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Editorials, Equities, Markets - July 27, 2022

Government allows Indian public companies to directly list shares overseas.

Government allows Indian public companies to directly list shares overseas.

 

Government’s vision for betterment of Indian companies:

In late January 2020 Government of India communicated to media that they are planning to allow direct listing of Indian companies in foreign markets. This will help Indian companies to not only rely on domestic markets but they can also raise capital on large scale from various foreign markets which will help companies in diversification and growth. This move can directly help Indian companies in increasing their turnover and profits.

Till now Indian companies go for the depository receipts to attract investors globally but this is bit unfamiliar amongst the investors globally and been less attractive in recent years. A minimum of 15 Indian companies currently attract foreign investors via ADR’s and GDR’s. These companies includes Reliance Industry, HDFC Bank, Infosys and many others.

 

Green signal by Indian Government:

Finance Minister Nirmala Sitharaman had announced an economic package of ₹ 20 lakh crore under government’s Atma Nirbhar Bharat Abhiyan. This is done for the revival of Indian Economy. It is an umbrella of massive ₹ 20 lakh crore economic booster package. The government ensured to provide some relaxation in all the sectors.

To improve “ease of doing business” in India, government allowed Indian public companies to list their shares in foreign markets. This provision will help Indian companies for better valuations, rapid growth and expand their businesses on a large scale. This move will help Indian companies to get funds at a cheaper rate from various foreign markets. This will directly help Indian economy to recuperate in a speedy way.

Government noted private companies that listed Non-convertible debentures (NCDs) on Indian stock exchanges not to be considered as listed companies. It is also expected that this provision is to prevent Indian companies to register themselves in foreign markets like Singapore and London for raising a fund and going global.

 

Existing vs proposed rule:

The existing rule states that companies which are listed on Indian stock markets can only list their company in foreign markets. Whereas, new proposed rule states that there is no compulsion for it. Indian companies can list themselves directly in various foreign markets to raise capital.

Until now, only American Depository Receipt (ADR’s) and Global Depository Receipt (GDR’s) can collect capital from foreign market sources. At least 15 Indian companies follow this mechanism to raise capital from foreign markets. However, this is not much familiar amongst the global investors. To eradicate this the new provision will allow Indian companies to a fresh new issue of shares or sale of existing holdings.

 

Rules and regulation:

All the required rules and regulation for listing an Indian company at abroad will be notified soon by the government. Once the provisions to the Foreign Exchange Management Act (FEMA) and Company Law Regulations are passed. Media noted Indian foreign exchange control laws do not require free capital convertibility, and there are other regulatory limits on capital account transactions.

Nevertheless, this proposal has been under discussion for a couple of years between stakeholders and regulators, especially regarding the selection of foreign jurisdiction. SEBI had indicated in 2018 that this route would be open only to the financially sound companies, so that the mechanism could not be used for exploitation. Sources indicated that final rules in this respect would probably be based on the Financial Action Task Force’s recommendations.

Finance Minister Nirmala Sitharaman noted, this provision of direct listing. If Indian public companies are not available over the globe but will be allowed in permissible jurisdictions.

 

Precautionary measures:

However, the approval will not come without any protections. The Indian government is likely to go along with the recommendations raised by SEBI in 2018. This requires a direct listing of Indian companies in abroad. It had suggested 10 overseas jurisdictions, including the US, UK, Japan, China, Hong Kong and South Korea for Indian companies to list. The selection was based on the fact that these jurisdictions are part of the Financial Action Task Force (FATF), The Anti-Money Laundering Global Task Force (GTF-AML) and IOSCO.

SEBI also suggested that this provision should be available only for financially stable . This will aid  to minimize frauds and manipulation. The firms with a  paid-up capital of 10% will be allowed to list in the foreign market.

The provision of capital raising in an overseas market can also have an impact on the Indian currency market. Since the flow of overseas capital can put pressure on the Indian currency and may lead to volatility. RBI and SEBI can be jointly involved to check this.

 

 

 

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Global Equity Funds Face Record $38.66 Billion Outflows Amid Market Valuation Concerns
Business, Equities, Markets - July 22, 2022

Equity valuation: Definition, Importance and Process.

Equity Valuation

 

What is Equity valuation?

Equity Valuation is a process conducted by financial experts to determine the fair market value of a particular company’s assets or equity securities. Usually, investors evaluate the company’s true value of its equity before investing. They evaluate using various techniques by looking at their business management, capital structure and their performance, expected future earnings, and current market value of their assets. Commonly, there are two types of equity valuation methods. The first is the absolute valuation method. It finds the true value of a stock based on fundamental analysis. The second is the relative valuation method which uses comparison techniques. It compares the company with peer company ratios such as the P/E ratio to derive the equity value of a particular stock.

 

Significance of Equity Valuation:

Systematic – The stock market is largely dependent on equity valuation. The stock market includes varieties of stocks from all sectors and industries. So, the market value fluctuates every minute due to the change in information that the market receives on the basic equity valuation. Valuation is the backbone of the whole financial system. It allows companies to operate with strong business models. Only those who are fundamentally strong are in top valuations. 

Individual – Along with the micro-level, equity valuation helps at an individual level also. Due to the equity valuation, the stock’s market value fluctuates every minute. This is due to the change in information that the market receives. So, a person evaluates varying effects and comes up with different results. 

Process of equity valuation:

Understanding various factors in macro environments – Firstly, it is important to understand the industry in which the company operates as its performance is highly influenced by the economic factors, their factors, and their operations. Economic parameters create a strong base for any equity valuation.

Forecasting – Investors forecast performance after considering not only currently trending but after evaluating all the past performances as a strong evaluation and analyzing technique is needed for coming to a final forecast. Cost and sales are important factors too in any forecasting for which investors need strong intricate knowledge base and experience.

Choosing the appropriate equity valuation model – As there are multiple valuation techniques and models available for investors they need to choose after understanding the sector, industry, and company’s business model. It is the responsibility of an analyst to select appropriate techniques.

Valuation Figure – After applying the valuation model, the next step is the final valuation. Analysts can come up with a single figure or range. However, investors prefer figures which have ranges. Different analysts may come up with different values because of using different models or considering different factors.

Final decision – It is based on all the factors and considering all the possible uncertainties. Finally, analysts come up with the final decision for a particular stock whether to buy, sell or hold depending on the current market price and intrinsic value.

 

Various Methods of Equity Valuation:

Based on different factors such as liquidity value, book value, replacement value, discounting factor, earnings ratios, price to book value, and profitability ratio, different equity valuation methods are broadly classified.

Balance sheet techniques – It utilizes all the information available on the balance sheet. It considers all the standards of accounting. Some of the major techniques in the Balance sheet method are Book value Method, liquidation method, and replacement method.

Discounted cash flow method – This model first evaluates the present value of future dividends for getting the present value of equity. They have different assumptions in different models like the single growth model, multi-period model, constant growth model, free cash flow model, two-stage model, H model, and zero growth model. One of the known methods is the dividend discount method.

Earnings multiple technique or Relative valuation – It is also known as the comparable method. It uses peers’ and competitors’ values to determine the value of equity. Earnings or relative valuation includes ratios such as price-to-earnings ratio, price-to-book value ratio, and price-to-sales value ratio.

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What are Gold funds and what are the benefits?

 

 

 

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LTFH Q1FY24: Retail Portfolio Grows 31% YoY, Reaches ₹84,444 Cr
Editorials - July 22, 2022

MSME definition to be widened further.

MSME definition to be widened further.

Government considers further broadening of the definition of micro, small and medium enterprises (MSMEs). With a vision to extend various official benefits to small businesses and to make sure that their schemes reach the maximum eligible firms, government is trying to pull as many micro, small and medium businesses as possible under the ambit of the definition of MSME.

The original definition:

Definition of MSME used to define micro units as having investment not more than Rs 25 lakh, small unit having investment between Rs 25 lakh -Rs 5 cr and medium one having investment between Rs 5 cr – Rs 10 cr. And in case of services, investment in a micro enterprise was must up to Rs 10 lakh in equipment, for that of small enterprise between Rs 10 lakh and Rs 2 cr and that of medium between Rs 2 cr – Rs 5 cr bracket. While announcing the Rs 20 lakh cr economic package, it was announced that definition of MSME shall be amended by making alterations in the both, the investment limits as well as in the annual turnover figures.

According to the new definition of MSME that had announced along with the economic package announcement, micro units were to be defined as those units whose investment does not exceed Rs 1 cr and have annual turnover limit Rs 5 crore, while a small enterprise shall be the one having investment between Rs 5 crore and Rs 10 crore and annual turnover limit of Rs 50 crore and medium units to have investment between Rs 10 cr – Rs 20 cr and annual turnover of Rs 100 cr. Government also made it clear that MSMEs should now cover both manufacturing and service enterprises alike.

Now the above definition stands further changes in limits:

MSME and Transport Minister, Nitin Gadkari mentions to media that the ministry is planning to increase the recently set annual turnover limit of Rs 100 cr for medium enterprises to Rs 250cr, this 250cr limit of turnover may also exclude export sales for the purpose of calculation of eligibility of the firm.
With the same intension the investment limit to qualify the definition of medium enterprise under MSME has been proposed to increase to Rs 50 cr from Rs 20 cr.

The two suggestions mentioned above are pending for approval from Ministry of Finance:

This move shall also motivate those MSMEs that fell in the earlier brackets of limitations to now explore and take risks to further expand and make more investments and enhance turnovers, as they shall be able to avail the same benefits even after growing a little big. This move shall therefore lead to witnessing growth in this sector. The NSS survey of 2015-16 reveals the count of MSMEs in India, totaling to 6.34 cr, comprising of around 6.3 crore micro units, while 3.31 lakh small and 5,000 medium firms.

 

What is on platter for the MSMEs?

On achieving the status of MSMEs, businesses would get assorted benefits like periodic governmental and regulatory relief, besides 25 per cent of official blocking of loans under priority sector lending programmes. Further, as per the conditions, these shall be eligible for enjoying recently announced benefits like additional collateral free working capital loan up to 20 per cent having guaranteed capital of Rs 3 lakh cr. Rs 20,000 cr and Rs 50,000 cr funds to further boost equity base of these small business that have growth potential.

According to the government, the collateral-free loan alone is expected to aid 45 lakh MSME units. There shall be different rules relating to insolvency for MSMEs. Promoters who are not the willful defaulters shall be allowed to bid for their stressed assets whereas large companies are not allowed to do the same. In FY19, 42,458 MSMEs together enabled central public sector firms to procure 30 per cent of their procurement worth Rs 33,264 cr. Further, MSME Ministry had also revealed that these businesses are known to have created 11.10 cr job opportunities in FY16 and MSMEs form 29 per cent of the total GDP.

 

 

 

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Role of Financial Intermediaries
Business, Markets - July 22, 2022

Role of Financial Intermediaries

Role of Financial Intermediaries.

 

Entities that act as a middleman between two or more individuals for any financial transaction like an investment bank or mutual funds are known as financial intermediaries. The main goal of these intermediaries is to build an efficient market and lower costs for conducting any business. However, intermediaries do not accept any deposits from the public. They provide services like leasing and factoring.

The overall stability of the economy depends on the performance of financial intermediaries and the growth of the financial services industry. They move excess funds from the parties who have excess capital to those parties who need funds. This creates an efficient market with a relatively lower cost of conducting business. 

 

Major financial intermediaries and their Roles:

The main role of any financial intermediary is to take deposits from savers and lend them to borrowers. They also pool small savings and collectively invest those funds in assets like stocks, bonds, or any other financial assets. Further, they provide loans to small consumers and businesses. However, there any many types of intermediaries based on these roles

Insurance Companies – There are different types of insurance companies. Almost all companies work in the same way. First, they try to find customers (in large numbers) who need coverage. It can be for anything such as a car, home, or health policy. After these customers purchase this insurance policy. Then in the future, whenever customers make a claim and request the insurance company a payout, the insurance company will provide it through that pool of money.

Pension Funds – Full-time employees use their savings for their retirement by investing. The pension fund organizations work on certain factors. Such as risk, the period for which investment is made, and matching contributions. Their employer matches that contribution to a certain extent. When the employee retires, they will get all the contributions with interest.

Banks – Banks are the oldest and most trusted financial intermediaries around the world. They provide multiple services to their customers such as saving, investing, and lending with many other customized services to fit specific criteria. For example, when an individual wants to raise a mortgage, then banks may provide money from another person’s deposits into the same bank for saving. Along with small individuals, large companies also prefer banks to help find investors.

Stock exchanges – Before stock exchanges were invented, it was a very tedious process for buying any company’s stocks. But one can use stock exchanges to trade as they facilitate the entire process with transactions.

Benefits of Financial intermediaries:

1. Expertise – Financial intermediaries not only have specialist knowledge but also all resources which are needed to assess the risk. They have the financial expertise to anticipate the profitability of any proposed projects.  
2. Value Transformation – Financial intermediaries can help both small and large borrowers at a time. They collect money from small investors and give them to the borrowers who need a large sum of money.
3. Transaction costs are reduced– Financial intermediaries help to reduce overall transaction cost as they provide facilities to a large number of borrowers through which overall transaction is balanced.
4. Risk Diversification – Financial intermediaries ensure that their entire risk is diversified. In case any borrowers have defaulted, it does not affect the savings of other depositors. 
5. Easy borrowing – Financial intermediaries ease borrowing by giving them various facilities or options to borrowers. So the borrowers do not require to visit a bank every time.

 

Role of Financial Intermediaries

 

 

What Happens when Businesses go Bankrupt.

 

 

 

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Kalpataru IPO Set to Raise ₹1,590 Crore, Signaling a Bold Move in Real Estate
Real Estate, Real Estate News - July 21, 2022

How to minimize taxes when selling real estate.

How to minimize taxes when selling real estate.

 

On the off chance that you sell your home at a cost more noteworthy than the purchasing value, at that point you will be eligible to pay tax on the income that you make by selling your home. Whether you sell a rental estate or land after owning it for more than 2 years, you become eligible to pay 20% LTCG tax upon indexing. However, if you’re making a Rs 50 lakh income, you will probably pay Rs 10 lakh as taxes. An assessee can re-invest the sum of LTCG in residential estate and assert an exemption under sections 54 And 54F of the Income Tax Act.

Short-term capital gain:

STCG ‘s property is seen to be a profit by the selling of property possessed by you for less than two years. As an investor, you are eligible to pay tax on STCG on properties as per the relevant marginal tax levy.

 

Long-term capital gain:

If you sell the property that has been held by you for more than three years, the benefit resulting from this sale will be called an LTCG. LTCG is measured as the gap between net sales and adjusted property costs. The advantage of indexation is to reduce the effect of inflation on the profits generated by selling land in such a manner that the real earnings on the land are taxable. It is focused on the premise that the valuation of capital is gradually decreasing as a consequence of inflation and thus, it is unjust to charge the long-term owner of the land on the cumulative profits that have accumulated to him purely as a result of inflation.

 

Exemption:

1. Section 54, where interest is rendered in the acquisition of a new property:

Under section 54, you can claim an exception from capital gain when you contribute a few or the entirety of the benefits by selling a home in India into another real estate.

Rules:

HUFs and individuals are exempted and are available for one residential real estate. The capital income from property selling will be balanced against purchasing a new residential building. The property which has been sold and bought will be in India. The current residential property should be purchased either one year before selling the existing property, or within 2 years after the sale date of the old real estate. If you intend to build a house, the development of the house should be done within 3 years from the selling date of the preceding home. When you purchase or build a new home, you may not be willing to sell it in less than 3 years. When you sell it within 3 years, you won’t receive the capital gain depreciation advantage and the sales profits will be taxable. Those 3 years are measured from either the day the new house acquires or finishes its function. The value of exemption claimed is smaller than the sum of capital income or the expense of purchasing a new home.

 

2. Section 54F, in which the transaction will be made on the acquisition of new land or another house:

Rules:

Exemption for HUFs and individuals. The new property will be acquired either one year before the selling of the existing property or within 2 years from the date of selling of the previous home. The exemption is valid only if the taxpayer does not possess more than one property on the day of sale of that estate, rather than the one the homeowner purchased to obtain the exemption under Section 54 F. When the whole selling concern is not invested but only a part selling concern is spent on the acquisition of new estate, the sum of the exemption must be correspondingly given.

 

Investment after selling property:

The new property will be the perfect place to spend your capital after selling your property. This could be your new property, or you could lease it to produce income. In the event of re-investment, there is still some uncertainty as to how to use the whole. Thus, you just need to spend the sum of capital gains to avoid the tax on LTCG. The most elevated estimation of capital benefits which you can put resources again is into some other property to make sure about a full exclusion is Rs 2 crore. When your capital gain is large, you will be forced to pay tax on surpassing Rs 2 crore. Note that you can use this right just once in your lifetime. Therefore, you should be cautious to make sure you don’t use this choice in the future.

 

Two properties:

Already, the assessment reasoning was just appropriate when you spent your capital gains in a single house. Nevertheless, it has now enabled citizens to spend their capital gains on two real estate properties, either by acquisition or development. In any case, this reinvestment decision will likewise need to remain under the complete top of Rs 2 crore.

 

 

 

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Automation key to post pandemic production
Autos, Hot Auto Threads - July 21, 2022

Automation key to post pandemic production

Automation key to post-pandemic production

The COVID-19 pandemic has an adverse effect on the entire economy.

The Cairn Oil’s Barmer plant which was managed by more than 7,500 employees on site reduced to 1,500 employees as the pandemic led to the lockdown of many manufacturing plants worldwide. Still, the oil and gas plant could recover 1.6 lakh barrels of oil every day. Before the pandemic, they used to recover 1.8 lakh barrels every day. This decrease in number is because of the low demand and not because of the labor shortages.

Still Cairn can manage the production because of its investment in automation and digitization.
The chief digital officer of Cairn, Anand Laxshmivarahan said that the organization will be focusing on cost optimization post-COVID-19. Do the companies will be willing to invest only in automation.

Companies like Tata Steel, Mahindra, Toyota, Tata motors, Maruti, etc. have ample methods to automate their product lines.

The government has set norms and guidelines for the company to operate amid lockdown such as companies must screen the temperature of the employees, provide them with protective hand gloves, provide them with additional medical insurance, employees should follow social distancing norms while working, etc has led the companies to think about employing machines than men.

 Mahindra & Mahindra’s Chief Human Resource Officer, Rajeshwar Tripathi says that the use of robots has significantly helped the automobile sector to grow. The company has already automated the body shop, the paint shop and some of its final assembly line.

Tata Steel, Vice President, HR, Suresh Tripathi said that Tata Steel employs thousands of contract workers for maintenance of machinery. Instead of that they can use sensors that can estimate the problem well in advance.

Ceat, HR Head, Milind Apte also has mentioned about adopting digitisation and automation.

In the long run automation will prove to be profitable and will generate greater return on investment and will also prevent such shutdowns. Automation although leads to less number of manpower, it will also need new set of skilled people.

 

 

 

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Real estate equity waterfall
Editorials, Expert Opinions - July 20, 2022

Real estate equity waterfall : How they work and what to look for.

Real estate equity waterfall : How they work and what to look for.

 

Equity Waterfall:

When we buy a property, we choose a combination of equity and debt to fund it. In exchange for their equity investment, our buyers are entitled to the profit and revenue of the real estate. The waterfall determines how earnings and profits are split between you and our investors.

The layout of the waterfall may vary from one contract to another, and it is necessary to look at the specifics of each agreement to evaluate if the separation is equal and fair for all the parties concerned. All information is presented in a contract called an operating agreement, that will be thoroughly and carefully reviewed in anticipation of the allocation of capital to the real estate deal. A waterfall, also known as a waterfall model, is a legal term included in an operating agreement which specifies how money is paid out, where it is paid out, and to when it is paid out during real estate equity transactions.

 

Waterfall Features:

1. Preferred Returns:

Preferred returns are described as the first claim benefit of the project before the target return is achieved. Preferred return simply generates another cash fund stream, and after the cash flow has been allocated to preferred owners, the remaining stream capital transfers to the next stage and divides as decided.

 

2. Lookback Provisions:

Lookback clauses are used as cash flow is distributed before the asset is disposed of. If the Limited Partners do not get a guaranteed rate of return decided upon settlement, the General Partner is forced to offer up a percentage of the cash income that was allocated to them before the transaction.

 

3. Catchup Provisions:

A catch-up clause ensures the Joint Partner 100 percent of the profits of the agreement before the negotiated rate of return is reached. If the specific rate of return has been met, all the residual earnings should go to the General Partner before the defined rate of return has been reached.

 

Operating agreement:

1. Members:

The partners of the agreement are those who are eligible to benefit from the successful transaction of the real estate. In certain instances, there seems to be a variety of limited partners and general partner. The GP is liable for identifying the opportunity, reviewing it, acquiring it, completing it, and handling the asset until the sale is complete. Usually, the GP will invest a limited portion of the total equity used to fund the deal. The LP’s are purely individual investors. They put their money with the GP and hope to obtain it back, plus a profit, from the cash flow produced by the real estate. The LPs offer the remaining of the capital required to finance the transaction.

 

2. Capital:

If the cash flow generated by the estate fails to reach the necessary return threshold in a specified period, the cash flow shortfall can or can not be carried forward to the next year. If the investor ‘s financial flows are accumulated, the deficit will continue over the following cycle before the cash flow is adequate to clear it. Cumulative cash holdings are beneficial to the LPs as it ensures that the GP does not obtain any funds before the deficit is erased. When the capital investments are not combined, they are more beneficial to the GP.

 

3. The Return Hurdles:

Return hurdle is the rates of return at which the capital investment divides between the LP and GP varies. These are designed to enable the GP to manage properties as profitably as practical. The better the profit that the property makes, the more income the GP gets to earn compared to their original investment.

 

4. Calculating Returns:

The return hurdle can be evaluated using several different approaches, although the two most popular are the multiple of equity and the internal rate of return. The internal cost of the return is the average discount rate, which determines the net present value of the potential cash flows, equal to zero, negative, and positive. The capital multiple is measured as the ratio of the capital received to the money invested and represented as a sum out of the second decimal point.

 

5. Simple Split:

The final way of deciding the configuration of a waterfall is a straightforward break and might have no desired return to investors. For example, 50 percent of all capital investment and profit is paid to LP and 50 percent of all capital investment is paid to the GP. This is popular in purchases where there might not be a high degree of complexity or a lot of costs, so the goal is to make distributions very easy.

The profitability of an investment from the investor’s point of view of return can rely on well-defined allocations that are properly distributed to the appropriate entities also during the investment holding period.

 

 

 

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Maruti Suzuki sets the target of regaining 50 percent auto market share in India
Autos - July 19, 2022

Auto insurance. What you need to know.

Auto insurance. What you need to know.

 

Accidents do happen, and policy is what protects your investments to be secure and healthy when they do. If an automobile accident is your mistake or someone else’s, your vehicle insurance policy will have to support. After all, how much it benefits is up to you, and that is decided by the variety of choices that make up the insurance plan. If you travel without vehicle insurance and experience an accident, the penalties are usually the least part of the financial responsibility. Whether you, a passenger, or either driver is involved in an incident, car insurance can reimburse your costs and will shield you against any lawsuits that might arise from an incident. Car insurance frequently covers the automobile from fraud, damage, or natural hazards, such as hurricanes or other weather-related accidents.

Choosing Your Auto Insurer:

If you choose to increase the chances that the premiums will be paid, you will always pick a successful insurance provider. Insurance providers should be efficient and have fair compensation for the premiums they demand. Remember, don’t apply to a private compensation provider that does not compensate for out-of-state injuries. Individuals are not forced to purchase auto insurance from a dealership that sells a new vehicle to them. In reality, purchasing somewhere else will save you money. Determining the compensation rate to a retailer may be complicated because the fee is often reflected in the net sales bill.

IDV:

The benefit of the insurance package is dependent on the IDV-Insured Declared Value for the car, which is the actual insured price that the company will offer you, approximately equivalent to the current value of the car. The IDV of the vehicle is not specific. When you update your vehicle policy for like a year, the depreciation rate will cause the IDV to decrease. You will need to update the agreement within a defined period or fear that you may have to pay significant fines. This is typically 90 days.

 

Recommend:

 

1) Factors:

The insurance provider can check at the motor vehicle background and determine how many incidents or fines the driver has got. Most insurance providers will have the accident background summary to determine whether the applicant had filed some auto insurance payments and how much compensation has been charged. While accidents and breaches will only impact the premiums you get for three years, several insurers can look at five or six years and determine whether they choose to sell you policies. Other car insurance providers are looking into the applicant ‘s financial background.

 

2) Insurance rates differ:

Auto insurance premiums vary considerably from one insurance provider to another. This is how every insurance provider uses their methodology to determine the danger and evaluate whether you’re paying for coverage. This ensures that no two companies will offer the same premiums on the same policy. Also, if you don’t equate the prices, you might make an over-payment.

 

3) Be careful:

Many insurance providers consider drivers that are licensed but have no cover to be unsafe or careless. Because of that, if you allow the coverage expires, you ‘re going to pay extra if you have auto insurance. To stop that, whether you do not wish to compensate for protection or intend to end your protection policies. If you wish to move auto insurance providers, make sure you buy automobile insurance before canceling the existing insurance policy.

 

Insurance cover:

1. Personal Cover:

This helps secure the security of your children in case of a lifelong illness or the tragic circumstances of your death. Up to 2 lakhs will be compensated for any harm done to the driver when driving, installing, or disassembling from the vehicle. Many insurers do provide extra incident compensation for co-passengers.

 

2. Damage attributable to natural disasters:

Things beyond your influence, such as fire, landslide, earthquake, tornado, hurricane, cyclone, flood, thunderstorm, etc.

 

3. Damage attributable to man-made calamity:

Man-made accidents such as robbery, thefts, violence, strikes, criminal attacks, and other disruption done by water, road, or rail transport.

 

4. Third-Party:

Mandatory by statute, this protection covers you against civil action for unintended accidents that have ended in serious harm or the death of a third person. It also includes harm to every property in the area.

 

Insurance DOES NOT cover:

Your insurers are trying all they can to shield you from adverse effects, although there are variations. Vehicle insurance plans typically do not protect the following:
1. Damage done by a driver who may not have a proper driving license.
2. Electronic and mechanical breakdowns.
3. Damage done while the car driver is under the influence of drugs or alcohol.
4. Anyone who is not covered is driving your car.
5. Driving someone else’s vehicle.
6. Vehicles employed rather than in compliance with the limits of their use.
7. Loss attributable to war, or nuclear threat.

 

How this pandemic will change the Auto Industry?

 

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Arkade Developers: High-Margin, Debt-Free Growth in Mumbai Realty
Business, Real Estate - July 19, 2022

Why does a home buyer need a real estate agent?

Why does a home buyer need a real estate agent?

 

When it comes to house selling, sellers and buyers remain on opposite sides of the table. Both sides may profit greatly by employing an estate agent to support both. However, their motives may be specific. Besides, the cycle of home purchasing can get difficult. Although you are not an expert, you want to ensure that you are doing things right. The representative of a real estate investor will help to ease the operation.

 

Buyer agent:

In the property market, the buyer’s agent helps prospective homeowners in all facets of the cycle of purchasing a property. They will compose deals for properties you will like to purchase, help with approvals and agreements, and direct you through the selling phase until you have found your perfect house.

 

Benefits:

1. Arrangements:

An essential part of the role of a buyer’s agent is to assist you with access to residences that attract you. The agent will consider your main purchasing desires and needs into consideration. And then consult so that you can filter the homes that suit your preference criteria. When you have located the property you are interested in, they can serve as a representative for you. And also the broker or seller’s representative to schedule appointments for all of you to take a first glance at certain homes.

 

2. Negotiating Skills:

Know that the agent has a legal responsibility to clients. It is the responsibility of your dealer to offer you the best deal for the house. They understand how it works naturally and what does not. As a result, they have little personal investment which can confuse their thought. If you already have an agent that stops you from making an unexpected financial dive, that is only more money saved.

 

3. Knows your need:

Buyers normally have a fairly clear understanding of what they need in a home. You will be better looking at residences with the checklist hidden in your head. However, the agent should be alert to concerns that you have in your mind, such as insect problems, roofing issues boiler concerns, and cracks. You can only say for sure whether you can find similar prices that can prove you are in the same category or not. An agent passes on studied, existing, and reliable data about the demographics, crime levels, colleges, and many valuable factors of a community.

 

4. Paperwork:

If you have purchased a home, you undoubtedly devoted a complete shelf just to the paperwork related to the sale. These will also include the written bid, the counteroffer signed and stamped, and the minor specifics of what precisely had been and is not included in the deal. When it comes to reading and interpreting the various papers involved with a real estate transaction, you may be way out of your depth. So, you will have a detailed understanding of what you are walking into irrespective of what you are purchasing or selling. Fortunately, all of this information should be much more common to your agent than you are.

 

5. Helps you:

Note, this is probably the first time you’ve been through this place and there may be a variety of nerve-wracking aspects in the cycle of home purchasing. One of the most commonly mentioned is that a customer may have to hold difficult talks with the seller over changes that you plan to make to the home until the sale is complete. However, this is where it helps a lot to have a buyer’s representative operating on your side. Because they are accustomed to these interactions and can treat them with aplomb.

 

6. Confidentiality:

If you’re a seller or a buyer, your agent does have your back. Legally, they have been obliged to bring the best interests of their customers first. The obligation imparts a rather strict secrecy level. The own agent will realize if the details that the other agent demands of you are fair. If you are the customer and the seller’s representative lied to you, deceived you, or leaked sensitive details, you have redressed. You should disclose this to the professional organization of the company, such as the National Realtors Association.

 

7. They are Expert:

Being an accomplished specialist, the buyer’s representative should have unique skills that can offer a degree of professionalism that can make the entire process of purchasing the home run easier. They will then enable you to make a decent bid on comparable homes, provided costs. You may rely on them to provide you with the details you need to make you feel comfortable about your purchase.

 

8. Long-Term relation:

You will be capable of building a clear understanding of what kind of house will be suitable for you by developing an established partnership with your buyer’s agent and steering you towards listings that best match your desires the next time you decide to search for a home.

Why does a home buyer need a real estate agent?
Image is only for representation purposes.

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Business, Uncategorized - July 7, 2022

Loan against FD.

Loan against FD.

 

All Non-Banking Financial Company (NBFC’s) and Housing Finance Companies (HFCs) accepting FD’s now offer loans on FD’s under certain terms and conditions. Any individual who has invested in FDs may claim loans against deposits by paying two percent above the FD rate for the loan period, and this can be executed after three months of deposit. The loan against the FD option can be considered over the option of prematurity of fixed deposits.

 

Pre-mature withdrawal theory of FD:

Given the current economic situation where government initiates to bring liquidity into the system, HFC and NBFCs have also re-established their liquidity characteristics in their FD schemes. Organizations offer FD options with premature withdrawal. However, no partial withdrawal option will be offered to the clients. In the event of premature withdrawal, the entire FD will be canceled and the interest on penalties for the period FD will be charged. Let’s suppose, for 5 years from 2017 to 2022, an individual has ₹10 lakh in FD. If he wants to close the FD prematurely in 2020, he must give up 1% to 2% annually in penalty charges for 3 years. You probably only need 50% of the money, but you have to withdraw the entire funds.

 

Brief about availing Loan against the FD’s:

In case of financial crises such as medical bills or marriage payments, people prefer to search for loans from multiple outlets to fulfill their requirements. One such source is a fixed deposit loan. The loan against an FD is a secured loan where your fixed deposit funds can act as a collateral to receive a loan. You will obtain a loan balance of up to 90% of the deposit. You don’t have to pause and take the money from FD for loan whereas you will receive a loan against FD.

 

Who can apply for this scheme?

Anyone with a deposit account can use FD loan irrespective of salary, occupation and credit rating. The following individuals may apply for an FD loan –

• All the fixed deposit holders may apply for a loan from FD, including individual holders or joint accounts.
• If you are minor, then this scheme is not applicable for you.
• Five-year tax saving FD investors can not apply for this type of loan.

 

Pros from this scheme:

The FD loan does not have any obligation and it is impartial of any occupation and can be used by employees or self-employed persons. To get this loan, you don’t need a good credit score. The sum credited to your account can be issued within hours of application.

• FD loans have a lower rate of interest than other unsecured loans, such as personal loans.
• There is no fee for processing to avail this scheme. Most banks don’t charge any kind of processing fee for this scheme. If the banks charge any fee, the processing fee will be negligible as compared to the processing fee for other loans.
• You may not have to interrupt the FDs and chose to withdraw prematurely. In turn, this saves you from losing interest in fixed deposit.
• Loan for both domestic and NRI Fixed deposits are available.
• To avail this scheme, the process is very simple and hassle-free. The process of this scheme is easy and straightforward with least documentation. The form is handled quickly and there is no much involvement of paperwork.
• The loan may be paid in installments or for a lump sum, but it must be paid up to the expiry of your FD term.
• The main benefit of the FD loan is that the financial company does not check the credit score and the past records. Your FD account acts as a security so that banks recover money from the FD account if individual default due to any uncertainties.

 

Cons from this scheme:

• If an individual is unable to pay the amount loan borrowed, the bank is entitled to recover the funds from a fixed deposit in order to recover the borrowed money.
• The holding of the loan against the FD will not exceed the maturity period of the fixed deposit. This means in any circumstances the borrower needs to pay back the loan before the maturity of FD.
• If you do not have a fixed deposit and you require immediate money, a personal loan can be considered as better, cheaper and viable option.

 

The loan limit of various banks for Loan against Fixed deposits:

The SBI Bank, Bank of Baroda, ICICI Bank, Citibank, Punjab National Bank sanctions loan up to 90% of the total funds available in fixed deposits. Bank of Baroda and Axis Bank sanctions loan up to 95% and 85% respectively of the total funds available in fixed deposits.

 

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