TASK 12

COMPANY ANALYSIS – INFOSYS LIMITED

Infosys Limited is an Indian Information Technology company that provides global business
consulting and information technology services. Infosys helps clients in 45 countries to create
and execute different strategies for their digital transformation. Infosys helps businesses to
renew & improve existing conditions so that their business can achieve higher efficiencies
and stay relevant according to current times.  Infosys has more than 200,000 employees and
through their hard work & dedication, Infosys has grown to become a US $10.9 billion
(revenues FY18) company with a market capitalization of US $39 billion.

Infosys History

Infosys was founded by seven engineers in Pune, Maharashtra, India with an initial capital of

$250 in 1981. It was registered as Infosys Consultants Private Limited on 2 July 1981. In
1983, it relocated its office to Bangalore, Karnataka, India.

The company changed its name to Infosys Technologies Private Limited in April 1992 and
to Infosys Technologies Limited when it became a public limited company in June 1992. It
was later renamed to Infosys Limited in June 2011.

An initial public offering (IPO) was floated in February 1993 with an offer price
of ₹95 (equivalent to ₹550 or US$7.80 in 2019) per share against a book value
of ₹20 (equivalent to ₹120 or US$1.60 in 2019) per share. The IPO was undersubscribed but
it was "bailed out" by US investment bank Morgan Stanley, which picked up a 13% equity
stake at the offer price. Its shares were listed in June 1993 with trading opening
at ₹145 (equivalent to ₹850 or US$12 in 2019) per share.

Its shares were listed on the Nasdaq stock exchange in 1999 as American depositary receipts.
The share price surged to ₹8,100 (equivalent to ₹28,000 or US$390 in 2019) by 1999
making it the costliest share on the market at the time. At that time, Infosys was among the 20
biggest companies by market capitalization on the NASDAQ. The ADR listing was shifted
from NASDAQ to NYSE Euronext to give European investors better access to the company's
shares.

Its annual revenue reached US$100 million in 1999, US$1 billion in 2004 and US$10 billion
in 2017.

In 2012, Infosys announced a new office in Milwaukee, Wisconsin, to serve Harley-

Davidson, being the 18th international office in the United States. Infosys hired 1,200 United
States employees in 2011, and expanded the workforce by an additional 2,000 employees in
2012. In April 2018 Infosys announced expanding in Indianapolis, Indiana. The development
will include more than 120 acres and is expected to result in 3,000 new jobs—1,000 more
than previously announced.

In July 2014, Infosys started a product subsidiary called EdgeVerve Systems, focusing on

enterprise software products for business operations, customer service, procurement and
commerce network domains. In August 2015, the Finacle Global Banking Solutions assets
were officially transferred from Infosys and became part of the product company EdgeVerve
Systems product portfolio.

INFOSYS’ VISION

“To be a globally respected corporation that provides best-of-breed business solutions,

leveraging technology, delivered by best-in-class people.”

Infosys does not just want to be a corporation which just focuses on increasing its business
and revenue, rather its vision is to be a corporation which provides best business solution by
indulging best talented people and eventually to become a reputed and respected corporation.

INFOSYS’ MISSION

“To achieve our objectives in an environment of fairness, honesty, and courtesy towards our
clients, employees, vendors and society at large.”

Infosys focuses on maintaining fairness, honesty and courtesy towards their clients,
employees, vendors and society in their path of achieving their objective. They believe that
these three key aspects were the main factors in achieving their vision.

Infosys Products and Services Offered

Infosys provides software development and its maintenance services to a wide array of
companies from different fields such as insurance, finance, manufacturing etc. Some of the
important work related platforms used in Infosys are

 Mana which is now called NIA - Next Generation Integrated AI Platform.

 Edge Verve Systems which includes Finacle, a banking solution with various modules
related to corporate & retail banking.

 Infosys' own analytics platform called as Infosys Information Platform.

 Infosys consulting is a global management consulting service.

Infosys Awards and Recognition

 Infosys won the Platinum Award at the Asset Corporate awards.

 In 2020, Infosys was ranked No. 1 in the HFS Top 10 Agile Software Development
2020 report.

 In 2020, Infosys was recognized as a leader in Retail and CPG Digital Services by
Avasant.

 In 2019, Infosys was a winner of the United Nations Global Climate Action Award in
'Climate Neutral Now' category.

 In 2019, Infosys was ranked as the 3rd Best Regarded Company in the World by
Forbes.

 At the 13th Indo-American Corporate Excellence Awards 2017, Infosys won the
Responsible Business and the Indo-U.S. Trade Driver of the Year Awards.

 Infosys tax team won the “Asia’s best in-house tax team” award for the year 2017
awarded by Euromoney.

 Infosys won the Golden Peacock Environment Management award for the year 2017.

 Infosys won the awards for Best CEO, Best CFO and Best Investor Relations for the
year 2017 in All Asia Executive Team Rankings by Institutional Investor magazine in
the field of Technology/IT Services.
 Infosys won the Best Company in India at the 20th Finance Asia Platinum Awards for
the year 2016.

 In 2013, Infosys was ranked 18th largest IT services provider in the world by HfS
Research. In the same year, it was ranked 53rd in Forbes list of World's Most
Innovative Companies.

 In 2012, Infosys was ranked No. 19 amongst the world's most innovative companies
by Forbes.In the same year, Infosys was in the list of top twenty green companies in
Newsweek's Green Rankings for 2012.

 In 2006, Institute of Chartered Accountants of India included Infosys into Hall of

Fame for being the winner of Best Presented Accounts for 11 consecutive years.

ORGANIZATIONAL STRUCTURE OF INFOSYS

MUTUAL FUNDS
 EQUITY FUNDS

SCHEME NAME PRESENT NAV FUND MANAGER AUM

PGIM India Midcap 34.15 Aniruddha Naha 1108 Cr
Opportunities Fund
Axis Midcap Fund 59.85 Shreyesh Devakar 10.432 Cr

Quant Midcap Fund 93.3 Ankit A Pande 36 Cr

Investo India Mid Cap 76.4 Neelesh Dhamnastar 1389 Cr

Fund Pranav Gokhla

Tata Midcap Growth 209.76 Abhinav Sharma 1129 Cr

Fund Satish Chandra Mishra

DEBT FUNDS

SCHEME NAME PRESENT NAV FUND MANAGER AUM

ICICI Prudential 36.48 Manish Banthia 6408 Cr
Medium Term Bond Shadab Rizvi
Fund
Axis Strategic Bond 22.7 Dhaval Patel 1349 Cr
Fund Devang Shah
L&T Resurgent India 16.76 Jalpan Shah 740 Cr
Bond Fund
Tata Medium Term 30.78 Murthy Nagarajan 70 Cr
Fund Abhishek Sonthalia

HDFC Medium Term 45.95 Amar Kalkundrikar 3031 Cr

Debt Fund

HYBRID FUNDS

SCHEME NAME PRESENT NAV FUND MANAGER AUM

ICICI Prudential Asset 73.56 Manish Banthia 10278 Cr
Allocator Fund (FOF) Dharmesh Kakkad
Sankaran Naren
Franklin India Pension 158.13 Lakshmikanth Reddy 451 Cr
Fund Krishna Prasad Natarajan
Sachin Padwal-Desai
UTI Retirement Benefit 31.56 Amandeep Singh Chopra 3234 Cr
Pension Fund V Srivatsa
Franklin India Life 69.24 Paul Parampreet 6 Cr
Stage FoF 30s Scheme

ICICI Prudential 83.28 Dharmesh Kakkad 81 Cr

Passive Strategy Fund Sankaran Naren
(FOF)

NATIONAL PENSION SCHEME

National Pension Scheme (NPS) India is a voluntary and long-term investment plan
for retirement under the purview of the Pension Fund Regulatory and Development
Authority (PFRDA) and Central Government

The National Pension Scheme is a social security initiative by the Central

Government. This pension programme is open to employees from the public, private
and even the unorganised sectors except those from the armed forces. The scheme
encourages people to invest in a pension account at regular intervals during the course
of their employment. After retirement, the subscribers can take out a certain
percentage of the corpus. As an NPS account holder, you will receive the remaining
amount as a monthly pension post your retirement. Earlier, the NPS scheme covered
only the Central Government employees. Now, however, the PFRDA has made it
open to all Indian citizens on a voluntary basis. NPS scheme holds immense value for
anyone who works in the private sector and requires a regular pension after
retirement. The scheme is portable across jobs and locations, with tax benefits under
Section 80C and Section 80CCD.

Who should invest in the NPS?

The NPS is a good scheme for anyone who wants to plan for their retirement early on
and has a low-risk appetite. A regular pension (income) in your retirement years will
no doubt be a boon, especially for those individuals who retire from private-sector
 jobs. A systematic investment like this can make a massive difference to your life
post-retirement. In fact, Salaried people who want to make the most of the 80C
deductions can also consider this scheme.

Types of NPS Account 

   Particulars NPS Tier-I Account NPS Tier-II Account

  Status Default Voluntary

  Withdrawals Not permitted Permitted

  Tax exemption Up to Rs 2 lakh p.a.(Under 1.5 lakh for government

80C and 80CCD) employees Other
employees-None
  Minimum NPS Rs 500 or Rs 500 or Rs Rs 250  
contribution 1,000 p.a.
  Maximum NPS No limit No limit
contribution

The two primary account types under the NPS are tier I and tier II. The former is the
default account while the latter is a voluntary addition. The table below explains the
two account types in detail.  

Equity Allocation Rules

The NPS invests in different schemes, and the Scheme E of the NPS invests in equity.
You can allocate a maximum of 50% of your investment to equities. There are two
options to invest in – auto choice or active choice. The auto choice decides the risk
profile of your investments as per your age. For instance, the older you are, the more
stable and less risky your investments. The active choice allows you to decide the
scheme and to split your investments.

NPS Account opening Contribution

PARTICUALRS TIER I TIER II

Minimum Contribution Rs 500 Rs 1000
required at the time of
account opening
 Minimum Subsequent Rs 500 Rs 250
Contribution amount
required
Minimum contribution Rs 1000 NIL
required per year
Minimum number of 1 Nil
contributions required in a
year

SUKANYA SAMRITHI YOGANA

Sukanya Samriddhi Account is a Government of India backed saving scheme targeted

at the parents of girl children. The scheme encourages parents to build a fund for the
future education and marriage expenses for their female child.

FEATURES

 Attractive interest rate of 7.6%, that is fully exempt from tax under section 80C.

 Minimum Rs. 1,000 can be invested in one financial year

 Maximum investment of Rs. 1,50,000 can be made in one financial year

 If the minimum amount of Rs 1000/- is not deposited in any financial year , a penalty
of Rs 50/- will be charged

 Deposits in an account can be made till completion of 14 years, from the date of
opening of the account

 The account shall mature on completion of 21 years from the date of opening of the
account, provided that where the marriage of the account holder takes place before
completion of such period of 21 years, the operation of the account shall not be
permitted beyond the date of her marriage

 Passbook will be issued to customers.

 Withdrawal Facility
  To meet the financial requirements of the account holder for the purpose of
higher education and marriage, account holder can avail partial withdrawal
facility after attaining 18 years of age.

 If the beneficiary is married before maturity of account, account has to be

closed.

List of Banks Offering Sukanya Samriddhi Yojana

 Allahabad Bank Sukanya Samriddhi Yojana.

 Andhra Bank Sukanya Samriddhi Yojana

 Axis Bank Sukanya Samriddhi Yojana.

 Bank of Baroda Sukanya Samriddhi Yojana.

 Bank of India Sukanya Samriddhi Yojana.

 Bank of Maharashtra Sukanya Samriddhi Yojana

 Canara Bank Sukanya Samriddhi Yojana.

 Central Bank of India Sukanya Samriddhi Yojana.

 Vijaya Bank Sukanya Samriddhi Yojana

 Union Bank of India Sukanya Samriddhi Yojana

 UCO Bank Sukanya Samriddhi Yojana

 State Bank of Travancore Sukanya Samriddhi Yojana

 Syndica Bank Sukanya Samriddhi yojana

 IDBI Bank Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana Tax Benefits

By investing in Sukanya Samriddhi Yojana account, one becomes eligible for income tax

benefits under section 80C, with a maximum cap of Rs 1.15 lakh. Withdrawal from Sukanya
Samriddhi Yojana account on maturity is also exempted from income tax.

Rules for opening Sukanya Samriddhi Account

You can only open and operate one account in the name of the girl child. You can't open two
accounts for one girl.
The birth certificate of the girl in whose name the account is opened should be submitted by
the guardian at the time of the opening of the account in the post office or bank, along with
other documents relating to identity and residence proof of the depositor.

How much can be deposited?

You have to deposit a minimum of Rs 250 in a financial year, but the total money deposited
in an account cannot exceed Rs 1.5 lakh.

Deposits in the account can be made till the completion of 15 years, from the date of the
opening of the account. For a 9-year-old, deposits have to continue till the child turns 24.
Between ages 24 and 30 (when the account matures), the account keeps earning interest on
the balance.

Can the account be closed prematurely?

In the event of death of the account holder, the account will be closed immediately on the
production of a death certificate. The balance in the account will be paid, along with the
interest till the month preceding the month of the premature closure of the account, to the
guardian of the account holder.

In any other case, a request for the premature closure of an SSY account can be put forward
after the completion of five years of the account opening. This too will be allowed, as per the
rules, on extreme compassionate grounds such as medical support in life-threatening diseases.
Still, if the account has to be closed for another reason, it will be allowed, but the entire
deposit will only get interest of a Post Office Savings Bank account.

Rules for partial withdrawal

To meet the financial requirements of the account holder for the purpose of higher education
and marriage, withdrawal of up to 50 per cent of the balance at the credit of the account at the
end of preceding financial year is allowed. However, the withdrawal will be allowed only
when the account holder turns 18.

For this, not just a written application, but documentary proof in the form of a confirmed
admission offer in an educational institution or a fee slip from such institution clarifying that
such financial requirement, is required. Further, the withdrawal amount will be restricted to
the actual demand of fee and other charges required at the time of admission as shown in the
offer of admission or the relevant fee slip issued by the institution.

Benefits of the Sukanya Samriddhi Yojana

1. High Interest

Sukanya Samriddhi Account provides a higher rate of interest than other Savings Plans that
offer financial security for the girl child. Each financial year, the government declares the
applicable interest rate for that year, while the interest on your investments is compounded
yearly. By maturity, the assets under your Sukanya Samriddhi Yojana account will increase
manifold – thanks to the power of compounding.

2. Significant Tax Savings

Your contributions towards the Sukanya Samriddhi Yojana for your daughter's future are
eligible for tax deductions under Section 80C of the Income Tax Act 1961. Thus, you can
claim tax deductions up to Rs 1.5 lakh invested in the scheme. Moreover, the tax-saving
benefits are also available on the interest earned and the amount received upon maturity or
withdrawals. The Sukanya Samriddhi Yojana is under the authority of the Department of
Revenue (DOR) and is one of the more popular investment schemes that come with the
exempt-exempt-exempt (EEE) status.

3. Guaranteed Maturity Benefits

Upon maturity, your account balance under the Sukanya Samriddhi Yojana, including the
accumulated interest, will be paid directly to the girl child (or policyholder). Thus, the
scheme essentially helps your daughter becomes financially independent and empowered
once she is mature enough to make life decisions on her own. Another benefit of investing
under Sukanya Samriddhi Yojana is that your accumulated savings continue to accrue
compounding interest even after maturity until it is finally closed by the account holder.

EXCHANGE TRADED FUND

Exchange traded funds pool the financial resources of several people and use it to purchase
various tradable monetary assets such as shares, debt securities such as bonds and derivatives.
Most ETFs are registered with the Securities and Exchange Board of India (SEBI). It is an
appealing option for investors with limited expertise of the stock market.

How do Exchange Traded Funds (ETFs) Work?

ETFs share characteristic features of both shares and mutual funds. They are generally traded
in the stock market in the form of shares produced via creation blocks. ETF funds are listed
on all major stock exchanges and can be bought and sold as per requirement during the equity
trading time.

Changes in the share price of an ETF depend on the costs of the underlying assets present in
the pool of resources. If the price of one or more asset rises, the share price of the ETF rises
proportionately, and vice-versa.

The value of the dividend received by the share-holders of ETFs depends upon the
performance and asset management of the concerned ETF company.

SCHEME NAV FUND AUM

MANAGER
ICICI Prudential Midcap 150 ETF-G 91.93 Kayzad Eghlim 65 Cr
Nippon India ETF PSU Bank BeES 24.14 Mehul Dama 162 Cr
Nippon India ETF Nifty Midcap 150 92.08 Mehul Dama 304 Cr
Reg-G
Motilal Oswal NASDAQ 100 ETF-G 936.42 Herin Visaria 2989 Cr
Kotak PSU Bank ETF 216.73 Devender Singhal 162 Cr

NON-CONVERTIBLE DEBENTURE

Non-convertible debentures (NCDs) are a financial instrument that is used by companies to

raise long-term capital. This is done through a public issue. NCDs are a debt instrument with
a fixed tenure and people who invest in these receive regular interest at a certain rate.

NCD issue means Non-Convertible Debenture public issue. NCD is a Secure and

Redeemable Corporate Bond, a bond issued by a corporation to raise money from the capital
market. Unlike equity shares, bondholders do not have any ownership interest in the
company. They are also known as securities that do not have any equity element attached to
it. NCD are tradable instruments. They are listed with major stock exchanges (BSE and NSE)
in India.

When one buys a corporate bond, one lends money to the company. In exchange, the
company promises to return the money on a specified maturity date along with a stated rate of
interest.

Corporate bonds are debt securities. They are considered as a long-term investment option.
The maturity period of these securities ranges from 1 year to 20 years.

The NCD issue process is similar to the IPO process. Investors apply for NCD shares through
a broker. Based on the subscription, they receive the number of NCD shares. The NCD's are
credited to the demat account and the money gets deducted from the trading/bank account.

NCD Issues Open in India 2021

Company Issue Issue Issue Size - Issue Size - Rating

Name Open Close Base (Rs Cr) Shelf (Rs
Cr)

India Grid Apr 28, May 05, 1000 This Issue have been
Trust 2021 2021 rated ‘CRISIL
AAA/Stable’ by
CRISIL Ratings
Limited and ‘IND
AAA/Stable’ by
India Ratings and
Research Private
Limited.

Muthoot Apr 07, Apr 29, 200 200 The NCDs have
Fincorp 2021 2021 been rated “A+
Limited (Stable)” by CRISIL
Limited
Muthoot Apr 08, Apr 12, 100 1600 The NCDs have
Finance 2021 2021 been rated ‘[ICRA]
Limited AA+/ “Stable” by
ICRA and “CRISIL
AA+/Stable” by
CRISIL

Edelweiss Apr 01, Apr 23, 200 200 ‘Acuite AA’:

Financial 2021 2021 (Outlook: Negative)
Services by Acuite Ratings &
Limited Research Limited
and “BWR
AA-/Stable
(Assigned)" by
Brickwork Ratings
India Private
Limited

Kosamattam Mar 30, Apr 23, 175 175 'BWR BBB+' -

Finance 2021 2021 Outlook Stable, by
Limited Brickwork Ratings
India Private
Limited

Muthoottu Mar 30, Apr 23, 125 125 ‘IND BBB’:

Mini 2021 2021 Outlook Stable’ by
Financiers India Ratings
Limited

India Grid Trust NCD April 2021 Detail

Security Name India Grid Trust

Security Type Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)

Issue Size (Base) Rs 1,000.00 Crores

Issue Price Rs 1000 per NCD

Face Value Rs 1000 each NCD

Minimum Lot 1 NCD

size

Market Lot 1 NCD

Listing At BSE, NSE

Muthoot Fincorp Limited NCD April 2020 Detail

Security Muthoot Fincorp Limited

Name

Security Secured, Redeemable, Non-Convertible Debentures (Secured NCDs)

Type and/or Unsecured Subordinated Non-Convertible Debentures (Unsecured
NCDs)

Issue Size Rs 200.00 Crores

(Base)

Issue Size Rs 200.00 Crores

(Shelf)

Issue Price Rs 1000 per NCD

Face Value Rs 1000 each NCD

Minimum 10 NCD
Lot size

Market Lot 1 NCD

Listing At BSE
 PUBLIC PROVIDENT FUND

Public Provident Fund (PPF) was introduced in India in 1968 with the objective to mobilize
small saving in the form of investment, coupled with a return on it. It can also be called a
savings-cum-tax savings investment vehicle that enables one to build a retirement corpus
while saving on annual taxes. Public Provident Fund (PPF) scheme is a long term investment
option that offers an attractive rate of interest and returns on the amount invested. The interest
earned and the returns are not taxable under Income Tax. One has to open a PPF account
under this scheme and the amount deposited during a year will be claimed under section 80C
deductions.

PPF withdrawal

As a rule, one can fully withdraw the PPF account balance only upon maturity i.e. after
the completion of 15 years. Upon completion of 15 years, the entire amount standing to the
credit of an account holder in the PPF account along with the accrued interest can be
withdrawn freely and the account can be closed.

However, if account holders are in need of funds, and wish to withdraw before 15 years, the
scheme permits partial withdrawals from year 7 i.e. on completing 6 years.

An account holder can withdraw prematurely, up to a maximum of 50% of the amount that is

in the account at the end of the 4th year (preceding the year in which the amount is
withdrawn or at the end of the preceding year, whichever is lower). Further, withdrawals can
be made only once in a financial year.

Procedure for withdrawal from PPF

In case you wish to partially or completely withdraw the balance lying in your PPF account.

Step 1: Fill in the application form using Form C with relevant information.

Step 2: Submit the application to the concerned branch of the bank where your PPF account
lies.

What are the tax benefits of investing in PPF?

PPF is one investment vehicle that falls under the Exempt-Exempt-Exempt (EEE) category.
This, in other words, means that all deposits made in the PPF are deductible under Section
80C of the Income Tax Act. Furthermore, the accumulated amount and interest is also exempt
from tax at the time of withdrawal. It is important to note that a PPF account cannot be closed
before maturity. A PPF account, however, can be transferred from one point of designation to
another. But, do remember that a PPF account cannot be closed prematurely. Only in the case
of the account holder’s demise can the nominee’s file for the closure of the account.

DISADVANTAGES OF PPF

 Less Liquid

You cannot withdraw from your PPF until the completion of seven years. This is a major
drawback of the scheme. After the completion of 7 years you can withdraw just 50 per cent of
the amount. Loans can be availed from the 3rd financial year excluding the year of deposit.
So, if you feel you need large sums of money then consider other liquid instruments apart
from the PPF.

 Trusts should stay away

While earlier, Hindu Undivided Families (HUF) and Trusts were allowed to invest in PPF,
that facility has now been withdrawn. HUFs and Trusts have to now look at other investment
instruments.

 No joint accounts allowed in a PPF

No joint accounts are allowed in PPF, unless you open the same with a minor. However,
nominations are allowed. Being a very long-term instrument, you must make a nomination in
the PPF account. This will avoid hassles at a later stage, especially for the legal heir.

 NRIs cannot open fresh accounts in PPF

NRIs are not allowed to open fresh accounts. However, if you had an account as a resident
Indian and have now become an NRI you can continue to contribute to the PPF. Again, you
will receive benefits like tax benefits
 PORTFOLIO MANAGEMENT SERVICES

Portfolio Management Service is a tailor made professional service offered to cater the
investments objective of different investor classes. The Investment solutions provided by
PMS cater to a niche segment of clients. The clients can be Individuals or Institutions entities
with high net worth. In simple words, a portfolio management service provides professional
management of your investments to create wealth.

Portfolio Management Types

 Active Portfolio Management

The active portfolio manager aims to make better returns than the overall markets i.e.
to generate Alpha. Higher returns would involve higher than normal risk in the
strategies and therefore, the portfolio manager tries to downsize the risk by
diversifying its investments into various asset classes, sectors and businesses. The
turnover of the assets under management is generally high as compared to Passive
style of managing funds.

 Passive Portfolio Management

Exactly opposite to the previous type is the Passive style of portfolio management.
The portfolio manager generally experiments with the Index funds which has a
relatively lower turnover and reasonably decent long term returns.

 Discretionary Portfolio Management

A discretionary manager is given full flexibility to make decisions for the investor.
While the individual goals, risk appetite and time-frame are taken into consideration,
the manager adopts the appropriate strategy which he thinks is the best suiting the
investment policy statement. The fees for such managed funds are generally higher
because of higher involvement in decision making as well as more efforts by the
manager.
Once the cash has been handed to the professional, the investor sits back and trusts
that the profits will roll in.

 Non-Discretionary Portfolio Management

The non-discretionary manager is more like an advisor than a portfolio manager
 himself. He advises the investor in which routes are best to take. The risks and
rewards are cleared mentioned in the advisory note while the discretion to take action
is totally with the investor. Only once the manager has been given the go ahead, the
portfolio manager takes the appropriate action on the investor's behalf.

Investment Strategies

Investment strategies are strategies that help investors chose where and how to invest as per
their expected return, risk appetite, corpus amount, long-term, short-term holdings, retirement
age, choice of industry, etc. Investors can strategies their investment plans as per the
objectives and goals they want to achieve.

Types of Investment strategies

Passive and Active Strategies

The passive strategy involves buying and holding stocks and not frequently deals in them to
avoid higher transaction costs. They believe they cannot outperform the market due to its
volatility; hence passive strategies tend to be less risky. On the other hand, active strategies
involve frequent buying and selling. They believe they can outperform the market and can
gain more returns than an average investor would.

Growth Investing (Short-Term and Long-Term Investments)

Investors chose the holding period based on the value they want to create in their portfolio. If
investors believe that a company will grow in the coming years and the intrinsic value of a
stock will go up, they will invest in such companies to build their corpus value. This is also
known as growth investing. On the other hand, if investors believe that a company will
deliver good value in a year or two, they will go for short-term holding. The holding period
also depends upon the preference of investors. For example, how soon they want money to
say to buy a house, school education of kids, retirement plans, etc.

Value Investing

Value investing strategy involves investing in the company by looking at its intrinsic value
because such companies are undervalued by the stock market. The idea behind investing in
such companies is that when the market goes for correction, it will correct the value for such
undervalued companies, and the price will then shoot up, leaving investors with high returns
when they sell. This strategy is used by the very famous Warren Buffet.
Income Investing

This type of strategy focuses on generating cash income from stocks rather than investing in
stocks that only increase the value of your portfolio. There are two types of cash income
which an investor can earn – (1) Dividend and (2) Fixed interest income from bonds.
Investors who are looking for steady income from investments opt for such a strategy.

SENIOR CITIZEN SAVINGS SCHEME

Senior Citizen Savings Scheme (SCSS) is a preferred fixed income investment option for
people above the age of 60 years. The primary objective of this scheme is to help senior
citizens ensure a regular flow of income post retirement. Since SCSS is a government-backed
investment scheme, it gives guaranteed returns on a quarterly basis. One can avail SCSS
through certified banks and post offices in India.

SCSS Interest Rate

Senior Citizen Savings Scheme (SCSS) interest rates for the first quarter (April-June) of FY
2021-22 is 7.4% p.a. This is one of the highest interest rates offered by a fixed income small
savings scheme.

SCSS interest rate is reviewed quarterly and is subject to periodic change. Interest is also
calculated and credited quarterly.

SCSS Eligibility Criteria

If you fall in the following groups, you are eligible to invest in SCSS:

 People above the age of 60 years

 Retirees in the age bracket of 55-60 years who have opted for Voluntary Retirement
Scheme (VRS) or Superannuation*

 Retired defence personnel with a minimum age of 60 years

Senior Citizen Savings Scheme (SCSS) Deposit Limits

Eligible investors can make a lump sum deposit in Senior Citizen Savings Scheme (SCSS).

 Minimum Deposit– Rs. 1,000 (and in multiples thereof)

 Maximum Deposit– Rs. 15 Lakh or the amount received on retirement, whichever is
lower

While deposits in SCSS accounts can be made in cash, it is allowed only for amounts less
than Rs. 1 Lakh. For deposits exceeding Rs. 1 lakh, using a cheque/demand draft for is
mandatory.

SCSS Maturity Period

A Senior Citizen Savings Scheme matures after 5 years calculated from the date of account
opening. However, the account holder does have the option of extending the account for an
additional 3 years after it has matured. This extension option is currently available just once
and the extension request has to be made within 1 year of maturity of the SCSS account.

Tax Implications of Senior Citizen Savings Scheme (SCSS)

Investment made in SCSS are also eligible for tax deductions in the following manner:

 The principal amount deposited in SCSS is eligible for a tax deduction of up to Rs.
1.5 Lakh per annum under section 80C of the Income Tax Act, 1961

 Interest on SCSS is taxable as per the tax slab applicable to the person. In case the
interest amount earned is more than Rs. 50,000 for a fiscal, Tax Deducted at Source
(TDS) is applicable to the interest earned. This limit for TDS deduction on SCSS
investments is applicable from AY 2020-21 onwards.

Senior Citizen Savings Scheme (SCSS) Highlights

Interest Rate 7.4% per annum (Q1 FY 2021-22)

5 years (with an option to extend it for 3 more

Tenure
years)

Minimum Investment Amount Rs. 1,000

Rs. 15 Lakh or the amount received on retirement,

Maximum Investment Amount
whichever is lower
  Safe and reliable investment
 High returns as compared to FD or Savings
Benefits Account
 Tax benefit up to Rs. 1.5 Lakh

 1.5% of the deposited amount if withdrawn

before the completion of 2 years
Premature Withdrawal Penalty  1% of the amount on withdrawing after the
completion of 2 years

INSURANCE

Insurance is a contract, represented by a policy, in which an individual or entity receives

financial protection or reimbursement against losses from an insurance company. The
company pools clients' risks to make payments more affordable for the insured.

Insurance policies are used to hedge against the risk of financial losses, both big and small,
that may result from damage to the insured or her property, or from liability for damage or
injury caused to a third party.

Insurance Products

Life Insurance

Life Insurance refers to a policy or cover whereby the policyholder can ensure financial
freedom for his/her family members after death. Suppose you are the sole earning member in
your family, supporting your spouse and children.

In such an event, your death would financially devastate the whole family. Life insurance
policies ensure that such a thing does not happen by providing financial assistance to your
family in the event of your passing.
Types of Life Insurance Policies
There are primarily seven different types of insurance policies when it comes to life
insurance. These are:
 Term Plan - The death benefit from a term plan is only available for a specified
period, for instance, 40 years from the date of policy purchase.
 Endowment Plan - Endowment plans are life insurance policies where a portion of
your premiums go toward the death benefit, while the remaining is invested by the
insurance provider. Maturity benefits, death benefit and periodic bonuses are some
types of assistance from endowment policies.
 Unit Linked Insurance Plans or ULIPs - Similar to endowment plans, a part of your
insurance premiums go toward mutual fund investments, while the remaining goes
toward the death benefit.
 Whole Life Insurance - As the name suggests, such policies offer life cover for the
whole life of an individual, instead of a specified term. Some insurers may restrict the
whole life insurance tenure to 100 years.
 Child’s Plan - Investment cum insurance policy, which provides financial aid for
your children throughout their lives. The death benefit is available as a lump-sum
payment after the death of parents.
 Money-Back - Such policies pay a certain percentage of the plan’s sum assured after
regular intervals. This is known as survival benefit.
 Retirement Plan - Also known as pension plans, these policies are a fusion of
investment and insurance. A portion of the premiums goes toward creating a
retirement corpus for the policyholder. This is available as a lump-sum or monthly
payment after the policyholder retires.

General Insurance
General insurance helps us protect ourselves and the things we value, such as our homes, our
cars and our valuables, from the financial impact of risks, big and small – from fire, flood,
storm and earthquake, to theft, car accidents, travel mishaps – and even from the costs of
legal action against us. And we can choose the types of risks we wish to cover by choosing
the right kind of policy with the features we need.

Types of General Insurances in India

Almost everything is insurable. However, General Insurance in India is bifurcated as Fire,
Engineering, Marine and Miscellaneous Insurance.
Let us look at them as per the use and general acceptability. Following are the different
types of General Insurances in India:
 Health Insurance
 Travel Insurance
 Motor Insurance
 Marine Insurance
 Home Insurance
 Commercial Insurance
Digit Insurance also offers insurance policies for Mobile, Bicycle, Shop Protection, and
others.
1. Health Insurance
The Health Insurance cover from Digit offers protection for the medical expenses
incurred due to hospitalization caused because of an accident or illnesses.
Although every policy is different, based on who it's being purchased for, it mainly
covers:
 Accidental Hospitalization (pre & post)
 Accidental illness and hospitalization
 Daycare procedures
 Psychiatric Support
 Annual Health Checkups
 Daily Hospital Cash
 
The cover can be extended to cover the following with some predefined conditions:
 Maternity benefit with Infertility benefit
 Critical Illness
 Organ Donation
 AYUSH (Alternate Treatment)
 
The premium for the health insurance is charged on the basis of:
 Age
 Pre-existing illness
 Lifestyle Habits
 Type of coverage
 Your family health history
2. Travel Insurance
Travel Insurance covers your financial liability, if any, when you travel within or beyond
the Indian boundaries. The financial liability may arise due to medical or non-medical
emergencies.
The duration of the travel for one time can be 180 days at the maximum. The
policyholder can take more than one trip in a year. Your Travel Insurance will cover:
 Loss of Baggage
 Loss of Passport
 Hijacking
 Medical Emergencies
 Delayed Flights
 Accidental Deaths
 Adventure Sports
Digit’s Travel cover comes with worldwide support and special features like:
 Zero Deductibles.
 Smartphone enabled claim process.
 Customized Travel Plan Cover.
 Missed call claim facilitation.
3. Motor Insurance
A Motor Insurance Policy is mandatory to be able to drive legally in India. Broadly there
are two types a) Third-Party Liability b) Comprehensive Package Policy.
A Third-Party Policy covers for losses faced in a situation where your vehicle damages
any third-party such as a public property, person or third-party vehicle. The same is the
minimum requirement to be able to drive legally in India, as stated by the Motor Vehicles
Act.
A Comprehensive Package Policy covers both third-party damages and liabilities and
damages/losses caused to you and your own vehicle. The losses may arise due to an
accident, theft, fire, natural calamities, and others.
Digit Insurance provides some add-ons under its Comprehensive Package Policies
for Cars and Bikes that act as additional shields to your vehicle, such as:
 Tyre Protect Cover
 Zero Depreciation Cover
 Return to Invoice
 Engine and Gearbox Protection
 Breakdown Assistance Cover
4. Home Insurance
You build your home with your toil and hard earned money. Everything you buy is a
priceless possession for you and hence it needs to be protected.
A Home Insurance Policy protects your valuable and other assets. It is a comprehensive
package policy that covers all valuables.
Digit Insurance gives protection for Home against Burglary, Loss/Damage of Jewelry,
Fire and Natural Disasters.
5. Commercial Lines
The lines of insurance that affects the business operations in the real terms are categorized
under the Commercial Lines of Insurance. Type of the insurance covers that one can buy
may include:
 Property Insurance
 Engineering Insurance
 Liability Insurance
 Marine Insurance
 Employees Benefit Insurance
 Business Interruption
Depending on the type of occupation, risk exposure, and the money involved, the
insurance could be different for each industry or business.
For example; an insurance that is specific to a cement plant, versus one for an IT
company will be different. The premium charged for a cement plant will be higher than a
showroom of air conditioner.
Therefore, Insurance is completely based on the level of the risk exposure. A worker in
the cement plant is more prone or susceptible to injury than to the one who is working in
the showroom.
6. Mobile Insurance
 Simple as it reads. A mobile insurance protects the phone from accidental damage. Under
the mobile protection cover, Digit Insurance compensates for repair of accidental screen
damage to your phone.
The buyers can have mobile insurance for both an old or new phone. Very affordable
insurance protection for the most expensive phones you buy.
7. Bicycle Insurance
Not just the cars and two wheelers, people are now passionate for expensive bicycles also.
Call it a fashion or change of lifestyle, Bicycle Insurance is another sought product these
days. Digit Insurance offers cover against Personal Accident, Theft, Accidental Damage,
and Hospital woes.

Health Insurance

Health insurance refers to a type of general insurance, which provides financial assistance to

policyholders when they are admitted to hospitals for treatment. Additionally, some plans
also cover the cost of treatment undertaken at home, prior to a hospitalisation or after
discharge from the same.

With the rising medical inflation in India, buying health insurance has become a necessity.
However, before proceeding with your purchase, consider the various types of health
insurance plans available in India.

Types of Health Insurance policies

There are eight main types of health insurance policies available in India. They are:

 Individual Health Insurance - These are healthcare plans that offer medical cover to
just one policyholder.

 Family Floater Insurance - These policies allow you to avail health insurance for
your entire family without needing to buy separate plans for each member. Generally,
husband, wife and two of their children are allowed health cover under one
such family floater policy.

 Critical Illness Cover - These are specialised health plans that provide extensive
financial assistance when the policyholder is diagnosed with specific, chronic
 illnesses. These plans provide a lump-sum payout after such a diagnosis, unlike
typical health insurance policies.

 Senior Citizen Health Insurance - As the name suggests, these policies specifically
cater to individuals aged 60 years and beyond.

 Group Health Insurance - Such policies are generally offered to employees of an

organisation or company. They are designed in such a way that older beneficiaries can
be removed, and fresh beneficiaries can be added, as per the company’s employee
retention capability.

 Maternity Health Insurance - These policies cover medical expenses during pre-
natal, post-natal and delivery stages. It covers both the mother as well as her newborn.

 Personal Accident Insurance - These medical insurance policies only cover financial

liability from injuries, disability or death arising due to accidents.

 Preventive Healthcare Plan - Such policies cover the cost of treatment concerned
with preventing a severe disease or condition.

Term 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, 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.
In other words, the only value is the guaranteed death benefit from the policy.

Types of Term Insurance

There are various types of term insurance besides the level term policies we've outlined
so far. Each policy has its pros and cons, depending on the needs of the policyholder.

Convertible Term

Convertible term life insurance allows a term insurance policy, which has a limited
number of years before expiring, to convert into whole life or permanent insurance. The
major benefit of convertible insurance is that the policyholder doesn't have to submit to a
medical exam, nor are any health conditions considered when the term policy converts to
permanent insurance.

Increasing Term

Some policies allow you to increase the death benefit as time goes on. The premium
increases as well, but it allows policyholders to pay lower premiums early on in life when
they have a lot of bills and expenses. The increasing term prevents having to qualify for
another policy at an older age to get the added benefit as would be the case with
traditional term insurance.

Mortgage Term or Decreasing Term

A mortgage term or decreasing term policy is the opposite of the increasing term because
the death benefit amount decreases over time. The goal is to match the decline of the term
benefit to the reduction of the policyholder's outstanding mortgage. The idea behind this
strategy is that you don't need as much life insurance if you have less mortgage debt.
However, although the premiums are smaller than term insurance, the premium payments
remain constant even as the benefit declines.

Annual Renewable

As each year passes, the term insurance is renewed but for a higher premium since the
policyholder is a year older. The benefit to annual renewable term insurance is that the
coverage is guaranteed to be approved each year. However, it may not be the most cost-
effective for everyone due to the increased costs over time.

Anooja Sajeev

Junior Research Analyst

Hedge School Of Applied Economics