Capital Mind Closes Seed Round of Funding, Awesome Things Coming Your Way!

Capital Mind is pleased to announce that it has closed a seed round of funding with early stage investors in India and the US, to build and market a new age financial analytics platform and products.

The seed round was led by Raghu Vohra of (www.blackstonevalleygroup.com) who will also be joining our board. Raghu brings with him a rich background in financial analytics and valued experience being a key member of two successful fintech startups (both were acquired). He is currently on his third sortie in Newport Beach, California.

Raghu says: “We welcome Capital Mind to our BVG portfolio and am very excited to be working with Deepak and the Team.”

Deepak Shenoy, CEO at Capital Mind, and the Capital Mind team look forward to bringing even better analytics, insights and easy-to-use financial solutions for Capital Mind customers and subscribers. 

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By |March 30th, 2015|Categories: General|Tags: |3 Comments

NPS Versus Good Old Long Term Equity Investing – Even Without a Tax-Saving Tag, Equity Rocks

It’s tax saving season, so it’s apt to ask: Should you buy into the New Pension Scheme (NPS) for which the government has given you a phenomenal extra tax benefit of Rs. 50,000 next year?

The answer is complicated, so let’s go through the motions. Your choices are:

a) Invest the Rs. 50,000 into an NPS scheme, every year, for the next 20 years.

b) Pay taxes on the Rs. 50,000 (say at 30%) and invest the remaining Rs. 35,000 in a mutual fund instead.

Your Goal: To maximize what you earn out after taxes when you retire.

The NPS

So you put in Rs. 50,000 a year into the NPS for 20 years. Since 2009, the average return in the NPS schemes has been between 10% and 12% annualized, even including equity. Let’s take 11% as the growth number going forward.

You will end up with Rs. 32.10 lakh.

According to NPS rules you can “commute” 60% of […]

By |March 30th, 2015|Categories: NPS, Retirement|0 Comments

NBFCs Want To Offer 0% EMIs Online, But RBI Will Soon Clip Their Wings, We Think

NBFCs are getting ready to offer zero-interest EMIs on online portals:

“We are in talks with all the leading ecommerce sites to start zeropercent EMI schemes and currently finalising the mechanism since it would involve a change in technology in the back-end and the way the transaction will be completed,” said Devang Mody, Bajaj Finance’s president for consumer business. Other NBFCs too are evaluating similar opportunities, industry executives said.

Banks cannot offer zero interest EMIs on such purposes. RBI had banned such mechanisms offered by banks on online credit card purchases. The reasoning was: Someone is paying the interest, obviously. In this case it is the manufacturer of the product. RBI said that made a convoluted marketplace, where the product available to a customer without an EMI was an effectively higher cost. So, manufacturers had to pass down the savings to the customer – and the way to do it was that banks had to specify what […]

By |March 28th, 2015|Categories: Banks|Tags: |0 Comments

Reducing Subsidies: Let’s Focus on Food Wastage, and Not Procure and Store 50% More Than Required, Please?

The Food Corporation of India continues to have very high stocks of wheat and rice, but it’s beginning to moderate. We are still storing stocks that are 50% higher than even the revised buffer requirements due to the Food Security Act (which were increased from earlier norms by over 1/3rd).

Here’s the current buffer stock of Wheat and Rice (which is pretty much more than 95% of what FCI procures):

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According to a Business Standard Article, the government will change the buffer norms (the black line above) to the following:

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We currently have 48 million tonnes (480 lakh tonnes) in stock. This is higher than even […]

By |March 27th, 2015|Categories: Government|Tags: , , |4 Comments

Optionalysis: Ranbaxy April Futures Will Expire on April 01 on Merger With Sun Pharma, Things to Note

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By |March 26th, 2015|Categories: Premium|Tags: |0 Comments

Portfolio: 2 More Stop Losses Make It A Rough March

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By |March 25th, 2015|Categories: Premium|Tags: |0 Comments

Optionalysis: Futures Premiums Are Through The Roof, While MA20 Starts Getting Interesting Finally

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By |March 24th, 2015|Categories: Premium|Tags: |0 Comments

RBI Swaps Government Debt In Its Own Book Instead of Finding a Market Trade

In the budget, we asked the question: Is a 30,000 cr. debt switch planned for March? Of course it was, it turns out.

The government was looking to switch debt worth 30,000 cr. from an immediate repayment (FY 2016) to a later year. And here’s why:

On Friday the RBI switched out 30,228 cr. worth securities from the FY 2016 to Fy 2027. This means the government effectively bought back securities worth Rs. 30,228 cr. maturing FY 2016, and issued new securities maturing FY 2027 in exchange. 

Whatever is repaid has to be re-borrowed because our governments are big ponzi-type schemes – debt can only be paid by issuing more debt. So a “shuffle” in maturity patterns can lead to smoother redemptions and reissues; essentially the government will need to reissue 30,000 cr. lesser of new bonds because of this swap.

But what’s the big deal? Even last year, the government[…]

By |March 23rd, 2015|Categories: RBI|Tags: |1 Comment

On CNBC TV18: Of Jindal Steel, Bank Headwinds and That Markets Haven’t Corrected Enough

I was on CNBC TV-18 today and spoke about Jindal Steel, Banks and the overall situation in the market.

 

By |March 23rd, 2015|Categories: Video|Tags: , , , |6 Comments

Portfolio: Crazy Moves, 1 Stop, and 1 Outlier Added

We make a few changes to our CAPM Portfolio. This post is for Capital Mind Premium subscribers only.

By |March 23rd, 2015|Categories: Premium|Tags: |0 Comments

SEBI Relaxes Norms for Debt to Equity

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SEBI will now allowed banks to convert debt to equity with regulatory easing. In its latest board meeting, it has allowed financial institutions to be free of some of the disclosure and acquisition norms (ICDR and SAST) if they convert debt to equity of “listed borrower companies in distress” .

This is broadly supposed to help banks. In two ways:

  • They can take over the management of the company (convert debt to majority shareholding) and then sell the company over to other people
  • Such conversion may not have the same norms as any other such equity acquisition – such as requirement of an open offer or such.

It’s not very clear what the fine-print is like. But here’s a primer:

What Does Debt To Equity Mean?

Let’s say Bhushan Steel owes State Bank […]

By |March 23rd, 2015|Categories: SEBI|Tags: |3 Comments

Links: Two US Hedge Fund Managers That Enriched Themselves While Investors Suffered

The story of two fund managers that made themselves money while their investors didn't.

By |March 23rd, 2015|Categories: Links|0 Comments

RBI Buys $12 billion in January, Returns to Expansionary Balance Sheet?

RBI bought dollars by the truckload in January, it turns out. Over $12 billion was purchased in Jan 2015, which is the largest single month of dollar purchases since January 2008!

Even then the rupee appreciated from the 63.8 levels it saw end-December, to the 61.76 levels in January.

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When RBI buys dollars, you would expect the rupee to fall, since the demand for dollars is high (with the RBI buying). And the rupee, therefore should fall. But the dollar fell and the rupee gained, which tells you how strong the incoming flow of dollars was – the demand for rupees was even higher.

FIIs bought over 33,000 cr. worth of debt+equity in Jan 2015, with most of the money coming in as debt:

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There’s something in here that […]

By |March 23rd, 2015|Categories: RBI|Tags: |7 Comments

Macronomics: The Government is Getting 40% of all New Deposits as Credit Growth Craters

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By |March 22nd, 2015|Categories: Premium|Tags: |6 Comments