ADITYA BIRLA GROUP

• The roots of the Aditya Birla Group can be traced back to 1857 in the tiny
village of Pilani, Rajasthan, when Seth Shiv Narayan Birla ventured into
cotton trading.
• Today, with operations across 34 countries, and revenues of US$44.3 billion,
the Group is a leading player in aluminium, cement manufacturing, viscose
staple fibre, carbon black, chemicals, copper, financial services, telecom,
branded apparels, fertilisers, viscose staple yarn and insulators
• A US $44.3 billion corporation, the Aditya Birla Group is in the League of
Fortune 500. Anchored by an extraordinary force of over 120,000 employees
belonging to 42 nationalities, the Group is built on a strong foundation of
stakeholder value creation.
• With over seven decades of responsible business practices, our businesses
have grown into global powerhouses in a wide range of sectors – metals,
textiles, carbon black, telecom and cement. Today, over 50% of Group
revenues flow from overseas operations that span 34 countries in North and
South America, Africa and Asia.
• The Aditya Birla Group was named the AON best employer in India for
2018 – the 3rd time over the last 7 years.
• The Group ranked 4th in the world and 1st in Asia Pacific in the 'Top
Companies for Leaders' study 2011, conducted by Aon Hewitt, Fortune
Magazine and RBL (a strategic HR and leadership advisory firm).
• Our Vision: To be a premium global conglomerate with a clear focus on
each of the businesses.
• Our Mission: To deliver superior value to our customers, shareholders,
employees and society at large.
 • Values: Integrity, commitment, seamlessness, speed and passion

To provide a robust innovation foundation, the Group has set up Aditya Birla
Science and Technology Company Private Limited (ABSTCPL)as a global
corporate research and development hub. ABSTCPL supports the Group's diverse
businesses through multi-disciplinary teams of expert scientists and engineers who
lead fundamental and applied research projects in several areas, including:
Aluminium, Carbon black, Copper, Cement, Chemicals, Fibres

▪ Companies under Aditya Birla Group

1. Aditya Birla Capital Limited (ABCL): is the holding company of all the
financial services businesses of the Aditya Birla Group. Through its
subsidiaries and joint ventures, it manages aggregate assets worth more than
Rs3000 billion and has a lending book of Rs600 billion (including housing)
as of December 31, 2018. ABCL is among the top five private diversified
NBFCs in India. It is also one of the largest private life insurance companies,
asset management companies and general insurance brokers in the country.
The company has undertaken various internal and external sustainability
efforts to be a sustainability leader in its sector.

Aditya Birla Capital Limited is the holding company of all the following
financial services businesses:

• Aditya Birla Finance Limited

• Aditya Birla Health Insurance Limited
• Aditya Birla Housing Finance Limited
• Aditya Birla Insurance Brokers Limited
• Aditya Birla Money
• Aditya Birla Myuniverse Limited
• Aditya Birla PE Advisors Limited
• Aditya Birla Sun Life Asset Management Company
• Aditya Birla Sun Life Insurance
• Aditya Birla Sun Life Mutual Fund
• Aditya Birla Sun Life Pension Management Limited
• Aditya Birla Asset Reconstruction Company Limited

Products

o Insurance

o Wealth management

o Financing

o Advising

2. Aditya Birla Chemicals (Thailand) (ABCTL): It is a part of the Aditya

Birla Group’s chemicals business. It has five manufacturing sites in
Thailand. ABCTL’s epoxy division, located in the Rayong province, is a
pioneer manufacturer of epoxy resins in the entire ASEAN region. Its
phosphates division offers enriched solutions for a variety of food segments
such as cheese, seafood, meat and bakery. ABCTL has won several honours
like the Prime Minister's Industry award, EIA Award from Science
Technology & Environmental Ministry, CSR-DIW Continuous Award,
among others.

Products

o Chlor-alkali

o Epichlorohydrin

o Epoxy resins

o Phosphates and sulphites

3. Aditya Birla Fashion and Retail Limited (ABFRL): It is a part of USD
44.3 billion Aditya Birla Group. With a revenue of Rs. 8,118 crore and a
retail space of 7.5 million sq. ft. (as on 31st March, 2019), it is India's first
billion-dollar pure-play fashion powerhouse with an elegant bouquet of
leading fashion brands and retail formats. Brands: pantaloons, Planet
Fashion, Van Heusen, Louis Philippe, Allen Solly, Peter England, Forever
21, etc
4. Aditya Birla Grasun Chemicals (Fangchenggang) Limited: is a joint
venture between Aditya Birla Chemicals (Thailand) Limited and
Fanchenggang Grasun Company Limited. The entity came into being in
2007 to provide food grade phosphoric acid to the phosphates division in
Thailand. The company has it’s a current capacity of 65,000 mtpa and also
offers sells its product in the open market.
Products
o Food grade phosphoric acid

5. Aditya Birla Idea Payments Bank Limited (ABPB): is a full-service

digital bank, incorporated with 51:49 equity stake held by Grasim Industries
Limited and Idea Cellular Limited. ABPB offers innovative banking features
like mobile number as bank account number, ‘One Bank PIN’ across
wallet/savings account/BHIM ABPB UPI, cashless transactions and
interactive bank statements.

Products

o Banking

o Insurance
o Loans

o Enterprise solutions

6. Aditya Birla Insulators: The world's fourth largest manufacturer of

electrical insulators, with an extensive product range that includes hollow,
solid core, disc, pin, post insulators,finding applications in substation
equipment and in transmission systems.

7. AV Group NB: is a part of the pulp and fibre business of Aditya Birla
Group. Located in New Brunswick, Canada, the company comprises of two
dissolving pulp mills – the Atholville Mill, a specialty cellulose pulp mill and
the Nackawic Mill, a specialty hardwood kraft mill.

Products

o Rayon pulp

8. Birla Carbon: is a world leader in the manufacturing and supply of carbon

black additives. The company provides products across ASTM (American
Standards Association) grades and specialty blacks. It caters to leading
brands and companies across the tire, rubber, plastic, ink and paint industries
globally

Products

o ASTM grade products and specialty blacks

9. Birla Jingwei Fibres Company Limited (BJFCL): is Aditya Birla Group’s

viscose staple fibre (VSF) manufacturing company located in the Hubei
 Province of central China. It was established in 2006 as a joint venture
company between the Aditya Birla Group and the Fujian Jingwei Group. In
2008, Aditya Birla Group acquired 100% ownership of the company.

Products

o Copper products

o Sulphuric acid

o Phosphoric acid

o Precious metals

o Di-ammonium phosphate and other phosphatic fertilisers

10.Essel Mining & Industries Limited (EMIL): Established in 1950, is one of

India’s largest iron ore mining companies and producer of noble ferro alloys.
Located in the mineral-rich Barbil-Barajamda belt of Odisha, the company's
calibrated iron ore lump and iron ore fines are the best quality available in
the country.

Products

o Calibrated iron ore lump

o Iron ore fines

11.Grasim Industries Limited: is the flagship company of the Aditya Birla

Group. It started as a textiles manufacturer in India in 1947. Today, it is a
leading global player in VSF and the largest chemicals (Chlor-Alkali-s)
player in India. It is also the largest cement producer and Diversified
Financial Services (NBFC, Asset Management and Life Insurance) player in
India through its subsidiaries UltraTech Cement and Aditya Birla Capital.
Grasim Industries Limited is the holding company of the following businesses:

▪ Jaya Shree Textiles

▪ Brand – Linen Club

Products

o Cement

o Viscose staple fibre

o Rayon grade pulp

o Ready mix concrete

o Chemicals

o Textiles

o Fertilisers

o Insulators

12.Hindalco Industries Limited: is the metals flagship company of Aditya

Birla Group. It is the world's largest aluminium rolling company and is also
a leading producer of copper. Along with its global subsidiary Novelis Inc.,
Hindalco has a presence in 12 countries. The company operates across the
value chain – from bauxite mining to alumina refining, aluminium smelting,
rolling and extrusions. It services key industry sectors such as building &
construction, automotives, packaging, electrical, consumer durables,
refractories, and ceramics.

Products

o Aluminium extrusions

o Flat rolled products

o Foil & packaging

o Copper cathodes and continuous cast copper rods

o DAP fertilisers

o Precious metals

13.Hindalco-Almex Aerospace Limited (HAAL): is a first-of-its-kind facility

in India that manufactures high-strength aluminium alloys for applications in
the aerospace, sporting goods and surface transport industries. HAAL’s
operations emphasise on clean fuel and efficient technologies and it is one of
the few AS 9100, ISO 140001 and OHSAS 18001 compliant companies in
India.

Products

o Aerospace alloy

o Aluminium billets

14.Indo Phil Group of Companies: is the first Indian-Filipino textile joint

venture. It is the largest textile mill in the Philippines with a production
capacity of 25,560 TPA and a captive power plant of 24.8 MW. The Indo
Phil Group consists of three companies: Indo Phil Textile Mills Inc, Indo
Phil Acrylic Manufacturing Corp, and Indo Phil Cotton Mills Inc.

Products

o Yarns

15.Novelis Inc: is the leading producer of flat-rolled aluminum products and

the world’s largest recycler of aluminum. Its customer base includes iconic
brands like Coca-Cola, AB Inbev, Ford Motor Company, Jaguar Land Rover
and Samsung. Sustainability is core to Novelis’ business.
 Products

o Aluminum rolled products and solutions for the beverage can

o Automotive and high-end specialty markets; recycling

16.UltraTech: is India’s largest manufacturer of grey cement, white cement

and ready mix concrete. In the white cement segment, UltraTech goes to
market under the brand name of Birla White. It has a white cement plant
with a capacity of 0.56 MTPA and two wallcare putty plants with a
combined capacity of 0.8 MTPA. With 100+ Ready Mix Concrete (RMC)
plants in 35 cities, UltraTech is the largest manufacturer of concrete in
India.
Products:
• Grey Cement
• White Cement
• Concrete
• Building Products
• UltraTech Building Solutions

17.Utkal Alumina International Limited: a 100 percent subsidiary of Aditya

Birla Group company Hindalco, is engaged in alumina refining.

Products

o Alumina
18.Vodafone Idea Limited: is an Aditya Birla Group and Vodafone Group
partnership. It is the leading telecom service provider in India and second
largest globally.

Products

o Cellular services
Aditya Birla Capital Limited
Aditya Birla Capital Limited (ABCL), is the financial services platform of the
Aditya Birla Group.

Formerly known as Aditya Birla Financial Services Limited, ABCL has a strong
presence across the life insurance, asset management, private equity, corporate
lending, structured finance, project finance, general insurance broking, wealth
management, equity, currency and commodity broking, online personal finance
management, housing finance, pension fund management, health insurance and
asset reconstruction business.

Anchored by more than 17,000 employees, ABCL has a nationwide reach and
more than 2,00,000 agents / channel partners, ABCL is committed to serving the
end-to-end financial services needs of its retail and corporate customers under a
unified brand — Aditya Birla Capital.

As of December 31st, 2018, Aditya Birla Capital manages aggregate assets worth
Rs. 3,000 billion and has a consolidated lending book of over Rs. 600 billion,
through its subsidiaries and joint ventures.

Aditya Birla Capital is a part of the Aditya Birla Group, a US$ 44.3 billion Indian
multinational, in the league of Fortune 500. Anchored by an extraordinary force
of over 120,000 employees, belonging to 42 nationalities, the Aditya Birla Group
operates in 35 countries across the globe.

A US $44.3 billion corporation, the Aditya Birla Group is active in 14

industry sectors and has achieved global and national leadership in several
businesses.

ABCL is among the top five private diversified NBFCs in India. It is also one of
the largest private life insurance companies, asset management companies and
general insurance brokers in the country. The company has undertaken various
internal and external sustainability efforts to be a sustainability leader in its
sector.

Business:

Aditya Birla Capital Limited is the holding company of all the following
financial services businesses:

• Aditya Birla Sun Life Insurance

Aditya Birla Sun Life Insurance Company Limited (ABSLI) is a
subsidiary of Aditya Birla Capital Ltd (ABCL). It is one of the leading
private sector life insurance companies in India. ABSLI was incorporated
on August 4th, 2000 and commenced operations on January 17th, 2001.
ABSLI is a 51:49 joint venture between the Aditya Birla Group and Sun
Life Financial Inc., a leading international financial services organization
in Canada.

• Aditya Birla Finance Limited (ABFL)

Aditya Birla Finance Limited (ABFL) is among the leading well-
diversified financial services company in India offering end-to-end
lending, financing and wealth management solutions to a diversified
range of customers across the country. ABFL is registered with RBI as a
systemically important non-deposit accepting non-banking finance
company (NBFC) and ranks among the top five largest private diversified
NBFCs in India based on AUM as of March 31st, 2017 (source: CRISIL).

• Aditya Birla Sun Life Mutual Fund (ABSLMF)

 Established in 1994, Aditya Birla Sun Life Mutual Fund (ABSLMF) is
co-sponsored by Aditya Birla Capital Limited (ABCL) and Sun Life
(India) AMC Investments Inc.
Having total domestic assets under management (AUM) of close to Rs.
2423 billion for the quarter ended December 31st, 2018, ABSLMF is one
of the leading Fund Houses in India based on domestic average AUM as
published by the Association of Mutual Funds of India (AMFI).
ABSLMF has an impressive mix of reach, a wide range of product
offerings across equity, debt, balanced as well as structured asset classes
and sound investment performance, and around 6.8 million investor folios
as of December 31st, 2018.

• Aditya Birla Health Insurance Limited (ABHICL)

Aditya Birla Health Insurance Co. Limited (ABHICL), a subsidiary of

Aditya Birla Capital Ltd (ABCL), is a joint venture between Aditya Birla
Group and MMI Holdings of South Africa. ABHICL was incorporated in
2015 wherein Aditya Birla Capital Limited (ABCL) and MMI Strategic
Investments (Pty) Ltd. hold 51% and 49% shares respectively. ABHICL
commenced its operations in October 2016 and is engaged in the business
of health insurance. ABHICL’s current product portfolio consists of unique
offerings including chronic care and incentivized wellness.

• Aditya Birla Housing Finance Limited (ABHFL)

Aditya Birla Housing Finance Limited (ABHFL), a subsidiary of Aditya
Birla Capital Limited, is a fast-growing housing finance company (HFC)
in India with a net worth of Rs. 11,569 million and lending book valued
at Rs. 108,283 million as on December 31st, 2018. This is reflected in its
 long-term credit rating of AAA (stable) by ICRA and AAA (stable) by
India Ratings, and short-term credit rating of A1+ by ICRA & India
Ratings.

• Aditya Birla Insurance Brokers Limited (ABIBL)

Aditya Birla Insurance Brokers Limited (ABIBL), a subsidiary of Aditya
Birla Capital Limited, is a leading composite insurance broker and
regulated by the Insurance Regulatory and Development Authority of
India (IRDAI). ABIBL is in the business of integrated insurance advisory
services for companies and individuals.

• Aditya Birla Money Limited (ABML)

Aditya Birla Money Limited (ABML), a subsidiary of Aditya Birla
Capital Limited, is listed on Bombay Stock Exchange Limited (BSE) and
National Stock Exchange of India Limited (NSE) since 2008. ABML is
currently engaged in the business of securities broking and is registered
as a stock broker with SEBI. It offers equity and derivatives trading
through NSE and BSE and holds PMS license from SEBI and offers
portfolio management services.

• Aditya Birla MyUniverse Limited (ABMUL)

Aditya Birla MyUniverse Limited (formerly known as Aditya Birla

Customer Services Limited) is a platform where you can compare and
select from a wide range of financial products such as personal loans,
mutual funds, home loans, credit cards and more. A rapidly growing
platform, it has over 5.12 million registered customers. It works with over
40 financial institutions to offer their services and products.
• Aditya Birla PE Advisors Limited (ABPE)
Aditya Birla PE Advisors is a wholly owned subsidiary of ABCL. It
provides financial advisory and management services with focus on
managing venture capital funds and alternate investment funds. ABPE is
presently appointed as an investment manager to two SEBI registered
domestic venture capital funds, namely, Aditya Birla Private Equity -
Fund I and Aditya Birla Private Equity – Sunrise Fund, where it currently
manages a gross AUM of Rs. 11.63 billion under these two funds.

• Aditya Birla SunLife Asset Management Company (ABSLAMC)

Established in 1994, Aditya Birla Sun Life AMC Limited (ABSLAMC,
formerly known as Birla Sun Life Asset Management Company Limited)
is a joint venture between the Aditya Birla Capital Limited and Sun Life
(India) AMC Investments Inc.
ABSLAMC is primarily the investment manager of Aditya Birla Sun Life
Mutual Fund, a registered trust under the Indian Trusts Act, 1882.
Additionally, ABSLAMC has various other business lines such as
Portfolio Management Services, Real Estate Investments and Alternative
Investment Funds. The Portfolio Management Service is a highly
customized service designed to seek consistent long-term results by
adopting a research based, methodical approach to investing. The Real
Estate Investment Advisory (REIA) business is a platform that enables
investors to access 'Real Estate Investments' opportunities meant for
investors on a private placement basis. Lastly, ABSLAMC also acts as an
investment manager to Aditya Birla Sun Life AIF Trust – I which is
formed as a Trust under Category III Alternative Investment Fund (AIF).
ABSLAMC has its subsidiaries in Dubai, Mauritius and Singapore.

• Aditya Birla Sun Life Pension Management Limited (ABSLPML)

Aditya Birla Sun Life Pension Management Limited (ABSLPML)
(formerly known as Birla Sun Life Pension Management Ltd.),
incorporated in 2015, is a wholly owned subsidiary of Aditya Birla Sun
Life Insurance Company Limited. It is registered with the Pension Fund
Regulatory and Development Authority (PFRDA) to act as the Pension
Fund Manager of the NPS Trust under the National Pension System
(NPS) to manage the pension funds for private sector in accordance with
the applicable provisions of the NPS, the schemes, the guidelines issued
by the PFRDA.

PRODUCTS

Wealth Financing Advising

Insurance
Management
BRANDS
 Aditya Birla Sun Life Insurance Company
Limited (ABSLI)

Aditya Birla Sun Life Insurance Company Limited (ABSLI), is a subsidiary of

Aditya Birla Capital Ltd (ABCL). is one of the leading private sector life
insurance companies in India. ABSLI was incorporated on August 4 th, 2000 and
commenced operations on January 17th, 2001. ABSLI is ABSLI is a 51:49 a
joint venture between the Aditya Birla Group and Sun Life Financial Inc., a
leading international financial services organization in Canada.

Formerly known as Birla Sun Life Insurance Company Limited, ABSLI is one
of India's leading life insurance companies offering a range of products across
the customer's life cycle, including children future plans, wealth protection
plans, retirement and pension solutions, health plans, traditional term plans and
Unit Linked Insurance Plans ("ULIPs").

As of December 31st, 2018, total AUM of ABSLI stood at Rs. 389,548 million.
ABSLI recorded a gross premium income of Rs. 18,599 million in Q3 FY 2018-
19 and registering a y-o-y growth of 68% in Individual First Year Premium and
currently ranked 7th in Individual Business (Individual FYP adjusted for 10%
single premium) (Source: IRDAI reported Financials). ABSLI has a nation-wide
distribution presence through 425 branches, 9 bank assurance partners, 6
distribution channels, over 83,000 direct selling agents, other Corporate Agents
and Brokers and through its website. The company has over 10,000 employees
and more than 16 lac active customers.

The Company offers a complete range of protection solutions to help secure

your family's future and provide financial support for your child's education,
wealth with protection solutions, health and wellness solutions, retirement
solutions and savings with protection solutions to help you stay financially
secure in the future with small disciplined savings at regular intervals. ABSLI
puts people's need first and aims to protect what is dear to the customer, with
assurance. While, Life Insurance cannot prevent risk, it can compensate
financial losses arising from risk
Aditya Birla Capital Limited (ABCL), is the financial services platform of the
Aditya Birla Group. With a strong presence across the life insurance, asset
management, private equity, corporate lending, structured finance, project
finance, general insurance broking, wealth management, equity, currency and
commodity broking, online personal finance management, housing finance,
pension fund management and health insurance business, ABCL is committed
to serving the end-to-end financial services needs of its retail and corporate
customers. Anchored by more than 17,000 employees, ABCL has a nationwide
reach and more than 2,00,000 agents / channel partners.

Aditya Birla Sun Life Insurance Co (ABSLI) got more than 90 per cent of its
premium income through unit-linked insurance products (ULIP). Then
regulatory reforms in ULIPs, which came in 2010-11, compelled a rethink. Like
other companies in the industry, ABSLI was also pummelled by those changes.

Margins and profits were under pressure, dropping steadily over the next few
years. Simultaneously, the company undertook a product rejig exercise, besides
introducing a new distribution model in 2014.

These changes cost money and are usually higher upfront, affecting profits for
the past few years. Profits dropped from a high of ₹541 crore in 2013 to ₹123
crore in FY 2017 before rising again to ₹166 crore in FY18.

It has been a slow and painful recovery during the past few years, but the gains
are now becoming visible. The portfolio, which was once excessively tilted
towards ULIPs, wears a more balanced look now. About 70 per cent of the
premium now comes from traditional products, and only 30 per cent through
ULIPs. Persistency ratios, which used to be in the low fifties, has climbed to 75
per cent in FY18.

Individual life premium rose 35 per cent in FY17 and the company followed
that up with a 20 per cent growth last fiscal. Asked to explain this journey and
how the company got these matrices to change for the better, Pankaj said the
company had become more customer-driven from its product-focus earlier. That
involved moving the agency force from ‘selling’ to ‘counselling’, and helping
customers understand themselves and their needs better. The company also
found that there was a trust deficit and worked on fixing this. As a consequence,
there were changes in the recruitment process – instead of going for mass
recruitment of agents and then facing a high attrition rate, there was focus on
recruiting right at the initial stage itself. This has resulted in attrition rates
coming down from a high of 77 per cent in FY16 to about 55 per cent in FY18.

There has also been a conscious effort to diversify the channel mix and increase
premiums earned through bancassurance tie-ups as well as via the direct
channel. The agency channel continues to be the mainstay with about 68 per
cent of premium coming in through it, but this is down from the highs of 80 per
cent just two years ago.

The company’s market share has grown to 4.7 per cent and it is now in the
seventh position in an industry with over two dozen players.

Types of Insurance

Life Insurance:
Life insurance is a contract between an insurer and a policyholder in which the
insurer guarantees payment of a death benefit to named beneficiaries upon the
death of the insured. The insurance company promises a death benefit in
consideration of the payment of premium by the insured.
Life insurance is a contract between an insurer and a policyholder in which the
insurer guarantees payment of a death benefit to named beneficiaries upon the
death of the insured. The insurance company promises a death benefit in
consideration of the payment of premium by the insured.

Health Insurance:
Health insurance is a type of insurance coverage that pays for medical and
surgical expenses incurred by the insured. Health insurance can reimburse the
insured for expenses incurred from illness or injury, or pay the care provider
directly. It is often included in employer benefit packages as a means of enticing
quality employees. The cost of health insurance premiums is deductible to the
payer, and benefits received are tax-free.
Health insurance can be tricky to navigate. Managed care insurance plans
require policyholders to receive care from a network of designated health care
providers for the highest level of coverage. If patients seek care outside the
network, they must pay a higher percentage of the cost. In some cases, the
insurance company may even refuse payment outright for services obtained out
of network. Many managed care plans require patients to choose a primary care
physician who oversees the patient's care and makes recommendations about
treatment. Insurance companies may also deny coverage for services that were
obtained without preauthorization. In addition, insurers may refuse payment for
name brand drugs if a generic version or comparable medication is available at
a lower cost.

Term Plan Insurance:

Term insurance is a type of life insurance policy that provides coverage for a
certain period of time, or a specified "term" of years. If the insured dies during
the time period specified in the policy and the policy is active - or in force - then
a death benefit will be paid. Term insurance is initially much less expensive
when compared to permanent life insurance. Unlike most types of permanent
insurance, term insurance has no cash value.
There are many different types of term insurance policies available. Many
policies offer level premiums for the duration of the policy, such as 10, 20, or
30 years. These are often referred to as "level term" policies. While premiums
for these level term policies remain level for a set number of years, after this
time period the premium increases significantly, making the policy cost
prohibitive. Most term policies have a built-in privilege to convert to a
permanent policy regardless of any changes in the insured's health.
Guaranteed Plan Insurance:
Term insurance is a type of life insurance policy that provides coverage for a
certain period of time, or a specified "term" of years. If the insured dies during
the time period specified in the policy and the policy is active - or in force - then
a death benefit will be paid. Term insurance is initially much less expensive
when compared to permanent life insurance. Unlike most types of permanent
insurance, term insurance has no cash value.
There are many different types of term insurance policies available. Many
policies offer level premiums for the duration of the policy, such as 10, 20, or
30 years. These are often referred to as "level term" policies. While premiums
for these level term policies remain level for a set number of years, after this
time period the premium increases significantly, making the policy cost
prohibitive. Most term policies have a built-in privilege to convert to a
permanent policy regardless of any changes in the insured's health.

Endowment Plan:

Endowment plan is a life insurance policy which provides you with a

combination of both i.e.: an insurance cover, as well as an savings plan. It helps
you in saving regularly over a specific period of time, so that you are able to
get a lump sum amount on policy maturity, if the policyholder survives the
policy term.

The policyholder gets his/her sum assured on a fixed date in future as per the
policy terms and conditions. However, in case of sudden death of the
policyholder, the insurance company will pay the sum assured (plus the bonus,
if any) to the nominee of the policy. Besides, it is also useful to secure yourself
or your family post-retirement or to meet various financial needs such as
funding for children's education and/or marriage or buying a house.
Whole Life Plan:
Whole life insurance provides coverage for the life of the insured. In addition to
providing a death benefit, whole life also contains a savings component where
cash value may accumulate. These policies are also known as permanent
or traditional life insurance.

The most common of life insurance products, whole life insurance guarantees
payment of a death benefit to beneficiaries in exchange for level, regularly-due
premium payments. The policy includes a savings portion, called the cash value,
alongside the death benefit. In the savings component, interest may accumulate
on a tax-deferred basis. Growing cash value is an essential component
of whole life insurance.
 Equity Research
Why are we doing equity research?

Working on a particular sector, analysing the past and estimation of the future
of that sector and forwarding the reports to the fund managers with detailed
financial analysis and recommendations on whether to buy, hold, or sell a
particular investment.

What is ULIP (Unit Linked Insurance Plan)?

It is a combination of insurance and investment where a portion of the premium

paid by the policyholder is used to provide insurance coverage to the
policyholder and the remaining portion is invested in debt and equity
instruments. It is invested in a similar manner to mutual funds. Based on the risk
profile and investment needs of the policyholder, he/she has the option to select
a personalized investment mix. Like mutual funds, each policyholder's Unit-
Linked Insurance Plan holds a certain number of fund units, each of which has a
net asset value (NAV) that is declared on a daily basis. The NAV is the value
upon which net rates of return on ULIPs are determined. The NAV varies from
one ULIP to another based on market conditions and fund performance.

There are three types of funds provided by Aditya Birla Sun Life Insurance,
examples of the same are provided below

Pure equity (Equity fund)

This is a 100% equity fund.

OBJECTIVE: To provide long-term wealth creation by actively managing

portfolio through investment in selective businesses. Fund will not invest in
businesses that provide goods or services in gambling, lottery /contests, animal
produce, liquor, tobacco, entertainment like films or hotels, banks and financial
institutions.

STRATEGY: To build and actively manage a well-diversified equity portfolio

of value and growth driven fundamentally strong companies by following a
research-focused investment approach. Equity investments in companies will be
made in strict compliance with the objective of the fund. The fund will not
invest in banks and financial institutions and companies whose interest income
exceeds 3% of total revenues. Investment in leveraged-firms is restrained on the
provision that heavily indebted companies ought to serve a considerable amount
of their revenue in interest payments

Top holdings in Equity

Reliance Industries Limited, Larsen & Toubro Limited, Endurance

Technologies Limited, Hindustan Petroleum Corporation Limited

Enhancer (Balanced Fund)

The proportion of investment is 30% Equity and 70% Debt

OBJECTIVE: To grow capital through enhanced returns over a medium to

long-term period through investments in equity and debt instruments, thereby
providing a good balance between risk and return. This investment fund is
suitable for those who want to earn higher return on investment through
balanced exposure to equity and debt securities.

STRATEGY: To earn capital appreciation by maintaining a diversified equity

portfolio and seek to earn regular returns on the fixed income portfolio by active
management resulting in wealth creation for policy owners.

Top holdings in equity

HDFC Bank Limited, Reliance Industries Limited, Infosys Limited

Top holdings in debt

Tata Steel NCD, GOI’s, Hindalco Industries NCD

Income advantage (Debt Fund)

This is a 100% Debt fund.

OBJECTIVE: To provide capital preservation and regular income, at a high

level of safety over a medium-term horizon by investing in high quality debt
instruments.

STRATEGY: To actively manage the fund by building a portfolio of fixed

income instruments with medium term duration. The fund will invest in
government securities, high rated corporate bonds, high quality money market
instruments and other fixed income securities. The quality of the assets
purchased would aim to minimize the credit risk and liquidity risk of the
portfolio. The fund will maintain reasonable level of liquidity.

Top holdings in debt

Reliance Industries Ltd NCD, Tata Steel Ltd NCD, HDFC Ltd. NCD
 Key Factors affecting Equity Research

1.Gross Domestic Product (GDP)

Gross domestic product (GDP) is a monetary measure of the market value of all
the final goods and services produced in a period of time, often annually. GDP as
"an aggregate measure of production equal to the sum of the gross values
added of all resident and institutional units engaged in production. Total GDP can
also be broken down into the contribution of each industry or sector of the
economy. The ratio of GDP to the total population of the region is the per capita
GDP and the same is called Mean Standard of Living. GDP is considered the
"world's most powerful statistical indicator of national development and
progress".
GDP is primarily measured based on the expenditure approach or spending
approach. The expenditure approach calculates the spending by the different
groups that participate in the economy. This approach can be calculated using
the formula:
GDP = C + G + I + NX, or
GDP = (consumption + government spending + investment + net exports).
C is private consumption expenditures, or consumer spending.
Consumers spend money to buy consumption goods and services.
G is government consumption expenditure and gross investment.
I is a private domestic investment, or capital expenditures. Businesses spend
money to invest in their business activities.
NX is net exports, calculated as total exports minus total imports (NX = Exports
- Imports). Goods and services that an economy makes that are exported to
other countries, less imports that are brought in, are net exports.
GDP first came into use in 1937 in a report to the U.S. Congress in response to
the Great Depression after economist Simon Kuznets conceived the system of
measurement. At the time, the preeminent system of measurement was the Gross
National Product (GNP). After the Bretton Woods conference in 1944, GDP was
widely adopted as the standard means for measuring national economies, though
the U.S. actually used GNP as its official measure of economic welfare until 1991,
after which it switched to GDP.
Economists actually use two types of GDPs to measure a country's economy.
Nominal GDP refers to a country's economic output without an inflation
adjustment. Real GDP is equal to the economic output adjusted for the effects of
inflation.
 Name 2019 GDP GDP (UN GDP Per
Population (IMF) '16) Capita

India 1,368,737,513 3,155,230 2,259,642 $2,305

United 329,093,110 21,410,230 18,624,475 $65,058

States

China 1,420,062,022 15,543,710 11,218,281 $10,946

Brazil 212,392,717 2,256,850 1,795,926 $10,626

2.Crude oil

Oil is a vital input for the production of a wide range of goods and services,
because it is used for transportation in business of all types. Higher oil prices
thus increase the cost of inputs; and final product price increases cause inflation,
if the cost increases cannot be passed on to consumers, economic inputs such as
labor and capital stock may be reallocated. Higher oil prices can cause worker
layoffs and the idling of plants, reducing economic output in the short term.

India is the world’s third largest Oil importing nation and world’s seventh
largest economy. It is a major looser in the case of rising Crude price and a
beneficiary in the event of falling Crude prices. The pace at which the economy
is growing, increases the need of the country to import more and more of crude
oil to meet the country’s industrial as well as domestic requirements.
With U.S imposing sanctions with regard to purchase of crude from Iran, India
stands to face the double whammy of rising Crude prices as well as weaker
rupee. India’s crude oil import bill for 2018-2019 rose sharply in March 2018 as
country is dependent for 80% of its consumption needs on its Crude Imports.
The CAD and Fiscal deficit are ballooning in the event of Trade Imbalance.

The Oil ministry pointed out that India is more comfortable if Crude prices stay
near to $50, thus $70 is way too high and would pinch India’s economy in a big
way going forward if Saudi’s propel crude prices further to $80. To offset
higher Crude prices the government either has to reduce Excise duty thus
impacting state finances or reintroduce fuel price caps to control Inflation thus
dent margins of Oil refiners.

The Oil Ministry has been advocating bringing fuel price under the GST ambit
which would reduce oil prices and provide immediate relief to vast majority of
people thus reducing heightened Inflation as currently taxes make up 50% of the
crude oil price pack.

The drop in crude prices helped the government to raise excise duty by Rs. 12
on petrol per litre and Rs. 13.77 on diesel per litre since April 2014 and also
helped prune Current Account Deficit thus raising GDP expectations. Off late,
Brent Crude prices have risen by $18 per barrel while petrol and Diesel prices
have gone up by over Rs.3 per litre.
Morgan Stanley has said that the Fiscal Deficit is likely to rise to 3.5% of
India’s GDP in the fiscal year 2018-2019 due to Trade imbalance. According to
Nomura every $10 increase in Oil prices to affect India’s CAD by 0.4%.
Being an Election year Nomura has decreased India’s GDP growth to 6.9%
from 7.8%. Deutsche Bank lowered its GDP forecast for India in lieu of
widening CAD to 7.3% from 7.5%.
 Going to Elections India is fighting with the negative impact of highest fuel
prices in the country in recent years. India is reeling under toughest test to fight
economic growth and Inflation under ever rising Oil prices.

Economic impacts can be like,

• An SBI report suggests that Indian’s CAD could cross 2.5% of GDP for FY
2019 (providing oil price continues at $80 per barrel). Currently CAD is
estimated at 1.9% for 2017-18.
• India imports around 80% of its annual crude oil requirement which is approx.
1.5 billion barrels a year from the world markets. Rising crude prices
increases government’s total expenditure thus impacting fiscal deficit
negatively.
• Rising crude prices affects rupee also adversely, as more money flows out of
the system to buy dollars for making crude payment.
• Thus some of the sector getting negatively impacted would be Oil &
Lubricants, Tyre, Paints, Plastics, Airlines etc.
Assuming oil prices will continue to grow…!

3.INFLATION IN INDIA (CPI &WPI)

➢ Inflation is nothing more than a sharp upward rise in price level. Inflation is a state in
which the value of money is falling i.e. price are rising.
 ➢ CPI measures Inflation rate in the country WPI measures the General Price level in
the whole sale market.

➢ CONSUMER PRICE INDEX:

Consumer Price Index is the main measure of price changes at the retail level. It
measures changes in the cost of buying a representative fixed basket of goods and
services and is generally accepted as a measure of inflation in the country. When the
CPI rises, the typical family has to spend more money to maintain the same standard
of living.

➢ WHAT DOES CPI MEASURE?

It measures Price changes of fixed market basket of goods and services of constant
quality and quantity. It tells how much cost of living has risen or fallen due to price
changes irrespective of changes in consumer behaviour or quality of goods. It does
not reflect the cost of living or in house hold consumption expenditure as such but
only the influence of price fluctuation on the trend.

➢ India's retail price inflation rate increased to 2.92 percent year-on-year in April
2019 from 2.86 percent in March and below market expectations of 2.97 percent.
 It was the highest inflation rate in six months, as food prices rose the most since
July last year. Inflation Rate in India averaged 6.15 percent from 2012 until 2019,
reaching an all-time high of 12.17 percent in November of 2013 and a record low
of 1.54 percent in June of 2017.

➢ WHOLESALE PRICE INDEX:

It is a price index which represents the wholesale prices of a basket of goods over
time. WPI has been in use in India since many years so the calculation is fairly
easy. It has over time developed and taken into its circle few of the important
factors that need to be considered. It measures inflation at each stage of
production. WPI is the basis for the economic deflation rate.
➢ Wholesale prices in India rose by 3.07 percent year-on-year in April 2019,
following a 3.18 percent gain in the previous month and matching market
expectations. Cost slowed for both fuel and manufactured products. On a monthly
basis, wholesale prices increased by 0.8 percent in April, much faster than a 0.42
percent gain in March.

INTEREST RATES IN INDIA

➢ India’s central banking institution, The Reserve Bank of India controls the monetary
policy of the Indian currency. So, the interest rate decisions are taken by the Reserve
Bank of India's Central Board of Directors. The official interest rate is the benchmark
repurchase rate.
➢ Repo rate also known as the benchmark interest rate is the rate at which the RBI lends
money to the banks for a short term. When the repo rate increases, borrowing from
RBI becomes more expensive. If RBI wants to make it more expensive for the banks
to borrow money, it increases the repo rate similarly, if it wants to make it cheaper for
banks to borrow money it reduces the repo rate.
➢ Reverse Repo rate is the short term borrowing rate at which RBI borrows money
from banks. The Reserve bank uses this tool when it feels there is too much money
floating in the banking system. An increase in the reverse repo rate means that the
banks will get a higher rate of interest from RBI. Current reverse repo rate is 5.75%.

➢ MSF - Marginal Standing facility: It is a special window for banks to borrow from
RBI against approved government securities in an emergency situation like an acute
cash shortage. MSF rate is higher than Repo rate. Current MSF Rate: 6.25%.

➢ Bank Rate - This is the long term rate (Repo rate is for short term) at which central
bank (RBI) lends money to other banks or financial institutions. Bank rate is not used
by RBI for monetary management now. It is now same as the MSF rate. Current bank
rate is 6.25%

4.Foreign Institutional Investors

Foreign Institutional Investors: Foreign investment provides a channel

through which these countries can have access to foreign capital. It can come in
two forms: foreign direct investment (FDI) and foreign portfolio investment
(FPI). Foreign direct investment involves direct production activities of medium
to long-term nature. However, the foreign portfolio investment is a short-term
investment mostly in the financial markets and it consists of Foreign
Institutional Investment (FII). Foreign investments in the country can take the
form of investments in listed companies (i.e., FII investments), investments in
listed/unlisted companies other than through stock exchanges (i.e., through the
foreign direct investment or private equity/foreign venture capital investment
route), investments through American Depository Receipts/Global Depository
Receipts (ADR/GDR), or investments by non-resident Indians (NRIs) and
Persons of Indian Origin (PIOs) in various forms. Foreign Portfolio/Institutional
Investors (FPI/FII) have been one of the biggest drivers of India’s financial
markets and have invested around Rs 12.51 trillion (US$ 171.81 billion) in
India between FY02-18. Highly developed primary and secondary markets have
attracted FIIs/FPIs to the country. Investments by FIIs/FPIs in India are
regulated by the Securities and Exchange Board of India (SEBI) while the
ceilings on such investments are maintained by the Reserve Bank of India
(RBI). Following are the few types of FIIs investing in India:

• Hedge Funds
• Foreign Mutual Funds
• Sovereign Wealth Funds
• Pension Funds
• Trusts
• Asset management Companies
• Endowments, University Funds, etc.

The total market capitalization (M-cap) of all the companies listed on Bombay
Stock Exchange (BSE) rose to a record high level of Rs 142.25 trillion (US$
1.95 trillion) in 2017-18.
Recent Developments/Investments
Some of the recent significant FII/FPI developments are as follows:

• In March 2019, initial public offer (IPO) of India’s first real estate
investment trust (REIT) was subscribed 2.6 times.
• In February 2019, net inflows from foreign portfolio investors (FPI) in
India reached a 15-month high of Rs 17,220 crore (US$ 2.49 billion).
• Union Bank of Switzerland (UBS) maintained its Nifty target at 9,500 by
March 2019.
• Morgan Stanley expects the BSE Sensex to reach 42,000 by December
2019 end.
• In September 2018, Embassy Office Parks filed the papers for India’s
first Real Estate Investment Trusts (REIT).

Government/Regulatory Initiatives

• A report filed by a panel appointed by the Securities and Exchange Board

of India (SEBI) on December 04, 2018 has proposed direct overseas
listing of Indian companies and other regulatory changes.
• In September 2018, the Securities and Exchange Board of India (Sebi)
relaxed the Know-Your-Client (KYC) requirement for Foreign Portfolio
Investors (FPIs).
• In September 2018, SEBI allowed Bombay Stock Exchange (BSE) and
National Stock Exchange (NSE) to start commodity derivate segments.
• SEBI has also allowed foreign entities to participate in the commodity
derivatives segment of Indian stock exchanges, to help them hedge their
 exposures. It has also proposed to allow Non Resident Indians (NRIs) to
invest through FPI route after meeting specific KYC norms.
• In August 2018, SEBI reduced the timeline for public issue of debt
securities from 12 days to six days.
• Foreign Portfolio Investors are also allowed to invest up to 25 per cent in
Category III Alternative Investment Funds (AIF) in India. Different types
of funds such as hedge funds, Private Investment in Public Equity (PIPE)
funds, etc. are operating in India as Category III AIFs.
• Investments by FPIs have also been allowed in Real Estate Investment
Trusts (REITs) and Infrastructure Investment Trust (InvITs).

Road Ahead
India is being viewed as a potential opportunity by investors, with the economy
having the capacity to grow tremendously. Buoyed by strong support from the
government, FII investments have been strong and are expected to continue to
improve going forward.
Mr Mark Machin, Chief Executive Officer, Canada Pension Plan Investment
Board (CPPIB), has expressed confidence in the Indian equity market and stated
that the country is one of the best investment destination based on its
demographic growth, increased productivity, and long-term economic growth
potential.
"The FII participation has been very consistent as far as India is concerned and
we see the trend continuing. We have been overweight India in the context of
Asia and emerging markets since November 2013 and that stance very much
continues," said Mr. Bharat Iyer, MD, Global Research, JP Morgan India.
Exchange Rate Used: INR 1 = US$ 0.0145 as on March 29, 2019
 5.Unemployment Rates:

1) India - 3.53% (2018)

2) China - 3.67% (first quarter of 2019)
3) France - 8.8% (fourth quarter of 2018)
4) US - 4% (Jan 2019)
5) Japan - 2.5% (Jan 2019)
6) Pakistan - 5.90 (2017)
7) South Africa - 27.6% (first quarter of 2019)
8) Australia - 5.2% (April 2019)
9) Canada - 5.7% (April 2019)

6.Index of Industrial Production (IIP)

Industrial Production (IIP) is an index that shows the performance of
different industrial sectors of the Indian economy. Following are the three
sectors of the IIP:-
1. Mineral Mining
2. Manufacturing
3. Electricity
IP is also prepared based on Use-based classification of industries. Here,
the industries are divided into six use-based sectors:

1. Primary Goods,
2. Capital Goods,
3. Intermediate Goods,
4. Infrastructure/ Construction goods,
5. Consumer durables and
6. Consumer nondurables.
The IIP is estimated and published on a monthly basis by the Central
Statistical Organisation (CSO). As an all India index, it gives general level
of industrial activity in the economy. According to the CSO, “It is a
composite indicator that measures the short-term changes in the volume
of production of a basket of industrial products during a given period with
respect to that in a chosen base period.” The level of the Index of Industrial
Production (IIP) is an abstract number, the magnitude of which represents
the status of production in the industrial sector for a given period of time
as compared to a reference period of time. The IIP is used by public
agencies including the Government agencies/ departments including that
in the Ministry of Finance, the Reserve Bank of India etc. for policy
purposes. The all-India IIP data is used for estimation of Gross Value
Added of Manufacturing sector on quarterly basis. Similarly, the data is
also used extensively by analysts, financial intermediaries and private
companies for various purposes.
Weighted arithmetic mean of quantity relatives with weights being
allotted to various items in proportion to value added by manufacture in
the base year by using Laspeyres'-formula:
∑(𝑊𝑖𝑅𝑖)
𝐼=
∑𝑊𝑖
Where I is the index, Ri is the production relative of the ith item for the
month in question and Wi is the weight allotted to it.

7.Business Confidence Index (BCI) &

Consumer Confidence Index (CCI)

Business Confidence Index (BCI): This business confidence indicator

provides information on future developments, based upon opinion surveys on
developments in production, orders and stocks of finished goods in the industry
sector. It can be used to monitor output growth and to anticipate turning points
in economic activity. Numbers above 100 suggest an increased confidence in
near future business performance, and numbers below 100 indicate pessimism
towards future performance
The Business Expectations Index (BEI) in India fell to 113.5 in the first quarter
of 2019-20 fiscal year from 116.2 in the previous three-month period, as firm’s
anticipated softer expansion in demand, with prospect of employment holding
up. Business Confidence in India averaged 117.80 Index Points from 2000 until
2019, reaching an all-time high of 127.50 Index Points in the second quarter of
2007 and a record low of 96.40 Index Points in the second quarter of 2009.The
BCI of United States in April 2019 is 52.8 and in the previous month is 55.3.

Consumer Confidence Index (CCI): The Consumer Confidence Index (CCI)

Survey is an index given by the conference board that measures how optimistic
or pessimistic consumers are with respect to the economy in the near future. The
Consumer Confidence Index (CCI) is based on the concept that if consumers are
optimistic, they tend to purchase more goods and services. This increase in
spending inevitably stimulates the whole economy.
The index is released on the last Tuesday of every month. It is a barometer of
the health of the economy and is based on consumers' perceptions of current
business and employment condition, and their expectations for business,
employment, and income for the next six months. The Consumer Confidence
Index is based on the Consumer Confidence Survey, which is a survey of 5,000
households.
Consumer Confidence in India increased to 105 Index Points in the second
quarter of 2019 from 104.60 Index Points in the first quarter of 2019. Consumer
Confidence in India averaged 103.53 Index Points from 2010 until 2019,
reaching an all-time high of 116.70 Index Points in the fourth quarter of 2010
and a record low of 88 Index Points in the third quarter of 2013.
The CCI of US rose to 102.4 in April 2019 from 97.2 in the previous month,
easily beating market consensus of 97.5, a preliminary estimate showed.