Health Insurance Policies

Have you read your health insurance policy carefully..?

As we already know that the health insurance policy is very essential thing for anyone regardless any income group or age group. It is mandatory part of any comprehensive financial planning. Many private and public sector companies provide these types of policies with many attractive benefit and limitation.

Many companies come with these types of policies with restriction like hospital daily room rent and many exclusions like pre existing decease. Now, it has become more important that we should read all the term and conditioned very carefully. At present, there is no free look in facility but IRDA has indicated that they can implement this norm on health insurance policies. As per current scenario, it is only implemented on life insurance policies only.

Please make sure whether lifetime renewability is available or not with the policy. Many medi-claim policy provider often refuse renew the policy after certain age. You can select a plan that offers lifelong renewal because buying insurance at older age becomes a difficult task in case any ailment. There are many decent policies available with lifelong renewal. Few of them as given below:

• Apollo Munich Easy Health Plan
• Apollo Munich Optima Senior
• Star Citizen Red Corpet
• ICICI LombardComplete Health Insurance – iHealth Plan
• Max Bupa Health Assurance
• Religare Mediclaim

You should check premium and benefit and select the plan according to your need.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Inflation would play crucial role in next RBI policy..?

Inflation would play crucial role in next RBI policy..?

There is little respite from rising prices. The wholesale price index, the most widely-watched indicator of inflation in India, rose 6.46 per cent in September from a year earlier. That is sharply higher than August's level of 6.10% and 5.85% in July’s level. It is well above the RBI's comfort level of 5 percent level. The biggest driver of inflation is still food inflation, which accelerated to a three-year high of 18.40  percent in September from 18.8 percent in August  because of supply disruptions due to heavy monsoon and poor storage facilities.

This is the fourth straight month that wholesale inflation has remained above the Reserve Bank of India's comfort zone and could add pressure on it to raise interest rates. A Reuters poll of economists predicted wholesale inflation at 6 percent for the month of September.

The elevated price levels will add more pressure on the Reserve Bank of India – which has clearly signalled that it will target inflation – to raise interest rates even as the economy is growing at its weakest pace in a decade.


At its last policy review on September 20, the RBI's new governor Raghuram Rajan had surprised everyone by increasing its main lending rate by 0.25 percent and clearly signaled that the central bank's focus would be on bringing down inflation. The RBI would be closely watching the September inflation numbers to determine its next rate action. The RBI's next policy review is scheduled for October 29. Economists polled by Reuters have forecast a further 50 basis points of increases in the RBI's main lending rate in six months.

Supply disruptions following heavy rainfall in some parts of the country have driven up food prices, particularly vegetable prices, in recent months. A weak rupee, along with increase in fuel prices, has kept upward pressure on inflation. The consumer inflation data will be released later today evening.

For more detail about any other query related investment, you can contact me through my email.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

Shriram Transport Finance Company Limited NCD issue

Today Shriram Transport Finance Company Limited (STFCL) have  launched  its public issue of non-convertible debentures (NCDs). The current issue will get closed in a couple of weeks time on October 21st, if it does not get preclosed this time again or extended by the company beyond this date. The company plans to raise Rs. 500 crore with this issue, including a green-shoe option of Rs. 250 crore.

This is the second such public issue of this financial year from STFC, as the company raised Rs. 750 crore from its first issue in July and the issue had got preclosed in just seven days time on July 24th.

Shriram Transport Finance offered 10.90% per annum for 36 months and 11.15% per annum for 60 months in its last issue to the individual investors. This time the rates are 35 basis points (or 0.35%) higher at 11.25% per annum for 36 months and 11.50% per annum for 60 months. The company did not offer 84 months option in its first issue. There is no monthly interest option this time.

Here you have the table having the details about the tenors and the interest

rate options with cumulative and non cumulative option.

As you can check from the table above, there is an additional incentive of 0.50% p.a. with 36 months option, 0.75% p.a. with 60 months option and 1% p.a. with 84 months option. Unlike tax-free bonds, this additional incentive is available to the individual investors irrespective of the size of their investment amount.

Categories of Investors - The investors have been classified in the following four categories and the individual investors fall in Category III as well as Category IV.

§  Category I – Institutional Investors

§  Category II – Non-Institutional Investors

§  Category III – High Net-Worth Individuals, including Hindu Undivided   Families (HUFs)

§  Category IV – Retail Individual Investors, including Hindu Undivided    Families (HUFs)

Non-Resident Indians (NRIs), foreign nationals and qualified foreign

investors (QFIs) among others are not eligible to invest in this issue.

Allocation Ratio - 50% of the issue is reserved for the Retail Individual Investors. The individual investor  can invest up to Rs. 5 lakh and 30% of the issue is reserved for the High Net-Worth Individual Investors. 10% of the issue is reserved for the Institutional Investors and the remaining 10% is for the Non-Institutional Investors (NIIs). The allotment will be made on a “first come first serve” basis.

Minimum Investment - The company has decided to keep the minimum investment requirement is  Rs. 10,000 again The face value of bond is  Rs. 1,000 each.

Listing - STFC will get these bonds listed on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). Investors can apply for these bonds either in physical form or in demat form. The company will get the NCDs allotted and listed within 9 working days from the date of closure of the issue.

Rating & Nature of the NCDs - CRISIL has rated these NCDs as ‘AA/Stable’ and CARE has assigned a rating of ‘AA+’ to this issue. Moreover, these NCDs are ‘Secured’ by a first charge on an identified immovable property and specified future receivables of the company.

Taxability & TDS - The interest earned on these NCDs will be taxable as per the tax slab of the investors. TDS will be applicable if the NCDs are taken in the physical form and the interest amount exceeds Rs. 5,000 in a financial year. But, if you take these NCDs in your demat account, the company will not deduct any TDS from the interest income.

Interest on Application Money & Refund - Investors will get interest on their application money @ 9% p.a., from the date of investment till the deemed date of allotment, and @ 4% p.a. on the amount liable to be refunded.

Interest Payment Date & Record Date - STFC will make its first interest payment on April 1, 2014 and then on April 1st every year. The record date will be 15 days prior to every interest payment date.

IIFL NCDs Issue vs. STFC NCDs Issue vs. HUDCO Tax-Free Bonds

The business model of Shriram Transport Finance is good and its credit rating also suggests that.  If you want to go with this issue, prefer short term period instead of long term period.

The investors falling in the higher tax brackets should opt for tax-free bonds rather than these taxable NCDs. So, personally I would go for HUDCO tax-free bonds or the upcoming IIFCL tax-free bonds rather than these STFC NCDs.

If you don’t fall in any tax bracket or fall in 10% tax bracket then you can consider this issue.

For more detail about any other query related investment, you can contact me through my email.

Regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com