{"id":20220,"date":"2015-06-11T13:14:52","date_gmt":"2015-06-11T13:14:52","guid":{"rendered":"https:\/\/demo.munark.in\/sinhasi\/?p=20220"},"modified":"2025-02-20T10:26:17","modified_gmt":"2025-02-20T10:26:17","slug":"sinhasi-intelligent-investing-forum-2","status":"publish","type":"post","link":"https:\/\/demo.munark.in\/sinhasi\/thought-leadership\/sinhasi-intelligent-investing-forum-2\/","title":{"rendered":"Sinhasi Intelligent Investing Forum 2 (2015)"},"content":{"rendered":"\t\t
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HELD ON: February 19th 2015<\/strong>
VENUE: Taj Vivanta, MG Road, Bangalore<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Since the SIIF \u2013 1, held in April 2014, was much appreciated by our clients, the Sinhasi Intelligent Investing Forum \u2013 2 was held just before the much awaited Budget 2015. The purpose of these forums is to have experts speak about several important aspects of the economy and the investment environment which impact each one of us as individual investors.<\/p>

Chief Guest:<\/strong> Shri N Rangachary (advisor to Sinhasi Consultants)<\/p>

Retired as the First Chairman, IRDA, Insurance Regulatory and Development Authority of India.<\/p>

Secretary in the Department of Space, Financial Advisor to the United India Insurance Company, Chairman of Central Board of Direct Taxes, heads the high level Committee set up by the Prime Minister for bringing clarity on taxation issues, \u2013 \u2018N Rangachary panel on taxation of IT\u2019, Member of The \u2018Parthasarathi Shome Panel\u2019 looking into taxation issues related to GAAR (General Anti-Avoidance Rules) and currently on the board of several reputed companies i.e. Central Depository Services Ltd., Central Warehousing Cold Chain Pvt. Ltd., Cecilia Healthcare Services Pvt. Ltd., Take Solutions Ltd., Shriram EPC Ltd., and Shriram Properties Ltd., Gokuldas Exports Ltd., etc.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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THE SPEAKERS<\/strong><\/em><\/h3>

Mr. Prashant Jain<\/strong><\/p>

Executive Director and Chief Investment Officer, HDFC Mutual Fund, Mumbai<\/p>

Topic: Outlook for Equity and Fixed Income<\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  • Shared Statistics and details on the impact of crude oil price reduction on CAD (Current Account Deficit) \u2013 positive impact on India.<\/li>
  • Shared facts on slowing car purchase in the US \u2013 possibly because younger generation is more connected on internet, prefers other means of transport other than driving \u2013 this will cause a huge reduction in the demand for Crude \u2013 a point to note.<\/li>
  • In spite of falling Crude prices, key producers are not reducing production, and shale oil production is increasing in the US. So US no longer a key crude oil consumer.<\/li>
  • Commodity prices falling (Slowing growth in China and rising supplies) , including crude , reduction in production of scale \u2013 positive impact on India<\/li>
  • Benefits of Crude oil price drop will be seen in the coming quarters \u2013 because of six week credit period for payment \u2013 positive impact.<\/li>
  • Modi Government \u2013 many positives were detailed \u2013 some of them being:<\/li><\/ul>

    a. Jan Dhan Yojana<\/strong> \u2013 Bank accounts for all almost 10 crore Indians have been created which will change the nature of investing. Today, without a bank account, most of rural India have limited savings options which is primarily Gold as a means of saving, and leverage able asset. Bank account will change this. With Bank accounts and further linking LPG subsidy to the bank account, rural India will receive income in the form of Interest. Demand for gold will further balance out. Again positive impact for CAD and India.<\/p>

    b. LED lighting for Rural India<\/strong> \u2013 electrification of Rural India \u2013 Govt. is launching a new scheme where each household will receive two LEDs free of cost and the 10 rupees will get added to their monthly electricity bill to recover the cost \u2013 very positive.<\/p>

    c. Coal Auction at correct value.<\/strong><\/p>

    • Interest Rates \u2013 expected to come down over the coming months as inflation is under control. Investing in Bond funds could yield good returns over the next 1 \u2013 2 years.<\/li><\/ul>

      d. India:<\/strong> poised as one of the best investment destinations \u2013 to become the 6th largest economy by 2020 \u2013 some points:<\/p>

      1. Demographics: 50% of population in the \u2018earning and consumption\u2019 phase \/ age \u2013 between 10 \u2013 40 years.<\/li>
      2. Low penetration of many consumer goods as compared to other developed \/ developing countries.<\/li>
      3. Major beneficiary of reduction in oil prices \u2013 one of the largest importers of oil as a percentage of GDP.<\/li>
      4. High interest rates and inflation which has to come down. Many Developed Nations are facing deflation issues and in India we are still fighting Inflation \u2013 Inflation better than deflation.<\/li><\/ol>

        e. Equities: one of the best investment options today<\/strong> \u2013 which will give 12 \u2013 15 percent returns over a 4 \u2013 5 year period:<\/p>

        f. Current Sensex PE:<\/strong> around 17 \u2013 not overvalued. Investment time horizon for sound returns should be 4 \u2013 5 years. Can invest even now at current levels.<\/p>

        g.<\/strong> What is important is over all asset allocation; investment time horizon, discipline, and patience. Can invest lump sum and SIP, based on cash flows and goals.<\/p>

        h. Equity VS gold and FDs<\/strong> since Dec 1979 till Dec 2014 \u2013 Returns of Sensex = 224 times ; FDs \u2013 39 times pre-tax ; 20 times post tax ; Gold \u2013 20 times post tax. Therefore equity investment is the best investment in the liquid investment category. Pl refer chart below.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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        \u00a0<\/p>

        • The Sensex has been doubling every 5 years even with all the challenges and crises having been faced over this 25 year period.<\/li>
        • Chart showing FIIs have systematically invested in India over the past 20 years without fail, every year \u2013 SIP, except for 2009 because of their own crisis. Foreigners have more faith in us, even though we are considered very intelligent!<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          Mr. V. Balakrishnan<\/strong><\/div>
          \u00a0<\/div>
          Ex \u2013 CFO, Infosys, Founder and Chairman of Reservoir Investment Managers (India) LLP, Bangalore<\/div>

          \u00a0<\/h4>

          Topic: Start Ups \u2013 An alternate investment opportunity<\/h4>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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          • Shared statistics \u2013 Fortune is now with the fringes \u2013 technology is rapidly disrupting traditional businesses as sound investment opportunities- e.g.: Amazon, Uber, Birch box, etc.<\/li>
          • These large tech businesses are rapidly looking for inorganic growth, and to buy sound startups since because of size, innovation can sometimes become difficult. This is a very huge opportunity for start-ups to be bought over by these larger companies.<\/li>
          • Because of huge demand for disruptive innovative, seed funding size has become 1 million dollars which is huge. VC funds have set up separate seed funds, investing and mentoring programs.<\/li>
          • This is where market giants are investing in Indian start-ups through M&A s\u2013 twitter = zip dial; face book = little eye labs; goibibo.com = redbus.in; etc. Now these cash rich companies are looking for further investments.<\/li>
          • Why Advantage India and Indians \u2013 India has the largest pool of IT \/ ITES professionals \u2013 3 million. India\u2019s smartest and brightest engineers are employed in Enterprise Tech companies. This talent pool is looking to unleash their potential as the ecosystem is growing and current jobs are becoming repetitive and mundane.<\/li>
          • The link between Silicon Valley and Bangalore:<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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            • Investing in Startups could lead to phenomenal results if entered correctly.<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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              CAGR of Valuation – Flipkart<\/strong><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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              \n <\/td>\n \n \u00a0Jan '12 <\/td>\n \n Oct '12 <\/td>\n \n Oct '13 <\/td>\n \n May '14 <\/td>\n \n Dec '14 <\/td>\n \n CAGR (over 3 years) <\/td>\n <\/tr>\n
              \n Flipkart (in USD) <\/td>\n \n 500 Mn <\/td>\n \n 1 bn <\/td>\n \n 2\u00a0bn <\/td>\n \n 7\u00a0bn <\/td>\n \n 11\u00a0bn <\/td>\n \n ~180% <\/td>\n <\/tr>\n <\/table>\n<\/div>