‘Focusing on the middle-income segment now’, says Shriram Life Insurance CEO

Considering Shriram Life Insurance’s focus is on the middle-income segment with lower ticket sizes, growing individual regular premium polices would be its main line, says MD & CEO Casparus Kromhout. In an interview with Mithun Dasgupta, Kromhout says the insurer hopes to have an annualised premium equivalent (APE) growth similar or higher for FY24 as compared to FY23. Excerpts:

Shriram Life Insurance’s new business premium for the first part this fiscal (H1FY24) grew by a 85.54% year-on-year to Rs 859 crore. What were the factors that contributed to it? What is the outlook for new business premium growth for this fiscal?

Given the fact that the beginning of the year is usually flat for the sector, our growth momentum in H1FY24 has been firmly defined by its retail and group businesses. While some of our flagship schemes helped catapult group business to Rs 515 crore, our retail new business witnessed a robust growth of Rs 344 crore, a rise of 30% based on the financials. Our mission centres around securing lives of vulnerable families residing in rural and tier III/IV cities, the majority of who have never taken a life insurance policy. As of September 2023, Shriram Life’s individual non-single business grew to Rs 319 crore, reflecting our stable pace in leading the business forward.

What kind of changes are you witnessing in the demand pattern as from April 1 proceeds from non-ULIP products, where premium exceeds Rs 5 lakh annually, become taxable?

The impact of tax changes is hardly felt on our customer base as our focus is more on rural customers. As a result, our pricing is also in tune with what the middle-income segment can afford. If you see our products, policies have a lower ticket size — the average policy ticket size being in the range of Rs 20,000. Only a very small percentage of our customers are from higher ticket sizes, where they need to bear the burden of tax on maturity proceeds.

The company’s retail annualised premium equivalent (APE) grew 24% y-o-y for FY23. What is the APE guidance for FY24?

The focus on the current year would be to expand more on individual non-single premium in our customer segments. The company has continued its growth momentum on retail APE and is at a YoY growth close to 30% (on financials) up to the month of September, 2023. We hope to continue the same path and have a growth similar or higher for FY24 as compared to FY23.

The company crossed an AUM of Rs 10,000 crore. What is the target to grow it in the next two-three years?

We have been growing consistently on Assets Under Management (AUM) over the last few years. Our five-year CAGR on AUM has been close to 20% as at March, 2023. Our AUM growth would depend on numerous factors, but we hope to continue growing in line with the company’s growth plans. We also hope that the country’s economic condition will remain upbeat in the coming months, making insurance a good investment choice. Even though the inflation rates might have come down from the peak it’s still prevailing beyond RBI’s comfort level of 4-6 % level. Hence RBI will probably continue with its status quo on policy rates for the fourth time in a row. The concerns at the global level and the weak monsoon in India, higher retail inflation, surging oil prices may lead MPC to continue with its policy rate and stance.

The company’s claims settlement ratio for last fiscal stood at 97.4%. Kindly inform us about the claim settlement ratios in urban versus rural areas.

Our response to claims has been accelerated through robust processes, analytics and technology framework which helps us fast track smart settlement. We source 45% of our business from rural areas and 50% of our claims come from those rural areas. Our claim settlement ratio has sequentially grown over the years, and we hope to improve it further this year depending on the quality of claims which relies upon various factors. However, we are positive that by enhancing our scale and doubling down on our processes, we should be able to minimise the gap from the last document received to the time when the claim is settled.

Nifty to sustain above 19400 or fall? See Fed chair speech, FII data, F&O ban, crude, more before market opens

GIFT Nifty traded 0.17% higher during Friday’s early trading session at 19,326, indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex. The equity benchmarks closed in the red on Thursday, erasing all morning gains. After touching an intraday high of 19,584.45, the NSE index crashed over 1% or 200 points to settle at 19,386.70. Sensex settled lower by 180 points at 65,252.34.

“The US market exhibited a positive trend as declining US PMI ignited hopes of a prolonged rate pause, calming US bond yields. Optimism in the domestic market was more visible in the IT sector, though sentiments were reversed in other major sectors, likely influenced by the prevailing global uncertainties. Despite this, mid- and small-cap stocks demonstrated resilience, and the decline in bond yields facilitated a resurgence in foreign investor buying momentum,” said Vinod Nair, Head of Research at Geojit Financial Services.

Asian Markets

MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.5% higher, also lifted by Nvidia’s bullish outlook. Still, the index is down about 8% so far this month due to weakness in China’s economy and yuan, as well as some gloomy factory readings from Japan, which also left sentiment fragile. China stocks also rebounded on Thursday, however, with the blue-chip CSI300 index advancing 0.7%.

Crude Oil

Oil prices fell slightly in early Asian trade on Friday, on track for a weekly decline as weak manufacturing activity hurt the global demand outlook and the dollar remained buoyant.

FII/DII Data

Foreign institutional investors (FII) bought shares worth net Rs 1,524.87 crore, while domestic institutional investors (DII) bought shares worth net Rs 5,796.61 crore on 24 August, according to the provisional data available on the NSE.

F&O Ban

The National Stock Exchange has GMR Airports Infrastructure, GMR Airports Infrastructure, RBL Bank, Manappuram Finance, PNB, India Cements, Hindustan Copper, GNFC, BHEL, Delta Corp, GNFC, Metropolis Healthcare and Indiabulls Housing Finance securities on its F&O ban list for 25 August. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.

Bank Nifty Outlook

“The Bank Nifty index recently encountered selling pressure from elevated levels and is now displaying indications of range-bound trading. The range of movement seems to be established between 44,000 and 45,000, a zone where substantial put and call writing activities are evident. In the current scenario, the index’s immediate support lies at 44,200. If this support level is effectively maintained, the index could potentially experience a recovery, driving it towards levels of 44,800 and 45,000,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.

Technical View

“A long bear candle was formed on the daily chart, which indicates a formation of bearish engulfing type candle pattern (not a classical one). The crucial overhead resistance of down sloping trend line has turned out to be a false upside breakout on Thursday. This is a negative indication and signal a chance of Nifty sliding down to or break below the immediate support of 19300-19250 levels in the near term. Any attempt of upside bounce could find strong resistance around 19550 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Fed Chair Speech

Investors are now waiting for a speech by Federal Reserve Chairman Jerome Powell on Friday at a central bank summit in Jackson Hole, Wyoming, for clues on the U.S. interest rates outlook. Data earlier Thursday showed claims for U.S. unemployment benefits pointed to a still-strong jobs market, news that some say could support the Fed’s hawkish message of higher interest rates for longer. Investors also digested comments from Philadelphia Fed President Patrick Harker who said the Fed will need to keep rates restrictive for a while.

Tiger-backed fund sells over 122 mn shares in Zomato

Internet Fund III, a Tiger Global-backed VC fund, offloaded 122 million shares in Zomato representing a 1.43% stake via a block deal on Monday. At Rs 91 a share, the deal value amounted to Rs 1,115 crore. The lock-in period of shares allotted to Blinkit shareholders during Zomato’s acquisition of the quick commerce entity ended on Monday.Among the major buyers were Kotak MF (41 million shares), Societe General (38.4 million), Axis MF (19.7 million), and Morgan Stanley Asia (15.3 million). Goldman Sachs Singapore, Citigroup Global Markets Mauritius, and BNP Paribas Arbitrage were other buyers. The Zomato stock closed up 1.53% at Rs 92.33 on the BSE. At present, it is over 20% its listing price.

On the NSE, Apoletto Asia sold close to 32 million shares or a 0.37% stake at Rs 90.10 for Rs 288 crore. Axis MF, Morgan Stanley Asia, ICICI Prudential, and SBI Life were among major buyers. Blinkit shareholders who were issued shares of Zomato in exchange for the deal, were subject to a lock-in period of one year beginning in August last year.

According to an August 18 report by JM Financial, the fresh equity shares to selling shareholders were issued at an implied price of Rs 70.76 per share. Zomato had negotiated a 12-month lock-in, compared to the statutory requirement of 6 months.“We note that several of them are already sitting on sizeable gains, albeit a large chunk of it is unrealised. A few cues from past actions of these investors suggest that at least some of them would be eager to book profits post the recent run-up in the stock,” said the report. It pointed out that a majority of these were owned by three VC investors — Softbank, Tiger Global, and Sequioa — and only 50% of shares attributable to Blinkit founders would be tradable; the remaining 50% remaining locked for another 12 months.Zomato completed the acquisition of Blinkit (erstwhile Grofers), a quick commerce firm, on August 10. The Rs 4,448-crore deal was first announced on June 24, 2022.The firm clarified in an exchange filing that the total value of the deal was Rs 4,508.2 crore for a 91% stake in Blinkit, which included the acquisition of Blinkit’s warehousing and ancillary services for Rs 60.7 crore. Zomato already owned 9% in Blinkit.Other players present in the quick commerce sector are Swiggy (Instamart), Dunzo (backed by Reliance Industries), BigBasket (Tata group), and Zepto. Zomato had registered a net profit of Rs 276 crore for the June quarter, according to BSE data.

Interview: GOPICHAND KATRAGADDA, president, The Institution of Engineering And Technology (IET)

Gopichand Katragadda, former group chief technology officer and innovation head of Tata Sons, and MD of GE India Technology Centre, is the first Indian to become the president of the Institution of Engineering and Technology, one of the world’s oldest and largest global engineering institutions. An expert in artificial intelligence (AI) technology, he says that AI is at a juncture similar to where the internet was in the early 1990s. “Everything around us will be reinvented and engineers can lead the way in delivering a resilient future by embracing innovation and technical advancements and dispelling myths about AI,” he tells Sudhir Chowdhary in a recent interview.

Excerpts:

Given your background in technology, where does your passion lie?

My passion finds roots at the intersection of technology, people, and culture. It’s a dynamic convergence where the limitless potential of technology meets the diverse tapestry of human experiences. Technology is a force that can drive innovation, solve complex problems, and improve the quality of life. With respect to people, I see boundless inspiration. It’s the innovators, the engineers, and the dreamers who shape the course of technological progress.

What does it mean to you to be the first Indian to hold this prestigious position in a global engineering body?

Holding the position of president at the IET is an honour. The IET, through its 150 years of history, has been associated with science and technology heroes including Lord Kelvin, Oliver Heaviside, Joseph Swan, JJ Thomson, Ratan Tata, and Narayana Murthy. By placing the president’s role globally, IET amplifies its intent to inspire, inform and influence the global engineering and technology community to engineer a better world. It also signifies the recognition of India’s growing influence in the field of engineering and technology.

Your views on buzzwords such as Web 3.0, 5G, IoT, and metaverse?

Web 3.0 holds the promise of enhanced security, privacy, and control over personal data but it has to navigate the challenges of scalability and regulatory frameworks. As it matures, it has the potential to redefine how we interact with the digital world.

5G is a game-changer in connectivity, enabling faster data transfer and low latency. IoT is driving the proliferation of connected devices, from smart homes to industrial sensors. The challenge lies in ensuring the security of these interconnected systems and harnessing the data they generate for actionable insights.

The metaverse represents a convergence of virtual and physical worlds, offering immersive digital experiences. While it holds immense potential in gaming, entertainment and remote collaboration, it also faces ethical and privacy concerns. It’s currently in the phase where expectations need to align with practical implementations.

From a hype-cycle standpoint, these technologies may be experiencing a “trough of disillusionment,” but they are not fading away. Instead, they are on a continuum, and AI will play a pivotal role in their maturation. AI will enhance security in Web 3.0, optimise 5G networks, make sense of IoT data, and shape the metaverse’s development.

What are the challenges you see in scaling AI innovations?

Scaling AI innovations presents both exciting opportunities and significant challenges. Ensuring that AI systems have access to diverse, accurate and represent-ative data is essential for their effectiveness. Furthermore, we must navigate the ethical dimensions of AI, including bias mitigation, transparency, and accountability.

Scalability also hinges on access to the right talent. The demand for AI experts and data scientists continues to outstrip supply, making talent acquisition and development a key challenge. As AI innovations scale globally, harmonising regulations and ensuring responsible AI deployment are essential to avoid fragmentation and ensure trust among users and stakeholders.

What can be done to catalyse the Indian technology ecosystem?

India’s potential in the technology ecosystem is immense. To catalyse this potential, we must nurture a culture of innovation, invest in research and development, and support startups and entrepreneurs. Collaboration between academia and industry is crucial. I encourage experienced engineers to register with the IET as chartered engineers to demonstrate their continued commitment to engineering excellence. India has 1.5 million engineers graduating every year – IET will endeavour to impact these engineers’ employability.

Stock exchanges slap fines on IOC, ONGC, GAIL for failure to meet listing regulations

Stock exchanges have slapped fines on state-owned oil and gas firms including IOC, ONGC and GAIL for their failure to meet listing requirements of having a requisite number of independent directors and women directors. In separate filings, the companies detailed the fines imposed by the BSE and NSE but were quick to point out that appointment of directors was done by the government and they had no role in it. Oil and Natural Gas Corporation (ONGC) was slapped a Rs 3.36 lakh fine, while Indian Oil Corporation (IOC) was asked to pay Rs 5.36 lakh fine.

Gas utility GAIL was slapped Rs 2.71 lakh fine, Hindustan Petroleum Corporation Ltd (HPCL) Rs 3.59 lakh, Bharat Petroleum Corporation Ltd (BPCL) Rs 3.6 lakh, Oil India Ltd Rs 5.37 lakh and a fine of Rs 5.37 lakh was imposed on Mangalore Refinery and Petrochemicals Ltd (MRPL).

IOC said the power to appoint directors (including independent and women directors) vests with the Ministry of Petroleum and Natural Gas, Government of India.

“And hence the non-appointment of women independent directors on the Board during the quarter ended June 30, 2023 was not due to any negligence / fault by the company,” it said. “Accordingly, Indian Oil should not be held liable to pay the fines and the same should be waived-off”.

IOC said it regularly takes up the issue with the ministry, for appointment of requisite number of independent directors (including Woman independent director), to ensure compliance with corporate governance norms. “We would also like to inform that the company had received similar notices from the BSE and NSE in the past imposing fines and waiver requests from the company was considered favorably by the exchanges,” it said. HPCL made a similar filing and cited past record of stock exchanges waiving such fines. ONGC said it has requested the government for nomination of the requisite number of independent directors on the board of the company. “Since the appointment of directors is beyond control of the company, request letters have been submitted to stock exchanges for waiving off the fine levied,” ONGC said.

BPCL said it had complied with the requirements for the financial year 2022-23 and till April 30, 2023. But the appointment of a full-time directors with effect from May 1, 2023 led to BPCL having five whole-time Directors, two nominee directors of the government and six independent directors.

As per norm, BPCL should have had seven independent directors – equal to the executive directors (five whole-time directors and two government nominee directors).

BPCL said it has “requested the Government of India from time to time for the nomination of one independent director. As the directors are appointed after receipt of nomination from Government of India. BPCL has no control over the appointment of Directors.” The firm said it will be approaching BSE Limited and National Stock Exchange of India Limited for waiver of the fines. “Similar letters were received earlier from the stock exchanges for which waiver request was made by BPCL and the same was considered favorably by the stock exchanges,” the filing said.

Oil India Ltd (OIL) said the non-compliance was beyond the control of the company as it is a government enterprise and directors are appointed by the administrative ministry, Ministry of Petroleum and Natural Gas.

MRPL said it is following up with the government from time to time for appointing the required number of directors on its board. GAIL said, “all the directors on the board of GAIL (including independent directors) are nominated/appointed by the Government of India. As such, appointments are outside the purview/control of the GAIL’s management.”

Petrol and Diesel Rate Today, 25 August: Some cities see revision; Check rates in Delhi, Mumbai, other cities

Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Hyderabad: Petrol and diesel prices were largely constant on Friday, 25 August across New Delhi, Kolkata, Mumbai, and Chennai. Petrol rates and diesel rates have been steady over the last few months. However, individual cities see fluctuations in their prices every day. The prices of petrol and diesel change state by state, depending upon various criteria such as Value Added Tax (VAT), freight charges, local taxes, etc.

The last country-wide change in fuel rates was on 21 May last year, when Finance Minister Nirmala Sitharaman slashed excise duty on petrol by Rs 8 per litre and Rs 6 per litre on diesel. Since the cut of excise duty by the central government in May 2022, some states have also reduced VAT prices on fuels, while some have imposed cess on petrol and diesel.

Currently in Delhi, the price of petrol stands at Rs 96.72 per liter, while diesel is being sold at Rs 89.62 per litre. In Mumbai, petrol demands a higher price of Rs 106.31 per liter, with diesel following suit at Rs 94.27 per litre. Meanwhile, in Kolkata, the cost of petrol amounts to Rs 106.31 per liter, with diesel priced at Rs 92.76 per liter. In Chennai, petrol is available at Rs 102.63 per liter, while diesel can be obtained at Rs 94.24 per liter. Here’s a look at fuel prices in other cities:

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Bengaluru:Petrol rate: Rs 101.94 per litre,Diesel rate: Rs 87.89 per litreChandigarh:Petrol rate: Rs 98.65 per litre, Diesel rate: Rs 88.95 per litreChennai:Petrol rate: Rs 102.63 per litre, Diesel rate: Rs 94.24 per litreGurugram:Petrol rate: Rs 97.04 per litre, Diesel rate: Rs 89.91 per litreKolkata:Petrol rate: Rs 106.03 per litre, Diesel rate: Rs 92.76 per litreLucknow:Petrol rate: Rs 96.57 per litre, Diesel rate: Rs 89.76 per litreMumbai:Petrol rate: Rs 106.31 per litre, Diesel rate: Rs 94.27 per litreNew Delhi:Petrol rate: Rs 96.72 per litre, Diesel rate: Rs 89.62 per litreNoida:Petrol rate: Rs 96.65 per litre, Diesel rate: Rs 89.82 per litre

Public sector Oil Marketing Companies (OMCs) including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise their petrol price anddiesel pricedaily in line with international benchmark prices and forex rates. Any changes in petrol price anddiesel priceare implemented from 6 am every day. “Oil companies will be in a position to look at the issue of reducing petrol and diesel prices if the international crude cost remains stable and these firms have a good next quarter,” said Petroleum Minister Hardeep Singh Puri a few months ago.

Cyclone Biparjoy leaves trail of devastation in Gujarat – SEE PICS

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A couple rides a scooter amid dust due to strong wind, before the arrival of cyclonic storm Biparjoy, in Ahmedabad, India, June 15, 2023. (Reuters Photo)

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This Thursday, June 15, 2023, satellite image released by NASA shows Cyclone Biparjoy approaching southern Pakistan. Biparjoy made landfall on Thursday evening as a vast swath of western India and neighboring southern Pakistan braced for flash floods, heavy rain and high winds. (NASA Photo)

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NDRF personnel clear trees uprooted following the landfall of Cyclone Biparjoy, in Diu. The intensity of cyclone Biparjoy which lashed the Saurashtra-Kutch region has reduced from ‘very severe’ to ‘severe’ category hours after making landfall in coastal areas of Gujarat. (PTI Photo)

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A man rides a motorcycle through a waterlogged street in Mandvi before the arrival of cyclone Biparjoy in the western state of Gujarat, India, June 15, 2023. (Reuters Photo)

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Kutch: Waterlogging at Mandvi after heavy rain owing to landfall of Cyclone Biparjoy, in Kutch district, Friday, June 16, 2023. (PTI Photo)

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Heavy rain at Mandvi owing to landfall of Cyclone Biparjoy, in Kutch district, Friday, June 16, 2023. (PTI Photo)

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Dwarka: Workers remove trees uprooted following the landfall of Cyclone Biparjoy, in Dwarka, Friday, June 16, 2023. Cyclone Biparjoy, a very severe cyclonic storm, made landfall near Jakhau Port in Gujarat on Thursday evening with a wind speed of 115-125 kmph gusting to 140 kmph as heavy rains lashed the coastal region. (PTI Photo)

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Kutch: Damaged hall in Swaminarayan Temple following the landfall of Cyclone Biparjoy, in Kutch district, Friday, June 16, 2023. Cyclone Biparjoy, a very severe cyclonic storm, made landfall near Jakhau Port in Gujarat on Thursday evening with a wind speed of 115-125 kmph gusting to 140 kmph as heavy rains lashed the coastal region. (PTI Photo)

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NDRF personnel clear trees uprooted following the landfall of Cyclone Biparjoy, in Gandhidham. The intensity of cyclone Biparjoy which lashed the Saurashtra-Kutch region has reduced from ‘very severe’ to ‘severe’ category hours after making landfall in coastal areas of Gujarat. (PTI Photo)

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A tree uprooted due to strong winds is seen before the arrival of cyclone Biparjoy in the western state of Gujarat, India, June 15, 2023. (Reuters Photo)

Medanta: Unlimited potential ahead; to enhance capacity, add 800 beds in north India by FY23–25

By Nuvama Research

We recently met Pankaj Sahni, CEO of Global Health (Medanta). Key takeaways emerged: He expressed confidence in the increasing demand for healthcare services in the Delhi NCR. He noted that there is no immediate supply risk, but cautioned that not all healthcare chains may thrive in the market.

Medanta perceives significant growth opportunities in Delhi-NCR due to low bed density and the absence of credible competition. Similarly, in Lucknow and Central India, they see potential due to limited established competitors.

Management is not too worried about competitors and their expansion plans in Delhi-NCR. Given lower bed density (1.9x beds per 1,000 people versus 3x in other key geographies), growing population, uptick in international patients and lack of credible players, there is enough headroom to grow. Moreover, its strong brand puts it ahead in the league. Medanta plans to add 800 beds over FY23–25 in north India, taking its total bed capacity to 3,500. Of this, 800 beds would come up at existing hospitals: Lucknow (150–200), Patna (250) and Gurugram (100). The Noida hospital is likely to commence with 300 beds in FY25.

Fundamental Analysis column: Strong earnings underpin market bullishness

By Jyotivardhan Jaipuria

At the beginning of the result season in July, we had three themes — first was that overall earnings will be strong and possibly surprise on the upside. The second was that earnings in India would be in contrast to weak earnings in the developed world. Thirdly, we expected the recent earnings downgrades to slow.

In terms of earnings surprises, nearly 46% of Nifty-50 companies extended their beat, similar to Q4FY23. The low base effect led to a big beat in earnings on a y-o-y basis while in terms of the number of companies extending the beat, its similar qoq. The Bloomberg consensus FY24-25F EPS was revised upwards by 2% reversing the recent spell of downgrades. The consensus now expects earnings to grow nearly 20% for FY24 ahead of our more conservative expectation of 15% growth.

So what drove the earnings growth? Once again, the earnings growth was propelled by domestic cyclicals, such as BFSI and Auto. BFSI recorded a 60% y-o-y profit growth while Auto posted a significant profit of Rs 179b (vs. a profit of Rs 13b only in Q1FY23. OMC’s profitability surged to `305b in Q1FY24 vs. a loss of `185b in Q1FY23 due to strong marketing margins. Ex-OMC, Nifty’s earnings rose 19% y-o-y vs. expectations of 11%. Metals continued to drag the aggregates with a 40% y-o-y decline in earnings, led by steel companies that saw a 70-80% drop in earnings. This reiterates our sector preference for “buy local, avoid global”.

Overall, the result season has given us confidence in our view that the economy is robust and we are at the start of a strong earnings cycle. Over the past two years, we have seen more investment-driven companies drive earnings with consumption sectors in India as well as global sectors like software dragging overall growth. Near term, we see continued pressure on these companies for next two quarters with a weak monsoon possibly dragging down rural-oriented consumer plays. But overall strong earnings growth is going to be the key driver for the stock markets with valuations looking a trifle expensive. While we think markets will consolidate near term, we think a doubling of earnings over next five years will lead to strong returns over the medium term.

(The writer is founder and MD, Valentis Advisors)

Digital convenience: How UPI is winning over foreign tourists in India

– By Manish Kumar Shukla

In a sequential spur to innovation, India – the nation has bestowed the world with historic upheavals in the market. It has once again managed to dazzle the world of banking and finance with another masterpiece- The Unified Payment Interface (UPI). In 2016, the disruptive technology was invented, opening doors to a much-awaited digital transformation, thereby changing India’s financial landscape from cash-centric to digitally powered transactions.

Furthermore, the monthly transaction count keeps rising, establishing unparalleled records in both worth and quantity, with the aim of reaching 1 billion daily transactions.

India’s indigenous UPI solution has emerged as a global star, aiding in conquering international shores. With countries worldwide including France, United Kingdom, Singapore, Japan, UAE, Nepal and many more expressing their intent to embrace UPI for their digital payment ecosystem, India has become a leader in real-time payments infrastructure. But the story doesn’t just end there, it’s just the beginning.

UPI and Foreign Tourists

From the backwaters of Kerala to the snow-capped mountains of Kashmir, there’s a lot about India that excites foreign tourists and facilitates the Indian tourism industry. But even in the digital era, foreign tourists are stuck making payments for all these experiences in cash, especially in remote areas due to the inaccessibility of ATMs and in such cases carrying a large volume of cash can be risky. Taking into consideration the struggle faced by foreign tourists while making transactions, India keeping in line with its ‘Atithi Devo Bhava’ ideology has permitted all inbound travellers to India to use UPI for all their merchant payments, making India a desirable tourist destination for all travellers.

Cardless Transactions

The integration of cards with UPI marks a revolutionary step in the digital payment ecosystem, providing foreign tourists with the best of both worlds. It elevates the foreign tourist experience to another level, eliminating the need for carrying physical bank cards, especially in remote areas where the availability of POS terminals is scarce. Additionally, it enhances security by putting the card data in the user’s hand, mitigating risks associated with card skimming at POS terminals. Preventing physical bank card loss, UPI empowers foreign tourist travel experience with enhanced payment options which bolsters transaction security.

Cash-free Economy

While some establishments in metropolitan and other bigger cities may accept international cards, in most of the smaller establishments as well as for daily expenses of a trifle amount, foreign tourists are forced to acquire local currency endangering their safety and security. On the contrary, QR code powered UPI eliminates the vulnerability of threats like robbery, counterfeit currency being passed on, issues related to loose change of money and unfavourable currency exchange rates with exorbitant fee. Developing an online payment ecosystem prioritises seamless cashless transactions, propelling India towards financial inclusion.

Minimised Payment Scams

India being a secular nation with more than 20 languages widely spoken, it is possible that a larger chunk of the population may not be fluent in English. The language barrier makes it difficult for foreign tourists to haggle with street vendors, making them prone to overcharging scams. UPI streamlines and optimises the digital payment expense for foreign tourists, eliminating their vulnerability to scams with its simplistic QR-code scan and payment gateway technology. The UPI digital payment gateway also reduces unnecessary OTP verification frauds, ensuring the delivery of a smoother and wholesome journey.

RBI- Empowering Foreign Tourists

RBI has broadened possibilities for foreign travellers in India, enabling seamless payments across all merchant outlets accepting QR-based UPI payments. With the augment of G-20, foreign tourists from G-20 countries were offered wallets which were accessible at selected Indian airports, providing them with the opportunity to experience digital India. UPI convenience is bound to increase the appeal of India as the go-to travel destination.

Road Ahead

Since UPI has become the norm today, be it- a rickshaw puller, fruit vendor or cab driver, everyone has been touched by the pangs of the UPI revolution. UPI is a leapfrogged advancement in the Indian digital financial landscape, demonstrating to the world the power of real-time transactions, driving high commerce from foreign travellers. UPI is continuing to reshape India’s payment landscape and is projected to continue making strides in boosting financial inclusion and accelerating the nation’s progress to a cashless economy.

(Manish Kumar Shukla is the co-founder & CTO at CheqUPI.)

(Disclaimer: Views expressed are personal and do not reflect the official position or policy of Financial Express Online. Reproducing this content without permission is prohibited.)