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Men, know the

cost of divorce Find out about your rights and ways to
protect your finances when headed
for a legal separation. P2
 cover story
02 The Economic Times Wealth August 7-13, 2023

Men,
know the
cost of
divorceFind out about your
rights and ways to
protect your finances
PHOTOS & ILLUSTRATIONS: GETTY IMAGES

while heading for a

legal separation.

By Ranaditya Baruah fee he paid his lawyer. “I will now have to during divorce proceedings, women are agreed to pay a huge sum to dismiss the

W
hen Sourav Kumar’s mar-
riage fell apart after eight
years, divorce seemed the
only viable option. The
emotional turmoil was ex-
pected, but what Kumar did not anticipate
was the extent of financial impact. For,
when the divorce came through in 2020, the
businessman was ordered by the court to
pay `20,000 a month as alimony and `15,000
a month as child support for his five-year-
old kid. This was in addition to the `1 lakh
try and increase my income from other
sources because the alimony and child sup-
port will make a big dent in my monthly in-
come,” says the 40-year-old from Guwahati.
In a country where women usually bear
the financial brunt of divorce and are vic-
tims of dowry and domestic abuse, most
advice and sympathy are directed towards
them. In the process, men are often ignored
when it comes to highlighting their finan-
cial and legal rights in a divorce, or even
when they are victimised in fake cases of
abuse and dowry. To gain an upper hand
known to file fake cases to put pressure on
their husbands. In fact, in a recent observa-
tion, Justice Sanjay Kumar Dwivedi of the
Jharkhand High Court said that although
Section 498A of the Indian Penal Code was
introduced to address cruelty inflicted by
husbands and their relatives, it is now be-
ing misused by women.
Mumbai-based Vikas Singh knows it
all too well. His former wife filed a fake
case of domestic abuse against him when
talk of divorce came up after just a year of
marriage. “While many men would have
case, I was prepared to face a court trial be-
cause I was aware of my legal rights,” says
the 44-year-old businessman. The result?
His wife ended up paying `12 lakh as dam-
ages for filing a fake case, besides shelling
out `1.75 lakh as his legal fee.
Typically, however, men end up bear-
ing a heavy financial burden, especially
where the woman is a homemaker and
financially dependent on him. While the
visible costs in a divorce include the legal
fees, maintenance and child support, there
are the invisible costs, which result from a
 cover story
The Economic Times Wealth August 7-13, 2023 03

Mutual consent vs Contested

divorce
Mutual consent Contested
TYPE

Both spouses file petition to end marriage; One spouse files for divorce, the
mutually settle issues like maintenance, other disagrees. No settlement on
child custody, division of assets/property. terms of divorce.

GROUNDS ON WHICH PETITION IS FILED

No grounds required. Grounds include cruelty, adultery, desertion,

conversion, mental disorder, leprosy, venereal
disease, renunciation, no resumption of
cohabitation, and not heard to be alive.

COURT PROCEEDINGS

First motion, when both spouses
file a joint petition in court.
Cooling-off period.
Second motion is filed within 18
months of first motion.
Divorce decree is issued.
One spouse files divorce petition.
Court sends notice to other spouse.
Statements are recorded.
Examination/cross-examination of
witnesses.
Divorce decree is issued.

TIME TAKEN

Faster and less contentious due More time-consuming, with

to mutual agreement on terms multiple court hearings. Can
of divorce. Takes 12-24 months. take 2-5 years.

COOLING-OFF PERIOD

Statutory period is six months, but No such period.

it can be waived by court.

LEGAL FEE

Starts from `5,000, due to `50,000-7 lakh, or higher, due to

shorter court proceedings. longer court proceedings.

Husband’s right to movable & immovable property

While the husband cannot stake a claim to wife’s streedhan, he has a right to other movable and immovable properties.

Movable property Husband’s ancestral or self- Property jointly owned, Property jointly owned and
acquired property... but loan taken by loan taken by both...
The husband has a The wife has no right over ancestral husband... In this case, the property is
right to any jewel- property. She can stake a claim to The husband can have a divided fairly, taking into account
lery, valuables or self-acquired property only if she is a strong claim to a significant the proportion in which the
gifts given to him by joint owner or has contributed to its portion of its value. spouses contributed financially.
the wife’s parents purchase, and can prove it.
before, after or
during marriage. Property owned and financed by husband...
Any asset that was Immovable property The property will belong to the husband.
bought by the hus-
band in wife’s name,
without passing it
on as a gift, does not Property owned by wife, Property owned by Property owned and
belong to the wife. loan taken by husband... husband, loan by wife... financed by wife...
If the wife has spent The wife will be the legal owner, Courts may consider it as It will be considered wife’s
her earnings for the but if the husband can prove he marital property and divide separate property and won’t be
household, these paid the loan for the house, he it fairly based on the wife’s divided in the divorce.
cannot be claimed. can stake a claim to it. contribution.

lack of preparedness or inadequate action
before the separation is set into motion.
These could be in the form of money taken
from joint accounts, investments where the
wife’s name was not cancelled as a nomi-
nee, or gifts that were given by husband
and his family to the wife, which became
her streedhan, among other such instances.
This is why it is important for men to be
aware of their financial and legal rights.
The ET Wealth cover story this week ad-
dresses the concerns of such men heading
for a legal separation. We have listed the
costs they may have to bear in a divorce,
the manner in which courts decide main-
tenance and child support, as well as the
legal fee they might have to pay. More
importantly, we tell them about the precau-
tions they can take when they know that a
separation is imminent.
 cover story
04 The Economic Times Wealth August 7-13, 2023

HOW IS THE MAINTENANCE
AMOUNT DECIDED?
Alimony or maintenance is the financial
assistance provided by one spouse to the
other during or after divorce. “It’s no long-
er a gender-based decision, but depends on
the financial capacity of the spouses,” says
Dinesh Rohira, CEO, 5nance.com.
Typically, however, it’s the man who
ends up paying alimony where women
are either homemakers or have a lower
income. “However, this is not a rule, and
if the husband is disabled or incapable of
earning, the court can grant alimony to
the husband as well,” says Rohan Mahajan,
Founder, LawRato.com. “It may deny
alimony if it finds that the party seeking
alimony has been unfaithful or unchaste
in marriage,” he adds. Also, if the wife is
earning well while the husband is not, she
may be denied any maintenance by the
court. If she is earning but unable to main-
tain a comfortable lifestyle, the husband
will have to shell out the required amount.
“Though there are no set rules for ali-
mony, the Supreme Court has laid down
a benchmark of 25% of the total monthly
salary of the husband when the alimony
is paid periodically. In case the alimony
is paid as a lump sum in a one-time settle-
ment, there is no set benchmark. It ranges
from one-fifth to one-third of the hus-
band’s total worth,” says Sudershani Ray,
Partner, Vanta Legal.
“However, the husband has the right to
any jewellery, valuables or gifts given to
him by the wife’s parents before, after or
during the marriage. Also, any asset that
was bought by the husband in the wife’s
name, without passing it on as a gift, does
not belong to the wife. If the wife has spent
any of her earnings on the household, these
cannot be claimed,” adds Ray.
Interim and final alimony: In some
cases, the husband also needs to support
his spouse financially during the divorce
proceedings and this is known as interim
alimony. The objective of interim alimony
is to provide support to the financially
weaker spouse while the divorce is in
progress. It helps the recipient spouse
maintain her standard of living and cover
the necessary expenses. Such an alimony
is temporary and lasts only till the final
divorce decree is issued or until a final ali-
mony amount is determined.
The factors that are considered by the
court to determine the quantum of final
maintenance are as follows:
Financial status of spouses: The court
considers the financial situation and earn-
ing capacity of both the spouses. If the
husband earns significantly more than his
wife or has substantial assets, he may be
required to provide alimony.
Duration of marriage: Marriages that
last longer may result in a higher alimony
compared to short-term marriages.
Age and health of spouses: Both these
factors are taken into account to assess
their ability to support themselves finan-
cially after divorce.
Income and earning capacity: The court
evaluates the income of both spouses and
their potential to earn in the future. If a
spouse has the potential to increase his/
her income through education or job oppor-
tunities, it may affect the alimony amount.
Standard of living during marriage: The
lifestyle and standard of living enjoyed by
the couple during marriage can influence
the alimony. The court may aim to main-
tain a similar standard of living for the
recipient spouse after divorce.
Non-monetary contributions: The
court may also consider non-financial
contributions made by the non-earning or
lower-earning spouse during marriage,
such as homemaking and child-rearing
responsibilities.
Reason for divorce: In some cases, the
reason for divorce, such as desertion or
cruelty, may affect the alimony amount.
CHILD CUSTODY & SUPPORT
A father’s right to child custody depends
on various factors, including the child’s
age and welfare, the kid’s own wish and the
parents’ financial capabilities. However,
the paramount consideration for the court
is the welfare of the child. There is no spe-
cific preference for the mother or father,
and the court will consider the parent who
can provide a stable and nurturing envi-
ronment for the child.
A father can seek custody only if he can
prove that he is better suited to meet the
child’s needs and provide a stable environ-
ment. In some cases, parents may opt for
joint custody or visitation rights, where
both parents are actively involved in the
child’s life post-divorce.
As for child support, this is the main-
tenance amount that is paid to the finan-
cially weaker spouse who has the child’s
custody. The following factors determine
the amount that is paid as child support:
Income of both parents: The income
and financial capacity of both parents are
crucial factors. If you earn more than your
wife, you may be required to contribute
more towards the child’s financial needs.
Child’s needs: The court considers the
child’s needs, including education, health-
care, lifestyle, and other expenses, to deter-
mine an appropriate amount.
Standard of living: The child’s standard
of living before the divorce is taken into
account to ensure that the child’s quality of
life is maintained as much as possible.
Child’s age: Younger children may have
different needs than older ones.
Custodial arrangement: The custody

Sourav Kumar Father’s rights in child custody

40 yrs, Guwahati
The right to a child’s
custody depends
Married for: 8 years on various factors,
including the child’s
Divorce type: Contested age, his wish and
Legal fee welfare, and parents’
financial capabilities.
`1 lakh A father can seek
(one-time fee for court appearances,
documentation, negotiations, and
custody only if he
other expenses.) can prove he is
better suited to meet
Alimony the child’s needs
`20,000 a month and provide a stable
environment.
Child support
`15,000 a month
Financial precaution
Has made child the
sole nominee in all
his investments and
financial assets.
Hindu law Muslim law Christian law
Under the Hindu Minor- The first and foremost Due to absence of
ity and Guardianship right vests with the child custody rights in
Act, 1956, if the child is mother and is known Christian law, these are
below five years of age, as the Right of Hizanat. governed by Sec 41 of
the custody goes to the The mother’s right to the Indian Divorce Act,
mother. The father gets custody over her son 1869. The court has the
the custody only if the terminates when he is right to decide the cus-
court feels the mother seven years of age, but todianship by keeping
is unfit to take care of she is entitled to the child’s welfare at heart
“I will now stick to a proper budget and try to increase my the child. If the child is daughter’s custody till and can even deny it to
income from other sources as the alimony and child support older, the custody can
go to either parent.
she reaches puberty. either parent if it does
not consider them fit to
will make a big dent in my monthly income.” take care of the child.
 cover story
The Economic Times Wealth August 7-13, 2023 05

Anupam Bordoloi
33 yrs, Bengaluru
Married for: 1 year
Divorce type: Mutual consent
Legal fee
`10,000
(one-time)
Alimony
Nil (mutual consent)
Child support
Nil (no child)
Financial precaution
Didn’t share financial
assets with spouse, so
lost nothing. However,
gold jewellery, clothes,
etc. gifted to wife
became her streedhan
and he had no claim
over it.
“Since my marriage was shortlived, I did not incur a huge
financial burden. I will still transfer my financial assets to a
family trust to protect these from future marital troubles.”
Don’t miss court sessions
arrangement (sole, joint, or shared
custody) can affect the amount
of child support. The parent with
primary custody is likely to receive
more support from the non-custodi-
al parent.
Educational & medical expenses:
The court considers school fees and
related costs, as also the medical
and healthcare costs, for the child.
Ability to pay: The court also as-
sesses the paying parent’s ability to
provide child support without expe-
riencing financial hardship.
“If one has a daughter, the pay-
ing spouse will be responsible for
providing maintenance till her
marriage. This includes the cost of
education, medical bills, shelter and
expenses related to her wedding.
However, in case of a son, one will
only be responsible for paying main-
tenance charges till he reaches the
age of majority,” says Raj Lakhotia,
Managing Partner, LABH &
Associates. “In the case of a special
child, one may be required to pro-
vide maintenance even after they
reach the age of majority,” he adds.
LEGAL FEE
The legal fees during a divorce case
can depend on several factors, in-
cluding the complexity of the case,
lawyer’s experience and expertise,
the duration of the proceedings,
geographical location, and the spe-
cific terms of engagement between
the lawyer and the client. “In case
of mutual consent divorce, the fee
may vary from `5,000 to `1 lakh, and
in case of contested divorce, the fee
may vary from `50,000 to `5-7 lakh,
or even more, depending on the
case,” says Lakhotia.
“Some lawyers charge a fixed fee
for the entire case, while others may
charge on the basis of appearance
and drafting. It is advisable to dis-
cuss the fee before hiring a lawyer,
if it suits you,” adds Mahajan.
HOW TO PROTECT
YOUR FINANCES
The most tricky part of a divorce is
splitting the assets and property. In
case of a mutual consent divorce,
this is settled mutually between the
spouses, but in a contested divorce,
the court takes a decision by scruti-
nising all financial aspects of both
the spouses.
While it’s easier to gauge the
finances of salaried professionals,
for business owners it’s complicated
as the income may fluctuate. “It is
advisable to include all liabilities to
provide a more comprehensive view
of one’s financial situation. If there
is any material development which
may impact the earning of the per-
son significantly, the fact should
be brought to the knowledge of the
court,” says Lakhotia.
Joint assets are often a tricky
area. In many cases, the husband’s
contribution is more than the part-
ner in the acquisition of such assets,
but they are shortchanged when the
split is done equally. To avoid such
situations, financial disclosures
should clearly state the division of
ownership so that you are not disad-
vantaged.
To ensure that you don’t end

If the wife files

Cooperate in all legal proceedings, and up losing the better part of your
attend all court hearings and mediation wealth, it is not only important to
sessions. Failing to appear in court can STEP be aware of your legal rights when

5
have negative consequences. “Some-
it comes to property and assets, but

a fake case…
times women file false cases and take
advantage of the law since the intent is also to take appropriate precautions
to demand maximum alimony. The man and steps way before the divorce
should go to trial and lead the evidence. proceedings start.
Once the trial starts, he can defend his Hire a financial planner, lawyer:
case and seek acquittal,” says Suder- Here are the steps you can Seeking professional help should
shani Ray, Partner, Vanta Legal. take to defend yourself
STEP be the first step because there are

4
against fraudulent cases of many legal and financial aspects
dowry or domestic abuse. that you will not be aware of, and

Seek legal help

Hire a competent lawyer specialising in dowry
File a counter case or domestic violence cases. “It can be very
If the spouse is using difficult to counter such allegations. Consult a
STEP STEP

1
false allegations to gain

3
good lawyer as he can understand the facts and
advantage in divorce or circumstances of the case and guide the client
child custody, you can file in the right direction. This is important because
a counter case. However, each case is different and the strategy to coun-
do this only if you have STEP ter the allegations will depend on the case,”

credible evidence to
support your claims. “The
counter case can be filed
for defamation (Section
500 of IPC), criminal con-
spiracy (Section 120B),
false evidence (Section
191), or even criminal in-
timidation (Section 506),”
says Mahajan.
2
Document your version
Prepare a detailed account
of the events leading up to
the false allegations and your
perspective on the incidents
mentioned in the case.
says Rohan Mahajan of LawRato.com.
Gather evidence
Collect evidence to disprove allegations, including text messages, e-mails, videos, social
media posts, or witnesses who contradict the accusations. Preserve evidence that shows
the true nature of relationship and your interactions with the spouse. “These could be a
voice conversation that shows the husband or family has never demanded dowry, or a
message threatening to file a ‘false’ case if alimony demands are not met, or a WhatsApp
message/video recording showing normalcy of relations pertaining to the period in which
the wife has falsely alleged incidents of cruelty or domestic violence,” says Mahajan.
 cover story
06 The Economic Times Wealth August 7-13, 2023

Vikas Singh
their expertise will help you protect
more money than the fee you pay.
Know your rights: Whether you
44 yrs, Mumbai consult a lawyer or research on
your own, it is important to know
your legal rights when it comes to
Married for: 1 year assets and properties so that you do
not lose your claim over these. For
Divorce type: Contested, but
instance, you have no right over the
changed to mutual consent after wife’s streedhan, which includes all
wife filed a fake case. movable, immovable assets, or gifts
Legal fee received by a woman prior to and
during marriage. Similarly, she has
`1.75 lakh no right over your ancestral prop-
(paid by wife as part of mutual erty (see Husband’s right to movable
agreement.) and immovable property).
Know your assets & liabilities:
Damages won Make a note of your income from all
`12 lakh (paid by wife as sources, household expenses, debts
damages for filing a false case and assets. Make a list of all your
of domestic abuse.) savings and investments, jewellery
and other assets. Collect all relevant
Child support financial documents, including
Nil (no child) bank statements, investments,
property deeds, tax returns, insur-
Financial precaution ance policies, and any other assets
Kept business assets or liabilities you both hold jointly.
separate from You should also be aware of your
personal assets spouse’s income, if any.
and out of reach
Assess all debts and liabilities
of spouse.
as well, both individually and as a
couple, to ensure that these are also
split in a fair manner. “Just like as-
sets, debts are also split depending
on factors such as the kind of debt,
in whose name and the purpose for
which it was taken. If possible, ar-
“One should always be aware of one’s legal rights. This is the rive at an amicable settlement with
the wife so the decision is not left
reason I was ready to face a court trial, though many in my for the court, in which case the wife
position would have paid a huge sum to dismiss the case.” could benefit more than the hus-
band, depending upon the conten-
tions and accusations made by her,”
cautions Mahajan.
Separate your finances: Start
separating your financial accounts
from your spouse’s. Close all joint
bank accounts and transfer money
to your individual account. Stop us-
ing joint credit cards and foreclose
all fixed deposits and other joint
investments.
Change nominee details: Make
sure to remove the name of your
spouse from your list of nominees
in all financial investments like
life insurance, mutual funds,
bonds, bank and demat accounts,
Provident Fund, PPF, etc. Similarly,
if you have a will where she has
been named a beneficiary, alter it to
remove her name.
Transfer assets to parents: “If
you assets and properties from
before marriage, it is a good idea
to transfer these to your parents’
names so that these are not consid-
ered during the split,” says Rohira.
Make a trust: Transferring one’s
assets to a family trust is another
way of keeping these safe from an
estranged spouse. A former spouse
will not have any legal claim to such
assets during a divorce.
Draft an agreement: A prenup-
tial agreement is not valid in India,
but you can draft an agreement
as business partners. During a
divorce, co-owned properties and
businesses are divided, and if the as-
sets are in wife’s name, the division
may not be fair to the husband.

What to do with term plans after a split

Here are the options you can exercise in case of your pure protection life policy in the name of either or both spouses.
By Dheeraj Sehgal taken in the name of the husband and

A
divorce can be challenging,
both emotionally and finan-
cially. Fortunately, as far as
pure protection life insurance is
concerned, it does not pose any
problems for the parties involved. In fact,
divorce has little or no impact on term in-
surance where the spouse is the nominee.
Insurance providers allow policyholders
to change the nominee at any point in time
during the tenure of the policy. Following
a divorce, policyholders can easily swap
the nominee of their term insurance plan
from their spouse to children, or even their
parents, just by submitting a new nomina-
tion form.
However, things can get slightly com-
plicated if the term insurance policy is
purchased under the Married Women’s
Property Act (MWP Act). The law was
enacted to safeguard the property owned
by married women from the claims of their
in-laws, relatives, or creditors after their
husband’s passing. It ensures that the
financial interests of married women are
protected at all times. The MWP Act allows
a married man to purchase a term insur-
ance plan and name his wife as a nominee.
If the insurance plan is purchased under
this Act, the death benefit goes solely to the
beneficiary named in the policy; in this
case, the wife.
Since the Act separates the insurance
plan from the rest of the estate of the hus-
band, his creditors or other family mem-
bers cannot lay claim to its benefits. Even
the husband cannot revoke his wife’s right
to the plan’s death benefit. So, if a married
man buys an insurance plan under the
Act and names his wife as beneficiary, a
divorce will not impact the plan in any way.
The wife will continue to remain the ben-
eficiary even after the marriage is legally
dissolved.
It is important to know how to manage
a term insurance policy after a divorce.
Here’s what the policyholders, who have
had their marriages dissolved, can do.
In the case of a regular term insur-
ance, you can consider changing the
nominee listed in the policy.
In the case of a joint life insurance,
wife, the children will typically be
named as nominees. Here, following
a divorce, the policyholders can con-
tinue paying the premiums to keep the
policy active. This would ensure that
the children remain financially pro-
tected despite the parents’ separation.
It is advisable to confirm if the plan
has any surrender benefit before going
through the divorce. The payout, if
any, may be split between the spouses
or invested for the children’s future, as
the couple may see fit.
Often, in case of a divorce, the policy-
holders could be tempted to immediately
discontinue paying the premiums for a
joint term insurance. However, by doing so,
the policy may lapse and the benefits under
the policy will no longer be valid.
THE WRITER IS
CHIEF DISTRIBUTION
OFFICER, INSTITUTIONAL,
BAJAJ ALLIANZ LIFE
INSURANCE
 guest column
The Economic Times Wealth August 7-13, 2023 07

Sow right to reap gains

Focus on picking the right investment that is suited to your needs, not on
external factors, over which you have little control, says Dhirendra Kumar.
ing it. The problem is that most of us start
with more hope than reasoning, but this
is a problem that should be resolved at the
start, not by selling too early.
Choosing investments that are not
suitable to our needs is another common
trait. In fact, the process of choosing in-
vestments often does not begin wi th the
DHIRENDR A KUMAR
CEO, VALUE RESE ARCH right questions. When a saver wants to
know where to invest, the obvious ques-

money tion he asks is: ‘Which investment should I

choose?’ However, it’s the wrong question.

mysteries The right one is: ‘What do I want from my

investments and, therefore, which type of
investment should I choose?’ If the invest-
ment is wrong, then it matters little if it
does well. It will still end up not serving

GETTYIMAGES
Isn’t it strange that your purpose.
investors worry Of course, choosing good investments is
not enough. Good investments go bad, or
about things they

I
cannot control while
f I say I’m going to give you some advice
ignoring things on agriculture, you’ll probably want to
they can? Can you question its authenticity, and you may
influence economic be right. However, let me assure you
growth? Wars and that farming is more akin to invest-
conflicts? Interest ment than you’d like to believe, and offers
invaluable learnings. Here’s the advice:
rates? No, you can’t.
z Don’t shout at the crops. Don’t blame the
Can you control
crop for not growing fast enough.
which investments z Don’t uproot the crops before they’ve had a
you make and at chance to grow.
what value? Of z Choose the plants that are suited to the
course, you can. soil and weather.
z Irrigate and fertilise. Remove the weeds.
z There will be good seasons and bad sea-
sons. You can’t control the weather; you
can only be prepared for it.
People often make investments with false
expectations. I know because I have done
it often enough. When we choose an invest-
ment, be it a stock or mutual fund, it’s an
act of belief, of commitment. We choose the
investment, so we are responsible for it. No
one chooses an investment hoping that it will
make modest gains or give returns on par
with the markets. Inevitably, the expecta-
tions tend to be high, and the reality for many
of our investments does not meet these expec-
tations. At this point, the natural reaction is
to pass the blame on to the stocks, fund man-
ager, or adviser. It’s human nature. However,
the truth is that no matter which type of
investment we make, it’s our money, and we
are responsible. If we make a bad decision,
it’s better to recognise it as such, understand
what happened, and move on.
How do we know if the decision was really
bad? Often, we don’t. Investors and, in fact, the
entire market, tend to go through cycles of eu-
phoria and depression. Just as we are over-op-
timistic about investments in the beginning,
we get over-pessimistic if they don’t meet our
initial expectations. It’s easy to fall into the
trap of turning pessimistic and selling our
investments early. If your initial thesis of why
it was a good investment still holds, keep hold-
your needs can change. Your portfolio may
require periodic rebalancing, and under-
performing investments may need to be
replaced to keep your portfolio healthy and
suited to your needs.
Finally, everything with your invest-
ments can be shipshape, but external
events can still cause some problems.
Isn’t it strange that investors worry about
things they cannot control while ignoring
the ones that they actually can? Can you
influence economic growth? Wars and
conflicts? Energy prices? Interest rates?
No, you can’t. Can you control which in-
vestments you make and at what value? Of
course, you can.
It’s much better to be prepared for any-
thing but not expect things to go smoothly.
Times will be better sometimes, and some-
times they will be worse, but mostly, they
will keep getting better. Our job is to focus
on our investments, not the environment.
Please send your feedback to
etwealth@timesgroup.com

Exchange `2,000 notes before 30 Sept

88% of the notes have been exchanged till now, but `42,000 crore worth of notes are still in circulation.
by Sneha Kulkarni that, roughly, notes worth
`42,000 crore still remain to be
It has been almost three months exchanged.
since the Reserve Bank of So, if you are holding `2,000
India (RBI) announced the notes, get them exchanged
withdrawal of `2,000 currency right away. The process is
notes from circulation and 88% very simple. Just visit a bank
of the notes have been returned branch with the currency,
till now. The banks will accept fill the requisition slip for ex-
deposits or exchange the `2,000 changing the notes, and submit
bank notes till 30 September it along with the `2,000 notes to
this year. the bank.
In a statement, the RBI said There is no cap on how much
that till 31 July, banks had can be deposited or exchanged.
received `2,000 notes worth However, according to a noti-
`3.14 lakh crore. This implies fication from the RBI, you can
exchange up to `20,000 in bank
notes at a time. Also, a general
KYC and other regulatory
requirements for cash depos-
its will apply. If you deposit
more than `50,000 in a single
transaction, you must mention
your PAN card number in ac-
cordance with the income tax
regulations.
The process may also dif-
fer across various banks. The
RBI governor has said that the
banks will follow their own
procedures and norms while
exchanging the `2,000 notes.
 review preview
08 The Economic Times Wealth August 7-13, 2023
product
launches
:: Mutual Funds
HDFC Mutual Fund has launched
the HDFC Transportation &
Logistics Fund, a thematic
fund that will invest in stocks
of companies involved in the
transportation and logistics
sector. The fund will focus on
companies that are leaders in
their respective segments. The
minimum investment is `100.
The NFO closes on 11 August.
HSBC Mutual Fund has launched
the HSBC Consumption Fund,
an open-ended thematic fund
that will invest in stocks of
companies engaged in, or
expected to, benefit from
consumption and consumption-
related activities. The minimum
investment is `5,000. The NFO
opens on 10 August and closes
on 24 August.
Kotak Mutual Fund has launched
the Kotak S&P BSE Housing
Index Fund. The scheme will
replicate the composition
of the S&P BSE Housing
Index and seeks to generate
returns commensurate with
the performance of the S&P
BSE Housing Index, subject to
tracking errors. The minimum
investment is `5,000. The NFO
opens on 7 August and closes
on 21 August
NJ Mutual Fund will launch the
NJ Flexi Cap Fund, an open-
ended diversified equity scheme
that will invest stocks across
market capitalisations. The fund
will track the Nifty 500 TRI. The
minimum investment is `500.
The NFO opens on 15 August
and closes on 29 August.
Shriram Mutual Fund will
launch the Shriram Multi Asset
Allocation Fund, an open-
ended hybrid scheme that will
invest in a mix of stocks, debt
securities, gold, silver and REITs.
The minimum investment
is `5,000. The NFO opens on
18 August and closes on 1
September.
:: Insurance
IndiaFirst Life Insurance
has launched IndiaFirst Life
Guarantee of Life Dreams
(G.O.L.D.) plan. The policy is
designed to provide regular
long-term income. Policyholders
can choose from premium
payment terms of 6, 8 and 10
years for a policy of 30-40
years. They also have the
option to pay on a monthly,
quarterly, half-yearly or
annual basis.
Filed your tax return? Now
don’t forget to verify it
More than 80% of the 6.77 crore tax returns filed this year have been verified
T
he relentless efforts of the tax
department and greater emphasis
on tax compliance have borne
fruit. A record 6.77 crore tax returns
were filed this year. This is 16.1% more
than the 5.83 crore tax returns filed in
the previous assessment year. The e-
filing helpdesk handled close to 5 lakh
queries from taxpayers in July, and
offered support to taxpayers during the
peak filing period through phone calls,
live chats and co-browsing sessions. The
Twitter handle of the tax department
was also very active during the period.
Tax experts point out that though one
may have filed tax returns by the due
date, they will not be considered valid
till the taxpayer verifies the return.
“The tax filing process does not end
with submission of the return. The re-
turn has to be verified by the assessee
before it can be taken up for processing,”
says Sudhir Kaushik, Founder and CEO
of tax filing portal TaxSpanner. A little
more than 50% of the 6.77 crore returns
filed have already been verified.
Till last year, taxpayers could verify
the ITR within 120 days, but now this
time frame has been shortened to 30
days. If not verified within this period,
the filed return becomes invalid and
you could be penalised for non-filing.
You can request for condonation if there
are valid reasons for the delay.
Tax refund message could be a scam
The tax department has warned against messages that are claiming to give a refund.
by Sneha Kulkarni
Have you received a message saying you
will get a tax refund? Don’t be too happy,
because it could be a scam. The government
has issued an alert to warn taxpayers about
fraudulent messages claiming to be from the
Income Tax Department. The message will
say that your refund has been approved and
will get credited to your bank account. The
account number mentioned in the message
is obviously not correct and the recipient
is told to update the correct bank details by
clicking on a link. It’s a phishing link, and
the fraudster is able to steal the identity and
details of the victim.
The tax department will not give a link for
a refund if one is due. It will automatically go
into the bank account mentioned in the tax
form. The department also does not ask for
personal information through e-mail. Nor
does it ask for passwords or OTPs. Any such
request is obviously a fraud.
If you receive an e-mail from someone
claiming to be the Income Tax Department
6.77 crore assessees filed
tax returns this year, 16.1% more
than the 5.83 crore returns filed
last year.
83% of the returns, or
5.63 crore, have already been
e-verified. Taxpayers get 30 days
to verify their returns.
3.44 crore of the returns
filed, or more than 50%, have
already been processed.
53.67 lakh of the assessees
filed tax returns for the first time.
64.33 lakh returns were
filed on 31 July, the last date for
filing returns.
486 per second was the
fastest filing rate registered
between 5 pm and 6 pm on 31 July.
or directing you to an income tax website,
here’s what you should do:
z Do not reply to such mails.
z Do not open any attachments. These at-
tachments may contain malicious code
that will infect your computer.
z Do not click on any links. If you have
clicked on links in a suspicious e-mail or
phishing website, then do not enter confi-
dential information like bank account or
There are six ways
to verify your
income tax return
Aadhaar-based OTP
For this, your mobile number and
PAN must be linked to your Aadhaar.
Net banking
Verify the return by logging in to the
tax-filing portal through your Net
banking account.
Bank account
Generate Electronic Verification
Code (EVC) through your bank
account. For this, you must have a
pre-validated bank account.
Demat account
The process is the same as bank
account to generate an EVC.
Bank ATM
Your ATM card can generate an EVC,
but this facility is restricted to a few
banks.
Signed ITR-V
Send a signed copy of the ITR-V to
the tax department at CPC, Post Box
No-1, Electronic City Post Office,
Bengaluru - 560100, Karnataka.
credit card details.
z Do not cut and paste the link from the
message into your browser. Phishers
can make a link look real, but it actually
sends you to different websites.
It is recommended that one should use
anti-virus software, anti spyware, and
a firewall and keep them updated. Some
phishing e-mails contain software that
can harm your computer or track your
activities on the internet without your
knowledge.
The tax department has urged taxpayers
to forward such e-mails or website URL to
webmanager@incometax.gov.in. A copy
may also be forwarded to incident@cert-in.
org.in You may forward the message as re-
ceived or provide the Internet header of the
e-mail. The Internet header has additional
information to help locate the sender. After
you forward the e-mail or header informa-
tion to the department, delete the message.
If you indeed are eligible for a tax refund,
you can check the status on the tax depart-
ment’s website.
 financial planning
The Economic Times Wealth August 7-13, 2023 09

PAPER WORK
:: Checks while filing
income-tax returns
Once the tax returns are filed, the
taxpayer eagerly awaits the accep-
tance and refund, if any. To ensure a
smooth process, here are the guide-
lines taxpayers should adhere to.

Choosing the
correct ITR form
Using the correct form
ensures that the return is processed
without any hitch. Filing the wrong
form may lead to additional scrutiny
and delays.

GETTY IMAGES
Accurate and complete
information

How to overcome financial

Any error may lead to delays
and give rise to queries. It is a good idea
to double-check details, such as PAN,
bank details, and contact information.

procrastination?
Timely filing
ITRs must be filed before
the due date. Timely filing
helps the I-T department manage the
Bill payment services and annual payments can make the process easier. workload efficiently and ensures that

R
the return is processed promptly.

Rehaan finds it convenient to
postpone taking decisions about
money despite automation of
investment processes. Even
though he has a comfortable
income, he is yet to address the
issue of his inability to stick to
payment schedules for his dues
and expenses. This includes card
payments, bills and insurance
premiums. Rehaan has not been
very bothered about it because
he does not see it as having too se-
rious an impact on his financial
situation. Is he right in not tak-
ing this aspect of his financial
well-being seriously?
ehaan’s history of delayed pay-
ments and decisions can affect
his financial situation in multi-
ple ways. It will result in a poor
credit score, which will trans-
late into high cost of borrowing and stiffer
terms when Rehaan needs to take loans.
Rebuilding his credit score will take a long
time and he should start immediately. This
is especially important since his payment
delays are not due to shortage of funds
but because of the way he handles money.
The other serious financial consequence
could be losing insurance protection. If
premiums are not paid on time, insurance
companies are not liable to provide cover,
leaving him open to the risk of shouldering
large expenses and leaving his dependants
unprotected.
Further, there are costs and penalties for
delayed payments that can add up. These
funds could have been invested for things
he would like to buy later. Penalties may
also take the form of benefits forfeited. For
example, he may lose the benefits of no- Validate account
claim bonus on general insurance policies If your mobile number
and accumulated reward points on cards. and bank account are
Insurers may refuse to provide cover or linked to Aadhaar, use the
e-verification code option. If Net bank-
expect a higher premium, and credit card
companies may offer a lower credit limit. ing is enabled, the portal will redirect
Rehaan should sign up for the bill pay- you to the bank’s site.
ment services provided by most banks
and register all his service providers, so Filing online and
that he can make the payment process e-verification
easy and less likely to be postponed. Filing online via department’s
Wherever possible, such as for insurance e-filing portal is quicker and more ef-
premiums, he should choose the annual ficient. E-verification should be done
payment option so that the chance of miss- immediately after the return is filed.
ing out on a payment is lower. He should
keep his contact details with his service Pre-validated account
providers updated so that he gets the Pre-validating the bank
intimation for dues and can take timely account for refund ensures
action. Taking corrective action imme- that the refund amount is directly
diately will not only protect his current credited to the account.
situation but also help redeem his past
mistakes over time.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.

smart things to know

Invoice discounting

1
When unpaid
invoices of
companies
are sold at a
discounted
2 3 4 5
Platforms
such as Jiraaf,
The
investment The inves-
There are
risks of
value to KredX, Tyke, horizon tors have delay or
financers or TradeCred, for invoice an op- default in
investors Leaf Round discounting portunity payment,
to generate provide invoice is typically to make a making this
cash flow, discounting as 30 to 120 high return a high-risk,
it’s known an investment days. in the short high-return
as invoice product to their term. product.
discounting. investors.
 financial planning
10 The Economic Times Wealth August 7-13, 2023
The illusion of prosperity
Directing all savings to property and gold, despite their visible lure, does not end well, says Uma Shashikant.
UMA SHASHIK ANT
IS CHAIRPER SON,
CENTRE FOR INVES TMENT
EDUC ATION AND LE ARNING
The lure of assets like
gold and real estate
are visible. They
enhance the social
status and signal to the
world that this family
is wealthy. People
like that attention.
Financial assets that lie
electronically hidden
don’t offer that
kind of optics.
S
ome stories never change. A mid-level
manager working in the Middle East
wants to come back to India. His chil-
dren need to go to college soon, and
it will be easier and cheaper for him
to educate them in India than trying to send
them elsewhere. He will still pay a premium
fee reserved for returning emigrants like him,
but he does not mind that. He wants his financ-
es reviewed, and this Pandora’s box holds the
same old horrors typical of such portfolios.
He has one residential flat that his family
plans to live in when they return. There are
two more houses bought on the outskirts of
the city. The wife’s parents live in one, and
the other remains locked, with cracking and
leaking walls. It also faces flooding every
monsoon. Hasty decision, he rues.
His wife managed to buy about 2,000 gm
of gold during their stay abroad. She is very
proud of her savings and sees the investment
as a sign of their prosperity. She will not agree
to sell or pledge any of it. Half of it will be
passed on to the daughter, and the other half
will remain in the bank locker to be worn on
various occasions.
The investment portfolio is a mishmash
of stocks bought on the advice of friends and
relatives. Some are performing well, most
are making losses. There are bank deposits
and half a dozen insurance policies. Mutual
funds are new entrants to the portfolio, and
he is unsure whether his investments in the
past five years have been right. It is too little to
matter in the larger scheme of things.
His total assets are worth `5 crore. The
realty assets are valued at around `3 crore; the
value of gold is around `1.25 crore; deposits are
GETTY IMAGES
worth `25 lakh; there are `20 lakh of stocks,
and mutual funds worth `30 lakh. His primary
worry was that the mutual funds seemed to
be going up and down. Did he make a mistake,
he asked. Almost 90% of his portfolio remains
inaccessible and unusable, and he is worried
about the 10%. He feels rich and wealthy. He
tells me repeatedly how proud he is of their
prosperity. This is understandable, given
where he began and how hard he worked to get
where he is today.
Let’s list your financial goals first, I tell
him. The usual list of education, marriage
and retirement come up. His children’s higher
education is the immediate goal that will pan
out over the next five to seven years. He will
have to spend on coaching classes, apart from
private school, as soon as he moves back. He
will have to find a job and regular income as
well. He is currently not sure what he will do;
he has plans of setting up a business, and some
ideas on becoming a consultant or an adviser.
He hopes to use the financial investments to
get him going.
You need an income for another 40 years, I
tell him, and he is shocked. There is nothing in
the asset portfolio that can fund the immediate
goals. There are no assets that will generate
the income he needs and, therefore, he is not
ready to retire. He needs a corpus that will
work for him, and with `75 lakh, minus the
funds needed for immediate education goals,
there is too little left.
He needs to sell two of his houses to generate
funds. Since the third house is tough to sell,
the second must go, even if it is a tough call. His
in-laws can live with them, or live in a simpler
rented property until the situation stabilises.
The wife needs to be willing to sell some
of the gold, so that the money can be used
to buy financial assets that will grow
and be available for use, as needed. The
financial assets should be at least half or
more of his overall assets so they they can
work for him.
What if I can’t do this, he asked. He did
not seem confident about negotiating
these drastic changes. If he is unable to do
this, he will have to continue to work in the
Middle East, and save and invest his in-
come differently, for the next five years at
least. Manage your children’s education,
build your retirement corpus and come
back later, I told him. It is cruel, he rued. It
is, but directing all the savings to property
and gold does not usually end well.
Is this not a textbook thing, he asked.
That may be the case, I told him, but what
are the choices currently? What would
you do differently instead of using the
limited choices at this time? Property and
gold are tough to sell; even tougher to use
for their income or gain. Many emigrants
build mansions that are incapable of
being rented. They want their families to
enjoy the benefits of their high earnings.
Commercial property that can earn rent is
not on their minds.
The lure in these assets is visible.
They enhance one’s social status and
signal to the world that this family is
wealthy. People like this type of attention.
Financial assets, which lie electronically
hidden, don’t offer that kind of optics. As
long as the assets are being built, people
feel good that these are growing in value.
It is only when the financial goals come
knocking and require funding that the
crunch is felt. Even then, the choice, as
this investor is likely to exercise, is to use
whatever financial assets are available at
the time. The can is kicked down the road.
As long as we have a house to live in
and choose a simple life, there won’t be
a problem, he argued. I have enough
money to educate the children, and that
is all that matters now, he said, sounding
like a martyr. This only builds higher,
unrealistic expectations from children.
The fact that their retirement is at
risk is something people don’t consider
seriously. In this case, he is still young.
Another decade of high-income work
will put the family’s finances in order.
A traditional mindset, which includes a
single income, property and gold, sacrifice
for kids, and desire to return home early,
won’t pass the sensibility test. However,
it appeals to emotion and sentiment.
The man in the middle feels like a hero,
an achiever, a martyr, and a self-made
millionaire. No one peels the layers, and
denial rules.
Please send your feedback to
etwealth@timesgroup.com

Rescue facility for
debt funds in stress
The Corporate Debt Market Development Fund, Sebi’s super fund,
will act as a last resort buyer during market dislocations.
by Sanket Dhanorkar
S
ebi has launched a backstop facil-
ity for debt funds to help them tide
over a liquidity crunch in times of
market dislocation. Here’s all that
you need to know about the fund.
Why is there a need for
Q a rescue fund?
Remember the Franklin Temple-
ton mutual fund debt fund fiasco of 2020?
Six of its debt schemes had to be wound
down after a severe market dislocation
dried up liquidity in their underlying
holdings. This prevented the fund house
from meeting a wave of redemptions
without undertaking a fire sale. The
problems across debt funds had first
surfaced after the IL&FS default in 2018.
Sebi’s super fund, the Corporate Debt
Market Development Fund (CDMDF),
will act as a last resort buyer in such
GETTYIMAGES
situations. It will buy illiquid securi-
ties from the affected funds in a market
dislocation, providing them with liquid-
ity. This is to shore up the confidence of
investors and prevent panic.
Who is paying for this?
Q
The participating debt schemes
and AMCs will pay to avail of
this facility. All debt schemes, barring
overnight and gilt funds, will contribute
0.25% (25 basis points) of their assets under
management to this fund, apart from a one-
time contribution of 2 bps of the fund AUM.
Every six months, the debt funds will make
incremental contributions if there is a rise
in scheme AUM. Against these contribu-
tions, the participating AMCs and debt
funds will get units in the super fund. The
AMC making the contributions can’t take
its money back if any of its debt scheme’s
AUM falls. Additionally, the participating
funds will bear the fees and expenses of the
fund—0.15% of the portfolio value dur-
ing normal times, and 0.20% of the port-
folio value in times of market stress.
How does it work?
Q
In normal circumstances, the
CDMDF will invest in short
duration government securities, treas-
ury bills, tri-party repo on government
securities, among others. In a severe
market dislocation as defined by Sebi, an
affected debt scheme may approach the
CDMDF to purchase the troubled securi-
ties. These can only be investment grade
listed securities (rated BBB- and above),
with less than five years of residual ma-
turity. The CDMDF will not buy unlist-
ed, below investment grade, or defaulted
securities. The purchase and valuation
of securities will be based on the frame-
work laid down by Sebi. The purchase
from any scheme will be in proportion to
CDMDF is likely to
raise around `3,000
crore from AMCs. So,
it will be able to pro-
vide a `30,000 crore
cover to debt funds.
the contribution made to the CDMDF at
the AMC level. The CDMDF will pay out
90% of the consideration in cash to the
affected fund house, and the rest will be
paid in the form of units in the CDMDF.
Once the market reverts to normalcy, the
CDMDF will either sell the bonds or hold
them till maturity.
How much cover can
Q
the fund provide?
The initial corpus of the CDMDF
will be made up entirely of contribu-
tions by participating debt schemes and
AMCs. However, if required, the fund
will have the option to borrow up to 10
times its actual corpus. This will be in
the form of loans from member lend-
ing institutions. This borrowing will
be guaranteed by the National Credit
Guarantee Trustee Company. Based
on estimates, the CDMDF may initially
raise around `3,000 crore from AMCs.
So, effectively, it will be able to provide a
cover of up to `30,000 crore to debt funds.
What if the affected
Q
bonds default?
In case of a default in the securi-
mutual funds
The Economic Times Wealth August 7-13, 2023 11
ties purchased by the CDMDF, the
losses will first be absorbed by the
units given to the mutual funds
against the purchase of bonds. These
units can be redeemed during the
tenure of the scheme. The next layer
of losses will be adjusted against the
contribution of the debt schemes and
AMCs. Any additional losses will be
absorbed by the government by in-
voking its guarantee.
What constitutes
Q
market dislocation?
Sebi has laid down a frame-
work for identifying periods of mar-
ket stress. It will take cues from a
model referred to as Financial Stress
Index (FSI), comprising 10 indicators
pertaining to the bond and forex mar-
ket. When the FSI gets triggered, the
Sebi board will make a qualitative as-
sessment of the situation, apart from
the output provided by the model.
The board will also determine the
period for which the backstop facility
will remain open at such times. The
market dislocation period will be
considered to have ended if no alert
appears from the model for a continu-
ous period of three months.
Will this make debt
Q funds safe?
It is vital to point out
that this facility seeks to provide
liquidity support to the debt funds
under duress. This will facilitate
redemptions even when the market
conditions are not supportive. It
does not protect investors against a
default in the affected schemes. As
pointed out earlier, any default in
securities purchased by the CDMDF
will have to be absorbed by the debt
schemes. Relief will also not be
available for securities in default or
expected to default. So the underly-
ing credit quality of the debt fund
portfolio remains critical. Besides,
the CDMDF can be activated only
during a severe market dislocation,
which may be triggered based on
the output of the model and further
assessment by Sebi. Any problems
arising outside this window will not
be addressed by the CDMDF.
Please send your feedback to
etwealth@timesgroup.com
 stocks
12 The Economic Times Wealth August 7-13, 2023
Companies with positive
cash flow are a good bet
The companies that generate positive cash flow which is above the industry level can
prove to be valuable investments due to their ability to generate above-average returns.
SIS
12-month
forward PE
16.3
THE SECURITY SOLUTIONS com-
pany reported good performance
in the June quarter despite a weak
macro environment. The revenue
and net profit grew by 11.1% and
8.5%, respectively, on a y-o-y basis.
The performance is supported by
a strong focus on margin improve-
ment and higher tax benefits.
The India Security business dis-
played promising margins, led by
the company’s focus on profitabil-
Current 1-year target
price (`) price (`)
434 528
ity by securing contracts that meet
the stringent minimum margin
requirement and SG&A cost control.
On the other hand, the cash logis-
tics solutions business is thriving
due to the focus on newer services,
including value cargo movement,
bullion transportation and door-
step banking.
The rising penetration of the
company’s key businesses—security
and facility management—and the
by Sameer Bhardwaj
T
he strong cash flow generated by
India Inc. in the past few years
has supported capex plans and
aided balance sheet deleveraging.
The healthy cash flow, coupled
with domestic liquidity, has also helped the
Indian firms to mitigate volatility in the
external market. Such volatility is fueled by
factors like rising global bond yields, strong
US dollar and global growth concerns,
which hindered the ability of corporate
India to raise money from the global market.
Going forward, the cash flow of India Inc.
is expected to remain stable. A recent S&P
report states that cash flow generation will
be supported by easing input costs that will
reduce the working capital needs in the com-
modity, chemicals and automobile sectors.
Relevance of cash flow
Cash flow helps in assessing a firm’s liquidi-
ty and business sustainability. It is analysed
using the cash flow statement that explores
the sources and usage of cash. The statement
broadly divides the cash flow from operat-
ing, investing and financing activities.
Out of these, the operating cash flow (OCF)
is relatively important as it measures the
revenue generated from a company’s core
business activities. It indicates the effective-
ness of a business to generate cash to cover
its expenses. The companies that generate
negative OCF over a period of time may
have to resort to external sources of funding
(debt) to sustain their operations.
The other important metric is the free
GETTYIMAGES
cash flow (FCF), which is calculated by
subtracting capital expenditure from OCF.
It represents the cash left after payment of
debts and expenditures like the purchase of
UPSIDE ANALYSTS’ RECOMMENDATIONS
POTENTIAL BUY HOLD
21.8% 4 1
100
shift of market share to organised
players, are expected to drive
long-term growth. SIS is also a key
beneficiary of liberalisation and
formalisation of labour markets and
laws. A recent Yes Securities report
is bullish on the stock and expects
the EBITDA margin to improve in
the future, led by the normalisa-
tion of business environment. It
estimates a revenue CAGR of 14.9%
over 2022-23 and 2024-25. 29 July 2022
fixed assets (property, plant, equipment). It
is the cash available to pay dividends to the
investors. FCF is harder to manipulate and
more transparent compared to the net profit,
and provides a true picture of the solvency
and financial strength of a company.
Positive FCF enables a company to de-
velop new products, make acquisitions, pay
dividends and reduce debt. Rising FCF is a
good sign as it indicates that the company
is generating excess cash that can be re-
invested in the business expansion. Suman
Bannerjee, CIO, Hedonova, believes that
the companies with positive cash flow have
strong core operations and can cover ex-
penses, while leaving room for future invest-
ments or returning value to shareholders.
However, negative FCF is not always bad
as the company may be making large invest-
ments and the same could generate good
returns in the long run.
How do markets value stocks
with positive cash flow?
Positive cash flow can improve valuations
and help create shareholder value. “If inves-
tors want to create long-term wealth and
have the intellect and perseverance to not
bow down to a few years of peer underper-
formance, companies with high FCF and
OCF present favourable investment pros-
pects in the long run,” says Anirudh Garg,
Partner & Head of Research at Invasset PMS.
Experts believe that companies with posi-
tive cash flow can deliver superior returns.
“Markets place greater emphasis on free
positive cash flow as a key indicator of finan-
cial health and success. Such companies tend
to create more wealth as they attract more
investor interest,” says Divam Sharma,
Founder & CEO, Green Portfolio PMS.
However, Garg advises investors to con-
SELL Nifty 500
0 116.26
SIS
96.99
1 Aug 2023
 stocks
The Economic Times Wealth August 7-13, 2023 13

UPL
12-month Current 1-year target UPSIDE ANALYSTS’ RECOMMENDATIONS
forward PE price (`) price (`) POTENTIAL BUY HOLD SELL Nifty 500

9.9 626 807 29% 17 6 1 116.26

THE CROP PROTECTION chemi-
cal company reported a weak
performance in the first quarter
of 2023-24, with a 17% and 81%
decline in revenue and PAT growth,
respectively, on a y-o-y basis. The
fall in agrochemical prices and
lower volumes due to higher inven-
tory impacted the performance.
The management expects a strong
volume revival in the second half
of 2023-24. The long-term per-
formance will be supported by its
healthy business profile, strong R&D,
diverse geographical presence and
wide product portfolio. The company
plans to increase its product mix in
high-margin products from the cur-
rent 28% to 50% by 2026-27. New
differentiated and sustainable solu-
tions, plans for scaling up verticals,
and accelerated penetration in select
100
markets, crops and segments are the
key strongholds. UPL
The separation of its speciality 84.48
chemicals business to the subsidi-
ary, UPL Speciality Chemicals, will
help scale up the business and lead
to better operational efficiencies.
A recent Centrum Broking report
is bullish on the stock, and expects
volume growth and cost reduction
to fuel overall growth in 2023-24. 29 July 2022 1 Aug 2023

sider other financial indicators,

such as revenue growth, profit GUJARAT STATE PETRONET TRANSPORT CORPORATION OF INDIA
margins, debt levels, competitive 12-month Current 1-year target 12-month Current 1-year target
UPSIDE UPSIDE
positioning, and overall market forward PE price (`) price (`) POTENTIAL forward PE price (`) price (`) POTENTIAL

conditions, as well while evaluating
a company.
Bannerjee endorses these views
and believes that a trend of positive
cash flow is an essential aspect of
the evaluation process, but other fac-
tors like the company’s debt levels,
growth potential and industry out-
look should also be considered.
ET Wealth analysed the OCF/
share and FCF/share for over 2,300
listed companies in the past four
fiscal years (2019-20 to 2022-23). The
firms that have maintained positive
and above-industry median OCF/
share and FCF/share in the entire
four-year period have delivered mar-
ket-beating returns across different
time frames.
There are 265 such firms, which
delivered an average one-year,
two-year, three-year and four-year
point-to-point absolute returns of
45.3%, 60.5%, 334.1% and 306.7%,
respectively. Comparatively, the
Nifty 500 index delivered 14.8%,
24.8%, 88.7% and 90.8% returns,
respectively (data based on 1 August
2023 values). However, the majority
are not offering any significant up-
side price potential due to the recent
broadbased market rally. The follow-
ing five firms are tracked by a decent
number of analysts and are offering
a double-digit share price potential.
21.9%
11.2 288 351
THE NATURAL GAS transmis- ANALYSTS’ RECOMMENDATIONS
sion company reported a strong
BUY HOLD SELL
sequential volume jump of over
17% in the June quarter, led by 20 1 0
strong demand from CGD and
additional industrial consum-
power segments. The standalone
ers in the medium term are key
net profit grew 2% q-o-q, but fell
growth catalysts. The firm is
2.6% y-o-y.
expanding beyond Gujarat, and
The firm enjoys leadership
its investments in GSPL India
position in Gujarat. It is expected
Gasnet Limited (GIGL) and GSPL
to benefit from the pick-up in
India Transco Limited (GITL) will
the refining, petrochemicals and
provide business diversification,
CGD segments, and increased gas
which will support long-term
penetration across north India.
growth. HPCL’s plans to commis-
The increased utilisation of LNG
sion its LNG terminal at Chhara
terminals, with the likely pick-up
port by the end of the third quar-
in LNG volumes, is expected to
ter will also support the com-
support the performance in the
pany’s transmission volumes.
future. The rising gas demand,
connectivity to new RLNG Gujarat State Petronet
terminals, moderation in LNG 124.01
prices, rising capex trend and
100
Nifty 500
116.26
29 July 2022 1 Aug 2023
16.2 760
THE SUPPLY CHAIN and logistics
solutions provider posted decent
numbers in the June 2023 quar-
ter. Its consolidated total income
and PAT grew by 5.5% and 5.8%,
respectively, on a y-o-y basis.
The performance was supported
by traction in warehousing, 3PL
services, and emerging vertical
solutions and demand recovery
in the automotive segment.
The company’s business
divisions are poised for strong
growth. The focus on increasing
the proportion of high-margin
LTL services in its overall freight
mix, and shift to organised sec-
tor are expected to support the
freight division, whereas the
emphasis on tech-enabled solu-
100
29 July 2022
13.3%
861
ANALYSTS’ RECOMMENDATIONS
BUY HOLD SELL
7 0 0
tions in transportation will drive
the supply chain division. The
high-margin seaways division
will sustain growth in 2023-24
as the company plans to expand
capacity for increasing volumes.
A recent Motilal Oswal report
believes that the company is
well equipped to navigate the
challenges and capitalise on the
opportunities due to its focus on
digital transformation and au-
tomation. It estimates revenue
and PAT CAGR of 15% and 16%
over 2022-23 and 2024-25.
Nifty 500
116.26
109.50
Transport
Corporation
of India
1 Aug 2023

HINDALCO INDUSTRIES
12-month Current 1-year target UPSIDE ANALYSTS’ RECOMMENDATIONS
forward PE price (`) price (`) POTENTIAL BUY HOLD SELL

10.2 464 521 12.3% 19 2 0 Nifty 500

THE ALUMINIUM AND copper
manufacturer is expected to report
a revenue of `43,645 crore in the
June 2023 quarter, according to
analysts compiled by Reuters-
Refinitiv. The estimates imply a
25% y-o-y decline. The fall in prices
of non-ferrous metals, decline in
Novelis revenue by 20% y-o-y in
the first quarter, and lower copper
sales amid maintenance-related
shutdowns will impact perfor-
mance. The LME prices of copper
and aluminium fell by 7.6% and
11.2%, respectively, between 31
March 2023 and 30 June 2023.
However, analysts are confident
about the long-term growth pros-
pects due to favourable energy
prices, ongoing efficiency projects,
operating leverage benefits, focus
on value-added products and
backward integration. The rising
domestic demand for aluminium
116.26
and copper will fuel growth. While 100
the aluminium demand is driven
by the government’s infrastructure
thrust, traction in the wires and ca-
bles segment, and higher demand Hindalco Industries
from EV segment will support the 111.77
copper segment. The performance
of Novelis is expected to improve
as the current headwinds of the de-
stocking of beverage cans in Asian
markets are expected to recede 29 July 2022 1 Aug 2023
after a couple of quarters. Current price as on 1 August 2023. Nifty 50 12-M forward PE: 19.9. Source: Refinitiv.
 mutual funds
14 The Economic Times Wealth August 7-13, 2023

Can you ignore small-cap funds?

The high returns do look attractive now, but be prepared for a drawdown that may last a long time.

by Sanket Dhanorkar

W
ith small-cap funds scorch-
ing the performance
charts, these have become
the flavour of the season.
Investors are piling on,
with expectations of continued momen-
tum in returns. They are being told that
they simply cannot ignore small-cap funds
if they want serious wealth creation. So, is
it time to shed the risk aversion associated
with small caps and make these the crown
jewels of your portfolios?
The numbers do look mouth-watering.
Over the past three years, small-cap funds
have clocked an annualised return of
39.4%, compared to flexi-cap funds’ 22.4%,
and mid-cap funds’ 31.1%. This gap in re-
turn translates into a big gulf in corpus. If
you stretch the horizon over 10 years, the
difference is acute. With a `10,000 monthly
SIP over the past 10 years, your invest-
ment of `12 lakh in a small-cap fund would
have surged to a whopping `41.24 lakh.
Comparatively, a mid-cap fund would have
GETTYIMAGES

grown the pot to `34 lakh and the flexi-cap

scheme to `28 lakh. The top performing
small-cap fund generated `55.8 lakh.
Meanwhile, the best mid-cap and flexi-cap
funds fetched `41.2 lakh and `36.43 lakh,
respectively. If you were to go by these
figures, shying away from small-cap funds
would imply missing out on a bigger cor-
pus. At least, that is the argument being
offered on social media.
Many investors avoid small-cap funds
for the perceived risks, since the returns
tend to exhibit higher volatility. Over
three-year time frames in the past six
years, flexi-cap funds have seen a standard
deviation of 6.37%. For mid-cap funds, it is
9.26%, and for small-cap funds, the stand-
ard deviation is 13.69%. Higher standard
deviation by itself need not be a deal-break-
er. It signifies that the small-cap fund’s
return tends to be more widely dispersed
around its mean. It can be argued that if
the mean return itself is often (but not
always) higher for small-cap funds, the
wider dispersion holds little significance.
Perhaps some volatility is a price worth
paying for the return potential.
However, we should dig a little deeper.
We know that small-cap funds are particu-
larly vulnerable in a falling market. This
can be measured by the drawdown—the
extent of erosion in a fund’s NAV during
a market fall. Drawdowns in small-cap
funds are evidently more acute. Over five
years, the maximum drawdown in small-
cap funds averages -40%, as per the data
from Morningstar. For mid-cap and flexi-
cap funds, it’s -33.6% and -32.6%, respec-
tively. Over 10 years, the gap is even bigger.
What’s more telling is the duration of
drawdown and the subsequent recovery.
Many small-cap funds are not only guilty
of experiencing protracted drawdowns,
Drawdowns in small-cap funds can be sharper and longer
Very few investors can hold their
nerves through such turbulence.
SMALL-CAP MID-CAP FLEXI-CAP
Max drawdown (%)
-40.0 -33.6 -32.6 -46.9 -36.1 -33.4
Max drawdown covers peak-trough NAV timeline.
Max drawdown recovery covers peak-trough-peak NAV timeline.
5 years 10 years
but they also take longer to recover lost
value. Morningstar data shows that over
a 10-year time span, small-cap funds have
taken roughly 152 weeks to recover value
from the worst drawdown (covering peak-
trough-peak date). Comparatively, mid-
cap funds have taken 116 weeks and flexi-
cap funds 65 weeks. Why is this critical?
Perhaps you can stomach a gut-churning
drawdown of -40% if it lasts 3-6 months
and rebounds within a year, but would you
be comfortable if this timeline stretches
over 24-30 months, or longer?
This is not a game everyone can play.
For many investors, sharp, long-lasting
drawdowns are unnerving. When faced
with such a scenario, the tendency is to
seek the exit door. If your investment sim-
Max drawdown period (weeks)
112
84
56
31 34
23
5 years 10 years
ply won’t let you stay in the game, it will be
a bigger loss than the additional gains you
potentially forfeit by avoiding this space. If
your risk appetite allows you to digest the
upheavals in flexi-cap or mid-cap funds,
and gives you the strength to stay in-
vested for longer, you are better off playing
within that comfort zone. Don’t get swayed
by the promise of higher returns. Your in-
vesting success is not merely a function of
returns. What matters more is your ability
to ride the market’s turbulences without
interrupting the compounding process.
Let’s assume that you can comfortably
absorb this elevated risk. Isn’t it worth the
pain if there is a bigger pot of gold assured
at the end? That seems to be the case con-
sidering today. Now let’s rewind to March
Max drawdown recovery period (weeks)
152
116
87
65
62
54
5 years 10 years
Data as on 31 July 2023
Source: Morningstar India
2020. Small-cap funds were sitting on a
10-year return of 7.5%, lower than mid-cap
funds’ 8.8% and only marginally higher
than flexi-cap funds’ 6%. Perhaps we are
nitpicking. So, let’s cast a wider net. Over
seven-year time spans since 31 July 2010,
the worst return an average mid-cap and
flexi-cap fund has managed is 4.75% and
0.95%, respectively. Meanwhile, the aver-
age small-cap fund suffered a loss of -2.84%
in its worst phase. The risks in small caps
will always be present. And don’t always
count on that pot of gold.
Please send your feedback to
etwealth@timesgroup.com
SMART STATS
The Economic Times Wealth
August 7-13, 2023

In This Section
MUTUAL FUNDS - P16
LOANS AND DEPOSITS - P18

ET WEALTH TOP 50 STOCKS

ALTERNATIVE INVESTMENTS- P19

Every week we put about 3,000 stocks through four key filters and rate them on a mix of factors. The end result
of this is the listing of the top 50 stocks based on the composite rating to help ease your fortune hunt.

RANK PRICE ` GROWTH%* VA LUAT I O N R AT I O S RISK R AT I N G

Current Previous Stock Net Div Downside Bear No. of Consensus
Rank Rank Price Revenue Profit PE PB Yield PEG Risk Beta Analysts Rating

1 Fast growing stocks

Kalpataru Projects 1 1 632.95 23.21 74.71 21.74 2.17 1.10 0.36 1.39 1.19 15 4.60
LIC Housing Fin 2 2 394.35 17.84 28.11 7.71 0.82 2.05 0.23 1.29 1.20 33 3.76
Balrampur Chini Mills 3 5 409.85 29.86 93.64 29.12 2.83 0.62 0.31 1.42 1.19 11 4.27 Top 5 stocks with the highest
revenue growth (%) over the
Larsen & Toubro 4 9 2,598.10 19.60 35.95 35.25 4.13 1.14 1.03 0.85 0.52 41 4.59
previous year
Orient Cement 5 6 143.90 15.57 90.42 23.65 1.81 1.06 0.27 1.42 1.42 15 4.20
Century 46
PSP Projects 6 7 799.25 39.32 50.67 21.62 3.56 0.65 0.43 1.48 2.04 12 4.58 Plyboards
IndusInd Bank 7 8 1,364.50 18.53 17.90 13.39 1.86 1.01 0.65 1.29 1.76 47 4.74 PSP Projects 39
Natco Pharma 8 12 807.25 35.04 52.14 20.36 2.99 0.37 0.39 1.16 0.55 14 3.57 Natco Pharma 35
SAIL 9 4 92.90 1.65 98.83 17.57 0.70 1.08 0.16 1.25 1.91 25 3.24
Ujjivan Small Fin
32
Somany Ceramics 10 10 737.10 16.90 90.45 43.67 3.97 0.41 0.48 1.24 0.75 20 4.60 Bank

Apollo Tyres 11 13 431.55 10.58 55.89 24.39 2.09 1.06 0.44 1.28 1.29 29 3.65 Balrampur Chini 30
Mills
EPL 12 18 214.65 18.47 37.54 30.11 3.44 1.94 0.80 1.26 0.45 11 4.64
Adani Ports & SEZ 13 11 773.35 19.41 60.99 31.04 3.62 0.66 0.50 2.19 2.43 20 4.85
2 Least expensive stocks
Federal Bank 14 17 132.15 12.88 13.85 8.78 1.26 1.36 0.57 1.23 1.58 39 4.80
Top 5 stocks with the lowest
Endurance Technologies 15 14 1,720.25 23.75 66.83 49.64 5.40 0.37 0.68 0.99 -0.08 20 4.35
price-earnings ratio
Finolex Industries 16 15 206.55 10.54 127.56 50.59 2.59 1.96 0.40 1.35 0.81 18 3.83
LIC Housing 7.71
VIP Industries 17 21 597.95 21.43 117.08 51.87 12.32 0.68 0.44 0.95 0.43 12 4.75 Finance

Hero MotoCorp 18 26 2,952.40 11.70 30.97 20.99 3.54 3.34 0.68 0.95 0.81 45 3.51 CESC 7.73

CESC 19 22 78.20 10.74 15.40 7.73 0.95 5.86 0.62 0.85 0.52 15 4.87 Ujjivan Small 8.23
Fin Bank
Cipla/India 20 23 1,165.00 15.20 37.06 33.45 4.00 0.73 0.88 0.85 0.35 41 4.10
Federal Bank 8.78
Cyient 21 34 1,502.75 24.01 37.51 31.86 4.78 1.71 0.88 1.29 0.36 17 4.06
UPL 12.62
Blue Star 22 27 769.00 27.03 46.20 37.94 11.19 0.77 0.73 0.98 0.39 24 4.17
Bharat Forge 23 20 908.40 20.05 143.54 79.87 6.29 0.77 0.56 1.10 1.30 30 3.93
Aurobindo Pharma 24 29 840.35 11.87 42.39 25.59 1.84 0.37 0.59 1.33 1.08 30 4.30 3 Best PEGs
NTPC 25 25 220.10 2.84 17.89 12.69 1.46 3.31 0.69 0.88 1.05 25 4.80 Top 5 stocks with the least
Engineers India 26 24 147.05 20.98 40.38 23.66 4.18 2.02 0.54 1.59 1.75 10 4.40
price earnings to growth ratio
Aptus Value Hsg Fin 27 31 262.90 18.84 30.30 26.28 3.96 1.52 0.89 1.58 0.01 16 4.38 LIC Housing Fin Balrampur Chini Mills

HDFC Bank 28 33 1,628.65 26.43 27.13 18.71 3.02 1.16 5.13 0.83 1.28 45 4.91
UltraTech Cement 29 32 8,136.15 14.36 62.11 46.34 4.32 0.46 0.78 0.84 0.88 46 4.20 0.16 0.23 0.27 0.31 0.31

HeidelbergCement 30 19 186.15 10.21 134.82 42.63 2.90 4.96 0.31 1.19 1.32 18 2.78
UPL 31 3 600.45 4.43 18.28 12.62 1.51 1.62 0.54 1.04 1.28 29 4.24 SAIL Orient Cement HeidelbergCement
Century Plyboards 32 41 655.00 46.11 41.16 38.26 7.65 0.23 0.93 1.10 0.42 26 4.46
JK Lakshmi Cement 33 35 636.30 12.42 47.57 20.29 2.67 0.79 0.44 1.64 1.80 21 4.00
4 Income generators
Ramco Cements 34 37 870.00 17.53 141.69 65.70 3.01 0.34 0.48 1.13 1.34 39 3.18
Top 5 stocks with the highest
NHPC 35 36 49.65 21.52 12.33 12.63 1.33 3.86 1.27 1.22 0.73 10 4.80
dividend yield (%)
DLF 36 -- 488.35 28.78 46.45 59.07 3.19 0.81 1.25 1.22 1.59 20 4.30
CESC 5.86
Bajaj Auto 37 -- 4,826.30 16.44 18.69 22.84 4.67 2.90 1.19 0.82 0.35 46 3.61
HeidelbergCement 4.96
PCBL India 38 -- 155.50 6.03 16.09 13.23 2.06 3.52 0.52 1.35 0.70 10 4.60
Indraprastha Gas 4.08
VRL Logistics 39 -- 714.95 22.49 32.79 37.81 6.44 0.69 0.80 1.37 0.29 12 4.58
NHPC 3.86
Ipca Laboratories 40 28 894.55 18.09 83.22 48.46 3.91 0.45 0.58 1.18 0.36 21 3.19
PCBL India 3.52
Zensar Technologies 41 43 479.80 9.23 68.47 33.12 3.65 1.04 0.50 1.51 1.55 12 4.33
Eris Lifesciences 42 38 795.70 29.45 21.59 28.87 5.02 0.92 1.34 0.86 -0.04 11 5.00
5 Least risky
UTI Asset Management 43 40 782.80 11.06 28.66 22.77 2.58 2.81 0.77 1.28 0.65 15 4.07 Top 5 stocks with the lowest
Ujjivan Small Fin Bank 44 -- 50.05 31.78 12.01 8.23 2.39 2.61 1.29 1.66 2.32 16 4.94 downside risk
Birlasoft 45 45 433.80 13.22 78.39 35.83 4.81 0.82 0.47 1.38 1.55 12 4.25 Larsen & Toubro
HDFC Bank
CG Consumer Electricals 46 47 292.15 16.00 35.27 40.31 7.03 1.05 1.20 1.32 1.13 46 4.35
Indraprastha Gas 47 48 452.50 10.42 22.72 19.31 3.99 4.08 1.09 1.24 1.54 38 4.32
0.82 0.83 0.84 0.85 0.85
Prince Pipes & Fittings 48 39 661.50 14.18 101.35 60.20 5.36 0.30 0.59 0.98 0.25 13 4.54
Coforge 49 49 4,765.25 17.27 47.62 41.02 9.13 1.35 0.83 1.31 1.27 34 3.65
Bajaj Auto UltraTech CESC
Kajaria Ceramics 50 46 1,429.20 19.47 53.98 66.55 9.85 0.63 1.23 1.04 0.10 34 4.09 Cement
SEE DOWNSIDE RISK AND BEAR BETA COLUMNS
IN THE ADJACENT TABLE.
*REVENUE AND NET PROFIT GROWTH IS BASED ON CONSENSUS ANALYSTS' EXPECTATIONS. NR: NOT IN THE RANKING. DATA AS ON 3 AUGUST 2023. SOURCE: BLOOMBERG
 smart stats
16 The Economic Times Wealth August 7-13, 2023

LAGGARDS & LEADERS

ETW FUNDS 100
BEST FUNDS TO BUILD YOUR PORTFOLIO
Taking a long-term view of fund returns, here is a list of 10
funds in each category—five leaders (worth investing) and
five laggards (that may be a drag on your portfolio).

LAGGARDS LEADERS

Equity: Large cap 5-year returns

ET Wealth collaborates with Value Research to identify the top-performing
8.31 14.5
funds across categories. Equity funds and equity-oriented hybrid funds are LIC MF Nifty Next 50 Index Quant Focused Fund
ranked on 3-year returns while debt-oriented hybrid and income funds are 8.39 14.28
ranked on 1-year returns. ICICI Prudential Nifty Next 50 BHARAT 22 ETF
8.55 14.23
RETURNS (%) UTI Nifty Next 50 Index Fund ICICI Prudential BHARAT 22 FOF
Value Research Net Assets Expense
Fund Rating (` Cr) 3-Month 6-Month 1-Year 3-Year 5-Year Ratio (%)
8.68 13.86
EQUITY: LARGE CAP JM Focused Fund Nippon India Large Cap Fund
Quant Focused Fund  313.27 12.24 15.92 17.54 26.36 14.5 2.32 8.71 13.53
ICICI Prudential Bluechip Fund
UTI Nifty 50 Index Fund - Regular Plan


38,734.11
11,585.85
10.03
8.14
12.54
11.47
17.52
13.39
23.96
21.84
13.3
12.61
1.59
0.3
26.36% Taurus Largecap Equity Fund Canara Robeco Bluechip Equity Fund

HDFC Index Fund Nifty 50 Plan  8,973.00 8.1 11.41 13.27 21.65 12.38 0.4 THE 3-YEAR
RETURN OF
ICICI Prudential Nifty 50 Index Fund
Bandhan Nifty 50 Index Fund - Regular Plan


4,821.90
807.51
8.1
8.04
11.4
11.28
13.24
12.99
21.55
21.47
12.28
12.51
0.43
0.6
QUANT
FOCUSED
Equity: Flexi cap 5-year returns
SBI Nifty Index Fund #  4,595.99 8.08 11.36 13.13 21.46 12.06 0.5 FUND IS THE
Tata Nifty 50 Index Fund - Regular Plan #  454.85 8.02 11.26 13.07 21.34 12.19 0.52 HIGHEST 6.15 20.66
HDFC Index Fund - S&P BSE Sensex Plan  5,070.88 7.91 10.54 14.11 21.33 12.83 0.4
IN ITS Motilal Oswal Flexi Cap Quant Flexi Cap Fund
CATEGORY.
ICICI Prudential S&P BSE Sensex Index Fund  1,031.15 7.92 10.5 14.12 21.25 12.88 0.35 7.41 18.46
Kotak Bluechip Fund - Regular Plan  6,080.89 8.21 10.27 13.12 21.11 12.42 1.79 Taurus Flexi Cap Fund 360 ONE Focused Equity Fund
Nippon India Index Fund - S&P BSE Sensex Plan # 476.59 7.8 10.32 13.61 21.02 12.5 0.75

7.84 17.93
Tata S&P BSE Sensex Index Fund - Regular Plan #  249.59 7.86 10.39 13.85 20.55 12.42 0.58
Axis Focused 25 Fund Parag Parikh Flexi Cap Fund
LIC MF S&P BSE Sensex Index Plan #  71.56 7.74 10.2 13.51 20.54 12.24 1.08
Canara Robeco Bluechip Equity Fund - Regular Plan  9,946.14 8.9 11.54 13.64 19.85 13.53 1.7
8.12 17.07
Bandhan Focused Equity HDFC Retirement Savings Fund Equity
EQUITY: LARGE & MID CAP
8.53 15.80
ICICI Prudential Large & Mid Cap Fund  8,582.19 12.06 14.64 20.19 31.31 15.78 1.81
Nippon India Retirement PGIM India Flexi Cap Fund
SBI Large & Midcap Fund #
Tata Large & Mid Cap Fund - Regular Plan #


12,609.11
4,638.99
10.99
10.84
14.76
15.02
19.8
20.59
29.17
25.3
15.74
15.73
1.74
1.89
31.31%
THE 3-YEAR
Mirae Asset Emerging Bluechip Fund - Regular Plan  26,684.26 11.86 14.73 12.99 25.26 16.6 1.6 RETURN OF
Kotak Equity Opportunities Fund - Regular Plan  13,765.53 11.78 16.16 18.78 25.13 15.02 1.67 ICICI PRU Equity: Mid cap 3-year returns
LARGE AND
EQUITY: FLEXI CAP 20.52
MID CAP IS 37.53
HDFC Retirement Savings Fund Equity Plan  3,336.99 12.43 17.88 24.99 31.89 17.07 1.88 THE HIGH- DSP Midcap Fund Quant Mid Cap Fund
ICICI Prudential Retirement Fund - Pure Equity Plan  297.86 14.54 18.64 18.78 28.53 — 2.4 EST IN ITS
JM Flexicap Fund  397.41 15.23 20.17 23.88 28.16 15.06 2.45
CATEGORY. 23.54 37.25
LIC MF Midcap Fund Motilal Oswal Midcap Fund
360 ONE Focused Equity Fund - Regular Plan  4,085.48 10.73 14.08 20.05 25.61 18.46 1.89
ICICI Prudential Focused Equity Fund  4,543.85 13.1 15.76 19.94 25.09 14.34 1.87 24.00 35.47
Parag Parikh Flexi Cap Fund - Regular Plan  37,699.02 8.38 15.28 19.14 24.61 17.93 1.48 HSBC Midcap Fund HDFC Mid-Cap Opportunities Fund
Union Flexi Cap Fund 1,534.07 12.34 14.72 15.88 23.72 14.12 2.13

24.58 35.32
PGIM India Flexi Cap Fund - Regular Plan  5,889.89 9.84 12.65 11.7 23.17 15.8 1.78
Axis Midcap Fund SBI Magnum Midcap Fund
Canara Robeco Flexi Cap Fund - Regular Plan  9,918.92 9.3 12.01 12.1 21.08 13.49 1.72
Mirae Asset Focused Fund - Regular Plan  9,202.25 8.89 10.42 8.83 21.02 — 1.75
27.27 34.38
Franklin India Prima Motilal Oswal Nifty Midcap 100 ETF
EQUITY: MID CAP
Quant Mid Cap Fund  2,188.28 13 17.44 21.77 37.53 21.27 2.38
Motilal Oswal Midcap Fund - Regular Plan  4,959.72 14.15 16.7 23.99 37.25 17.34 1.84
37.53% Equity: Small cap 3-year returns
SBI Magnum Midcap Fund #  11,132.53 13.9 20.2 19.12 35.32 17.99 1.76
THE
Nippon India Growth Fund #  16,353.16 16.16 20.62 23.45 33.67 18.2 1.75 3-YEAR
RETURN OF
26.82 50.13
PGIM India Midcap Opportunities Fund - Regular Plan  8,965.44 11.42 11.92 9.85 33.15 19.64 1.72
QUANT MID ITI Small Cap Fund Quant Small Cap Fund
Mirae Asset Midcap Fund - Regular Plan  10,567.13 16.94 18.32 16.28 33.13 — 1.72
CAP FUND 33.82 46.75
Edelweiss Mid Cap Fund - Regular Plan  3,250.39 12.35 16.7 18.17 32.65 16.37 1.88 IS THE
Kotak Emerging Equity Fund Regular Plan  29,758.50 12.95 15.94 17.31 32.14 17.14 1.53 HIGHEST Bandhan Emerging Businesses Nippon India Small Cap Fund
IN ITS 34.36 43.73
EQUITY: SMALL CAP CATEGORY.
Quant Small Cap Fund  5,565.26 15.34 20.93 34.72 50.13 27.19 2.37
Aditya Birla Sun Life Small Cap HSBC Small Cap Fund
Nippon India Small Cap Fund #  31,945.15 18.95 26.02 32.77 46.75 22.03 1.58 35.84 43.3
Kotak Small Cap Fund - Regular Plan  10,829.68 16.37 19.16 18.48 41.06 20.72 1.68 Axis Small Cap Fund HDFC Small Cap Fund
Canara Robeco Small Cap Fund - Regular Plan  6,587.28 14.64 16.64 16.49 40.69 — 1.75
36.10 41.58
Edelweiss Small Cap Fund - Regular Plan  1,946.11 15.83 19.37 23.33 40.17 — 1.99
Invesco India Smallcap ICICI Prudential Smallcap Fund
Axis Small Cap Fund - Regular Plan  14,251.72 14.43 16.34 21.74 35.84 22.17 1.66

EQUITY: VALUE ORIENTED

SBI Contra Fund #  11,865.28 12.59 19.28 25.9 39.31 19.11 1.74 Hybrid: Aggressive 5-year returns
ICICI Prudential Value Discovery Fund  30,705.23 11.48 14.32 23 29.75 16.42 1.65 39.31%
Kotak India EQ Contra Fund - Regular Plan  1,688.06 10.7 13.34 19.19 24.69 13.73 2.07
THE 3-YEAR 7.01 19.74
EQUITY: ELSS RETURN OF Nippon India Equity Hybrid Quant Absolute Fund
SBI CONTRA 16.3
Quant Tax Plan  4049.39 10.94 16.43 15.45 36.65 23.14 2.32
FUND IS
8.07
Bandhan Tax Advantage (ELSS) Fund - Regular Plan  4776.49 13.37 16.39 20.22 32.34 15.26 1.81 THE HIGH- Bandhan Asset Allocation ICICI Prudential Equity & Debt Fund
Bank of India Tax Advantage Fund - Regular Plan  791.83 10.65 16.28 19.04 26.64 15.07 2.27 EST IN ITS 8.34 14.02
DSP Tax Saver Fund  11302.96 11.83 13.85 15.8 25.56 14.7 1.69 CATEGORY.
Shriram Aggressive Hybrid HDFC Children's Gift Fund
Kotak Tax Saver Regular Plan  3855.26 10.15 14.53 17.3 25.34 14.8 1.82
Mirae Asset Tax Saver Fund - Regular Plan  16633.98 10.99 14.36 14.57 25.2 15.76 1.61 8.43 13.32
PGIM India ELSS Tax Saver Fund - Regular Plan  540.34 8.82 11.73 15.74 25.15 13.63 2.34 PGIM India Hybrid Equity Kotak Equity Hybrid Fund
Parag Parikh Tax Saver Fund - Regular Plan  1741.72 6.4 9.51 17.29 24.57 — 1.87 8.63 13.27
Union Tax Saver (ELSS) Fund  663.37 12.3 14.42 15.94 24.55 14.51 2.4 Aditya Birla Sun Life Equity HDFC Retirement Savings Fund
Canara Robeco Equity Tax Saver Fund - Regular Plan  5749.92 9.49 12.51 12.33 23.36 15.21 1.75
ANNUALISED RETURNS IN % AS ON 2 AUGUST 2023.
 smart stats
The Economic Times Wealth August 7-13, 2023 17

ETW FUNDS 100 Value Research Net Assets

RETURNS (%)
Expense

1 Top 5 SIPs
Fund Rating (` Cr) 3-Month 6-Month 1-Year 3-Year 5-Year Ratio

HYBRID: EQUITY SAVINGS

HDFC Equity Savings Fund  2,717.34 4.81 7.21 10.51 14.15 8.82 2.04 Top 5 equity schemes based
Mirae Asset Equity Savings Fund - Regular Plan  608.62 5.6 7.95 10.00 13.25 — 1.39 on 10-year SIP returns
UTI Equity Savings Fund - Regular Plan  273.56 5.35 7.94 12.06 13.19 — 1.5
Nippon India Small Cap Fund
SBI Equity Savings Fund - Regular Plan #  2,317.15 7.01 10.16 11.18 12.69 8.78 1.19
Kotak Equity Savings Fund - Regular Plan  2,535.46 4.84 6.81 10.92 11.46 8.66 2
24.29
Edelweiss Equity Savings Fund - Regular Plan  274.22 4.75 6.97 9.66 10.07 8.2 1.58 Quant Tax Plan

HYBRID: AGGRESSIVE (EQUITY-ORIENTED) 22.58

Quant Absolute Fund  1,246.49 7.27 10.72 11.86 29.25 19.74 2.31 SBI Small Cap Fund
ICICI Prudential Equity & Debt Fund  23,711.22 10.22 13.59 19.38 29.05 16.3 1.7 29.25% 22.57
HDFC Children's Gift Fund  7,001.71 9.19 15.51 20.2 23.35 14.02 1.78 THE 3-YEAR Quant Small Cap Fund
Kotak Equity Hybrid Fund - Regular Plan  3,841.16 8.1 10.83 13.88 22.49 13.32 1.85 RETURN
HDFC Retirement Savings Fund - Hybrid Equity Plan  1,077.44 10.1 14.41 19.2 22.13 13.27 2.17 OF QUANT 22.40
ABSOLUTE
Mahindra Manulife Aggressive Hybrid Fund  719.04 10.3 12.46 14.76 21.80 — 2.29 Quant Flexi Cap Fund
FUND IS THE
Edelweiss Aggressive Hybrid Fund - Regular Plan  669.14 9.17 12.3 17.57 21.64 12.54 2.36 HIGHEST IN ITS 20.87
Baroda BNP Paribas Aggressive Hybrid Fund  832.63 8.36 11.25 13.42 17.40 13.1 2.23 CATEGORY.
Canara Robeco Equity Hybrid Fund - Regular Plan  8,895.85 7.97 10.18 11.87 17.08 12.1 1.74 SIP: SYSTEMATIC % ANNUALISED RETURNS
INVESTMENT PLAN AS ON 2 AUGUST 2023
HYBRID: CONSERVATIVE (DEBT-ORIENTED)
HDFC Hybrid Debt Fund  2,831.21 4.3 7.23 11.63 12.32 9.25 1.8

2 Top 5 MIPs
SBI Magnum Children's Benefit Fund - Savings Plan #  96.30 5.08 8.04 10.8 13.57 9.09 1.21
SBI Conservative Hybrid Fund #  7,917.25 4.71 6.99 10.56 12.26 9.49 1.11
Kotak Debt Hybrid Fund - Regular Plan 1,891.05 4.15 6.52 9.78 11.41 9.71 1.77

Top 5 MIP schemes based on
ICICI Prudential Regular Savings Fund  3,269.71 4.3 6.32 9.12 9.69 8.79 1.72
3-year SWP returns
Canara Robeco Conservative Hybrid Fund  1,084.11 3.2 5.14 7.12 8.38 8.57 1.82

DEBT: MEDIUM TO LONG TERM Bank of India Conservative Hybrid Fund

SBI Magnum Income Fund #  1,603.83 1.57 3.93 7.13 4.86 7.43 1.46 13.60
UTI Bond Fund - Regular Plan  319.89 1.33 3.76 6.90 8.35 4.08 1.63 SBI Magnum Children's Benefit Fund
Aditya Birla Sun Life Income Fund  1,834.82 1.35 3.6 6.36 4.42 7.43 0.89 7.13%
THE 1-YEAR 13.42
DEBT: MEDIUM TERM RETURN OF Aditya Birla Sun Life Regular Savings
Aditya Birla Sun Life Medium Term Plan  1,878.50 1.66 3.88 7.08 13.32 8.01 1.54 SBI MAGNUM
INCOME IS 12.18
SBI Magnum Medium Duration Fund #  7,136.53 1.67 3.93 6.97 5.35 7.58 1.21
THE HIGH- SBI Conservative Hybrid Fund
ICICI Prudential Medium Term Bond Fund  6,553.88 1.64 3.72 6.68 6.04 7.14 1.4
EST IN ITS
Axis Strategic Bond Fund  1,898.23 1.58 3.84 6.65 5.81 6.88 1.08 CATEGORY. 12.07
DEBT: SHORT TERM HDFC Hybrid Debt Fund
ICICI Prudential Short Term Fund  17,968.36 1.85 3.94 7.29 5.35 7.23 1.07 12.04
UTI Short Term Income Fund - Regular Plan  2,374.57 1.74 3.67 6.70 6.33 5.04 0.96 7.29% SWP: SYSTEMATIC % ANNUALISED RETURNS
HDFC Short Term Debt Fund  12,320.45 1.72 3.79 6.65 4.97 7.11 0.74
THE 1-YEAR WITHDRAWAL PLAN AS ON 2 AUGUST 2023
Sundaram Short Duration Fund  194.10 1.59 3.68 6.62 6.69 5.34 0.86 RETURN OF
Aditya Birla Sun Life Short Term Fund  6,048.91 1.62 3.64 6.40 5.39 7.06 1.09 ICICI PRU
Axis Short Term Fund 7,511.86 1.47 3.52 6.30 4.68 6.86 0.98 SHORT TERM

3


DEBT: DYNAMIC BOND

FUND IS
THE HIGH- Multi Cap : Cash holdings
EST IN ITS
SBI Dynamic Bond Fund #  3,002.65 1.52 3.94 8.29 4.26 7.48 1.43
CATEGORY.
ICICI Prudential All Seasons Bond Fund  10,600.49 1.82 4.06 7.67 5.48 7.7 1.31
17.81
Quantum Dynamic Bond Fund - Regular Plan  87.97 1.83 3.89 7.62 5.02 7.18 0.73
360 ONE Dynamic Bond Fund - Regular Plan  803.51 1.44 4.1 6.12 5.55 6.36 0.52

DEBT: CORPORATE BOND

9.21
ICICI Prudential Corporate Bond Fund  21,926.35 2.01 4.17 7.70 5.33 7.3 0.53 7.33 7.15 6.46
Nippon India Corporate Bond Fund #  2,438.28 1.71 3.76 7.09 5.69 6.76 0.67 Expense as on 31 July 2023
Aditya Birla Sun Life Corporate Bond Fund  17,607.71 1.88 3.9 6.95 5.25 7.52 0.5 # : Expense as on before
Kotak Corporate Bond Fund - Standard Plan  10,287.01 1.68 3.72 6.50 4.87 6.81 0.67 31 July 2023
Axis Corporate Debt Fund - Regular Plan  4,813.83 1.59 3.65 6.36 4.89 6.53 0.93 Returns as on 02 Aug 2023
Assets as on 30 June 2023 Quant Ac- Tata SBI Multi- Kotak LIC MF
All equity funds ranked on 3-year returns. Debt funds ranked on 1-year returns. Rating as on 31 July 2023 tive Fund Multicap cap Fund Multicap Multi Cap
Fund Fund Fund
Did not find your fund here?
Log on to www.wealth.economictimes.com for an exhaustive list. % OF ASSETS AS ON 30 JUNE 2023

Methodology
The Top 100 includes only those funds that have a 5- or
4-star rating from Value Research. The rating is determined
EQUITIES (figures over the past one year)
Large-cap: Mostly invested in large-cap companies. FUND 4 Debt: Corporate bond
RAISER
by subtracting a fund’s risk score from its return score. Multi-cap: Mostly invested in large- and mid-cap 0.58
The result is assigned stars according to the following companies. 0.53
0.49 0.51
distribution: Mid-cap: Mostly invested in mid-cap companies. 0.48

62.6%
 Top 10% Small-cap: Mostly invested in small-cap companies.
 Next 22.5% Tax planning: Offer tax rebate under Section 80C.
(Not covered
 Middle 35% in ETW Funds International: More than 65% of assets invested abroad.
 Next 22.5% 100 listing) Income: Average maturity varies according to objective. of 163 equity diversified
  Bottom 10% Gilt: Medium- and long-term; invest in gilt securities. funds (102 of 163 funds)
Fixed-income funds less than 18 months old and equity funds Equity-oriented: Average equity exposure more had the highest exposure
less than three years old have been excluded. This ensures than 60%. DSP Cor- Aditya Sundaram ICICI Baroda
that all the funds have existed long enough to be tracked for
to the banking sector porate Birla Sun Corporate Prudential BNP
Debt-oriented aggressive: Average equity exposure
consistency of performance. Given the focus on long-term between 25-60%.
stocks in terms of their Bond Life Cor- Bond Corporate Paribas
investing, liquid funds, short-term funds and FMPs are not equity sectoral allocation, Fund porate Fund Bond Corporate
part of the list. For the same reason, we have considered only Debt-oriented conservative: Average equity exposure Bond Bond
the growth option of funds that reinvest returns instead of less than 25%. in June 2023.
% AS ON 30 JUNE 2023
offering dividends that increase the NAV of funds. Arbitrage: Seek arbitrage opportunities between equity % EXPENSE RATIO IS CHARGED ANNUALLY.
Despite these rigorous filters, the list includes 2/3 funds of and derivatives. SOURCE: ACEMF
METHODOLOGY OF TOP 100 FUNDS ON
each category to maximise choice from the best funds. Asset allocation: Invest fully in equity or debt as per WWW.WEALTH.ECONOMICTIMES.COM
The fund categories are: market conditions.
 loans and deposits
18 The Economic Times Wealth August 7-13, 2023

LOANS & DEPOSITS

ET WEALTH collaborates with ETIG to provide a comprehensive ready reckoner of loans and fixed-income
instruments. Don’t miss the information on investments for senior citizens and a simplified EMI calculator.

Top five bank FDs

Interest rate (%) What `10,000
HOME LOAN RATES
TENURE: 1 YEAR compounded qtrly will grow to With effect from October 2019, all banks have made the transition to
Equitas Small Finance Bank 8.20 10,846 external benchmarks for pricing new home loans. Most banks have
IndusInd Bank 7.75 10,798 picked the RBI repo rate as the external benchmark.
YES Bank 7.50 10,771
Bandhan Bank 7.25 10,745 REPO RATE: 6.50%
DCB Bank 7.25 10,745 FOR SALARIED FOR SELF-EMPLOYED (%)
BANK
TENURE: 2 YEARS RLLR (%) FROM (%) TO (%) FROM (%) TO (%) WEF
DCB Bank 8.00 11,717 HDFC Bank -- 8.40 9.00 8.40 9.00 Not Given
IndusInd Bank 7.75 11,659 IndusInd Bank -- 8.50 9.75 8.50 9.75 Not Given
YES Bank 7.75 11,659 Indian Bank 9.20 8.50 9.90 8.50 9.90 9 Feb 2023
Equitas Small Finance Bank 7.75 11,659
Punjab National Bank 9.25 8.50 10.10 8.50 10.10 9 Feb 2023
RBL Bank 7.50 11,602
Bank of India 9.25 8.50 10.60 8.50 10.75 1 July 2023
TENURE: 3 YEARS
IDBI Bank 9.10 8.55 10.75 8.65 12.25 12 Feb 2023
DCB Bank 8.00 12,682
Bank of Maharashtra 9.30 8.60 10.30 8.80 10.80 8 June 2023
Equitas Small Finance Bank 8.00 12,682
AU Small Finance Bank 7.75 12,589 SBI Term Loan 8.75+CRP 8.70 9.65 8.70 9.65 1 July 2023
IndusInd Bank 7.50 12,497 Union Bank of India 8.50 8.70 10.80 8.70 10.80 1 July 2023
IDFC First Bank 7.25 12,405 Kotak Mahindra Bank -- 8.75 9.35 8.80 9.60 Not Given
TENURE: 5 YEARS Karnataka Bank -- 8.75 10.43 8.75 10.43 1 July 2023
DCB Bank 7.75 14,678 Federal Bank -- 8.80 10.25 10.20 10.30 Not Given
IndusInd Bank 7.25 14,323 Indian Overseas Bank 9.35 8.85 9.55 8.85 9.55 8 Feb 2023
Equitas Small Finance Bank 7.25 14,323 UCO Bank 9.30 8.85 10.40 8.85 10.40 15 Mar 2023
HDFC Bank 7.00 14,148
Canara Bank 9.25 8.85 11.20 8.90 11.25 12 July 2023
ICICI Bank 7.00 14,148
Punjab & Sind Bank 8.54 8.95 9.95 8.95 9.95 9 Feb 2023
J&K Bank 9.10 9.10 9.50 9.10 9.50 10 May 2023
Top five senior citizen bank FDs Bank of Baroda 9.15 9.15 10.50 9.25 10.60 14 Feb 2023
Interest rate (%) What `10,000 Bandhan Bank -- 9.15 13.32 9.15 13.32 Not Given
TENURE: 1 YEAR compounded qtrly will grow to
IndusInd Bank 8.25 10,851 Karur Vysya Bank 9.60 9.23 12.13 9.23 12.13 10 Feb 2023
Bandhan Bank 7.75 10,798 ICICI Bank -- 9.25 9.90 9.40 10.05 Not Given
DCB Bank 7.75 10,798 Dhanlaxmi Bank 8.50 9.35 10.00 9.85 10.50 25 Feb 2023
J&K Bank 7.60 10,782 DCB Bank 9.75 9.75 9.95 9.75 9.95 13 Feb 2023
Kotak Mahindra Bank 7.60 10,782

TENURE: 2 YEARS
DCB Bank 8.50 11,832
Your EMI for a loan of `1 lakh
IndusInd Bank 8.25 11,774 TENURE 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS
RBL Bank 8.00 11,717
@ 7% 1,980 1,161 899 775 707
Axis Bank 7.80 11,671
Federal Bank 7.75 11,659 @ 8% 2,028 1,213 956 836 772
TENURE: 3 YEARS
DCB Bank 8.50 12,870
@ 9% 2,076 1,267 1,014 900 839
AU Small Finance Bank 8.25 12,776
@ 10% 2,125 1,322 1,075 965 909
IndusInd Bank 8.00 12,682
FIGURES ARE IN `. USE THIS CALCULATOR TO CHECK YOUR LOAN AFFORDABILITY.
Bandhan Bank 7.75 12,589
FOR EXAMPLE, A `5 LAKH LOAN AT 10% FOR 15 YEARS WILL TRANSLATE INTO AN EMI OF `1,075 X 5 = `5,375
IDFC First Bank 7.75 12,589

TENURE: 5 YEARS
Post office deposits Interest (%)
Minimum
investment (`)
Maximum
investment (`)
Features
Tax
benefits
DCB Bank 8.25 15,043
Axis Bank 7.75 14,678 Sukanya Samriddhi Yojana 8.00 250 `1.5 lakh p.a. One account per girl child 80C
IndusInd Bank 7.75 14,678
RBL Bank 7.50 14,499 Senior Citizens' Savings Scheme 8.20 1,000 `30 lakh 5-year tenure, minimum age 60 yrs 80C
State Bank of India 7.50 14,499
Public Provident Fund 7.10 500 `1.5 lakh p.a. 15-year tenure, tax-free returns 80C

Kisan Vikas Patra 7.50 1,000 No limit Can be encashed after 2.5 years Nil
Top five tax-saving bank FDs 5-year NSC VIII Issue 7.70 1,000 No limit No TDS 80C
Interest What `10,000
TENURE: 5 YEARS AND ABOVE rate (%) will grow to
Time deposit 6.9-7.50 1,000 No limit Available in 1, 2, 3, 5 year tenures 80C#
DCB Bank 7.75 14,678
IndusInd Bank 7.25 14,323 Single `9 lakh 5-year tenure, monthly returns Nil
Post Office Monthly Income
ICICI Bank 7.00 14,148 7.40 1,000
Scheme
Joint `15 lakh 5-year tenure, monthly returns Nil
IDFC First Bank 7.00 14,148
RBL Bank 7.00 14,148 Recurring deposits 6.50 100 No limit 5-year tenure Nil

Savings account 4.00 500 No limit `10,000 interest tax-free Nil

ALL DATA SOURCED FROM ECONOMIC TIMES INTELLIGENCE GROUP
(ETIGDB@TIMESGROUP.COM) Data as on 3 August 2023 #Benefit available only for 5-year deposit
 market watch
The Economic Times Wealth August 7-13, 2023 19

ALTERNATIVE INVESTMENT
RETURNS MONITOR
The scope and attractiveness of alternative investments is increasing. Here’s a weekly tracker of returns from such investments. But don’t
compare these with returns from traditional investments since the proportion and purpose of alternative investments is vastly different.

Gold (995) (`) Silver (`) Platinum ($/troy ounce) WTI Crude ($/barrel)
51,360 59,073 57,309 72,197 902.28 920.15 90.66 79.49
3 AUGUST 2022 3 AUGUST 2023 3 AUGUST 2022 3 AUGUST 2023 3 AUGUST 2022 3 AUGUST 2023 3 AUGUST 2022 2 AUGUST 2023

PRICE OF 10 GM GOLD PRICE OF 1 KG SILVER

CHANGE
X 1 WEEK -0.72% 1 WEEK -4.28% 1 WEEK -1.85% 1 WEEK -0.75%
X 1 YEAR 15.02% 1 YEAR 25.98% 1 YEAR 1.98% 1 YEAR -12.32%

PENNY STOCKS UPDATE

Penny stocks as a recommended non-traditional investment? Not exactly. ET WEALTH
neither has the expertise nor does it recommend investing in such stocks. But since the
relatively ‘low’ cost of investment attracts some investors to penny stocks, we provide
a weekly snapshot of this most volatile and uncertain type of stock investing.

Top price gainers Top volume gainers

MARKET 1-WEEK (%) 1-MTH (%) 1-MONTH AVG 1-MONTH AVG MKT CAP MARKET 1-WEEK (%) 1-MTH (%) 1-MTH AVG 1-MONTH AVG MKT CAP
STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR) STOCK PRICE (`) CHANGE CHANGE VOL (LAKH) VOL CHG (%) (`CR)

Spentex Industries 3.43 9.58 118.47 0.77 238.54 30.79 Ruchi Infrastructure 8.56 4.52 -1.04 3.70 1,482.95 184.47
Ushdev International 1.95 71.05 78.90 2.25 142.68 66.01 Visagar Financial Services 1.08 -12.20 4.85 87.44 1,112.35 64.25
Minal Industries 2.34 9.35 38.46 0.35 529.93 44.90 Indiabulls Enterprises 9.44 -0.42 -6.16 2.28 654.59 187.71
Quadrant Televentures 1.03 21.18 33.77 6.53 31.30 63.07 Minal Industries 2.34 9.35 38.46 0.35 529.93 44.90
Natural Biocon (India) 9.43 -1.67 31.52 1.66 147.11 10.72 Earum Pharmaceuticals 1.33 3.10 -15.29 87.08 389.55 41.02
ACI Infocom 1.1 -11.29 30.95 5.21 118.16 12.16 GG Engineering 1.09 -8.40 -4.39 113.23 360.41 95.87
Gennex Laboratories 8.67 25.11 28.83 7.02 155.12 153.11 National Plywood 5.12 0 12.04 0.02 348.58 12.62
India Lease Development 6.96 3.88 22.54 0.01 54.60 10.23 Meyer Apparel 1.80 -0.55 1.69 0.16 325.60 14.49
Prag Bosimi Synthetics 2.4 16.5 18.81 0.15 -0.59 17.85 GCM Securities 2.07 13.74 6.15 2.04 293.15 39.33
BKV Industries 9.4 7.43 17.21 0.04 -7.53 14.48 Cranes Softwares 3.09 -5.79 -5.50 3.03 290.29 36.38

Top price losers Top volume losers

Aerpace Industries 9.81 -22.51 -38.03 1.79 -24.96 30.90 Avance Technologies 1.56 -21.61 -36.59 1.76 -93.25 61.84
Kenvi Jewels 8.99 -22.43 -37.96 1.21 -73.23 113.63 Shree Securities 0.39 -17.02 -17.02 4.5 -85.40 31.12
Avance Technologies 1.56 -21.61 -36.59 1.76 -93.25 61.84 Sharp Investments 0.72 -6.49 0 4.09 -82.61 17.43
Veerkrupa Jewellers 1.71 -12.31 -36.19 4.77 -19.54 22.42 Family Care Hospitals 6.72 -0.88 -4 3.8 -81.18 48.97
Vinny Overseas 3.43 -8.29 -34.42 2.76 206.48 79.78 Madhav Infra Projects 6.09 10.73 10.53 3.5 -79.05 156.03
Galactico Corporate 6.33 -14.34 -31.34 4.21 -62.3 94.32 KBC Global 2.56 -3.40 -17.68 6.76 -78.87 157.44
Deep Diamond India 5.98 4.36 -29.23 5.05 5.19 19.14 RO Jewels 6.22 -9.20 -19.22 2.04 -77.82 31.38
Gala Global Products 6.68 -7.73 -26.27 1.73 -67.97 36.46 Vivanta Industries 5.12 -18.08 -25.58 2.37 -76.79 51.20
Vivanta Industries 5.12 -18.08 -25.58 2.37 -76.79 51.20 Kenvi Jewels 8.99 -22.43 -37.96 1.21 -73.23 113.63
Evexia Lifecare 1.86 -1.06 -24.39 24.27 -39.85 115.19 Comfort Intech 4.42 -1.12 -4.33 5.11 -70.21 141.40

STOCKS HAVE BEEN SELECTED USING THE FOLLOWING FILTERS: PRICE LESS THAN `10, ONE-MONTH AVERAGE VOLUME GREATER THAN OR EQUAL TO 1 LAKH, AND MARKET
CAPITALISATION GREATER THAN OR EQUAL TO `10 CRORE. DATA AS ON 3 AUGUST 2023. SOURCE: ETIG DATABASE AND BLOOMBERG.
 mutual funds
20 The Economic Times Wealth August 7-13, 2023

ICICI PRU MID CAP

Modest long-term track record

ET Wealth collaborates with Value Research to analyse top mutual funds. We examine the key fundamentals
of the fund, its portfolio and performance to help you make an informed investment decision.

HOW THE FUND HAS PERFORMED Top 5 sectors in portfolio (%)

Point-to-point returns (%)

BASIC Services 14.75

FUND BENCHMARK CATEGORY AVERAGE FACTS Automobile 12.27

34.55 Materials 11.93

31.31 DATE OF LAUNCH
30.04
28 OCTOBER 2004 Metals &
25.24 Mining 11.16
21.88 CATEGORY
15.24 16.45 15.36 EQUITY Healthcare 7.62
13.87
TYPE
MID CAP The fund’s sector positioning reflects
AUM* counter-cyclical approach.
1-YEAR 3-YEAR 5-YEAR `3,999 crore
Top 5 stocks in portfolio (%)
AS ON 1 AUGUST 2023
BENCHMARK
The fund has sharply lagged behind the Hindustan
NIFTY MIDCAP 150 Petroleum
index and peers over the past year. 4.52
TOTAL RETURN INDEX Corporation
Balkrishna 4.00
Industries

Rolling returns (%)

WHAT IT Jindal Steel &
Power
3.26

COSTS
FUND BENCHMARK

Lupin 3.01
22.08
1-YEAR NAV** UNO Minda 3.00
21.13 GROWTH OPTION
`187.1 The fund portfolio is fairly diversified
17.22 IDCW** with modest positions in top bets.
3-YEAR `31.4
17.10 MINIMUM INVESTMENT
Recent portfolio changes
`5,000
MINIMUM SIP AMOUNT New entrants
16.01
`100 3M India, Bharat Forge, Fine Organic Industries,
5-YEAR
15.83 EXPENSE RATIO* (%) Oberoi Realty, Page Industries, Siemens,
1.96 Timken India (May). DLF, JSW Energy, Mahindra
AS ON 1 AUGUST 2023
The fund’s long-term track record indicates EXIT LOAD & Mahindra Financial Services, Mangalore
modest outperformance across time frames. 1% for redemption within Refinery & Petrochemicals, Mphasis, Prestige
365 days Estates Projects, Zydus Lifesciences (June).
Note: Different benchmark (S&P BSE 150 MidCap TRI) is used due to non-availability of stated benchmark data.
Figures denote daily average rolling return over past decade for relevant time frames.
*AS ON 30 JUNE 2023 Complete exits
**AS ON 1 AUGUST 2023
Avanti Feeds, JSW Steel, Matrimony.

WHERE THE FUND INVESTS

Com, Motherson Sumi Wiring India, NMDC,
Zensar Technologies (May). Arvind Fashions,
Barbeque-Nation Hospitality, HDFC Asset
Management Company, Sun TV Network (June).
Portfolio asset
Fund
allocation
style box
Growth Blend Value How risky is it?
Equity 95.77% Fund Category Index
Large

CAPITALISATION

Large cap 13.64%

Standard Deviation 15.86 15.43 15.86
Mid cap 68.45%
Medium

Small cap 17.92% Sharpe Ratio 1.49 1.58 1.70

Cash/debt 4.23%
FUND Mean Return 27.79 28.62 31.21
Small

MANAGER
BASED ON 3-YEAR PERFORMANCE.

INVESTMENT STYLE The fund’s risk-return profile is not

The fund currently has a sizeable
presence in both large caps and small LALIT KUMAR among the best in its category.
11 MONTHS
caps, apart from its mid-cap focus. Source: Value Research

Should
This mid-cap fund takes a counter- growth stocks, offering some lagged sharply in the past year and
cyclical approach for the bulk of margin of safety. It currently has its long-term track record is also

You its portfolio, assuming positions

in out-of-favour sectors. It also
a sizeable presence in both large
caps and small caps, apart from its
modest. Considering its counter-
cyclical approach, investors can
Buy has some allocation in special
situations, and a presence in
mid-cap focus. This is influenced
by market conditions. The fund has
expect better outcomes over
longer time frames.
 pick of the week
The Economic Times Wealth August 7-13, 2023 21

Indian Bank: On a growth trajectory

Improving asset quality, investments in digital channels and industry tailwinds to drive growth.

T Fundamentals
he public sector bank reported a strong performance in granular retail deposits. The management has guided a 10-12%
the June 2023 quarter, led by a pick-up in loan growth, y-o-y loan growth for 2023-24.
Third, the bank’s asset quality is improving, which will grad- CONSENSUS
stable NIMs, healthy NII growth and lower provisions. ACTUAL
ESTIMATE
Its operating profit and net profit grew by 16% and 41%, ually enhance RoA and help moderate credit costs in the me-
2021-22 2022-23 2023-24 2024-25
respectively, on a y-o-y basis. Looking at the key performance dium term. An Emkay report states that the bank has the lowest
Revenue (` cr) 10,928.54 21,781.10 24,135.85 28,072.20
metrics between June 2022 and June 2023 quarters, consistent NNPAs among public sector banks. Decline in slippages, lower
Operating income(` cr) 757.35 3,016.14 3,259.82 5,989.78
improvement is visible in gross and net NPAs, NII, net profits stress flow from the restructured pool, strong recoveries and
and provisioning coverage ratio (PCR). upgrades, and accelerated write-offs have supported the asset Net profit/loss (` cr) 1,481.05 3,239.82 4,139.68 5,572.19

The Indian Bank had 5,798 do- quality. The strong PCR is expected Basic EPS (`) 28.16 28.68 33.97 44.74
mestic branches and three foreign to reduce incremental provisioning
branches till June 2023. It had a well-
Analysts’ views in 2023-24 and aid profitability. Valuations PBV PE
DIVIDEND
YIELD (%)
diversified loan book, with a 61% Fourth, investment in digital Indian Bank 0.98 6.97 2.51
share of RAM (retail, agri & MSME) channels is improving efficiency and State Bank of India 1.59 9.47 1.91
loans, and a 39% share of corporate 10 customer service. It saw a healthy
Buy Bank of Baroda 0.95 6.71 2.85
loans till the June 2023 quarter. Most jump in mobile and Net banking us-
Punjab National Bank 0.69 14.86 1.09
analysts are confident about the ers, which grew 36% and 25% on a y-
1 Union Bank of India 0.82 5.85 3.44
growth prospects of the bank due to o-y basis in the first quarter. In 2023-
Hold
multiple reasons.
First, the sector’s long-term struc-
24, the bank is planning to spend
`500-600 crore on tech upgrades and Brokerage calls TARGET
RECO DATE RESEARCH HOUSE ADVICE PRICE (`)
tural strength will benefit the bank. branch expansion. The stock outper-
Rising income, buoyant economic formed the Nifty PSU Bank index 28 Jul 2023 Emkay Buy 425
growth prospects, significant under- in the past year by delivering 93.4% 27 Jul 2023 Motilal Oswal Buy 380
penetration of credit, rebound in loan returns against the sector bench- 27 Jul 2023 AnandRathi Buy 386
Most analysts are confident about Indian
demand from retail, MSME and cor- Bank’s growth prospects due to lower mark return of 53.9%. It trades at a 27 Jul 2023 Phillip Securities Neutral 330
porate segments, increasing digital provisions, healthy NII growth and 12-month forward PBV of 0.82 times, 3 Jul 2023 ICICI Direct Buy 410
adoption and product innovation will well-diversified loan book. which is over 24% discount to the sec-
continue to enhance the demand for
banking and financial services.
tor median PBV.
Selection methodology: We pick the stock that has shown
Relative performance 193.6

100 MARKET PRICE: `342.25

Second, various loan segments are seeing growth momen-
tum. Housing, auto and personal loans are driving the retail
segment, whereas crop loans are supporting agri loans. MSME
and corporate loan segments have also seen decent growth in
the quarter. A gradual rise in the proportion of higher yielding
loans in the overall loan mix and repricing of assets are likely to
keep the margins stable.
Analysts expect the bank’s credit growth to be faster than
its peers due to its strong deposit base and focus on mobilising
the maximum increase in ‘consensus analyst rating’ during
the past month. The consensus rating is arrived at by averag-
ing all analyst recommendations after attributing weights to
each of them (5 for strong buy, 4 for buy, 3 for hold, 2 for sell and 115.6
1 for strong sell). An improvement in consensus analyst rating
indicates that the analysts are getting bullish on the stock. Only SENSEX
stocks with at least 10 analysts covering them are considered. 112.2
You can see similar consensus analyst rating changes during 2 AUGUST 2022 INDIAN BANK ET BANKS 3 AUGUST 2023
the past week in ETW 50 table. —Sameer Bhardwaj Indian Bank is compared with ET Banks. Stock price and index values
normalised to a base of 100. Source: ETIG and Bloomberg.

WHAT EXPERTS ADVISE

BUY RESEARCH STOCK 1-YEAR TARGET POTENTIAL
*STOCK PRICES AS ON 3 AUGUST

STOCK ADVICE COMMENT

HOUSE PRICE* (`) PRICE (`) UPSIDE (%)

Initiate with ‘buy’ as it will benefit from opportunities in green energy and EV sectors. Also, wide product
Pitti Engineering KR Choksey Buy 460 754 63.9 offerings, impressive client base, superior return ratios and focus on debt reduction are key strongholds.
Retain ‘buy’ due to a significant uptick in the box office collections, driven by the rising share of Hindi and
PVR Inox Nuvama Buy 1,557 2,080 33.6 Hollywood movies, robust content pipeline for 2023-24, new screen additions and synergy benefits in
tickets, F&B and costs.
Maintain ‘buy’ as higher production, led by capacity expansion, along with higher VAP share, over 2024-25
JTL Industries Axis Securities Buy 376 470 25.0 and 2025-26, will drive growth. Also, stability in steel prices is expected to reduce inventory losses in the
second half of 2023-24.
Maintain ‘buy’ due to an improvement in the gross margins in the first quarter, led by realisation improve-
Stove Kraft JM Financial Buy 487 600 23.2 ment and in-house manufacturing benefits. Likely improvement in demand during the festive season, export
opportunities and focus on market share expansion will drive growth.
Maintain ‘buy’ as it is strongly positioned to benefit from buoyant industrial capex cycle. Robust order pipe-
The Anup Engineering ICICI Direct Buy 2,114 2,590 22.5 line, focus on expanding capacity, growing product range and increasing share of exports are other positives.
Reiterate ‘buy’ due to new project wins, strong cash realisation, growth opportunities from TBCB and new
Power Grid Corp. Antique Buy 252 300 19.0 verticals, promising 2032 outlook and discounted value of investments.

SELL RESEARCH STOCK 1-YEAR TARGET POTENTIAL

STOCK ADVICE COMMENT
HOUSE PRICE* (`) PRICE (`) DOWNSIDE (%)

Reiterate ‘sell’ due to volume decline in the first quarter of 2023-24, led by supply challenges and
United Breweries Motilal Oswal Sell 1,542 1,200 -22.2 lower inter-state sales. Volatility in raw material prices and expensive valuations are other negatives.

your queries
22 The Economic Times Wealth August 7-13, 2023
How should I decide if a share is worth
holding over a period of time? I had bought
shares of SL Tech in 2014 at `62 per share.
Now, the share price is almost three times its
value. Should I encash and invest some-
where else, or continue to hold the shares? I
had also bought Jisljaleqs shares in 2016,
and these are now less than half their value.
Should I bear the loss and let these go?
It is very difficult to time the market. There is no
set rule for holding or letting go of an invest-
ment. If an investment has given you the de-
sired return and you want to book profit, you
could sell it. However, if you see more upside in
the long term, based on your research, you
could continue to hold these shares. There are
no fixed criteria and the decision depends on a
lot of factors like future prospects of the compa-
ny, investor’s return expectations, liquidity re-
quirement, etc. Similarly, if you have incurred a
loss in a stock, you need to research on the fu-
ture prospects of the company, and
sometime you need to book a loss
and exit from that stock. For
better understanding, you
could consult a Sebi-regis-
tered investment adviser.
Vikash Jain
Co-founder, Share Samadhan
I am a 91-year-old retired central government
employee and I get a pension. I am a widower and
have two sons, both of whom are over 60 years
old and have their own independent incomes. My
grandchildren are also adults. I have a life-long
CGHS health coverage. In 2023-24, my gross pen-
sion will be `8.7 lakh and the interest from fixed
deposits will be around `8 lakh. Most of my
investments are in debt mutual funds and hybrid
funds, with their current value being `1 crore. I
am unlikely to make withdrawals or switch from
one fund to another in this financial year. I have
already deposited `1.5 lakh in my PPF account. I
am not averse to giving modest donations to
institutions of my choice or government-run
funds. Can you suggest measures, including an
HUF, for keeping the tax liability to a minimum?
In order to optimise your tax, you should opt
for the new tax regime after transferring your
fixed deposits to any of the following:
a) HUF of your sons or grandchildren. This will
make the interest taxable in HUF and you will
pay nil tax after availing of the deduction.
b) Gift the fixed deposits and funds to grand-
children who are above 18 years old, if they
don’t have taxable income. The interest in-
come will be taxable in grandchildren’s hands
and incur nil tax liability.
c) Shift fixed deposits to gold bonds, or
equity-oriented mutual funds, or
e-gold, or land, if liquidity is
managed through mutual
funds for emergency.
Sudhir Kaushik
Co-founder & CEO, TaxSpanner
QA
&
Our panel of experts will
answer questions related to
any aspect of personal
finance. If you have a query,
mail it to us right away.
QUESTION OF THE WEEK
I am 60 years old and received `75
lakh on retirement a few days ago.
Where should I invest this sum for
maximum benefit?
As you are a retiree, your investment deci-
sions should focus on preserving capital,
generating income and managing risk. If
this is only a part of your retirement cor-
pus, you can invest some or most of it in
fixed income schemes. Your best options
are fixed deposits with reputable banks,
Senior Citizens’ Savings Scheme (SCSS),
which offers a higher interest rate than
regular FDs, and the Post Office Monthly
Income Scheme (POMIS). You can also con-
sider annuity schemes, such as the Prad-
han Mantri Vaya Vandana Yojana, as well
as other annuity plans that allow you to in-
vest a bigger chunk of your corpus at once.
If `75 lakh is your only source of income,
or if it is a big part of your retirement cor-
pus, then fixed income investments alone
may not be sufficient. The returns from an-
nuity plans are usually in the range of
4-6%, and those from small savings
schemes and FDs are around 7-8.5%. As-
suming an average return of 8%, you will
earn an interest of `50,000 per month, or
`6 lakh, in a year from `75 lakh.
You may have to invest a portion of your
capital in equity so that you earn around
12% returns. This would allow you to with-
draw `6 lakh in the first year, and then step
up this withdrawal amount by 5% every
year, for the next 22 years.
You will also have to ensure
you are adequately insured
for any healthcare emer-
gency. You may want
to set aside a part of
this income as emer-
gency funds, but
this may reduce
your future interest
income and finan-
cial independence.
Adhil Shetty
CEO, BankBazaar
My father wants to gift me a plot of
land, which is his self-acquired
property and is valued at over `1
crore. My sister has no objection.
What would be the tax implication
for me? Is it better to inherit the
property via a will instead?
It is pertinent to note that Section
56(2)(x) of the Income-tax Act, 1961,
deals with the taxability of income in
the nature of gift of movable or im-
movable property. It has been clearly
mentioned that in case such a proper-
ty is received by way of will or inher-
itance, or if received from any rela-
tive, it would not be subject to tax.
Therefore, it will neither invite any
capital gain, nor be considered ‘in-
come from other sources’. Since your
father falls within the definition of
‘relative’, there shall be no tax impli-
cation for you. If the property is in-
herited by way of will rather than as
a gift, the taxability would be the
same, that is, it will be exempt from
tax under this provision. However, in
case of a gift, it is ad-
visable to have a
registered gift
deed.
Amit Maheshwari
Partner, AKM Global
I am a senior citizen. I redeemed `7 lakh
worth of mutual funds from my wife’s
account to pay for my spine surgery in
August 2022. All the units had been held
for the long term. Will I have to pay any
long-term capital gains tax?
You should verify the exact amount by
obtaining the capital gains report from
your broker/investment platform. The
taxability of equity-oriented mutual
funds is at the rate of 10%, with appli-
cable surcharge and cess. Mutual funds
qualify as equity-oriented if more than
65% is allocated to equity, otherwise it
is considered a debt fund. If the re-
demption is from a debt fund, the capi-
tal gain will be taxed at your slab rate.
The taxability of this transaction will
be incurred by your
wife since the in-
vestment was in
her name.
Shubham Agrawal
Senior Taxation Adviser,
TaxFile
Ask our experts
Have a question for the experts?
etwealth@timesgroup.com
 mutual funds
The Economic Times Wealth August 7-13, 2023 23

All goals within easy reach PORTFOLIO

DOCTOR
Aashish Goyal is saving for multiple goals. Here’s what the doctor has advised:
Not many
1 2 3 4 5 6 7

ARINDAM
investors
CONTINGENCY DOWN PAYMENT DOWN PAYMENT VACATION: CHILD’S CHILD’S RETIREMENT:
FUND: FOR HOUSE: FOR CAR: 2 years 3 years EDUCATION: MARRIAGE: 19 years know
1 year 7 years whether
GOALS

IMMEDIATE PRESENT COST: PRESENT COST: 15 years CURRENT NEED:

PRESENT COST: PRESENT COST: `4 lakh `4 lakh PRESENT COST: PRESENT COST: `2.3 crore they have
`4 lakh `30 lakh FUTURE COST: FUTURE COST: `20 lakh `30 lakh (`90,000 a month)
invested in
FUTURE COST: FUTURE COST: `4.58 lakh `4.9 lakh FUTURE COST: FUTURE COST: FUTURE COST:
N.A. `32.1 lakh `38.97 lakh `82.77 lakh `8.3 crore the right
funds and if their
FUND NAME AMOUNT
INVESTED (`)
EXISTING
SIP (`) RECOMMENDED ACTION PORTFOLIO fund portfolio is on
Shift to a sweep-in account or a liquid fund after deposits
CHECK-UP track. The Portfolio
1 Fixed deposits 4,00,000 0 mature. Has been investing in
Use maturity proceeds for the down payment of house and equity funds for the Doctor assesses the
2 Fixed deposits 30,00,000 0 take home loan for balance amount. past 4-5 years. health of the fund
Start systematic transfers of `20,000 per month to Axis
3 Axis Midcap 4,49,705 0 Banking & PSU Debt fund.
Regular investments portfolio, examines the
have helped build a
4 Axis Smallcap 3,01,102 0
Start systematic transfers of `10,000 per month to Axis
sizeable corpus. schemes and their
Banking & PSU Debt fund. Use FDs if there is a shortfall.
Portfolio had small- suitability with regard to
PGIM India Midcap Oppn 3,47,748 0 Start SIPs of `15,000 in this outstanding mid-cap fund.
5 and mid-cap skew. the goals and, if
Kotak Small Cap 2,16,310 0 Start SIPs of `5,000 in this outperforming small-cap fund. Flexi-cap funds are
more stable. required, recommends
Motilal Oswal Long Term Equity 17,692 0
Sectoral funds are corrective measures. The
Mirae Asset Tax Saver 1,39,219 0 very volatile. Go for
Consolidate all five funds into two schemes, Mirae Asset advice given is based on
6 Mirae Asset Emerging Bluechip 1,07,402 0 Emerging Bluechip and 360 One Focused Equity, and start SIPs diversified schemes.
of `5,000 each in both funds. the performance of the
Aditya Birla SL Digital India 2,50,371 0 Retirement goal too
modest at `50,000. funds, the risk profile of
360 One Focused Equity 72,624 0 Hiked to `90,000 per the investor as well as
Continue SIPs in this outstanding flexi-cap fund, but reduce month.
Parag Parikh Flexi Cap 21,05,749 60,000 amount to `20,000. his financial goals.
Review investments
Sectoral funds are volatile. Shift to diversified scheme Tata
Tata India Digital 3,24,582 0 and rebalance at least
Large & Midcap.
7 once a year.
Stock investments 26,00,000 0 Consider moving to mutual funds for stable returns. Assumptions used
Reduce risk when goal
Continue contributions to these schemes and don't withdraw is near so that you
in the calculations
Provident Fund, PPF and NPS 32,00,000 16,000 before retirement.
don’t miss the target. INFLATION
The goals can be reached by using the
TOTAL `1,35,32,504 `76,000 mutual funds marked in the same colour. Education For all
expenses other goals

10% 7%
Start SIPs in equity funds to build RETURNS

bigger retirement corpus

Equity funds Debt options

12% 8%
PORTFOLIO Anil Warang wants to build a
1
RETIREMENT CORPUS: 5 years
CHECK-UP retirement corpus. Here’s what the
GOAL

Invested lump-sum CURRENT NEED: `80 lakh (`40,000 a month) PORTFOLIOS

amount in equity funds doctor has advised: FUTURE COST: `1.12 crore
ANALYSED BY

after early retirement. RAJ KHOSLA,

AMOUNT EXISTING NEW Managing Director
`1 lakh rental income FUND NAME RECOMMENDED ACTION
INVESTED (`) SIP (`) SIP (`) and Founder,
is sufficient to sustain MyMoneyMantra
Gradually shift from FDs and bank account to PPF and
current expenses, but Bank FDs and savings account 90,00,000 0 Senior Citizens’ Savings Scheme to earn better returns. 0
inflation could over-
take it in a few years. Canara Robeco Bluechip Equity 1,16,667 0 Start SIPs of `10,000 in this outstanding large-cap fund. 10,000
WRITE
Start SIPs of `25,000 in Kotak Flexicap 88,583
Fund has given insipid returns in recent years. Hold,
0 but monitor performance closely. 0 TO US
equity funds to build
corpus in 5-6 years. Mirae Asset Large Cap 1,13,437 0 Continue holding this stable large-cap fund. 0 FOR HELP
If you want your portfolio examined,
Target of `3.6 crore too Kotak Emerging Equity 59,524 0 Start SIPs of `5,000 in this stable mid-cap fund. 5,000 write to etwealth@timesgroup.com
1
high. Cut to `80 lakh. Small-cap funds are volatile. Consider moving to less with “Portfolio Doctor” as the subject.
Kotak Small Cap 56,478 0 volatile Kotak Emerging Equity Midcap fund. 0 Mention the following information:
Note from z Names of the funds you hold.
the doctor SBI Contra 1,21,289 0 Start SIPs of `5,000 in this value fund. 5,000
z Current value of the investment.
Too much money in UTI Nifty Index 1,07,282 0 Start SIPs of `5,000 in this outstanding index fund. 5,000 z If you have SIPs running in any
of them.
bank account, tax-inef-
ICICI Prudential Short Term 2,12,256 0 Continue holding these debt funds to lend stability to 0 z The financial goals for which you
ficient fixed deposits. invested.
Kotak Banking and PSU Debt 2,10,027 0 portfolio. 0 z How much you need for each
Start PPF account to financial goal.
build tax-free corpus. ,
TOTAL `1,00,85,543 `0 `25,000 z How far away is each goal.
 your feedback & more...
24 The Economic Times Wealth August 7-13, 2023

Readers’ response, online and in print, to ET Wealth stories has been enlightening.
We pick some that add information and perspective to our articles from previous issues.

The cover story ‘SIP secrets you ment’. The article is very informative. I am 66
should know’ contends that SIPs are
a very useful tool for retail investors
Stopping SIPs and still struggling to prepare for retirement
perhaps because I am still working and earn-
to create wealth. However, in reality,
the returns for the investor depend on
not a bad idea ing for the family.
Shashank Jare
how the scheme performs. If an SIP The cover story ‘SIP secrets you
is in a fundamentally weak fund, no should know’ was informative, I do not agree with the suggestions in the
matter how long you invest and how but some points were amiss. article ‘Is HRA tax-exempt for rent paid to
good an exit strategy you plan, the re- Stopping SIPs when the market spouse?’. Claiming tax exemption for rent
turns will be disappointing. is high will not reduce your paid to a spouse is nothing but an attempt to
Arup Choudhury corpus if the money is invested evade tax. Husband and wife are one family
in safer option like a debt fund or unit, and one cannot pay rent to the other
Dhirendra Kumar’s article ‘How the fixed deposit. These investments and claim exemption for house rent allow-
right volatility can help boost returns’ can be shifted to the equity fund ance.
makes a very good point. Not many when the markets turn sober. J.R. Patel
investors understand the true meaning Rajesh Kumar
of volatility. They try to avoid it, even The article ‘Should you quit work after hav-
though volatile stock prices help gener- ing kids?’ made for a good read. With nuclear
ate alpha for savvy investors. families becoming a rule rather than an excep-
Divya Sharma tion in the Indian society, raising children well
some retirees may consider this selfish, Shashikant offers a thoughtful analysis of is a great challenge. Working parents find it
Uma Shashikant’s article on retire- Shashikant persuasively argues that it is the advantages and disadvantages of each especially difficult. They give generous pocket
ment is outstanding. Her insights into essential to enjoy retirement to the fullest. option. money to children to demonstrate their con-
the realities of retirement are clear The article also addresses well the dilemma Jeffry Copps cern and affection. What is the use of financial
and practical, particularly the need to about leaving one’s entire wealth to heirs independence for women if children do not
spend more than the interest earned or to donate some to charity. This is a deci- Thank you Uma Shashikant for your forth- get the attention they deserve?
on retirement savings. Although sion that many retirees struggle with, but right piece on ‘How to prepare for retire- S. Ramakrishnasayee

REALTY Upcoming and affordable hub

Medchal Highway offers a mix of apartments and plotted development that’s easy on the pocket.
HOT SPOT
Supply by BHK
LOCALITY SNAPSHOT 56%

MEDCHAL HIGHWAY, HYDERABAD 40%

A prominent growth corridor along NH-44 connecting the city center near Secunderabad to Medchal in the north.
It has a mix of defence establishments, civilian residences and commercial activities.
It hosts affordable low-rise apartments, villas and plotted developments; prominent developers include Aparna, Indis and Modi. 4%
Nearest key employment hubs in Bollaram (Industrial Development Authority) are about 18 km away from the locality. 2 BHK 3 BHK >3BHK
Hospitals: Renova Hospital | Colleges: Narsimha Reddy and St. Martin's college | Retail: The Chennai Shopping Mall
Consumer preference
by budget (`)
PRICE RANGE: `4,000-9,000 psf DISTANCES: RGI Airport: 48 km Secunderabad Junction: 14 km NH-44: 0.5 km
3%
LOCALITY VALUES 14% 8%
Below 25 lakh
2 BHK 15%
850 (sq ft) Kompally 25-50 lakh

`40 uO
R R Price (`/sq ft): 4,500-8,000 50-75 lakh
NH-44

hr 44%
Ne Rent (`/month): 10,000-25,000 30% 75 lakh-1 crore
lakh (avg)
Above 1 crore
Alwal
Hig chal
ay

Bollaram Kompally
ad
hw

(Industrial Price (`/sq ft): 5,000-8,500

d

3 BHK
et R
Me

Development
Jeedimetla
1,200 (sq ft) Authority) *Rent (`/month): 12,000-28,000 Consumer preference
dip

`75 by carpet area (sq ft)

Sid

Quthbullapur
Alwal Quthbullapur 3%
lakh (avg) Hyderabad Price (`/sq ft): 5,500-9,000
*Rent (`/month): 15,000-30,000 9% 14% Below 750
NH

750-950
-65

>3 BHK
1,800 (sq ft)
Jeedimetla 15% 950-1,150
Price (`/sq ft): 4,000-7,500 1,150-1,350
1.30
`lakh *Rent (`/month): 8,000-20,000 18%
41%
1,350-1,550
(avg) Above 1,550
Note: Map not to scale *2 BHK rent (INR/month)

Schools 20+ Hospitals 10+ Restaurants 15+ Banks 15+ Grocery Stores 15+ Petrol Pumps 10+ In dia’s No. 1 P ropert y Sit e

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