Entrepreneurship

SME SECTOR – FUTURE GROWTH ENGINE

 

The SME segment is a very critical part of the Indian economy. Besides the fact that it is important from the point of view of employment and exports it assumes significance in the light of the ‘make in India’ campaign launched by the government.

The small and medium enterprises (SME’s) play a crucial role in the socio-economic growth story of India being the primary drivers of India’s growth story; the sector is expected to contribute significantly to the domestic output in the years ahead. Also for a country like India where employment of the masses is the need of the hour the SME sector could be first choice as this sector provides employment to 40% of the workforce. According to the 2013 survey by the National sample survey organization there are 57.7 million small business units mostly individual proprietorship which run manufacturing, trading or services activities. In the sector 70% is represented by agriculture and 30% by manufacturing and services.

Small & Medium enterprises (SME’s) particularly in developing countries are the backbone of the nation’s economy. They constitute bulk of the industrial base and also contribute significantly to their exports as well as to their Gross Domestic Product (GDP). In India Micro Small and Medium Enterprises (MSEME’s) contribute 17% of its GDP, 45% of the manufactured output and 40% of exports. The sector provides employment to about 69 million people. The MSME Sector is the largest generator of employment in the Indian economy. It forms a major portion of the industrial activity with a contribution of 90%

The problems confronting these sectors are inherent in their operations given their structures. The main challenges being their small size, owner driven, lack of quality products, low governance standards, absence of proper accounting systems, employment of unqualified members, succession risks, business risks.

 Most of the time the next generations do not share the founders view .All this is further aggravated by the problem of availability of credit and cost of the same. Any improvement in their status would require adequate flow of credit from the formal banking sectors as this has become a precondition for their operations. There are several challenges facing the sector but the primary challenges in procuring finance are -First, the flow of credit is limited ,while it is part of the priority lending and banks have to lend them, they are reluctant to do so as the probability of NPA’s is high during the downturn. Second, the cost of borrowing is high as the risk perception is more compelling for banks. Hence debt servicing becomes a challenge given that they do operate on thin margins to begin with and as a corollary their propensity to default becomes higher- Third, unlike their medium and large counter parts these units are not in a position to borrow from international markets as they are too small to draw confidence consequently the support from banks to this sector is hence quite low with less than 10-12% of bank credit going to the SME segment. Most of these non registered enterprises do not even maintain proper books of accounts and are not formally covered under taxation areas. Therefore banks find it difficult to lend to them.

SMEs require financing throughout their development lifecycle from Seed capital during start up through to growth investments in their development stage. However they face considerable challenges in accessing finance, thus limiting their ability to rise above SME status and enhancing their economic growth.

70% of SME’s do not use formal lending facilities while another 15% are under financed from such sources. Restricted access to finance was cited by SMEs worldwide as their greatest constraint on growth.

The Indian SME sector has been growing exponentially despite the limitations and it has indeed become the backbone of India’s GDP growth. The performance of the SME s in India comes only next to china

The role of SME in employment generation, innovation and creating entrepreneurial culture has been crucial in fostering competitiveness in the economy and boosting inclusiveness growth contribution. SMEs however can only grow range bound with own funds or pooling the funds of friends and relatives which is generally inadequate for quantum growth.

A study reveals that India needs 1.3 million jobs every year and both the private and public sector may not be in a position to fulfill the need and the SME sector will have to play a crucial role in creating employment in the years ahead. With this objective in view the government is in the process of initiating several measures to boost this sector.

The government is implementing a special programme to promote and develop infrastructure to improve productivity and competiveness of micro small and medium enterprises. It is generally believed that a large number of micro small and medium enterprises are using outdated technology because of lack of sufficient finance, lack of access to modern technology, absence of in house research and development etc.

For up gradation of technology the government is also implementing micro and small enterprises cluster development programme and preparing diagnostic study report and detailed project report besides taking steps like soft intervention ,hard intervention, common facility  centers and infrastructure development.

Growth funding platform of capital markets though badly required by SMEs was unavailable. A game changing initiative for SME was unleashed in 2010 by the Prime Ministers task force.

Based on the recommendation of the Prime Minister task force SEBI on May 18 2010 laid down the framework for setting up stock exchange / trading platform diverted to SMEs. In line with this framework BSE SME exchange was launched in March 2012, while the NSE SME Platform was launched in September 2012.

In India SME Exchange is at an evolution stage but worldwide it already existed for years

 

 

THE SME PLATFORM

With the setting up of the SME platform on the National Stock Exchange and the Bombay Stock Exchange there is a great opportunity for entrepreneurs to raise equity capital to finance their growth plans and thus unlock value.

The SME platform provides a great opportunity for entrepreneurs to raise capital for growth, expansion as well as acquisitions.

Listing on the stock exchanges enables companies to unleash the valuations of companies and in the process create wealth for all stakeholders. Generally SMEs require debt for very long periods ranging from 10 years to 20 years and have to pledge collaterals to banks for availing of debts. The debts carry high rate of interest and the debts have to be serviced till repayment.

On the other hand an investor of equity capital is like a partner and there is no compulsion to refund the amount invested. There is no obligation to pay interest unlike debt funding. The cost of raising equity has a one time cost and if apportioned over a long period, it reduces the yearly cost of capital to an insignificant amount. It also expands the investor base which in turn will help in getting secondary equity financing including private placement. It will also enhance the company’s visibility through media coverage and research reports besides providing an exit route to PE investors. Public filed documents and coverage by stock analysts also enhances the visibility of the company.

Another advantage is that employees can participate in the company’s ownership and benefit from being a shareholder by purchasing through primary markets, secondary markets or stock options which can serve to ensure stronger employee commitment to the company’s performance and success. Again both domestic and international investors repose faith in listed companies and strategic tie ups are easy. But the biggest advantage for a listed company is that its shares can be utilized as an acquisition currency to acquire target companies instead of direct cash offering. Using shares for acquisition can be a tax efficient and cost effective vehicle to finance such transactions

. The tax benefits are also immense. The unlisted shares attract short term capital gains up to 30%  and long term capital gains tax of 20% (depending on the assesses income slab) whereas in the case of listed securities the rates on short capital gains are 15% and nil on long term capital gains.

 

Majestic Research Services & Solutions (MRSS) .The Company went in for an IPO (initial public offer) on 30th June 2105 at a price of Rs 12.75 to garner Rs 1.43 crores. Subsequently on 26th November 2016 the company went in for a FPO (follow on Public Issue in the price band of Rs 106-114 to garner Rs 10 crores. The current price is around Rs 700 taking the market cap toRs 300 crores against the pre issue net worth of Rs 3 crores.

 

Vidli Restaurants went in for an initial Public offer on 3rd February 2016 at at issue price of Rs 10 and after touching a high of Rs 187 the current market price is Rs 150 accounting for a market cap of Rs 50 crores against a pre issue net worth of Rs 3 crore.

 

The year 2016-17 saw a total of 78 SME IPOs raising a cumulative of more than Rs800 crore , an almost three fold jump from the previous fiscal that saw Rs 311 crore being raised from 50 issues .

Recently Surat based Fresh foods raised Rs 51 crore through an IPO the highest so far

Global Education Ltd with an IPO size of Rs 25 crore raised Rs 840 Crore the highest so far.

Focus Lighting and Fixtures whose issue closed on 7th April 2017 received 15,500 applications and garnered Rs 360 crores against the issue size of Rs 4.05 crore with oversubscription of almost 90 times the biggest oversubscription on the NSE emerge Platform.

 

 

 

 

 

 

 

SME PLATFORMS WORLD OVER

|SME Exchange is a stock Exchange dedicated for trading the shares of small and medium scale enterprises (SME’s). The concept originated from the difficulties faced by SMEs in gaining visibility or attracting sufficient trading volumes when trading volumes when listed with other stocks in the main exchanges. World over, trading platforms / exchanges for shares of SMEs are known by different names such as Alternate Investment Markets or Growth Enterprises Market, SME Board etc. Some of the known names are AIM (Alternate Investment Market) in UK. TXS Ventures in Canada, GEM (Growth Enterprises Market) in Hong Kong. MOTHERS (Market of high growth and emerging stocks) in Japan, Catalist in Singapore, Chinext, EMERGE on NSE in India.

Internationally countries have provided for a separate exchange / trading platform to facilitate listing of securities of growth companies , new economy companies, small and medium companies. The stock markets and its expansion has been an important factor in giving boost to the growth of the corporate sector as it is an important and efficient conduit to channel and mobilize funds to enterprises and provide an effective source of investment in the economy.

Almost every company in its history starts up as a small company, and then graduates to a medium sized company and only then to a large company. SMEs that can scale up their operations efficiently can create significant value for their shareholders. This transition from a small company to a large enterprise will be the single largest value creator. Years of dedicated entrepreneurial effort should not go unrewarded through value destruction but should be enchased through value unlocking.

The SME platform world over have been very successful. AIM (U.K) has 957 companies listed with a market capitalization of Pounds 104288.2; Chinext (china) has 484 companies listed with a market capitalization of Rs 42, 19. 679 crore.  GEM (Hong Kong) has 212 companies listed with a market cap 268152 crore. MOTHERS (Japan) has 212 companies with a market cap 206138 crore.  Capilist (Singapore) has 158 companies listed with a market cap of Rs 46,675 crore while SME Platform in India in a short period of time has over 300 companies listed with around 50 in the pipeline. So far 34 companies have migrated to the main board.

 

NASDAQ which started as fledging SME exchange has transformed itself into one of the leading exchanges globally and today is valued at $ 7.5 trillion. India is a home to 5 crore SME’s and even if 0.25% get listed it would amount to 1, 25,000 companies listed on the SME Platform.

In a world with booming entrepreneurship success stories, success is often measured by the value one has in terms of money. The success, however, is years of hard work and toil that gets people where they are today.

 

 

HOW DOES AN ENTREPRENUER GET COMPENSATED?

 

The Small and Medium Sector (SME) plays a very significant role in and developing economy and India is not exception. Yet this sector has been unable to unleash its full potential. The primary reason being lack of funds

Availability of funds can be derived from three sources

1) Owned Funds

2) Internal Accruals

3) Bank Funds

 

Owned funds are from self, relatives and friends which are limited

Internal Accruals (surplus) are also limited

Bank funds are limited to collaterals, not easy to obtain, has a high costs and repayment obligations which in times of downturn become difficult to service.

Observations reveal that most of the times entrepreneurs during their entrepreneurial journey work for three entities mainly the banks (interest costs) Manpower (Salaries) and Government (Taxes)

What is left at net profit level is a mere 5%. With these meager earnings it may not be worthwhile to run a business. This does not seem fair considering the fact that to build a business involves a lot of sacrifice. Many small entrepreneurs start their businesses from scratch to scale but on several occasions in the absence of succession witness the business end up in scrap

 So how does an entrepreneur get compensated?  The only way is to unlock value through the mechanism of listing.

This avenue which was unavailable in the past due to the stringent conditions imposed by the main boards (BSE, NSE) has now been thrown open to the SME sector with the setting up of the SME platform both on the BSE and NSE.

As stated earlier what is left for the promoter is a mere 5% of turnover, therefore on a turnover of Rs 100 crore the net profit would amount to Rs 5 crore. But instead if the company was a listed entity and the market assigns a price earnings ratio (PE multiple) of 20 the market cap of the company would stand at Rs 100 crores (5*20). - 100% of turnover against 5% of turnover.

Today Reliance Industries is a company with the largest market cap of around Rs 6,00,000  crore and with Mukesh Ambani  holding about 50% of the shareholding his net worth is around Rs 3,0,000  crore ( USD 46bn) making him the richest man in India.

Reliance reported a net profit of Rs 29,000 crore for FY 17. On a net profit basis at 50% holding the net profit share of Ambani would amount to Rs 14, 500 crore but on a market valuation basis his net worth at 50% of Rs 6,00,000  crore is worth Rs 3,00,000  crore,

Assume that the company reports an increase of  Rs 3000 crore net profit for FY18, the share of Ambani at 50% would amount to Rs 1500 crore. If the market assigns a 20 PE multiple to Reliance then the market cap would amount to Rs 60,000 crore (3000*20) and the share of Ambani would amount to Rs 30,000 crore against Rs1500 crore at net profit level.

Amazon the world’s largest e commerce player till recently had been reporting losses. Currently the market cap of Amazon is $ 480 billion and with Jeff Bezos holding 17% his net worth is around $ 81 billion. At a point of time his net worth crossed that of Bill Gates at $ 90 billion making him the richest man in the world.

Co founder and current Chief Executive officer (CEO) of Google Larry page has been paid an annual salary of $ 1 every year since the company went public. Though the practice of limiting the top executive salary is not widespread Page is not alone, his long time partner and Google Co founder Sergey Bin also earns a $ 1 salary as do Oracles Larry Ellison, Hewlett’s Packard’s Meg Whitman and F ace book founder Mark Zuckerberg . Despite his virtually nonexistent salary page has profited immensely from his company. His net worth is estimated at around $ 44 billion. CFO s such as Page has large stock holding that they can afford to make the largely symbolic gesture of accepting only $ 1 as a pay check. Since his wealth increases only if the stock value increases his interests are more aligned with the company’s success.

Therefore it is crystal clear that the only way an entrepreneur can compensate himself is by unlocking value through the listing mechanism.

 

 

 

 

 

 

 

 

VALUE CREATION THROUGH VALUE UNLOCKING

Value creation is different from wealth creation. Value creation is a long process. Value is goodwill that takes your business to enviable heights.

Post liberalization several companies have created huge wealth for the promoters as well as stake holders as the Indian economy has grown by leaps and bounds and several sectors and companies have created huge wealth for both the promoters as well as stakeholders.

The future now belongs to the SME sector (Small and medium enterprises). The sector plays an important role in any developing economy and India is no exception. Despite the fact that SME companies have huge potential yet they have suffered due to lack of financing support and most of them have emerged as over debt companies with high risk as they have purchased all their infrastructure, machineries, etc with the help of finance against personal collaterals at high costs.

There are still thousands of SMEs which are eligible for listing and who need capital. These promoters have to restructure their companies and their mindsets in order to benefit from listing. This means better corporate governance, sound accounting practices, meaningful disclosures and full compliance, all of which lead to wealth creation not just for the investors but for the promoters in  significant manner. 

It is only through the process of listing that equity capital can be infused to fuel growth as well as well as create value through  the process of value unlocking .

Let us take the case of two companies   A & B. Both the companies are run by efficient and aggressive promoters and are in the same line of business. On the financial front both companies have a share capital of Rs 5 crores and have reported a net profit of Rs 5 crores translating into an earnings per share of Rs 10. The only difference is that company A is a listed company while company B is an unlisted entity. As company A is a listed company let us assume that the market assigns it a price earnings ratio (PE Ratio) of 10 and therefore the market price of the company would amount to Rs 100 translating into a market cap of Rs 50 crore whereas in the case of company B in the absence of any PE ratio the value remains at Rs 5 crore. In the subsequent year both the companies’ record a 50% increase in net profit of Rs 7.5 crore accounting for an earnings per share of Rs15 and applying the PE ratio of 10 the market price for company A would amount to Rs 75 crore while for company B it would remain at Rs 5 core in the absence of any benchmark. Thus the listed company A would have a market cap of  Rs 75 crore while in the case of company B the value would remain at Rs 5 crore ( A difference of Rs 70 crore for the same performance , the difference being company A is  listed )

Now let us assume that both the companies plan to embark on an expansion plan of Rs 12 cores. Company A being a listed company with a market price of Rs 150 decides to issue 10 lakh shares at a price of Rs 120 per share (Rs 10 on capital account and Rs 110 on premium account) amounting to Rs 12 crore while company B in the absence of any market price will have to resort to a bank loan of Rs 12 cores at the rate of 15%.

Let us assume the scenario over the next 5 years.

 

 

 

 

 

 


On the Rs 12 crore garnered by company A – Rs 1 crore would be on capital account and Rs 11 crore on premium account. The amount of Rs 11 crore has no cost and is not repayable in the lifetime of the company while on the capital account the management is not obliged to pay a dividend. In case the management decides to pay a dividend of 10%, it would amount to Rs 10 lakhs per annum and 50 lakhs over a 5 year period. Assuming the management holds 75% stake an amount of Rs 37.5 lakh would accrue to the management.

Therefore a listed company which has access to premium funds to fuel growth is always at an advantage compared to an unlisted firm.

There is a classic case of two promoters running successful businesses – one into computers and leasing and the other in the telecom business of EBBX systems – Both of them had planned to unlock the value of their business by listing their companies on the stock Exchange. The promoter of the computers and leasing business took a quick decision and listed his company and today due to lack of succession sold the business which is now valued at over Rs 8500 crore against the initial investment of Rs 50 lakhs. The promoter of the telecom business took time to decide on listing and by time he took a decision the norms for listing changed and the company remained unlisted. Today he is also saddled with the succession problem and with his health on the decline is unable to devote time to the business and despite several attempts is unable to find a buyer.

 A once highly successful business with a reputed brand has virtually closed down and value thus created over the years has been destroyed.

There is another case of two investors who invested in different banks at the same time. Investor A invested in a listed bank by purchasing 1000 shares of HDFC Bank by investing an amount of Rs 10,000 while investor B purchased 1000 shares in a Credit Co-op Bank by investing sum of Rs 10,000. Today investor. A’s portfolio is valued at Rs 5  crore while investors B portfolio in still valued at Rs 10,000 in the absence of a market value. Both the banks have grown exponentially over the years but the difference in value is immense as HDFC Bank is a listed Bank and value is benchmarked.

 

 

 

PAYING TAX PAYS

 

 

 

It is observed that most of the times companies appear reluctant to pay taxes as it involves an outflow of cash resulting in lower cash accruals for the company. This case may be true as far as an unlisted company is concerned but for a listed company the benefits are substantial.

 

The illustration below proves the point.

 

Company A an unlisted company earns a pretax profit of Rs 1 .33 crore. The company pays a tax amounting to Rs 33 lakhs and reports a net profit of Rs 1 crore.

Company B is a listed company earns a pre tax profit of Rs 1.33 crore. The company pays a tax amounting to Rs 33 lakhs and reports a net profit of Rs 1 crore.  Since the company is a listed company the stock market assigns a price earnings ratio (PE ratio) to the company. Assume the PE ratio assigned to the company is 20, therefore the market cap of the company would amount to approx Rs 20 crores. (Net profit * PE ratio) i.e. (1 crore *20) = Rs 20 crores

Therefore for an outflow of Rs 33 lakhs by way of taxation the company gains Rs 20 crores by way of market capitalization which it could use to raise premium funds (free money with no cost and repayment obligation), whereas no such benefit accrues to an unlisted company.

 Since the market cap is Rs 20 crore, let us assume that the company raises Rs 10 crore through premium and uses the fund for expansion of business on which it earns a margin of 10% amounting to Rs 1 crore. Thus on a payment of Rs 33 lakhs by way of tax the company gains Rs 20 crores by way of market capitalization and Rs 1 crore by way of additional profits which further pushes up the market capitalization by around Rs 20 crores enabling the company to raise further funds at substantial premium.

Hence the benefits that accrue to a listed company on reporting profits are immense compared to an unlisted company. In the above case both companies report a net profit of Rs 1 crore, while company A the unlisted entity pays a tax of Rs 33 lakhs with no additional benefits, in the case of company B which also pays a tax of Rs 33 lakhs the additional benefit is Rs 20 crores by way of market capitalization and Rs 1 crore by way of additional profits which could add another Rs 20 crores by way of market capitalization.

 

 

 

 

 

 

 

EARNINGS SUPERIOR TO ASSETS

The value of a company consists of both tangibles and intangibles. Tangibles are reflected in the financials while intangibles are reflected in valuations. Coco Cola is one of the most recognized brands but the value is not reflected in financials but in valuations. Currently the market cap of Coco Cola is around $ 190 billion of which the brand contributes around $ 80 billion accounting for around 40%.

The market cap of HDFC Bank is valued at around  Rs 5,00,000  crore of which the brand is valued at Rs 1, 30,000 crore accounting for around 25% of the market cap.

Listed companies are better placed to encash the brand. Also the stock markets give more credence to earning than assets. Assets could fall into two categories – Productive or unproductive assets. Those assets that are productive generate better returns in forms of earnings and those assets which are unproductive generate inadequate returns. One concern expressed by a few promoters is that they are reluctant to sell their stake in the IPO at book value as the current value of the assets is more than the historical cost.

Intangibles which form a significant part of the company’s valuations are reflected in market cap (Listed companies) but stock markets give more value to earnings rather than assets because assets irrespective of their value mean nothing unless they contribute to earnings

The illustration below proves the point

FINANCIAL STRUCTURE

The book value per share of the company is Rs 50 at historical cost and 10% higher at Rs 55 at current replacement cost.

It is suggested to the promoter to issue shares in the IPO at book value based on historical cost i.e. Rs 50 per share.

The promoter is reluctant to issue shares at book value based at historical cost as he is of the view that he will incur a loss in value of Rs 2.5 crore ( i.e. 10% of the net worth of Rs 25 crore .  However the actual loss in value would amount to only 62.5 lakhs as he is offering only 25% to the public. (25% of Rs 2.5 crore). However on listing he would be more than compensated for the loss in value.

The working below will give a better view point.

IPO

 

Loss in value to promoter.

On per share basis

 

Performance on Listing

As the company is reporting a net profit of Rs 2.5 crore on an equity capital of Rs 5 crore the earnings per share works out to Rs 5 and applying a Price earnings (PE) multiple of 20 the stock price would quote at Rs 100 which would amount to a gain of Rs 50 per share against the IPO price of Rs 50

Total gains on Listing

 

Gains to promoter

 

In order to save Rs 62.50 lakhs the promoter would have lost Rs 24.38 crore

 

Apple has assets worth $ 321 billion of which 47 billion is accounted for by property and is valued at $ 805 billon while Exxon Mobil has assets worth $ 330 billion and is valued at $ 344 billion. Similarly JP Morgan chase has assets worth $ 2.5 trillion and is valued at $ 294.7 billion

 

The total market cap of the Tata Group is $ 130.6 billion (Rs 8, 43,000 crore) of which TCS contributes around 5, 00,000 crore accounting for around 60% of the market cap. TCS is an asset light company compared to the likes of Tata Motors, Tata Steel Tata Chemicals etc which are asset heavy companies, yet these three companies have a combined market cap of around Rs 2.27 lakh crore compared to Rs 5 lakh crore of TCS. The market cap of Amazon is $480 billion compared to Wal-Mart at $ 200 billion

 

Technology companies which do not have substantial assets but earnings make up the five most valuable companies in the world worth a market cap of $ 2.5 trillion while JP Morgan Chase which has assets of over 2.5 trillion is valued at $ 294 billion.

 

Therefore in summary it is earnings rather than assets that are recognised by the stock markets.

 

 

 

 

 

 

LISTED ENTITIES AT AN ADVANTAGE

 

 

It is only through the process of listing that equity capital can be infused to fuel growth as well as well as create value through  the process of value unlocking .

A listed company which has access to premium funds to fuel growth is always at an advantage compared to an unlisted firm.

An investment of Rs 10,000 in Eicher Motors in the year 1984 is today valued at Rs 870 crores without considering dividends.

An investment of Rs 10,000 in Wipro in the year 1970 is today valued at Rs 600 crores without considering dividends.

The only way to grow companies is through equity based premium funds which is available to a listed company based on performance and not on collaterals. Till recently this avenue was unavailable to the SME sector in view of the stringent entry norms in financials, compliances and cost. Also in order to be viable the size of the issue should be large enough. Some  of the larger issues on the main board were- Coal India – Rs 15475 crore Reliance Power-Rs 11700, DLF -Rs 9188 Cairn India-Rs 8616 Reliance Petro-Rs 8100 NHPC Rs-6039 TCS-Rs 5420 NTPC- Rs5386 .

However taking into consideration the problems faced by the SME sector the government of India set up the SME platform to create an avenue for listing. World over there are SME platforms to cater to the needs of the SME sector.

.

A company which is unlisted and has no access to premium based equity funds and has to rely on debts will find it difficult to compete with  the listed company which  has access to  premium based equity funds. Experience reveals that most of the promoters in unlisted companies spend almost their entire entrepreneurial life span working for banks paying huge interest year after year.

Lack of financing support to SME s have led them to emerge as debt laden companies with high risk as they have bought all infrastructure, machineries and credits with the help of finance against personal collaterals and high costs. High inflation, high cost of financing and lack of proper guidance are becoming adversary against their growth.

With the help of proper financing, updated knowledge, guidance and vision of improving their bottom-line with upgrading technology, they can grow and create value of business

.

Valuations have been unlocked in several verticals like Jewelry,( P.C. Jewelers)  Tutorials,(Mahesh Tutorials) Fragrances(SH Kelkar), Fitness, (Talwalkars) Staffing ( Team Lease)), Diagnostics,( Thyrocare)  Pharma Research, (Sygene International )  QSR( Specialty Restaurants) Education Content( S. Chand) Mutual fund ( Reliance Nippon ) Casinos ( Delta Corp) Stock Exchange (BSE) Mattresses (sheela Foam) QSR ( Jubilant Foods)

The net worth of the Tata Group is around Rs 1.75,000 crore but the market cap is at Rs 9, 15,000 crore resulting in unlocking value to the tune of around Rs 7, 40,000 crore.

Some of the recent companies that have unlocked value are:

 

Today Azim Premji of Wipro is a wealthy person only because wipro unlocked value through listing. It has not only benefitted the promoter but also the stake holders.. An investment of Rs 10,000 in the stock of Wipro in the year 1980 is valued at over 600 crores without taking into consideration dividends. Due to the unlocking of value Premji was able to sign the giving pledge mandate in 2013. He has already donated about 39% (valued at Rs 53,000 crore) of his wealth to his foundation which focuses on education and governance.

Listing also provides the benefit of Employee Stock options- HCL Tech Vice Chairman took home a total package of Rs 181.74 crore in 2015-16 on enchasing stock options.

Companies are built to last and value created over the years should not be destroyed for lack of succession or continuity but the value need to be unlocked through the listing process. Unfortunately many entrepreneurs who have created value see them getting destroyed as the next of kin do not seem keen to continue the business and instead prefer to migrate. Many companies that have been successfully built up from scratch end up in scrap. The process of listing not only unlocks value but allow

.

There have been several companies that have been built through hard work, dedication, passion, grit and determination and there are huge intangibles that are not financials but valuations which remain hidden or unlocked in unlisted companies the event the company fails to outlive its founders. Value created over the years gets destroyed.

 

 

 

LISTING REWARDS PERFORMANCE

Listing not only unlocks value but also rewards performance.

For e.g. State bank of India is a 200 year old bank but it has a market cap of Rs 2,4,0000 crore, whereas HDFC Bank which is only a 20 year old bank has a market cap of Rs 3,50,000 crore.

Indigo a recent entrant has a market cap of Rs 36,000 crore compared to Jet Airways which has a market cap of only Rs 8000 crore.

Page industries is a recent entrant with a market cap of Rs 15, 0000 crore compared to Rs 2000 crore of VIP Clothing (Formerly Maxwell Industries)

BSE is an Exchange with a 140 year old history whereas the NSE is an exchange which is only 20 years old yet the market value of BSE is around Rs 5000 crore compared to Rs 45,000 crore of the National Stock Exchange.

 

SCALE UP OR CASH OUT

SME companies which have huge potential have suffered due to lack of financing support and most of them have emerged as over debt companies with high risk as they have purchased all their infrastructure, machineries, etc with the help of finance against personal collaterals at high costs.

High inflation, high costs of financing and lack of proper guidance is the adversary against their growth. With the help of proper financing, updated knowledge, proper guidance and vision of improving their bottom-line with upgraded technology, they can grow and create value of the business.

Almost every company in its history starts as a small company, and then grows into a medium sized company and subsequently graduates to a large company. Reliance Industries started with a net worth of Rs 6 cores and today is valued at over Rs 6,,00,000 crore. HDFC Bank stated with 1 branch and today has over 5000 . Maruti started with a capacity of 1, 00,000 vehicles and today has a capacity of 15, 00, 000 vehicles.

Infoys started with a capital of Rs 50,000 in a 500 square feet apartment and today the company reports a turnover of Rs 66,000 crores and a profit of around Rs 14,000 crores.  The five promoters today hold 12.74% valued at over Rs 30,000 crores.

SMEs that can scale up their operations efficiently can create significant value for their stakeholders. This transition from a small company to a large enterprise is the single largest value creator. In several cases the promoters through years of dedicated entrepreneurial efforts create valuable companies of scale but many a times the next generation do not share the vision of the promoters and succession and continuity is an issue and companies that have been built up from scratch to scale end up in scrap and hence years of dedicated entrepreneurial efforts should not go unrewarded through value destruction but should be encashed through value unlocking.

SME s considering their size has limited financial resources. Most companies that are in the growth phase tend to over borrow and banks are not willing to provide further credit and they eventually become cash strapped. Equity capital is then necessary to bring back strength to the balance sheet.

We are all aware that in future technology and branding will play a very important role and companies that are behind in technology will be eased out. Therefore to survive in future technology and branding will be two key issues. Technology as well as branding has huge costs initial costs and most of the companies in the SME sector may find it difficult to incur these costs making them obsolete over a period of time . Funding will be the key issue, borrowings are not easy from banks, so is owned funds, it is only through public participation on premium funds that a company can grow and the only route is through listing. The SME Platform which was set up in mid 2012 is a boon to entrepreneurs to take advantage of the ease of listing as well as compliance to catapult their companies in the new technological and disruptive eco system.

What’s up was offering calls to a billion active users. It already carries 30 billion messages a day against 20 billion done by all telecom operators put together. What ups neither owns any telecom network and nor has sunk in billions into acquiring spectrum assets. It runs its entire business with just 40 engineers. Airbnb emerges as the largest hotel chain in the world, without owning a single hotel room. Amazon was well ahead of Best Buy and Wal-Mart in terms of transactions. Uber is the largest aggregator without owning any vehicle.

We have a new world of disruption that do not own any asset but own the customers. It is the gatekeepers who are winning the game now with their new platforms. From automobiles to telecom to retail, technology led upstarts are gradually edging out traditional business models. We are into a new world of disruptors that do not own any asset but customers. Through constant disruptions several products have become obsolete.

.Typewriters (Remington Rand). Radios, (Bush) Transistors, (Philips )Telegraph,(Post office) Telegrams,(Post office) Fax Rolls ( Denmur Fax Rolls)  Fax Machines, (Global Tele) Calculators, Film Rolls,( Kodak) Post card,(Post office), B&W  TV sets,(  Crown TV, EC TV, Dynora TV)Dictaphone, Inland Letter,(Post office) Greeting Cards etc. (Archies, ITC)

There are many companies who are aware that the disruptive eco systems are bound to make their existing business models irrelevant and are therefore planning to list their companies which will enable them either to scale up or sell out in the event they are unable to meet the new requirements

We have to accept that we are in the midst of a disruptive ecosystem where traditional models are getting irrelevant and in order to survive the onslaught it is necessary either to adapt to the new environment where the costs in technology would be high. The only answer is listing which would provide you with the necessary funds to get relevant or cash out.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS OF CONTROL

 

There are certain apprehensions expressed by promoters that dilution of 25% may result in less control. As long as the promoter holds 51% of the capital there is no risk of loss of control.

There are over 6000 companies listed on the stock exchanges and over the last 25 years there are no instances of hostile takeovers.

Also it may not be worthwhile for any individual to plan a takeover of a company on the SME platform in view of the low floating stock.

Assume a company with a capital of Rs 3 crore (30, 00,000 shares) offers 25% i.e. 7, 50,000 shares valued at RS 75 lakhs to to public. Assume the share price is Rs 30 and even if the predator manages to acquire 25% of the floating stock ie around 2, 00,000 shares his average price could be in the region of Rs 300 considering the low floating stock he would have committed an investment of Rs 6 crore for a stake of just 6%.

Thus it would not be viable for any predator to attempt a takeover into any company with low liquidity and a management holding of more than 51%.

There are many promoters who run their companies with less than 51% holding. A few of them are illustrated below.

 

 

 

 

 

 

 

INTANGIBLES

All intangibles like brand equity, copyrights, patents, intellectual property. Customer lists. Trademarks, franchise or licensing agreements, management bandwidth, management drive and dynamism are not reflected in financials but in valuations. Intangible assets are non physical assets with a theoretically infinite life, cannot be amortized and therefore do not appear on the company’s balance sheet.

Even though an intangible asset such as coca cola logo carries huge recognition value it does not appear in the company’s balance sheet and hence is not reflected in financials but in valuations. The market cap of Coco Cola is $ 197 billion while the brand value is at $ 73 billion representing 37% of the market cap.

The market cap of Apple is $ 900 billion of which the brand is valued at $ 180 billion representing about 20% of the market cap.The market cap of Google is $ 724 billion while the brand is valued at $ 102 billion representing around 15% of the market cap. In India the market cap of the Tata Group is 9.15 lakh crore while the brand is valued at Rs 1.28 lakh crore representing around 11% of the market cap. Apart from brands there are several other intangibles that reflect in valuation specifically customer list, management drive and dynamism, consistency in performances etc.

 Therefore listing allows a promoter to unlock huge value that remains unlocked in an unlisted company.

Companies are built to last and value created over the years should not be destroyed for lack of succession or continuity but value created needs to be unlocked through the listing process. Unfortunately many entrepreneurs who have created value see them getting destroyed as the next of kin do not seem keen to continue the business and instead prefer to migrate. Many companies that have been built up from scratch to scale end up in scrap. The process of listing not only unlocks value but allows the promoter to cash out in case the next of kin do not seem keen to continue.

 

 

 

 

 

 

 

 

 

 

 

BENEFITS OF LISTING

a) Easier access to capital and financing opportunities

Equity financing will cover debt burden leading to lower financing cost and healthier balance sheet. Debt financing has a high cost with replacement obligation whereas premium based funding has no cost and no repayment obligation. Several companies have in their growth journey raised premium based funds which have strengthened their balance sheets tremendously some of which are: Reliance Industries, Tata Motors HDFC to name a few.

b) Expand investor base

 Expansion of investor base will help for getting secondary equity financing including private placement. What is required to fuel growth is constant availability of funds. As far as unlisted companies are concerned the dependence is on promoters and relatives where the funds are limited. However listed companies with a huge shareholder base have access to unlimited funds as they have huge number of shareholders on a pan India basis. Reliance has over 25 lakh shareholders and in its growth history has been able to raise funds at regular intervals through various types of instruments.

Companies with large shareholding:                                  Companies with high retail stakes


Currency Value: Listed shares, having their value established in the market, act as currency and can be used as collateral to raise funds. Several promoters pledge the shares with a view to raise funds.

Listed securities act as a viable M&A currency and help avoid the cost and time involved in M&A transactions. Dish TV is buying out Videocon not by paying cash but by issuing shares. As public listed company, its shares can be utilized as an acquisition currency to acquire target companies, instead of direct cash offering. Using shares for an acquisition can be a tax efficient and cost effective vehicle to finance such transactions.  In an all stock deal shareholders in Videocon will get 2.02 shares of Dish TV. Indus Ind Bank is taking over Bharat Finance in an all stock deal valuing the company at Rs 12,000 crore.

d) Facilitate growth through strategic investments, mergers and acquisitions- Domestic and international investors repose faith in listed companies. Listed small and medium companies are likely to get strategic investments from both, domestic and international investors as well as companies.

e) Reduced cost of borrowings: Listing often leads to improvement in credit ratings, which in turn enables raising of loans at a reduced rate of interest. Banks normally offer lower interest rates of around 2% to listed companies. Thus if a company has a loan of Rs 10 crores the savings could be in the region of Rs 20 lakhs

f) Stakeholders Comfort: Listing adds to the comfort of stakeholders such as customers, lenders, creditors of the company, which in turn often results in increased order book, better negotiated business terms like credit period, margin requirements, less- onerous contractual covenants etc.

g) ESOPS-   . ESOPs typically, serve as a tool for retaining / incentivizing the talent and also act as wealth creator for employees. The benefits of listing can be attributed to unlocking value of the company and making ESOPs effective, thus aiding to talent retention. It also acts as an incentive for the employees as they can participate in the ownership of the company and benefit from being a shareholder. This can serve to ensure stronger employee commitment to the company’s performance and success. Share options in a public limited company have an immediate and tangible value to employees, especially as a recruitment incentive.  Companies where employees have been granted stock options have resulted in huge value creation. Of the 981 employees in 59 listed companies as many as 389 have a net worth running into crores of rupees,170 employees are between 50 lakhs and 99 lakhs while 287 employees are millionaires where stocks are worth between Ra 10 lakhs to 49 lakhs.

Avenue Super Mart which runs the D- Mart chain of stores has gone public and is valued at over Rs 80, 000 crores.Ignatius Naronha the Managing Director has 13.7 million shares in Esops which is now valued at over Rs 1000 crores while the Chief Financial Officer – Ramakant Baheti is valued at over  Rs 300 crores.

HCL Tech Vice Chairman took home a total package of Rs 181.74 crore in 2015-16 on encashing stock options

h) Visibility:  Profile Building: The companies listed on the stock exchange get recognition as well are followed by investors and analysts; Listing of a company provides a platform for recognition and visibility. It generates greater public awareness through media coverage, publicly filed documents and coverage of stock by sector investment analysts and can provide small and medium companies with greater profile and credibility leading to increase in value of shares. Prospectus, Research reports, Exchange websites, other websites, Television News channels are some of the mediums through which visibility is created.

i) Increased Corporate Governance- Listing helps companies to strengthen their internal governance systems leading to better internal control and corporate governance.

j) No long term capital gains.-Under Income Tax Act 1961, long term capital gains are exempt from tax on transfer of listed shares held for more than 12 months. Listing offers opportunity to avail of this exemption, subject of course to the holding period of one year. Even short term capital gains in listed shares is payable at a reduced rate of 15%.

Assume the promoter has started a business with an investment of Rs 1 crore and over the years the business is now valued at Rs 50 Crores. Assume the promoter has no successor and decides to sell the business for Rs 50 crore. The long term capital gain would amount to Rs 49 crore (Rs 50 crore minus Rs 1 crore) and the tax payable on Rs 49 crore @ 20% would amount to Rs 9.80 crore. However if the company was a listed entity not only the promoter would get a higher valuation but would also be exempted from tax. Let us assume that the promoter would get a valuation of Rs 55 crore as a listed entity, the gain would amount to Rs 54 crore (Rs 55 crore minus Rs 1 crore). In the normal circumstances the tax would amount to Rs 10.80 crore but in the case of a listed company the tax would be zero which would amount to a gain of Rs 10.80 crore.

k)No tax on equity infusion in the company-As per the Finance Act 2012, a company is liable to tax on equity infusion, if the equity shares are issued to an investor other than a registered venture fund at a premium exceeding the fair price. Such a tax is not applicable in the case shares are listed.

l) No tax on distressed business purchase-As per income tax there lies a tax liability on the investor if the shares of an unlisted company are bought below its net worth. Such a tax incidence is mitigated if the shares are listed.

m) No tax on buy back of shares- Tax at the rate of 20% on buy back of shares in not applicable if the shares are listed.

 

 

MAIN BOARD – STRINGENT NORMS

To list on the main board the norms are stringent on the financial, regulatory and compliance front some of which are as follows:

Financial: A profit of Rs 15 crore in 3 out of 5 years

Approval – SEBI approval

Cost – Rs 5- 6 to 8 crore. The fees paid to Investment bankers in recent issues are as follows; BSE – Rs 28.6 crores, ICICI Prudential and Life Insurance Co- Rs 90.9 crore, RBL Bank- Rs 30.3 crore, Equitas Holdings- Rs 37.6 crore, PNB Housing Finance- Rs 43.8 crore.

SME PLATFORM – RELAXED NORMS

Financial: A profit in 2 out of 3 financial years.

Approval: No SEBI approval required

Cost: Around Rs 30 – 40 lakhs depending on the work load.

After two years of listing on the SME companies can migrate to the main board without any additional cost. As of now more than 34 companies have already migrated to the main board.

Valuations have been unlocked is several sectors like Jewerelly,( PC Jewellers)  Tutorials ( Mahesh Tutorials) Fragrances,( S.H. Kelkar) Fitness, (Talwarkar)  Staffing, (Team Lease)  Diagnostics,( Thyrocare)  Pharma Research, (Syngene) Casinos, ( Delta Corp) Mattteresses   ( sheela Foam ), QSR ( Jubilant food – Domino Piza) Stock Exchange (BSE) Restaurant ( Specialty Restaurants) Education content Publishers ( S . Chand) . Mutual – Reliance Nippo

Some of the companies that have recently unlocked value on the main board are as follows;

 

 

 

 

Focus Lighting and Fixtures whose issue closed on 7th April 2017 received 15,500 applications and garnered Rs 360 crores against the issue size of Rs 4.05 crore with oversubscription of almost 90 times the biggest oversubscription on the NSE emerge Platform.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INSPIRING STORIES

·         Jeff Bezos started Amazon in the garage of his Seattle based apartment  and the company is currently valued at $489 billion while Jeff Bezos  himself is valued at $ 83 billion,

·          

—  Google started with $1,00,000 to emerge today  as a  $ 680 billion company

—   

—  Microsoft from a meager $ 16005 worth of turnover has grown to achieve a turnover of $ 85.3 billion  with a current Market Cap  of $ 575  billion

—   

—  Apple started with a valuation of $10000 million  to become a $ 900 billion company 

—  Face book was valued at $ 4.9 million  during its initial  stage which now has a Market Cap  of around $ 443  billion

—   

—  Cisco started with $2million to become a $ 155billion company

—   

—  Reliance industries which had a pre issue net worth of Rs 6 crore  in the year 1977 is currently valued at over Rs 6,00,00  crore and Mr Mukesh Ambani is valued at over Rs 3,00,000  crore

—   

—   Five technology companies in the form of Apple, Microsoft, Google, Face book and Amazon all which began from scratch are currently valued at over $ 2.5 trillion and Bill Gates of Microsoft have emerged as the richest person in the world with a net worth of around $ 90 billion (Over Rs 6 lakh crore).

—   

—   In china Jack Ma who raised $ 25 billion (Rs 1.6 lakh crores) the highest amount through an IPO and the company is currently valued at S440 billion and Jack Ma himself is valued at $ 39 billion.

—   

—  HDFC Bank stated with 1 branch and today has over 5000 branches and a market cap of over Rs 5,00,000  crore.

—   

—  Maruti began with a capacity of 1, 00,000 vehicles and today has a capacity of 17, 00,000 vehicles with a market cap of Rs 2.5 lakh crores

—   

—  Infosys commenced operations with a capital of Rs 50,000 in a 500 square feet apartment and today the company reports a turnover of Rs 66,000 crores and a profit of around Rs 14,000 crores.  The five promoters today hold 12.74% valued at over Rs 30,000 crores.

—   

—  In 1983, 27-year-old Dilip Shanghvi borrowed Rs10, 000 from his father and came to Mumbai from Kolkata to set up a pharmaceutical business. In 2015, he became India’s richest man.

—   

—  Biocon was founded in 1978 with Rs 10,000 as the initial capital, failing to find any financial institution for investment.  The operations began out of the garage of a rented house with two employees. Today the company is valued at Rs 22,000 Crores

Nadu Arokiaswamy Velumani was born to a poor landless farmer Nadu Arokiaswamy Velumani .. Today he is the owner of the world’s largest thyroid testing company Thyrocare is worth Rs 3377 core and has made its debut on Indian bourses. Velimani owns 64% stake in the company which makes him worth Rs 2158 crores.

Sunil Mittal at the age of 18 he started manufacturing bicycle parts in Ludhiana. He borrowed money from his father and today has created one of the largest telecom company – Bharti Airtel in the world with a market capitalization of Rs 2,60,000 crore  and a personal net worth of Rs Rs 45,000 crore.

Anil agarwal converted a scrap metal business into a global business empire He started selling scrap metal. Today his company Vedanta Resources is a metal and mining company which has stakes in state owned Bharat Auminium and Hindustan zinc.

—  father and son duo, kapil and Rahul Bhatia were just a travel agency in Delhi.After 5 year Indigo Airlines started off as a humble budget airline and today has grown into the largest airline with a market capitalization in excess of Rs 30,000 crore with the personal net worth of Rs 24,000 crore

—  Maruti started with 1 lakh vehicles and now makes 15 lakh vehicles with a market share of 50% for more than a decade. It came out with an IPO in 2003 and has generated a 30% return to stakeholders

—  Qimat Rai Gupta  Havells fame started operations from a tiny electric shop in Delhi and never dreamt that his company would emerge as a RS 2000 crore enterprise some day.. .  Today Havels has a market cap of Rs 26,000 crores

—  Eicher motors managing director (MD) and chief Executive officer Lal decided to divest 13 of the 15 businesses that Eicher was in and decided to put all money and focus behind Royal Enfield and trucks. Two businesses that he believed the group had a shot at leadership Lals bet paid off big time with eihcer becoming a grand success. Today it has a market cap of Rs 87,000 crore.

—  V Guard back to 1977, Mr. Kochouseph Chittilappilly set out to build a brand in the Indian electric and electronic goods panorama. With a small manufacturing unit for voltage stabilizers, a capital of Rs.100,000 and two employees, the company set sail. Mcap  5400 cr  

—  Chimanlal Choksi, Champaklal Choksey, Suryakant Dani and Arvind Vakil were the four friends who started the company. Suryakant Dani owned a garage where he did the painting work for Machines & vehicles. The same garage is where Asian Paints started off its operations.  Driven by its strong consumer-focus and innovative spirit, the company has been the market leader in paints since 1968. Today it is double the size of any other paint company in India. Asian Paints manufactures a wide range of paints for Decorative and Industrial use.Mcap  1.06 lakh cr  Rev USD 16750 cr 

—  Today the combined market cap of the HDFC twins HDFC and HDFC Bank is valued at Rs 7, 50,000 crores in a short span of time

 

 

 

 

ALTINA SECURITIES – TWIN OBJECTIVES

PROMOTING ENTREPRENUERSHIP AND FINANCIAL LITERACY

Altina Securities as a part of its Corporate Social Responsibility (CSR) has been playing a very active role in focusing on its twin objectives of promoting and nurturing entrepreneurship both at the start up and scale up level as well as promoting financial literacy.  

The Company set up by Mr. Clifton Desilva who has over 35 years of experience in all facets of the financial markets is leveraging his expertise of several years to groom and mentor entrepreneurs both at the start up and scale up level.

Over the last several years the company has to its credit of grooming entrepreneurs from scratch to multi billionaires. We groom young individuals/entrepreneurs possessing the requisite initiative, perseverance, drive, long term vision and ability to take calculated risks

 The primary objective is to educate aspiring entrepreneurs about entrepreneurship and motivate them to establish their own ventures. The mentoring sessions organized and addressed by eminent entrepreneurs and industry leaders to encourage aspiring entrepreneurs to take up the path of entrepreneurship.

 Apart from being instrumental in aiding companies to create value the company is also helping companies unlock value by advising them to list their companies especially on the SME platform of the National Stock Exchange and the BSE. According to an estimate India needs 1.3 million jobs per year to provide gainful employment to India's young population. Large business houses in India both in the private and public sector may find it difficult to generate employment on such a large scale. Therefore there is a need to actively focus on entrepreneurship which can help in creating jobs to absorb India's young population. Currently Altina Securities is in the process of listing several small and medium companies on the SME platform.

 

ENTREPRENUERSHIP

Entrepreneurs in order to scale up operations require access to funds on a regular basis. With this need of entrepreneurs in view our other focus areas is promoting financial literacy. There are suppliers of capital (investors) and Consumers of capital (entrepreneurs) Suppliers of capital are basically investors who are seeking viable opportunities to lock in their capital while consumers of capital are typically entrepreneurs who have great ideas and are looking for long term capital to monetize their ideas.

In imparting financial literacy we educate the providers of capital the merits of investing into equities and the modus operandi too. The providers of capital can transfer their funds to the consumers of capital who in turn invest into the business and grow the business not only contributing to the GDP of the nation but also providing decent returns to the suppliers of capital as well as creating employment which in turn has a positive effect on the economy; In summary we connect the suppliers of capital with the consumers of capital.

Post liberalization the Indian economy has undergone a sea change and is integrated with the global economy. Competition has also intensified, with transparency, corporate governance, and a more structured format being the order of the day

Promoting Entrepreneurship is attained through various initiatives one of them being industrial visits. These visits are aimed at showcasing how many companies from humble beginnings have grown into huge conglomerates through sheer grit, determination and passion of the promoters. It also brings to fore how companies are run professionally with strict adherence to corporate governance norms. It also provides an insight on the internal working of the company giving greater clarity about various management concepts as the participants can practically learn how these concepts are put into action. Many Research Reports suggest that there is a huge gap between today’s educational system and industrial requirements.

The objective of Altina Securities is to expose aspiring entrepreneurs to various industrial sectors through these industrial tours which are organized free of cost. In order to showcase the models on which professional companies are operated Altina Securities has organized several industries tours to leading companies

Some of the sectors and companies visited are as follows:

 

FINANCIAL LITERACY

Another focus area is financial literacy wherein Altina Securities continues to play an active role through initiatives like seminars, conferences and workshops on financial literacy.

Financial literacy is done through investment seminars as well as imparting knowledge through the print media. Till date we have organized over 1000 investment seminars where experts in their respective fields have enlightened the participants. We have also published over 1000 articles on financial literacy in leading investment publication in the print media.

 In the year October 2013 Capital Finance International nominated the company for the best investor education programme in India -2103 which included voting from IMF and World Bank.

We have also organized several full day workshops on wealth creation.Again all these initiatives have been free of cost to the participants.