Friday, June 11, 2021

LIC Shows Unique Capability in the Run Up to Mega IPO

M.R. Kumar, Chairman, LIC of India

A pandemic of Covid-19 scale leaves no business untouched. And a ‘Second Wave’ like how it happened in India, starting from March-April rattled most sectors to their core. And life insurance companies were no exception, as new policies and recurring premium payments take a direct hit during lockdowns.

That is why the May numbers from all the life insurers were keenly awaited by the market. Most analysts expected life insurers to take a major hit in May, as it was the month in which both Covid+ cases and deaths due to it peaked in the country beyond even the wildest projections.

The May life insurance figures, especially the sequential or month-on-month figures over April, were expected to be poor. And the numbers were indeed poor when it was published recently. The number of policies sold by all life insurers combined, declined 13.69% in May over the previous month.

This may make anyone jump into the conclusion that the largest player – LIC of India – was the worst performer, contributing the maximum to this slide. After all, LIC accounts for more than 75% of life policies in this country.

But believe it or not, it was just the reverse that was witnessed in May! The industry slump of 13.69% in the number of new policies sold in May was despite LIC performing spectacularly in two of its core segments – with 114% growth in Group Single Premium and 20% jump in Group Non-Single Premium policies. In other words, it was LIC’s singularly powerful performance that has limited the industry’s slide to just 13.69%.

When we move from the number of new policies to the total new business premium collected from these policies, LIC’s performance in May is even stronger. The public sector insurer’s Group Single premiums surged 158% in May, while its Group Non-Single premiums soared 445%. 

In sharp contrast, private insurers saw their premiums fall 20.19% over the previous month to Rs 4,029.34 crore in May. LIC’s new business premium jumped 106.31% to Rs 8,947.64 crore.

The key takeaway from the May numbers is not the sheer size of LIC, which is more than double of all the private life insurers combined, but the fact that LIC has the resilience and agility to perform powerfully even under extremely stressful situations like the pandemic’s second wave.

This is a strength that will keep LIC in a higher orbit, than the rest of the industry, when it goes for its IPO, which is expected to happen in the second half of this fiscal. Because, it is good to perform well when everything is going well, but it is great to perform well when nothing is going well. Markets recognize this ability and reward it too by way of superior valuations.

In another recent development, LIC Chairman M.R. Kumar’s tenure was extended by almost 9 months by the Union Government. This is widely thought to be due to the central role he has been playing in leading the country’s largest ever IPO, and to ensure continuity in this eventful period for the country’s largest life insurer.


Wednesday, June 9, 2021

IDFC First Bank Launches Ghar-Ghar Ration for Customers

V Vaidyanathan, MD & CEO, IDFC First Bank

IDFC First Bank, which prides itself on its ‘Customer First’ strategies, has broken new ground in this regard by launching a unique food kit program for 50,000 low income customers who have been badly hit by Covid’s second wave.

One highlight of the Ghar-Ghar Ration program is that it is funded by this new generation bank’s employees. They are donating salaries ranging from 1 day to 1 month to fund a ‘Customer Covid Care Fund’ for this ambitious program to support its most vulnerable customers during this make-or-break time for them.

The food kit has been thoughtfully designed with the following items - 10 kg rice / flour, 2 kg dal / lentils, 1 kg sugar and salt, 1 kg cooking oil, 5 packets of assorted spices, tea and biscuits and other staples needed to support a small family for about a month.

IDFC First Bank employees are not only funding this program but doing the actual work of procuring these food kits and distributing it to customer’s door steps with a personal touch, especially in rural areas. In locations where physical delivery is now difficult, like some urban locations, IDFC First employees will be giving prepaid cards worth Rs. 1800 which will be enough to buy the kit’s items.

To ensure that the food kits or prepaid cards reach the most needy customers, the bank has announced that all impacted customers can contact their nearby IDFC First Bank branch to avail of this food assistance. In a true display of magnanimity, the bank has also made it clear that even overdue customers can avail this facility.

While the bank’s employees are taking care of their customers this way, IDFC First Bank is ensuring that its employees are also being taken care in the most befitting way. It has created the ‘Employee Covid Care Scheme 2021’, to assist the families of employees who either lost their lives due to the pandemic or have been seriously affected.

The scheme is noted for its comprehensiveness with almost all needs taken care of including employment to spouse, generous group term life insurance, continued 2-year salary credit for nominee, waiver of employee loans, home loan waiver, extension of family medical insurance, financial assistance for relocation, pro rata bonus for this year’s service, salary advance at 0% interest and personalized financial advisory service to affected families.

IDFC First Bank employees are also undoubtedly inspired by the personal philanthropy of their boss, MD & CEO V Vaidyanathan, whose tales of gratitude and generosity are unsurpassed. Close on heels of gifting a former teacher who helped him while he was young, with 1 lakh shares of IDFC First Bank, Vaidyanathan gifted three individuals with a total of 4.5 lakh shares which was worth Rs. 2.43 crore, for the purpose of buying houses. 

Such generosity is nothing new to him either as three years earlier, when he was Chairman of Capital First, Vaidyanathan had gifted 4.3 lakh shares worth Rs. 20 crore to his two drivers, three maids, some colleagues and family members.

Speaking about the current Ghar Ghar Ration program, Vaidyanathan said, “While we cannot solve all problems considering the magnitude of the crisis, we want to support our customers to the extent we can, and hence our “Ghar Ghar Ration” program. We have been driving the philosophy of “Customer First” at our Bank and we felt that there is no better way to instill this philosophy in our employees than by employees directly contributing for the welfare of our affected customers.”

Monday, June 7, 2021

SRM Hosts Global Conclave on Sustainable Agriculture

Dr. P. Sathyanarayanan, President, SRM University - AP

Amaravati based SRM University - Andhra Pradesh, has hosted an international conclave on the sustainability of agriculture on June 3rd & 4th 2021. Over 100 participants including 20 distinguished panelists and 20 presenters made it an event of immense value for everyone involved in the theory and practice of sustainable agriculture.

Distinguished participants in this SRM international conclave were from Arizona State University, USA; International Food Policy Research Institute; Commission for Agriculture Costs and Price, Government of India; Indian Council for Agricultural Research; Delhi School of Economics; JNU; BSMRAU, Bangladesh; Centre for Development Studies, Thiruvanathapuram; Symbiosis School of Economics, Pune; Amity University, Sharda University, and several other institutions.

The event was hosted by the Department of Economics, SRM-AP and the opening remarks by Prof. VS Rao, Vice-Chancellor of the University, set the tone for the whole event, when he reminded everyone that despite the current world agricultural production being enough to feed the entire world, over 821 million people still suffer badly from hunger. Prof. Rao also touched upon the various means to integrate smallholders into a new digitally driven agri-food system that takes care of data, agri inputs, marketing, finance, training etc.

The first keynote speech of the conclave was by Prof Vijay Paul Sharma, Chairman, Commission for Agriculture Costs and Price (CACP), Ministry of Agriculture & Farmer Welfare, Government of India. The keynote focused on the shift in agriculture from supply driven to demand driven and what should be the right kind of government interventions to improve farmers’ welfare, shortage of labor and mechanization, technology, credit infrastructure, public investment, and climate change.

SRM Group of Institutions, including SRM University, Andhra Pradesh; SRM Institute of Science & Technology near Chennai; SRM University, Delhi-NCR; SRM University, Haryana; and SRM University, Sikkim have made it a habit of hosting such conferences of national and international prominence on breakthrough developments in various subjects including medicine, engineering, business, finance, management, law, science etc, which keeps the huge family of SRM students and faculty updated with all the latest knowledge.

SRM collaborates with renowned universities like University of California at Berkeley for entrepreneurship development; SRM faculty has come to be ranked among the top 2% researchers in biotechnology; SRM students win prestigious international scholarships like the Erasmus Mundus; and SRM institutions consistently come top in campus placements with almost all renowned domestic & MNC giants recruiting its students.

Admissions are now open to various courses in SRM  of institutions. Recently, SRM has revised the SRMJEEE 2021 phase 2 exam dates. Now, Phase 2 of SRM engineering entrance exam 2021 will be held on June 29 and 30. Also, the last date for applying for SRMJEEE Phase 2 is changed to June 20. Earlier, SRM had conducted phase 1 of SRMJEEE 2021 on May 23 and 24 in remote proctored mode, the results of which are already out.


Friday, June 4, 2021

How Significant is IDBI Bank’s Legal Win in UK?

IDBI Bank has achieved something that many Indian banks should have done long back – go after the really big fish instead of breaking their head over the small borrowers. The state-run bank, taken over by LIC two years back in a timely rescue, won a $239 million or Rs. 1745 crore debt judgment from the High Court of London against India’s Essar Shipping Group.

The case goes back to 2013 when the bank gave $148 million to two Singapore registered Essar Group companies for building jack-up rigs, for which the group’s Cyprus based parent company IDH gave the corporate guarantee, with the jurisdiction being United Kingdom. But as early as July 2017, the scheduled repayments were defaulted, and the bank’s orders to repay were not heeded, with IDBI Bank moving UK courts in 2020.

A final effort to reach a one-time settlement was reached in February this year with two Essar group companies, but again not honored, which prompted IDBI Bank to press for speedy redressal which has now arrived from the UK court. This is one of the largest such debt judgments obtained by any Indian bank in the UK. While the judgment is appealable, and Essar is now considering whether to appeal it, there is no doubt that the order will force more state-owned banks in India to wake up from their slumber and take action against such big fish. 

However, the irony is that such a smart state-owned bank is soon going to be privatized. In fact, IDBI Bank is all set to be the first among several state-run banks that are being selected to be privatized. The thinking behind such privatization is not to sell off the weaker banks in the government stable, but the better ones like IDBI Bank, Central Bank, Indian Overseas Bank and Bank of Maharashtra, so that they can get easy buyers offering good valuations.

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