Review: Edelweiss Tokio Life Wealth-Plus

Couple of days back, Edelweiss Tokio Life launched the Wealth Plus product.

This product is not only very low cost but the life insurance company actually adds to the premiums!

Since it is a very unique product, it can be a game changer in the industry.

Product Features:

  • Unit Linked Product
  • Very Low Cost
    • 0% premium allocation charges
    • 0% policy administration charges
    • 100% of your premium gets allocated
  • Additions
    • The company will provide additional allocation every year as follows:
      • Policy Year 1-5: 1%
      • Policy Year 6-10: 3%
      • Policy Year 11-15: 5%
      • Policy Year 16-20: 7%
    • Over a 20 year term, 80% of one year premium will be paid by the company!
  • Child Proposition
    • On death of parent, following benefits are paid:
      • Lump sum amount
      • All future premiums immediately credited so more compounding benefits
      • All future premiums waived off
      • Company will pay additional allocation every year
  • Investment Strategy
    • Flexibility to choose investment strategy
    • Funds available-Equity Large Cap, Equity Top 250 ,Equity Mid Cap Fund,
    • 0% Switching Costs
    • All Funds are in the top Decile as rated by Morningstar
  • Plan Benefits
    • Death Benefit: Higher of Sum Assured or Fund Value
    • Maturity Benefit: Fund Value

Do check out the product if interested in a top performing low cost ULIP


Why Internet Companies and Startups are not ready to face the stock markets

It has been observed that the internet companies and startups in India are not too keen to be part of stock markets and are not open to the investors of the country. Since the year 2006, the country has witnessed a giant leap in the number of start-ups or the internet companies. This has made India as the 3rd largest startup hub in the whole world. But out of these, only five companies have listed themselves on the stock exchanges.

These five companies are Infibeam Incorporation which was set up in the year 2007 and is listed both on NSE and BSE, Intellect Design Arena which was set up in the year 2011 and is listed on both NSE and BSE, Koovs which was set up in 2010 and is listed on LSE, 7Seas Entertainment Ltd which was set up in the year 2005 and is listed on BSE, and lastly Yatra Online Inc which was set up in the year 2006 and is listed on NASDAQ.

The experts believe that though there have been many discussions happening on this topic lately, but the share market is not expecting any other listing by any other internet start-up in the near future. They say that there is no upcoming IPO as of now as most of the start-ups are not ready and they need some more time and preparation to come up with IPO.

Though in the current scenario, we have been witnessing a magical increase in the number of IPO’s. While as many as 7 silicon valley companies have gone public in the initial three months of this year, but only a handful companies like e-commerce Shopclues and online furniture company Pepperfry have declared their plans.

One of the prime reasons cited is the inconsistent finances. Recently both Flipkart and Snapdeal have recorded major losses. Though there have been many private investors and world’s biggest investors like IDG and DST who have invested in the Indian startups in past, but raising funds from IPO is quite a challenge. The investors do not invest unless they see soaring revenues and profitability.

Another reason is the lack of innovating new business models. Many new start-ups go with the same age-old model or their competitor’s business models. The retail investors demand for the creativity from the start-ups so that they have better chances of getting success in the long-term. Sometimes, the investors are also found to be hesitant in investing in a high-risk young business that are first or new in the market.

Also, what leads to the failure of a startup IPOs in India is the negative regulations. The startups are measured on the same parameters as the established firms having a completely different business models and growth paths. Though in the last few years, the government of India and also the stock market regulator Securities and Exchange Board of India (SEBI) have tried making the situation less cumbersome for the start-ups.

For more business news, visit BloombergQuint.


Case Study : Repayment of default amount is not enough

(Disclosure: This blog post is sponsored by Credit Sudhaar)

Ashish is a 30 year old and he has been working for five years; he wanted to buy a house and for that he decided to apply for a housing loan. After carefully researching online and talking to a few of his friends and colleagues he decided to apply for a loan with SBI. Despite fulfilling the eligibility criteria and submitting the required documents his loan application was rejected. He could not understand the reason for it.

The SBI Home Loans representative told him that his credit score was low (for the bank) which led to the rejection of his loan application. Ashish was surprised as he had two credit cards which he used responsibly and always paid his dues on time. He decided to get his Credit Information Report so that he could figure out the reason for his low rating.

The CIR revealed that he had missed on repaying the last two installments of his education loan; he had moved cities and had failed to inform the bank. So any notices sent to him would not have reached him and now due to those defaults the asset has been classified as a “SUB” which denoted a sub-standard asset. Any asset which remains a NPA (Non Performing Asset) for more than a year is classified as a Sub Standard Loan. 

Now that Ashish knew what the problem was he decided to solve it. He contacted the bank from where he had taken the loan, checked what the total dues were (the pending EMIs plus the accumulated interest and fines. He paid the dues, got a NOC from the bank after a little follow and was relieved at having taken care of the problem. He waited for a few weeks to check his credit report.

He was disappointed, though the loan was no longer reflected as a “Sub” asset and his score did improve marginally but it still was not at a level at which the bank would sanction him a loan. Though he knew that there were lenders that offered loans for bad credit scorers too but he did not want to take that route as these loans were generally available at very steep rates.

Why Repaying the Dues is Not Enough?

Are you also confused like Ashish and wondering why the score did not improve drastically and why is it still difficult for him to get a home loan sanctioned? Well we have an explanation for you.

Repaying the loan meant that the overdue status of the loan was taken care of but the missed EMIs will continue to reflect in the CIR. The CIR carries the repayment record of last 36 months and two missed EMIs are sure to be cause concern for any prospective lender and lower the credit score. Repayment history is the most crucial factor in credit score and it has a 35% weightage in the score calculation. In Ashish’s case there were no other loans; his credit trail was not too deep so even a single missed payment would have a great impact on the overall credit rating.

If someone were to have multiple loans which have been running for a while and they default on a single payment then there would be an impact but it would be lesser than what was faced by Ashish. The education loan being the first loan does set a kind of tone for the credit trail so one needs to be very careful in repaying it. Two missed payments for a the first and only loan in the CIR does not present a healthy credit picture.

What Should Ashish do Now?

The older the default the lesser its importance is in the eyes of the future lenders. Ashish should continue to be a responsible credit card user, keep his credit utilization ratio less than 30%, he should remember to pay dues on time and should not make any further loan applications till he is sure about his credit score acceptance. Improving the score takes time and with time the score will become better.

There is no quick fix the credit score improvement, he has taken the step in the right direction by paying the complete dues and the results are sure to follow in time!


Is Financing a Used Car worth it?

(Disclosure: This blog post is sponsored by Credit Sudhaar)

Getting a car loan, irrespective of whether used or new, is often said to be a bad idea. This is because cars depreciate quickly over time. In other words, cars lose their worth over time faster than other kinds of assets.

In fact, some assets, such as real estate, increase in their worth over time. On the other hand, even a new car can lose 50% of its market worth in 5 years.

So, if you are planning to buy a used car with a loan, make sure you understand the advantages and disadvantages of the same.


  • Easy on the Pocket

People buy a used car because they don’t to stress themselves financially, and that’s perfectly alright.

With a used car loan, not only you get to buy your favorite “hot wheels” at an affordable price, but you also don’t have to pay the entire amount in one go.

With a used car loan, you can easily pay off the full amount (which is already quite low) in small installments on a monthly basis.

  • Builds Credit

The best bad credit fix method is to build score through loans and credit card payments. This is where a used car loan can come handy. Since the loan amount is likely to be quite affordable you can easily pay off the installments on a timely basis and improve your score quickly.

  • Saves Money

A used IDBI, SBI or HDFC car loan may add another expense to your current list of expenses but it can also save you a lot of money. By having your own car, you can reduce your transportation costs to a great extent. Plus, your spouse can commute to the work too and save even more money.


  • High Interest Rates

The interest rates on used car loans are usually higher than those on new cars, and there are multiple reasons why. First, since the duration of a used car loan is shorter (with the loan amount being smaller) banks try to make up for it through high interest rate. Second, it’s difficult to predict the depreciation rate of used cars. So, if you default on the loan and the lender has to possess the car and sell it, they won’t be able to get a fair price. Some also believe that lenders put high interest rates on used car loans to deter the customers in the interest of selling new cars.

  • High Depreciation Rate

Financing a used car is especially a bad idea because it will depreciate fast. So, you will be paying money on a monthly basis on something that’s losing its value. If you decide to sell your car in the future you won’t get a quarter of the price you paid for it in total (principal amount+ interest).

  • Additional Costs

Although there are many dealers that sell used cars that are in excellent condition, they still are more likely to malfunction more often than new cars. So, while you will have a monthly EMI to deal with already, when there are repair costs, etc. it can put more financial burden on your shoulders.


Now that we have discussed both the advantages and disadvantages of financing a used car, the question remains- is it worth it? Unfortunately, there is no right answer to this question.

While it’s certainly better to get a loan for a new car, not everyone can afford that. In that situation getting a used car loan is not a bad idea.

However, there are ways you can make it work better. For instance, working on bad credit fix can improve your chances of getting better interest rates.

You can also compare the features offered by several dealers or wait for the best timing to submit a loan application.

Just don’t forget to pay your EMIs on time, as even a single late payment can affect your CIBIL score and make it even more difficult to get loans in the future.



IPOs in 2017 and ahead

An analysis of initial public offering (IPO) activity in the fourth quarter of the 2017 fiscal year signals a healthy year ahead in terms of equity markets, according to observers.

Despite uncertainty about how the landmark goods and services tax (GST) will pan out, India is still considered a promising destination for global investors, an EY report states.

The firm said there were 14 IPOs on the BSE and BSE SME indices in the January-March quarter, the biggest being Avenue Supermarts Ltd., operator of the D-Mart retail chain. Its Rs 1,870 crore IPO coincided with the BSE Sensex hitting a two-year high.


What new listings can I expect in the coming financial year?

Several state-run companies are expected to float shares on public markets, in line with the government’s divestment target of Rs 72,500 crore for the 2017-18 fiscal year. Numbers from PRIME Database show than 23 companies at different stages of SEBI approval are vying for at least Rs 25,000 crore worth of shares in the next financial year.

Cochin Shipyard Ltd. (CSL), Housing and Urban Development Corporation Ltd. (HUDCO), Central Depository Services Ltd. (CDSL) and National Stock Exchange of India Ltd. (NSE) are some of the companies looking to float shares soon.

CSL has proposed to issue 3,39,84,000 equity shares at Rs 10 each in its long-delayed IPO, for an equity capital totalling Rs 33.984 crore. The government is also looking to offload a 10% stake in HUDCO at roughly Rs 1,000 crore, a sale that would value the company at Rs 10,000 crore.

There’s speculation that the IPO of the NSE may raise more than Rs 10,000 crore by existing shareholders dumping 20%-25% of shares through the offer for sale option.

In the financial services space, UTI Mutual Fund, India’s oldest asset management company with 1.37 lakh crore assets under management, could raise Rs 6,800 crore in an IPO this year. If so, it would be the first domestic mutual fund to list its shares on the bourse.

SBI Life is another upcoming IPO that followers of market news are keenly watching. State Bank of India (SBI), which owns 74% of the insurer, wants to dilute an 8% stake, while its joint venture partner, BNP Paribas Cardif, would offer 2%.

A stake sale in SBI Life would make it the second Indian insurance company to be listed, after ICICI Prudential Life Insurance floated its shares in September.

Taking a cue from the US, where Warren Buffett has invested USD 9.3 billion in four airlines, GoAir’s promoters have also expressed an interest in an IPO this year.

Sounds exciting. How can I get a piece of the action?

Analysts expect the momentum of Indian equity markets to continue over the year, so you may want to prepare as bulls are already lining up.

You’ll need a demat account. Most banks have made it very easy to participate in IPOs online through a facility called Application Supported by Blocked Amount (ASBA). This enables prospective shareholders to block the money needed to subscribe to an issue. Only if the requested shares are allotted to you is the money withdrawn from your bank account. Of course, the traditional method of bidding for an IPO through a stockbroker still works.

You can then track the performance of these newly-listed companies – and therefore your returns – on the benchmark BSE IPO index. It lists the value of companies for two years after they go public.

For more business news, visit BloombergQuint.