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VOLUME 5.10

ISSUE 96

AUGUST 16, 2011

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about us

Re 01

Grph 02

New 03

National & International events in the world of nance

Dee

Indin Ecnmy 04

Cnemprry aricle

Declining consumption of oil in US 05

Ination & Interest Rate to keep Markets Volatile 07

Did Y Knw? 08

What Constitute US Debt?

Inver Fc 10

Rallis

Inver Check 11

Tree House IPO

sden spek 12

A peek into the corporate world through our Students SIP expe-

rience

bzz Wrd 15

Qiz 16

Check your Financial Quotient

CHaaNaKYa

is the ofcial

Finnce Newleer,

releed frnighly.

I jecive i

keep ech & everyne

re wih he c-

iviie & even in he

world of nance.

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Rates

01

Rep

Revere RepCll re

Ination ( n 28h Jly)

Frex Reerve( n 5h ag 2011)

91 dy t-bill

IIP (Fr Jne 2011)

6.90 Gs 2019

8.00%

7.00%

5.00%-8.10%

+9.44%

$ 317.226 illin

8.3110%

+8.8%

8.0907-8.0907%

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43.5

44

44.5

45

45.5

46

1-Aug 4-Aug 7-Aug 10-Aug 13-Aug

Rs/$

GRaPHs

02

22900

23600

24300

25000

25700

26400


Gold(per 10 gram)

15000000

19000000

23000000

27000000

31000000

5000

5150

5300

5450

5600


future rates open interest

5000

5200

5400

5600

5800

6000

16,500.00

16,900.00

17,300.00

17,700.00

18,100.00

18,500.00


sensex nifty

100

105

110

115

120


Oil(per bbl)

By- Sumit Kumar Gupta II MBA G

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inteRnational news

Central banks of Emerging nations buy $10 bn in gold as West wobbles

Double dip recession: Americans wonder where the misery will end

Investors will return to emerging Asia: Asian Development Bank

Setting its sights on rival Apple Inc, Google Inc announced its biggest deal ever, a $12.5

billion cash acquisition of mobile phone maker Motorola Mobility Holdings Inc.

FOREX-Swiss franc falls, euro gains as risk appetite rises

Gold turned higher in muted volume as Wall Street rose for a third straight session on an

encouraging New York State manufacturing report and on hopes that French and German

politicians meeting in Paris can restore some condence in the battered euro credit markets.

national news

By- Rajat Sikri II MBA L

03

StanChart H1 India operating prot slumps 39%

City Union Bank (CUB) has said it would require ` 3,000 crores by 2014, to support its

target of achieving a three-fold increase in its business.

RBI allows pre-paid cards for corporate reimbursements

BSE to include Coal India, Sun Pharma in Sensex

Indian stock market among worst performers this year

India, Japan to synergise socio-economic development-linked energies at Tokyo

Food ination accelerated signicantly in the week that ended on July 30 because of

simmering price pressures in several commodities, even as the Reserve Bank of India

damped down hopes of a pause in rate increases, at an informal interaction with top

bankers in Mumbai

Concerned over the slowing growth of the economy, the Prime Ministers EconomicAdvisory Council (EAC) has called for boosting the condence of investors in the

country.

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Debate: inDian economy

By- Richa M Jain, II MBA L

Ritu Jadhwani, II MBA L

Introduction

There is a good saying - a million dollar question, probably the usage of the saying might change

in near future to - a million rupees question. Certainly, this might happen if more analyses aremade on the devaluation of dollar and appreciation of Indian rupees. Within a span of 12 months,

the value of dollar has signicantly dropped from around 47 to 48 rupees to around 39 rupees. Of

late, the value of 1 U.S. dollar is around 39 rupees.

Indian economy is among the fastest growing economies of the world. The appreciation of the

rupees against the dollar would be another giant sign towards its economic prosperity and

augmentation. However, the economic epidemics like poverty, unemployment etc., could not be

dealt in the short-run.

Against the MotionThe depreciation in the value of dollar, though has benets, it also shows its negative impact on

the Indian Economy. The most affected segment due to this fall is the exporters. The exporters

will be getting their return in dollar at the cost of 39 rupees per 1 U.S. dollar, whereas they used to

get around 47 rupees against one dollar. In the past one year, the dollar has dropped by around 20

per cent against Indian rupees. This reveals that positive or negative impact on volume of export

or import would be around 20 per cent, which cannot be over looked as the exporters are suffering

losses. However the impact will remain until there is depreciation of dollar against rupees. If it

continues, then a great change can be expected in the longer run, in international trade arena.

Another impact would be the fantasy of dollar has been losing ground day by day.

The rupee increased to almost a three-year high last week and it has already impacted margins in

the software business, which is one of Indias biggest exporters. There is a concern that it could

get worse.

An increase in the rupee value means that software companies get fewer rupees for every

contracted dollar. It also means an increase in the cost of IT services out of India, if companies

try to maintain their margins. The volatility makes it difcult for companies to predict their cash

ows, and hence impacts their planning process.

One of the biggest impacts the falling dollar value will have is on oil prices. The entire world

purchases oil in dollars. If dollar prices fall, the purchasing power of other countries Japanese

yen and Swiss franc increases in terms of the exchange value being lower. This has a tendency to

increase the demand for oil which eventually might lead to increase in oil prices.

Falling value of Dollar will also impact business in textiles and garments sector, handicrafts,

engineering goods, chemicals and marine products. Thus, we now have to wait to check the

future impact of such a fall, and how the economy reacts to it.

For the Motion

There are many advantages to India and many other countries due to the falling dollar value.

Firstly, a cheaper dollar will lead to higher purchasing power in the hands of consumers for U.S.

04

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products. This is not only benecial to consumers at large and also to the U.S. in general as its

sales will increase. This impact in the long run can be huge as it can increase the revenues of

home countries to a greater extent especially during this recessionary stage when the country is

struggling to grow. This can be justied from the fact that majority of the companies on the S &

P list earn 50% of their revenues from abroad.

Secondly, Indian importers will be able to make purchase more for the same price as the value for

the goods and services falls with fall in the U.S. dollar.

Thirdly, foreign tourism will have higher revenues as due to falling dollar value, the cost of

holidaying abroad comes down which makes it cheaper to travel to U.S. leading to higher

vacations abroad and hence more revenues.

Lastly, many companies importing manufacturing raw materials from the U.S. will be able to

purchase the same at a lower price and hence their cost of production will eventually come downleading to lower end price.

Finally how long will these situation last needs to be waited upon and seen due to the following

reasons:

- If countries want to boost their exports, they would prefer the dollar price rising. This

could lead to change in trend.

- The countries fear other European countries to default; they might nd the U.S. as a safe

Investment heaven again. This could again lead to increase in dollar value.

- Countries like Brazil and South Korea are discouraging foreign investment in their

xed income securities. Lesser investment inow in these currencies means lesser pressure on

their currency and hence lesser chance of their currency appreciating against dollar. Hence the

technicalities make it difcult to predict the benets in the future.

05

DeclininG consumPtion of oil in us

By- Pawan Rao, II MBA L

As a U.S. economic rebound stalls and threatens to spiral into recession, oil demand in the worlds

top consumer may be slipping into an irreversible decline.

Last years edgling recovery in U.S. oil usage -- when demand rose 400,000 barrels per day

(bpd) -- made up for only a part of the 1 million bpd demand drop during a year of economic

turmoil that began in August 2008.

Until recently, most analysts believed a healthier economy would push U.S. oil use higher this

year and next, before tighter environmental regulations, increased use of bio fuels, and tougher

fuel-efciency standards kick in later this decade to lower demand permanently.

Instead, a sour economy may turn last years demand growth into a one-off. With U.S.manufacturing and service sectors slowing, a recent S&P downgrade on U.S. debt, and a series of

stock market falls that have rattled consumer condence, the odds are tilting toward short-term

declines as well.

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Last week, the U.S. Department of Energy lowered its forecast for U.S. oil demand from growth

to decline in 2011. It also cut its forecasts for growth in global oil demand, as did the Organization

of the Petroleum Exporting Countries and the International Energy Agency.

U.S. mandates require 36 billion gallons of renewables like ethanol be blended into motor fuelby 2022, up from 14 billion gallons this year. The Obama administration has also boosted fuel

economy standards for passenger vehicles to 54.5 miles per gallon by 2025, more than double

current standards.

GLobaL aPPEtItE FoR oIL

Limp demand in the United States and Western Europe wont fully offset growth in developing

countries like China and India, whose appetite for crude nearly guarantees world demand will

keep climbing.

Last years U.S. growth accounted for less than one-fth of the rise in global oil demand, which

was up 2.3 million barrels per day. But with the U.S. still burning more than 19 million bpd

-- twice that of No. 2 oil consumer China -- slower demand here could further hammer U.S. oil

futures , which have already fallen by one-quarter since hitting $114 a barrel in April.

Until the recent slowdown, consensus forecasts saw U.S. oil demand up around 100,000 bpd this

year as GDP grew about 2.5 percent, said Adam Sieminski of Deutsche Bank.

The latest government data shows U.S. oil demand, which looked buoyant earlier this year, slipped

from year-ago levels in each of the last four months as pump prices climbed. Gasoline use inJuly was the lowest on record for the month, according to MasterCard data. Less demand may

wrongfoot oil market bulls like Goldman Sachs, which continues to call for oil prices to surpass

2011 highs next year, as demand expands faster than output. For a long time the premise has been

that demand growth will outpace supply, but it might be the other way around, said Tim Evans

of Citi Futures in New York.

LEss RaDICaL tHaN 2008

Barring an acute double-dip recession, few analysts expect U.S. demand to repeat the radical

declines of 2008 or 2009. Last year, U.S. demand rose for only the rst time since 2005 when it

peaked at 20.8 million bpd, but had still fallen more than 8 percent since then.

Higher unemployment since 2007 has cut U.S. vehicle miles travelled by about 2 percent, said

James Coan at Rice Universitys Baker Institute in Houston. Americans without jobs drive about

55 percent less, Coan said.

Sunoco Inc, the Northeasts top independent oil rener, has been particularly blunt about the long-

term outlook for its main business.

The silver lining for consumers is that retail U.S. gasoline prices are expected to fall further fromlevels above $4 a gallon earlier this summer. Wholesale gasoline futures have already dropped 19

percent since late April highs, and the reductions should trickle down to consumers soon.

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inflation & inteRest Rate to keeP maRkets Volatile

By- Pawan S Rao, II MBA L

According to Peter Beutel of energy consultancy Cameron Hanover in Connecticut, if recently

lower wholesale prices hold, they could amount to savings of $115 billion over a year for drivers.

But recent history shows that even sharply falling pump prices cant resuscitate U.S. demand

during a downturn. Between mid-2008 and mid-2009, oil use dropped by a million barrels a day,

even as gasoline prices cooled by 30 percent.

Source: http://english.alarabiya.net

Apart from concerns over a slowdown of the US economy and the euro zone debt crisis, high

domestic ination and fears of an interest rate hike will keep the stock market volatile this week,

say experts.

The 30-share Bombay Stock Exchange Sensex index lost 2.69% to close at 16,839.63 last week

amid persistent selling pressure on worries over the global economic crisis after ratings rm S&P

downgraded the US creditworthiness.

An unprecedented downgrade of the US credit rating by Standard & Poors on August 5 led to a

sharp fall in the market, with investors resorting to panic selling. On Tuesday, when the markets

will open for trade this week, the overall ination numbers for July will be released. Headline

ination stood at 9.44% in June, while weekly food ination shot up to 9.9% at the end of July,

sparking fears of a further round of interest rate hikes to tame prices.

The market was surprised by the higher-than-expected rate hike of 50 basis points by the Reserve

Bank last month. Now, the sharp spurt in food ination has raised concerns that the central bank

will stick to its monetary tightening policy.

People are expecting interest rates to go up. Worries over the US and euro zone crisis are still

high and fresh in the minds of investors. There is a possibility of a pullback from current levels,

but we should be bracing for some more volatility in the short term, said Geojit BNP Paribas Re-

search Head Alex Mathews. Analysts said that given the tricky situation in overseas markets andlocal macro-economic headwinds, it would be wise to remain cautious and stay stock-specic.

The global environment will play a pivotal role in directing the investor sentiment, they added.

Domestically, it will be ination and macro-economic concerns that will guide the investor mood.

Fund ows in the Indian markets have not been that bad, considering the intensity of the sell-off.

The government, too, is trying its best to address the governance decit. But ination continues

to be a big headache, with food ination aring in end-July, IIFL Head of Research Amar Am-

bani said. On the macroeconomic front, exports continue to be robust, but might moderate in the

coming months owing to the slowdown in the US and Europe

Source:http://www.moneycontrol.com

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By- Anubhav Jain, II MBA M

The United States public debt is the money borrowed by the federal government of the United

States at any one time through the issue of securities by the Treasury and other federal government

agencies. Gross debt has increased by over $500 billion each year since scal year (FY) 2003,

with increases of $1 trillion in FY2008, $1.9 trillion in FY2009, and $1.7 trillion in FY2010.As ofAugust 3, 2011, the gross debt was $14.34 trillion dollars.

As of January 2011, foreign countries owned $4.45 trillion of U.S. debt, or approximately 47% of

the debt held by the public of $9.49 trillion and 32% of the total debt of $14.1 trillion. The largest

holders were the central banks of China, Japan, the United Kingdom and Brazil. The share held

by foreign governments has grown over time, rising from 25% of the public debt in 2007 and 13%

in 1988.

As of May 2011 the largest single holder of U.S. government debt was China, with 26 percent of

all foreign-held U.S. Treasury securities. Chinas holdings of government debt, as a percentage of

all foreign-held government debt, have decreased a bit over the last year, but are up signicantly

since 2000 (when China held just 6 percent of all foreign-held U.S. Treasury securities).US owe

China $1.159 Trillion divided by $14.3 Trillion = 8%.

Another third is owned by the American public, and the nal third is debt held by US own govern-

ment, as in, one part of government owes another part of government. Theoretically, that intra-

governmental debt could be cancelled without any consequence.

The annual gross domestic product (GDP) to the end of June 2011 was $15.003 trillion (July 29,

2011 estimate), with gross debt at a ratio of 96% of GDP, and debt held by the public at 65% of

GDP.

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES

(in billions of dollars)HOLDINGS 1/ AT END OF PERIOD

May May

Country 2011 2010

China, Mainland 1159.8 867.7

Japan 912.4 784.8

United Kingdom 2/ 346.5 350.7

Oil Exporters 3/ 229.8 228.6

Brazil 211.4 161.5

Taiwan 153.4 126.2

Carib Bnkng Ctrs 4/ 148.3 166.3

Hong Kong 121.9 145.7

Russia 115.2 126.8

Switzerland 108.2 84.4

Canada 90.7 84.4

Luxembourg 68 75.6

Germany 61.2 55.8

Thailand 59.8 46.3

Singapore 57.4 40.6

India 41 29.2Turkey 39.3 27.6

Ireland 33.5 48

Korea, South 32.5 37.8

DiD you know: wHat constitute us Debt?

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Belgium 31.4 17.6

Poland 27.9 23.4Mexico 27.7 34.2

Italy 25.4 20.8

Netherlands 23.7 17.6

France 23.6 37.9

Philippines 23.6 14.4

Norway 21.1 15.2

Sweden 20.9 13.4

Colombia 19.9 15.7

Israel 19.1 20.1

Chile 18.9 12

Egypt 12.9 28

Malaysia 12.7 10.5

Australia 12.3 14.1

All Other 202.5 174.6

Grand Total 4514 3958.1

Of which:

For. Ofcial 3239.6 2690.8

Treasury Bills 422.8 466.9T-Bonds & Notes 2816.8 2223.8

*TOTAL US DEBT= 14.3 TRILLION

Department of the Treasury/Federal Reserve Board July 18, 2011

1. Estimated foreign holdings of U.S. Treasury marketable and non-marketable bills, bonds, and

notes reported under the Treasury International Capital (TIC) reporting system are based on

annual Surveys of Foreign Holdings of U.S. Securities and on monthly data.

2. United Kingdom includes Channel Islands and Isle of Man.

3. Oil exporters include Ecuador, Venezuela, Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qa-

tar, Saudi Arabia, the United Arab Emirates, Algeria, Gabon, Libya, and Nigeria.

4. Caribbean Banking Centers include Bahamas, Bermuda, Cayman Islands, Netherlands Antil-

les and Panama. Beginning with new series for June 2006, also includes British Virgin Islands.

Source: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt

http://answers.yahoo.com/question/index?qid=20110717193851AA3fwpn

http://en.wikipedia.org/wiki/United_States_public_debt

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inVestoR focus

By- Madhukar Das II MBA G

Rallis India

the market is facing tough times under the global pressure. The economic concernslike inflation also adding to the market misery. The Reserve Bank of India, in a boutwith troublesome inflation yet again increased lending rates by 50 basis points in itsJuly 26 review. The Sensex shed close to 2000 points (about 10%) in past 30 days and

the situation still looks grim.

Fundamenally speaking

Rallis India incorporated in the year 1948 is a company engaged in production andtrading of chemicals, fertilizers and pesticides. It is a member of Tata group of compa-nies, Indias largest and most respected business house. It is the second largest pesti-cides company in the country with a market share of over 13%. The company has im-pressive global presence especially in south east Asia and Europe. The Company hasset up new pesticide plant in Dahej, Gujarat (SEZ) with the capex of `180 crores. Thefacility started commercial production from June 2011. This new plant would support

export sales of Rallis. This plant will enjoy tax exemption for five years and have po-tential to generate turnover of Rs 5000 million over three years. Company`s standalonesales grew by 17% to Rs 2,384 million. The companys sales volume grew by >15%YoY during the previous quarter. EBITDA grew by 29.4% YoY to Rs 314 million withthe EBITDA margin of 13.1%. Standalone PAT has shown growth of 11.7% YoY toRs 166 million. Lower growth in PAT was on account of higher finance cost and de-preciation. The international business contributes a large portion of the companyssales and is subjected to foreign exchange risks as current scenario is very uncertain.However the margins are healthy for the company. Net profit margin is 12.1% againstindustry average of 7.9%. Impressive return on capital employed at 49.7% against aver-age of 17.1%. P/E ratio is higher than average indicating it is the preferred stock within

the industry segment.

The price line has given acontinuation wedge

breakout pattern signaling ashort term upmove.

Momentum line has crossedover in the positive regioncoinciding with the

breakout.

The MACD line has

crossed over the signal line.

RSI line has remainedbuoyant never nearing theoversold region in the 3month period in considera-

tion.

The commodity channel in-dex is showing sharp move-ments. Therefor the current

signal may be achieved in avery short period. Howeverthis movement is not purelyreflected by the trade vol-umes. The volume remains

lower than the average.

special poin of in-

ere:

Due to adverse mar-ket conditions therewere no calls made

for the previous issue.

We are looking at atrading horizon of 15-

30 days and shall givemore weightage totechnical analysis andprice trend of thestock. We shall alsostudy the fundamentalaspects of a companyto avoid getting intoloss making tradepositions in case ofmovement of marketin direction oppositeto that of my predic-

tion.

technically speaking

Recommendation :

BUY

CMP : `166

Target Price :`180

Stop loss : `159

BUY :

VIP Industries

CMP`765

Target`825

Stop Loss`735

Exide IndustriesCMP`157.80

Target`168

Stop Loss`153

Sell :

Precision Wires

CMP`110

Target`96

Stop Loss`117

Other Picks

Source: Company Website

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Inrdcin:

Tree House Education is one of the leading educational services providers in India, incorporated

in 2006. They have 177 pre-schools under the brand name of Tree House across 23 cities in In-

dia. Out of 177 preschools 108 are self-operated by the company while rest are based on franchise

model. Tree House provide a wide variety of educational services to K-12 schools which includes

designing curriculum and providing teaching aids, supplying methods for imparting education,

organizing extra-curricular activities for students and teacher training. They offer playschool and

nursery facilities, vacation camps, mother-toddler classes, hobby classes, day care facilities and

teacher training course at pre-schools. Tree House Educations pre-schools are mainly located in

the states of Maharashtra, Gujarat, Karnataka, Rajasthan and Andhra Pradesh. The promoters of

the company are Rajesh Bhatia and Geeta Bhatia

a he Ie:The issue opened on Aug 10, 2011 - Aug 12, 2011 and was 100% Book Building process. The

price band for the issue was ` 135- ` 153. The company is offering discount of` 6 per equity

share on the nal issue price to the retail price. The issue size is 8,432,189 Equity Shares of`. 10

face value each. Company plans to raise around ` 129 crore from market if value at upper price

band. CRISIL has assigned an IPO Grade 3 to Tree House Education IPO, which means company

has Average Fundamentals. The Book running lead manage` for the issue are J M Financials

and Motilal Oswal Investment Advisory Private Limited while the registrar for the issue is Link

Intime India Private Limited and it has agreement with NSE and BSE. The company is diluting

25 % stake through issue. In the pre-IPO placement to Matrix India partners and Foundation Capi-

tal, company raised around ` 150 crore. It raised ` 17.07 crore from issue of 12.64 lakh shares

at ` 135 per share to two anchor Investors Rising India Focus Fund and Axis mutual Fund. The

company reported 96.74 per cent CAGR revenue growth between FY08 and FY11, amounting

to ` 41.15 crore. It also reported a prot after tax for FY11 at ` 9.2 crore. The company plans to

use money raised through the issue for pre-schools expansion, for constructing educational com-

plexes in Rajasthan and Gujarat and for repayment of Loans.

Cnclin:

The issue received bids for more than 1.32 crore equity shares as against issue size of 71.67 lakh

equity shares (excluding Anchor investors). QIB portion was subscribed 1.02 times, NII portionwas subscribed 1.68 times and Retail portion was subscribed 2.76 times. Maximum bids were

received at lower end of price band i.e. ` 135. Anchor Investors were also allotted shares at the

same price so we expect the listing to be at lower end of price band. We see that the issue is highly

priced and is available at P/E multiple of 48 times which is quite high as compared to its peers and

most of its revenue come from pre-school business which is highly disorganized. But if we see

the positive side of the IPO, currently the preschool market in India is ` 3000-4000 crore and is

growing at 36 % y-o-y. Around 50 % of the Indian population is below 24 years and the promot-

ers have good experience in Educational sector also Tree School has strong pre-school network

which give it scalable business model approach. We see that its quite new business and has highgrowth potential in future so investors with long term horizon can consider investing in price

range between ` 80-100 per share.

By- Saurabh Khator, II MBA L

inVestoR cHeck

11

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stuDent sPeak

12

In this issue of Chaanakya, We have with us Mr. Zafar Iqbal, who completed his internship with

MCX Ltd..

Chnky: What is the organization all about?Mr. Zfr: MCX refers to Multi Commodity Exchange. It is an electronic commodity future

exchange. It offers more than 40 commodities.

Chnky: How did you get selected for your Internship?

Mr. Zfr: I used my network to get the internship in MCX. I always wanted to work in any

company relating to commodities. I kept asking and getting information on who is working in

such companies. I nally found the contact and kept on persuading that person till he agreed to

help me get an internship in MCX.

Chnky: What was your topic and role as an intern within the organization?Mr. Zfr: I did my internship was regarding the Benets, need and regulatory framework for

introduction of Commodities derivative funds related products in the Indian market and analysing

how they are presently working in the countries where they are allowed.

In addition to that, Comparing the commodity contracts of various commodities like turmeric,

corn, energy, carbon, ethanol, ATF etc. which are present in various commodity exchanges all

over the globe like Dubai Gold and Commodities Exchange (UAE), Russian Trading System

Stock Exchange (Russia), New York Mercantile Exchange (USA), ICE Futures Europe (UK) etc.

Chnky: How you approached towards your assigned goals?

Mr. Zfr: I did not have any clue about commodities market; neither did I know about the

basics of commodity trading. First I had to make my basics strong. I only had a brief idea about

what a derivative trade is. I had to know derivative trading well since commodities market

involves a lot of derivative transactions. I read a lot of literary material and research papers. The

workshops and training provided by MCX through Angel Broking and Bloomberg helped me to

understand the practical aspects and basic technicalities of the commodities market. After this, I

gained condence and my interest in the subject increased. Since most of my project was about

studying contracts and studying regulatory framework, I did my job by making a detailed study

of the relevant contracts and regulations. The guidance of my mentor at MCX proved very vitalin giving a proper direction to my project.

Chnky: How was your experience within the organization?

Mr. Zfr: I had a mixed experience at MCX. I got to meet very intelligent, authoritative and

knowledgeable persons at MCX. The professional way in which they handle things inspired

me and also thought me lessons. On the other hand i also saw certain personnel without any

professionalism. They were bad examples. But at the end everything is a part of the package. I

am glad I got to experience many experiences.

Chnky: How your internship would be an add-on to your prole at the time of your

placement?

Mr. Zfr: I am looking for a career in the commodities sector. The experience and contacts

which I gained during my internship would certainly help me.

By- T. B, Deekshit Ravichandra, II MBA L

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In this issue of Chaanakya, We have with us Mr. Rajat Chawla, who completed his internship

with ING Vysya Bank Ltd.

Chnky: What is organization all about?

Mr. Chwl: ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile,

Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global nancial powerhouse,ING of Dutch origin, during Oct 2002. ING has gained recognition for its integrated approach of

banking, insurance and asset management. It stands proudly as the rst Indian International Bank

by being a member of the reputed nancial global Giant ING.

Chnky: How did you get selected for your Internship?

Mr. Chwl: I got selected through a direct interview arranged by an acquaintance, Mr. Sameer

Mehta. Mr. Mehta is the Regional-Head and VP (Sales), ING for UP & Uttaranchal.

Chnky: What were the bases for your selection as an intern?Mr. Chwl: My selection was based on my interview and my past academic performances.

Apart from my academic performance, I think my aptitude to learn and interest to work was the

key for my selection.

Chnky: What was your topic and role as an intern within the organization?

Mr. Chwl: The Area of my study was Credit Risk Management at ING Bank with reference to

SME Finance. My mentor for the project was Mr. Prasad Das, Area Credit Manager, ING Vysya

Bank Ltd.

My role as an intern was to

1. Study the business performance of the prospective borrower2. Meeting with clients and visiting their workplace to understand the purpose of their

3. Analyzing the Financial Statements and future estimates

4. Following the whole credit appraisal process and assisting the Area credit Manager in

arriving at credit decisions.

Chnky: How you approached towards your assigned goals?

Mr. Chwl: My project was divided into three parts and it helped me completing my project in

an organized way.

a) Theoretical aspect: Understanding what is SMEs , MMEs and their basic traits in the

manner mentioned below:

i) Going through the balance sheet of the customer.

ii) Customer meetings

iii) Presentation of post analysis of the balance sheet of the above mentioned customers.

iv) Meeting existing customers and new to bank customers

b) Practical aspect: This part consisted of the ongoing process and various other practical

aspects of credit risk management and exposure to other interrelated jobs.

c) MIS: Basics about MIS , preparation of information, and the control aspects generated

with each kind of MIS

Chnky: How was your experience within the organization?

Mr. Chwl: I enjoyed myself throughout my internship. It was a true learning experience as I

got an opportunity to work with some excellent personnel in the area of credit risk management.

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I am indebted to Mr. Das for his valuable advice, stimulated suggestions and overwhelming

support without which the project would not have been a success. I went in as a blank document

but came back with a lot to cherish.

Chnky: How your internship would be an add on to your prole at the time of your

placement?Mr. Chwl: I had always aspired to work as a manager in the area of credit risk management.

I nd myself lucky to go through an internship in the area of my interest. It will give me enough

condence to face the interviewing panel during my placements. I have done my home work.

Rest is destiny!

Chnky: What would you like to suggest to candidates seeking the internship in the same

organization?

Mr. Chwl: I feel that one should be clear with his area of interest. Clarity of thought and

willingness to learn is the most important thing. If you want to seek an internship in ING VysyaBank Ltd, then you should start approaching the organization right from the end of December.

These guys might not pay you any stipend but the learning is priceless. Getting an internship in

CRM department of ING is not very easy, so a strong reference will always put you ahead of

others.

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buzzwoRDs

Cmfr leer

Comfort letters are documents issued to back up an agreement but which do not have any

contractual standing. They are often issued by a parent or associate company stating thatthe group will back up the position of a small company to improve its trading position.

They always state that they are not intended to be legally binding. They are also known

as letters of comfort.

PIP

It refers to the smallest price change that a given exchange rate can make. Since most

major currency pairs are priced to four decimal places, the smallest change is that of the

last decimal point . For most of the currency pairs, this is the equivalent of 1/100 of one

per cent, or one basis point.

For example, the smallest move the USD/CAD currency pair can make is $0.0001, or one

basis point. The smallest move in a currency does not always need to be equal to one basis

point, but this is generally the case with most currency pairs.

Cover on a Bounce

Cover on a bounce is the covering of a short position after it has reached and bounced

off a level of support. This strategy waits for the price to move to a support level, insteadof selling before, to see if the level will hold - because the trader will benet if it doesnt

hold. Once the security bounces, it is clear the security will have trouble moving down

further, so the trade covers the short position.

Levels of support act as a backstop to a further move downward in price, but can some-

times fail to hold. If a security falls below a support level, it will often lead to an even

stronger downward move as the level is taken out. The trader waiting for a bounce is bet-

ting that the support level will not hold and they will benet if this materializes

Cver n apprch

Cover on approach is the closing out of a protable short position as the security moves

toward a key level of support. As a security moves closer to a level of support the chances

of it falling any further weaken because buying has come into the security at the support

level, which keeps the price from a continued downward move and limits the continued

success of the short trade.

Critical support levels often provide limits for how far a security can fall. By covering

before the security gets to the support level, they are being conservative with their gains

as support levels limit further moves downward and can often see large moves back up

as the security bounces.

By- Pragathi P. II MBA K

Apurva Gupta II MBA J

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quiz

By- Abhijeet Singh I MBA G

1. Jyothy Lab to buy 20 percent more stake in ________ at `41.2/share.

a. HUL

b. P & G

c. Henkel India

d. Reckitt Benckiser

2. HDFC bank has recently raised `____________ crore from lower Tier-II bonds.

a. 3,650

b. 3,000

c.3,200

d.4,000

3. __________ has recently signed a memorandum of understanding (MoU) with the Indian

Army for customized defence salary account .

a. Axis Bank

b. PNB

c. IDBI Bank

d. SBI

4. IT rm Tata Consultancy Services (TCS) has appointed _______________ as the Managing

Director and Vice Chairman of its UK subsidiary, Diligenta.

a. Sanjay Tyagi

b. Robert Clan

c. Vinay Kumar

d. Phiroz Vandrevala

5. Global Offshore, formerly known as Garware Offshore Services, plans to spend ___________

millions on adding two more Platform Supply Vessels (PSVs) of 4,500 dead weight tonne (dwt)

each to its eet.

a. $ 112

b. $ 120

c. $ 100

d. $ 90

6. Microsofts acquired Skype in ______.

a. $10.5 billion

b. $8.5 billionc. $9.5 billion

d. $11 billion

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cRosswoRDs

acr

2. Which oldest micronance rm headed by Vijay Mahajan is getting `. 800cr

funds from investors

6. India will route Euro payments through Union Bank of India and which other bank

to settle payments for National Iranian Oil Company

7. With which company did Jet Airways formed an agreemen to develop mumbais

prime land located in Bandra-Kurla Complex

8. Who headed the TRAC committee which proposed the new Makeover and Take

over rules

Dwn

1. The committee that submitted its report on customer service in banks

3. State Bank of Patiala and State Bank of Hyderabad are proposed to merge with

which bank

4. The airline that was rejected recently by Star Alliance to be a part of it

5. The Indian Infrastructure company that has bid for Barcelona and Madrid Airports

17

By- Naveen Kulkarni I MBA N

8/4/2019 Chaanakya 5_10

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answeRs to PReVious issue

8/4/2019 Chaanakya 5_10

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team

Apoorv Jhudeley

& Rajat Sikri

Edir

Zafar Iqbal

Crn

Vaibhav Nagar

Gurjit Singh

New

Naveen Kulkarni

Crwrd & Qe

Sumit Kumar Gupta

Grph & Re

Amit Prakash

bk nd Mgzine Review

T. Deekshith Ravi Chandra &

Rao Pavan Sridhar

sden aricle

Rohit Dhannawat &Saurabh Khator

Inver check

Amit Prakash &

Chinmay Uchhrang

Jethwa

scm

Mandeep Kaur

Saumya Sar

Cmmdiie Mrke

Richa Jain &

Ritu Jadhwani

Dee

Akshat Malik,

Geetika Gupta &

Manan Datt

almni spek

Abhijeet Singh

Qiz

Anubhav Jain

Did Y Knw

Gaurav Jain

sck Wch

Madhukar Das

Inver Fc

Apurva Gupta &

Pragathi P.

bzz Wrd

Kumar Gaurav &Meenakshi Ramnath

Review Cmmiee

Apoorv Jhudeley &

T. Deekshith Ravi Chandra

Creive Hed & Deign

Rhl sinh

Cver Pge nd Ly

Deign

8/4/2019 Chaanakya 5_10

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Inie ofMngemen

Hosur Road, Bangalore - 560029, Karnataka, India

Tel: +91-80-4012 9350/9351/9355

Fax: +91-80-4012 9000