DISHA 2018: Day 5: Guest Lecture: ‘The AUM game: Where is India heading?’ by Mr. Mahesh Chhabria – VP (New Projects) SBI Mutual Fund

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On 31st August 2018, TAPMI invited Mr. Mahesh Chhabria, VP (new projects) SBI Mutual Fund to engage the student community in a guest lecture. The topic was “The AUM game: Where is India heading?”.

Mr. Chhabria started the discussion by explaining the importance of interpersonal skills as a Portfolio Manager and it is vital to know when to sell the stocks. He also mentioned that there is a constant need to interrogate the reason behind investments and evaluate if it has been achieved or not. Mr. Chhabria focused on the importance of acquiring and applying fundamental knowledge and theories behind the investments when one is managing funds.

While speaking about Asset Under Management(AUM), Mr. Chhabria vividly explained various factors contributing to AUM growth. He also mentioned that India’s mutual fund business has doubled itself in the last 10 years. Mr. Chhabria described the evolution of the mutual Funds industry in India and how people now see mutual funds as a savings platform. With the advancement of technology and application of data science and analytics in the investment industry, there are tools available to suggest people where and when to invest. These tools analyze the investing style of an investor along with the risk-taking capabilities and provide suitable options to an investor. He opined that while digital innovations can help in applying the required technical and analytical skills, use of technology lacks the creative and intuitive human skills which are equally important to analyze the market.

Mr. Chhabria concluded the discussion by elaborating on the future of the mutual funds industry and various challenges it is facing in India.

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Disha 2018: Day 5: ‘Role of Treasury in Strategic Management’ – Mr. Bharat Gupta, VP – Model Validation Lead, Northern Trust Corp

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On 31st August 2018, Mr Bharat Gupta, VP – Model Validation Lead, Northern Trust Corp delivered a guest lecture on the ‘Role of Treasury in Strategic Management’. He began by explaining how balance sheets and financial statements work. He mentioned that for a Treasurer, obtaining money or funds at a competitive price is the highest priority. “How easily one can get the required resources from the market is the test of the efficiency of a Treasurer”, he explained.

He elaborated that it is important to decide on means of funding, whether it is through Commercial Papers, Bonds or Deposits. He then went onto explain the Fund Transfer Policy. He explicated that the transfer pricing represents the price paid from one company to another for a product or service when both are owned and report to the same parent company. He added that the transfer pricing policy dictates the approach taken by the two companies when determining the price of a product or service.

Mr Gupta then spoke about the various challenges a Treasurer can face while raising funds for their company. He then outlined the concept of swaps and the effects of the interest rates on it. He emphasized that swap payments are notional, what gets exchanged are the interest payments and not the principal payments. He stressed that when interest rates are increasing, we convert the fixed rate assets into the floating rate assets.

Mr Gupta then spoke about the LIBOR scandal where the banks where rigging the interest rates. He alluded that LIBOR is going to be phased out and as an alternative to LIBOR, a new system, Secured Overnight Financing Rate (SOFR) is going to be implemented. He clarified that SOFR is based on transactions in the Treasury repurchase market, where banks and investors borrow or loan from Treasuries overnight. In the United States, he cited, this work is being led by the Alternative Reference Rates Committee (ARRC), which comprises of major over-the-counter (OTC) derivatives market participants as well as regulatory bodies.

He explained the different types of Options and moved on to the determination of Options Premiums. Using the example of the Black-Scholes Model of Options Pricing, he discussed, how Options are priced. He then commented on the Monte Carlo Simulations (MCS) and how for the American Options, this model of simulations cannot be used. He advised that instead of MCS, Geometric Brownian Motion is followed in Black Scholes process to determine prices of American Options.

Mr Gupta finally spoke about Stress Testing which is the ability of a bank to rebound from the downgrading of loans or losses thereby clarifying which banks lose their capital.

DISHA 2018: Day 2: Guest Lecture: “HR in Financial Services – Know your Domain, Know your Customers” – Mr. Pramod Shah, Deputy Vice President – HR, Tata Capital

DSC_0141Mr. Pramod Shah, Deputy Vice President – HR, TATA Capital, addressed the ardent finance enthusiasts of TAPMI about the financial services; the different sectors and opportunities in the domain.  He elucidated the different segments in banking, the nuances of the ever growing fintech industry, insurance and the impact of the financial crisis of 2008 and demonetization.

Giving an overview of banking sector, he spoke of the different types of reach it should have – from providing digital services in top tier cities to getting more customers in bottom tier cities.  He stressed upon three key factors that a professional in this sector should work on; knowing the domain, understanding the customer and understanding the geography of the market.  With respect to the aspect of financial inclusion, he cited the example of the farmers in rural areas.  Many have huge money power, but are not aware of how to invest, he explained.  HR professionals should come up with campaigns to create awareness about banking and establish trust and relationship with the rural population.  But employees not wanting to shift to rural areas, is a constraint in setting up a new branch in rural areas.

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Some problems and challenges associated with other domains were also discussed.  The students expressed apprehensions about investing resources in fintech, though it is an emerging and growing arena. He reasoned that the investment and development of such avenues are actually done keeping in mind the risks that they may not be profitable or sustainable.  He opines that our banking system has stayed strong despite a setback during the 2008 financial crisis and demonetization.

Mr. Shah insisted that HR professionals in finance sector should adapt to the changes and uncertainties in the domain.  In the banking sector for instance, they should understand customer needs, sales and cost and credit risk in terms of lending.  He advised students to not underestimate the power of ‘Compliance’ roles in HR by prioritizing ‘Talent Management’ over it.  It is a myth that there is less growth in the Compliance roles for a professional, he stated.  In all, for an HR professional, the value one adds to the customers defines one’s growth, he concluded.

Disha 2018: Day 1 – ‘Analytics in Banking’ – Mr. Abhishek Bose, Senior VP Analytics, Yes Bank

Mr. Abhishek Bose started the discussion by sharing his nostalgic memories brought by TAPMI, him being a proud alumnus of the college. With a descriptive presentation, he gave a short brief about Analytics as a field of study, and the importance it holds in marketing, banking, finance, and other domains.

A case submission on IPL by one of our students was also lauded by Mr Abhishek. He discussed some of the nuances of the case, and related them to Big Data and Analytics. He discussed how data has become increasingly important for organisations today, and the factors which led to this change, one of them being the reduced cost of storing data.

With a rich background in marketing and analytics, and currently in banking, Mr Abhishek drew parallels between these domains. He touched upon the struggles of response conversion and other business problems he addresses every day, and said, “The sharper the business objective, the sharper is the problem statement and the more impactful are the solutions.” Some very unique and interesting topics were brought up by him, including Credit Approval, Vintage Marketing, Building Indices, etc. that are prominent and advancing fields in Analytics.

A major focus of the discussion was to make the participants aware of the avenues that are available to data scientists in today’s world, both in the product and the service sector. He also talked about the pre-requisites for the role of a data scientist, and also gave some personal ‘Fundas’ on how his career path progressed, and how one can make a career in Analytics.

He shared observations on how banking sector is still moving at a slower pace when it comes to adoption of big data analytics, which is crucial to any business, when it comes to harnessing their data to identify new opportunities. The discussion ended with participation from students who are enthusiastic about Data Science.

Manthan 2018: Day 2: “India as an emerging superpower”- Mr. Satyendra Nayak, Consultant, Spectrafin

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The second day of Manthan 2018 started off with a guest lecture from Mr. Satyendra Nayak, Consultant at Spectrafin. In his interactive session with the students, sir talked about India as the emerging superpower.

Mr. Nayak started by talking about the ancient history of India, how it has never been just a nation, but a continent. India is second largest in terms of the population today, and according to him, it is one of the greatest resources that we have.  It’s not just population, but also the demographic profile of India, which is growth conducive. 45% of India’s population is between the ages of 15-35; which is the productive segment of the population. This results in faster growth rate in the country’s GDP. In the last two decades, China was the highest growing nation in terms of GDP, he said. Overall GDP is affected by output produced and wealth of the nation. Also affecting the GDP of a country is the circular flow of income; the factor payments and factor income like wages and salaries, interest, rent, and profits. Thus, increased spending by the population generates more investment which leads to greater production and wealth creation. Assets such as houses, educational institutes, corporates, which last for a lot of years are wealth creations.

Apart from economic progress, Mr. Nayak talked about the agricultural, military, nuclear, infrastructure and qualitative or the spiritual strength of our country. He also mentioned that the vast natural resources of the country are a huge advantage to it. He called India the agricultural basket of the world but said that it will be underutilized as long as proper technological innovation is not initiated in rural segment of the population. In military strength, he said, we are the 4th largest, but we are also the largest importer of defense equipment. He declared that India is slowly moving towards developing the infrastructure to manufacture the equipment on its own. Indian railway connectivity is one of the largest in the world and thus, also adds to the strengths of the nation. Finally, he insisted that no territorial expansion is possible for a nation- economic progress is what makes a nation a superpower. And when a nation becomes a superpower and owns material prosperity and wealth, they pursue spirituality and religion. In this aspect too, India is superior as it has a storehouse of spiritual and religious knowledge, so much so, that many other major countries are now following our traditions and customs. Thus, he reiterated, India is emerging as, and is set to become a superpower soon.

Manthan 2018- Day 2: Samnidhy Investors Meet 2018

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On 11th March 2018, the Samnidhy Investors Meet for the year 2018, was held as part of the second day of the Annual Budget Conclave, Manthan 2018.

Samnidhy is a one-of-its-kind, student-management investment fund at TAPMI, and the only one to be legally registered in the country. It has completed 3 years of operation, since its inception in 2014. Comprising an official board of directors, it is regulated by strict guidelines and protocols and is mentored by an advisory board consisting of senior capital market professionals.

The Samnidhy 2017 Board of Directors included Mr. Abraham Mathew (CEO), Mr. Dhanyakumar M. H. (CIO), Mr. N. Phani Kumar (CRO), Mr. Dinesh Guna (CMO), Ms. Abhilasha Mathur (CHRO), and Ms. Bhargavi Mittal, the interim CIO. The team also comprised of 52 Analysts covering 13 sectors.

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Prof. Aditya Mohan Jadhav addressed the gathering and spoke about the roots of Samnidhy, and its evolution over the years. Ms. Mitali Chitre, Principal at Baring Private Equity Partners unveiled the Samnidhy Newsletter for 2017-2018.

This was followed by the formal presentation by the outgoing Board of Directors on the stock selection and review process. The key highlights of the presentation are as follows. For the year 2017, Samnidhy had a corpus of Rs. 7.9 Lakhs, wholly contributed by the students of TAPMI. The corpus has grown by 127% since their beginning in 2015, and the fund reaped in post-tax returns of 18.6% for the current year. They suffered a loss of 2.7% because of the bear market. The portfolio holdings mainly consisted of those in NBFC, Banks, Automobile, FMCG and Infrastructure sectors.

They also presented the key activities during the past year, such as weekly and quarterly publishing of the Samnidhy Newsletter, a periodic “Stock of the month” analysis shared with the TAPMI community, sector presentations by Samnidhy Analysts and guest interactions for Samnidhy Analysts.

This was followed by an interaction with the distinguished guests, who provided several suggestions ranging from analyzing and choosing stocks, to improving their marketing communication. The student investors also posed questions to the Board of Directors.

The meet ended with the introduction of the new Board of Directors for Samnidhy 2018 -19, consisting of Mr. Subhajit Bhattacharjee (CEO), Mr. Saket Golchha (CMO), Mr. Sanjay Sawhney (CIO), Mr. Akshay Salot (CRO) and Ms. Christina Sebastian (CHRO).

Manthan 2018: Day 1: Interactive Session by Mr. Vivek Law, Founder, CEO & Editor-in-Chief, The MoneyMile

Edited-2291On day 1 of Manthan 2018, students had an interactive session with Mr. Vivek Law. Mr. Law is the founder, CEO, and editor-in-chief of The Money Mile. He is also Co-president of Keiretsu forum in Delhi-NCR and Bangalore. Mr. Law started off his career as a crime reporter and since then have worked with organizations such as TV Today Ltd, Bloomberg TV, CNBC-TV 18, Economic Times, Business Standard and Financial Express as Editor. He has a rich industrial experience of 23 years and his areas of expertise include, but are not limited to, financial literacy, investigating economic crime, consumer protection, and the stock market.

Mr. Law began the session by giving a brief introduction about himself and shared some insights from his life’s journey. After working for 12 years in newspaper, Mr. Law shifted his career to magazine work and joined India Today, where he tried more writing on finance. In 2004, he again shifted the career path, this time to television. In 2017, Mr. Law launched a digital video platform for finance, called The MoneyMile. The aim of the session was to create a basic idea among the students about the importance and need for investment. Mr. Law said that the investment habits of the ultra-rich in the country are totally in contrast with the habits of the rest of India. 93% of the ultra rich invests in equities in comparison to others, which is one of the reasons why the rich always stay rich. Investing is not about telling one not to spend. Mr. Law expressed his opinion that one should start investing when they have the luxury of money, which is right from the time they start earning. Mr. Law said that, if there’s one thing that can change someone’s life, it is the compounding power of money. Unless and until the investment is not getting the power of compounding, it’s impossible to create wealth.

In the second half of the session, Mr. Law talked about the importance of setting a goal before venturing into investment. He asked the students to put the goals down, such as child education or health or retirement and choose a scheme for investment with these goals in mind. Mr. Law is of the opinion that one need not invest in multiple schemes. It’s always safe to choose one particular scheme or at times, a few select schemes across categories for investment. Talking about the risks associated with investing in equities, Mr. Law said that no one knows what is going to happen in the stock market and charting can help only to an extent. The trend in India is that we buy equities when prices are high and disposes of when the price is low or when the market falls. When one goes into the stock market without realizing how much risk they can take, loss occurs.