Automobiles – not so mobile!

Posted on August 27, 2019Categories Corporate Finance, Entrepreneurship, Indian Economy   Leave a comment on Automobiles – not so mobile!

A slump in business, an economic slowdown, is a topic which most national and international newspapers talk about. All major businesses which depend on consumer spending are complaining about a serious drop in sales, which has forced corporates to shut down factories and lay off lakhs of people.

The automobile industry is one of the biggest employer of the country, employing over 4 million people directly and indirectly. It is said to impact approximately 10% of India’s GDP.

The current slump in the sales of automobile industries reminds us of the decades gone by, not because they faced the same issues as today, but because sales were slow as the whole auto sector was much smaller than what it is today.

May, 2019 saw the sharpest drop in sales (20.55%) recorded in 18 years. This steep drop in sales has forced large manufacturers like Suzuki, Mahindra, Hero Moto Corp, etc – now keep their factories shut for a few days each month, as there isn’t enough demand for their cars/ bikes.

There are many reasons for this mighty slump. Starting from the liquidity crisis, the rise of Uber and Ola and a weak rural economy.

Demonetization and the implementation of the Goods and Service tax has ensured that many people using showed banks/ finance, no longer have the option of these shadow banking options. Most people who buy a two or a four wheeler, take a loan to buy the vehicle. With no unofficial channel of finance available, rural India, which accounts for a major chunk of auto sales, is now unable to purchase tractors, cars or two-wheelers.

A fat chunk of the loans availed by consumers were from NBFCs. They have funded around 55-60% of commercial vehicles, 30% of passenger cars and nearly 65% of two-wheelers in India, according to ICRA. With NBFC loans being unavailable, more than 200 dealerships have shut down in the last 18 months across India.

After the downfall of IL&FS (Infrastructure Leasing & Financial Services), many banks that are sitting on piles of cash, are unwilling to lend money. NBFCs lend money to consumers for buying property, consumer durables or any other product that can be financed. They would usually raise funds from banks, and with banks unwilling to lend them money, lending out to consumers is out of the question.

As observed in many industries, it’s not that a consumer buys what he needs, he/ she is tempted into buying something they may not need, but can afford due to the loan they can take. It will be very rare to see someone buy a car or a large durable product without a loan. Therefore, without the availability of loans, automobile sales have dropped by a huge margin.

There was a time when 70-75% of car sales were financed by NBFCs. It has now fallen to around 50%, thanks to stricter lending norms put in place by lenders.

The slump for this market is drastic and there has to be some changes brought in by policy makers. The only silver lining for the industry is the upcoming festive season. Festivals like Navratri and Diwali could bring in temporary relief for automakers with sales set to go up, at least marginally.

An interesting point for many MNCs to note is the conglomerate of Bajaj. Bajaj sells two wheelers and it realized that it depended heavily on banks and NBFCs for auto sales. Most dealerships have a bank/ NBFC executive at their office in order to provide support to consumers walking in enquire about their bikes.

The Bajaj group has its own NBFC arm by the name of Bajaj Finserv, which offers cheap financing options to consumers for its consumers. This was done by Bajaj in anticipation to any market slowdown that could happen in the future. Despite a slowdown, Bajaj Auto witnessed a 7% increase in sales in May, 2019. Hence, it proves that there is a healthy demand in the market, and with financing options, people can purchase what they need.

The auto sector is witnessing a slowdown, despite consumers having the willingness to spend. Ensuring that sales do not dip and the company has enough finance with it to run operations is the task of the CEO. The CFO is tasked with mainly managing the finances, arrange finance (corporate finance) – but in the case of an NBFC, his role is as important as the CEO.

These are the times when people look up to a company’s CFO. If a CFO is able to manage corporate finance well, he can turn a loss making company into a wildly profitable company. At one point of time, the CFO was just meant to be a financial gatekeeper, although now he/ she is a strategic partner for the CEO.

Basically, a modern day CFO must think big, plan for the longer run, he/ she must serve as the final financial authority that .

He is seen as a leader who ensures financial stability for the organization, supports the CEO and provides the Board of directors with a long term plan to ensure the smooth functioning of the organization.


Financially difficult situations are pretty much inevitable in the modern world. Changes are constant, and it all boils down to the decisions made by the senior management, such as the CEO and the CFO. offers an online course on CFA level 1 course on Corporate Finance. It is designed to give young working professionals a better understanding about the financial aspects of a firm. Get a unique in-depth understanding without disrupting your daily schedule! Click the link above to know more.

Disciplined Investing

Posted on August 21, 2019Categories Executive Courses, Financial Markets, General, Mutual Funds   Leave a comment on Disciplined Investing


“History shows you don’t know what the future brings.”  – G. Richard. Wagoner Jr.

What’s worse than losing the money you invested? Throwing more money behind it, in the hope of recovering all the money.

As Warren Buffett says, “never test the strength of the current with both your feet”. Dividing your investments among different asset classes – stocks, bonds, gold, mutual funds and anything else as per your financial goals is known as asset allocation. It’s necessary to invest in multiple asset classes, in order to reduce our dependence on any one investment.

Why is asset allocation important?

Your asset/ investment prices could move in opposite or the same directions on any given day.It is difficult for seasoned investors and industry watchers to predict an asset’s value at any point of time. Therefore, it is important to invest in different assets in order to protect yourself from a sudden drop in investment value.

By investing in products having different risk profiles, you can insulate yourself from volatile market fluctuations, that could seriously hurt your net worth. This will minimize the risk of losing money and increase your chances of decent returns.

An investor may invest in different type of assets depending on the –

  1. Funds available
  2. Risk taking ability
  3. Financial objectives

A wonderful example of investment diversification/ asset allocation is that of Piramal Fund Management.

The Piramal Fund recently informed investors that they would extend the tenure of its Real Estate Management Fund by a year. The fund has a tenure of 6 years extendable by another 2 years.

Out of the 10 residential projects, it has fully recovered investments from 4 projects and are awaiting funds from 6 other projects. The reasons that were mentioned for this delay ranged from delays in government approvals to land acquisition and drop in land prices.

The extension was done to ensure that they recover all the funds invested and protect the fund from early claims of other fund investors.

The Piramal group has a wide range of business investments ranging from healthcare, life sciences, real estate and many more. This diverse platform enables them to build a portfolio strong enough to withstand any major market fluctuation in one of their asset allocated sectors. Therefore, any fluctuations in one segment allows them to rejig their investments in the market, thus protecting their total sum invested.

How does an investor decide his/ her asset allocation?

A thorough assessment has to be done before investing. Let’s say you’ve got a portfolio of Rs 1 Crore. You decide to invest 50% of this in mutual funds, 30% in gold and 20% to equity, .i.e. 50:30:20. Once the investments are done, you need to track this closely.

If you see a rise in the value of your mutual fund investments, but a drop in the price of stocks, the share allocation of your portfolio changes. Let’s assume it becomes 60:30:10, you need to rebalance or reinvest it in a way to protect yourself from losses.

This is because the value of your investments could fall at any time in the future and at that point the loses could be higher. Similarly, when the value of your allocation decreases significantly, you can switch asset classes in order to protect yourself from heavy losses.


The goal is to stick to the asset allocation plan. This will help you reduce the risk in your portfolio and pave way for smoother flow of income.

Reviewing your portfolio at least 2 times a quarter would be a healthy plan.

BSE Institute Limited’s Executive Program In Wealth Management gives an in depth knowledge of the current market investment scenario. It is most suitable for investors and fund managers looking to build large portfolios using a solid investment strategy.

Personal finance, as easy as personal hygiene

Posted on August 13, 2019Categories Education, Executive Courses, Mutual Funds   Leave a comment on Personal finance, as easy as personal hygiene

“Money compounding is one concept that does not hit you unless your stars are aligned”

Manoj Arora

Managing personal finances is an underrated life skill. It hits you right on your head when your responsibilities start piling as you get married. It is common to see youngsters, who start earning, spend the money without a care in the world. However, that changes the moment they become parents or have any medical emergencies.

A set of personal finance rules will make sure you’ve funds for your luxuries, debts, emergencies and all the other expenses one might incur.

It is always better to plan for the future instead of regretting when its too late.

For all of us who wish to begin building a strong portfolio, here are a few tips that you can follow easily:.

  1. Set a budget

The first thing you need to learn when you start earning, is to budget your expenses. Budgeting means planning your finances.

Keep a track of all the things you do throughout a month. Divide your earnings in such a way that your expenses are lesser than your savings. This will not only help you gain control over your earnings but also help you keep track and plan for the future.

The future is unpredictable and you never know which month might end up being expensive. You must be financially ready for these moments.

These are the few things you need to keep in mind when you budget your earnings:

  • Earnings
  • Savings
  • Expenses
  • Investment

Your earnings are the total amount you receive at the end of the month, which is divided into 3 funds. You need to divide it in a way to make sure that the average of your investments and savings is more than your expenses.

  1. Investing

After planning your budget, decide the investment amount.

Any person who invests, expects a return sometime in the future.

We do this for multiple reasons, from supporting our family needs to buying luxury items and many more.

The greatest dilemma for any investor is, “where to invest”? Here are some of the most sought after and common investment options for investing-

  • Stocks- When you buy a stock of a company, you’re entitled to a share of the profit, whichever is incurred. This type of investing has its own risks but at the same time it could be a very profitable scheme for you.
  • Fixed Deposit- For people who don’t have the appetite for risks, this is your safest bet. Expect a return of around 6% on your investment. The returns are lower than stocks, but definitely risk free.
  • Mutual funds- Mutual funds have lesser risks when compared to individual stocks or bonds. Funds accept investments and invest in individual stocks on their own. Your money is invested by fund managers, who have a few decades of experience in managing funds.
  1. Get rid of your debts

Once you start budgeting your expenses and investing, you’re half way there. People start struggling when they can’t get rid of their debts after using credit cards. Compound interest is the biggest trap you could fall into, so our advice is to avoid credit cards.

Now, if you’re the sort of person who can’t resist a credit card, make sure you pay more than the minimum amount due each month. This could help you save huge chunks of money in the long term.

On other hand you’ve certain debts like the ones incurred while purchasing a home can be seen as a good debt. There are 2 crucial reasons why it could be a good debt. Firstly, make sure you invested into an asset whose value is set to increase. Secondly, opt for lower rate of interests which will be beneficial in the long term.

High interest rates will make getting out of debt a huge task in the longer run, so make sure you look into these fine details.

  1. Insurance

You might think that everything is has been covered from budgeting your expenses to investing and getting rid of debts, but don’t forget that you’ve built something very important here and this fortune needs to be protected.

There are certain unexpected disasters that could leave you in ruins. If you’re not insured, it could leave a huge hole in your pocket. In order to stay protected during such situations it is important to have a permanent or term life insurance as per your needs.


No matter who you are, or what your current financial situation is, if you can follow these few tips, you can secure your financial future. Differentiate between your needs and wants, and then build on it.

BSE Institute’s  Executive Program in Investment Management helps professionals learn basic and advanced concepts of investing and portfolio management. It can help you be a top notch investor in no time.


It’s not data, it’s an ammunition!

Posted on August 7, 2019Categories Algorithms, Analytics, Artificial Intelligence, Data analytics   Leave a comment on It’s not data, it’s an ammunition!


Napoleon Bonaparte, the great French military general and statesman once said, “War is 90 percent information”. He said it in a different context back in the 18th century, but it is certainly relevant today in the world where trade and business mean war. With each business trying to get on top, a few bits of information might be the greatest ammunition you might need to get an edge over your competition.

The impact of not spending on data science and analytics can be catastrophic. A recent study found that, US businesses lose up to $600 billion annually due to poor data quality. Poor data gives poor insights and hence, they lose business to competitors.

The question isn’t, “does your business need data analytics?” instead its “how can my business get better data and insights?” Data analytics is today a critical business function like sales, marketing, finance and production.

Now, before we get into the benefits, let’s understand what exactly business analytics is.

It is the detailed study of data or information through statistical and operations analysis. This helps the businesses in taking certain critical decisions and make some strategic moves. Most importantly, business analytics operations help you find a pattern in every operation that you are analyzing, which helps you schedule your work process accordingly.

What are the benefits of Business Analytics?

There are many benefits to speak about, but we will stick to just the critical points:

  1. Increases revenues- The most basic motive of any business is to increase their revenues and well, business analytics will help you achieve this. Using the insights derived from analytics, a company can make quick changes which can attract more consumers and drive up sales.

Earlier the time taken to receive information from the market, from consumers, distributors and regional heads would take a few weeks at least. With the internet and smart hand held devices, that relay data real time, the insights team can get all the market data they need for analysis immediately. This can be crucial as any product that is not performing well can be pulled from the market and replaced with a high performing one. Instead of a drop in sales, the company will see a steady rise in sales, all because the analytics team relayed insights immediately.

  1. Decisive- There are various decisions in a business that will be crucial in the short and the long term. Making a decision will always be a dilemma, but business analytics makes the work easier for you. The statistical analysis will provide you with trends and help you make up your mind when it comes to quick decision making.

Netflix is a great example of a business that uses data analytics to give you quick suggestions on the next movie you should watch based on your previous choices.

  1. Competitiveness- The market is a game of fine margins. The quality of your data analysis could help you climb over your competitor and win the battle.

How do you think the likes of Starbucks remain at the top in their businesses? Even they use data analytics to personalize their services for customers using the Starbucks app. They collect data regarding the buying patterns of the customer and their preferences. This helps them give the customers a better and improved service.

Personalization isn’t the sole purpose. They even use the data to come out with new advertisements, new menus, offers and much more!

  1. Trend mapping- Data analysis allows analysts to predict the future demand for certain products and commodities. By observing the current demand, prices and other economic factors of earlier years, an analyst can predict the demand for a product in a year with similar climatic and economic conditions.

With such knowledge, a company can buy its raw materials before hand at a lower cost and have the finished products in the stores when they expect the consumers to demand it. This will allow a company to have its products on the shelves before its competitors, who may not have an idea of the expected demand.

A lot of the points mentioned above were unheard of 5-6 year back. However, today data allows people and organizations to be well prepared for tough competition. With data science and analytics any small firm can scale up rapidly by being present exactly at the places where consumers look for their products and selling the exact type or variant that their consumer wants. This can allow them to accumulate sufficient capital for growing their business.

Become a data science expert to help any organization grow by leaps and bounds in a short time. Join BSE Institute`s Certificate program in Business Analytics to begin your journey in this new emerging industry.