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session 2 krishna

Future Proofing Financial Infrastructure

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Tracking through serial number, QR codes and automation to ascertain which retailer is financing your product and having the transparency of it all is enabled by digitsation,” said Nikhil Sohoni, Group CFO, Blue Star

Technological innovations which have made it possible to provide virtual models of huge infrastructure projects has been a significant tool in redefining the real estate industry. Today, the Indian real estate market stands at USD 250 billion and is estimated to grow to USD one trillion by 2030. Leveraging technology has drastically transformed the industry, experts emphasised during a panel discussion at the BW CFO Future of Finance Summit 2023 in Mumbai.

Kunal Sanghavi, Chief Financial Officer, HDFC Securities, highlighted certain insights regarding the brokerage and financial service industry in India. “As a country we had close to 20 million demat accounts until five years back,” he said, “only in the last five years this number has increased five times, this transformation is due to the overall shift in digitisation which has reduced the cumbersome process of opening an account.”

Account opening used to require multiple signatures, take months to process, combined with logistical issues. All these processes have now been digitised. The advent of high-speed mobile internet, coupled with regulatory enablement has fostered this development, subsequently enabling retail participation, leading to companies raising funds.

“Tracking through serial number, QR codes and automation to ascertain which retailer is financing your product, the nature of financing and having the transparency of it all is enabled by the digitisation process,” said Nikhil Sohoni, Group CFO, Blue Star.

Delving more into the discourse, Jitesh Kakarea, CFO & Supply Chain Director, Moet Hennessy, also spoke about fintech companies leading the way for digital transformation, “Fintech has democratised learning, stock broking firms are onboarding consumers through a learning program. Their asset light models have generated a far better reach,” Kakarea said.

Blockchain adoption in fintech has not taken off, features like e-KYC have kept blockchain under-utilised. However, cloud technology has enabled scale and flexibility for business models, data security, etc.

“Financial resilience and stability have been the priority of Reserve Bank of India. Sufficient capital and liquidity ensure financial resilience, whereas delivering critical services during any disruption is the competency of operational resilience,” said Gaurav Malik, CFO, Experion Developers.

The digital lending and fintech space provide opportunities to the country, but also poses regulatory challenges. Regulators should ensure that transactions are done in a fair and transparent manner, with the sole aim of consumer protection.

The discussion concluded with the prediction of future tech disruptions such as central bank digital currency (CBDC), integrated digital approach, blockchain in real estate transaction, among others.

adani

Adani Cement Refinances $3.5 Bn From 10 International Banks

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DBS Bank, First Abu Dhabi Bank, Mizuho Bank and MUFG Bank acted as Mandated Lead Arranger and Bookrunners and Underwriters to the transaction

Adani Cement, a subsidiary of the Adani Group, has completed a refinancing program, securing a financing package of USD 3,500 million from 10 international banks.

According to a press release by Adani Group, the refinancing, executed through Endeavour Trade and Investment Ltd, is aimed at terming out the acquisition finance facility for Ambuja and ACC, two major cement brands in India, by a tenor of 3 years.

The refinancing program underscores Adani Cement’s robust access to the global financial market and its strong liquidity position.

The funds have been raised from a group of international banks and will result in an estimated cost saving of approximately USD 300 million for Adani Cement.

This achievement aligns with Adani Cement’s commitment to financial stability and growth.

Adani Cement, currently the second-largest cement player in India, completed the acquisition of Ambuja and ACC, valued at USD 6.6 billion, in September 2022.

This acquisition marked a significant milestone in the infrastructure and materials sector. The refinancing initiative forms a part of Adani Cement’s capital management plan outlined in September 2022, focusing on stepwise deleveraging.

The refinancing deal was orchestrated by several leading banks including DBS Bank, First Abu Dhabi Bank, Mizuho Bank, MUFG Bank, Barclays Bank PLC, BNP Paribas, Deutsche Bank AG, ING Bank, Sumitomo Mitsui Banking Corporation, and Standard Chartered Bank.

Cyril Amarchand Mangaldas and Latham and Watkins acted as Borrower’s counsel for the financing, while Allen & Overy LLP and Talwar Thakore and Associates served as legal counsels to the lenders.

Adani Cement’s acquisition of Ambuja and ACC positioned it with a combined installed production capacity of 67 million metric tonnes per annum (MTPA), with plans to expand to 100 MTPA by 2025, including the recently announced acquisition of Sanghi Cement.

The integration of these brands with the Adani infrastructure platform has significantly improved operational efficiencies, leading to an increase in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to INR 1,253 per ton in the quarter ending June 2023, compared to INR 340 per ton immediately after the acquisition in September 2022. (ANI)

 

 

 

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Household Savings Reflect Changing Consumer Preferences, Not Economic Distress: FM

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The Finance Ministry has contended in its latest report that households are now accumulating fewer financial assets than in the past due to their increased use of loans to purchase real assets like homes and cars, which is “not a sign of distress but of confidence in their future employment and income prospects.”

Data from the Reserve Bank of India released this week showed that net household financial savings decreased from 7.2 per cent of the GDP in 2021–2022 to 5.1 per cent of the GDP in 2022–2023—the lowest level in 47 years, or since 1976–1977. In addition, household financial liabilities increased from 3.8 per cent of GDP in 2021–22 to 5.8 per cent last year, raising concerns that many households’ recovery from the COVID–19 epidemic is still insufficient and that high inflation has eroded savings.   

The ministry claimed that although fresh inflows have decreased, overall net financial assets are still increasing. “Between June 2020 and March 2023, the Stock of Household Gross Financial Assets went up by 37.6 per cent and the stock of household gross financial liabilities went up by 42.6 per cent — there was no big difference between the two,” the Ministry said. 

Since September 2022, vehicle loans have increased by more than 20 per cent, with double-digit growth since April 2022. Clearly, the household sector is not in difficulty. They are financing their purchases of cars and homes, the Ministry claimed.

This, it stated, demonstrated that as of 2021–2022, the proportion of household savings to nominal GDP had stayed consistent, dropping from about 20 per cent to 19 per cent.

foreign funds

IIFL Finance To Raise Up To Rs 1,000 Cr Via Secured NCDs

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The IIFL NCDs would be issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 (10 NCD) and in multiple of Rs 1,000 (1 NCD) thereafter, across all categories

IIFL Finance Limited is all set to open a public issue of Secured Redeemable Non-Convertible Debentures (NCDs) on January 6, 2023, to raise up to Rs 1,000 crore for the purpose of onward lending, financing, refinancing the existing indebtedness of IIFL Finance Limited (payment of the interest and/or repayment /prepayment of principal of borrowings) and General Corporate Purposes. 

The firm’s NCDs will offer up to 9 per cent yield. IIFL Finance will issue secured redeemable NCDs, aggregating to Rs 100 crore, with a green-shoe option up to Rs 900 crore amounting to Rs 1,000 crore. The IIFL NCDs would be issued at face value of Rs 1,000 and the minimum application size is Rs 10,000 (10 NCD) and in multiple of Rs 1,000 (1 NCD) thereafter, across all categories. 

The company said that its NCDs will offer effective yield of up to 9 per cent per annum for tenor of 60 months. The NCDs will be available in tenors of 24 months, 36 months and 60 months. The frequency of interest payment is available on monthly, annual and cumulative basis for 60 months tenor, while for 24 months and 36 months it is available on annual and cumulative basis.

IIFL Finance’s consolidated Loan Assets under Management is Rs 55,302.08 crore as on September 30,2022. The lead managers to the issue are Edelweiss Financial Services Limited, IIFL Securities Limited*, Equirus Capital Private Limited and Trust Investment Advisors Private Limited. The NCDs will be listed on the BSE Limited and National Stock Exchange of India Limited. 

The public issue opens on January 6, 2023 and closes on January 18, 2023, with an option of early closure

Rbi cfo

RBI Prescribes Norms For Small Finance Banks Looking To Deal In Forex

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Other criteria for entering the forex business include profit in the preceding two years and net NPAs not being more than 6 per cent in the previous four quarters

The Reserve Bank on Monday said small finance banks which have completed two years of operations and have a minimum net worth of Rs 500 crore can deal in foreign exchange.

In a circular, the RBI said this is being permitted with the objective of giving more flexibility to small finance banks (SFBs) to meet their customers’ foreign exchange business requirement.

Other criteria for entering the forex business include profit in the preceding two years and net NPAs not being more than 6 per cent in the previous four quarters.

(PTI)

Mukul-Kanchan-_-Head-of-Finance_-Plum-1

Plum appoints Mukul Kanchan as its Head of Finance

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Plum, an employee health insurance platform, has appointed Mukul Kanchan as its Head of Finance. Mukul has assumed charge from June 2022 and will be working closely with the founders to solve complexities as the business scales up at a faster clip. Mukul will support scaling the business with sustainability, building financial prudence and robustness, acquisition initiatives, and fundraising. He will also strengthen risk management practices and compliances at Plum.

Mukul is an investment banker and a private equity investment professional. He comes with over 16 years of experience in leading Finance, M&A and Business Development functions in prominent start-ups and global corporations such as Clix Capital, D. E. Shaw & Co, E&Y and Aten Capital among others. In his earlier role as CFO at Clix, Mukul drove the acquisition of GE Capital India entities in 2016 which was later renamed as Clix, simplified the legal entity structure of the group, drove M&As and partnerships, and led the overall Finance function. On his new role as Head of Finance at Plum, Mukul Kanchan said, “Plum is aptly placed to disrupt the corporate health insurance space with its superior digital platforms, high-quality customer experience, and a plug-and-play product that is simple enough for organisations to use. In a world of high-growth tech start-ups, a finance leader must become a strategic partner to their CEOs. From staying conservative to displaying aggression, from valuing cost-cutting to chasing opportunity cost, from controller to being an enabler, and from playing by the book to writing a new playbook, the new age finance leaders must act as a catalyst for growth and aspire to change the game.” Abhishek Poddar, Co-founder and CEO, Plum says, “Mukul is a highly adept finance leader and will be an invaluable asset to Plum’s leadership team. Having worked at some of the most robust financial services organisations, not only does he bring the expertise needed to run our finance function, he also has a critical understanding of what it takes to drive growth and operational excellence. Having worked with Mukul for some time now, I have experienced his superior intellect and leadership abilities and am excited to work closely with him as we execute the next phase of Plum’s journey.”

Plum, an employee health insurance platform, has appointed Mukul Kanchan as its Head of Finance. Mukul has assumed charge from June 2022 and will be working closely with the founders to solve complexities as the business scales up at a faster clip. Mukul will support scaling the business with sustainability, building financial prudence and robustness, acquisition initiatives, and fundraising. He will also strengthen risk management practices and compliances at Plum.

Mukul is an investment banker and a private equity investment professional. He comes with over 16 years of experience in leading Finance, M&A and Business Development functions in prominent start-ups and global corporations such as Clix Capital, D. E. Shaw & Co, E&Y and Aten Capital among others. In his earlier role as CFO at Clix, Mukul drove the acquisition of GE Capital India entities in 2016 which was later renamed as Clix, simplified the legal entity structure of the group, drove M&As and partnerships, and led the overall Finance function. On his new role as Head of Finance at Plum, Mukul Kanchan said, “Plum is aptly placed to disrupt the corporate health insurance space with its superior digital platforms, high-quality customer experience, and a plug-and-play product that is simple enough for organisations to use. In a world of high-growth tech start-ups, a finance leader must become a strategic partner to their CEOs. From staying conservative to displaying aggression, from valuing cost-cutting to chasing opportunity cost, from controller to being an enabler, and from playing by the book to writing a new playbook, the new age finance leaders must act as a catalyst for growth and aspire to change the game.” Abhishek Poddar, Co-founder and CEO, Plum says, “Mukul is a highly adept finance leader and will be an invaluable asset to Plum’s leadership team. Having worked at some of the most robust financial services organisations, not only does he bring the expertise needed to run our finance function, he also has a critical understanding of what it takes to drive growth and operational excellence. Having worked with Mukul for some time now, I have experienced his superior intellect and leadership abilities and am excited to work closely with him as we execute the next phase of Plum’s journey.”

money

Piramal For A Change In Compensation Structures

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Piramal said a finance sector professional needs to have highest integrity, deep knowledge of the sector and understanding of technology and also humility to be open to flags of concern being raised by someone

Piramal Finance chairman Ajay Piramal on Friday pitched for a need to change the compensation and incentive structures in the financial services space.

Piramal, whose business interests straddle various sectors, said an executive is rewarded upfront for writing a long-term loan which can also go awry by becoming a non-performing asset in the future. Piramal said a finance sector professional needs to have highest integrity, deep knowledge of the sector and understanding of technology and also humility to be open to flags of concern being raised by someone.

He said the higher cost of funds does not allow the non-bank lender led by him to compete with banks, and hence it has chosen to play in tier-II and III markets where rates are not so important. Piramal said there is a need for more banks to be allowed into the country, pointing out that even though licences have been put on tap by RBI, no single entity has received those since 2015.

The US has 45,000 banks despite having lower population, while India has only 45 banks in comparison, he said, underlining the credit flow will have to grow to achieve ambitions like having a USD 10 trillion economy by 2030.

He also pitched for more NBFCs to be allowed into deposit accepting, and pointed out that there is a freeze on such licences now. The financial sector’s credit growth has to be over 16 per cent for a real GDP growth of 8 per cent, he said, adding that if we as a country are not able to meet growth aspirations, we cannot leverage on the demographic dividend. 

PTI

GST 2

CFOs and GST: A Balancing Act

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Till the time all the required software and processes are mastered, it will be a challenge for them to run the company effectively in a top-down manner.

Chief Financial Officers (CFOs) are conventionally responsible for maintaining the financial well-being of a company, stakeholder management, investor relationships, and expectations of the market. However, this role has evolved and become more nuanced over the years. Today they must function at the delicate intersection of technology and finance which includes managing investor relations while maintaining a balance between tax compliance, profit-making, and corporate governance. With changing roles, the adaptability of CFOs is being challenged, tested including efficient handling of the Goods and Services Tax (GST) compliance and its associated issues.


CFOs must be more careful about timely uploading GST invoices; else the company will suffer a loss by way of penalties imposed by the tax authorities and experience blocked working capital. Non-compliances in GST is now attracting severe penalties, fiscal and criminal, never before imposed by the GST authorities. One way is to focus on cloud-based solutions, which will also help in bringing out a single source of information instead of a fragmented one. While this sounds like a simple solution and can ease bulk GST uploading, getting the entire workforce in line to keep documents up to date is a challenging task. Also, GST is a newer concept, that requires digital filings as compared to the age-old taxation system in India. This comes at a time when the focus is on tax optimization in companies and not just tax compliance. To carry out this task effectively, CFOs need appropriate trained staff and tools. Till the time all the required software and processes are mastered, it will be a challenge for them to run the company effectively in a top-down manner. Owing to this confusion, company leaders are getting arrested due to known or unknown frauds. In Mumbai Zone alone, 730 cases of tax evasion, amounting to INR 6380 cr are reported under sections 132 (1)(b) and 132 (1)(c) of the CGST Act. Following these charges, a lot of senior personnel were being taken into custody.


Adding to the woes of finance giants in companies is the ever-fluctuating GST rate, be it positive or negative, which have to be carefully tracked and monitored. Not only does this increase the chances of alleged fraud and/or willful evasion, but also poses a tight rope situation where the CFO must balance out between his or her primary duties and government compliance. Now, not only is the role compliance-related, but also one of predictive nature, where future financial impact is also to be predicted. All this, while keeping a hawk’s eye on the evolving GST regime. The new year saw restrictions in GST filing requirements getting tighter with time, removing provisional tax input means businesses must reconcile invoices frequently.


Non-compliance will hit the company image and profits directly which is a peril for the role of a CFO. This adds to unprecedented stress on CFOs, as they must ensure the company does not go to the other side of the law. Also, they now must work closely with the company’s Chief Information Officers (CIOs) to figure out managing, training its employees, handling data security and cybersecurity across the board. CFOs are also experiencing Ransomware hits to their company and even though these events are not revealed in the market but some of the big names in the Indian industry had suffered it.  This will ask for more effective coordination across company verticals, senior management and CFOs will have to take the frontal role here.

electricity

Adani Power Board Appoints Shersingh B Khyalia As Its CEO

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His experience spans across power trading, legal, regulatory and commercial, finance & accounts, and PPA management aspects of the power business.

Adani Power’s board on Tuesday approved the appointment of Shersingh B Khyalia as the company’s chief executive officer (CEO) with effect from January 11, 2022.

“Board of directors of the company, at its meeting held on January 11, 2022, has considered and approved the appointment of Shersingh B Khyalia as a chief executive officer of the company with effect from January 11, 2022,” according to a BSE filing.

According to the filing, Shersingh B Khyalia is not related inter-se to any of the directors of the company.

Shersingh B Khyalia is a Chartered Accountant and brings with him over 32 years of experience in managing complex business in the power industry, including generation, transmission, and distribution.

His experience spans across power trading, legal, regulatory and commercial, finance & accounts, and PPA management aspects of the power business.

Earlier, Khyalia has worked as the managing director in Gujarat Power Corporation, where he got experience of the renewable power sector especially the development of ultra mega renewable parks.

During his almost three decades of service in the power sector, he has been a director on the boards of Power Exchange (India) Ltd, Paschim Gujarat Vij Company Ltd, Uttar Gujarat Vij Company Ltd, Dakshin Gujarat Company Ltd, Madhya Gujarat Company Ltd, Dakshin Haryana Distribution Company Ltd, and Gujarat Green Revolution Ltd. 

(PTI) 

tata

Tata Motors ties up with Bandhan Bank for passenger vehicle finance

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As part of the tie-up, Bandhan Bank will provide loans to Tata Motors’ customers at an interest rate starting from as low as 7.5 percent, the automaker said in a statement.

TATA Motors on Wednesday said it has tied up with Bandhan Bank for retail finance for its range of passenger vehicles.

As part of the tie-up, Bandhan Bank will provide loans to Tata Motors’ customers at an interest rate starting from as low as 7.5 percent, the automaker said in a statement.

The scheme will offer a maximum of 90 percent financing on the total on-road cost of the vehicle, it added. Customers can also enjoy the benefit of special EMI options with a repayment tenor of up to seven years and the bank has also designed certain exclusive features like zero charges on foreclosure and part payment, Tata Motors said.

“This partnership is a part of our #FinancEasy Festival, wherein we are collaborating with multiple finance partners across India to make ownership of cars accessible, as well as a hassle-free process for the customers and thereby adding to the celebrations of this festive season,” Tata Motors Passenger Vehicle Business Unit Vice President (Sales, Marketing & Customer Care) Rajan Amba noted.

The company hopes that these offers will make the process of purchasing Tata cars much easier for customers and that this will positively impact their overall buying experience, he added.

PTI

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