Niveshak April 2014 Issue with Page Flip version

Sunday, May 18, 2014 , Posted by Team Niveshak at Sunday, May 18, 2014

Dear Niveshaks,

While the whole country is gripped in the poll fever, we bring to you a fresh new edition of Niveshak. The month of April started with The Reserve Bank of India (RBI) granting two preliminary licenses to IDFC Ltd and Bandhan Financial Services to set up new banks in a country where only one household in two has access to formal banking services. RBI Governor Raghuram Rajan said that banking licenses will be an on-tap facility, meaning the central bank will keep issuing new licenses to applicants it deems fit as and when re­quired.
 Another major event was Sun Pharma’s acquisition of Ranbaxy Laboratories, in a landmark $4-billion transaction, which marks the coming together of two major Indian pharmaceutical companies to create the world’s fifth-largest generic drug maker by sales. The all-share deal, the biggest in the pharmaceutical sector in the Asia Pacific region this year, is seen as a rare purchase of a local rival by a leading Indian company. The erstwhile ‘king of good times’, Vijay Mallya, may now lose his Kingfisher brand. Lenders have started the process of selling brands associated with the grounded Kingfisher Air­lines (KFA). And the ones up for grab include ‘Kingfisher’, ‘fly the good times’ and ‘flying models’. On the international front, Vic Gundotra, the high-profile Indian executive who headed the Google+ team at Google, is leaving the company. Apart from being the man behind Google+, Gundotra was instrumental in making Google I/O, company’s annual conference for developers a success. But, the biggest happening in the country right now is going on in regards to the 16th Lok Sabha Elections, the world’s largest election. Every major party is busy doing campaigning for elections and all the citizens are busy contem­plating whom to give the hot seat for the next 5 years!!
As we move ahead with our initiative of Niveshak Investment Fund (NIF), the portfolio has shown a favorable growth trend, outperforming the market. A detailed report inside summarizes the overall performance of the fund for this month. The Article of the Month this time is “2016: A bubble waiting to burst?” which intends to address the recessions that occurred in the US economy and their global impact and then identify a pattern fol­lowed by business cycles. Our Cover Story for this month “Banking Licenses” analyses the various aspects related to the new banking license and what effects it will have on the In­dian banking sector. FinGyan section of this edition elaborates on “Behavioral Approach To Understand US 2008 Crisis”. FinSight article “CAPM- Telecom” shows computation of cost of equity for different valuations in the Telecom sector derived by different values over different spans of time. The FinPact article “The Vodafone – Hutchison Essar Deal” tells about one of the biggest telecom M&A deal for India. Not only was this one of India’s largest foreign takeovers, this deal also attracted an unprecedented array of blue-chip legal teams from India and abroad. This time, the FinView section has the excerpts from our interaction with Mr. Jaydip Mukhopadhyay, ERS Manager at Deloitte & Touche LLP. He gave us many useful insights into the risk management sector. The Classroom section this time throws light on the famous term of “Chinese Wall”.

We would like to thank our readers for their immense support and encouragement. You remain our prime motivation factor that keeps our spirits high and gives us the vigor and vitality to keep working hard. Thank you.

Stay invested!

Team Niveshak
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