief Executive Officer and MD of Greenko Group, said, “Attracting an equity investment from Siemens Financial Services demonstrates the evolution of the Indian energy market with inter-state transmission of renewable energy, confidence of international financial institutions on project & technical capabilities and the necessary regulatory frameworks to further support growth. We are delighted to partner with SFS for our Poovani Wind Project and welcome them to India.”

Mr. Steffen Grosse, Chief Financial Officer of Energy Finance, Siemens Financial Services added, “We are excited to announce this new transaction with Greenko Group, one of the leading renewable IPPs in India. Completing our first equity investment in renewables in the region further underscores our company’s commitment to bringing optimal energy solutions to India backed by innovative Siemens Gamesa Technology.”

Clean and affordable energy generated from this project will offset approximately 651,000 tonnes of CO2e from environment and electrify approximately 155,000 households annually. The project will be connected to the central transmission system of India, which will enable inter-state flow of energy from a renewable resource rich state and enable other states comply with their renewable purchase obligations and secure long-term renewable energy supply at a fixed price.

Brookefield-led India Infrastructure Trust (InvIT) to acquire East West gas pipeline for Rs 13,000 crores.

Brookfield has filed the preliminary placement memorandum, in terms of which India Infrastructure Trust, an InvIT set up by Brookfield as Sponsor and 90% investor, will invest Rs. 13,000 crore to acquire the East West Pipeline (“Pipeline”). As a part of the transaction, the InvIT will acquire 100% equity interest in Pipeline Infrastructure Private Limited (“PIPL”) which currently owns and operates the Pipeline.

Pursuant to this acquisition by Brookfield, the existing pipeline usage agreement has been reworked as follows:

• The reserved capacity reduced to 33 MMSCMD against the 56 MMSCMD.
• Any unutilized capacity payment by RIL will be the difference between Rs. 500 crore a quarter and actual revenue earned by PIPL.
• RIL will continue to be entitled to transport gas, either by itself or of any customers, free of cost against any outstanding unutilized capacity payments.

At the current approved final tariff of Rs. 71.66/MMBTU, if the average volume of gas transported is 22 MMSCMD, RIL will not be liable to make unutilized capacity payments.

The next review of tariff in April 2020 will also consider upward revision to tariff arising from the determination of lower revised capacity of the pipeline. Considering the new investments in the upstream sector in the KG basin, and the growing LNG imports, ability to swap gas, the average volume expected to be transported through the pipeline is expected to be significantly higher compared to the current levels.

RIL will be entitled to a significant participation in the net earnings of PIPL under the mechanism specified in the pipeline usage agreement. RIL’s current investment in preference shares valued at Rs. 4,000 crore to continue and will be converted into equity at the end of 20 years.

Further, at the end of 20 years, RIL has the right to acquire equity shares of PIPL held by the InvIT at an equity value of Rs. 50 crore.

GMR Infra bags contract to develop greenfield Bhogapuram airport near Vizag.

GMR Infrastructure Limited has informed Bombay Stock Exchange that its subsidiary GMR Airports Ltd has emerged as the highest bidder for the Development, Operations and Management of Greenfield International Airport at Bhogapuram, Andhra Pradesh (AP) on a PPP basis. The initial investment for Phase-1 to be approx. Rs 2,300 crores.

Andhra Pradesh Airports Development Corporation Limited (APADCL), had initiated the RFP process for a new airport at Bhogapuram in November 2018. The project involves design, build, finance, construction, development, up-gradation, modernization, operation and maintenance of the Bhogapuram airport for a period of 40 years. As part of the qualification process, APADCL had shortlisted seven applicants viz GMR Group, GVK, Dolt Infra, !-Investment, NIIF, Esse! and Reliance Infra. However, only GMR Group, GVK and Dolt Infra submitted their financial bids.

In Calendar Year 2018, the existing civil enclave at Vishakapatnam Naval Airfield has handled 2.33 mn passengers and 5000 Tons cargo. Over the past 4 years, the passenger traffic at the Vizag airport has grown at 14% CAGR while the Airport ranks 5th amongst the custom airports in India in terms of Cargo traffic.

The proposed greenfield airport site lies on the border of Visakhapatnam and Vizianagaram districts, and is approximately 45 km from Visakhapatnam through NH-5 and 25 km from Vizianagaram via NH-43. The site is strategically located on the east coast and stands to get benefitted from the vast catchment area surrounding the region. Moreover, the beach corridor development is underway in proximity to the proposed International Airport in Bhogapuram which will provide impetus to retail and hospitality developments in the region.

Mr. GBS Raju, Business Chairman, GMR Group said, "It is a matter of great pride for us as Bhogapuram Airport win will add to the ever-growing portfolio of Airports developed, managed and operated by GMR Airports. We look forward to work on this prestigious airport and will aim to deliver an airport of global standards which would be a matter of pride for the region of Visakhapatnam and provide a further fillip to the economic potential of Andhra Pradesh." 

The company is looking forward to receiving a Letter of Award shortly.

Saab signs MoUs with Indian aerospace firms for Gripen Jet Aerostructures.

As India plans to induct 110 Multi Role Combat jets in its fleet, Sweden's Saab has shown interest in the bid by signing MoUs with Indian aerospace firms as per #MakeInIndia plans. Saab has taken another important step forward to expand its footprint and aerospace ecosystem in India by signing new Memorandums of Understanding (MoUs) with three of the country’s leading aerospace manufacturers; Dynamatic Technologies Limited, CIM Tools Private Limited and Sansera Engineering Limited.

The MoUs with CIM Tools and Sansera expand the existing working relationships with Saab on commercial aerostructures to the Gripen fighter and other defence-related products in the Saab portfolio. The MoU with Dynamatic is a starting point to explore future joint opportunities in commercial and defence-related aerostructures work, including Gripen.

“Saab’s Aerostructures business unit has had a successful relationship with CIM Tools and Sansera for several years. Based on that experience we see these two companies can add great value to our Gripen ‘Make in India’ offer,” says Mats Palmberg, VP Industrial Partnerships and Head of Gripen for India. “The MoU with Dynamatic adds the capabilities of complex airframe assembly to Saab’s ‘Make in India’ offer for Gripen,” continues Palmberg.

“I am pleased that the fruitful co-operation we have established over several years with CIM Tools and Sansera can be further developed for the Gripen fighter. The MoU with Dynamatic has the potential to further develop our ecosystem for commercial aerostructures as well as Gripen,” notes Lars Jensen, Managing Director and Head of Saab Aerostructures.

Collaboration and knowledge-sharing are the keys to success when building a successful indigenous aerospace ecosystem. The new MoUs announced today will enable Saab to work with these Indian companies to establish an indigenous, efficient, tailor-made manufacturing system that will develop, deliver and support state-of-the-art Gripen fighters in India for the Indian Air Force.

Dynamatic Technologies Limited designs and builds highly-engineered products for automotive, aeronautic, hydraulic and security applications at various locations in India and Europe. Dynamatic is firmly established as one of the leading private aerospace companies in India, with a wide range of capabilities including complex structural assembly, detailed parts manufacturing and engineering services.

CIM Tools Private Limited is well-established as one of India’s leading aerospace manufacturing companies, providing components, detailed parts and sub-assemblies for aerospace primes worldwide. CIM Tools has experienced continuous business growth thanks to its dedicated owners and skilled workforce.

Sansera Engineering Limited has its roots in the automotive industry providing highly efficient manufacturing and engineering of forged and machined components to prime global automotive companies. In 2010, using its knowledge of efficient and automated manufacturing, Sansera started production of aerospace components for leading companies in the aerospace sector. With swift skills development and investment in facilities and equipment, Sansera continues to grow as a part of India’s aerospace manufacturing industry.

Source - Press Release.

#IRMA2019: Key insights from ICICI Lombard’s ‘Managing New Age Risks’ survey.

Technology, as we know, has become an integral part of our business enterprises. Industrial Revolution 4.0 which connects physical devices with electronic devices comes with new kind of risks. As the world is getting increasingly interconnected, everyone shares the responsibility of securing our cyberspace. Adopting preventive measures and cyber risk mitigation tools has become the need of the hour.

ICICI Lombard, India’s leading private sector general insurance company has commissioned a PAN India survey titled ‘Managing New Age Risk’ to assess the preparedness of Indian organisations towards new age risks. A detailed feedback of CXOs from 100 companies across various sectors was taken for this research.

Corporate dependence on insurance to cover the risk of cyberattacks is expanding in line with their increasing reliance on tech for everything from invoicing to engaging consumers on social media. Next-gen technologies such as Artificial Intelligence, Robotics, Cloud, Blockchain, IoT etc. are associated with new age risks like cyberattacks, data theft, cloud hacks etc. India was the target of 17% cyberattacks, second only to US (38%) between 2015- 2017 as per report released by Symantec Corp. The Indian Computer Emergency Response Team (CERT-In) reported 53,081 cases of cybercrime in the year 2017. More than 40,000 computers in India were jeopardised by Wannacry ransomware attack. Recently, a Pune-based co-operative bank lost nearly Rs 94 crores when hackers operating from abroad breached bank’s ATM servers.

As cyberattacks become more frequent and severe, the need for solid insurance coverage to plug potential financial losses is in demand.

ICICI Lombard’s ‘Managing New Age Risks’ survey delved into understanding the risks that Indian Inc. perceives as critical for business. It also looked at the role of insurers in managing risks from the lens of Indian firms. The survey findings were unveiled by Mr. Bhargav Dasgupta, MD and CEO, ICICI Lombard in the august presence of Prof. Kenneth Rogoff, Professor of Economics & Public Policy at Harvard University and a former Chief Economist at the International Monetary Fund.

The report highlights that companies still consider traditional risks as extremely crucial for their business. CXOs believed that assets like property, machinery and health & wellness of employees are pivotal risks and are needed to be insured. When asked about which risks have been gaining importance in the last 3 years, the response was clearly for new age risks such as hacking, data theft etc. 67% of India Inc. believes data thefts have increased substantially from the last 3 years, 63% feels that risks from cybercrime have increased substantially in the same period.

In terms of challenges to handle risks, 43% CXOs find new age risk incident to be unique, while 42% found it even difficult to identify the source of an attack, making it a tough task to manage. 21% company executives believed that new age risk incidents spread too fast, making it difficult for firms to handle them.

Lack of internal capabilities was a key takeaway when it came to preparedness of organisations in managing new age risks. 41% respondents believed that their existing systems were not equipped to handle these risks, while 39% respondents felt that there was a shortage of skilled manpower that could address these risks. 71% of respondents said that prevention of new age risks is the best way to deal with e-risks.

On the role of insurers, 81% companies believe that insurers are equipped to a certain extent in managing new age risks. Specifically, companies believe that insurers are better equipped to manage risks such as cloud computing (100%) and cyberattacks (69%). However, a majority of CXOs believe that e-risks like data thefts can be better managed internally.

“New age risks are already a reality today, globally and in India. It is most critical that Indian firms take cognizance of this aspect. As is evident from ‘Managing New Age Risks’ survey, being prepared and having the right risk management framework in place is the need of the hour. ICICI Lombard is partnering with their clients to ensure that they are equipped with appropriate and adequate ‘risk management and mitigation’ solutions to effectively handle any prospective new age risk incidents.” - Mr. Bhargav Dasgupta, MD & CEO, ICICI Lombard.

In the digital age, cyberattacks will face a sharp incline in the years to come. Corporates and Insurance companies will have to combine synergies to fight these new age cyber risks in the interest of customers.

- Chaitanya Kulkarni.

YES BANK Datathon unites professionals and academia to co-create next-gen data driven products.

Technology and Banking are no longer poles apart. Over the last few years, innovation in the fintech industry has taken the world by storm, becoming a global phenomena not limited to one region. The Asian fintech space was dominated by innovations from Indian and Chinese firms, especially from the new-age startups. Being a software superpower, Indian startups and MNCs are contributed immensely towards the development of innovative products and models.

This year, we all have witnessed the growth of game-changing technologies like UPI, Blockchain, Artificial Intelligence and Open Banking. Global technology giants like Google, WhatsApp were wooed by the United Payments Interface, making India a top destination of digital payment adoption. Blockchain, which is also the underlying technology for all cryptocurrencies is implemented by banks to secure financial transactions.

Experts who have closely followed these trends believe that the next wave of fintech would be in the field of data science. YES BANK, India’s fourth largest private bank has been at the forefront for adopting next-gen technologies to service its customers better. YES BANK believes that the best of outcomes in the field of technology is received from the engineers and data scientists of tomorrow – the students. The idea generation from aspiring data scientist and its execution under the mentorship of CIOs and CTOs would be key in building scalable models in the data science ecosystem.

Data scientists, engineers, students from Top colleges, all compete at the Datathon.

Datathon, India’s first bank led Datathon collaborated aspiring data scientists and professionals from IT field to augment YES BANK’s 600 TB anonymized and embedded data stack to create new Artificial Intelligence/Machine Learning (AI/ML) prototypes in a period of just 100 days. In its inaugural season, more than 6000 aspiring data scientists/ engineers and developers joined this competitive initiative. The top teams include not only students from top technology institutes like the IITs, BITS, ISI Kolkata and University of Moratuwa, Sri Lanka but also 150 plus professionals from top IT organisations.

Participants at Datathon got an opportunity to access unstructured and anonymised data on Cloudera and AWS dashboards. YES BANK had also onboarded a pool of 20+ data science experts and leaders across industries, to support the data science teams as well as to help the bank identify relevant use cases for product development using Big Data Analytics, AI and ML. After the detailed scrutiny of models, top 15 teams were invited to Bengaluru to present their models in front of esteemed panelists at Datathon Finale.

Data models developed during the Datathon were aimed at addressing the current business and service requirements. For instance, team Django Unchained has created an AI based application for sales representatives of the bank which enables them to measure share of wallet reserved for every retail customer, predict customer attrition and provide customized products to different classes of customer. Team Prayaas, a mix student team from NMIMS Mumbai and ISI Kolkata worked on a proactive model which predicts individual customer deliveries like cards, cheque books, statements by reducing human interference and service requests. Majority of models presented at Yes Datathon pointed towards improving customer satisfaction and reducing overheads; a facet of fintech.

And the winners are...

Oracle, a team of professionals from IBM and two students from IIM Bangalore bagged the top spot of Yes Datathon challenge. Team Oracle presented a ‘master product’ which creates a single 360 degree view of every retail customer. Upon analysis, the model provides customised product and service recommendations for every individual retail customer along with the resolution of pending service requests. Team Data Pros and Data Acers from the University of Moratuwa, Sri Lanka were honoured with runners-up and Best Student Team (position) at Yes Datathon challenge.

YES BANK plans to deploy the selected data models in the real-time banking ecosystem by March 2019. YES BANK believes in the ideology of consistently adopting next-gen technologies to deliver superior products and services. Datathon is also actively partnering with top technology institutes, and has partnered with top IITs and BITS Pilani, and will also host AI/ML challenges and data engineering workshops to deepen practical and technical knowhow of future technology leaders and widen the data science ecosystem. Yes Datathon is a part of a long-term strategy of YES BANK of ‘becoming a technology company in the banking business’.

- Chaitanya Kulkarni.

COCO by DHFL General Insurance is here to transform the “Sold, Not Bought” aspect of Insurance.

Students studying in the field of Insurance are practised to believe in the thought process of “Insurance is Sold and Not Bought”. This is even considered as conventional wisdom for veterans working in the insurance industry. Many people claim that insurance products are complex, easily misunderstood, need a detailed analysis to be underwritten, and therefore have to be “sold” to customers. But for how long? With the advent of technology, InsureTech firms are here to demystify the age-old concept of “Sold, Not Bought”. Insurance companies are not just going to B2C but the customer too is keen for best value offering.

In the age of where everything is going digital, insurance companies are offering new products through the digital ecosystem. The key advantages for consumers choosing digital insurers are product choice, transparency, direct point of contact etc. COCO by DHFL General Insurance believes in the Philosophy of Connected Covers – a policy which can be bought, reviewed, claimed and renewed, all online in the digital ecosystem with the help of next-gen techs like Artificial Intelligence and Machine Learning.

COCODrive offers India’s highest Personal Accident Cover

COCO by DHFL General Insurance has launched India’s first customizable online comprehensive car insurance policy named COCODrive. Gone are the days when consumers were forced to buy unwanted services in bundled insurance policies. Busting traditional routes, COCODrive gives freedom to customers to choose from whopping 19 add-ons depending upon the type of car, the age of a car or geographical area.

The a`la carte approach in the COCODrive policy provides suggestions to customers that will help them pick the right add-ons suitable for their need. COCO by DHFL General Insurance ensures that customers have the right protection for themselves, their loved ones and of course their family car.

COCODrive offers India’s highest personal accident cover which can go up to Rs 35 lakhs. The policy offers many non-standard add-ons such as enhanced owner, occupant and paid driver personal accident cover. While the recent Supreme Court decision mandates personal accident cover of Rs 15 lakhs, COCODrive is the only product in the market to offer an enhanced personal accident cover that can go as high as Rs 35 lakh.

Protecting your loved ones: Family + Car.

Choose what you want! COCODrive offers a range of crucial add-ons for you, your loved ones and your car. COCO by DHFL General Insurance offers 6 car related add-ons out of a total number of 19 add-ons, which is the highest in the market.

Using a car which is older than 5 years, then you should buy Zero Dep cover as it fully pays the replacement cost of your car’s damaged parts without worrying for depreciation. If you live in monsoon prone areas like Mumbai, Bangalore, Kerala or North East which face excessive floods every year. The Engine Protect add-on cover pays for damages caused to the vehicle’s engine or its most important parts like cylinder, piston, crankshaft, pins, gearbox etc due to water ingression. Flood related damages are excluded in the standard motor insurance policy and it is essential to buy if you live in low lying areas. Also, car owners should avoid parking your car in the flood prone areas or over a river bridge during monsoon. A car fully submerged under water can result in a total loss. In such unfortunate case, New Car for Old Car add-on can get you a claim worth the cost of the new vehicle at just Rs 0.50 per day.

In case of a vehicle breakdown or meeting with an accident, the Roadside Assistance offers a host of benefits including towing, battery jump start, phone assistance etc. Data analytics suggests that 80% of breakdowns or accidents happen on National Highway, far from the city. In such case, if your vehicle can’t be repaired on spot, the Emergency Transport and Hotel Stay add-on covers for your last minute travelling charges or an overnight hotel stay. Accidents generally end up in a need to go to the hospital, although we dislike it. The Accident Hospitalisation add-on will ensure that the cost of medical expenses (driver and occupants) do not add to your pain.

COCODrive rewards you for Safe Driving with No Claim Bonus (NCB) which can go high as 50% of the policy value. The NCB Secure add-on allows you to have Second Chance by protecting your NCB in case you make 1 claim during your policy tenure.

#CareMoreHaveMore

COCO by DHFL General Insurance Ltd is a new age InsureTech (general insurance venture) promoted by Wadhawan Global Capital Pvt Ltd (WGC).  COCO by DHFL General Insurance, a 100%  owned entity of WGC started its business operations in November 2017 with an overreaching ambition to transform General Insurance domain in India. COCO has launched Motor Insurance and is soon going to venture into other General Insurance segments namely Health, Travel, and Home. COCO, the digital avatar of DHFL General Insurance was awarded for ‘Brand Excellence in BFSI’ at Awards for Excellence in Branding and Marketing, Singapore 2018. The Gross Written Premium for YTD FY 201819 stood at Rs 202.71 crores, making COCO by DHFL General Insurance a leading InsureTech firm to service Indians.

- Chaitanya Kulkarni.