Top 10 personal finance blogs globally and why I love them

So happy to say 3 top personal finance blogs are from India.  Indian blogs Bemoneyaware, Jago Investors and Basu Nivesh in the top the list! not being partial at all!

There are several blogs I follow globally, many of them I like just because they maintain a consistency on the subject they cover. Mostly very niche, within the personal Finance, they chose a topic – example – budgeting, loans, spending, investments or insurance. Based on their content, alexa and Moz ranking I have curated  a list of 10 personal finance blog you must have a look. The blogger in the personal finance list belongs to Asia, Europe, Canada, US even India.

1.       The Penny Hoarder – In 2017, Inc. 5000 ranked The Penny Hoarder as the No. 1 fastest-growing private media company in the U.S. for the second consecutive year, and #25 on the overall list of the fastest-growing private companies in America. With over 12-17 million reader per month and 1.2 million subscriber, they are in top of their game. The Founder and CEO of the blog, Kyle Taylor is an entrepreneur, philanthropist, and the founder & CEO of The Penny Hoarder. The blog cover huge array of topics from freebies, discount deals. The blog makes money interesting, catchy and funny.

     This blog enjoys an amazing ranking of 3,686 in the United States and global ranking of         14,637

2.       Bemoneyaware Being an Indian, its giving me great pleasure to list this blog on the top. The author, Kirti is a mother of 2 kids and a software professional. Having faced difficulty in the financial processes, in field of investing and other mundane transactions, she decided to start this blog, and this is one of the highest  ranking blog in India as well as globally.

     #The top Indian personal finance blog currently enjoys a Indian Rank of 5275 and a                  global rank of 68,800

3.       Jago Investor – An Indian finance blog, founded by Manish Chauhan and Nandish Desai in 2008) with the aim to educate more and more investors and improve their financial life by imparting financial education among them. They have been writing about personal finance and have been conducting various workshops in different indian cities. They have also authored various personal finance books. They work with clients across India from various cities and have a 10 member team across Pune and Ahmedabad.

The team has written 1000+ articles, 7 books amongst many other achievements.  
    #The top personal finance blog enjoy an Indian ranking of 12750 and global ranking of             163,000 in Alexa

4.  Get Rich Slowly – J.D. Roth. I founded Get Rich Slowly in 2006, published Your Money: The Missing Manual in 2010, created the year-long “Get Rich Slowly” course in 2014, and for four years contributed the monthly “Your Money” column to Entrepreneur magazine. In 2009, for reasons both personal and financial, I sold Get Rich Slowly — but stuck around as manager, editor, and primary writer until 2012. Then I “retired”. (Sort of.) In October 2017, he bought Get Rich Slowly back. The Canby, Oregon born founder has been featured On Forbes.

       #Listed on the top 10 #personal finance #blog, currently enjoys US Ranking – 21,200               and global ranking of 80,000.

5.  Basu NiveshThis is Indian Finance blog is authored by Basavaraj Tonagatti. In his blog, he mentioned that the blog originated from the idea of educating people on personal finance. Apart from being a successful blogger with a big follower list, he is one of the few celebrated Fee Only advisers. (SEBI registered advisor). The blog is 8 year old and doing a great job on creating financial awareness amongst Indians. 
     This Indian personal Finance blog enjoys Indian ranking of 5,942 and a global ranking          of 78,500

6.       FrugalWoods– Liz, better known as Mrs. Frugalwoods, writes about a wide range of topics, including her experiences as a young  parent, her adventures as a novice homesteader, and the financial decisions that made our life possible. Her philosophy is that managing money wisely enables one to pursue unusual aspirations and opens up a world of options for how to live one’s life. She covers a wide range of category including biking, home improvement, health and beauty, holiday and special. Her blogs are engaging and makes me click every hyperlink.

      The blog has a US ranking of 44,000 and Global ranking of 1,96,000

7.       Oblivious Investor  – This one essentially is an investment blog. The author Mike Piper is a CPA and the author of several personal finance books. The point of this blog is to show that investing doesn’t have to be complicated. He dedicates this blog to spreading the idea that investment success is based upon following a few principles: Diversifying portfolio, minimizing cost and avoiding media noise.

      The blog enjoys a US ranking of 50,833 and Global ranking of 2,38,800

8.       Afford AnythingThe beauty of the blog lies in its name- Afford anything. Accrding to the blogger –  Afford Anything is a movement rooted in one idea: You can afford anything, but not everything — and that’s true not only for your money, but also your time, focus, energy and attention.
The author Paula Pant has an elaborate CV to flaunt. Besides being the founder of  the award winning  website AffordAnything.com and a writer she is a speaker specializing in money, business and real estate investing.She has been featured more than four dozen major publications, including Forbes, Fortune, Money.com, AOL DailyFinance, Marketplace Money and many more.
She’s contributed to dozens of major websites, including U.S. News, AARP Bulletin, MSN Money, Bankrate, Hotpads, Trulia, Huffington Post etc.  She is the Budgeting and Personal Finance Expert for About.com.

     The blog enjoys US ranking (on Alexa) 42,725 and global ranking of 1,61, 600

9.     My Money BlogThe blog is run by Jonathan, based in United State and I’ve been sharing about money since 2004. He is a self-directed investor, financial freedom enthusiast, and calls himself a perpetual learner.  He is running the blog for 13 years.

      Enjoys a US ranking of 30,674 and a global ranking of 131,485

10.   Budgets Are SexyIt is a 10 year old blog. Blogger blogs with the name J. Money. The blog covers savings, money management and tips. Budgeting is an important part in the blog.

      The #Top personal finance blog enjoys a US ranking of  27,895 and global alexa ranking        at 129,700

   As you are a special reader who have read the whole blog post, you deserve more. Here you go with one more blogpost which I really like for the money management lessons. 
    
       Squawkfox  – The Author Kerry is a  Financial Journalist and author of of 397 Ways to Save Money. She is a world renouned blogger, and known for her fun approach to personal finance writing reaches an audience of millions around the globe each year and inspires readers to become financially independent. Based out of Torronto, she is a personal finance columnist, TEDx speaker, a money expert on CBC’s On The Money, and a contributor to the Globe and Mail. She has appeared on lifestyle shows The Marilyn Denis Show, Canada AM, and CTV’s Your Morning.

      US Ranking of 89,000 and global ranking of 316,500

Hope you make use of the information from the blogs listed here. I also read many more interesting international blogs which are very interesting, may not have as many followers and views as above blogs. Those personal finance blogs There are many more useful personal finance blogs, let me know if you want to know more about them.

Do you have the Moolah to buy your desires? Budgeting will help

This article is written by Guest Author Ms. Nayan Thapar, a personal finance enthusiast and pursuing post graduation in communications. Views are welcome at mymoneystreets@gmail.com


You wish to buy a house? A car? Or let’s say you are this “I love to travel so let’s pack our bags and go on an adventure trip” kind of a person. But, the fact that there isn’t enough money in your bank account to fulfil your whims and fancies, you cease to live life the way you want to live. You somehow always end up restricting yourself and ultimately, just get used to the life that lacks impulse.

From the blog – Create wealth with conviction and planning

In order to provide a cushion to your dreams, here are some tips that could ease your financial pain in no time. So to be precise, let’s talk about the ‘B’ word: Budget

·         The little things; #thatmatters
We joke about these little things but at the end of the day, these Lilliputian efforts that you put in, really matter. Giving an example would make a difference. As a student, you are always late to catch the college bus that you get as a service and instead you end up taking an Uber or an Ola because you want to be in class before 10 am. Now, that costs you around 30 bucks which is insignificant but when we calculate it in our monthly expenses, it sums up to about 900 which “could” have been used as your bus ticket to the next destination on your travel bucket list. Does it make sense? I think, it does.
·        Confessions of a shopaholic
Everybody understands when we talk about impulse buying because everybody has gone through that phase at some point in their life and everybody has gone on a major guilt trip now and then. The question is how do we curb this feeling? Well, now that we are staying in a world full of digital heads, there are so many apps which can help us keep a check on the kind of purchases that we make and in which areas we end up splurging on. Apps like Walnut, MoneyManager and Monefy can actually curb your urge to splurge!
·        Get set Goal
Set a monthly as well as an annual aim or a short term and a long term goal, according to your suitability. It just makes things a lot simpler. You already have a pathway on how you have to go about throughout the month and it won’t come out as a shocker unlike the times when you suddenly realize that you are underpaid or you fall under the ‘urban poor’ bracket.
·        Strike a happy medium
Balancing your way through is essential. Every month, when you plan your checklist, categorize on where you want to extravagantly indulge and where you can cut down on your expenses to balance out your expenditure.
If you make these miniscule changes to your financial calendar, then there is a definite chance that you might bag some bonus trips and getaways or might end up purchasing more than what your pocket allows (but that is helpful sometimes and not all the time).

Loans are not bad, we need to be responsible with it

#Loan and the peril of the compounding
The topics on savings and investing through various means and modes have become quite popular, thanks to the conscience of regulatory bodies and growing numbers of personal finance experts. Before we go into any other diacussion, we need to appreciate that Indians are known for their savings habbit with more than 30% of their income goes into savings. In Investing, wide range of financial products have been introduced through last three decades. Mutual fund industry alone trebled their assets under management with Indian retail investors in last decade. Concept of SIP and power of compounding is already doing the magic. However, the overall financial behavior is yet to mature. 
The term “risk” doesnt go well with our especially middle class elders. The younger generation however are more experimental given their high disposable income and less family responsibility and small family structure. In last 100 years Indian economy  has gone through massive change, so is the socio-economic behavior. But due to lack of adequates and inherent orientation, the new earning fraternity is often found clueless and spoilt for choice on the financial front. 
Loan is one of those frowned terms in Indian households as the equity investing has been. Thanks to evergrowing mutual funds industry, it has turned around the conservative indian investors by beating market returns and with superior offering. But, loan is still a forbidden word owing to our paternalistic regulators and still conservative experts. Its high time, that we look at Loan more rationally. This is not neccesarily an evil. The evil is caused because of irresponsibility, which is result of low or no understanding of the product. Loan as a financial instrument is one of the oldest financial products in the world. If we have to define loan in simple terms, when we are depositing money in the bank, we are lending our money to bank and bank in returns is giving us predecided interest depending on the tenure. Same way bank lends out with a predecided term and interest rate. The difference is bank being a large institution with huge establishment and loan repayment capacity, it offers us lower interest when we lend to the bank and it charges a higher interest rate from the customers, as it runs higher risk on its capital by lending to individuals. 
Decade ago things were little different. Especially India had a practice of “sahukar”, the informal lending channel, which ruined many households with malpractice for centuries. The trauma and fear has been carried as burden by generations. Even post independence, untill 1990s, the interest rates were very high in the banks and with the compounding effect, cost of loan was very high. But, with lowering the interest rates and competitive environment, loans are available at much lower cost. 
However, no way I mean that one should take a loan without any rhyme or reason. The way investment has a purpose, loan should be taken 1. If it is absolutely neccesary 2. You have enough money to pay and just want to ease the cash crunch. Lending beyond repayment capacity will create huge trouble.
The way investing early is applauded because of power of compounding, for loans it is exactly opposite, we may call ot as “peril of compounding”. If one misses out loan repayment instalments, the interest would be added to the outstanding amount and the interest will be calculated on the whole outstanding ruther than the principal in the next instalment onwards.
Given all the facts, India is waking upto the reality of modern financial system of the world, and doors have opened for new age loan products especially in the personal loan space like peer to peer lending, short term small loans lending, credit line addition to our ever evil Credit Cards. Thanks to prudent approach of RBI and CIBIL history, loan industry is well regulated. In all likelyhood, loans will be mire accepted product and will be used very responsibly by us

Financial Inclusion – A Mission and A Revolution!



The term ‘financial inclusion’ reminds me of the first ethos of democracy that is ‘equality’, equal treatment, equal opportunity and equal availability of resources. It simply means providing financial services at a minimum cost to sections of underprivileged and low-income segments of society, making all individual contributing to the economic growth.

If we go by research reports, India stood in the bottom few countries in financial inclusion until 2011, which caused financial disparity and uneven growth, a major setback for the developing nation. However, the recent multi-layered approach towards financial inclusion indicates a strong step towards eliminating this socio-economic hindrance. According to World Bank data, around 2 billion people in the world don’t use or have access to formal financial service and about 50% of the poorest households are unbanked. The experts believe, the inclusion of these unbanked population would reduce the economic inequality, World Bank aims to complete Universal Financial Access (UFA) by 2020.

The India Scene: Though the term was coined in the year 1994, the history of financial inclusion goes back to the pre-independence era of the first foundation of the modern banks. As time rolled, India, a new democracy did its own bit to include the poor and deprived population to include in the financial system. However, the history of banking in India had its image deep-rooted in Indians as ‘for rich and wealthy’, which restrained the poverty-stricken less privileged to knock the door of banks. They kept relying on unorganised money-lenders who preyed on the poor. Few major steps in this era included nationalising the banks between 1969-1980. It was only the first step towards a long marathon. This era also built the foundation of RRBs (Regional Rural Banks), formed to serve the large unbanked population of rural areas and promoting financial inclusion. 

The year 1991 marked the new wave of liberalisation reforms in trade and economic policies in India, which also brought the private banks into existence. The process of opening branches in rural India, however, remained slow. 

Real Growth: For long, banks ignored the remote and rural areas of India to focus on their profit and keeping their costs in check. RBI played a catalyst in the modern reform by permitting banks to engage business facilitators (BFs) and BCs as intermediaries for providing financial and banking services, also known as Bank Mitra. To further penetrate rural India, RBI simplified branch authorisation in December 2009, allowing domestic scheduled commercial banks to freely open branches in tier III to tier VI towns and villages with a population of less than 50,000 under general permission.

In the last decade, India has witnessed a paradigm shift in the approach of financial inclusion, from a social responsibility it has turned into a full-fledged ‘mission’. The true essence of financial inclusion is reflected in the series of initiatives under the leadership of PM Narendra Modi. Keeping up with the demand of millennial generation and new economic environment, financial inclusion is now not limited to opening bank branches in rural areas and frill-free bank accounts. There have been multiple action parallely undertaken like a revolution to reach the goal. Besides direct approach, the government also facilitating other institutions in their efforts and keeping up with the need of modern financial reforms. 

Year 2011 onwards
The series of new initiatives are compelling the unbanked population to open a bank account and link it to Aadhaar and PAN to receive government subsidies and other assistance. It is not a one-time approach, but the persistent effort can be seen through action at multiple levels attacking the root cause.

During the period 2011 – 2015, the unbanked population of India halved from 57.7 crores to 23.3 crores, as reported in a PwC research. PradhanMantri Jan DhanYojna (PMJDY) and demonisation drive together mobilised about 26 crores of unbanked population to the formal financial ambit further lowering the number.

With PMGDY, the government also introduced term insurance policy for all, Pradhan MantriJeevan Jyoti Yojana (Rs. Two lakh sum assured for An annual premium of Rs. 330) and health insurance scheme Pradhan Mantri Suraksha Bima Yojana (Rs. Two lakh sum insured for a premium of Rs. 12). The Adhaar linked accounts now can also be used for UPI with a smart phone or even feature phones (mobile wallet). To encourage the unbanked population, the consistent efforts are made through the demonetisation drive, direct subsidies and now monetary assistance for pregnant women in the underserved population amongst other. The regulations in microfinance business over last decade have made financial services affordable for the poor. The introduction of payment banks and small banks only ensures a better reach to the rural and remote areas without proper infrastructure facility.

A recent research report by BCG mentioned India to be making the fastest progress in the financial inclusion drive. Including digital mode of banking in the base level is expected to further strengthen the movement as the number of mobile users exceeds the bank account holders with a high margin. Given the infrastructure and resource constraints, digitisation drive will make rural banking viable and efficient.

Communication: The recent moves of PMJDY account and demonetisation was well covered by all media outlets and PM intelligently used media for the benefit of the nation especially with his ‘Mann ki Baat’ on radio and announcements on national TV Doordarshan. Going further, communication will play an important role. Experts will agree, India, the country with the world’s second largest population is known for its diverse culture and socio-economic system. As the focus is to reach the rural and remote areas and include them in the financial system, the communication tool and strategy need to merge with the local flavour while keeping the key message intact. The localisation of communication strategy efforts will further improve the trust of the rural to only open but transact and maintain their bank accounts for their own benefits.

If we think logically, the common mass media used for the tier-I cities would be quite irrelevant for the tier-II and below, however widely it can report the issue. For an effective communication programme, three major aspects would be: 1. Targeting right Influencer group 2.Choosing the right platform/ tool and 3. Designing the key message.

Choosing the right Influencer group will be as important as the messaging. The village communities are largely influenced by their Panchayat, school going or educated children, teachers, doctors, postmen and local heroes. The benefits of bank account and choosing formal financial products can be promoted in platforms like local events through plays, sponsorship programs of self-help groups, training children in the government schools, training volunteers to spread the message in the community etc. Sharing a digital demo should be an important element of the campaign. The content of the messaging should be touching the right cords of the rural population.
An informed society makes a better decision. So, educating them in the right direction is also a core responsibility of powers that be, apart from providing mere services. 

Create wealth with conviction and planning, guess work only lead to fear and greed

It is a general and well accepted belief that now(early) is the best time to invest, equity is the best investment vehicle and S-I-P in #Mutual Fund is the best discipline for  the investors. But, there is more to it. Factor which is important element of investment  or financial planning for that matter is the mindset of the investor. Fear factor and lack of planning can lead to massive mismanagement and wealth erosion. The factors including emotion and goal setting are important to make a risk proof investment portfolio. In the next two paragraph I intend to elaborate on the same.  

Detach yourself from emotions like ‘Fear’ and ‘Greed’

RISK remains a common constant factor in every sphere of our lives, so is investments. We do not stop boarding flights after hearing many hijacks, neither we stop traveling by train when we hear about train accidents, nor even we stop praying to rain god despite suffering floods year after year in various part of the country.
Life gives us choices, and we hope for everything to be in a particular fashion to enjoy life to the fullest,  so does investments, with which we create our estate, wealth pool, our pride. Often we talk about risk profile of investor and planning investment accordingly. So, what defines the risk profile of an investor? – It is his age, health, responsibilities and timelines. Similarly investments too come with various risk factors. And, NO investment is risk free, not fixed deposits, gold, land, equity, commodity, dollar or anything. 
Every investment has its own share of risks and rewards associated with it. For example, we can have a fixed and assured appreciation on our wealth in a short span of time through fixed deposits, company deposits, for long term it may not be able to give inflation adjusted returns and the sum my look tiny compared to the needs of future. In similar fashion, it is not mindful to invest in equity/ related instrument for an year if you already have a set deadline and amount requirement, market may just crash and your investment may show an enormous negative return. So, choosing an instrument should depend on the requirement and timeline. FEAR is only when the expectations areunrealistic. 
But still, we invest and grow. And we like to grow despite all risk factors. Rather than focussing on the risks, a smart investor looks at the possible risk mitigation tool, a plan which helps distribution in asset classes, setting measurable goals and simple execution.  

Why do we create Wealth – Set measurable Goals

Wealth creation is a function of setting goals and plan a disciplined action. We need wealth, but without a purpose wealth cannot be enjoyed. We need wealth for certain purposes, namely post retirement life, vacations, medical emergencies, child education, buying Home etc. There are numerous dreams human have, for a few, we can plan our investments. Planning can include simple S.M.A.R.T formula.
S  – SPECIFIC– To attain something we need to have a specific desire, namely buying  car/ Europe vacation/ education/sabbatical
M – MEASURABLE – Clarity on the expectation and exact outcome. If we know the price of the car is 4 times our monthly salary, we need to know in how many months you will be able to save the amount, or if you will take it on loan, how many EMIs you can finish your loan comfortably without stretching limits.

A-ATTAINABLE –  We can dream of moon, but we need a NASA rocket for that. We need to be able pool in the investment within the current inflow

R- REALISTIC – Expectation of returns should be realistic. If you are investing in fixed income product, you need to know, that the income will be on single digit percentage point and equity will be volatile.


T- TIMELY – Goal need to have a timeline. If your child is 5 year old, it is likely he will go for higher studies in 15 years time, so the investment plan need to pan out in a manner that you have your kitty ready to go within that time period.    
Happy Investing!

SREI Infra NCD issue – Good buy for investors with moderate risk and lower tax bracket

#SREI Infra Finance issue of secured NCD of Rs. 250 Crore with an option of retaining upto Rs. 1000 Cr.  to be launched on Sep 7, closing on sep 29, 2016.  
About the company – #SREI Infrastructure Finance Ltd, is a RBI registered non-deposit taking NBFC. Classified as an “Infrastructure Finance Company” in the year 2011 by RBI. The company was originally incorporated in New Delhi on March 29, 1985 by the name Shri Radha Krishna Export Industries Limited with the Registrar of Companies, Delhi & Haryana, in accordance with the Companies Act 1956 as a Public Limited Company, to undertake lease and hire purchase financing, bill discounting and manufacture and export of certain goods. Company’s name was changed to Srei International Limited on May 29, 1992 and further changed to Srei International Finance Limited with effect from April 12, 1994. The name of the Company was further changed from Srei International Finance Limited to its existing name Srei Infrastructure Finance Limited on August 31, 2004. Company is registered as a Non-Banking Financial Company within the meaning of the Reserve Bank of India Act, 1934.
About the issue
From liquidity crunch to overflow, the market has seen a major shift of sentiment in past 6 months. The equity IPOs to Bond issues investors are lapping it up all.
After an overwhelming response of two tranches of DHFL Secured NCD issues, SREI is next on the block. SREI’s base issue at Rs. 250 crore, may retain up to 1000 crore with green-shoe option
Features in details –
Issue open and close – Opens on 7th September 2016, closes on 28th September 2016, however, the allotment is on first cum first served basis and the company may close issue on oversubscription within a day or two as well.
The NCD Bond – SREI is offering NCDs which are backed by security/assets. Hencce, the capital investment is secured by SREI, incase of non-payment/ non-liquidity invesors has the right on liquidating the secured asset to recover the cost.
Tenor – 400 days, 3 years and 5 years
Annual yield – Upto 10%, depending on tenor and interest payout option
Face value – Rs. 1000/ unit
Minimum and maximum investment –  The minimum application amount is Rs. 10,000 collectively across all options on NCDs and in multiples of One (1) NCD after the minimum application.
Categories of Invstors and allotment ratio – 
Category I – Rs. 200 crore
Category II – Rs. 200 crore
Category III – Individual & HUF Investors – Rs. 600 crore
NRIs, QFIs and foreign nationals cannot invest in this issue.
                                               
Credit Rating – SREI has received an AA+ from BWR, which s second highest rating after AAA, making it a safe investment option. This issue has received one notch better than last Secured NCD issue of last year which was at  AA.
Format  – Investors can hold both in physical or demat format, demat is not mandatory.
Listing – will be listed on both exchanges – BSE and NSE
Trading – Allowed from the first day, no lock-in period
Taxation – Though the dematerialised NCDs don’t attract TDS, the investment will taxed at short term (less than a year) and long term (debt investment more than a year are taxed at 10%) depending on the holding period. The interest will be taxed as per the tax bracket of the investor.
Series
I**
II#
III***
IV**
V#
VI
VII**
Frequency of Interest Payment
Cumulative
Monthly
Annual
Cumulative
Monthly
Annual
Cumulative
Minimum Application
Rs. 10000 (10 NCDs)
Face Value/ issue price
Rs. 1000/-
In multiples of
1000 (1NCD)
1000 (1NCD)
1000 (1NCD)
1000 (1NCD)
1000 (1NCD)
1000 (1NCD)
1000 (1NCD)
Tenor
400 days
3years
5 years
Coupon per annum
NA
9.35%
9.75%
NA
9.6%
10%
NA
Effective Yield (per annum) for Category I, Category II & Category III Investor(s)
9.08%
9.76%
9.82%
9.75%
10.02%
10.04
10.00%
Mode of Interest Payment
Multiple mode
Amount (` / NCD) on Maturity for Category I, Category II & Category III Investor(s) **
Rs. 1100
Rs. 1000
Rs. 1000
Rs. 1322
Rs. 1000
Rs. 1000
Rs. 1611
                                                             
Application Form for SREI Infra NCDs – Click here
Financial Health of the company – Annual Results Consolidated Figures in Rs. Crores / View Standalone
Mar-13
Mar-14
Mar-15
Mar-16
TTM
Sales
3,188.74
3,235.17
3,339.32
3,234.14
3543.88
Expenses
518.89
521.11
696.54
629.96
945.64
Operating Profit
2,669.85
2,714.06
2,642.78
2,604.18
2598.24
OPM
83.73
83.89
79.14
80.52
74.7
Other Income
25.8
25.19
21.24
27.8
49.29
Interest
2,139.25
2,350.28
2,274.15
2,310.75
2278.94
Depreciation
193.62
163.35
201.43
215.29
225.66
Profit before tax
362.78
225.62
188.44
105.94
142.93
Tax
102.71
88.11
67.04
44.41
51.31
Net Profit
263.18
138.51
129.11
72.52
100.77
EPS (unadj)
5.14
2.67
2.46
1.34
Dividend Payout
15.88
18.18
19.49
34.69
Compounded Sales Growth:
Compounded Profit Growth:
10 Years:
25.49%
10 Years:
-2.15%
5 Years:
14.66%
5 Years:
-17.86%
3 Years:
0.47%
3 Years:
-36.30%
TTM:
10.78%
TTM:
13.93%
*data – www.screener.in
After a difficult period of three years, company has seen a upward trend in last one year. The balance sheet and P&L sheet reflects the same.
Should you invest in #SREI secured Non-Convertible Bonds? 
It is a good debt investment  option with high yield and attractive tenor spread of 400 days, 3 years and 5 years. #NCDs are being offered by reputed infra-finance company, having a minimum investment requirement of Rs. 10, 000. The NCDs are secured, backed by assets, which means incase of default/ non-payment, assets can be liquidated to repay the debts.
The #coupon rate across segment is expected to be just above 1.5- 2 % from any bank FDs at this point of time. While a bank FD is offering 7.5% interest on yearly deposit, 400 days option is giving a good 1.5% extra return. Also, after a rough patch, the financial health of the company has improved thus interest payment ability. Brickworks has given it a thumbs up by giving it notch higher Rating of AA+ in the latest issue.
A person with moderate risk profile can invest a part of fixed income portfolio in this issue. Person in lower tax bracket will get to see higher return.


Risks in this issue – 
·         NBFC Business is particularly vulnerable to volatility in interest rates
·         SREI is in infrastructure sector, which has seen lull for over five years
·         Any increase in the levels of non-performing assets in loan portfolio, for any reason whatsoever, would adversely affect the business, results of operations and financial condition   
·         SREI derive majority/substantial of our revenues from our top 20 borrowers. Inability to maintain relationship with such borrower or any default and non-payment in future or credit losses of our single borrower or group exposure where they have a substantial exposure could materially and adversely affect business, future financial performance and results of operations

Sovereign Gold Bonds or GOLD ETF. Which one is your cake?

  •      GOLD ETF thrives on high liquidity, can be converted into physical on 1 kg of gold, NRIs can invest too
  •        SGB offers interest on investment and capital gain tax exempted on redemption

Gold has been one of the oldest currency/ investment instrument world-wide. It is used widely as currency hedge, hedge against #inflation, and safe heven during various economic or political crisis. In India #Gold has a very special place. It is a popular investment choice among Indian households. However, the mode of investment is Jewellery and it is an emotional choice on rather than a well thought out investment choice, it is mostly bought as a wedding gift for the bride as “Stri Dhan” as it is referred.
There are many theories on the ideal exposure on this asset class, but no-one can deny that a portion of wealth should be kept in Gold, may vary from 10-20% of total portfolio, as its price tends to increase with the rise in the cost of living.
Jewellery, coins and bars – Asset with emotions attached
Though the asset class is important, investing in this has been a high-cost and difficult one. In Jewellery and gold bars, there many concerns like safety and storage, purity concerns and difficulty in trading. It also attract high taxation. It comes at a premium adding making charges in the range of 8 -25%, it my further vary depending on the seller.
GOLD ETF – Buy any day/ sell any day/ keep as long as you want
Last decade has seen a gradual but major shift in investors’ taste, with Mutual Fund companies offering GOLD ETFs and Gold FoF (Fund of Funds). GOLD ETFs are nothing but open-ended funds that trade on a stock exchange just like equity shares. Gold ETFs can be bought anytime like equity shares, can be bought anytime with minimum investment of 1 unit. Gold FOFs are predominantly used for SIP facility (monthly recurring investment) investing in Gold ETFs to accumulate Gold over a period of time. This is stored in dematerialised format, so no fear of theft or storage concerns. Though it comes under long term/short term taxation depending on the investment horizon, it doesn’t have any wealth tax attached. This is the most liquid form of Gold investment.  

NRIs can Invest in Gold ETF through trough exchanges with registered PINS account.
Gold Sovereign Bonds – Only form which pays interest
There is a new entrant in the market for investing in Gold, Sovereign Gold Bonds. Introduced in H2, 2015, bonds are issued by RBI in tranches on behalf of Government of India.
Sovereign Gold Bond Scheme, is an alternative instrument for holding Gold. Investors can simply apply through designated Banks/ PO/ NBFC and NSE brokers for investing in the SGB scheme in Paper/ Demat format. n a paper form through Sovereign Gold Bond Scheme. The under-lying asset for these bonds is Gold. These bonds will track the price of gold. The bonds also offer 2.75% interest income on the initial investment amount paid semi-annually to the investors. Minimum investment amount is equivalent to 1 gm of physical gold. 
The minimum tenor of the bonds are 8 years however, there is exit options  in 5th, 6th and 7thyear and it has a fixed tenor. The bonds are tradable in stock exchanges for those who holds the bonds in demat format. It doesn’t attract any capital gain taxes on redemption, however, interest pay out and early exit attract taxes as per long term/ short term gains.
Though the investment format is good, liquidity is low with exit option after 5 years with fixed tenor for maturity and the liquidity on exchange transaction remains to be seen.
So far in One year, Government of India has mobilised investment worth 2,292 crore Rs in four tranches in series I. Data shows no. of applications for the fourth tranche increased to 1.95 lakh from 62,169 in the first tranche. Despite these advantages, investors must note that liquidity in secondary market for sovereign gold bonds is yet to be seen.

The table intends to illustrate various aspects on the investment instruments.


Investing in corporate bonds – A good debt investment option available for Indian investors

Debt Secondary market remains an unexplored category for Indian investors, though it is very popular globally. This post attempts to highlight few basics about bond investments
Fixed income like #Bonds, #NCDs remains least talked about subject, amongst the indian individual investors. Investors can invest in the primary market and stay put till maturity, as well as trade like equity/ shares. Infact, news reports indicates, bonds have yielded higher return compare to #Nifty or sensex in last one year.  There are two types of bonds traded in the debt market, Government securities (G-sec) and corporate bonds (Tax free bonds, NCD etc). G-Sec are considered to be the safest option with maturity ranging from 91 days (ultra short term) to 30 years (long term).
Corporate bonds are issued by banks, NBFC and corporates involve higher risks compared to G-secs, however they offer higher return comparatively.
When we talk about debt instruments (bonds, NCDs, CDs etc.) we come across terms like coupon rate, annual yield, yield to maturity etc. Let’s understand what is yield and how it is related to coupon rate and bond prices. Yield is annual return on the investment indicating in percentage term.

Analysing Bond investments in two scenarios – 1. Primary market 2. Secondary market. 

Primary market clearly defines that investors enter when the issue opens by the corporate.
For Example – In Primary market, a bond issued with face value – 100, Coupon rate 10%, minimum investment of 10 bonds, chosing annual payout option, Tenor 10 Years . Here the market value of the bonds will remain at Rs. 100 till the maturity. The yield to maturity(YTM) will be 10% = coupon rate since market value is the same as face value. Final payout will be bond price + interest accrued.

Secondary market –  Apart from the new bond issues, there are existing bonds in the market with higher yield, which investors can look at, but one need to understand that the two markets work differently and yield may vary significantly.The secondary market signifies trading in the already listed bonds.
Yield to maturity for secondary market investors – Case 1 – Bond traded at discount
Once the bond is listed on the exchanges, the bond prices fluctuate depending on the asking prices and volumes on the said trading day. The asking price of a bond move based on demand, supply and interest rate cycle. However, future payouts are pre-determined. Suppose, a bond is issued at a face value of Rs.100/-, with a coupon rate of 10% yearly, somebody invests Rs. 10,000 in the issue, the yearly interest payout remains at Rs. 1000 for the rest of the tenure. Incase, the bond prices fall to Rs. 90, still the coupon payout will be Rs. 10. So, now the same bond will be available at 9000 Rs. And, will still be able to fetch annual return of Rs. 1000, as the coupon payments on the bonds remain the same, so the annual return (or annual yield) is 11.1%.
In this scenario, the current bond price<issue price. Hence, it can be called as “discount”. One, who is investing in this situation, will get higher coupon pay out, i.e. higher yield. It may happen in the higher interest rate cycle, (the interest rate moves upward).   

Yield to maturity for secondary market investors – Case 2 – Bond traded at premium
In exactly opposite scenario, if the interest rates fall post the bond issue, the interest of the buyers increases the exiting bonds available in the secondary market, as they offer higher coupon rate, however, the buyer may need to pay premium as the askprice of the existing bonds with higher coupon rate move upwards due to increased demand. Now, if the bond price increases to Rs. 110, for 10,000 investment, coupon payout remains at 1000, and on the current NAV, the value of the investment will be 100*110 = 11000. This is a win-win situation for the primary market investor. However, in the secondary market, the coupon pay-out remains at Rs. 1000, against the bond price of Rs. 110. Hence the new investor is getting 9.09% interest pay-out, lesser than the coupon offered in the issue. If current bond price> issue price, it is said the bonds are sold at premium
Incase, there is no change in the ask price than the issue price, it is known as at par value(face value).

In the secondary market, yield-to-maturity includes coupon payment and the additional gain (bought at discount) or loss (if bought at a premium).

The points to be noted –
1. During the rising interest rate environment, investors can take advantage of the discount on the bond price, and enjoy the high yield as the coupon payout (interest payment) remains the same on lower cost of investment.
2. During the falling interest rate regime, the early investors can look at entering existing bonds with high yield option to capture a good yield, it may attract premium.
3. The liquidity in the instrument in the secondary market plays an important role. Size of the issue, investor interest, maturity date etc plays important role in the volumes. If the volumes are not adequate, one may need to wait or pay a premium.   
4. In secondary market, the bonds carry risks on interest rate,liquidity, credit and market risks
For trading in bond market you need to have a demat account. Please contact your share broker.  
You may check Investing answers YTM calculator to find approximate yield to maturity when you buy on secondary market.

DHFL NCDs issue – should or shouldn’t buy – NCD review

View: Neutral NCD issue review
DHFL NCD Issue opens on Aug 3, 2016, closes on August 16, 2016
Should or should not buy? What to look at? Is it safe? Will it give high returns? What are the risk involved?
About the company – #DHFL, is a deposit-taking housing finance company registered with the NHB and focused on providing financing products for the #LMI (Lower Middle Income) segment in India primarily in Tier II and Tier III cities and towns since 1984. They are known for providing secured finance primarily to individuals, partnership firms and companies for the purchase, self-construction, improvement and extension of homes, new and resalable flats, commercial properties and land. They also provide certain categories of non-housing loans including loans for commercial property, medical equipment, and for plant and machinery.

About the issue

DHFL, NCD issue opens on August 3, 2016, a public issue of secured redeemable #Non-Convertible Debentures (“NCD”) of face value of Rs. 1,000 each aggregating up to Rs. 4,000 crore. The Issue is scheduled to close on August 16, 2016, with an option of early closure or extension as decided by the Board of Directors of our Company (“Board”) or the Finance Committee.

The NCDs received the highest credit rating ‘CARE AAA (Triple A)’ by Credit Analysis and Research Limited (“CARE”) BWR AAA (Pronounced as BWR Triple A) by Brickwork Ratings India Private Limited (“Brickwork”). The rating of CARE AAA by CARE and BWR AAA, Outlook: Stable by Brickwork indicates that instruments with this rating are considered to have the highest degree of safety regarding timely servicing of financial obligations signifying the instrument carries lowest credit risk.
·         The minimum application amount is Rs. 10,000 collectively across all options on NCDs and in multiples of One (1) NCD after the minimum application. Maximum limit of a retail investor is Rs. 10 lakh.
·         Allotment is on a first-come-first-serve basis (except on the date of oversubscription, if any, when all the investors applying on the said date will get allotment on a proportionate basis).
·         Investors have an option to apply for NCDs in dematerialized as well as physical form
·         Category IV Investors (Retail Individual Investors) are defined as Resident Indian individuals and HUFs allowing investment upto 10 lakh
·         Investors can apply through ASBA, the NCDs are available both in physical and Demat format
Issue Structure
The issue is divided into 10 series depending on the tenure of the series and coupon payment. And divided into 4 categories – category I, II, III, IV.
  •  Interest on Application Money is at 8.00% p.a. and Interest on Refunded Money is at 6.00% p.a
  • Tenure of the NCDs are 3, 5 and 10
  • Coupon payment options – monthly, quarterly and annually
  • The interest payout metho includes NEFT, RTGS, Direct debit
  • Floor rate on interest rate for all categories is 8.90% and cap on interest rate for all categories is 9.50%.
  • Series X is a Consumer Price Index (CPI) linked instrument (Floating Rate Instrument) has a tenor of 3 years and the Coupon Rate for Category I & II investors is currently 9.10% (Reference CPI + 4.08%); and that for Category III and Category IV investors is currently 9.20% (Reference CPI + 4.18%). 12 month average for the period before the record date (currently at 5.02%; Source http://mospi.nic.in.  

Allotment is first come first served basis
Issue size and allocation
QIB: Rs. 800 Crore
Corp: Rs. Rs. 800 Crore
HNI: Rs. 1200 crore
Individual: 1200 crore
Total : 4000 crore
Interest rate:
For individuals
9.20% p.a for 3 years
9.25% p.a for 5 years
9.30% p.a for 10 years
For Non-individual
9.10% p.a for 3 years
9.10% p.a for 5 years
9.10% p.a for 10 years
#NRI investors cannot invest in this issue
My Take – #NCDs are being offered by reputed housing finance player, having a minimum investment requirement of Rs. 10, 000. The NCDs are secured, backed by assets, which means incase of default/ non-payment, assets can be liquidated to repay the debts. Credit rating agencies CARE and BWR has awarded highest credit ratings, suggesting lowest risk involved.  So, safety score is high for the principle amount.
Now let us look at the interest rate and coupon payment scenario. The #coupon rate across segment is expected to be just above 1.5- 2 % from any bank FDs at this point of time. Though the dematerialised NCDs don’t attract TDS, the investment will taxed at short term (less than a year) and long term (debt investment more than a year are taxed at 10%) depending on the holding period. The interest will be taxed as per the tax bracket of the investor. So, with a high tax bracket investor (20-30%) won’t be benefited much, as the return will be almost similar to Bank FDs.
However, interest rate movement can be a game changer in this investment. Apart from the coupon payment, capital appreciation on principal is possible incase interest rates soften during the tenure of the NCDs. The interest rate and bond prices move in opposite direction and one can sell it at a profit, instead of holding on till maturity. The scenario exactly can become opposite in case of rising interest environment, the prices of the instrument may fall sometimes even below the face value in some rare cases. For the investors in lower tax bracket, instrument offers higher interest rate than bank with minimum risk, may also enjoy capital appreciation incase interest rates fall.

General Risks –
  •         #DHFL’s Business is particularly vulnerable to volatility in interest rates
  •     Any increase in the levels of non-performing assets in loan portfolio, for any reason whatsoever, would adversely affect the business, results of operations and financial condition
  •     Any downgrade in their credit ratings may increase interest rates for refinancing their outstanding debt, which would increase their financing costs, and adversely affect our future issuances of debt and our ability to borrow on a competitive basis.


What is NCD and what makes it so attractive as an investment instrument

What is NCD and what makes it so attractive

NCD is a fixed income instrument Apart from taking bank loans Corporates, NBFCs raise money through issuing debentures. It is a financial instrument issued by corporates to support their business needs. There are two type of debentures, convertible debentures and non-convertible debenture. Convertible debentures are unsecured bonds and can be converted into equities or stocks at a future date as specified by the issuer.

NCD is financial instrument used for taking loan from the financial market. It cannot be converted into equity shares of the issuer in a future date, hence it offers higher interest rate. The NCD offers atleast 1.5 – 2% higher interest than any fixed deposit by a reputed bank and company deposits. NCDs come in both secured and unsecure form, secured #NCDs are backed by assets. Unsecured NCDs entails higher risk.

Added Edge
1. What makes it more attractive is, in the falling interest regime, the bond prices may surge, hence the value of the funds.
2. No TDS deducted on the demat form of investment (physical form does)

Points for the new investors
1. Once you come to know about a new NCD offer, check with your stock broker for online application.
2. Like any other IPO, it has a NCD comes with opening and closing dates
3. NCD offers coupon rate. Coupon rate is the interest rate paid on a bond by its issuer for the term of the security. For example, if a NCD issue comes with a face value of Rs. 100 and coupon rate 10%, the interest earned will be Rs. 10 per annum. However, in the tenure if the NAV price falls or surge, it will have no impact on the interest pay out, it will continue as Rs. 10 per year throughout the tenure. Hence, coupon rate is fixed on the offer price and continue through maturity 
4. Check for the credit rating allotted by #ICRA, #CRISIL, #CARE (triple A rating Suggest good financial health of the issuer, double A may give higher coupon rate, triple A ensures safety of your capital)
5. NCDs are also traded on stock exchanges. Apart from the new offers, investors can also buy exiting NCDs through stock exchanges, however, one need to be double careful and seek guidance from financial planner.  
6. Interests are generally paid through direct credit, RTGS, ECS and NEFT mode. It may offer monthly/ quarterly/ annually/ cumulative options.
7. Tax – The investment is taxed at short term (less than a year) and long term (debt investment more than a year are taxed at 10%) depending on the holding period. The interest will be taxed as per the tax bracket of the investor.
8. This is as liquid as a bank fixed deposit. However, there is no penalty fee for pre-mature withdrawal of this investment
9. Additional Features – Some NCD public issues offer special rate of interest to Senior citizens or to shareholder.

Pros

1. It’s #liquidity is as good as any fixed deposit in bank, which has a specific tenure but can be withdrawn any time. However, FD may charge a penalty fee on interest accrued.. but incase of NCD, there is no penalty.
2. If it is compared with company fixed deposit, company deposits (a popular instrument in the senior citizen segment with 0.25- 0.50% extra interest)comes with various conditions for pre-mature withdrawal, for eg – lock-in periods, penalties etc.
3. NCDs come with Rating from #ICRA #CRISIL #IndiaRatings #CARE which gives a clarity to the investor on the risk involved, higher the rating, lower is the risk (AAA being the highest category, followed by AA, A, A-, BBB and so on)
4. Incase of bankruptcy, NCD holders get preference over shareholders

Cons
1. Incase interest rate increase, the value of the NCD may fall, sometimes even below the Face Value.

2. Though, the instrument can be traded on the exchanges, one may not find a buyer for NCDs if the trade volumes on bourses are low.

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