HDFC PLATINUM SENIOR DEPOSIT PLAN

HDFC Ltd has introduce a new scheme HDFC PLATINUM SENIOR DEPOSIT PLAN with effect from September 27, 2012 exclusively for Senior Citizens (who are 60 years and above). Maximum Deposit amount is Rs. 25 lacs per individual. The interest rates and the details attached

a) Maximum Deposit amount is Rs. 25 Lac per individual.

b) Interest is Compounded annually for cumulative interest option.

The detail as given below :

If you have any query about above scheme. Please feel free to contact me.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Golden Rules For Investment

Warren Buffett is one of the greatest investors of all time, but if you were to ask him whom he thinks is the greatest investor, he would probably mention one name : his teacher, Benjamin Graham. Graham was an investor and investing mentor who is generally considered the father of  value investing.
We can get more information about security analysis and value investing from his written books, "Security Analysis" (1934), and "The Intelligent Investor" (1949). These books are often considered requisite reading material for any investor. In this article, we will discuss  about of  Benjamin Graham’s  investing principles.

Rule No. 1: Margin of Safety

Margin of safety is the principle of buying a security at a significant discount to its intrinsic value, which is thought to not only provide high-return opportunities, but also to minimize the downside risk of an investment. In simple terms, Graham's goal was to buy assets worth Rs 100 for Rs 50. He did this very, very well.
These business assets may have been valuable because of their stable earning power or simply because of their liquid cash value. It wasn't uncommon, for example, for Graham to invest in stocks where the liquid assets on the balance sheet (net of all debt) were worth more than the total market cap of the company. It means that Graham was effectively buying businesses for nothing. While he had a number of other strategies, this was the typical investment strategy for Graham.
This concept is very important for value investors which can provide substantial profits once the market inevitably re-evaluates the stock and ups its price to fair value. It also provides protection on the downside if things don't work out as planned and the business falters. The safety net of buying an underlying business for much less than it is worth was the central theme of Graham's success. When chosen carefully, It was found that a further decline in these undervalued stocks occurred infrequently.

Rule No. 2: Expect Volatility and Profit from it
Investing in stocks means dealing with volatility. Instead of running for the exits during times of market stress, the smart investor greets downturns as chances to find great investments.  Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. Sometimes, he will be excited about the prospects for the business and quote a high price. Other times, he is depressed about the business's prospects and quotes a low price.
Because the stock market has these same emotions, the lesson here is that you shouldn't let Market's views dictate your own emotions, or worse, lead you in your investment decisions. Instead, you should form your own estimates of the business's value based on a sound and rational examination of the facts. Benjamin suggested, rather than fearing volatility, use it to your advantage to get bargains in the market or to sell out when your holdings become way overvalued.
Here are two strategies that Graham suggested to help mitigate the negative effects of market volatility:

Rupees-Cost Averaging
Ruppes-cost averaging is achieved by buying equal amounts of investments at regular intervals. It takes advantage of dips in the price and means that an investor doesn't have to be concerned about buying his or her entire position at the top of the market. Rupees-cost averaging is ideal for passive investors and you can also avoid of worry to gauge market.

Spread your investment between Stocks and Bonds
Graham recommended distributing one's portfolio evenly between stocks and bonds as a way to preserve capital in market downturns while still achieving growth of capital through bond income. Remember, Graham's philosophy was, first and foremost, to preserve capital, and then to try to make it grow. He suggested having 25-75% of your investments in bonds based on market conditions. This strategy had the added advantage of keeping investors from boredom, which leads to the temptation to participate in unprofitable speculating trading .

Rule No. 3: Know Your Category of investing
Graham advised that investors know their investment category. He referred to active and passive investors as "enterprising investors" and "defensive investors." You only have two choices. The first choice is to make a serious commitment in time and energy to become a good investor who equates the quality and amount of hands-on research with the expected return. If this isn't possible, then be content to get a passive ( possibly lower) return but with much less time and work.
If you have neither the time nor the inclination to do quality research on your investments, then investing in an index is a good alternative. Both Graham and Buffett said that getting even an average return is more of an accomplishment than it might seem. The fallacy that many people buy into, according to Graham, is that if it's so easy to get an average return with little or no work (through indexing), then just a little more work should yield a slightly higher return. The reality is that most people who try this end up doing much worse than average.
The defensive investor would invest in index of both stocks and bonds. In doing so, an investor is virtually guaranteed the market's return and avoids doing worse than average by just letting the stock market's overall results dictate long-term returns. According to Graham, beating the market is much easier said than done, and many investors still find they don't beat the market.
Not all people in the stock market are investors. Graham believed that it was critical for people to determine whether they were investors or speculators. The difference is simple: an investor looks at a stock as part of a business and the stockholder as the owner of the business, while the speculator views himself as playing with expensive pieces of paper, with no intrinsic value. For the speculator, value is only determined by what someone will pay for the asset. To paraphrase Graham, there is intelligent speculating as well as intelligent investing - just be sure you understand which you are good at.
The above mentioned rules of investing are very vital. Graham served as the first great teacher of the investment discipline and his basic ideas are timeless and essential for long-term success. He bought into the notion of buying stocks based on the underlying value of a business and turned it into a science at a time when almost all investors viewed stocks as speculative. If you want to improve your investing skills, it doesn't hurt to learn from the best. Graham continues to prove his worth through his disciples, such as Warren Buffett, who have made a habit of beating the market.

Warm Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Muthoot Finance NCD Details

Muthoot Finance Limited, a flagship company of the Muthoot group, is primarily into the gold financing business which constitutes 99% of its total advances. It is also the largest gold loan company in India.  Muthoot started its lending business in 2001 after getting RBI’s registration to function as an NBFC and currently it has a network of 3,780 branches all over India. The company till date has no major plans to diversify its business from gold loans to any other streams of financing. This issue will be the fourth issue from this company in just over one year’s time. Muthoot collected Rs. 1,413 crore through its previous three issues – Rs. 693 crore from Series I, Rs. 460 crore from Series II and Rs. 260 crore from Series III. The size of this NCD issue is Rs. 500 crore including a green-shoe option of Rs. 250 crore.

Muthoot reported revenues of Rs. 4,549 crore in FY12 as against Rs.2,316 crore in FY11, a jump of almost 96%. Net profit of the company increased by a massive 81% from 494 crore in FY11 to 892 crore in FY12.  Gross NPAs and Net NPAs of the company stood at 0.56% and 0.57% respectively as on March 31, 2012 as against 0.29% and 0.33% respectively as on March 31, 2011.

Again, NRIs and foreign nationals among others are not eligible to invest in this issue. The allotment will be made on a “first-come-first-served” basis. These bonds will also list on both the stock exchanges – NSE and BSE. Investors will have the option to apply these bonds in physical form also except the “Option V” bonds which are available only in the  demat  mode. The detail as given below

Issue of Muthoot Finance Secured Non-Convertible Debentures (NCDs)

Options	Particulars
Issuer	Muthoot Finance Limited
Issue period	17 September 2012 To 5 October 2012
Issue Size	Rs 500 Crores (Public issue of Rs 250 Crores with an option to retain over-subscription of Rs 250 Crores)
Basis of allocation	First come first serve basis
Listing	Proposed to be listed on BSE and NSE
Rating	ICRA AA-/Stable and CRISIL AA-/Stable
Face Value and Issue Price	Rs 1,000 per NCD (Trading Lot - 1 NCD and in multiples of 1 NCD)
Minimum Application	Rs 10,000 (10 NCDs) and in multiples of 1 NCD thereafter
Interest Payment Date	Annual Frequency - on 1st day after 31 March and Monthly Frequency - 1st day of next month.
Trading and Issuance	Both physical and dematerialised form (NCDs under Option V will be compulsorily allotted in dematerialised form.)
Interest Payable	Interest on application 11.50% p.a and Interest on refund 6.00% p.a. (Refer Terms and Conditions)
Who can apply: Institutional, Non Institutional, Indian Nationals Resident in India and HUF
Investor Category	I (Institutional)	II (Non Institutional and HNl)	III (Retail)
Issue allocation %	15%	35%	50%

Specific terms for each series of Bonds:

Series	I	II	III	IV	V
Frequency of Interest Payment	Annual	Annual	Monthly	Annual	Cumulative
Tenor (In months)	24	36	60	60	72
Coupon Rate (%) p.a	11.50%	11.75%	11.75%	12.00%	NA
Effective Yield (%) p.a	11.50%	11.75%	11.75%	12.00%	12.25%
Redemption Amount per NCD	Face value + interest				Rs. 2,000

View on this issue:

As the Reserve Bank of India (RBI) has become stricter with the gold financing norms. Competition from the banks and other gold financing companies has also increased. It is the most unattractive issue of this financial year.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

RBI Cuts CRR and leaves Repo Rate Untouched

Today, The Reserve Bank of India (RBI) left interest rates unchanged but cut the cash reserve ratio for banks by 25 bps, saying the primary focus of monetary policy remains fighting inflation, days after the government unveiled a string of reforms to boost growth and improve its fiscal position.

The RBI left the policy repo rate at 8 percent. The RBI cut the cash reserve ratio (CRR), the share of deposits banks must keep with the central bank, by 25 basis points to 4.5 percent in a move it said will inject about 170 billion rupees of liquidity into the banking system.

The rupee and bond prices weakened immediately after the RBI decision, with the yield on the 10-year bond rising 5 basis points from before the RBI statement to 8.17 percent. The one-year swap rate rose 8 bps to 7.68 percent from before the release. The sensex and nifty have also seen some decline from their respective high after immediate RBI policy announcement.

"The government's recent actions have paved the way for a more favourable growth-inflation dynamic by initiating a shift in expenditure away from consumption (subsidies) and towards investment (including through FDI). However, in the current situation, persistent inflationary pressures alongside risks emerging from twin deficits-current account deficit and fiscal deficit -- constrain a stronger response of monetary policy to growth risks" the RBI wrote in its policy statement.

On Thursday, the government announced a sharp increase in the price of heavily subsidised diesel. It had unveiled a slate of measures to rein in a ballooning fiscal deficit and avoid a credit rating downgrade to junk. However, for common man it has become very difficult to run their daily life expenses and govt has its own target to control fiscal deficit devil.

The RBI has held borrowing costs steady since a deeper-than-expected 50 basis point cut in April, and has repeatedly called on the government to do its part by improving its fiscal position, which had fuelled some expectation that it might cut rates as a gesture in reply to the government's moves.

Govt’s diesel price hike decision had initially prompted market participants to speculate that the RBI may lower interest rates on Monday, but a spike in August inflation data on Friday from July's near three-year low put a damper on such expectations. India's wholesale price index rose a higher-than-expected 7.55 percent in August from a year earlier, mainly driven by higher food prices.
The govt seems serious about reform this time. The diesel price rise will aggravate short term inflation. But, along with the measures unveiled Friday to liberalise ownership of supermarkets and other industries, it shows the government is serious about fiscal consolidation and encouraging investment, and may make RBI more inclined to ease monetary policy sooner than later.

The government kicked into gear late last week after a wave of corruption scandals had weakened it and led to months of little substantive policy action, souring investor sentiment and putting at risk India's investment-grade credit rating.
So we can say, RBI has made a balancing act and kept an eye on inflation also. Now it is important how well and soon govt’s reform measures for growth would be implemented. There is also a strong fear that the announced measures may be stuck in opposition’s strong movement against these reform policies.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Shriram City Union Finance Limited
SECURED Non Convertible Debenture Issue
Rating: AA- from CRISIL.

For 36Months
Particulars	Coupon (%)
Individuals	11.50%
Non Individuals	10.60%

For 60Months
Particulars	Coupon (%)
Individuals	11.75%
Non Individuals	10.75%

About Shriram City Union Finance Limited

Shriram City Union Finance Limited is a deposit-accepting NBFC registered with RBI. Established in 1986 and with a track record of more than twenty five years in the financial services sector, it is also one of the largest small enterprise finance company in India.

Key Strength

1. Company has track record of more than 25years in financial services and has pan india presence, with 575 branches.
2. Growth in Assets under management (AUM) from 226,889.78lacs in FY08 to Rs1,242,103.98lacs in FY12 ; growing at a CAGR of 41.30%.
3. Diversified product portfolio:
1. 11.60% of AUM comprised of product finance loans.
2. 18.33% comprised of Vehicle loans.
3. 5.23% comprised of personal loans.
4. 15.46% comprised loans against gold.
5. 19.99% loans to the small enterprises finance segment collateralized by gold.
6. 29.39% comprised loans to small enterprise finance segment.
4. Company has an experienced senior management team and a board with extensive experience in the financial services sector.
5. Largest small enterprise finance company in india with a dominant market share of 95% in the small loan segment (loans of Rs1lacs -Rs10lacs).
6. Company also leads the total india micro, small and medium enterprises market with 53% share.
7. Company is a part of the Shriram group; which has a strong presence in financial services in india; including commercial vehicle financing, consumer finance, life and general insurance, stock broking, chit funds and distribution of life and general insurance product and mutual fund products.

The Issue
Public Issue by our Company of NCDs aggregating upto Rs. 250 Crores with an option to retain over-subscription upto Rs. 250 Crores for issuance of additional NCDs aggregating to a total of upto Rs. 500 Crores. The NCDs will be secured in nature and Security for the purpose of this issue will be created in accordance with the terms of the Debenture Trust Deed.

Objects of the Issue
The funds raised through this Issue will be used to finance company's business operations, lending, investments, repay existing loans, business operations including capital expenditure, working capital requirements, meeting expenses of the Issue.

ISSUE DETAILS:

Issue Opens	12th Sept, 2012
Issue Closes	26th Sept, 2012
Tenure	36 Months & 60 Months
Rating	AA- from CRISIL & CARE
Face Value	Rs. 1,000 each
Listing	NSE & BSE
Issuance & Trading	Compulsorily in Dematerialized form
Min. Application	Rs. 10,000 (10 NCDs of Rs. 1,000 each)
Trustees for NCDs	GDA Trusteeship Ltd.

KEY FINANCIAL F IGURES (Rs. in Lacs)
Particulars	FY2010	FY2011	FY2012
AUM	521,550	799,805	1,343,104
Net Worth	100,000	121,207	172,390
Total Income	110,790	132,345	205,641
Net PAT	19,426	24,059	34,253

KEY FINANCIAL RATIOS (%)
Particulars	FY2010	FY2011	FY2012
Gross NPA	2.27%	1.86%	1.55%
Net NPA	0.71%	0.43%	0.38%
CAR	26.28%	20.53%	17.40%

Comparison to Bank & Company FD
		Post Tax Return under Tax Slab
Option	Interest Rate	30.00%	20.00%	10.00%
Bank FD	9.25%	6.48%	7.40%	8.33%
Company FD	10.50%	7.35%	8.40%	9.45%
SCUF NCD*	11.75%	8.23%	9.40%	10.58%
Source: Bank FD rates of ICICI Bank for 5 years and Company FD rates of Mahindra Finance. * SCUFL rates of 60 month Cumulative option, series IV (for Individual).

Why should one invest..?

The issue available in four series offers an added incentive in coupon for individual investors taking it to the coupon rate of 11.50% and 11.75% for 36 and 60 Months, respectively. Also, the issue being a SECURED one and a decent Credit Rating are an added advantage. However, NCDs are not guaranteed investments like those of Bank FDs and thus one should balance the portfolio's exposure towards such issues after properly analyzing the risk factors.

The additional incentive above 10.60% for 36 Months and 10.75% 60 Months of 0.90% and 1.00% respectively, for Individual Investors is an attractive option. Also, with the option of Cumulative one can lock-in the high yield for a longer duration (5 Years) with the reinvestment at the same rate. With the issue being secured the effective yield of 11.50% for 36 Months and 11.75% 60 Months is a good opportunity for individual investors.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com