3 Tips# How to Achieve Financial Freedom. Money Matters

Financial freedom generally denotes having resources, investments, and cash so that you can afford the kind of life you want. Individuals can take small steps each day towards this goal by following a budget and paying close attention to their finances.

How to move about?

Let’s find our way to Financial Freedom!! It’s not only your income but the habit of savings that make you financially independent. Don’t wait for your salary hike or scaling of the business. Just realise the significance and strength of small savings!! Regular savings of @10% per month can accumulate funds aggregating more than a month’s salary in your account in just 10 months? Not a big science only simple mathematics, you need to believe in yourself!

“You don’t have to see the whole staircase, just take the first step.”

– Martin Luther King, Jr.

http://www.moneyxtensions.com

Are You Managing Your Money Well?

Look back at your total salary last year? Were you not managing your life comfortably? You have already received your annual increment and maybe a promotion too, Right? Additional few dollars dropping in your Bank account has not made any difference except the frequency of dining out or buying a household item to improve your lifestyle. You have already exhausted by spending comfortably throughout the month and there is still a week to go when the next salary gets into your account?

How do people react ?:

This is what a decently employed person keeps doing till he confronts a serious problem of virtually no balance left in the account. He has to resort to quick high-cost borrowing for each and every activity involving money. This could be for hospitalization, child education, home repairs, loss of a job or any other emergency requirement.

#1. The only way to save is Auto Debit/Transfer:

Open another account with your bank and start saving by setting up auto debit instruction in your salary account today. This is the only and best way to avoid spending whatever you get in your Bank account.

For example, the net salary of Rs.50000/- is credited into your account on the 7th date of every month. An auto tranfer of 10% i.e Rs.5000/- will be automatically clicked on the same day leaving behind Rs.45000/- in your account. Hopefully, you will organize yourself to ensure all expenditute within the said amount.

#2 Set Up/Plan Your Budget:

No business, No state, No Country, and for that matter no family can survive without planning a budget. It’s a simple exercise of matching your likely expenses with the income/salary being credited in the Bank account every month. Though the living expenses remain on tips it is advisable to adopt a habit of writing in your diary every month. This will provide you an opportunity to have a look at the expenses for exploring chances of taking leverage on cutting down expenditure during a particular month.

“The goal isn’t more money. The goal is living life on your terms.” –Chris Brogan

Never allow your debt to surpass 10% of annual income; If your total annual salary/income comes out to be Rs.1200000/- then the short term debt should not go beyond 120000/- at any given time under any circumstances.

Earning and spending without having a clearly defined budget is like driving a vehicle carrying your family without knowing the destination and checking on the fuel required for your journey.

”If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”

– Edmund Burke

#3 Explore Extra Income Source:

The current pandemic condtions have made the world wiser and adaptable to the new environment as everything has kept moving though not as smooth as it should have been.

There is no dearth of finding an additional source of income that can supplement your resources for enjoying financial freedom. It depends on your resolve only that can initiate and identify utilizing the extra few hours at your disposal. This could be earning a few dollars by using your professional qualitifcation, hobbies by subscribing to the portals like freelancer, Udemy, and many others paying for the services on offer 24x7x365:

1. You can also explore the option of doing some online drop shipping business that doesn’t require you to maintain any inventory or account books. You can use your selling instincts by availing of marketing options to bring customers to your store. Leave everything from packing to the delivery upto the supplier. In the end, a handsome return to keep your retirement plan moving
2. Never miss an opportunity to use your credit card judiciously to earn points for earning cash backs or other such gifts by observing strict discipline.

Hi friends, do you have any other way of accomplishing financial freedom. Your feedback will be an enriching experience for me as well the readers. No one is a complete individual or professional in any field and I am not the exception.

Have a wonderful day ahead,

https://www.success.com/10-meaningful-quotes-about-achieving-financial-freedom/

How $100 Turned $324000! Unbelievable Crypto Growth. Risky Rewards!

All the traditional old stories attributed to financial advisors advocate for saving enough and controlling expenses being the only way to amassing wealth for a relaxed impending retired life in 20 to 30 years. The art of compounding keeps adding valuation to your investments at consistently good rates for the funds to grow on the expected graph.

Traditional instruments being Bonds, Mutual Funds, Bank Deposits, Shares will never eat into your entire capital as turbualence here and there may reduce the average returns only. The assets lying in your portfolio are safe, secure and easily accessible for encashmnt or swapping at any point of time.

We have seen over the past few decades that all the global indices grow at around 11 to 12% per annum. Leave aside the bubbles of markets crashes happening at irregular intervals causing anxieties in the minds of investors, the compounding factor brings a good wealth for you even if you stay invested passively. These are the strong plus points for those believing in safe and assured returns from their investments. Alas! this route of accumulation of wealth takes longer journey to your retirement at the age of 60 years.

Photo by David McBee on Pexels.com

However, for the possibility of your retirement occurring anywhere between 40 to 50 years of age, you will have to think differently!! The idea of putting your money in the most volatile and riskier options could be scary for the obvious reasons but we have been listening from the experts “More the risk- More the profit”. Your money will grow in proportion to your risk only.

The year end rally saw the cryptocurrency prices soaring sky high prompting me to contemplate allocating some money in this newly found love of cryptocurrency in general and Bitcoin/Etherium in particular. Though not a guaranteed return option yet an investment that can get you closer to your relaxed retirement sooner than planned. The risk to reward ratio is incredible as you will see in the following illustration.

Cryptocurrency has come a long way since the year 2010. From virtually nonexistant pricing, Bitcoin has touched $42000 recently. Bitcoin came into existence through its founder Santoshi Nakamoto in 2009 as the first blockchain-based cryptocurrency in the world. It was considered as an attempt to create an alternate arrangement for money transactions directly without using the usual authorized medium of Banks or financial institutions. Feeling threatened by the presence of cryptocurrency seemingly an alternate to the Fiat currency, all countries have remained in unacceptable mode to regulate this cryptocurrency so far.

The price of Bitcoin remained inconsequential for the initial few years but July 2010 saw this unregulated little-known currency moving up from $ 0.0008 to $0.08. A big jump by all means!! Did anybody ever contemplate investing in Bitcoin even in 2010? I think no one would have ever visualized that this scarce commodity will create a magic in few year’s time and investors will carry this currency to astronomical heights.

Despite some of the exchanges closing down due to intervention of the regulatory bodies in various countries, a sudden spurt in price transpired in 2013 when a bitcoin trading @$13 reached a maximum $220 by the end of the year. Bitcoin after attaining a mind-boggling price of $19780 in December 2017 cruised along with prices going down to the $3500 levels right through 2018 but bouncing back to five figures in 2019.

Starting from the third quarter of 2020, cryptocurrency market has shown a tremendous spurt in prices, and the level of $28000 for a bitcoin achieved in December looked invincible. But look at the way this currency has behaved right from the start of the current year. We have witnessed milestones after milestones getting crushed in every session as the price skyrocketed to $42000 a bitcoin levels in the first week of January 2021.

While there is a Maximum limit of Bitcoin i.e 21 million to be mined and 18.62 million have already been in circulation as of date. This limited supply has created the gap between demand and supply impelling the institutional investors to join the party in a big way. The news of more than 78% accessible bitcoins having been possessed by the institutional investors left retail investors vying for the remaining 22% available in the market. As anticipated, this continued demand-supply gap may swell the prices beyond the purview of small investors in the future.

Over the last ten years, this currency has grown from a meager $ 0.08 to $42000, growing to (42000 is a 52499900% increase of 0.08.) Unbelievable. An investment of 100 (roughly 1200 bitcoins) in 2010 would have become $50400000 as of the first week of January 2021. look at the table “A” below for more comprehension. Etherium, the number two altcoin in the market has also been showing tremendous growth in the company with its more illustrious elder brother Bitcoin. Etherium is the platform being used by a large number of small tokens in the market and is likely to remain in demand.

Name of Currency	Price 2010	Price 2015	Price 2020	Price 2021	Investment in 2010/15	Number of Bitcoin & value
Bitcoin	$0.08	$360	$28000	$42000	$100	1200=$50400000
Etherium	NA	$0.43	$753	$1393	$100	233=$324569

TABLE–A

Friends don’t you feel tempted to invest in this lucrative option despite being a risky proposition. To start with, let me put the various sentiments, both negative and positive about the future prospects of cryptocurrency in the words of leading businessmen/institutions to disseminate a fair idea before taking a dip in the crypto markets:

In the words of Warren Buffet, “I don’t have any Bitcoin. I don’t own any cryptocurrency, I never will,” he told CNBC in 2020. He has always been talking against this currency as these investments don’t follow the strictest terms of his legacy.

Photo by Pixabay on Pexels.com

Another negative news on the volatility witnessed over the last few days as the UK regulatory has been quoted as saying :

“Individuals investing in crypto-currencies such as Bitcoin should be prepared to lose all their money, a United Kingdom regulatory agency warned. The Financial Conduct Authority (FCA) issued the warning after a sharp run-up in price in the last few months and a sharp decline over the weekend..https://moneywise.com/a/why-warren-buffett-hates-bitcoin

Slowly but surely most countries are opening up to cryptocurrency. We have regulated crypto exchanges like Coinbase, Bitflyer, Binance, Kraken, Huobi Global, etc to conduct business and a country like India has also started doing unprecedented business as all Banks allow transactions linked with cryptocurrency nowadays. I am not talking about the trading part which requires relevant skills and professionalism before jumping into this most volatile and risky business. However, this is an opportunity for those having a big risk appetite to venture into this portfolio for investing for a longer horizon.

The big brains of highly accredited professionals working with the leading Banks and Financial Institutions have been talking of a great future for this cryptocurrency.

US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business. JPM Coin is the first digital currency to be backed by a major US bank. The crypto-currency, which runs on blockchain technology, has been used successfully to move money between the bank and a client account.

http://www.bbc.com/news/business-47240760

To conclude, I would love to present a very encouraging statement from the CEO of Pay-pal:

“I really like Bitcoin. I own Bitcoins. It’s a store of value, a distributed ledger. It’s also a good investment vehicle if you have an appetite for risk. But it won’t be a currency until volatility slows down.” —David Marcus, CEO of Paypal

Friends, looking at the briefly explained pros and cons of investing in this very tricky, speculative, and turbulent crypto market, you can take an informed decision before taking a call to venture into this unpredictable market. Short term players with fragile financial backup and a tendency to exit or enter the market frequently are prone to greater risk and must avoid spending restless nights after investments. However, as illustrated above, customers with high risk appetite may spare a few thousand to initiate into this market to reap rich dividends in the longer run.

What do you think of holding crypto currency in your portfolio as an alternate opportunity for a long term investment?

Stay Safe Stay Connected

           
Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Make Money with Penny Stocks. Beginners Guide. Learn Investing in Penny Shares

Let’s embark upon the journey of dreaming with Penny shares and find out how beneficial it is to invest or trade in Penny stocks. As per the definition” Penny stocks are those that trade at a meager price, have very low market capitalization, are mostly illiquid, and trade on stock exchanges with a small volumes. In the Indian stock market context, any share trading at a price around Rs.10 is termed as a Penny Stock”.

image courtesy:bing.com

In the USA any stock trading at less than $1 is termed as a penny stock and going by the international standards, I will take any stock trading less than Rs.50/-as a penny stock.

From the very definition, Penny Stocks are high risk most affordable entities available in the stock market alluring the retail or first time investors into buying these cheap shares without going into the merits or demerits of such investments. Come on friends! Have a look at your portfolio and see how many penny shares are still lying in your account.

image courtesy: bing.com

some of you must be feeling on nine clouds after accumulating thousands of penny shares in your trading account. Spending a few thousand for buying these cheap stocks didn’t fluster your budget too. In all probability, You have started watching movement of these stocks on a business news channel or the stock trading platform regularly. Right!!

Recalling the achievements of stock market wizards, Sir Warren Buffet, Jhunjunwala, or Damanis, you must have been dreaming of accruing millions in your account for astronomical rise in the prices of these cheap stocks known as Penny Shares. Isn’t it right? I know you are agreeing with me though reluctantly!!

Now coming back to the penny shares, You can’t pick up any stock just because some news channels or experts have recommended the share. You must learn techniques by using your normal prudence for earning money by investing in these speculative stocks

1. Management: First and a foremost parameter which should be taken into consideration before venturing into this high-risk speculative activity is the management i.e the people associated in running the business of this company. What is the outlook and moral strength of these individuals, their past experience, and how the Industry thinks about them as a leader: A visionary/strong-willed and a person of proven prudence is more likely to navigate the business out of woods. How many of you will go with the Anil Ambani group of companies which are trading as Penny stocks these days. Look at the management of Vodafone Idea, NHPC, Trident, and imagine the future prospects of these companies?
2. Business Model: Next on priority is the company’s plan for earning profits. their products, marketing, expenses, and targetted customers. Most of the units fail when they start a business without finding a relevant niche, targetted clients, and unexpected expenses. Have a look at the business model of NHPC, a Mini Ratna company and, Vodafone Idea; they have excellent business models and great potential for growth in the future. Look at the Kingfisher model and Bisleri pop model. Both of these companies failed miserably due to unviable businesses. Do you agree?
3. Fundamentals: See if there is a sales/profit growth during the last three years. What is the position of Cash Flow and Free Cash Flow? Any company generating free cash flow can be trusted for future growth.
4. Debts: Is there any unpaid debts. Find out Debt. Equity ratio for the three years. is it decreasing or not?
5. EPS: Please see if there is an increasing trend in EPS
6. ROE: Return on Equity. Normally the ratio stands at 15% or above for good companies but you must try to find out whether it’s increasing over the years?

Thankfully, this entire information is available on the internet and can be accessed in a few minutes. The said data which is not beyond the comprehension of an ordinary investor must be co-related before clicking the “BUY” button on your trading platform.

Now coming to the harsh reality of Indian market conditions, we must acknowledge that most of the customers can’t identify themselves whether they are traders or investors in the stock market. It may be irritating to a few but I will certainly provide some space for the benefit of my readers to let them know the difference between the two.

Trader: Any customer who puts his money in the market for earning profits by selling or buying shares in a few minutes/hours or days taking advantage of volatility in the market caused due to Market moods/International news/Govt Policies/War-like situations or some good or bad news about the company. These type of customers are known as Traders.

Investor: Any customer who buys shares of a company and remains invested for a couple of months/years/decades earning the fruits of growth of the company through dividends/stock splits/bonuses is certainly an investor. He tides over the upheavals/turbulences and other market uncertainties by concentrating on the business model of the company and its periodical results. The investors belong to a rare breed of customers who never regret dealing in stock markets as the end result is always encouraging in their favor. They create wealth for themselves.

Image courtesy: bing.com

Check Points and future course of action for the customers who prefer trading in these stocks:

• Please don’t get tempted to buy penny shares shares when there is a sudden movement in the penny stocks. This could be due to some speculative news in the media or some vested interested players are jacking up the prices for preying on innocent retail investors. Control your emotions and inner instinct to react to each and every news.
• Please log in to your trading account and find out how many penny stocks are you carrying in your account
• Have you seen any appreciation in their value since the date of buying
• If there is a considerable upward movement in these shares then keep tracking the performance of the company and retain these shares as they may help in creating good wealth for you in the distant future.
• If the shares are lying dormant with virtually no movement or the prices have gone down further, then don’t think twice. Get rid of these stocks immediately and invest in some good stocks as suggested in my earlier post”Be your own advisor”
• Invest in Penny shares only if, You have high risk appetite, can handle losses and are a seasoned investor. Strict NO for new entrants or low net worth individuals.
• Always start your stock investing journey by chosing the Blue chip stocks in your portfolio. That will provide you a much needed confidence for continuing investing in this high yield investment option.
• Always believe in investing in penny shares for longer horizons as all the millionaires or billionaires have shown patience and resilience in selecting the stocks and then giving their investments time to grow. You must remember that Titan, Lupin, Sesa Goa(Vedanta), Crisil didn’t rise to the current levels within months. Jhunjhunwala had to wait for decades to see his fortunes turning to billionaires.

Hi Friends, hopefully you are more enlightened and clear about the relevace and growth potential of Penny shares in your portfolio. Stay alert and take well informed decision only. Believe in yourself and earn money by investing in penny shares by learning the art of chosing the right ones by following the aforementioned guiding tips.

Have a great day!!

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

UK Scare: Sensex Crash

Amidst the ongoing vaccination drive in the USA and the UK, there comes a bad news about a new corona variant from the UK. Many countries have announced halting air traffic originating from the UK in the wake of a sudden spurt in corona cases and its new variant recently. The news has jolted the entire world once again. The EU was looking all set for starting vaccination after clearance of Pfizer corona vaccine today but the new development has forced them to stop ferry and air service connecting the UK immediately.

Indian govt has also decided that all flights originating from the UK to India shall be temporarily suspended till 31st December 2020. A large number of the Indian Companies derive their maximum revenue share from the UK . These companies may feel the pinch due to the latest developments in the UK. The prevailing events will certainly result in under-par performance during the remaining period of the current financial year for a few companies like TATA steels,Tata Motors, Motherson Sumi and a few others.

The increasing number of corona cases in the USA, a new variant in the UK, and talks going around about overvaluation of some companies made the Indian markets crash today? However, Sensex losing more than 1400 points and Nifty closing 400 points lower on Monday didn’t cause any jitters for the ongoing IPO of Antony waste Handling cell Ltd that was oversubscribed within a few hours of its opening on Monday. This IPO was not successful in its first attempt in March 2020 as investors showed little interest in the IPO due to prevailing pandemic conditions worldwide.

It looks like this year 2020 has more worries for us at the fag end of December. X-mass celebrations may see dampened spirits by keeping the already financially strained and exhausted families indoors. This year has already tested the endurance level of everyone around the globe. Any further escalation in the crisis will subject the already suffering people to another level of ferocity in the coming year.

Thankfully, the DOW and other international markets have not shown any nervousness following the Indian debacle and we should hope that the moods of investors will be kept upbeat with the impending Financial Stimulus efforts going on in the USA.

** The House of Representatives, USA has passed the $900 billion corona virus bill that will bring some respite to those who were waiting for the financial stimulus eagerly. It will certainly improve liquidity position and consumer spending may increase before closing of the year. We may see improved foot fall of customers in the coming few days bringing scome cheers for the small businesses also.

Stay safe and keep invested

Investment Fundaas!!

Stock markets are a lucrative but riskier mode of investment option worldwide where average returns come to a cool 12 to 14% for long term investments. Investors look forward to accessing valuable data that may help them in taking an informed decision for investment in securities. Whether , it’s developing or the developed economies, the mindset of every investor remains more or less the same. There could be differences in the temperament or risk appetite between the investors coming from diverse backgrounds but they are all attuned to booking profits by curtailing their losses.

Despite turbulance and volatile nature of markets, the number of customers entering stock markets keeps surging every year. It will be premature to imagine that these customers enter this era after pursuing formal training or crash courses in stock trading or investments. My experience suggests that only a few customers come prepared with complete information on the salient features of stock markets. Ever-increasing number of customers need sophisticated tools as well as expert guidance to transact business for earning profits with an eye on protecting their capital.

We find hundreds of blogs and an equal number of Videos every day trying to impress upon the investors with their half-cooked stale stories. Business TV/ Youtube Channels have their own agendas to maximize profits by streaming programs that get maximum viewership. They end up serving the interests of the companies rather than the investors. However, there are still some superb websites and Channels which provide well-researched data for you to utilize analyzing important statistics. Morning star, Screener, investing.com, yahoo finance, Google finance etc. are some of the sites that provide authentic updated data for brainstorming by the investors.

Though it’s not an easy call to predict the movement of markets or offer foolproof advice on trading in the stock markets I will try to communicate in a simple and amenable language for you to comprehend and apply the knowledge while conducting business in the stock market. You are not going to become a complete professional with this brief piece of enlightenment but you will feel more comfortable and confident to conduct stock market business more prudenly in the future.

Let’s categorize the customers to understand the gamut of stock market business in a better way. There are generally two types of customers engaged in buying and selling shares/securities with the sole aim of earning profits:

1. Traders: Any customer who enters the market for buying and selling of shares for earning profits by putting his money for some minutes/hours/days is known as a TRADER. He has nothing to do with the fundamentals of the company and acts only on any hot news about the company/Latest Govt.Policy/Political disturbances or any information that impacts the market movement. This is the riskiest type of stock market business as you may earn huge money in a few trades but likely to incur losses on some other occasions. Income from this type of activity is taxable under short term capital gain tax as applicable in the respective countries.
2. Investors: A tribe of customers who try to understand the company by following its past performance, management and, future projections by committing his money for a longer period of time is called INVESTOR. These types of customers are likely to earn big profits by remaining invested for longer horizons. Historical data proves wealth creation for those investors who stay invested for a period of 10 years or more. A large number of millionaires or billionaires worldwide have found their way to stardom through this route only. Income generated by the investors is taxable under long term capital gain tax as applicable in the respective countries.

Remember!! Be patient!! Today is not the last day of the stock market. Take a well-researched decision before jumping into the market. Please don’t get tempted for buying or selling without reassuring yourself about the timing and value of a stock. Any hasty decision will land you in trouble and the hard- earned money may slip out of your hands. Trade in high volume scrips initially and lower priced stocks should be avoided.

In the following table, I have tried to incorporate a few ratios/terms along with their relevance for your reference and understanding in an easier way. You can save this table and utilize the data in case of need. Once you have shortlisted a few stocks for trading or investment, you need to collect and correlate data with the given table for taking a final call on buying the stock.

Terminology/ Ratio	Formula	Benchmark	Relevance
Earnings per Share(EPS)	Net Income/Ordinary shares value	+ve	It should increase every year and any reverse trend must be analyzed properly. More the EPS(Earnings per Share) good for investors. In new companies like After pay, this may be negative also but you can see how this figure has been improving over the years.
Price to EPS (PE ratio)	Share Price/EPS	<15	In simple words, PE ratio is the value by which multiple of EPS, the share price of any company is trading in the market. For example, if the share price of any company is 120$ and EPS is 8$, then the PE ratio will be 120/8=15. Normally value less than 15 is considered good for investment. However, some good companies have high valuations and it will be prudent to compare the PE ratio with other companies of the same industry.
(Return on Equity) ROE	Net Income/Equity	>15	Value more than 15 is good for investment. Must compare this ratio for the past three quarters to have a clear picture of the company. The Increasing trend indicates the good health of the company even if the value is less than 15
(Return on capital employed) ROCE	Net Income/Total capital employed	>15	Value more than 15 is good for investment. Must compare this ratio for the past three quarters to have a clear picture of the company. The Increasing trend indicates good health of the company even if the value is less than 15
D/E Ratio	Debt/Equity	<1	D/E ratio is a calculation used to assess how much debt is being used to run a business compared to the equity of the business. valuation ranging from 1 to 2.5 is acceptable. For infrastructure companies, it could go beyond these figures
(Price to Book Value) P/B Ratio	Price/Book value	=1	Any value around 3 looks satisfactory for good companies. However, this ratio is much higher in well established companies. More value of this ratio indicates lesser amount of money available in case the company goes into liquidation
Dividend	Surplus Profits or reserves/total shares	As per the profit	A sum of money paid regularly by a company to its shareholders out of its profits is known as a dividend. Though all companies don’t pay dividends this adds to the value of shares.
Promoter’s Capital	Preferably more than 50%	50% and above	Refer shareholding pattern to see the %age of promoters capital and whether there is any pledging of shares by the promoters. Pledging of shares is not desireable. Have a look at the contribution in the share capital made by Mutual Funds and FIIs. Any such contribution is good for the investors.
Revenues or Sales	Must increase	Must increase	This is the figure which must increase every year for a robust healthy working of the company. Any decrease means there is a problem with the company management and study thoroughly before investing.

To illustrate further, the relevance of these data and terminology used in the above table, a live example of Colgate India Ltd one of the top consumer goods companies in the world is being shown hereinbelow. You will see by yourself, how a good company demonstrates strength in all the parameters and ratios. Please go through the data as shown below and try to connect with the table shown above. This will help you in arriving at the correct decisons while investing in the stock market.

COLGATE PALMOLIVE(INDIA) LTD:

• Market Cap₹ 43,523 Cr.
• Current Price₹ 1,600
• High / Low₹ 1,630 / 1,065
• Stock P/E : 49.7
• Book Value: ₹ 60.0
• Dividend Yield: 1.75 %
• ROCE:: 67.4 %
• ROE: 53.7 %

ROE(Return on Equity)

Return on Equity
10 Years:	65%
5 Years:	53%
3 Years:	51%
Last Year:	54%

Data: Courtesy Screener.in

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Primary Markets: Investing in New Stocks(IPO) How to Buy IPO

Friends, It may sound strange but the developed economies look averse to the more friendly environment for retail investors prevalent in the developing economies. There could be various reasons attributing to such apparent contrasting conditions. Maybe, the retail investors in developed countries have other priorities in place. There could be a lack of enthusiasm by the small investors or you can say there are virtually no small investors in the developed countries.

Though there can’t be any comparison with the USA, the most robust economy in the world but my effort is to showcase the procedures as visible from the layman’s perspective. Let’s discuss the situation prevalent in the two top democracies i.e India and the USA along with another developed economy Australia. All the three countries have a very effective regulatory system in place which takes care of stock markets functioning in their respective countries. we have regulatory bodies who take care of stock exchanges for safeguarding the interest of the investors.  Regulatory bodies protect the interests of investors and traders by providing a healthy environment in the equity market. These are::

1. SEBI ( Securities Exchange Board of India): India
2. ASIC ( Australian Security and Investment Commission): Australia
3. SEC ( Securities and Exchange Commission) : USA

IPO/Float. Primary Market

Australia: IPO also known as Float in Australia is opened by companies for subscription but investing in stocks through IPO by the Retail Investors is a challenging job. Companies planning to raise capital through IPO’s tend to sell their entire stock to Institutional Investors/Stock Brokers for ensuring successful launching of the IPO. Some brokerage houses get more share from the companies while others are not so lucky. That makes a tricky exercise for retail investors to access the IPO process.

The interested retail investors subscribe to the issue by opening a broking account with a broking house i.e stockbroker. It depends on the whims and fancies of the stockbroker as to which investor he wants to allot the IPO and how many shares will be allotted to the investors. You are fortunate enough if your broker considers you a potential applicant for the IPO.

Photo by Jose Francisco Fernandez Saura on Pexels.com

There is one more route for the allotment of IPO in Australia. If you are already a customer of the company, you are likely to get an invitation from the CEO to participate in the IPO.. Otherwise, most of the public is left out of the IPO process in Australia and whatever the retail investor gets is not more than 10% and that too on a selective basis only. The retail investor remains in dark throughout the process.

USA: Almost on the same lines, all companies hire the services of investment Banks/Brokers for selling their shares ignoring the Retail Investors. Generally, a retail investor has to open a broker account with the brokerage house, send money in his account and wait for the allotment. You are fortunate if the broker considers you as a potential applicant and processes your application for allotment of shares.

Historically, the ratio of Institutional Investors to Retail Investors for the issue of shares is 90 to 10. The Investment Bankers team up to form syndicates with each Bank getting a share of IPO. The Banks/brokers generally prefer big Institutional investors, Mutual Funds, Pension Funds, Hedge Funds through a process called Roadshow. A roadshow is a series of presentations made in various locations leading up to an initial public offering (IPO). Investment Bankers/Underwriters make a sales pitch to potential investors before going public. Suddenly one day the retail investors come to know about the listing of the IPO and is forced to buy from the secondary market price that is normally very high for the initial few days.

India: The most transparent system of IPO allotment appears to exist in India as there are predecided numbers of shares reserved for all categories including retail investors. Date of application/Date of allotment/Date of Listing/Face Value of the Share/Premium if any, all these factors are predecided and available on the application form.

A retail investor can apply for a multiple numbers of lots in one application up to Rs.2 lac only. Normally 35% of total shares are reserved for Retail Investors. One important feature of the Indian IPO system is the application through ASBA(Applications Supported by Blocked Account) meaning no amount of money will be taken out of your Bank account till allotment. Your money always remains in your Bank account till you get a firm allotment of the shares. The successful applicants are drawn through a computer random process at the pre-decided date and the lucky ones get the allotment of shares in their Demat account again on the fixed date.

The scheduled listing of shares takes place on the fixed date as mentioned in the application form. The investor is in a position to book profit by selling the allotted shares immediately in the stock market. Those who were not lucky in the computerized draw, they can buy from the open market at the prevailing prices. The whole process is transparent like a mirror and does not take more than 15 days.

Friends, I will be happy to find feedback about the procedures as explained by me. You can correct me if you feel like it.

Stay Safe Stay Invested

Learn Investing. Stock Analysis and Be Your Own Advisor

Hi Friends, We all understand that a Retail INVESTOR can’t tabulate and analyze each and every relevant information about any company before opting to buy shares from the stock market. In fact, he is always prompted by his inner instinct to put his hard-earned money in the stock market after observing a few trading sessions or hearing some hot news about the company. Sometimes a tip from the so-called experts or friends may lure him to try his luck by investing in the recommended scrips. Statistics prove that such investors end up losing money which keeps them away from this most efficient high yielding investment avenue in the future.

The Truth:

(1)Less than 10% of investors earn money from the stock markets but those who do are long time investors earning big returns

(2) Most Demat accounts opened by customers turn inactive after carrying out a few transactions in India

(3) More than 75% of Demat accounts are inactive as per the SEBI guidelines in India. The only reason of these abnormal figures could be customers losing money during the early few trades forcing them to leave the market. Strange!!

THE FACT: Only those investors earn big who show resilience and continued confidence by remaining invested in the stock market for longer periods of time.

Extracting observations from the experiences of successful investors and utilising my personal sweet/sour/bitter encounters over the past few years, I have tried to come up with a visibly foolproof technique of venturing into the stock market by small-time investors. Hope this will not only mitigate the risk of losses but help in ensuring good returns by investing wisely. This is going to be a simple exercise that does not require any calculator or assistance from your financial advisor or experts. Great!!

Please grab a pen and a piece of paper to scribble down some personal information while sipping tea/coffee or a fresh lemon juice sitting in a cozy relaxed environment. Don’t worry!! It’s not that personal. Be comfortable!!

Can you take me through your day’s journey by writing down the products you have used today. I am sure the list of products will appear somewhat like below:

I have tried to reorganize the list of your daily use products from Breakfast to Dinner in four tables as exhibited above. Simple! There is nothing techincal about it. You will agree that these items are more or less the same which are used by everybody around you in your neighbourhood. Please have a close look at the names of companies manufacturing these products or providing services to their customers through a network of outlets spread across the country..

Now coming to the companies manufacturing these daily use products or providing services, you will appreciate that these are established brands and market leaders in their respective categories. They have established brand value, continued patronage from their customers, ever-increasing sales, persistent dividends, increase in value and, a great future. Don’t you feel safe and privileged to be associated with the names of these big market leaders?

I will prompt you to visit the screener.in website and see for yourself how encouraging the results must be about these companies over the past few years. Please click: https://www.screener.in/ to find out information about any listed company without spending even a penny.

Another look at the shareholding pattern will make you more enlightened with the following information: Yes! You can google this information easily:

1. Promoter’s Contribution
2. Contribution of MF/Financial Institutions
3. Pledge of Shares if any by the promoters

Promoter’s confidence in their own company can be gauged from the shareholding pattern. Companies with promoters contribution of 50% and above without any incident of pledging their shares are considered a good bet for investment.

Similarly, those companies where Mutual Funds/Financial Institutions have considerable stake stand to gain the confidence of retail investors. The Mutual Fund Companies and Financial Institutions consider buying shares of any company after thorough scrutiny and future potential by the highly paid and qualified analysts/fund managers. Your task is made easier by the professionals working with these Funds as they have the responsibilty for safety and regular growth of investments received from their investors.

Are you feeling confident now? Come on! have a deep breath and find out the crucial information about the companies as suggested in the foregoing para. Enlighten yourself by spending a few minutes on the data and come out with a glow on your face. I know you are feeling a lot more informed and convincing to take an informed decision.

I will not recommend for you to rush and grab these shares with whatever money you have in your Bank account. You need to plan your investments by identifying 5 companies initially. Start investing through SIP only. Set aside Rs10000/- every month and start investing through SIP at least for five years. However depending upon availability of funds, you can identify, a few more stocks for investment after a few months. The growth could be smaller as compared to the more risky portfolio of small and medium cap companies but the experience will make you richer and more assured to consider investing in these companies in the future also.

Friends! Please note that volatility is the inherent nature of stock markets all over the world. All securities being traded in the stock market tend to fluctuate many times during the day. In case you keep tracking the market movements every minute, there is every possibility of getting tempted to exit or enter the market at the wrong time. This habit can trap a retail investor in selling or buying shares accruing avoidable losses.

Proffer your investments a breathing space to grow!!!

Warning:: Don’t keep watching your portfolio every hour/every day

Friends, I have tried to be very honest and straight on the subject but there could be some information that you might have anticipated but left out inadvertently. Please let me know to cover it in my next effort.

Stay safe and keep reading

Demat Accounts- Passive Income Source by Investing/Trading in Stocks

Pandemic conditions not only brought scary moments worldwide but also happened to provide some thrilling vistas to the new generation in India. With a regular stream of income dropping in their Bank accounts and virtually no outlet to spend freely, these people found trading in stock markets a very exciting idea. First-quarter ended on 30/06/2020 saw more than 2.4 million Demat accounts opened in the various Banks/DP’s by these customers!!

As a matter of fact, the number of Demat accounts increased substantially during the current Financial Year in India. These figures have jumped from 35.9 million on 31/03/2019 to 40.8 million as of 30/11/20, an unprecedented increase of 4.9 millions accounts in 8 months. A great performance by any yardstick. This year has witnessed phenomenal growth in the stock market operations with participation from a new set of customers. Every millennial was confined to the four walls of his house due to lockdown conditions enforced by the authorities starting in the month of March 20 and these enterprising professionals found trading in stocks an engaging medium for a few hours during the day. I am sure some of them will turn out to be serious investors in stock markets.

Let’s try to comprehend the entire process of Demat account opening in India

Central Depository: In India, there are two depositories that hold your shares/NCD’s/other Financial securities safely in the electronic form for you. These are the CDSL (Central Depository Services Limited) and NSDL (National Securities Depository Limited. Their nature of business is the same but due to ever-increasing number of Demat accounts, CDSL came into being to share the workload of NSDL in 1999.

Depository Participants/Brokers: All Financial securities viz Shares/NCD/ etc are held in demat accounts opened by the customers in DP’s. The DP’s(Depository Participants) are a link between the customer and Depositories. These DP’s could be Banks and Financial Institutions as well.

Demat Account: Like we need a Bank account to keep our money safe, we need a demat account to keep our dematerialised Financial securites like shares/NCD’s safe

So, if you wish to trade in the Indian stock market i.e. buy and sell securities, firstly you need to have a Demat account.This demat account needs to be attached with your savings account for carrying out buy/sell transactions in the stock market.

Where to Open Demat Account:There are a large number of DP’s who are providing the job of a broker/DP efficiently in India. To quote a few; Zerodha,Angel Broking,5paisa, Upstock,IIFL are the leading DP’s right now. Most of the Private and Public Sector Banks are also functioning as Depository Participants/Brokers nowadays. I will recommend opening Demat account with your existing Bank only as they can easily provide complete package of services on a single platform

Eligibility:

1. Any Indian resident major/minor can open demat account in India. Though documents are required to be executed by the natural guardian in case of minor
2. NRI can also open demat account in India by producing his POA/POI/Bank documents but the passport must contain his birth place in India.

List of Documents required for opening Demat Accounts:

• Identity Proof: PAN card, voter id, Aadhar card, Passport etc.
• Address Proof: Aadhar card, bank statement, driving license, utility bills etc.
• Bank account details

Procedure::

Account Opening Form: You need to fill up and submit the Demat account opening form along with necessary details either in person or online.

KYC Compliance: Adhere to (KYC) norms and submit the copies of KYC documents to the Depository Participant.

Verification: A representative of DP shall conduct in-person or online verification to cross-check the information furnished by you in the Demat account opening form.

Account number/Unique ID: Once the verification is completed, the DP shall provide you a Unique Account number or ID and Password. It normally takes 5 to 7 working days to open a Demat account.

Access your Online Demat Account: Your unique ID is the key to access your online Demat account. You are good to go! You are prompted to change your password while loging into your Demat account for the first time.

Maintenance Charges(AMC): There are annual charges for maintenance of Demat accounts. It varies from Bank to Bank ranging from Rs.100 to 800 per year. However, some brokers waive off this cost subject to their own terms and conditions

Brokerage: For every transaction you are charged a certain percent as brokerage which can be negotiated and reduced depending upon the quantum of operations in your Demat account. Some Banks have recently started a fixed amount of Rs.20 per transaction for intraday trading to attract more customers.

As per the SEBI guidelines, any account which has not been operated for more than 1 year is treated as Inactive in India. Incidentally, the country has 75% of Demat accounts as INACTIVE as of date. Not an encouraging situation at all. We hope this generation of new customers would find interest in stock investments and continue maintaining their accounts in good health.

Hi Friends, Do you feel like venturing into the most volatile and high yield world of investments. You guessed it right; I am talking of The Stock Markets. We all understand that stock markets are the only investment avenues that offer returns of more than 14% with long-term perspectives. Despite turbulences and tremours caused in the global economy over the past fifty years, the long term returns have never been short of 14%. If you have risk appetite and temperament to remain invested for more than five years then this is the place you can put your money in. for unexpected returns.

What are you waiting for? Login to your Bank account and start filling up the prescribed form for opening your Demat account right now.

Happy reading and keep sending your feedback

Financial Freedom Step wise Financial Planning, Savings,investments,wealth creation

Financial freedom!! A stage that culminates your long career into a happy relaxed retired life when you don’t have to work for your sustenance anymore. Your savings work for you to live your life happily as the wealth created by you over a span of 30 years starts generating a passive income. This could be, a regular flow of interest from Bank Deposits/ Dividends from the Stock market/Mutual Funds or Rent from the property you own. Looks interesting!! However, the fact remains that most people fall short of their targetted goals due to a lack of planning of their personal finances.

Financial freedom can easily be accomplished by managing your Personal Finances well. Sit down with a piece of paper and pen to scribble the details about your income and expenses at the end of every month. Find the difference between your income and expenses. Yes! This is your cash flow statement. You ought to know about your monthly income and expenses like your salary, Rent, Utilities, car expenses, Interest/Insurance, etc. A perusal of your monthly expenses will provide insight into the nature and relevance of each and every amount spent during the month. well!! You are already on your way to financial Freedom if your cash flow is positive. However, friends, if your expenses are more than your income then you need to sit down and find out where are you going wrong.

“Do not save what is left after spending, but spend what is left after saving.”- Warren Buffet

SOS:Income-Expenses= Negative. If you are spending more than your income, the cash flow is going to be negative indicating you are either using your credit cards or raising loans from your resources for making both ends meet regularly. You don’t appear to have control over the expenses and taking the liberty to spend more than what you are earning. Do you believe this is a happy situation in the long run? Certainly not!! You are destined to be doomed if you don’t check your Finances immediately. Let’s take a case of income expenses statement of Mr. A for Nov 2020:

November 2020: Income	Dr	Cr
salary		50000
Expenses Nov.2020
Utiilities	20000
Rent	15000
Car Loan	10000
Insurance/Petrol/Interest	12000
Cash Flow	57000	50000

Income-Expenses=Cash Flow::: 50000-57000=(-7000)

The above illustration reveals a negative cash flow of Rs.7000/- as the expenses happen to overshoot total income. Mr.A needs to check expenses or raise his income level to be more comfortable with his finances in the future. Now let’s have a look at the table, you will find that the chances of curtailing expenses are possible through Utilities/Rent only as other expenses are more or less of fixed nature. Mr. A will have to either shift to some alternate location where he could rent a house at lower rent or cut down his expenses on utilities to bring back his cash flow from negative to positive.

With a little bit harmonization in your expenses, you can see your life turning into bliss. This is how you need to manage your personal finances for achieving Financial Freedom. You must remember and need to pursue your goals with FIRE::

FIRE: Financially Independent Retire early:

Management and planning of Personal Finances warrant you to Become Financially Literate. There is nothing technical about it but continuous monitoring of your income and expenses will do the trick for you. Once your path is illuminated with the wisdom of Financial Literacy, you can be assured of attaining freedom sooner than expected. Incidentally such an important subject doesn’t find a place in the curriculum of school or college studies across the world. The sole purpose of education remains in producing Clerks/Engineers/Doctors only and no effort is made for equipping the students with tools for managing personal finances.

May the fault lies in our education system which never enlightens us on managing money matters. Normally every child looks up to his parents for all Financial decisions till he actually starts earning. The child never grows up to tackle financial matters independently. Moving from schooling to college degrees, he keeps improving his grades without ever being told about the intricacies of this very important subject of Personal Finance. Campus placement or getting a good job remains the only exciting factor in his mind

let us start with the expenses part which plays important role in budgeting your finances. Your instinct for spending more goes berserk on finding liquid easy access to money. You must understand that the credit cards and other avenues are designed to meet your emergent temporary requirements. The credit cards are meant for day to day bills only. No long term borrowings!! In no case payment of the credit card bill be made in part or with a minimum amount. Banks/Credit Card Companies play with your mindset always trying to tempt customers for making a minimum payment of bills. You feel temporarily relieved of the pressure by not making full payment of the credit card bill but this trap leads only to make you broke in the future as interest rates charged by the Credit cards companies on the unpaid balances are astronomical.

The balances keep accumulating and suddenly, you will find the credit card companies declining further usage as the limit has been exceeded due to the interest factor. I would recommend auto-debit of credit card bill linked with your Bank account

Let’s understand the two types of credit which you are using in your life. There is good credit and bad credit to name the two. Good credit provides you liquidity at a cheaper rate for the creation of appreciating assets, whereas bad credit will make you pay higher rates for the creation of assets decreasing in value. You need to buy/invest by using bank Loans/Finance Companies only when the asset created by such finance is of appreciating nature. Buy a house/Gold/Stocks or any other investment which is bound to increase in value, it’s a good borrowing.

However, if the asset is of diminishing nature like Car/TV/Costly Electronic gadgets/Furniture etc then you need to re-evaluate the project as rates on this credit are high and the value of items is bound to decrease in the future. This is certainly a bad credit. Since none of these articles are of emergent nature, you can plan and buy by saving from your monthly expenses

Which type of credit do you think will be better? The answer looks imminent when you find items purchased by good credit increasing in value every year and at the same time, the bad credit besides being costly helps only in adding articles getting depreciated in value over a period of time.

Now coming to Positive Cash Flow, You will find a certain amount in your Bank account after spending for expenses at the end of every month. These surpluses can be used for making extra payment for reducing your loan liabilities or investing in a phased manner to achieve life goals like child education/New House/Investments/Retirement Fund etc. . Why not start saving today with the howsoever small amount it may be. This beautiful proverb says it all: “Little drops of water make a mighty ocean”.

Nature teaches us a great lesson about the significance of small consistent efforts in our life but a steady stream of savings is required for achieving our life goals. Little by little, birds make beautiful nests and little by little small towns become big cities.

There is a need to evaluate your Balance Sheet at the end of each year. This will show whether you are on right track or not. The consistent increase in Net worth will pave way for making your life beautiful. There are only two ways to keep your net worth curve moving up: Firstly by increasing your Assets and secondly by decreasing your liabilities.

Liabilities		Assets
Car Loan	125000	Bank Balance	75000
Credit Card	50000	PF	60000
		Car	150000
		Mutual Funds	50000
Net Worth	160000
Total	335000	Total	335000

Assets-Liabilities= Net Worth:::(335000-175000=160000)-Mr B aged 30 years

You will see in the above illustration that Mr. B has a net worth of 160000/- and he is well on way to becoming financially independent. An increase in net worth every year indicates the wealth you are creating for yourself and the family for the future. Time to think about long term goals after allocating enough amount towards an emergency fund. Here is a live example of how the principle of compounding works for your consitent savings/investments to pave for a beautiful future.

Principal Value PV	Inflation Rate i	Time n	Future Value FV
50000	6%	30 years	FV=PV(1+6/100)n
			287175

Table(A)

Table (A) provides you the future value of Rs.50000/- after 30 years with 6% inflation.. You will agree that the value of money keeps decreasing every year. You can’t buy for Rs.100 the same stuff after one year which you are buying today. Similarly, the value of your salary/income will not be the same after 30 years. It will be decreased substantially. That means you need to earn more to keep pace with the rising prices after 30 years. Now please refer to the table below: You will find that your salary amount of 50000/- after 30 years at inflation rates of 6% will have to grow substantially and the calculation comes out to Rs. 287175. Does that mean you will have to earn Rs.287175/-pm after 30 years to live the same life which you are living today.> Agreed?

Principal Value PV	Interest rate i	Tenure n	Maturity Value MV
5000	10%	30 Years	MV=PV(1+10/100)n
			1.14 cr

Table (B)

For maintaining the same standard of living as you have been enjoying today, you need to earn Rs.287175 after 30 years but who will pay you this amount after your retirement. You will have to take care of yourself.

Friends,You need to accumulate huge funds which could generate a passive income of Rs.287175 per month, when you are retired and want to live a comfortable happy life. Table (B) as shown above will lead your way to achieve goals by investing wisely with consistent small savings. Average returns in stock markets range anywhere between 10 to 14 % annually and you can earn 10% on bonds/other safe investments also. Let us start investing Rs.5000/-PM expecting average return@10% being the lowest for 30 years You will be astonished to find the huge amount accumulated at the end of 30 years.

Just hold your breath and see the astonishing figures on your screen!!

Is it not interesting? You get an unbelievable amount of Rs.1.14cr on your retirement after 30 years. Is it not sufficient to provide you passive income of Rs.287175/- PM. This is how the compounding of savings works but you need to be consistent and prudent in choosing the right investment avenues.

Friends, I hope you liked my way of expressing financial freedom. I have not touched upon Emergency Fund or Mid Term Goals as these have been covered in my earlier blogs. Your feedback with critical comments is welcomed for making this blog worth gaining knowledge about Personal Finances

Happy Reading

CIBIL Score: Your Creditability

Credit institutions/Lenders/Bankers feel proud in attracting their potential customers with slogans like”Get your Loan approved in 10 minutes”. Yes this is true and possible these days as 24×7 access to the CIBIL score helps the Bankers/lenders to approve or reject your Loan application in a few minutes only.

The first step for appraisal of any credit facility is extraction of CIBIL report and the lenders are in a position to convey principle approval /Rejection immediately

Relevance and importance of CIBIL reports can be gauged from the fact that Lenders found it really tough to co-relate information provided by the Loan applicants prior to 2007. As a Banker, we had to rely on the affidavits provided by the ap;licants declaring (1) that they have not availed any credit facility from any Bank/Financial Institution (2) that there was no default with any financial institution. Sometimes the information would prove to be false as the applicants outsmarted the appraising officers of Banks/Lending Institutions by concealing the factual position.

But with the advent of CIBIL reports, concealment of any information is beyond comprehension now. The task of maintaining a good score has become a necessity for the Loan seekers. You are entitled for one Free copy of your three credit reports once a year. That means you can have one report each from Transunion,Equifax,Experian every year. This helps you to have a look at what the financial institutions/banks are reporting for your Loan accounts and other related inormation. Accordingly necesaary steps can be intitiated to improve your credit score.

Your CIBIL Score is calculated by perusing your credit behaviour as appearing in the Accounts and Enquiries section of your CIR(Credit Information Report). The range of credit score varies betwen 300 to 900. Generally a score of 700 and above is considered good by the Lenders. Almost 80% of loans are sanctioned with a CIBIL score of 700 and above.

A few important parameters needs to be noted for building your good crddit score:

1. Payment History: Never default in payment of your Loan installments or other obligations. Always pay all installments regularly in time
2. Utilisation Level: Try to avail a portion of credit card limit as per your genuine credit needs to get a review of increase in credit limit in future. Dont avail the sanctioned credit limit to the full regularly. Avoid Cash withdrawal as far as possible
3. Credit Mix: A balanced mix of secured and unsecured loans helps to improve your credit score. If you are availing only unsecured loans like Credit Card,Personal Loans,Clean Overdrafts etc, the score may not move up. However, the simultaneous availment of Home Loans or loans backed up by a collateral security would help in upgrading/maintaining a good credit score
4. Multiple Inquiries: Don’t make too many inquiries as it impacts your credit score negatively for the reasons (1) The loan burden is likely to increase in future which may not be in consonance with your income(2) You are trying for loan facility from a large number of lenders and your application is being rejected. In both the cases your credit score is going to be impacted adversely.
5. Pay Full Amount:Never fall prey to the guiles of credit card companies for paying the minimum amount of your bill. This not only attracts very high interest rate but also affects your credit score
6. NOC: Always insist for an NOC after making full and final payment of your Loan account. This will help in getting your CIBIL report corrrected in case of any wrong reporting by the Bank/Lender.

With more than 40 years experience in managing Bank/NBFC credit portfolio, I found a large number of CIBIL reports with NA or Zero credit score making it difficult to appraise a particular loan proposal.

This situation normally arises in the case of new customers or weaker section of the society as NA or 0 score happens due to non availability of credit track record for more than 6 months. I could recollect the faces of potential borrowers getting pale on finding their Credit Report with 0 Score apprehending rejection their apllication outrightly

Customers as well as the lenders are more enlightened these days now. Lenders tend to gather other elevant information to correlate with these reports before sanctioning such cases. .

In such circumstances Transunion 2.0 can be perused which provides quantum of risk of new customer from High, Medium, low with numerical value of 1 to 5. This is handy in case of small borrowers.