Look out for the Smartest Indian Entrepreneur

Yes, it's Zoho's Sridhar Vembu. I have been a great fan of Zoho and it's online suite of applications. So much so that I flaunt the Zoho logo on my website on my own!

Now read the Forbes article by Sramana Mitra and

Sridhar Vembu's interview with Mitra

Some excerpts:

Adventnet is a 100%, bootstrapped, $40-million-a-year revenue business that sends $1 million to the bank every month in profits.

Doing what? you might wonder. Selling network management tools, to be precise. But with a unique twist. Vembu employs 600 people in Chennai, India, and a mere eight in Silicon Valley. Imagine what that does to his cost structure!

Zoho's CRM costs $10 per user while Salesforce costs $65!

Way to go, Zoho!

Active Investor Groups in India

There are some very well maintained and active Groups on stock investing in India which are built by savvy individual investors. It serves as a community of small investors who can share views, news and research reports on stocks.

Some popular groups are:

1. Association of Indian Individual Investors
2. EagleEyeTrade Group
3. SmellTheCheese
4. Investor Talks

Recently, I came across this thread where the member shares his own story of how he failed to understand the thin line seperating ambition and greed. This guy made money with options and became so confident that he put all his money and his father's retirement corpus into options and lost everything in the market crash of January. Sounds very scary but a lot of learning for novice investors who get attracted by the glamour.

India's first online weekly onpersonal finance

Database of personal finance products in India

This is the sample database where you can filter, search and see the record summary of a financial product in India. This is an attempt to simplify things and I have kept the database to the minimal.

So you have just the three things that are critical to your decision to buy: Returns, Security and Expenses(How much the agent gets as commission)And if you need the details, there's the "More details" link in the record summary!

This is the skeleton and it needs to be fleshed out. Questions? Ask.

Mutual Fund AUMs resilient to market crash in January: CRISIL

Indian mutual fund assets under management (AUM) reduced only marginally by Rs.22 billion (0.40 per cent) to Rs.5.52 trillion as on January 31, 2008, from Rs.5.54 trillion (including fund of funds) as on December 31, 2007, despite a sharp correction in the equity markets. The benchmark S&P CNX Nifty lost more than 16 per cent in January 2008 over the previous month.

Said Mr. Krishnan Sitaraman, Head - Fund Services & Fixed Income Research, CRISIL FundServices, "The mutual fund AUMs were, by and large, resilient to the stock market crash. New investors continued to enter at the low levels, and look out for buying opportunities, new fund offers and inflows into debt funds. Of the 32 fund houses, as many as 14 actually registered an increase in AUMs in January." Despite the market fall, mutual funds were net buyers in the secondary equity market, by Rs.77 billion in January 2008, up from Rs.30 billion in December 2007.

Sectoral indicators
Three of CRISIL's mutual fund indices (those with equity components) ended negative in January 2008, after four consecutive months of positive run. Debt market indices (save CRISIL MIPEX), on the other hand, not only ended positive in January 2008, but largely also exceeded the returns in December 2007.

The equity category, represented by CRISIL Fund~eX, posted gains of a negative 16.50 per cent, almost in line with the fall in S&P CNX Nifty. CRISIL Fund~bX, the index for balanced funds, posted negative returns of 11.71 per cent in January, while CRISIL MIPEX, the index used as a benchmark for monthly income plans, had returns of a negative 1.61 per cent.

Among debt funds, CRISIL MF~Gilt (the gilt funds index) again reported the highest returns (of 2.72 per cent), followed by CRISIL Fund~dX, the long-term bond funds index (of 1.31 per cent). CRISIL STBEX, the debt index serving as benchmark for short-term bond funds, posted returns of 0.73 per cent, while CRISIL~LX, the index for liquid funds, had returns of 0.66 per cent.

Activities on the regulatory front
Among key regulatory activities in the month, the Securities and Exchange Board of India (SEBI) board approved removal of charging and amortisation of initial issue expenses in close-ended mutual fund schemes. Henceforth, all mutual fund schemes will, therefore, meet expenses connected with sales and distribution of schemes from the entry load. Consequently, waiver of load for direct applicants will also be available in close ended schemes.

Search & Filter Financial Products in India

There are thousands of financial products. Over 700 Mutual Fund schemes, more than 2500 stock scrips to choose from, over 300 Insurance schemes, plenty of Debt/Bond products (Government:NSC, KVP, Corporate Bonds)

There are lakhs of financial advisors and they are a very fragmented group. Most of them have limited knowledge of personal finance. To my knowledge, less than 1% of this huge number are certified financial planners having a holistic view of your personal finance decisions. Rest of them sell selected products without having much knowledge of the other products available.

As individuals, we have to take the blame for being lousy with our personal finance decisions. We need to do a bit of research and find out the best suited products for ourselves. But where to start?

Is there a database which will give me an overview of the products available? Under various categories like Mutual Funds, Stocks, Insurance, etc. And can I look at the sub categories like Open ended & close ended Mutual funds, for example? Can I have a view of the products available for a particular company, say LIC?

Moving beyond the product listing, can I have a summary of the products that interests me? Is there some database which lets me take a look at the costs, benefits and the USP of a particular product?

Do you have more questions? Your question will help me in building a better and more informative database.

Infrastructure Focussed Mutual Funds Outperform in India

The CRISIL Composite Performance Rankings (CRISIL~CPR) that ranked 306 Mutual Fund schemes in India across 15 categories for the quarter ended December 31, 2007 have been announced

The total ranked schemes covered more than 65 per cent of the industry assets under management (AUM) under open-ended schemes. Speaking of the best-performing schemes, Mr. Krishnan Sitaraman, Head – Fund Services & Fixed Income Research, CRISIL FundServices, said, “The trend of infrastructure-focused schemes being out-performers among equity schemes, which was witnessed in the last quarter, continued in the most recent quarter ended December 2007.”

The mutual fund industry’s AUM crossed the Rs.5 trillion mark to reach an all-time high of Rs.5.60 trillion in October 2007, but closed slightly short of the record in December 2007 at Rs.5.54 trillion. The AUM increased by 15 per cent during the quarter and 71 per cent during the year, primarily due to a significant contribution from equity oriented funds. Over 60 per cent of the increase in AUM during the quarter was attributed to equity-oriented funds. Mutual funds were net buyers in the secondary equity market to the extent of Rs.35 billion in the quarter, as against Rs.24 billion in the previous quarter.

In the Large Cap-Oriented Equity schemes category, the CRISIL~CPR 1 list consisted of Sundaram BNP Paribas Select Focus which maintained its rank, DWS Alpha Equity Fund which moved a notch up, and new entrant to the cluster, Principal Large Cap Fund. Sundaram BNP Paribas Select Focus could retain its position on account of a higher Superior Return Score (SRS). The scheme gained from the 165 per cent and 143 per cent quarterly increases in the share values of Adlabs Films and Lanco Infratech, respectively.

In the Equity Diversified category, Kotak Opportunities moved up a notch to find a place with DSP Merrill Lynch India T.I.G.E.R. Fund, ICICI Prudential Infrastructure Fund, JM Basic Fund, Sundaram BNP Paribas CAPEX Opportunities Fund, and Tata Infrastructure Fund in the CRISIL~CPR 1 ranking cluster. Standard Chartered Premier Equity Fund was a new entrant to this category. Kotak Opportunities moved up because of a higher SRS. It gained from the 188 per cent and 196 per cent increase in the share prices of ABG Heavy Industries and Jindal Steel & Power, respectively.

In the Debt-Long category, the benchmark CRISIL Fund~dX gave higher returns of 2.63 per cent over the quarter compared with 2.57 per cent in the quarter ended September 2007. Birla Sun Life Income Fund continued to top the category for the fifth consecutive quarter; the fund retained its position due to a higher SRS (which has a 50 per cent weightage in the ranking) and good performance on the asset quality parameter. Birla Income Plus moved up a notch, on the back of a better SRS score, to share the top spot with Birla Sun Life Income Fund.

In the liquid retail segment, Standard Chartered Liquidity Manager Plus has been at the CRISIL~CPR 1 position since June 2007. ICICI Prudential Liquid Plan moved up a notch to claim the top spot while UTI Liquid Cash Plan moved up two notches to secure a position at CRISIL~CPR 1. ICICI Prudential Liquid Plan could join the top position due to more consistent returns (better ranking on the volatility parameter), better quality of portfolio, and lower maturity. UTI Liquid Cash Plan effected the two-notch upward movement due to improvements on all returns-based parameters, higher asset size, and better quality of portfolio.

Winners All (Schemes ranked CRISIL~CPR 1)
Large Cap – Oriented Equity Schemes	Equity Linked Savings Schemes (ELSS)
DWS Alpha Equity Fund	Principal Personal Tax Saver
Principal Large Cap Fund	Principal Tax Saving Fund
Sundaram BNP Paribas Select Focus	Income Schemes
Diversified Equity Schemes	Birla Income Plus
DSP Merrill Lynch India T.I.G.E.R. Fund	Birla Sun Life Income Fund
ICICI Prudential Infrastructure Fund	Liquid Institutional Schemes
JM Basic Fund	Tata Liquid Fund – SHIP
Kotak Opportunities	Liquid Super Institutional Schemes
Standard Chartered Premier Equity Fund	ICICI Prudential Liquid Plan - Super Institutional
Sundaram BNP Paribas CAPEX Opportunities Fund	Reliance Liquidity Fund
Tata Infrastructure Fund

When will we have our Credit Scores in India?

CRISIL today announced that it has reached a preliminary understanding with Equifax Inc., USA, and Tata Capital Limited, to set up a Credit Information Company (CIC) in India. CRISIL has applied to the Reserve Bank of India (RBI) for permission to start and operate a CIC. The establishment and commencement of operations of the CIC will depend on regulatory approval from RBI.

CRISIL will be providing the Indian market with credit information services and analytics. It expects the retail finance market in India to grow at about 20 per cent annually over the next five years, buoyed by favourable demographics, substantial increases in disposable income, and changing lifestyles. Lenders will require reliable, accurate information to be able to lend with confidence.

A credit score is based on a statistical analysis of a person's credit files, to represent the creditworthiness of that person, which is the perceived likelihood that the person will pay debts in a timely manner. In the United States, the credit score is primarily based on credit report information, typically from one of the three major credit bureaus, Experian, TransUnion and Equifax.

In India, CIBIL is an effort made by the Government of India and the Reserve Bank of India to improve the functionality and stability of the Indian financial system by containing NPAs while improving credit grantors’ portfolio quality. CIBIL provides a service, which allows its Members to make informed, objective and faster credit decisions.

Looks like we will have our own FICO credit score very soon!

India's first online weekly onpersonal finance

What is the difference between Investing & Speculating?

The Equity Desk has a page where the difference is explained.

For stock speculation is largely a matter of A trying to decide what B, C and D are likely to think – with B, C and D trying to do the same”. – Warren Buffet

“An Investment operation is one which upon, thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative” – Benjamin Graham

“Investment is an activity of forecasting the yield on assets over the life of the assets… speculation is the activity of forecasting the psychology of the market” – John Maynard Keynes

Whenever you rely on knowledge and know what you are doing it is termed as investing but Speculation is when you rely on luck and do not know what you are doing.

What do you do? Invest or speculate or do nothing? :)

India's first online weekly onpersonal finance

Money is Magical; What is Money?

Atanu Dey explains Money and explains how Money can simply disappear without a trace!

Money is one of the most ingenious creations of human creativity. It is a way of keeping an account of who owns what. For that, first there have to be stuff that can be owned. So the stuff that you can own is the real stuff and money just keeps track of who has claims on that stuff. So if there is no stuff, money is worthless. On a deserted island with no stuff on it, sacks of money would be less useful than some stuff that you can use.

Read his full post where he explains the concepts of Money in a lucid manner by telling a story!