Why we are obsessed with money

What a way to exist!

For most of us, practically the whole day all we are thinking is about money and more specifically how to have more money!

As if money was the only thing in life. Unfortunately for most of us, circumstances just do not permit any other thought!

We are running behind money most of the time which is almost akin to have become obsessed with money. Everything that we are doing in life is centred around money.

Unfortunately, this is because we need money for anything and everything that we do. There’s nothing wrong and what are you doing, however the problem is that over time, it becomes a compulsive habit to keep earning more.

That’s where the danger is. The problem is that there is a point where from we chase money as an addiction, we chase money because we like to do so. If we did not chase money we would not know what to chase now because we get out identity from money and the amount of money we have.

Another thing is that right from childhood we are always taught and our minds are conditioned that everything that we are doing is going to be for the sake of earning money.

There is no one who told you that money is just a means, and then there is something greater in life to achieve. Some examples are legacy; building something, charity; to giving something / helping someone, passion; pursuing something and living; simply to enjoy life and your money

We have got addicted to this and how!

There are three reasons for this:

First, we are what we do. It is the human behaviour. I know I should exercise and I don’t. I know I should eat healthy and I don’t. I know I should spend time with my kids and I don’t. I know that, yes, money isn’t going to make me happy and I still keep trying to make money.

We live by the laws of inertia, in a pattern which is hard to break. But we have to break it. For ourselves and for the sake of people and reasons for which we are chasing money.

Secondly, we need signals of progress. Money is a measure of how far you have progressed in life. The more the money you have the more you can make sure your progress. It’s simply the logic of evolution. People need validation of their success. Bigger house, bigger car, branded goods and list goes on.

Thirdly, it’s the easy way out. It’s only human to avoid difficult things. Important things are very difficult to measure.  Have I been a good father or husband? Have I groomed my child well?  Such things take years to measure and we still don’t have answers.

So, should we not be focused on creating money for ourselves?

I’m not saying that. Definitely create. Take care of yourself for sure!! Use it to the maximum to make yourself happy!!! You need a certain amount and beyond that is extra.

The definition of their certain amount is naturally different from one person to another. If that extra is going to happen easily, without stress and without your involvement, then its fine. Basically don’t kill yourself for that extra. Be Smart.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

How the RBI actually helps you

RBI

Most of us in Mumbai, see this huge structure called the Reserve Bank of India and wonder what it really does. It’s also a tourist attraction!! It has so many other offices and again one wonders why they need to have so many offices. I’m going to try and highlight a very interesting part of RBI’s work and how it helps us directly on a day-to-day basis.

The RBI does a review of the monetary policy of the country at frequent intervals during the year. So how does the monetary policy help us investors to take smart decisions?

Monetary policy is a tool by which the RBI decides to raise interest rates or reduce interest rates or keep them steady.

In our country, as we’re an oil importing nation, this decision is very closely linked to Oil. Oil to a large extent contributes to inflation. We all know what happens when inflation keeps rising. We in India unfortunately do not see too much of inflation falling and things becoming cheaper.

Oil is Not Well

So when oil prices rise i.e. we see a rise in crude oil prices almost instantly we can expect rising food prices. This is because there is going to be a rising cost pressure for manufacturing & services. This rise obviously gets passed onto the retail consumers.

When this happens RBI adopts a hawkish stance, tries to pull money out of the system by raising interest rates. Now when interest rates rise no one seems to be interested in borrowing. This immediately puts a brakes on money circulation.  Less money chasing goods decreases the demand for money. This way it controls inflation.

There is yet another tool that the RBI has and that is known as the CRR or the cash reserve ratio.  This ratio in simple words means the amount of cash that the bank must maintain with the RBI as the percentage of the total assets. So when this increases banks are forced to park more with the RBI and this is also a way to control inflation.

On the other hand when things look dull, when there is a recession of sorts, the RBI comes to the rescue and gets into action to kickstart growth in the country. It does this by lowering the interest rates. This we all will understand quite easily because we see a direct benefit of this happening. We see a fall of interest outgo in our EMI’s for the home loan that we are carrying. New loans become cheaper.

Individuals are motivated to go out and make purchases, whether it is for a washing machine or a piece of real estate. Businesses are motivated to go out and borrow to buy more machinery, to expand capacity, to hire more staff and manpower and basically do everything that will add to the growth of business.

Economic growth results as a result of all this. It is also during this time that stock market rises, we see a rally in stock prices and mutual fund NAV’s jumping higher and higher each day. There is prosperity all around.

Critical Role

As you can see that the central bank of the country has a very very important role to play.  If it makes a mistake, things can go really wrong.  Imagine like the USA or Japan if our interest rates were very low; everyone would run to borrow, they would borrow more than they require because it would be cheap and easy to borrow. And that is very individuals would run into what is known as the debt trap, because someday you’ll have to pay back.

Each day the central bank attempts to make sure that everything in our country remains stable and financially there’s nothing that goes wrong dramatically.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

The year of the bond, once again!

We are not talking of James Bond, we are talking of investment bonds.

We are in a situation where the fixed deposit rates are at a general low and there is a lot of discontent among depositors of fixed deposits.

Whenever we see a situation like this, one way or the other, the bond markets come to the rescue. It comes to the rescue of smart depositors, who are agile to move their money from fixed deposits to bond funds.

Let’s understand what is happening and why.

What Exactly is Happening in the Bond Markets?

It is likely that in this year, investors of bond funds will make handsome gains. Bond prices may rise and there may be capital gains. Investors of bond funds not only earn the rate of interest, but also earn capital gains. So that way, they make more than the return they would make on fixed deposits. The returns could be a high single digit or sometimes as high as double digits.

Over three years, this will become practically tax free or the tax would be a very small amount. So, basically, I am thinking that a rally will happen in the bond market. There are three main reasons for this — reduction in government borrowing (which is favourable), recovery of trading losses (which is favourable) and no change in monetary policy (which is neutral).

A word of caution, however, that such bond market investments are also subject to bond-market volatility and should be considered ideally with the help of a financial expert.

Before proceeding further, let us, therefore, quickly explain a bond, bond fund and bond market. We need to do this because few people understand the bond markets and even fewer invest in the bond markets.

Bond is nothing, but a commercial transaction where the borrower is issuing a bond to the lender and the lender will earn a certain rate of interest. When interest rates fall, everyone becomes interested in owning that bond.

As a result, the demand for the bond increases, the price of the bond increases and the bondholder makes capital gains.

A bond fund is a fund where ordinary investors pool in their money and a fund manager buys them a portfolio of bonds.

Moving onto the Reasons For a Rally in Bond Funds…

Now, the fundamental reason for a rally is reduction in interest rates as it stimulates economy and growth.

Firstly, the government is a massive borrower of funds. So a reduction in government borrowing reduces the demand for money in the economy. As a result, prices of bonds rise and this contributes to capital gains for bond holders.

Secondly, the Reserve Bank of India (RBI) recently announced that the commercial banks and RBI, which are the largest lenders to the government, will have another year to offset losses they have incurred on account of buying government bonds in the past. This action will lead to a rise in the price of bonds and this contributes to capital gains for bond holders.

Lastly, on one side due to the rise in oil prices, there is more inflation and thus more money is needed for circulation in the economy. On the other side, many government bonds are maturing, which will provide money supply. So, it is likely that we see a neutralising effect and thus RBI will take no action. This inaction here will support capital gains as explained above. Hence, this year might be a year of good gains for the bond investors.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Five new financial goals for you this summer

I am going to try and explain to you why the summer holidays of April and May are great months to get a lot of things started, financially speaking.

This time period in a way resets the financial clock. You also have the option to hit the reset button on everything you have done so far; financially speaking of course and hope to do better things better than you did last year.

Let’s look at some of the new and unusual things to do in April.

  • Make a learning budget

Learn something about money or anything you like. The best way to make money is to learn something about money. Just like if you wanted to learn cooking you will get into the cooking class. If you wanted to learn swimming you would enrol in the swimming class. If you find learning about money is too daunting task than learn something which is close at to your heart or related to your work. If you learn something new, there’s a possibility that you will use your new ideas to generate new income and in turn that will generate new wealth for you.  So make a budget, enrol somewhere and spend that budget. How about a % of your annual income? Spend it for sure!

  • Plan a unique holiday 

When you’re by yourself and without your mobile phone you will have the opportunity to think! When you have time to think, suddenly good ideas will come to your mind.  You may think this is silly but you can be sure that you will be amazed if your drivers experiment just once. So it might be a good idea to go for a holiday just by yourself. If you find that too intimidating, join a group of strangers. You can combine that with the adventures experience if you like.  Be extra careful if you’re going with your special buddies. Do this only if they are going to be in a position to help you discuss your idea and make it bigger. They must play the role of complimenting your thoughts. So make a schedule to do this holiday and obviously make a budget to make it happen. Think & create new ways of making wealth.

  • Make a prediction and make it happen

Be brave. Let’s aim to grow and multiply net worth by 50% by the time you come to the end of this financial year. This is not a joke and it is easier than you can imagine.  I’m speaking about NETWORTH and I’m not talking about return on investment. If your networth is Rs. 100 today, all I’m saying is that let’s aim to make this a 150 by the end of this year. This networth comprises of all your savings till date. This can be achieved by simply saving aggressively every month for the next twelve months. Just put this into a recurring deposit or liquid fund so you don’t spend it.  We just have to prove to ourselves that this is possible. Where and how we will invest this money will think about that later.

  • Eliminate a negative belief 

I want to give you an exercise here. Write down all your negative beliefs you have about money and wealth. Most people are not able to achieve the desired level of wealth because they think about wealth negatively. So even if you are earning a good amount of income you will never see yourself becoming wealthy. Examples are money causes problems, money causes a fight, managing money is complicated etc. Then for each negative thought, you have written down the positives i.e. the opposite for a few months. Soon negatively biased feelings will evaporate.

  • Make a new investment; something you have not done before

Again here you do not have to be a financial expert. The idea is to learn something new. There are hundreds of investment options. Our objective here is to learn something new. Talk to your advisor and seek his or her guidance. Just a word of caution here; don’t do anything which is speculative or is something that you just can’t understand. Do what do find easy you understand and do that then.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Seeking financial freedom? The time is NOW!

John Lewis famously remarked, “If not now, then when? If not us, then who?” This is so appropriate in the current financial world that we live in.

That statement will leave to rest every other argument that is conservative and against the idea of wealth creation. We are often faced with the situation where there is no option but to create wealth. Read on to know why!

Interest rates are painfully low. For all those diehard fans of guaranteed investment returns, there’s hardly any place to go to. Thinking of fixed deposits? Feeling happy with 7%? And fully taxable? That period is over. Period.

That doctrine of investing into pure fixed deposits and similar instruments is unfortunately standing challenged. There is no option but to sprinkle it with a combination of a little something that will add to the returns earned from fixed income type of securities. In fact this category of investors are in a way, best placed in terms of the current tax laws.

They can earn about 9-10% with minimal or near zero tax over about five years and more. Starting to generate rate of return above the inflation level of 7% is starting to create wealth. So there it is; there is no option but to move in the direction of creating wealth.

For more evolved investors, who invest in equities and who and still sitting on the sidelines tend to run out of patience every now and then. They are sometimes waiting for the right time, sometimes waiting for correction, sometimes waiting for valuation and sometimes waiting for just nothing. Sometimes, just too busy to take action!

I totally understand not wanting to lose hard-earned money. But if the money does not move it will stagnate. That’s the problem with money.

Hit the Ground Running

Inaction and inactivity kills it. Makes it costly to hold. Makes us lose opportunities, sometimes small and sometimes significant. I know of many people including my dad, who just kept investing into equities and holding forever. No doubt they were hugely (big HUGELY) better off then the people in the same time zone. I think they could have done far better with some smart lessons on asset allocation. This is because if they compare the growth rate of their holding over a period of 20 or maybe 30 years the compounded rate of return earned is often not impressive.

It is just marginally better or a few percentage points above the fixed deposit rate. Hence the need for asset allocation, which simply put is not to have all eggs in one basket at any given point in time. These sections of investors anyways create wealth, and, asset allocation is the tool that ensures that the process of wealth creation continues uninterrupted. So again there it is; even for this section there is not option but to start enhancing their wealth creation activities, else returns will continue to remain forever mediocre.

Then there are skeptics and there is nothing much for skeptics of everything, except that they need a serious dose of financial education. Perhaps what if needed is a proof of concept and for that, which better country to live in other than India where financial transparency in investments is so high that I sometimes feel, it comes from another planet.

 Your Money Needs Action

Today, there is a whole lot of variety to choose from and we have never been more spoilt for choice. But the most important thing in all this is to understand that your money needs action. It needs activity and for that the time is now!

And furthermore, if you asked me this question 10 years ago; I would have said that, the Time is NOW. If you ask this question 10 years hence, I will still say the Time is NOW. Any time is the right time to start the process of creating wealth. All that is important is that you take your first step; then continue it all the way with zeal and determination… till you have the level of wealth that you desire. And if you accumulate more than you need, still do it and share it with the world.

If you want your financial freedom; then the Time is NOW!

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager and Financial Freedom Coach.

Young Turks: Here’s the success story of venture fund Aspada

Venture fund Aspada was co-founded by Kartik Srivatsa and Thomas Hyland in 2012 and has made 17 investments so far across Fin-tech, agriculture, health and edu-tech startups.

Young Turks takes a look at their investment thesis, their differentiated VC model and meet three of their portfolio companies – Capital Float that underwrites unsecured loans to startups and SMEs; Dunzo, a hyper local concierge and delivery player that is also Google’s first direct startup investment in India; WayCool, a Chennai-based agriculture-tech startup.

Govt notifies rules to relax telecom infra rollout fees, documentation

Bharti Airtel share price, stock market, rights issue

The Department of Telecom has notified an amendment in rules to ease the rollout of communications networks by fixing a nominal one-time fee for overground cables at Rs 1,000 per kilometre and waiving all other fees other than administrative and restoration charges.

The notification has also simplified documentation for laying overground telecom cables. “The Central Government has notified the Indian Telegraph Right of Way (Amendment) Rules, 2021 on 21st October 2021 to incorporate the provisions related to nominal one-time compensation and uniform procedure for establishment of Overground Telegraph Line in the Indian Telegraph Right of Way Rules, 2016,” an official statement said.

It said there will be no fee other than administrative fee and restoration charges for establishing, maintaining, working, repairing, transferring or shifting the underground and overground telegraph infrastructure.

“These amendments will ease Right of Way Related permission procedures for establishment and augmentation of Digital Communications Infrastructure Across the country,” the statement said.

Industry body Digital Infrastructure Providers Association (DIPA) said optical fibre is a fundamental and structural part of both mobile and fixed broadband networks, and faster rollout of fibre is important for backhauling a large amount of data at high throughput, improving reliability, and reducing latency.

Oil hovers below recent highs; ends week up

brent crude oil

Oil traded just below multi-year highs on Friday with bullish sentiment about low supplies tamped by concerns from world leaders that demand disruptions from the COVID-19 pandemic may not be over.

Brent crude futures rose 92 cents, or 1.1 percent, to settle at $85.53 a barrel. The benchmark, which touched a three-year high of $86.10 on Thursday, was up 1 percent in the week, its seventh weekly gain.

US West Texas Intermediate (WTI) crude futures gained $1.26, or 1.5 percent, to settle at $83.76 a barrel, not far off a seven-year high hit this week. The contract gained 1.7 percent on the week and was up for a ninth straight week.

Prices have been boosted by worries about coal and gas shortages in China, India and Europe, spurring some power generators to switch from gas to fuel oil and diesel.


Also Read | Natural gas prices fall 19% from multi-year highs in US; why and what it means for India


Winter weather in much of the United States is expected to be warmer than average, according to a National Oceanic and Atmospheric Administration forecast.

US crude found support this week as investors eyed low crude stocks at the US storage hub in Cushing, Oklahoma.

US Energy Information Administration data on Wednesday showed crude stocks at Cushing fell to 31.2 million barrels, their lowest level since October 2018.

“America’s gasoline demand appears to be experiencing an Indian summer,” PVM analysts said in a note, pointing to the highest implied demand for this time of year since 2007 despite high pump prices.

“Supply is still very, very tight, the market is just cautious about the possibility of an uptick in COVID cases in Russia, China and now Germany,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Prices pulled back from earlier intraday highs after German Chancellor Angela Merkel said the pandemic is not yet over.

Federal Reserve Chairman Jerome Powell said he could not rule out another COVID-19 spike this winter.


Also Read | Jerome Powell says inflation risks rising, but Fed can be ‘patient’


 

Jerome Powell says inflation risks rising, but Fed can be ‘patient’

Federal Reserve Chair Jerome Powell said Friday the tangled supply chains and shortages that have bedeviled the US economy since this summer have gotten worse and will likely keep inflation elevated well into next year.

But the Fed is not yet prepared to lift its benchmark interest rate, he said.

There is now greater risk of “longer and more persistent bottlenecks and thus to higher inflation, Powell said at a virtual conference hosted by the South African Reserve Bank.

Powell, echoing many economists, has previously said that shortages and higher prices are mostly a result of the pandemic’s impact on supply lines, with factories in Asia temporarily closing amid COVID infections and dozens of cargo ships anchored offshore.

He said Friday that he still thinks those supply problems will be resolved over time, but the Fed will be vigilant and take steps to push inflation back down to its 2 percent goal if necessary.


Also Read | Dow posts record closing high, stocks gain for 3rd week; dollar dips


No one should doubt that we will use our tools to guide inflation back to 2 percent, he said.

Consumer prices, according to the Fed’s preferred gauge, jumped 4.3 percent in August from a year earlier, the fastest such increase in three decades.

The Fed chair said he is ready to taper, or reduce, the central bank’s $120 billion in monthly bond purchases, which are intended to lower longer-term interest rates and encourage borrowing and spending.

But he added that it would be premature to raise the Fed’s short-term interest rate, because the job market needs more time to recover. Powell noted that there are still 5 million fewer jobs in the US than before the pandemic.

We think we can be patient and allow the recovery to take place and allow the labor market to heal, he said.


Also Read | Oil hovers below recent highs; ends week up


 

Dow posts record closing high, stocks gain for 3rd week; dollar dips

The Dow Jones industrial average registered a record closing high on Friday and major equity indexes posted a third straight week of gains while the US dollar slipped.

On the day, MSCI’s broadest gauge of global shares was flat, and the S&P 500 and Nasdaq ended lower. Stocks came under pressure after Federal Reserve Chair Jerome Powell said the US central bank was “on track” to begin reducing its purchases of assets.

Intel’s stock fell 11.7 percent and was among the biggest drags on the S&P 500. Late Thursday, Intel reported sales that missed expectations and pointed to shortages of chips holding back sales of its flagship processors.

American Express Co’s stock gained, boosting the Dow after the company beat profit estimates for the fourth straight quarter.

Next week brings reports from several key mega-cap names including Amazon.

The dollar pared losses after Powell’s comments, but the dollar index was last down 0.10 percent at 93.64, and is off from a one-year high of 94.56 last week.


Also Read | Jerome Powell says inflation risks rising, but Fed can be ‘patient’


“There’s a bit of a positioning unwind taking place. We’ve obviously seen a firmer dollar since the September” Fed meeting, said Mazen Issa, senior FX strategist at TD Securities in New York. “That also dovetails with the seasonal tendency for the dollar to soften into the end of the month.”

Investors also digested news that China Evergrande Group appeared to avert default with a source saying it made a last-minute bond coupon payment.

The Dow Jones Industrial Average rose 74 points, or 0.21 percent, to 35,677. The S&P 500 lost 5 points, or 0.11 percent, to 4,545. And the tech-heavy Nasdaq Composite dropped 125 points, or 0.82 percent to 15,090.20.

The pan-European STOXX 600 index rose 0.46 percent and MSCI’s gauge of stocks across the globe shed 0.03 percent.

The MSCI index posted gains for a third straight week along with the three major US stock indexes.

In the US bond market, yields on longer-dated US Treasuries slid.

The yield on 10-year Treasury notes was down 1.6 basis points to 1.659 percent after rising to a five-month high of 1.7064 percent late Thursday.

Oil rose and ended up for the week, near multi-year highs. Brent crude futures rose 92 cents to settle at $85.53 a barrel, and registered its seventh weekly gain. US crude futures gained $1.26, to settle at $83.76, and rose for a ninth straight week.

Spot gold was up 0.6 percent at $1,793.82 per ounce.

Among cryptocurrencies, bitcoin last fell 2.21 percent to $60,841.96.

Also Read | MPC Minutes: RBI remains laser-focused to bring back inflation to 4%, says Shaktikanta Das

Govt expects Indian electronics manufacturing to reach USD 300 billion by 2024-2025: MoS IT

Representational Image: Electrical/Electronic Engineering, Electrical/Electronic Engineers, Electricals, Electronics, chip

The government expects the Indian electronics manufacturing sector to grow to around USD 300 billion (about Rs 22.5 lakh crore) by 2024-25, Minister of State for Electronics and IT Rajeev Chandrasekhar said on Friday.

Speaking at an event by the Public Affairs Forum of India (PAFI), the minister said the government is looking beyond devices and communication, with expansion plans looking at equipment and systems, and further to automotive and medical equipment.

Chandrasekhar said in 2014-15, the electronics production in the country was about Rs 1.8 lakh crore which grew to Rs 5.5 lakh crore in five years. Electronics is the second largest traded commodity after hydrocarbons and petroleum, he noted. “We were marginal players for decades but we have grown on the back of very precise policy action…,” Chandrasekhar said.

Also Read: India is closer to 6% GDP potential growth, says Citi’s Samiran Chakraborty

He further said in the USD 1.5 trillion global electronics market where there is clamour for a diversified and trusted supply chain, the government has now decided that India should be a significant player in that space. “Our ambitions are reasonable. We believe that by 2024-25, we want to be at about USD 250-300 billion worth of electronics manufacturing in India,” Chandrasekhar said.

Also Read: View: Can manufacturing be the messiah?

The national electronics policy had set a target to create a USD 400 billion electronics manufacturing ecosystem by 2025. The minister also said India will be a very significant provider of trusted goods and services to the global market. He said at some point, in the not so distant future, India will have the ability to manufacture semiconductors as well.

RBI releases revised scale-based regulatory framework for NBFCs

The Reserve Bank of India (RBI) on Friday released a revised scale-based regulatory framework for Non-Banking Financial Companies (NBFCs). The new rules will be effective from October 1, 2022. NBFCs will be split into four buckets depending on their size and rules that are applicable to the lower layers will be applicable to the highest layers as well.

The apex bank had announced the draft guidelines in January and now the final guidelines have been released. As per the guidelines, the minimum net owned funds has been increased for certain categories of NBFCs to Rs 10 crore but a glide path has been provided for them to achieve it.

Also Read: NBFCs seek exemption from new current account rules

All NBFCs irrespective of their size will now also have to move to a 90-day NPA recognition cycle which is similar to banks. Apart from this, a ceiling of Rs 1 crore per borrower for financing subscription of IPOs has also been imposed on NBFCs after concerns were raised about increased exposure of some of the smaller NBFCs in these IPOs.

Watch the video for more.

FM Nirmala Sitharaman holds meeting with UK Foreign Secy, discussed ways to enhance biz ties

Finance Minister Nirmala Sitharaman on Friday held a meeting with UK Foreign Secretary Liz Truss and discussed various areas in which both countries can cooperate each other. Both leaders discussed investments in green energy, infrastructure, National Monetization Pipeline, FinTech and IFSCA as key areas for further collaboration between the UK and India.

“Finance Minister Smt. @nsitharaman cited the close collaboration between the two countries, strengthened through Comprehensive Strategy Partnership adopted by the Prime Ministers of India and UK in May 2021,” the Finance Ministry said in a tweet.

Also Read: Well-managed companies attract equity investors: Finance Minister Nirmala Sitharaman

Earlier in the day, she had a meeting with Executive Vice President, European Commission, Frans Timmermans discussed cooperation on climate action. Both discussed possibility of collaboration on green hydrogen to harness the natural synergies in this area between India and EU.

Also Read: FM Nirmala Sitharaman says economy will grow 7.5-8.5% from 2022

“Finance Minister Smt. @nsitharaman welcomed EU’s decision to join Technical Assistance Facility of Coalition for Disaster Resilient Infrastructure (CDRI) for promoting Disaster Resilient Infrastructure in Small Island Developing States,” another tweet said.

STARTUP DIGEST: Ola electric scooter deliveries delayed; Google slashes commissions for subscription services; Facebook plans new group name and more

Ola Electric Scooter

Here are the top headlines from the startup space this week.

Ola electric scooter deliveries, test rides delayed to November

After announcing the launch of the Ola Electric Scooter in August, the company had committed to start deliveries and offer test drives for the product from October. That plan, however, has run into delays and is also likely to affect the company’s next phase of sales.

It is now understood that Ola Electric’s plans to start test drives have now been pushed to November and that may have an impact in terms of delaying the delivery timelines for the product.

The company said it will ask the customers to make full payment only after taking a test drive. That may have an impact on the next phase of sales for the Ola Scooters, which was originally to start on November 1. The company is looking to start these test drive camps only in select metros.

Ola Cars eye $2 bn in GMV, to hire 10,000 people

Mobility giant Ola plans to hire 10,000 new people, as it eyes a market leadership position with $2 billion gross merchandise value (GMV) for its vehicle commerce platform Ola Cars over the next 12 months.

Ola Cars has already sold 5,000 pre-owned cars in its first full month of operation, the company said in a statement. It has commenced pre-owned vehicle sales in Delhi, Mumbai, Pune, Bengaluru, Chennai, Hyderabad and Ahmedabad and will also expand to Chandigarh, Jaipur, Kolkata and Indore by end of this week, it added.

Over the next two months, Ola Cars will be operational in 30 cities and expand to 100 cities by next year. The platform offers innovations such as doorstep test drive, seven days no questions asked return of a purchased vehicle.

BigBasket, 1MG employees get access to Tata Digital’s new super app

As the Tata Group begins the rollout of Tata Digital’s new super app TataNeu among employees, the app is now also accessible to employees of BigBasket and 1MG, companies that were acquired by the group earlier this year, sources told CNBC-TV18.

The app is being rolled out to employees from earlier this month and Tata Group plans to roll it out to all five lakh employees in India in the next 2-3 weeks.

TataNeu has onboarded BigBasket, 1MG, Curefit, Croma, Taj Hotels, and is also in the process of onboarding other Tata Group brands onto the platform.
Reports suggest that the official launch of the super app has been delayed due to the impending e-commerce rules, the draft of which had proposed that e-commerce platforms cannot sell their own group brands and labels on the platform.

Curefoods acquires 7 food brands; aims to expand its cloud kitchen footprint

Cloud kitchen startup Curefoods, which operates brands like EatFit, announced its acquisition of multiple D2C food brands across the country.

Curefoods already has 10 brands in its portfolio, of which seven are new acquisitions featuring the likes of CakeZone and MasalaBox. Curefoods has also acquired exclusive online franchising rights for YumLane, Sharief Bhai, and Aligarh House.

The company is looking at onboarding a total of 25 brands and has already signed 15 more letters of intent (LoIs).

Zomato CEO Deepinder Goyal joins Unacademy’s board of directors

Food delivery giant Zomato’s CEO and co-founder Deepinder Goyal has joined the board of directors of edtech platform Unacademy.

Goyal invested in the edtech unicorn’s Series H funding that was announced in August. OYO boss Ritesh Agarwal had also participated in the round. Unacademy had raised $440 million led by sovereign wealth fund Temasek for a valuation of $ 3.4 billion.

Unacademy in talks to acquire Swiflearn: Report

Edtech startup Unacademy is in talks to acquire Swiflearn in a deal worth $15-20 million, sources told Entrackr.

The transaction will be a mix of cash and stock. Swiflearn’s founders will join Unacademy along with the team members, the report added.

This will be the 11th acquisition for Unacademy since its inception. The company had acquired Handa Ka Funda, TapChief, NeoStencil, PrepLadder, Mastree, CodeChef, Coursavy, Kreatryx, Wifistudy and Rheo TV.

Scaler Academy acquires Coding Minutes for $1M

Edtech upskilling platform Scaler Academy has acquired online learning platform Coding Minutes for $1 million in an all-cash deal.

This is the second acquisition for the edtech startup. In August, Scaler had acquired Coding Elements to accelerate business growth, leading to the launch of their data science & machine learning vertical.

With the acquisition of Coding Minutes, Scaler will focus on building specialised content that effectively engages beginner-level tech aspirants, the company said in a statement.

Good Glamm Group buys ScoopWhoop

D2C beauty and personal care brand Good Glamm Group has acquired media startup ScoopWhoop Media in an all-cash deal. The financial terms of the deal were not disclosed.

ScoopWhoop will continue to work as an independent brand and media house within the Good Glamm Group. Its founders Sattvik Mishra, Rishi Pratim Mukherjee and Sriparna Tikekar will continue leading ScoopWhoop and will work closely with Darpan Sanghvi, Priyanka Gill and Naiyya Saggi, co-founders of the Good Glamm Group, the company said in a statement.

The group is also entering the men’s grooming space with the acquisition and is looking to invest Rs 500 crore over the next three years.

Stripe marks its first India acquisition with Recko

Global fintech giant Stripe has acquired enterprise financial software firm, Recko for an undisclosed amount. This marks Stripe’s first acquisition in India.

The San Francisco-based firm said in a blog post that the acquisition of Recko will help the company include payment reconciliation within its infrastructure. Recko’s team will join Stripe’s remote engineering hub, helping to build and scale Stripe’s products globally.

This acquisition comes amid Stripe’s increased investment in India, including updated data locality architecture and rapid local hiring, the company said in a statement.

Swiggy announces 2-day period time-off for women delivery partners

Online food delivery platform Swiggy has said it will offer two-day paid monthly period time-off to its regular delivery partners.

The delivery partners can voluntarily take time off and be eligible for a minimum earnings guarantee during that time.

To ensure safety, Swiggy also said partners- men and women, will be allowed the flexibility to decline an order in an area they thought was unsafe. Earlier the company had capped delivery hours at 6 PM for female delivery partners citing safety concerns.

This comes at a time when there is more scrutiny on the rights of gig workers in India.

Grofers likely to enter horizontal e-com; plans to deliver anything in 10 minutes

Online grocery delivery platform Grofers said it continues to look for local entrepreneurs who are keen on building businesses in the instant commerce space. It has so far partnered with 86 “dark store owners” in 13 cities.

In August, Grofers had started a 10-minutes grocery delivery service in 10 cities, including Delhi, Mumbai, Bengaluru and Jaipur.

The Zomato-backed company is working with local partners to power this initiative.

CrossTower offers Rs5,000 credit to Indian users to learn crypto trading

Crypto trading platform CrossTower has announced a unique feature, which offers free credit of Rs 5,000 to each Indian user’s wallet for trading on cryptocurrency on its platform.

With this feature, Indian users will be able to learn crypto trading comfortably without investing a single rupee, the company said in a statement.

CrossTower users in India will learn and also earn profits that they can withdraw for personal use, after settling the full credit amount. The users can claim and use a free credit amount of Rs 5000 and trade with multiple currencies. If the price of crypto decreases, CrossTower will bear the loss, the firm added.

Salman Khan launches Chingari’s crypto-token $GARI

Bollywood actor Salman Khan has unveiled $GARI, a crypto-token launched by micro-content, short video application Chingari.

The actor also announced his collaboration with the app as a brand ambassador for its NFT marketplace and token reward program in a tweet.

With this foray, Chingari, which currently offers customised videos, an extensive song library, hyper-realistic AR filters, and content in more than 20 languages and has around 50 million monthly active users and almost 85 million downloads to date, has reportedly become India’s first social network to issue crypto tokens.

Google to invest in Meesho?

Google is in talks to invest $50-$75 million in social commerce platform Meesho, sources told ET.

The investment is part of Meesho’s recent financing round and values the Bengaluru-based company at $4.9 billion.

In September, Meesho raised $570 million from US-based asset manager Fidelity and Eduardo Saverin’s B Capital. Google’s investment will take the round size to over $600 million, the report added.

Google slashes commissions for subscription services to 15%

Tech giant Google has slashed the commission for in-app purchases to 15 percent effective January 1 amid rising regulatory scrutiny of its and Apple’s app store practices.

Google had said last year that developers would have to pay a flat 30 percent commission on all in-app purchases but deferred its implementation to April 2022 following protests by Indian startups. For e-books and on-demand music streaming services like Spotify, Google is cutting its commission to “as low as 10 percent”, the company said.

With the latest announcement, the company will charge a 15 percent commission starting from day one. Google already has a policy where the first million dollars a developer earns through Google requires a 15 percent cut.

Amazon to hike annual Prime membership fee to Rs 1,499

Amazon is set to increase the price of the annual membership of its Prime programme in India by 50 percent to Rs 1499.

Monthly and a quarterly fee of Prime membership – which offers users access to Amazon Prime Video and one-day delivery on millions of items on the e-commerce platform – is also being hiked.

“The price of Prime memberships in India is being revised from Rs 999 to Rs 1,499 (annual plan), Rs 329 to Rs 459 (3-month plan), and Rs 129 to Rs 179 (monthly plan),” an Amazon spokesperson said.

The spokesperson added that the price of Prime membership in India will be changing very soon, and the company will announce the exact date of the price change at a later time.

Microsoft launches program to help Indian startups accelerate the deployment of AI

Tech giant Microsoft has launched a new programme AI Innovate for nurturing and scaling startups that are leveraging Artificial Intelligence (AI).

Microsoft AI Innovate is a 10-week initiative that will support startups in India leveraging AI technologies, helping them scale operations, drive innovation, and build industry expertise, the company said in a statement.

The programme will start as a quarterly cohort in November in partnership with The Indus Enterpreneurs (TiE), Mumbai. Startups from all major sectors including financial services, healthcare, education, agriculture, space, manufacturing and logistics, retail, and e-commerce have been invited to participate and apply for the first cohort of the program.

LetsVenture launches ‘LV Fuel’- a founders’ syndicate to invest in new startups

Online investment platform LetsVenture has launched LV Fuel, an investment syndicate comprising founders from the early-stage investment platform’s portfolio companies to bet on new entrepreneurs.

LV Fuel will enable LetsVenture founders to give back to the ecosystem via capital, experience and skills and empower new founders from idea to scale up stages, said LetsVenture in a statement.

The syndicate currently has a cohort of over 40 founders, and it aims to have more than 200 founder investors in the next two years, it added.

Twitter announces 1st community in India for cricket fans; launches live scorecard for cricket

Twitter has introduced its Communities feature to India with the launch of a cricket-focused community called Cricket Twitter-India that will enable users to talk all things cricket in multiple Indian languages.

The micro-blogging site is also introducing live cricket scorecards that will provide users latest updates on its platform. This is Twitter’s first non-US community after the social media firm launched the product in September 2021.

The feature is now live on the web and the iOS and Android apps.

Razorpay launches TokenHQ in partnership with Mastercard, RuPay, and Visa

Fintech startup Razorpay has launched Razorpay TokenHQ, a multi-network Card-on-File (CoF) Tokenisation solution.

This will be a turnkey solution for businesses, allowing their end-customers to continue experiencing the convenience of saved card transactions, with added security and in compliance with RBI guidelines, the startup said in a statement.

TokenHQ will work across all major card networks including Mastercard, RuPay and Visa. Businesses would be able to create, process, delete and modify tokens for online card payments with customers’ consent. Almost the entire base of 5 million businesses using Razorpay’s services will be ready to support tokenised card transactions, the firm added.

Indian startups’ salary expenditure shot up by 43% between April and September: Razorpay Report

Indian startups have witnessed a hike in salary expenditure as it rose by 43 percent from April to September, as per a Razorpay report.

This comes after payroll management became the biggest expense that organisations incurred during the pandemic that served as an inflection point for startups.

According to the report, edtech, fintech, and electronics are some of the sectors that witnessed a significant increase in their salary spends during the last six months. Moreover, some startups even increased the median salary of their employees by 7 percent this year.

Indian short video-app market clocks 3x growth in ad revenue in 6 months: RedSeer Report

After the ban on TikTok and other Chinese short-video making apps, the advertisement revenue from Indian short-form space has been growing at a rapid pace and tripled in the last six months, new data showed.

According to the latest report released by homegrown consulting firm RedSeer Consulting, short-form content has grown 1.37 times in terms of monthly active users (MAU) and 1.1 times in terms of daily active users (DAU) from June 2020 when Chinese app TikTok was banned in India.

GLOBAL TECHNOLOGY & STARTUP NEWS

Facebook plans new group name to revamp image: The Verge

Facebook, which is under fire from regulators and lawmakers over its business practices, is planning to rebrand itself with a new group name that focuses on the metaverse, the Verge reported.

The name change will be announced next week. Facebook CEO Mark Zuckerberg has been talking up the metaverse, a digital world where people can move between different devices and communicate in a virtual environment, since July, and the group has invested heavily in virtual reality and augmented reality, developing hardware such as its Oculus VR headsets and working on AR glasses and wristband technologies.

Facebook plans to hire 10,000 in EU to build ‘metaverse’

Facebook plans to hire 10,000 in the European Union over the next five years to help build the metaverse – a nascent online world where people exist and communicate in shared virtual spaces, Reuters reported.

This would be a significant step the company is taking towards the concept, something top boss Mark Zuckerberg has touted in recent months.

In September, Facebook committed $50 million towards building the metaverse, where companies like Roblox Corp and “Fortnite” maker Epic Games have an early foothold.

UK fines Facebook $70M for breaching order in Giphy deal

Britain’s competition regulator has fined Facebook 50.5 million pounds ($69.6 million) for breaching an order imposed during its investigation into the U.S. social media giant’s purchase of GIF platform Giphy, Reuters reported.

The Competition and Markets Authority (CMA) said Facebook had deliberately failed to comply with its order, and the penalty served as a warning that no company was above the law.

Facebook has increasingly come under fire from regulators and lawmakers about its business practices. It said it strongly disagreed with the CMA.

Square CEO Jack Dorsey says looking to build a bitcoin mining system

Square CEO Jack Dorsey said that the fintech firm is looking to build a bitcoin mining system based on custom silicon and open source for individuals as well as businesses.

This would add to Square’s existing bitcoin-focused projects including a business to build an open developer platform, as well as a hardware wallet for the cryptocurrency.

A team led by Square’s hardware lead, Jesse Dorogusker, will investigate requisites for Square to take on the project to build a bitcoin mining system.

South Korea targets Apple over new app store regulation

Apple was on a collision course with South Korea on Friday over new requirements that it stop forcing app developers to use its payment systems, with a government official warning of a possible investigation into the iPhone maker’s compliance.

The development comes after South Korea amended the Telecommunication Business Act in August to try to curb the tech majors’ market dominance and stop the big app store operators such as Apple and Alphabet Inc’s Google from charging commissions on in-app purchases.

The law went into effect last month but Apple had told the South Korean government that it was already complying and did not need to change its app store policy, a Korea Communications Commission (KCC) official in charge of the matter told Reuters.

Apple’s talks with Chinese battery makers CATL and BYD mostly stalled

Apple’s talks with China’s CATL and BYD over battery supplies for its planned electric vehicle have been mostly stalled after they refused to set up teams and build US plants that would solely cater to the tech giant, sources told Reuters.

The firms informed Apple sometime in the past two months that they were not able to meet its requirements, the people said. But the US company has not given up hope of resuming talks with either CATL or BYD.

BYD, which has an iron-phosphate battery plant in Lancaster, California, declined to build a new factory and team that would solely focus on supplying Apple.

Panasonic is one of the companies that Apple is considering.

Snap shares plunge as Apple privacy changes hit ads business

Shares of Snap plummeted 25% on Thursday after the owner of photo messaging app Snapchat said privacy changes implemented by Apple on iOS devices hurt the company’s ability to target and measure its digital advertising, as per Reuters.

The company, which earns the vast majority of its revenue from selling digital advertising on the app, said the issue was compounded by global supply chain disruptions and labour shortages and caused brands to pull back on their ad.

The Apple privacy updates were rolled out broadly in June and prevent digital advertisers from tracking iPhone users without their consent.

Snap added it expects the Apple privacy changes and global supply chain disruptions to linger through the fourth quarter, which is typically the highest-earning period for social media companies when brands ramp up marketing for the holiday season.

Amazon and others commit to using zero-carbon shipping fuels by 2040

Amazon and IKEA are among commercial users of container shipping that will opt for zero-carbon marine fuels by 2040 in a new initiative aimed at speeding up decarbonisation in the maritime sector, executives told Reuters.

With about 90 percent of world trade transported by sea, global shipping accounts for nearly 3 percent of the world’s CO2 emissions and the sector is under growing scrutiny to become cleaner.

The initiative, which was organised by the non-profit Aspen Institute and has nine signatories so far including others such as Unilever and Michelin, sets a goal for companies to only purchase ocean freight services powered by scalable zero-carbon fuels by 2040.

Tencent says ‘loophole’ allowed WeChat searches on Google, Bing

Tencent’s WeChat has fixed a glitch that allowed some of its content to be searchable by external search engines. This has raised questions over regulators’ latest attempt to crackdown on the internet sector.

Some of WeChat’s content, including articles on its public accounts page, was briefly searchable in the last few days on Alphabet-owned Google and Microsoft’s Bing, but not on China’s dominant search engine Baidu, Reuters checks showed.

The change had prompted speculation that Tencent was heeding a call by Chinese authorities for its tech giants to tear down “walled gardens” in the country’s cyberspace which has come amid a wide ranging crackdown on the sector.

Walmart allowing some shoppers to buy bitcoin at Coinstar kiosks

Walmart customers at some of its US stores will be able to purchase bitcoin using ATM-like machines installed by Coinstar, Reuters reported.

Coinstar, known for its machines that can exchange physical coins for cash, has partnered with digital currency exchange CoinMe to let customers buy bitcoin at some of its kiosks.

There are 200 Coinstar kiosks located inside Walmart stores across the United States that will allow customers to buy bitcoin, a Walmart spokesperson said.

Donald Trump launches ‘TRUTH’ social media platform

Former US President Donald Trump will launch his own social media app, TRUTH Social, that he said would “stand up to Big Tech” companies such as Twitter and Facebook that have barred him from their platforms.

TRUTH Social will be created through a new company formed by a merger of the Trump Media and Technology Group and a special acquisition company (SPAC), according to Reuters.

The social network, set for a beta launch next month and full rollout in the first quarter of 2022, is the first of three stages in the company’s plans, followed by a subscription video-on-demand service called TMTG+ that will feature entertainment, news and podcasts.

PayPal in talks to but Pinterest for $45Bn

PayPal Holdings has offered to buy digital pinboard site Pinterest for $45 billion, a combination that could herald more financial technology and social media tie-ups in e-ecommerce.
Acquiring Pinterest would allow PayPal to capture more of that e-commerce growth and diversify its income though advertising revenue.

PayPal has offered $70 per share, mostly in stock, for Pinterest, sources told Reuters. The online payments provider hopes to successfully negotiate and announce a deal by the time it reports quarterly earnings on November 8.

Citi India retail unit sale: Kotak, Axis, IndusInd, HDFC Bank likely bidders as deadline ends

At least four domestic banks likely submitted binding bids to acquire Citibank’s India consumer business as the deadline ended on October 22, CNBC-TV18 learnt.

The country’s top tier private banks including HDFC Bank, Kotak Mahindra Bank, Axis Bank and IndusInd Bank are among the potential suitors who likely bid for Citi’s consumer business, said two people in the know.

“The deadline to submit bids ended as of 3:00 pm today (October 22), and all I can say is we are open to all opportunities and evaluating prospects closely,” said the chief of one of the banks that has bid for Citi, but he did not wish to be quoted.

Also Read: Federal Bank Q2 results: Net profit rises 50% to Rs 460 crore

While DBS had initially shown interest and even participated in the last round of presentations made for the Citi acquisition, it is understood to not have submitted a binding bid for the India business, as per another person involved in the matter.

It was speculated that the sale would draw huge interest, the valuation sought by Citi may have deterred a few from participating, according to one of the people quoted earlier. The bids that are eventually received may be depressed as Citi has lost a lot of market share in India, this person added.

“Citi has been losing customers every month since it announced plans to exit, and has lost quite a bit of market share, so the business is not as attractive as it was a few months ago,” said a senior executive at a large private bank on the condition of anonymity.

Also Read: RBI imposes monetary penalties on Paytm Payments Bank, Western Union Financial Services

Credit Suisse recently said in a note, “For the larger private banks, Citi’s retail business (primarily credit cards and mortgages) adds only 3-6 percent to their loans and deposits. It is more significant (13-20 percent) for Kotak and IIB (IndusInd Bank), and its 2.6 million cards base is a key asset that will more than double their current card base. Its saving franchise is also attractive and adds 30 percent to Kotak and 60 percent to IIB saving deposits.”

“At $2 billion valuations, this acquisition would erode 140-560 bp of CET1 for the acquirer. Kotak with surplus capital (15.8 percent CET even post-acquisition) is better placed, while Axis and IIB will need to raise capital (6-16 percent dilution) to fund this,” CS said in its note.

“Full benefit of acquisition will be contingent on what the cross-sell acquirer can achieve on Citi’s 2.5 mn premium retail liability customers. Use of surplus capital for it could help push up Kotak’s ROEs by 400 bp to 15.5 percent (though P/B multiple will also rise to 5.3x from 4.4x). For HDFCB and ICICI, ROEs would improve 130-180 bps,” Credit Suisse said.

Citi’s India Exit

While announcing its first-quarter earnings for 2021 in April this year, Citigroup’s global CEO Jane Fraser announced the bank’s exit from consumer banking in 13 countries including India.

Also Read: Digital dollar may threaten monetary sovereignty of poor nations: Raghuram Rajan

“While the other 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital, investment dollars and other resources are better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia. We will continue to update you on strategic decisions as we make them while we work to increase the returns we deliver to our shareholders,” Fraser said.

India is among those 13 markets where Citigroup has decided to exit from consumer banking. The other 12 countries include Australia, Bahrain, China, Indonesia, Korea, Malaysia, the Philippines, Poland, Russia, Taiwan, Thailand and Vietnam.

The bank has been in India for 119 years, since 1902 when it started operations in Kolkata. It currently has 35 branches across the country and employed 19,235 people as of March 2020.

Citibank India’s financials

Citibank operates in India as a branch of the global giant Citigroup and has a balance sheet size of Rs 2.18 lakh crore. The other two big foreign banks in India are HSBC with a balance sheet size of Rs 2.11 lakh crore and Standard Chartered with Rs 1.84 lakh crore in 2019-20.

Also Read: RBI’s new recurring payment rules: Customers see disruptions as banks, merchants not fully aligned yet

Its retail book is primarily led by mortgages and credit cards, with a strong focus on premium customers. Citibank India serves 2.9 million retail customers, with 1.2 million bank accounts and 2.2 million credit card accounts as of March 2020. Citibank India is one of the country’s leading credit card issuers, with around 6 percent market share of retail credit card spending in the country.

The bank reported a profit after tax of Rs 4,912 crore as of March 2020, versus Rs 4,185 crore in the previous year. Citi will report its FY21 numbers only in June this year. As of FY20, its Net NPA ratio stood at 0.6 percent, vs 0.5 percent in FY19. Its CASA ratio stood at 55.8 percent, and total capital adequacy at 15.9 percent as of March 2020. Its total assets, including credit extended to Indian institutional clients from offshore Citi entities, stood at Rs 299,250 crore as of March 31, 2020. It has a deposit base of about Rs 1.57 lakh crore.

Its India business includes retail banking, wealth management, credit cards, and mortgages, investment banking and treasury and trade solutions.

Also Read: Yes Bank: CARE upgrades bank’s debt instruments rating, revises outlook to ‘positive’

HDFC Bank, Kotak Mahindra Bank, Indusind Bank and Axis Bank were yet to respond to CNBC-TV18‘s query at the time of publishing this story.​

Developers want to hike home prices as sales hit a peak

Real Estate

With residential real estate sales rallying to a 92 percent spike year-on-year last quarter, and new home registrations taking place at a rapid clip, developers are looking to capitalise on a market that is quickly consolidating its post-COVID recovery.

While homebuyers have been treated to a bevy of deals and discounts ever since the pandemic dampened buyer sentiment, developers now say a price-hike is just around the corner. At S Raheja Realty’s upcoming ‘New Light’ project in up-market Khar, in Mumbai, the developer tells CNBC-TV18 that future buyers will have to pay more for homes that are yet to be sold.

Also Read: Real estate sector to touch $1 trillion by 2030: Amitabh Kant

“We are already 60 percent sold in terms of inventory,” says Ram Raheja, director, S Raheja Realty, “We are on the last 40 percent of our inventory, which will definitely see a price hike as we go towards finishing.”

Mumbai: registrations hit a high during Navratri

While reasons for an incoming price-hike are multifold, the most probable cause is also the obvious one: the pace of registrations, which in turn is an indication of a spurt in demand. In Mumbai, a market that longer offers the much-celebrated stamp duty rebate that it did till March 31, the registration juggernaut keeps rolling on.

The first seven days of Navaratri, October 7 to 13, saw a whopping 356 property registrations per day, according to data from Knight Frank India. During this period, the Maharashtra government made Rs 24 crore in revenues per day — three times more than it made in October last year.

While the auspiciousness of the festival may have driven pent-up registrations, experts say the festive season this year could be the best one for Indian real estate in five years. “Consumers have realized that prices have bottomed out and from here they will only see it inching upwards,” says Gulam Zia, executive director, Knight Frank India.

‘Best year for real estate in the last half-a-decade’

“Sentiment is building in, and there is no reason for us to believe that the festive season will not do much better than what we saw in 2019,” Zia adds, “We are going to see one of the best years in the last half-a-decade.”

Also Read: First time home buyers back and participating in real estate rebound: Prestige Group

Even in the generally muted Kolkata residential market, registrations hit a peak even before the festive season. Buoyed by a 2 percent rebate in stamp duty offered by the West Bengal government, the July-September quarter saw 15,160 registrations in Kolkata, which is a 122 percent jump year-on-year.

In fact, Kolkata and Chennai have been singled out by Knight Frank as the two property markets that have seen residential prices inch up marginally on account of the spike in demand. Given this demand, developers in Chennai are bracing for a sales boom in the next three months.

“Compared to last quarter, it (sales) will be at least 15 percent more, and compared to last year same period, it could be around 30 percent more,” says R Kumar, Chairman and MD of Chennai-based developer, Navin’s, “There is all-round positivity, and the festival season is going to add to that mood. I think decision-making will be easy and faster.”

Buyers willing to spend more

Given pricing trends in the last quarter, there is some indication that buyers are also willing to shell out more for a home. Knight Frank’s numbers reveal that the share of homes priced between Rs 50 lakh and 1 crore sold between July and September grew to 35 percent of the total inventory sold last quarter from 32 percent last year. So, it comes as no surprise that developers like S Raheja Realty are building bigger homes and looking to put a premium on their price tags, especially in the mid-to-luxury segment.

Also Read: Godrej Properties hits record high, realty stocks in focus once again; here’s why

Indications are that developers are looking to make the most of the sustained post-COVID recovery and make up for half-a-decade of a lull. Given that the market looks set to hit a new peak in residential sales this festive season, the consensus is that there’s no better time to marginally hike prices and make a neat profit or two.