Niveshak August-September 2021 Issue

FINANCE & INVESTMENT CLUB

NIVESHAK

COVER STORY

FINVIEW

KNOW YOUR SECTOR

Evergrande Crisis: An Avalanche for Chinese Economy

Mr. Deepak Sharma, President & Chief Digital Officer, Kotak Mahindra Bank

FinTech: Democratizing Finance with Technology

ISSUE I • VOLUME XV • AUG-SEP'2021

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E D I T O R ' S N O T E QUI N'AVANCE PAS RECULE

Dear Niveshaks, We are delighted to present to you the August-September edition of Niveshak. This edition is special as the imposition of the COVID-19 lockdown protocols in India has completed ~1.5 years. India has learned many things from digitalizing education to reviving its economy and adopting the path of digitization across sectors.

This Niveshak starts from the month of August in which India’s stand for UNSC presidency is being discussed as India is looking forward to becoming a permanent member.

The automobile sector has witnessed huge activity in terms of Ford exiting the Indian market.

The telecommunication sector experienced a sigh of relief with the Indian Government finally announcing a rescue package for the troubled players. That said, major consolidation activity took place during this FY Q2 2022.

TEAM NIVESHAK

Aagam Parikh

Aayush Jain

Akriti K.

Akshat Sharma

Darshan K.

Nikhil Chadha

Shashwati A.

Shreyansh D.

Unnati Tanwar

Aritro Dutta

Arushi Mathran

Hardik Goyal

Manish Kumar

Nihar Mehta

Pratyush Kumar

Rakesh M K

1 | EDITOR'S NOTE

Sandhaan G.

Vasundhra Misra

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The magazine especially covers China's Evergrande 'economic catastrophe' which has triggered a regulatory crackdown on the country’s real estate sector.

There are even concerns that it could potentially spiral into a global financial contagion. We've covered the success, the debacle, and the way forward from here on this burning issue.

Finally, test your finance, economics, and market awareness with this edition's newly designed crossword for you. Don't have a physical copy? Don't worry, scan the QR code and 'Go Digital'!

In the Finview section, we bring you the insights of Mr. Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank, who shares his views on FinTech, India's payment infrastructure, adoption of Blockchain technology within the banking system, and much more.

We hope you derive something from this edition and that you stay safe and sound in these exciting times!

We would love to hear your thoughts, feedback, and ideas.

Please feel free to reach out to us, to let us know what you think!

Stay Invested, Team Niveshak

Know Your Sector of this edition talks about the much-anticipated FinTech sector, its revenue model, key evaluation metrics and the challenges faced by this sector apart from the 'must know' things about the industry.

It being the 'time of deals,' we have incorporated a new section, 'Deals Brewery', covering deep insights into the famed Byju's acquiring Tynker for $200M in a US expansion push.

'Something Ventured, Something Offered' of this edition covers the latest funding received by CoinDCX - the first Indian crypto startup to reach the 'unicorn' status, it being the 21st of this year.

All images, design, and artwork are copyright of IIM Shillong Finance Club © Finance Club Indian Institute of Management, Shillong

Disclaimer: The views presented are the opinion/work of the individual author and the Finance Club of IIM Shillong bears no responsibility whatsoever.

EDITOR'S NOTE | 2

CONTENTS Cover Story Niveshak Investment Fund Monthly performance of NIF

Evergrande Crisis: Rise & Fall

9-12

FinTech: Fina

17-

7-8

5-6

Groundbreaking news for the months

The Month That Was

Know Se

13-16

Views of Mr. Deepak Sharma

FinView

w Your ector

Future of ance

Deals Brewery Byju's acquisition spree continues

19-20

-18

Something New, Something Offered CoinDCX: India's first crypto unicorn

23

24

An enthralling Fin Crossword

Let's Fin Up! 21-22

Find out why Mutual Funds sahi hai!

FinSupervise

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T H E M O N T H T H A T W A S THE FINANCE BULLETIN

Government announces telecom rescue package The Indian Government finally announced a rescue package for the troubled telecom industry. A four-year moratorium has been approved on dues of telecom service providers (TSPs). There is also a provision through which the companies can offer equity for the amount owed to the Government.

A critical decision, the definition of Adjusted Gross Revenue (AGR) has been changed to exclude nontelecom revenue. The Centre has also announced 100% foreign direct investment (FDI) in the telecom sector through automatic route from the previous limit of 49%. The spectrum tenure will also be hiked to 30 years from the previous limit of 20 years.

operations in the country, stating that their decision was reinforced by years of accumulated losses, persistent industry overcapacity, and lack of expected growth in India’s car market.

ZEE-Sony merger ZEE Entertainment announced a surprise merger deal with Sony Pictures Network India (SPN). It will create India’s second-largest entertainment network by revenue if the deal goes through. Under the terms of the nonbinding agreement, SPN will infuse growth capital of $1.575B and end up with a 52.93% stake in the merged entity, while ZEE shareholders will own the remaining 47.07%. The merger proposes that Mr Punit Goenka stays as MD and CEO of the newly merged entity also.

Ford Motor Company to exit India

FM Announces National Monetization Plan

Ford Motors announced that they would be shutting down their Indian manufacturing plants, which would mark the end of their

The Government unveiled a 4-year National Monetisation Pipeline (NMP) worth an estimated ₹6 lakh crore. It aims to involve the private

5 | THE MONTH THAT WAS

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private sector to harness the value of brownfield projects by transferring to them revenue rights but not ownership in the projects. This is referred to as Asset Monetization and the funds thus generated are utilized for infrastructure creation.

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surge in their price and huge losses for traders whose payments may be blocked.

Sri Lanka declares Economic Emergency

The government has taken a step in building an investor-friendly nation by passing the bill which seeks to modify the Income Tax Act so that no tax demand would be issued in the future based on the retrospective change for any indirect transfer of Indian assets made before May 28, 2012. This policy is expected to boost foreign investments and impact cases of two big companies, Vodafone Group and Cairn Energy, which have won the international arbitrations against levy of retrospective taxes on them.

Sri Lankan government announced an economic emergency to contain food prices amidst the country’s FOREX crisis which saw foreign reserves dropping to a meagre $2.8B in July this year. The value of the Sri Lankan rupee has fallen 7.50% against the US dollar this year. The country is seeing a wave of COVID-19 cases which have hit the tourism industry, a significant earner of foreign reserves for the island nation.

Moreover, the government's decision to shift entirely to organic farming has further fueled the crisis by dampening agricultural production. These events led to soaring inflation of food prices as Sri Lanka relies heavily on imports to meet its food demand.

Taliban takes over Afghanistan

HDFC Bank - Paytm tie up for payments

Taliban finally captured the Afghan capital city of Kabul. The President, Ashraf Ghani fled the country fearing safety.

The Taliban halted the movement of cargo between India and Afghanistan, directly affecting the long-standing bilateral trade relationship between the two countries which stood at $1.4 billion for FY21.

With India importing 85% dry fruits from Afghanistan, it could lead to a surge

HDFC Bank and fintech giant, Paytm announced a strategic partnership with the aim to deliver innovative payments and lending solutions across India. The two firms will launch innovative products and Point of Sale (POS) solutions in the retail segment while leveraging their respective network of consumers and merchants to fast-track the penetration of digital payments in semi-urban and rural areas.

Retrospective tax law scrapped

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N I V E S H A K I N V E S T M E N T F U N D PERFORMANCE EVALUATION

NIF SINCE INCEPTION

Sensex Scaled Value

Portfolio Scaled Value

Return measures Total investment value: ₹10,00,000 Current portfolio value: ₹29,25,836 Change in portfolio value: 6.59 % Change in Sensex: 3.12 %

NIF SEPTEMBER PERFORMANCE

Sensex Scaled Value

Portfolio Scaled Value

Risk measures Standard Deviation NIF: 39.91% Standard Deviation Sensex: 36.05 Sharpe ratio: 5.29 (Sensex: 5.23) Cash remaining: ₹1,84,140

Comment on equity markets & NIF performance The equity market saw weakness during last week of the month owing to the combined effect of the Evergrande crisis, US inflation & the possibility of RBI hiking the reverse repo rate in Oct'21.

The performance of the market was much broad-based with mid-caps and small-caps bouncing back to give positive returns. The benchmark index scaled above 60,000 during the month, covering last 5,000 points in just 28 trading sessions.

NIF saw a portfolio change of 6.59% (Sensex: 3.12%) and stood at a net value of ₹29,25,836

7 | NIF

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INDIVIDUAL STOCK WEIGHTS & MONTHLY PERFORMANCE Portfolio Weight

Performance

TOP GAINERS - SEPTEMBER 21

47.87%

- Tirumalai Chemicals

33.63%

- Nelco

19.71%

- PVR

TOP LOSERS - SEPTEMBER 21

(6.19)%

- Godrej Consumers

(5.88)%

- Asian Garnito

(5.58)%

- Bharat Forge

NIF SECTORAL WEIGHTS

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C O V E R S T O R Y EVERGRANDE CRISIS: TOO GRANDE TO FALL?

Evergrande - The Success Story After three decades of statecontrolled saddled economic growth and mass poverty, the Chinese Communist Party, under the leadership of Deng Xiaoping, decided to change the fate of Chinese people by opening up the economy for private businesses and the outside world.

The following years witnessed blooming private economic activity and a massive inflow of foreign capital, owing to the country's cheap and abundant human resources. Soon China was on its way to becoming the world's factory.

Consequently, millions of Chinese people started moving towards urban centers to be a part of this unprecedented economic odyssey, which naturally served as the inflection point in the Chinese real estate sector.

It proliferated rapidly due to the invigorated demand for urbanization. Amidst

9 | COVER STORY

this great leap, the Evergrande group was founded by a seasoned industry professional, Xu Jiayin.

Under Hui, the company primarily focused on building high-rise apartments by virtue of the availability of low-cost loans and pre-sales cash received from buyers who would purchase the properties before they were built.

Evergrande was raking in hundreds of millions of dollars a year in revenue when it went public in 2009 on the Hongkong Stock Exchange. By 2020, real estate sector contributed to over onefourth of the GDP of China, and Evergrande was the secondlargest real estate developer and hauling in $76B a year in revenue and $18B in gross profit.

Currently, it has around 200,000 full-time employees and claims to have generated around 3.8M jobs in China. It has also ventured into other industries, viz, automobiles, wealth management, tourism, sports, and food.

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The Debacle Evergrande's business model of rapid, debt-fueled expansion during the booming years of China's urbanization made the group China's second-largest developer. However, slowdown in the property market due to the disruption caused by COVID-19 and a government campaign to halt lending to over-leveraged developers ravaged the company's operations, which has been detrimental to the group's ability to service its enormous liability of over $300B. In August 2020, the Chinese authorities implemented a "three red lines" policy, according to which a property company could not borrow new debt unless it satisfied three leverage ratios: liability to asset less than 70%, net debt to shareholders' equity less than 100%, and cash to short-term debt not less than 100%. Having failed to meet these required ratios, Evergrande cannot borrow new debt to refinance its old debt and continue normal operations.

Owing to the group's deteriorating situation, its suppliers have also disengaged from partnering further on standard credit terms.

Therefore, Evergrande has failed to finish many projects, estimated to involve 1.5M apartments units, among many others. A big part of the problem is that Evergrande's debts have relatively shorter maturities when compared to the

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operating cycle of its primary business (real estate), which does not generate cash quickly.

Ultimately, it cannot mask the mismatch between maturity rates of assets and liabilities by rolling over more debt, the way it used to before the government took these policy measures.

This liquidity crisis quickly morphed into a solvency problem as Evergrande failed to service two offshore interest payments on its bonds in September itself. To find a reprieve from the current situation, Evergrande reportedly tried to sell some of its assets (including its electric vehicles and property services units) to raise cash to meet its debt servicing obligations but failed to find buyers for its offering even at discounted prices.

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The Impact Nearly a million Chinese home buyers purchased apartments from Evergrande that the company no longer has the means to finish building.

Companies doing business with Evergrande, including construction companies, design firms, and materials suppliers whom Evergande owes enormous amounts are also at risk of incurring significant losses.

Evergrande owes money to around 171 domestic banks and 121 other financial firms. If it defaults, banks and other lenders may be forced to lend less. This could lead to what is known as a credit crunch when companies struggle to borrow money at affordable rates. A credit crunch would be terrible news for the world's second-largest economy because companies that cannot borrow find it difficult to grow. In some cases, they are even unable to continue operations.

Evergrande's meltdown may also unnerve foreign investors, seeing China as a less attractive place to put their money.

11 | COVER STORY

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All this could depress existing home prices, which could dampen Chinese consumer spending.

Chinese homeowners view properties as their most significant investment. If it grows in value, their long-term economic fortunes improve. If it shrinks, people get poor and might curtail their spending, resulting in a prolonged slowdown.

Evergrande sees improvement in net gearing; worsening in cash coverage Refernce: Company filings, Bloomberg

All said and done, experts believe Beijing is unlikely to let the Evergrande situation turn into a forest fire.

This does not necessarily mean bailing out the group, but preparation for a soft lending should Evergrande come crashing to the ground. Beijing has reportedly already asked its agencies to prepare to mitigate the social and economic impact of this meltdown swiftly. It is widely believed that Beijing has both the resources and the will to take on any potential blow that Evergrande could give.

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Learnings and the Way Forward Evergrande's crisis pierces the veil of the real estate sector in China and manifests the mayhem an unrestrained ballooning industry can create. If one single company that owes over $300 billion goes insolvent, its financial exposure to hundreds of small and big lenders, millions of investors in bonds and stocks, and lakhs of homebuyers that have in turn borrowed money from a number of banks, can well become a source of systemic risk. Another risk is the effect one large-scale real estate failure can have on the sector and the demand for metals, steel, cement, and other building materials.

The primary reason why Evergrande now finds itself incapable of servicing its $89B debt and other outstanding dues of $215B is the recent policy tightening by Beijing in order to put a leash on the overleveraged developers. Such regulations are welcome, but they need to be planned carefully, rather than being thrust suddenly upon companies to minimize the chances of the situation going away.

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Another point is that housing as a form of saving can turn out to be too much of a good thing. It is estimated that some 96% of China's urban households, forming around 60% of Chinese people, already own at least one home, yet there has been no abatement in demand for houses thus artificially pushing up the property prices.

The total value of houses and builders' inventory in China is over $50T , much more than other assets like bonds and stocks. Such concentration of savings in a single asset also makes it a potential source of systemic risk.

All these issues point out the larger issues that should engage policymakers and warrant prompt measures.

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F I N V I E W SPOTLIGHT ON SUCCESS

Mr. Deepak Sharma President & Chief Digital Officer, Kotak Mahindra Bank

You have been with Kotak for the last 13 years. How has your journey been and how has the bank adapted technologically over the years?

We got our banking license in 2003. I joined the firm in 2008.

While as an organization, Kotak has been there much before it got its banking license, it is still very young as a bank. Kotak has always had this culture of growing faster than its peers and finding new avenues of growth. I think that's where the journey of digital technology and leveraging these as tools for faster growth in terms of customer acquisition and service started for us. We had a choice to either follow the template that our predecessors had set or try and build a model that is different from the rest.

13 | FINVIEW

And we chose what we call at Kotak a 'Phy-gital' model, which is physical distribution with digital empowerment, and combining the two to create new value and that's where Kotak started to build many digital-first products.

Some of them succeeded and some didn't, but just like any start-up culture, I think learning from failure and bringing that to the forefront in the following product is what we kept doing. We launched products like '811' and forayed into the payment and lending space. Today we acquire about 75% of our customers digitally and in the last eighteen months with Covid, I think building that digital capability has helped us continue to grow.

How do you see traditional b ab n akn s kcso m p e t i n g w i t h n e w a g e , tech-savvy and agile FinTechs & NeoBanks that have enormous VC and PE money to burn?

So firstly, they are not banks.

When we call them Neobanks, it is

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an experience layer that they are building on top of a banking or a regulated entity. Banking, which is being a custodian of someone's money & managing that trust is a very serious business & that's why the regulators have stringent compliance & regulatory norms which banks have to fulfill right from capital adequacy ratio to investing in government bonds & priority sector lending to ensure that the financial inclusion agenda is met. FinTechs, on the other hand, always start with the speed of an insurgent and use this speed to bring in scale, while banks, as incumbents, have scale but lack speed. So this is a classic battle here - will the incumbents get speed before the insurgents get to scale? But apart from this, the business models are also very different & as a private limited company, your ability to take certain risks is very low versus the private equity model, which is a growth-led model with a minimal regulatory obligation. However, we also need to focus on the points of collaboration rather than just competition. Banks cannot do so much experimentation, whereas FinTechs can, and I think that is a great way to collaborate.

Banks understand the risk and compliance better, while FinTechs bring in more value around how they see business models & build the user experience. At the same time, banks have been sharpening their edge since they do not want to remain legacy players.

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India is a very attractive m am r kaer tk ef ot r F i n T e c h s a n d w e s e e a lot of unicorns being built in this area. With rising concerns about data privacy, what are some steps our country can take in order to make this entire ecosystem safer and more trustworthy?

Today more and more firms are getting access to customer transaction data, and they are not just the front-end, but also payment processors, technology service providers, aggregators, etc. who manage technology & not necessarily just the customer interface. Most of them aren't regulated under any framework whatsoever, but they do touch data. India is moving towards a Data Privacy Bill. And if you look at the bill's content, it rightly covers the rights of a user and the responsibility of a provider who is managing the service and establishes the ownership of data.

I think going forward we will see higher customer awareness as regulation comes into force. As we start seeing the availability and accessibility of data becoming vital to governance frameworks, it will bring in an increased sense of responsibility. Data localization for financial services brings control about how data is used. I think we will see a lot more happening in this space over the next 2-5 years because this field will explode. Consumers will also demand the same going forward.

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India has a very robust pm a yem pay n tesn t ss y s t e m , t h a n k s t o UPI. What are your views on leveraging this system in order to improve financial penetration within the country and do you see any specific opportunities in this area?

apply for an IPO. So I think the number of use cases is linked to imagination and the problems we can identify.

So I think UPI today has taken India to the number one digital payment provider in the world, right? I think it's a great success story coming out of India after Aadhaar, which is the largest biometric database. Many more use cases are coming because UPI makes the whole payment infrastructure democratic and transparent. Anyone can go in and plug into it after ensuring that specific governance standards are in place. So the use cases are only limited to imagination. For example, you would have read in the last few months about the eRUPI launch. e-RUPI is a purposeled payment, which is a digital currency of sorts you can create.

So while it's not a currency, it behaves like a currency that can be used for a particular purpose in many ways. Through that, we started gathering location data which was embedded in the QR code. That means data regarding where the payment is made, whether the payment is made in a financial inclusion district or a village, is available.

So the government is now able to track that. UPI has also gone global, wherein you can receive remittance through it and even

Robo advisory in India won't be a lift and shift of how we have seen it in other parts of the world because traditionally, what a Robo advisor does is portfolio allocation while rebalancing, to manage optimum return. But I think in India, you will start seeing more low-volatility funds, ETFs and index funds. Unless you can beat the benchmark through this technology, the advisory would always be questioned, so to that extent, it would still take its learning curve because the attitude or maturity towards investment is still pretty conservative in India, especially when we are talking about longterm sustainable investment. Even though we see equity markets become attractive, these avenues are not necessarily seen as longterm financial planning-based investments. People are looking at this more as a short-term kind of play.

So even though the technology is available, regulation has to evolve because Roboadvisory means that a customer is giving you power of attorney to run and rebalance their portfolio.

The most important thing is the customer attitude and preparedness towards getting

15 | FINVIEW

What scope & opportunities d o dyoo u s e e f o r R o b o A d v i s o r y i n India?

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somebody to manage their money.

I think just like in payments where we have many options, similarly, in the investment category, Robo advisors will remain one of such options, but I still do not see it becoming a pivotal option in India, at least in the short term.

What are your views on the C r yCpr tyop t o i n d u s t r y and its potential use cases in the Indian context? Do you expect positive regulations soon?

Difficult to answer. I know there are a lot of people who are interested. A lot of private capital is chasing this category and it has garnered a lot of interest from youngsters. So I would say this is a very divisive topic, depending on how different countries, different regulators are looking at it. What is the impact of this on the real economy?

What is the real prospect of long-term value creation versus the short-term bubble? It depends on whom you ask and accordingly, you will find a different answer. So, there's no one clear answer, and I think I would not like to get into this controversy because this is yet to settle down and I'm watching out as much as anybody else to see which way this moves. Between the central government and the regulators, I think one has to really look at the impact of it. How do you control it and will this become a way for people to park their black money or move money abroad in an unregulated manner versus using this as an investment versufdfdfkfmd,fdfd

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instrument or asset class. So Depending on this, there are pros and cons of both. But I think as far as Blockchain as a technology is concerned, the concept of a distributed ledger has been there for decades. I think the challenge here is that the computing power requirement is still pretty high.

Even though you are not doing crypto mining here, you still need strong computing power and the speed at which you can settle many of these transactions with the blocks you create. I think we have started to see some use cases adopted by financial service institutions, for example, Kotak Mahindra and many other banks have got together to form what we call a Blockchain Infrastructure Company (BIC). BIC is a company that is looking at building use cases around trade finance and on the supply chain side. So that's going to be a reality. We also offer cross-border remittance with the Ripple X platform, which has been live for the last three years or so.

KYC records are moving to the blockchain.

I think banking transactions and certificates of deposits can come to the blockchain. Many such use cases are practical and closer to reality.

I see the prospects of blockchain integrating into financial services in the next five years to be much higher.

FINVIEW | 16

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K N O W Y O U R S E C T O R FINTECH: THE HEART OF MODERN FINANCE

Overview India’s FinTech ecosystem is witnessing a unique growth trajectory due to digital public infrastructure and increased partnerships. The growing need for digital transformation post Covid-19 coupled with India’s rising start-up culture has also given major boost to investments into the FinTech sector.

Revenue Model FinTech companies follow different sources of revenue models. Some of them include: Subscription Fees: Annual or monthly payment to use their services.

Third Parties: FinTechs pull in clients and direct them to third parties (insurance companies), who offer percentage of their revenue to FinTechs.

Advertising: Customer data or attention is sold to advertisers or business partners, who pay Fintechs for reviewing & promoting their products.

17 | KNOW YOUR SECTOR

Application Programming Interface: Allow data to flow more securely and allows companies to build products through partnerships.

Interest Income: Relevant in case of lending FinTechs.

Key Evaluation Metrics In such a competitive industry, evaluating financials and growth segments are not enough. A more holistic evaluation entails looking at following metrics Acquisition measures how many new users are onboarded.

It includes number of app downloads and new user creation rate.

Activation indicates the number of people who actually start using the service. For example, Monthly Active Users (MAUs) and app/site traffic.

Retention rate evaluates the number of people that keep using the product and can be gauged using active accounts & returning customers.

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Indian FinTech Landscape

Referrals refer to customer willingness to further recommend the product/ service, which can be evaluated through the number of social shares.

Revenues can be evaluated using daily revenue and number of transactions.

Marketing metrics evaluate the effectiveness of customer attraction technique, specially as businesses grow and costs magnify.

These can be measured using conversion rates, web traffic sources, cost per lead and customer lifetime value.

Technical metrics indicate how smoothly the tool & app performs.

These include page load times, rates of timeouts and number of simultaneous connections.

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Reference: Credit Suisse India FinTech Sector Report

Challenges There is still a vast section of unbanked Indian population. And a lot of people, especially the older generation, prefer cash transactions over online transactions. FinTech companies are required to adhere to strict regulatory and compliance laws which might further dampen the activities of FinTech startups.

They also face high risks from cyber attacks, leading to resistance among customers.

Conclusion FinTech sector in India is fairly under-penetrated. With growing penetration in categories like online lending, insurance tech, wealth management platforms, the sector is poised to witness huge growth in the coming years.

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D E A L S B R E W E R Y ED-TECH GIANT BYJU'S GULPING DOWN ANOTHER PLAYER

Deal Highlights Marking its 9th acquisition of the year, Byju’s added US-based coding platform Tynker to its portfolio. The financial terms of the deal were not disclosed by either party but media claims that the deal amounts to about $200M. The cash & stock purchase will enable Byju's to introduce its creative coding platform to a larger audience, exemplifying its ambition to become a global edtech leader. This is Byju’s 3rd acquisition of a US-based company after Osmo and online reading platform Epic, reaching towards its target of investing $1B in North America.

All the 3 acquisitions are different & complementary to each other. We are not making these integrations with the intent to neutralize competition.

These are skill-sets we don't have, and marketing expertise we don’t have.

- Byju Raveendran (Founder)

19 | DEALS BREWERY

About Tynker Founded in 2012, Tynker is a K-12 (used by KG to 12th standard) creative coding platform that enables students to develop coding skills to design and power animations, music, games, drones and robots, smart devices, virtual worlds and more. The start-up claims that its coding curriculum has been used by every one in three K-8 schools in the US, 100K schools globally and over 60M students across 150 countries.

About Byju's Started as an online video platform for K-12 segment and competitive exams in 2011, Byju's is now the most valuable (~$18 billion) ed-tech company in the world. Byju's has largely fuelled its growth through the acquisition route. It has made around 15 acquisitions in total since inception. It claims to have 40 million users overall and 3 million annual paid subscribers with an annual retention rate of 85%.

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Byju's companies portfolio: Coding Platform

Professional Courses

Test Prep

Geographical Expansion Tynker has strong presence in US and other markets where Byju's wants to go deeper. The deal will give Byju's a path to cater to wider audience and meet its ambition of being an unfathomable global ed-tech leader.

Increased Market Share

Support

Digital Reading K-12 Prep

Scoping into deal Coding is a life skill of this generation and many to come, thereby providing much headroom to grow. However, there are many other synergistic benefits such as follows that accrue to this deal: Integrated Product Offerings Byju's can enable synchronous and asynchronous learning for students by exploiting the synergies provided by Whitehat Jr & Tynker. The learnings from live teachings in WhiteHat could be used in self coding on Tynker. It can also target to offer courses of other portfolio companies to the customer base of Tynker by integrating the app interface.

The acquisition allows Byju's to horizontally integrate into areas other than its core offerings. After the onset of Covid-19, coding gained strong momentum around the world, especially developed markets.

This marks an opportunity for Byju's to foray into the probable next big thing.

Blending Technology Byju's has largely grown with innovative tech-oriented methods of learning and Tynker also offers increased interactive learning methods. They have plans to exploit each other's technology to differentiate themselves from the competitors.

The future of learning is hybrid and this union will bring together the best of offline and online learning, as we combine our expertise to create impactful experiences for students.

The pandemic has brought the importance of the blended format of learning to the forefront.

- Byju Raveendran (Founder)

DEALS BREWERY | 20

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FINSUPERVISE HANDLING YOUR PERSONAL FINANCES

Overview A mutual fund is a type of investment instrument in which a group of investors pool their money in order to obtain a return on their investment over time. An investing specialist known as a fund manager or portfolio manager oversees this pool of funds. It is his/her responsibility to invest the funds in various assets such as bonds, stocks, gold, and other assets in order to maximize profits. The investment gains are split among the investors in proportion to their contributions.

Benefits of Mutual Funds Investing Diversification Liquidity Tax-Benefits Expert Management Transperancy

21 | FINSUPERVISE

Types of Mutual Funds: Based on Asset Classes: 1) Debt funds 2) Equity funds 3) Hybrid funds Based on Structure: 1) Open-ended funds 2) Closed-ended funds Based on Investment Objective: 1) Growth funds 2) Income funds 3) Liquid funds 4) Tax saving funds Why Invest in Mutual Funds?

Most of the people investing in mutual funds have a certain financial objective in mind, whether it is short-term or longterm. Investing in mutual funds is a great approach to achieve your objectives faster.

There are mutual fund strategies for every personality type. Before starting a mutual fund investment, investors should evaluate their risk profile, investment horizon, and goals.

NIVESHAK

State-Wise Penetration September'21: (in Cr.)

AUG-SEP'21

CRISIL MF Ranking CRISIL is an analytical company, which provides rankings, and advisory services. MF rankings given by CRISIL depend on global parameters. The rankings are very crucial for investors when they are deciding on a particular scheme.

Exit Load: It is the penalty charged by the fund house if one isn't able to stay invested for a stipulated time-horizon. Most mutual funds are open-ended and come with no exit load.

For example, if you are risk averse and want to buy a car in the next five years, gilt funds may be a good option. You should consider investing in equity funds if you are willing to take risk and want to buy a property in the next fifteen to twenty years.

How do you decide which mutual funds to invest in?

1) 2) 3) 4) 5) 6) 7)

Investment Objective & Style Investment Strategy Fund Performance Experience of Fund Manager Expense Ratio Ratio & Performance Analysis Entry and Exit Load

Entry Load: This fee is generally referred to as a 'load'. Entry load can be said to be the fee charged from an investor while entering a scheme or joining the company as an investor by mutual fund companies

FAQs How can you redeem your mutual fund units?

You can redeem MF units anytime.

You need to inform your fund house or the agent and the money will be deposited within 3- 7 working days, post-redemption.

Who can invest in mutual funds?

All individuals who have completed their KYC process are eligible to invest in mutual funds.

However, some fund houses don’t accept investments from NRIs living in the US & Canada due to the FATCA regulations.

FINSUPERVISE | 22

NIVESHAK

AUG-SEP'21

SOMETHING NEW SOMETHING OFFERED COINDCX - INDIA'S FIRST CRYPTO STARTUP TO REACH 'UNICORN'

Overview India crypto startup CoinDCX raised $90M (INR 670 Cr.) in a Series C funding round, led by Facebook co-founder Eduardo Saverin’s B Capital Group alongside Coinbase Ventures, Polychain Capital, Block.one, Jump Capital among others.

CoinDCX became India’s first crypto startup to reach the ‘unicorn’ status with this funding and is India’s 21st overall, this year alone.

The funding is aimed at developing new innovative products, improving existing product array, and strengthening exchange infrastructure and product team with an intent to provide seamless and secure trading experience & liquidity.

23 | SOMETHING NEW SOMETHING OFFERED

TOTAL FUNDING: $109.4M VALUATION: $1.1B USER AGE: 26 TO 45 YEARS INDIA TIER 1 & TIER 2 CITIES

Milestone & Path Ahead The Covid-19 pandemic stimulated several investors to venture into cryptocurrencies for abnormal returns in a decentralized format. All such factors in totality enabled the 'unicorn' to create a user base of over 3.5M since its inception.

The startup is also trying to tap into partnerships with fintech players to expand its crypto investor base. The long-term goal is to set up an R&D facility and to also work with the government to introduce some investor-friendly regulations.

NIVESHAK

AUG-SEP'21

LET'S FIN UP! THE CROSSWORD

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Across 1. The 'aftermarket' where securities trading takes place (9) 3. Acquisition of a controlling interest in a company; 'acquisition' (6) 6. '007' Financial Thing (4) 8. Recent DHFL Acquisition (7) 9. The ticker for this share scrip is 'RACE' (7) 10. Food-Tech company recently executed an IPO of ₹8,250 crores (6) Down 1.

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Flagship Index of Bombay Stock Exchange (6) Simultaneous buying & selling to exploit market inefficiencies (9) British Currency (8) Situation when commodity futures price is higher than spot price (8) A negative balance of money (7) Recent ' Paidy' acquisition (6) LET'S FIN UP! | 24

ANNOUNCEMENTS Team Niveshak invites articles from participants from all colleges across India. We are looking for original articles related to Finance and Economics. Participants can also contribute puzzles and jokes related to Finance and Economics. References should be cited wherever necessary.

The best article will be featured as "Article Of The Month" and would be awarded a cash prize of 3000/- along with a certificate. The runner-up article would be awarded a cash prize of 2000/- along with a certificate.

INSTRUCTIONS Send in your articles to niveshak.iims@gmail.com Mail subject line must be "Article For Niveshak_<Title>" Mention your Name & Institute Name along with the article Ensure that article has a word count between 1500 - 2000 Please DO NOT send PDF Files and stick to the format Number of authors is limited to 2 for each article Also certain entries which could not make the cut to the magazine will get featured on our website

FORMAT Microsoft Word Font: Times New Roman Size: 12 Line Spacing: 1.5

ISSUE I • VOLUME XV • AUG-SEP'2021