THE INVESTOR VOLUME IX ISSUE IX …

1 NiveshakTHE INVESTORS eptember2016 VOLUME IX ISSUE IXThe Telecom War in IndiaHow Jiowill affect the marketDisclaimer: The views presented are the opinion/work of the individual author and the Finance Club of IIM Shillong bears no responsibility EDITOR S DESKN iveshakVolume IXISSUE IXSeptember 2016 Faculty ChairmanProf. P. SaravananAaron Keith RegoAbhishek JiaswalAditya Kumar JainAnisha KhuranaAnkit SinghalAnkur KumarAnoop PrakashDevansh ShethShreyans JainAll images, design and artwork are copyright of IIM Shillong Finance Club Finance ClubIndian Institute of TEAMDear NiveshakThe month of September saw the benchmark Sensex falling 557 points or rom the start of the month. The month did not see any major economic events or policy announcements by the government. The most talked about topic this month was the new RBI governor who would replace Dr. Raghuram month also the news came that the country s GDP grew by in the irst quarter of this iscal year.

2 This reairmed the India s position as the fastest growing major-economy in the world. Also on the governance ront, there was some good news. Our Babu-led bureaucracy has inally energised themselves and has started competing among themselves to get the status best performing states. Many states have also hired big consulting irms to help them understand the process of evalua-tion and ind ways to improve their rankings. On policy-ront the government is tak-ing its initiative further and is giving major boost to the Uniied Payment Interface (UPI). There was also one initiative that could be the irst of the million steps needed to revive the inancially-drain Indian Railways (IR). The IR has started the dynamic surge-pricing for ticket booking for some of its premium magazine ront, this month we have covered HUL for our Equity Research Report. HUL being a behemoth FMCG company provides a wide view of the Indian rural sector economy also. Article of the month talks about talks about the Uniied Payment Interface (UPI).

3 The author talks about why how the UPI is diferent rom Payment Wallet system and who it is another step to make a cashless society. Our cover story talks about the Telecom batle which has started with the launch of Jio at rock-botom price. On the FinGyaan, the author gives views on the GST and how it could help in removing the parallel economy running in the country. FinRewind sec-tion talks about the WorldCom Scandal in the year 2002. While for FinSight we have a topic on the robust BRICS economy. The author illustrates how these ive nations could be the engine of growth for the world economy. On Classroom this time we are explain the concept on Margin FinView, this time we have brought the interview of Mr. Tapan Singhel, MD & CEO of Bajaj Allianz. He gives his views on investment philosophy, how we can convert the insurance industry into a pull-based selling model and how IoT can add value to the Insurance industry. Finally, we would like to thank our readers for their immense support and encourage ment.

4 You remain our prime motivation factor that keeps our spirits high and gives us the vigour and vitality to keep working hard. We hope you had a great inancial year and wish you the best for the new one. Stay invested Team NiveshakCONTENTSN iveshak Times04 The Month That WasArticle of the month 12 Uniied Payment Interface and Its Impact on Payment Cover Story24 WorldCom Scandal, 2002 Finsight28 BRICS - The Fuel to the World s growth EngineCLASSROOM33 Margin TradingFinGyaan20 GST Impetus for Indian Econ-omyFinRewind16 Telecom Data WarFINVIEW30 Mr. Tapan Singhel, MD & CEO of Bajaj AllianzEquity Research Report10 HULMAY 2016 GDP grew by in Q1 Indian economy grew by in the irst quarter of this iscal. Though this reairms the India s positions as the fastest major economies in the world, the growth is below expectations. This also diminishes the hope of achieving 8% growth for the whole year. Also this growth is also slow than the growth achieved in the Q4 of economy needs to grew by 8% consistently if it needs to create job, reduce poverty and uplift the life of people.

5 This slow growth might also put some pressure on the central bank to cut interest rate in the monetary policy meeting on October 4th. But that hope is also tied to the inlationary pressure in the April July iscal deicit was registered at of the whole year s budget which is slightly above than the last year s igure of to Acquire Ten SportsSony Pictures Network Limited (SPN) will buy Ten Sports for INR 2600 crore from Zee Entertainment Enterprise (ZEE). This would add muscle to the already large portfolio of currently owns channels like Sony Six, Sony Six HD, Sony ESPN and Sony ESPN HD. By acquiring Ten Sports it will add channels like Ten 1, Ten 2, ten 3 had also acquired Ten Sports from Dubai-based Abdul Rahman Bukhatir s Taj Group for INR 500 crore. Adding Ten Sports channels to its portfolio to its already diversiied channels will make SPN s portfolio quite strong.

6 Also SPN holds broadcasting right to the Indian Premier League (IPL). The biggest advantage would come from channels like WWE (World Wrestling Entertainment).States Competing to Get the Best RankingCompetition would even get the babu-culture moving was little unexpected. But that has actually happened among the states. Indian states are competing among themselves to get the best ranking among themselves. These ranking are updated continually. As soon any reform or initiative has been veriied by the concerned department, the same is fed into the dashboard. This is done on a real time understand the process and to improve their rankings, states have hired top-notch consultants. The consulting irms would also help these states on how they could improve their ranking. There have been some disagreements about the method. While some states have questioned the process of evaluation, DIPP has also raised question about the reforms initiated by some states contemplating whether these reforms should qualify for consideration in the evaluation process or to Revive Construction SectorIn a major step to boost the economy and take it to the path of growth trajectory, government has taken slew of measures that will boost the construction sector.

7 As this sector is linked to the heavy-metals industries, revival in construction sector would have direct efect on the improvement in other , the government has taken steps to improve the process of release of funds stuck in the arbitration process. As per the data release government agencies, pending claims from government bodies are the major reason for the burgeoning debt in the construction sector. These pending claims account for about 150% of the total government has also given approval to the 100% FDI in the food sector. Under the steps taken by the government, the government would pay around 75% of the claim amount to an escrow account. For faster settlement the disputes would also be transferred to a new arbitration for Financial Inclusion: UPI to Get Major BoostIn a major push for the inancial inclusion that would help sort the last mile connectivity problem, the government has given major push to the The Niveshak ShillongTeam NIVESHAKNIVESHAK4 The Month That WasUniied Payments Interface (UPI).

8 UPI could rope in as many as 1015 ecommerce players. The concept of UPI is almost same as that of the mobile wallet system Paytm. But there is a slight diference. While payment apps like Paytm does not require one to have bank accounts, UPI system would work with bank account. However the other functionalities and workings are almost same. This would act both as advantage as well disadvantage. While advantage would be in the form of people would be opening bank accounts and thus inancial inclusion while this same advantage couls be its biggest stumbling block since a large section of people still do not have proper documents to open bank Could Hold Large Share in a Company s IPO: SEBIIn order to increase retail participation in the companies market regulator Security Exchange Board of India has increased the participation of employees in the company in which they work.

9 As per the earlier guidelines, employees could bid up to INR 2 lakh for their company s IPO. But with the revised guidelines, the employees would be able to invest unto INR 5 lakh in their company. This has been done to improve the participation and increase the retail base in the company s IPO. In 2010, SEBI had hiked the employee participation up to INR 2 lakh. But from then there has been devaluation in rupee. So to ofset that efect of rising inlation SEBI has taken decision to increase the Surge Pricing in RailwaysRailways has taken a step that would help it mop up little more cash. It has introduced surge pricing mechanism for premium trains like Rajdhani, Satabdi and Duronto. Under the proposed mechanism, the railways price would increase with the increase in the number of the reserved berth. With every 10% reservation in the birth, the price would increase by 10% of the base price.

10 Also the maximum price has been capped to times the base price. This means around 50% of the total seats would be sold at times the base price. This would be done only on the base fare. Other charges like reservation charges, IRCTC charges etc. would be levied in addition to the above hiked oicials said that this would help Indian Railways mop up around INR 500 crore for this iscal. Also they contended that when other modes of transportation have dynamic price mechanism then why not Railways should Niveshak Month That Was FINANCE CLUB, INDIAN INSTITUTE OF MANAGEMENT SHILLONGSEPTEMBER 20166 Cover StoryNIVESHAK6 Article of the MonthMARKET CAP (IN RS. CR)BSE Mkt. Cap1,10,73,648 CURRENCY RATESINR / 1 / 1 / 100 Jap. / 1 Pound 1 RATESBank Repo / DEPOSIT RATESBase - : : : as on September 30thMarket Snapshot-2,000-1,00001,0002,0003,0004,00 0272002740027600278002800028200284002860 028800290002920001-09-201602-09-201606-0 9-201607-09-201608-09-201609-09-201612-0 9-201614-09-201615-09-201616-09-201619-0 9-201620-09-201621-09-201622-09-201623-0 9-201626-09-201627-09-201628-09-201629-0 9-2016 BSE FII, DII Net turnover (in Rs.)