India Bulls

PROJECT REPORT
ON
“EQUITY VALUATION”
Undertaken at
INDIA BULLS FINANCIALSERVICES LTD.
Submitted in partial fulfillment for
MASTER OF BUSINESS ADMIMISTRATION
Programme of
KCC INSTITUTE OF TECHNOLOGY AND MANAGEMENT
( Batch2017-19 )
Submitted by :-
SWETA KUMARI
MBA II yrs
Roll:-1766370017
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CETIFICATE
This is to certify that Ms. Sweta Kumari of Kcc Institute of

Management , Greater Noida had undergone three week project
training in Finance department of our organisation.
During her training she was given project of “Equity Valuation”.
She is found to be very diligent during the project and the work
done by her is creditworthy and deserves appreciation in all
regards.
She bears a good moral character .we wish her good luck for her
future endeavours.
Anuj shukla
Branch manager
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PREFACE
The stock market in India has been a kind of mysterious place for
many people who think that the persons investing their money in
the market are sort of gambling on their money. There is usual
misconception in the minds of the common man that because of
the volatility of the market, their hard earned money is not safe in
the stock market.
However, this fear can be checked by proper research on a share
someone is interested to invest on. The market doesn’t behave in
an arbitrate manner but certain trends are repeated over the time
again and again. It is quite responsive towards the economic
activities taking place in India as well as around the whole world.
The broad objective of the project is to understand the behavioural
pattern of the shares of IndiaBulls Financial Services Ltd. over the
past one year and a half so that one can understand the
movement of the share on a particular trading session as well as
the impact of news coming from different quarters of the market.
The project will provide a tool in the hands of the investors to take
the decisions regarding their investment in the shares of IBFSL
that is, when to buy or when to sell the shares. It will also give
them the answer that whether it is right time to invest in this
share or not, and what could be the best time to invest in this
share.
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ACKNOWLEDGEMENT
I express my sincere thanks to my project guide, Mr. Anuj

Shukla, Branch Manager., for guiding me right from the
inception till the successful completion of the project.
I sincerely acknowledge him for extending their valuable
guidance, support for literature, critical reviews of project
and the report and above all the moral support he had
provided to me with all stag5es of this project.
I would also like to thank the supporting staff of finance
Department, for their help and cooperation throughout our
project.
SWETA KUMARI
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EXECUTIVE SUMMARY
During the course of my internship at India Bulls Securities Pvt. Ltd, I
have very well realized the fact that practical learning is far better than
classroom teaching. For the last one year, I have been studying so
many financial terms but their practical implication was understood
only when I started doing my project in the company.
My project ‘Equity valuation of IndiaBulls Financial Services Ltd’
involves a complete research on IndiaBulls Financial Services Ltd. and
understands the movement of company’s shares listed in BSE and
NSE. The company is a subsidiary of IndiaBulls group which is one of
India’s top Business houses with businesses spread over Real
Estate, Infrastructure, Financial Services, Securities, Retail,
Multiplex and Power sectors.
The project is broadly divided into two analyses: fundamental and
technical analysis. In Fundamental analysis, the performance of
the company in the last year is considered. The performance of
the company is a crucial factor behind taking the decision of
investment in that particular company on a long term basis. Every
investor wants to get the maximum return on his/her investment
and that’s why it is always good to see the growth prospects of the
company in the future.The fundamental analysis gives vital
information about the valuation of the company, whether the
company is undervalued or overvalued.
But still there is very decent chance of gaining a good return on
the share if someone invests in the share for the period of at least
3-6 months. This is because of the fact that the last quarter of the
previous financial year was not good at all for the company as the
profit was in the negative territory for the company. The sales
were down and the cost of borrowing was high and therefore the
company had to incur much higher cost as compared to previous
quarters.
The technical analysis on the other hand, answers the question
like when to buy and when to sell. A good technical analysis helps
to gain in either movement of the price of the share. The main
basis of technical analysis is the historical charts that show the
past trends of a particular share. The technical analysis is carried
out mainly on the belief that the trends repeat themselves.
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TABLE OF CONTENTS
S.NO. PARTICULARS PAGE NO.
1. CERTIFICATE 2
2. PREFACE 3
3. ACKNOWLEDGEMENT 4
4. EXECUTIVE SUMMARY 5
5. INTRODUCTION TO COMPANY 7
6. INTRODUCTION TO EQUITY VALUATION 16
7. OBJECTIVE OF STUDY 21
8. RESEARCH METHODOLOGY 22
9. FUNDAMENTAL ANALYSIS 26
10. TECHNICAL ANALYSIS 112
11. FACTS AND FINDINGS 125
12. CONCLUSION 127
13. BIBLIOGRAPHY 129
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INTRODUCTION TO
THE COMPANY
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Since the early 1990s, India has gradually opened up its markets
through economic reforms by reducing government controls on foreign
trade and investment. The Stock Exchanges have become a prominent
player in this economic reform and has now become a key driver of
India’s Economy. With this, Indian stock broking firms are on an
expansion drive. One Such firm is Indiabulls Securities Ltd.
India bulls Securities Pvt. Ltd. is a company registered under the
Companies Act, 1956 .It is a professionally managed group headed by
the directors, having vast experience in the stock market.
Indiabulls Financial Services Limited was incorporated on January 10,
2000 as M/s ORBIS INFOTECH PRIVATE LIMITED at New Delhi under
the Companies Act, 1956 with Registration No. 55 - 103183. The name
of Company was changed to M/s. Indiabulls Financial Services Private
Limited on March 16, 2001 due to change in the main objects of the
Company from INFOTECH business to Investment & Financial
Services business. It became a Public Limited Company on February
27, 2004 and the name of Company was changed to M/s. Indiabulls
Financial Services Limited.
And Now, this company has achieved milestone by voted as -- The
Youngest Company of the year in ET500
INDIA BULLS FINANCIAL SERVICES Ltd. is a public company and
listed on the National Stock Exchange, Bombay Stock Exchange,
Luxembourg Stock Exchange and London Stock Exchange. The market
capitalization of Indiabulls is approx US $ 800 million, and the
consolidated net worth of the company is approx US $ 400 million.
Indiabulls and its group companies have attracted US $ 300 million of
equity capital in Foreign Direct Investment (FDI) since March 2000.
Indiabulls ranks at 82 and position in the list of most valuable
companies in India. Indiabulls is promoted by three engineers from the
Indian Institute of Technology (IIT) Delhi. Foreign Institutional
Investors (FIIs) and foreign funds hold over 60 percent shareholding of
Indiabulls. Some of the large shareholders of Indiabulls are the largest
financial institutions of the world such as Fidelity Funds, Capital
International, Goldman Sachs, Merrill Lynch, Lloyd George and
Farallon Capital. There are approximately over 40,000 shareholders of
the company.
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Indiabulls Financial Services is a retail financial services company
providing a diverse array of financial products and services, through
its nationwide network of over 300. Indiabulls offices, and services over
2,50,000 clients spread across 110 cities in India. Indiabulls, along
with its subsidiary companies, offer consumer loans, brokerage and
depository services, personal loans, home loans and other financial
products and services to the retail markets.
Indiabulls, which has a workforce of over 10,000 full time employees,
reported US $ 60 million in Profit Before Tax and US $ 45 million in
Net Profit for the first nine months of the current financial year.
Philosophy: -
Indiabulls has created a unique organization that is designed for you –
the Smart Investor –. it passionately believe in the Smart Investor who
wants to make his own educated investment choices and demands
world class access to a full range of services and products ranging
from Equities to Insurance, combined with the highest level of
integrity, service and professionalism. Indiabulls is a full service
investment firm offering clients access to a tremendous range of
financial services from 135 locations across 95 cities. We have a strong
team of over 1000 Client Relationship Managers focussed on serving
customers unique needs. Our world class infrastructure, built with
tens of crores of investment, provides our clients with real-time
service, multi-channel & 24/7 access to all information and products.
As we've expanded and developed to serve the needs of all kinds of
investors, we've been guided by one underlying philosophy:
You come first.
We are proud to introduce to you Indiabulls Professional Network TM
that offers real-time prices, equity analysis, detailed data and news,
intelligent analytics, and electronic trading capabilities, right at your
finger-tips. This powerful technology is complemented by our
knowledgeable and customer focussed Relationship Managers who are
available to help with your financial planning and investment needs.
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About Founders: -
The fast paced growth, diversification and consolidation of the Group
has been possible due to the vision and leadership of the co-founders
of Indiabulls.
Sameer Gehlaut is the Chairman, CEO and Whole Time Director of
Indiabulls. Sameer is an engineer from IIT, Delhi (1995) and has
worked internationally with Halliburton in its international services
business in 1995. He has utilized his experience with the international
best practices and professional work culture at Halliburton to lead
Indiabulls successfully.
Rajiv Rattan is the President, CFO and Whole Time Director of
Indiabulls. Rajiv is an engineer from IIT, Delhi (1994) and has rich
experience in the oil industry, having worked extensively across the
globe in highly responsible assignments with Schlumberger. Rajiv has
managed remote exploration projects providing evaluation services for
different clients in India as well as abroad.
Saurabh Mittal is a Director at Indiabulls. Declared the best
graduating student in IIT, Delhi in (1995), Saurabh was also one of the
engineers selected by Schlumberger to work for its international
services business in 1995 and gained experience of working in various
global locations. He graduated as a Baker Scholar with an MBA from
the Harvard Business School. He has also developed in-depth
understanding of international financial markets.
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FLAGSHIP IN OTHER SERVICES
Insurance
Personal Loan
Home Loan
Real Estate
Resources Ltd.
Insurance: -
“When you hear the word Insurance, the words boring and mundane
probably enter your mind.”
When it comes to business, you are right up there. Taking all those
split second decisions, avoiding pitfalls and making sure your money
works hard for you. But don't you think the business of life requires
just as much attention and probably even more. That's we are proud to
bring to you an offer exclusively for you. As a part of our endeavor to
provide you with world-class products and services, Indiabulls gives
you the opportunity to avail of the whole range of Birla Sunlife
Insurance Products through the Indiabulls network of 1000
Relationship Managers over 135 locations nationwide. Which means
you can take care of life, while taking care of business. As always, we
put your needs first.
Loans: -
Personal Loan:
No questions. Only Loans. No matter where you work, or how much
you earn, we offer you the shortest route to a loan with minimum
paperwork and procedures. With
Indiabulls Fast Loans
you can avail of easy loans for a minimum of Rs.10,000 to a maximum
amount of Rs.1,00,000.
•Flexible loan tenor of up to 4 years (i.e. 1 month to 48 months).
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•Loans available from a minimum of Rs.10, 000 up to a maximum of
Rs.100,000.
•Easy monthly repayment through equated monthly installments
(EMI). Easy documentation and quick disbursal
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Home Loan: -
Indiabulls has commenced lending of Mortgage Loans to prospective
customers under the flagship of Indiabulls Housing Finance Ltd. Here
we enable home-seekers to access finance to buy, build, rent or
improve their homes. We also provide plot loans, Loan against
Residential, Commercial and Rental Property, thereby enabling the
borrower to leverage the property owned to fund any legitimate needs
be it Business Expansion, Child's Education, Child's Marriage or for
holiday abroad.
Real Estate: -
Through its group companies, Indiabulls is also engaged in real estate
development. The group companies recently made winning bids for the
Jupiter and Elphinstone Mills in Mumbai in an auction carried out by
the National Textiles Corporation (NTC), a Government of India
undertaking. The company will now develop modern commercial
complexes in the heart of Mumbai - the financial capital of India.
Indiabulls' foreign partner, Farallon Capital made the first real estate
related FDI investment in Indiabulls Properties Pvt. Ltd to buy Jupiter
Mills immediately after the new FDI guidelines were introduced by the
Government of India for real estate development in March 2005.
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Indiabulls Resources Ltd:
Indiabulls Resources Ltd, a 100 per cent subsidiary of Indiabulls Financial Services Ltd.,
has been established with the objective of evolving as an independent oil company over
time. Our immediate short-term goal is to partner with oil companies who are willing to
come to India and bid in the current NELP-6 round. We are ready to invest along with
such companies for exploration blocks of mutual interest.
Indiabulls has grown its business by over 100% CAGR since inception. The growth of
Indiabulls in a highly competitive market is a testimony of its quality services.
The company is serving a diverse customer base of institutional and retail investors The
Company has a balanced mix of revenues from emerging markets and is well positioned
to leverage the growth potential offered by these markets.
GBS provides investors a robust platform to trade in Equities in NSE and BSE, and
derivatives in NSE. The company has a worldwide vision and it along with its associates
is currently providing state of the art stock broking services through all the major stock
exchanges, trading through NSE & BSE, depository services through CDSL and all the
services are available under the one roof. With its ability to evolve with the changing
environment the Company has been able to put itself to the forefront of stock broking
activities. With its network spreading across various parts of India, it has made a
distinct mark among the stock broking houses and high net worth corporate as well as
individuals.
The company offers financial information, analysis, investment guidance, news & views,
which are designed to meet the requirements of everyone from a beginner to a savvy and
well-informed trader.
VISION:--
“Our vision is to grow our business and make our presence across the
world.”
MISSION:--
“Our mission is to create and introduce the new definition of
investments around the globe.”
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Management Team
Name Designation
Mr. Vivek Rana Chairman / Managing Director
Mr Rajiv Balhara Director
Mr. Kuldeep Sharma Director
Mr. Yajur Chaudhary Director
Mr. Rajneesh Aggarwal Director
Mr. Bipin Kumar Director
Mr. Gajraj Singh Director
Mr. Anil Kaushik Director
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INTRODUCTION
TO
EQUITY VALUATION
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Equity
Equity is generally defined as ownership interest in
a corporation in the form of common stock or preferred stock. As
a unit of ownership, common stock typically carries voting rights
that can be exercised in corporate decisions. Preferred
stock differs from common stock in that it typically does not
carry voting rights but is legally entitled to receive a certain level
of dividend payments before any dividends can be issued to other
shareholders.
What is Equity Valuation?
In recent times, the market has become volatile like never before and
the investors are at risk of losing money if they won’t invest carefully
with proper research and analysis. The market is not a place to gamble
and the investors who look it that way definitely lose money in the
market.
Therefore, it is well advised for the investors to go into the details
before investing his/her hard earned money in the stocks of a
particular. She/he should see whether the company is worth investing
or not and if it is, then what should be the duration of investment so
that the return on investment is maximum.
The equity valuation is a method by which a particular company is
analysed on different parameters and the decision on investment as
well as the duration of it, is taken on that basis to maximise the return
on the investment. Equity valuation mainly consists of two types of
analysis:
Fundamental Analysis
Technical Analysis
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Fundamental Analysis:
Fundamental Analysis is a method of evaluating a security by attempting to
measure its intrinsic value by examining related economic, financial and other
qualitative and quantitative factors. Fundamental analysis of a business involves
analyzing its financial statements and health, its management and competitive
advantages, and its competitors and markets.
Fundamental analysis is performed on historical and present data, but with the goal of
making financial forecasts. There are several possible objectives:
To conduct a company stock valuation and predict its probable price evolution,
To make a projection on its business performance,
To evaluate its management and make internal business decisions
To calculate its credit risk
Fundamental analysis maintains that markets may misprice a security in the short
run but that the "correct" price will eventually be reached. Profit scan be made by
trading the mispriced security and then waiting for the market to recognize its
"mistake" and re-price the security.
The end goal of performing fundamental analysis is to produce a value that an

investor can compare with the security's current price in hopes of figuring out
what sort of position to take with that security (underpriced = buy, overpriced
= sell or short).
In fundamental analysis, one can use either a top-down or bottom-up approach:
The top-down investor starts his analysis with global economics, including both
international and national economic indicators, such as GDP growth,
inflation, interest rates, exchange rates, productivity, and energy prices. He or she
narrows his search down to regional/industry analysis of total sales, price levels, the
effects of competing products, foreign competition, and entry or exit from the industry.
Only then does he narrow his search to the best business in that area. This is basically
known as EIC analysis.
The bottom-up investor starts with specific businesses, regardless of their

industry/region.
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Technical Analysis:
Technical Analysis is a method of evaluating securities
by analyzing statistics generated by market activity,
such as past prices and volume.
In its purest form, technical analysis considers only
the actual price and volume behaviour of the market or
instrument. Technical analysts may employ models
and trading rules based on price and volume
transformations, such as the relative strength
index, moving averages, regressions, inter-market and
intra-market price correlations, cycles or, classically,
through recognition of chart patterns. Technical
analysts do not attempt to measure a security's
intrinsic value, but instead use charts and other tools
to identify patterns that can suggest future activity.
Technical analysts believe that the historical
performance of stocks and markets are indications of
future performance.
Technical analysis is widely used among traders and
financial professionals, and is very often used by active
day traders, market makers, and pit traders.
Though the two methods are completely different in
nature, analysis of both is essential to take the best
decision regarding the investment of money in a
particular security.
In our valuation, we are starting with Fundamental
analysis based on Top-Down approach and therefore, our
research starts with the EIC analysis.
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OBJECTIVE OF STUDY
1.TO examine the calculation & effectiveness of Equity

Valuation with the help of principal and method.
2.TO study the value of Equity and market
capitalization of company by taking various
measurement.
3.TO evaluation of Financial performance BASED on
equity valuation
4.TO make suggestion to policy maker better Evaluation
of equity and market cap.
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RESEARCH
METHODOLOGY
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There was hardly any need of collection of primary data
neither there was any scope for it.
The data collected for the purpose of the study was
secondary data. The secondary data was collected mainly
through:
Websites like yahoo finance, Rediff money, Google finance
etc.
Newspapers like Economic Times, The Business Standard,
Business Line
Magazines like Dalal Street, Business World and Business
Today
The main sources of data collection were different financial
websites and the government websites like websites of RBI,
Ministry of Finance, and Ministry of Planning Commission
etc. The data collected through these sites then utilised for
the detailed analysis.
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Mode of Analysis:
For fundamental analysis, the main focus was on going through the
past details and the signal that a change in a particular data over a
particular period was giving. The comparison of data over the past few
years was very important.
For technical analysis, the main tools that were used were Bollinger
Band, MACD, and Relative Strength Index. The explanations of these
tools are given with the analysis later in the project report. These tools
were of great help for predicting the future movement in the price of
the share.
The study of these tools was done with the help of the websites of BSE,
Yahoo Finance and Wikipedia.
Limitations:
Since my project deals with the research on a listed company, the

limitations were very few because of the availability of sufficient data
for the technical analysis. But for the fundamental analysis the
current data for many key analyses were not available.
The major limitations of the project can be grouped as follow:
The Balance sheet of the company for the FY 2008-09 was not
available. This was a big limitation for the ratio analysis. Also, the
Balance sheet of the competitors was not published yet.
The company does not provide a detailed analysis of its product
portfolio and this was a big limiting factor while analysing the growth
of the company over the last year in different sector of financing viz.
Housing Finance, Vehicle Finance etc.
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The economic survey for this year has not been done yet and because
of that the key statistics like the expenditure on infrastructure,
education and social sector was not available which was vital for the
economic analysis.
Sometimes, the availability of too many data also poses a great
problem and this happened during the project work as well. The
different websites use to show different figures over the same period of
time and this ambiguity in data was quite problematic.
Despite these limitations, the project was completed in a smooth
manner and the interesting nature of the project made all these
limitations too small to think of.
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FUNDAMENTAL
ANALYSIS
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EIC Analysis:
Global Economy:
The global economy is largely governed by the economic giant USA,
which is the largest economy in the world. The happenings in USA
have a major impact on most of the economies in the world because we
are living in the era of Globalisation in which no country in the world
is isolated.
According to the estimates of CIA World Fact Book, World GDP
(Purchasing Power Parity), also known as world gross domestic
product or GWP - gross world product, calculated on a nominal basis,
was at $67.2 trillion in 2007. The estimated figure for the year 2008 is
$69.49 trillion. This shows that the world GDP was doing well and the
growth was led by the economies like China, India and Russia. But the
financial tsunami that started from USA took every country in the
world into its waves and created a scenario never seen before.
The Wall Street crumbled and the concept of investment banking
almost vanished from the USA. Suddenly, everything starts looking
gloomy and fear of yet another depression caught the world. With all
the major economies of the Europe and the USA were in recession, the
economist world over were looking optimistically towards Asian Giants
China and India.
The severity of the recession can be understood by the fact that the
business giants that stood the testing times of Depression and the
World Wars, fell prey to this financial earthquake that had its
epicentre in USA. The governments, world over started taking steps to
revive their economies and the stimulus package were announced. The
US government announced a stimulus package of $787 Billion to pull
out its economy from the financial crisis because of which about 3.6
million jobs were lost till the package was announced on 17th
February, 2009(source: Cbc news).
Germany, Europe’s largest economy launched a new recovery plan in
January to bring its economy out of recession. Same was the case with
Britain which had to unveil a fresh package for its banking sector. The
EU leaders agreed on a €200 Billion stimulus plan to snap the
European economy out of recession. But the measures taken by the
countries didn’t go in vain. The world economies started showing signs
of recovery and this was evident from the fact that recently IMF revised
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its earlier estimates for the growth of world economy from -2.2% in
November 2008 (source: Economic Times, Nov 7, 2008) to -1.3%,
according to the official site of IMF. On the similar lines, IMF upgraded
the quantum of contraction that the world economies would be facing
in the coming financial year. The projected growth by IMF for Japan,
Russia, Germany, UK, USA and Brazil was -6.2%, -6%, -5.6%, -4%,
-2.8% and -1.3% respectively. However, these figures were upwardly
revised by IMF in the last few months.
Let’s take a look at the performance of the key economies in the recent
months of FY 2008-09:
US Economy:
The economy of the United States is the largest national
economy in the world. Its gross domestic product (GDP) was
estimated as $13.8 trillion in 2009. But the economic situation of
the country deteriorated heavily because of the recession that
started in December 2007. According to the National Economic
Accounts, BEA the US economy contracted by 5.1% in the last
quarter of this financial year 2008-09 which was more severe than
1% contraction in the Q3 of FY 2008-09.
Economy of Japan:
The economy of Japan is the second largest economy in the
world, after the United States at around US$4.5 trillion in terms
of nominal GDP and third after the United States and China when
adjusted for purchasing power parity. According to country-
data.com, for three decades, Japan's overall real economic
growth had been spectacular: a 10% average in the 1960s, a 5%
average in the 1970s, and a 4% average in the 1980s. However,
this trend changed dramatically when the recession pulled its
economy in red. According to the Bloomberg.com, in the first
quarter of FY 2008, the economy of Japan contracted by 3.3% as
recessions in the U.S. and Europe triggered a record drop in
exports.
Economy of China:
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The economy of the People's Republic of China is the second
largest in the world after that of the United States with a GDP
of$7.8 trillion (2008) when measured on a purchasing power
parity (PPP) basis. It is the third largest in the world after the US
and Japan with a nominal GDP of US$4.4 trillion (2008) when
measured in exchange-rate terms. China has been the fastest-
growing major nation for the past quarter of a century with an
average annual GDP growth rate above 10%. But the impact of
recession was also evident as the economy grew by 6.8% and 6.1%
in the last two quarters of FY 2008, according to chinadaily.com.
Economy of Germany:
Germany has the world's fourth largest economy in USD exchange-rate terms and
the largest economy in Europe. The German economy is heavily export-oriented;
as of 2008, Germany is the world's leading exporter of merchandise, and exports
account for more than one-third of national output. As a result, exports
traditionally have been a key element in German macroeconomic expansion. This
is the reason why Germany was one of the worst affected economies because of the
sharp fall in the consumption in the US and other markets all over the world
during the recession. GDP growth in 2006 was 2.9% and in 2007 was 2.5%.
However in 2008 GDP slowed down to a growth of 1.3%.
Economy of Russia:
Russia is a unique emerging market, in the sense that being the
nucleus of a former superpower shows more anomalies. On one
hand, its exports are primarily resource based, and on the other,
it has a pool of technical talent in aerospace, nuclear engineering,
and basic sciences. According to IMF, Russia has the world’s sixth
largest economy by purchasing power parity. The Russian
economy contracted by 9.5% GDP in the first three months of
2009, after a 1.2% GDP growth in the last quarter of 2008,
according to Tradingeconomics.com, Bloomberg.
Economy of United Kingdom:
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The United Kingdom is a major developed capitalist economy. It is
the world's sixth largest by nominal GDP and the seventh
largest by purchasing power parity. It is the third largest economy
in Europe after Germany's and France's in nominal terms, and the
third largest after Germany's and Russia's in terms of purchasing
power parity. According to the National Statistics department of
UK, the economy contracted by 1.9% in the fourth quarter of FY
2008.
Economy of Brazil:
Brazil has a moderate free market and export-oriented economy.
Measured nominally, its gross domestic product surpasses a
trillion dollars, the tenth in the world and the second in the
Americas; measured by purchasing power parity, $1.9 trillion,
making it the eighth largest economy in the world and the second
largest in the Americas, after the United States. According to an
article posted on The Wall Street Journal, dated 9th June, 2009,
Brazil posted growth of 5.1% in 2008. However, it saw a 3.6%
contraction of the economy in the fourth quarter of the year
under the impact of an international credit crisis and a slowdown
of the global economy.
As we go through the GDP growth trend of one of the key
economies in the world in the recent months, the impact of the
recession becomes clear. However, the global economy has started
showing signs of recovery with several macroeconomic indicators
are turning green in the past two months. Now, we will take a
detailed look at the Indian economy.
The Indian Economy:
Indian Economy has covered a long ground since it was liberalized
in 1991.Today, The Indian economy is the twelfth largest in the
world by market exchange rates and the fourth largest in the
world by GDP measured on a purchasing power parity (PPP) basis
behind only the USA, China, and Japan, according to the CIA, The
World Fact Book. It is slated to overtake Japan and become the
third major economic power in the next ten years. India is also
one of the few markets in the world which offers high prospects
for growth and earning potential in practically all areas of
business. Indian economic growth has been among the fastest in
the world in the recent years, growing 9.2% in 2007 and 9.6% in
2006. However, like most of the countries all over the world
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Indian economy is also facing tough times because of the
recession. But, Indian economy is largely driven by the domestic
demand and this is the reason why Indian managed a GDP growth
rate of 6.7% in the FY 2008, which is a commendable figure
considering the fact that most of the economies were in the red
during this financial year. Only China managed a higher growth
rate than India in the year 2008-09.
The rapid growth seen in the recent year can largely be
contributed to the liberalisation of the Indian economy in 1991.
India was a highly protected, semi-socialist autarkic economy till
1991. There were numerous structural and bureaucratic
impediments in setting up a new business and foreign investment
was not welcomed. The opening up of the Indian economy in
1991, unleashed the latent entrepreneurial talent of the Indian
and in less than two decades India has established itself as the
next economic superpower of the world. The Indian economy was
also able to attract the foreign invest that is quite necessary to
bridge the saving-investment gap and put the economy on the
right track.
Despite robust economic growth, India continues to face several
major problems. The recent economic development has widened
the economic inequality across the country. Despite sustained
high economic growth rate, approximately 80% of its population
lives on less than $2 a day (PPP), more than double the same
poverty rate in China, according to Human Development Report,
UN published in 2007/08.
31
Gross Domestic Product:
The gross domestic product (GDP) or gross domestic income (GDI),
a basic measure of an economy's economic performance, is the
market value of all final goods and services made within the
borders of a nation in a year. it is equal to the sum of the value
added at every stage of production (the intermediate stages) by all
the industries within a country, plus taxes less subsidies on
products, in the period. GDP is commonly used as an indicator of
the economic health of a country, as well as to gauge a country's
standard of living.
According to the CIA, The World Fact Book, the estimated figure
of GDP of India was $1.209 trillion. The nominal per capita
income was calculated to be $1016 per annum. Traditionally,
Indian economy is considered to be agriculture based economy
and despite a steady decline of its share in the GDP, is still the
largest economic sector and plays a significant role in the overall
socio-economic development of India. Industry accounts for
29.1% of the GDP and employ 17% of the total
workforce. However, about one-third of the industrial labour force
is engaged in simple household manufacturing only. In absolute
terms, India is 16th in the world in terms of nominal factory
output. The chart below shows the contribution of different
sectors to the GDP. The service sector is growing rapidly in the
past few years. It provides employment to 23% of work force, and
it is growing fast, growth rate 7.5% in 1991–2000 up from 4.5% in
1951–80. It has the largest share in the GDP, accounting for
53.7% in 2017 up from 15% in 1950.
32
Source: CIA, World Fact Book
The dynamics of Indian economy is changing and one of the

landmark structural changes achieved by Indian economy is that
today services sector contributes more than 50% of India's GDP,
which is a general characteristic of any developed economy.
The recent trends in GDP growth:

The Indian economy has been on high growth trajectory for the past
five years. The usual Hindu growth rate of 4-5% is a thing of past now
with the economy registering about 9% growth for three consecutive
year 2016-18. The recent development in the world economy pulled the
growth substantially in the FY 2019 but still India is the second fastest
growing major economy in the world. The march of the elephant is
expected to continue as the steps taken by the government is showing
the results and the world economy is on the path of recovery.
The graph below shows the growth trend in the past five years.
33
During the ninth five year plan (1997-02), the GDP growth was modest
at 5.5% (source:
indiabudget.nic.in) but the economic activities picked up in the tenth
plan and the growth rate surged to 7.8%, the highest so far for any
plan period which is only marginally short of the target figure of 8%
and if we overlook the dismal performance during theReuters.com
Source: year 2002-03,
the figure could be even higher.
A notable feature of growth during the Tenth Five Year Plan was the
resurgence of manufacturing. There was a sharp acceleration in the
growth of manufacturing from 3.3% during the Ninth Five Year Plan to
8.6 per cent during the Tenth Five Year Plan. The average growth of
manufacturing during the five years ending 2007-08 is expected to be
about 9.1 per cent. The contribution of manufacturing to overall
growth increased from about 9.6% during the Ninth Five Year Plan to
about 17.7% during the Tenth Five Year Plan. The target growth rate of
9% in the eleventh five year plan might be revised because of the
recent slump in the growth but still the revision should not be too
much on the downside.
34
The following table gives a comprehensive detail of the performance of
the various sectors of Indian economy in the past five years.
Source: indiabudget.nic.in
Inflation:
35
Technically speaking, inflation is the persistent rice in the price of
commodities. A moderate amount of inflation is important for the
proper growth of an economy like India because it attracts more
private investment. The RBI has followed a policy of keeping the
inflation in the range of 4-5% over the past decade.
There are several methods to measure inflation. In India, the inflation
is measured generally on the basis of wholesale price index (WPI) and
the data released by the RBI every Thursday on inflation is based on
the WPI only. However, there are other methods like Consumer Price
Index is also there which gives more accurate picture of the amount of
impact the rise in inflation has on the common people. In India, all the
commodities are broadly categorised into three groups namely Primary
Articles (which include food products), Fuel Products and the
Manufactured Products (such as steel, cement etc). The Weightage
given to these groups are 22.02, 14.23, and 63.75 respectively on a
scale of 100.
The inflation has been more or less under control over the past decade
but rise in the prices of fuel and the food articles last year pushed the
inflation rate to an unprecedented high level of 12.91% for the week
ended 02nd August, 2018. The average inflation rate for the year 2018
was seen at 9.11% (the average of 52-week inflation rate) and was even
higher if we consider the period Jun-Oct last year when the average
was 12.09% with the figure of inflation for the entire period was in
double-digit. This was the time when the price of crude oil reached to a
peak of $145 per barrel and the government had no other price but to
hike the price of fuel for the Indian consumers also as India imports
about 70% of its annual fuel demand. This further pushed the price of
other commodities and the inflation reached to 16 year high level of
almost 13%.
The trend of inflation for the past 17 months is quite evident in the
following graph:
36
The rise in the price, however, could not sustain
Source: Office of over long
Economic period of
Advisor
time as the contraction in demand the world over pulled down the
prices of commodities with the price of crude oil fell down to as low as
$30 per barrel. Also, the close monitoring of prices and appropriate
policy interventions initiated in the last year and a half by RBI helped
in maintaining price stability and reducing the impact of increase in
global prices on domestic consumers. The inflation rate for the week
ended 04th April, 2017 was 0.18% and after that there has been a
moderate upward movement in the WPI.
Index of Industrial Production:

Index of Industrial Production (IIP) is an abstract number, the
magnitude of which represents the status of production in
the industrial sector for a given period of time as compared to a
reference period of time. In simplest terms, it is an index which
details out the growth of various sectors in an economy. The
index seeks to reflect the growth in the country’s industrial
activity and excludes all kinds of services. Also base year needs
to be decided on the basis of which all the index figures would be
arrived at. In case of India the base year has been fixed at 1993-94
hence the same would be equivalent to 100 Points.
There is visible link between trends in IIP and the growth in
revenues of the CNX-500 companies over the past six years.
According to an article published in Business Line, dated April 6,
2018 the two parameters were said to be positively correlated
with a correlation co-efficient of close to 0.79. The correlation
indicates that if the IIP numbers point to a possible slowdown,
37
then corporate earnings numbers may well be headed the same
way, unless higher agricultural growth or a far superior
performance from the services sector offsets such a slowdown.
Over the period of analysis, IIP and revenue growth have moved mostly
in tandem, with only a few quarters of divergence. From a period of
slow growth in early 2001, both the parameters have made a sharp
comeback, accelerating sharply since 2005; the latest numbers once
again bring the hint of a slowdown in the economy. Macro-economic
factors such as inflation and interest rates also appear to have
influenced the growth in both these variables.
In 2011-12, both IIP and corporate revenue growth remained modest,
with India Inc’s growth just about matching the IIP readings. A high
base and a spike in inflation numbers the preceding year appear to
have contributed to this challenging period. By 2012-13 however, both
industrial production and corporate India’s sales were firmly on the
recovery path.
Over the next couple of years, sales growth for corporate India
began to accelerate and comfortably outpace the growth in IIP. By
June 2014, the CNX 500 revenue growth was almost four times
the IIP growth number. The increasing role of service industries
such as construction, engineering services and IT, not captured in
the IIP, could have aided corporate earnings in this period. The
economy’s boom phase, starting 2015, was reflected in all the key
indicators. By the quarter ended September 2016 GDP grew by
10.1 per cent over the previous year, IIP jumped to a 12 per cent
growth and revenues of CNX 500 companies surged by 33 per cent
for this quarter.
The above trends clearly suggest that boom phases in the IIP have
corresponded with those in corporate earnings, while slow phases
have been reflected in a sales slowdown. In this context, the
recent slowdown in IIP is a cause for concern on the pace of
growth likely in India Inc.
Source: The Business Line, April 6, 2018
Now, we take a look at the IIP data released by the Central
Statistical Organisation of the Ministry of Statistics and Programme
Implementation on May 12, 2019. The data gives a detailed picture of
IIP for the Fiscal year 2018-19.
38
Source: mospi.gov.in
The recent trend in IIP is quite dismal as far as the performance of

India Inc. is concerned. The IIP data in the latter half of the financial
year shows the declining trend in the Indian economy. Index of
Industrial Production (IIP) for March 09 draws its worst performance
since January 1993. The number has come at -2.3% against
economists projection of a contraction in the range of 0.5% to 0.7%.
As we look at the table, the cumulative growth for the FY 2018 was
2.4% which is way below than the cumulative growth figure of 8.5% in
FY 2017.
The number for the month of March this year was negative even as the
six core industries which constitute 26.7% of the industrial output
data grew at 2.9% in March, same as a year ago, raising hopes about a
better factory output data for this month. This was the highest
sequential core sector growth rate since September last year when it
grew at 3.9%.
During the Full year, April-March 2018-19, the six core sector
industries registered a growth of 2.7% as against 5.9% during the
corresponding period of the previous year. India's industrial
production in March was squeezed down due to a sharp decline in the
Capital Goods, Manufacturing and consumer durables even as
Electricity and Mining components reported decent growth.
The following figure shows a comparative performance of different

sectors of industry with the last year.
39
Source: RBI Bulletin June, 2009
Unemployment:
According to International Labour Organization, Unemployment is a
state when a person is available to work and seeking work but
currently without work. It is one of the most pressing problems of
any economy especially the underdeveloped ones. This has
macroeconomic implications too such as reduction in the output,
reduction in tax revenue, and rise in the government expenditure.
Unemployment was recognised as a problem in India as early as
1950s but faster economic growth, with special emphasis on
employment intensive sectors like the small scale industry, was
considered adequate to tackle it. But it was only during the seventh
five year plan (1985-90) that the government started taking concrete
steps to tackle the unemployment. The decades of 1980s showed a
relatively higher GDP growth but the growth in unemployment
outpaced it. Therefore, the government undertook a detailed
assessment of employment and unemployment trends in 1990s and on
the basis of the findings of this study, a new strategy to overcome the
problem of rising unemployment rate in India. The subsequent five
year plans saw an increased emphasis on the reduction of
unemployment rate if not the complete abolishment. Therefore,
government of India took a new initiative and came up with National
Rural Employment Guarantee Act in 2005 to provide more
employment opportunities to the rural people.
40
The unemployment trends on a yearly basis are shown in the graph
given in the next page.
Source: CIA, World Fact Book
Clearly, the unemployment rate has been declining in the recent years
but there is a lot to be done as the rate of increase in the labour force
may outpace the growth rate in employment generation in the coming
years.
Balance of Payment:
According to IMF, "Balance of Payments is a statistical statement
that summarizes transactions between residents and non-
residents during a period." The balance of payments (or BOP)
measures the payments that flow between any
individual country and all other countries. It reflects all payments
and liabilities to foreigners (debits) and all payments and
obligations received from foreigners (credits). Balance of payments
is one of the major indicators of a country's status in
international trade, with net capital outflow.
The Indian economy is facing tough times because of the recession.
The Global financial crisis has been affecting India’s foreign trade
since end-2008. It has been affecting investment flows too.
41
India’s Trade deficit on a balance of payments (BoP) basis has
widened significantly by 52.04 percent to $ 105.33 26 billion in
the nine months (April-December) of fiscal year*2008-09 from $
68.28 billion in the comparable period in previous fiscal. The
widening trade deficit is attributed to significant growth in
imports. During the nine-month period (April-December, 2018)
imports were up 30.60 percent to $ 238.86 billion from $ 182.89
percent in the comparable period in fiscal 2007-08.
The key features of India’s BoP that emerged at the end of Q3 of
fiscal 2018-19 were: the key features of India’s BoP that emerged
in April-December 2008 were: (i) widening of trade deficit led by
high growth in imports and slowdown in exports, (ii) increase in
invisibles surplus, led by remittances from overseas Indians and
software services exports, which financed about 65 per cent of
trade deficit, (iii) higher current account deficit due to large trade
deficit, (iv) lower net capital flows mainly led by large net
outflows under portfolio investment and large repayments under
short-term trade credit, and (v) sharp decline in reserves.
Some of the major highlights of BOP for the Q3 2018 can be
stated as follow:
Export growth turned negative during Q3 of 2018-19 for the first time
after 2011-12 due to global economic slowdown.
Import growth on BoP basis decelerated to a single digit during Q3 of
2018-19 after a gap of almost 6 years mainly led by lower crude oil
prices and non-oil imports.
The current account deficit at US$ 14.6 billion during Q3 of 2018-19
was the highest quarterly deficit since 1990.
For the first time since Q1 of 1998-99, the capital account balance
turned negative during Q3 of 2018-19 mainly due to net outflows
under portfolio investment, banking capital and short term trade
credit.
The foreign exchange reserves on BoP basis (i.e., excluding valuation)
declined due to widening of current account deficit combined with net
outflows under the capital account. The largest decline in reserves
during any one quarter in earlier years at US$ 4.7 billion was last
observed in Q3 of 2015-16.
42
On a BoP basis India’s Merchandise exports recorded a decline of
10.4% in the Q3 of 2018-19 as against an increase of 33% in the same
quarter of 2017-18.
Import payments, on a BoP basis, registered a lower growth rate of
8.9% in the Q3 of 2018-19 as compared to a high growth of 41.9% in
the same quarter of the previous financial year. The slowdown in
import growth is mainly attributed to oil import payment due to sharp
fall in the prices of crude oil during this quarter.
Capital account balance turned negative showing outflows of US$ 3.7
billion during the Q3 of 2018-19 (net inflows at US$ 31.0 billion during
Q3 of 2017- 18) for the first time since Q1 of 1998-99 mainly due to
net outflows under portfolio investment, banking capital and short-
term trade credit.
The gross capital inflows to India during Q3 of 2018-19 amounted to
US$ 70.0 billion (US$ 127.3 billion in Q3 of 2017-18) as against gross
outflows from India at US$ 73.6 billion (US$ 96.3 billion inQ3 of 2017-
18). Other components of the capital account which recorded a fall
during the quarter were inflows and outflows under foreign direct
investment and external commercial borrowings, while inflows under
short term trade credit also declined during the quarter.
Net FDI flows (net inward FDI minus net outward FDI) amounted to
US$ 0.8 billion in Q3 of 2018-19 (US$ 2.0 billion in Q3 of 2017-18).
Net inward FDI stood at US$ 6.7 billion during Q3 of 2018-19 (US$ 7.9
billion in Q3 of 2017-18). Net outward FDI remained buoyant at US$
5.9 billion in Q3 of 2018-19 (US$ 5.8 billion in Q3 of 2017-18).
Exchange Rate:
The foreign trade in India is done in terms of US Dollar and therefore
the US Dollar is considered to be hot currency in India. The Indian
rupee is not a prominent one in the world. But it is a currency
used by the people of a dynamic economy. Over the years the
Indian government has maintained the exchange rate of Indian
Rupee visa-a-versa US Dollar in the range of Rs. 40-47/US $ and
this policy was adopted mainly to support export and improve
trade balance. But last year rupee appreciated to a level of Rs.
37/US $ and then because of the impact of recession it
depreciated to an unprecedented low of almost Rs. 52/US $. After
43
then it gained some lost ground and appreciated to reach to a
level which can be called a satisfactory level.
The table below gives the trend of exchange rate of Indian Rupee
in terms of Dollar for the last one year.
Indian Rupee/1$
The rupee was exchanged at the level of below Rs. 40/US $ for the first
three months and for most part of the fourth month of last year. Then
there was a sharp depreciation in Indian Rupee in terms of US $ and it
reached to a level of Rs. 49.76 on October 24th, 2008. Then INR gained
some ground in November to reach to a level of Rs. 47.5/US $ on 7th
November, 2008. But the depreciation continued after that as INR
reached a new low of Rs. 51.68/US $ on 6th March, 2009 and after that
a gradual appreciation is seen over the past few months this year. The
situation is likely to remain the same and the rupee might see a level
of Rs. 46-47/US $ for the rest of this year.
Foreign Trade:
The export took a great hit during the last financial year because of the
recession that gripped the world economy. The first six months of the
last financial year was quite good as the export showed a steady
growth but in October last year the export turned negative for the first
time in a decade and since then it has not turned positive. The export
target of $200 Bn for this financial year was not achieved. The imports
were also down to single digit from January this year because of the
fall in the prices of crude oil but the overall trade balance was not
favourable as it grew more in negative territory.
44
The following table gives details of India’s foreign trade in the last
Financial Year.
Foreign Trade (Annual and Monthly)
2009-10(Provisional)
Month US dollar million
Export Import Balance
April 15,961 24,823 -8,862
May 15,550 26,684 -11,134
June 16,522 25,734 -9,213
July 17,072 29,054 -11,982
August 15,900 29,040 -13,140
September 14,131 26,417 -12,285
October 12,814 22,724 -9,910
November 10,206 22,405 -12,198
December 12,151 18,419 -6,267
January 11,422 16,415 -4,993
February 11,913 16,823 -4,910
March 11,516 15,561 -4,045
Source: DGCI & S and Ministry of Commerce & Industry.
45
Monetary Policy:
Monetary policy is the process by which the government, central
bank, or monetary authority of a country controls (i) the supply of
money, (ii) availability of money, and (iii) cost of money or rate
of interest, in order to attain a set of objectives oriented towards
the growth and stability of the economy.
In India, the main objective of the monetary policy has been to
control the inflation and ensure availability of credit to the
common people. The monetary measures are taken by RBI from
time to time to ensure the smooth functioning of Indian
Economy. This was quite evident in the last year when the prices
of commodities were rising to an unsustainable level; RBI
gradually tightened the monetary measures and hiked the key
rates like CRR, Repo Rate to suck the excess liquidity out of the
system to ensure that it doesn’t reach to an unmanageable level.
The Repo Rate and the CRR were hiked to 9% in August last year.
This was the first time since October 2000 that repo has touched
9 per cent while CRR touched 9 per cent for the first time since
late November 1999.
After September last year, the scenario changed a bit and the
market world over faced the credit crunch and there was
contraction in demand because of which crude oil prices touched
a new low of $ 32 per Barrel. The RBI responded to this new
situation by reversing its stance taken on the monetary policy for
the country and eased the liquidity flow by reducing the key rates
like CRR and Repo rate in s gradual manner.
From a level of 9% last August, the CRR was reduced to 5% this
January and the total amount of liquidity released in the market
because of this reduction was Rs. 1,60,000crore. The SLR was also
reduced, for the first time since 1997, to 24% from earlier level of
25% in November last year. The expansionary monetary policy
approach, however, is yet to show concrete results as the credit
growth has not picked up yet.
Fiscal Policy:
The Indian economy is driven ahead by strong fundamentals and
despite the global slowdown the economic growth was second highest
in the world.
46
The fiscal policy for the year 2019-20 will continue to be guided by the
objectives of keeping the economy on the higher growth trajectory
amidst global slowdown by creating demand through increased public
expenditure in identical sectors.
The growth trends for the last four years indicate a continuous
upswing in the economy. Increasing productivity, growth of service
sector and buoyancy in tax receipts associated with the growth and to
some extent, improvement in tax compliance and enforcement as a
result of a more rational, liberal and efficient tax system, have
contributed toward achieving quantitative goals set under the FRBM
Act. Reduction of fiscal deficit has been achieved from 4.5 per cent of
GDP in 2013-14 to 3.1 per cent of GDP in RE 2017-18. During the
same period, revenue deficit has declined from 3.6 per cent of GDP to
1.4 per cent. But because of the expansionary fiscal policy adopted by
the government in the latter half of last year the fiscal deficit came to a
level of 11% of the GDP for the FY 2018.
The Government announced two fiscal stimulus packages, first on 7th
AUGUST, 2018 of Rs. 3,00,000 core- including additional plan
expenditure of Rs 20,000crore and a 4-percentage-point cut in
excise duty and then on again 3rd January, 2019. The government did
not reveal the cost of second fiscal incentive, except to add that
tax cuts would involve revenue foregone of Rs 40,000crore in the
current fiscal.
Tax Collection:
Net direct tax collection during the fiscal 2018-19 stands at
Rs.3,38,212crore, up from Rs.312,202crore during 2007-08,
registering a growth of 8.33 percent. Growth in Corporate Taxes
was 10.84%, while Personal Income Tax (including FBT, STT and
BCTT) grew at 9.09%. Despite economic slow-down and
substantial relief to non-corporate taxpayers, direct tax
collections exceeded the previous year's collection by about
Rs.26,000crore.
Net direct tax collections during first two months of the current
fiscal (2018-19) stood at Rs.24,158crore, up from Rs.22,840crore,
registering a growth of 5.77%. Growth in Corporate Taxes was
5.56% (Rs.8,578crore as against Rs.8,126crore), while Personal
Income Tax (including FBT, STT and BCTT) grew at 5.92%
47
(Rs.15,559crore as against Rs.14,690crore). Overall refund outgo
during the period increased by 26.19% (Rs.11,375crore as against
Rs.9,014crore) while refunds to non-corporate taxpayers grew by
61.7% (Rs.2,149crore against Rs.1,329crore), spurred by faster
processing of returns on the new national computer network.
Source: IT Department, Govt. of India
Industry Analysis:
Target Industry: Financial Services Industry
The financial services refer to the services provided by the finance
industry. The finance industry encompasses a broad range of
organizations that deals with money. Among these organizations are
Banks, credit card companies, consumer finance companies, stock
brokerages, investment funds and some government supported and
sponsored enterprises.
The Indian Financial services industry is very diversified in nature with
every domain of finance is covered by the industry. The main emphasis
of our analysis will be on Non Banking Financial Companies (NBFCs)
and Insurance sector. IBFSL is basically an NBFC which is also
planning to offer insurance services apart from providing finance to the
people as well as private companies and partnership firms.
Industry of Non Banking Financial Companies:
A non-banking financial company (NBFC) is a company registered
under the Companies Act, 1956 and is engaged in the business of
loans and advances, acquisition of shares/ stock/ bonds/ debentures/
securities issued by government or local authority or other securities of
like marketable nature, leasing, hire-purchase, insurance business,
chit business, but does not include any institution whose principal
business is that of agriculture activity, industrial activity, sale/
purchase/ construction of immovable property.
A non-banking institution which is a company and which has its
principal business of receiving deposits under any scheme or
arrangement or any other manner, or lending in any manner is also a
non-banking financial company (residuary non-banking company).
48
NBFCs are doing functions akin to that of banks; however there are a
few differences:
(i) An NBFC cannot accept demand deposits (demand deposits are
funds deposited at a depository institution that are payable on demand
-- immediately or within a very short period -- like your current or
savings accounts.)
(ii) It is not a part of the payment and settlement system and as such
cannot issue cheques to its customers; and
(iii) Deposit insurance facility of DICGC is not available for NBFC
depositors unlike in case of banks.
Initially, the NBFCs that are registered with RBI are:
Equipment leasing company;
Hire-purchase Company;
Loan Company;
Investment Company.
With effect from December 6, 2016 the above NBFCs registered with
RBI have been reclassified as
Asset Finance Company (AFC)
Investment Company (IC)
Loan Company (LC)
Overview of NBFC Sector in India:
The following diagram depicts a brief snap of the structure of Non-
Banking sector in India.
Non-banking financial companies (NBFCs) have seen considerable
business model shift over last decade because of regulatory
environment and market dynamics.
49
In the early 2010s, the NBFC sector in India was facing following
problems:
High cost of funds
Slow industrial growth
Stiff competition with NBFCs as well as with banking sector
Small balance sheet size resulting in high cost of fund and low asset
profile
Non-Performing Assets
Majority of NBFCs were not able to face the pressure created on and
were wiped out. However, since FY2011-2012, there has been
significant improvement in the business model of existing NBFCs with
improvement in overall business environment. NBFCs have been able
to expand their resource profile by diversifying the funding avenues.
Further a strict control on asset quality and overheads, coupled with
use of innovative borrowing tools such as securitization has resulted in
improved profitability of NBFCs.But the recent developments in the
world financial market have posed a great challenge to the survival of
NBFCs. The companies in this sector have to formulate new strategies
to survive in this rapidly changing market.
50
Apart from mergers, other options waiting for NBFCs are to
change the tracks and explore new areas. They have to extend
their product portfolio to include asset management companies,
housing finance firms and to venture into newly opened insurance
sector for private participation. Examples of such initiatives are
launch of associate company of Sundaram Finance to disburse
housing loans, which has been the domain of HDFC and LIC
Housing Finance. Entry of Kotak Mahindra Finance Limited,
Sundaram Finance and Lakshmi General Finance into the
insurance business is another example. In the medium term most
NBFC's are looking at developing niche areas and concentrating
on fee based income to offset the loss in fund based activities.
Examples include the move of Ashok Leyland Finance to launch a
finance portal that would be used to sell products of other
financial intermediaries and to use its skill in collection to derive
a pure service income. The benefits of such horizontal integration
would be a diversification of the company's revenue stream which
goes with the old saying of putting one's egg in different baskets.
In the market of retail finance and financial loans, in order to beat
the competition, NBFCs have to increase the quality of their
service which is described as the convenience offered to the
customer in terms of speed, accuracy and product features.
Investors in future will also be looking for certain qualitative
details like reputation of the management and the financial track
record of the NBFC before they invest their monies. NBFCs stands
a good chance to succeed as they have an advantage of being
lower in operating cost as compared with other financial
intermediaries because of their small size, efficient operation and
fast decision making. NBFC's aggressive collection mechanism
and lower proportion of big corporate loans gives them an edge in
containing risk and also results in fewer amounts of NPAs which is
critical in the financial sector.
The role of NBFCs has become increasingly important from both
the macroeconomic perspective and the structure of the Indian
financial system. Over a period of time, one has to accept; that it
is only those which are big enough and serious about being in the
finance business will and must grow, survive and constantly
grows, NBFCs have to focus on their core strengths while
improving on weaknesses. They have to constantly search for new
products and services in order to remain competitive. The coming
51
years will be testing ground for the NBFCs and only those who will
face the challenge and prove themselves will survive in the long
run.
Recent Developments:
Total number of NBFCs registered with the Reserve Bank, consisting of
NBFCs-D (deposit-taking NBFCs), RNBCs, and mutual benefit
companies (MBCs), miscellaneous non-banking companies (MNBCs)
and Nidhi companies, declined from 12,968 at end-June 2017 to
12,809 at end-June 2018. The number of NBFCs-D declined from 401
at end-June 2017 to 364 at end-June 2018, mainly due to the exit of
many NBFCs from deposit taking activity. The number of RNBCs
declined to two at end-March 2018.
Of the 364 deposit-taking NBFCs, 335 NBFCs filed annual return for
the year ended March 2018 by the cut-off date of September 30, 2018.
Even though the public deposits declined by Rs.304crore in 2017-18
over the previous year, partly reflecting the decline in number of
reporting NBFCs, total assets increased significantly by Rs.23,019crore
(32.1 per cent), while net owned funds increased by Rs.3,974crore
(48.0 per cent) during the same period (Table VI.14). The rise in total
assets and net owned funds reflected partly the restoration of IFCI Ltd.
and TFCI Ltd. to the NBFC category. The share of public deposits held
by RNBCs in the total deposits of all NBFCs remained constant at 91.6
per cent in 2017-18 as compared with 2016-17. However, the share of
RNBCs in total assets of NBFCs declined to 25.8 per cent at end-March
2018 from 32.3 per cent at end-March 2017.
The ratio of deposits of reporting NBFCs to the aggregate deposits of
scheduled commercial banks dropped to 0.73 per cent at end-March
2018 from 0.92 per cent at end- March 2017 mainly due to the decline
in deposits of reporting NBFCs. The share of NBFC deposits in broad
liquidity aggregate also declined during the period.
52
Entry Barriers:
The Reserve Bank of India on 2nd June 2018 asked non-deposit taking
NBFCs to raise the minimum Capital to Risk-weighted Assets Ratio
(CRAR) from 10% now to 12% with immediate effect and further to
15% with effect from April 1, 2019.
NBFCs operate almost like banks, except for running a checking
account, or accounts, where money can be easily withdrawn by writing
checks, or using a debit card. Although the capital adequacy norm for
NBFCs is higher than what is required for a regular bank, they do not
have any statutory liquidity ratio (SLR)—the amount of money banks
are required to invest in government bonds— and cash reserve ratio
(CRR)— the amount of money banks are required to keep with RBI—
requirements.
The following guidelines are provided by RBI for a company venturing

into NBFC sector:
A minimum net owned fund (NOF) of Rs. 2crore
A minimum investment grade Credit Rating from CRISIL, CARE, ICRA,
Fitch etc.
Maximum rate of interest offered on deposit is 11%
Minimum duration of deposit is 1 year while the maximum is 6 years.
Besides these regulations, there are several other regulations imposed
by RBI on NBFC like exposure norms, corporate governance
requirement, NPA and provisioning for bad debts, statutory audit as
per RBI guidelines, transfer of certain amount of profit to reserves and
others.
Some of the important regulations relating to acceptance of deposits by
NBFCs are as under:
The NBFCs are allowed to accept/renew public deposits for a
minimum period of 12 months and maximum period of 60 months.
They cannot accept deposits repayable on demand.
53
NBFCs cannot offer interest rates higher than the ceiling rate
prescribed by RBI from time to time. The present ceiling is 11 per cent
per annum. The interest may be paid or compounded at rests not
shorter than monthly rests.
NBFCs cannot offer gifts/incentives or any other additional benefit to
the depositors.
NBFCs (except certain AFCs) should have minimum investment grade
credit rating.
The deposits with NBFCs are not insured.
The repayment of deposits by NBFCs is not guaranteed by RBI.
There are certain mandatory disclosures about the company in the
Application Form issued by the company soliciting deposits.
Company Analysis:
Company Profile:
Indiabulls Group is one of the top business houses in the country with
business interests in Real Estate, Infrastructure, and Financial
Services, Retail, Multiplex and Power sectors. Indiabulls Group
companies are listed in Indian and overseas financial markets. The
Networth of the Group exceeds USD 2 billion. Indiabulls has been
conferred the status of a “Business Super brand” by The Brand
Council Super brands India.
Indiabulls Financial Services is an integrated financial services
powerhouse providing Consumer Finance, Housing Finance,
Commercial Loans, Life Insurance, Asset Management and Advisory
services. Indiabulls Financial Services Ltd is a registered Non-Banking
Financial Corporation. Indiabulls Financial Services Ltd is amongst 68
companies constituting MSCI - Morgan Stanley India Index. Indiabulls
Financial is also part of CLSA’s model portfolio of 30 Best Companies
in Asia. Indiabulls Financial Services signed a joint venture agreement
with Sogecap, the insurance arm of Societe Generale (SocGen) for its
upcoming life insurance venture. Indiabulls Financial Services in
54
partnership with MMTC Limited, the largest commodity trading
company in India.
Today it enjoys a leading position in finance and real estate services in
India. Presently its expanse includes around 640 branches and over
4.5 Lakhs customers. Indiabulls Financial Services Ltd. has listings in
National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and
Luxembourg Stock Exchange. The net worth of Indiabulls in the
present financial year is 510 million US Dollars. Some of the largest
financial institutions like Fidelity Funds, Goldman Sachs, Merrill
Lynch, Morgan Stanley, and Farallon Capital are the majority
shareholders.
Company History:
Indiabulls Financial Services Limited was incorporated on January 10,
2000 as M/s Orbis InfoTech Private Limited at New Delhi under the
Companies Act, 1956 with Registration No. 55 - 103183. The name of
Company was changed to M/s. Indiabulls Financial Services Private
Limited on March 16, 2001 due to change in the main objects of the
Company from InfoTech business to Investment & Financial Services
business. It became a Public Limited Company on February 27, 2004
and the name of Company was changed to M/s. Indiabulls Financial
Services Limited.
The Company was promoted by three engineers from IIT Delhi, and
has attracted more than Rs.700 million as investments from venture
capital, private equity and institutional investors such as LNM India
Internet Ventures Ltd., Transatlantic Corporation Ltd., Farallon
Capital Partners, L.P., R. R Capital Partners L.P., and Infinity
Technology Trustee Pvt. Ltd. and has developed significant
relationships with large commercial banks such as Citibank, HDFC
Bank, Union Bank, ICICI Bank, ABN Amro Bank, Standard Chartered
Bank, Lord Krishna Bank and IL&FS.
The Company and its subsidiaries have facilities from the above
mentioned banks and financial institutions aggregating to Rs. 1760
million. The Company headquarters are co-located in Mumbai and
Delhi, allowing it to access the two most important regions for Indian
financial markets, the Western region including Mumbai, rest of
Maharashtra and Gujarat; and the Northern region, including the
National Capital Territory of Delhi, nearby cities, parts of Haryana,
Uttar Pradesh and Punjab; and access the highly skilled and educated
workforce in these cities. The Marketing and Sales efforts are
55
headquartered out of Mumbai; with a regional headquarter in Delhi;
and its back office, risk management, internal finances etc. are
headquartered out of Delhi, allowing the company to scale these
processes efficiently for the nationwide network.
IBFSL fixes an issue price of Rs. 19 per share for its IPO which was
oversubscribed 18.5 times. The response was quite impressive from all
categories of investors. The book was finally subscribed 18.5 times
with over 1.3lakh bids. The institutional portion was subscribed more
than 12 times, the retail portion 25 times and the non-institutional
portion 24 times.
Source: Religare Technova
Listing Details - Indiabulls Financial Services
Key Dates
Year Ending Month Mar
AGM Date (Month) Sep
Book Closure Date (month) Aug/Sep
Subsidiaries:
Indiabulls Housing Finance Ltd
Indiabulls Housing Finance Limited provides home loans and
loans against property. The company also offers plot loans and
loans against residential, commercial, and rental property.
The company is headquartered in New Delhi, India. Mr. Gagan
Banga is the Director of the company.
Indiabulls Credit Services Ltd
Indiabulls Credit Services, Ltd. operates as a financial services
company in India. It offers personal loans, and broking and
financial services. The company is based in New Delhi, India with
additional offices in Chandigarh, Ludhiana, Amritsar, and Ambala
in India.
Mr. Amit Talgeri is the chief operating officer of the company.
56
Indiabulls Commercial Credit Ltd
Indiabulls Commercial Credit Services Ltd offers commercial credit

loans and Business Loans for the customers. The company is based in
New Delhi, India.
57
Products and Services Offered:
Home Loan:
Home loans by Indiabulls can be availed for
Purchasing a already constructed house/flat
Purchasing a residential plot
For re-financing existing loans taken from other banks or housing
finance companies.
The minimum amount that can be availed is Rs. 5Lakhs. Loan against
property is provided against:
Residential,
Commercial and
Rental properties
Commercial Vehicle Loan:
Indiabulls Commercial Vehicle Loans offers commercial auto loans
to a variety of business owners. The Commercial Vehicle Finance
provided by us helps the small and medium operators to acquire
vehicles with minimum hassle and documentation. We provide
customized financing options to suit your needs.
Business Loans:
IBFSL also provides SME loans for the budding entrepreneurs as well
as the established partnership firms and Pvt. Limited Companies.
The key features of Business Loans can be summed up as follow:
Attractive interest rates
Monthly repayment mode ranging from 12 to 48 months
Borrow from Rs. 5Lakhs to Rs. 50Lakhs
Speedy loan approvals.
Apart from the above mentioned services, the company also offer
services like loan against property, commercial credit loan, loan
against shares, and insurance distribution.
58
Top Competitors:
The financial services industry in India is very competitive with the
presence of some very good brand names in the domain. The
competition is quite tough here.
The top competitors of the company are:
Reliance Capital Ltd.
Mahindra Financial Services Ltd.
Religare Enterprises Ltd.
Motilal Oswal Financial Services Ltd
India Infoline
Updates on New Business Ventures
Indiabulls Societe Generale Life Insurance Company Ltd
• Company expects Life Insurance Business to be a key growth driver

over the next few years and is looking at making substantial
investments to scale up the business soon after completing the
regulatory process.
• Company will leverage on its strong capital base and large
distribution strength to rapidly gain market share.
• Licensing process is expected to be completed in CY2009. The global
market slowdown had caused uncertainty in the environment and
resulted in delay in regulatory approvals. The company now expects to
complete the approval process over the next 6 months.
• Appointment of Key Management Personnel has been completed.
• Set up of Project Management Office, key vendors and technology
providers has also been completed.
International Multi Commodity Exchange Ltd
59
• The national level multi commodity exchange being set up as a joint
venture between Indiabulls Financial Services Limited and MMTC will
go live by end of July 2009.
• In line with the Government ownership guidelines, entire paid-up
capital of Rs 100crore has been subscribed by IBFSL (40%), MMTC
(26%), Indian Potash Ltd (10%), and Others (24%)
• Recognition of the exchange from Forward Markets Commission
expected shortly.
• Technology platform for the exchange including network
infrastructure is at advanced stage of completion and membership
campaign is underway.
• Exchange has identified about a dozen contracts in the first phase
comprising bullion, agro and base metals and energy with strong
delivery support
Share Holding Pattern:
Promoters 29.72
Institutional Investors 27.32
Private Corporate Bodies 1.89
NRI's/OCB's/Foreign Others 16.19
General Public 6.98
Others 17.9
Dividend Policy of the company:
60
Source: Money.Rediff.com
61
Indiabulls Housing Finance Limited (CIN: L65922DL2005PLC13602
Unaudited Consolidated Financial Results
for the quarter and six months ended September 30, 2018
(Rupees in Crores)
Statement of Consolidated Unaudited Results for the quarter and six months ended S
Quarter ended
Particulars 30.09.18 30.06.18 30.09.17
(Unaudited) (Unaudited) (Unaudited)
1 Revenue from operations 3,980.39 3,890.27 3,155.68
2 Other income (Refer Note 5) 274.88 181.05 296.77
3 Total revenue (1+2) 4,255.27 4,071.32 3,452.45
4 Expenses
Employee benefits expense Finance 196.31 209.03 178.39

costs
2,556.37 2,335.14 1,911.30
Depreciation and amortisation
expense Other expenses 10.94 8.43 7.83
Total expenses
105.09 116.28 246.96
2,868.71 2,668.88 2,344.48
5 Profit before tax (3-4) 1,386.56 1,402.44 1,107.97
6 Tax expense
Current tax expense (Net of MAT credit 445.35 323.10 140.05

entitlement)
62
Deferred Tax (Credit) / Charge (93.71) 30.66 115.67
Total Tax Expense 351.64 353.76 255.72
7 Profit for the Period / Year (5-6) 1,034.92 1,048.68 852.25
8 Add: Share of Profit / (Loss) of 9.23 6.04 9.10

Associate
9 Profit for the period / year 1,044.15 1,054.72 861.35

attributable to Minority Interest (7+8)
10 Less: Share of Profit attributable to - - -

Minority Interest
11 Profit for the period / year 1,044.15 1,054.72 861.35

attributable to the Shareholders of the
Company (9- 10)
12 Other comprehensive income
Other comprehensive income / loss (net of 90.39 (16.74) (21.71)

tax)
13 Total comprehensive income (after 1,134.54 1,037.98 839.64

tax) (11+12)
14 Paid-up Equity Share Capital 85.34 85.32 84.87
63
15 Earnings per Share (EPS) before extraordinary items
*(EPS for the quarters and six months are not annualised)
-Basic (Amount in Rs.) 24.48 24.73 20.30
-Diluted (Amount in Rs.) 24.25 24.48 20.04
-Face Value (Amount in Rs.) 2.00 2.00 2.00
Earnings per Share (EPS) after extraordinary items
16 Items exceeding 10% of Total Expenses
-ECL for Loan assets / Bad Debts Written Off (Net) 40.28 64.84 199.7
Notes to the Financial Results:

1 The Group has adopted Indian Accounting Standards ('Ind AS') notified u
the Companies Act 2013 ('the Act') read with the Companies (Indian Accoun
Rules, 2015 from April 01, 2018 and the effective date of such transition is
transition has been carried out from the erstwhile Accounting Standards no
read with relevant rules issued thereunder and guidelines issued by the Nat
('NHB') (Collectively referred to as 'the Previous GAAP'). Accordingly, the imp
been recorded in the opening reserves as at April 01, 2017. The correspondi
these results have been prepared on the basis of the previously published re
GAAP for the relevant periods, duly re-stated to Ind AS. These Ind AS adjust
reviewed by the statutory auditors.
These financial results have been drawn on the basis of Ind AS accounting s
applicable to the Group as at September 30, 2018 based on MCA Notificatio
G.S.R. 365(E) dated February 16, 2015 and March 31, 2016 respectively. Th
these financial results for the current and previous periods may require adj
changes in financial reporting requirements arising from new standards, m
existing standards, guidelines issued by Ministry of Corporate
Affairs and NHB / RBI or changes in the use of one or more optional assum
retrospective application of certain Ind AS permitted under Ind AS 101 .
64
2 Reconciliation between financial result previously reported (Previous GAAP) and (Rupe
Ind AS
Quarte
ended
Particulars 30.09.1
(Unaudi
Total profit as per Previous GAAP 861.0
Adjustment on account of effective interest rate / derivatives valuation (99.78
Adjustment due to fair valuation of employee stock options (16.92
Adjustment on account of expected credit loss (17.70
Adjustment on account of gain from excess interest spread on assignment 112.6

transactions and Securitisation
Other Adjustments 16.24
Tax Impact on above including reversal of Deferred Tax Liability on 36 (1) (viii) 5.83
for the quarter
Net profit under Ind AS 861.3
Other comprehensive income / loss (net of tax) (21.71
65
3 Statement of Assets and Liabilities: (Rupees in Crores)
As at
Particulars 30.09.18
(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment 113.22
Goodwill on Consolidation 57.83
Other Intangible 15.18
Financial assets
-Investments 2,947.55
-Loans 102,571.72
Other Financial Assets 1,174.22
Deferred tax assets (net) 410.89
Other non-current assets 426.68
Sub-total - Non-current assets 107,717.29
Current assets
-Trade Receivables 34.62
-Cash and cash equivalents 3,656.59
-Bank Balances other than above 416.82
-Loans 11,661.45
66
-Other financial assets 820.09
Current tax assets 490.90
Other current assets 207.53
Sub-total - Current assets 32,086.31
TOTAL- ASSETS 139,803.60
EQUITY AND LIABILITIES
Equity
Equity share capital 85.34
Other equity 15,383.67
Total Equity 15,469.01
67
Liabilities
Non-current liabilities
Financial Liabilities
- Borrowings 70,405.
- Other financial liabilities 423.9
Provisions 149.7
Other non current liabilities 303.7
Sub-total - Non-Current Liabilities 71,283.
Current liabilities
- Trade Payables 29.02
- Other financial liabilities 20,608.
Other current liabilities 95.26
Current tax liabilities (net) 61.38
Provisions 9.32
Sub-total - Current Liabilities 53,051.
TOTAL EQUITY AND LIABILITIES 139,803
The consolidated financial results of Indiabulls Housing Finance Limited ('IB

for the quarter and six months ended September 30, 2018 have been review
Committee and subsequently approved at the meeting of the Board of Direct
15, 2018. The consolidated financial results have been subjected to a limite
Statutory Auditors of the Company.
The income received/recognised by the Company from its Cash equivalents
68
investments in the form of Dividend Income on Units of Mutual Funds, Prof
Mutual Funds (unquoted) and Profit on sale of Current Investments, is inclu
above.
In the standalone financial statements of Indiabulls Housing Finance Limite
Acorn Oak North Holdings Limited has been accounted for on fair value bas
increase in total equity (net worth) of Rs. 1,906.47crores to Rs. 16,612.40cr
total equity (net worth) does not yet include impact of fair valuation of this i
Consolidated equity would have increased to Rs. 17,349.54crores, had this
the consolidated levels also.
The Group has availed the exemption provided by Securities and Exchange
vide Circular No. CIR/CFD/FAL/62/2016 in respect of disclosure requirem
disclosure of financial results and Statement of Assets and Liabilities for the
March 31, 2018. Accordingly, the financial results and Statement of Assets
year ended and as at March 31, 2018 is not disclosed.
The Company’s main business is financing by way of loans for purchase or
residential houses, commercial real estate and certain other purposes in Ind
of the Company revolve around the main business. Accordingly, there are n
segments as per IND-AS 108 dealing with Operating Segment.
Figures for the prior year / period have been regrouped and / or reclassified
necessary.
69
Indiabulls Housing Finance Limited (CIN: L65922DL2005PLC13602
Unaudited Standalone Financial Results
for the quarter and six months ended September 30, 2018
(Rupees in Crores)
Statement of Standalone Financial Results for the quarter and six months ended Se
Quarter ended
Particulars 30.09.18 30.06.18 30.09.1
(Unaudited) (Unaudited) (Unaudit
1 Revenue from operations Other income (Refer Note 5) 3,612.93 3,601.12 3,006.2
2 Total revenue (1+2) 268.87 188.33 293.4
3 3,881.80 3,789.45 3,299.6
4 Expenses
Employee benefits expense Finance costs 183.16 193.78 161.9
Depreciation and amortisation expense Other expenses 2,378.25 2,200.73 1,860.7
Total expenses 9.07 7.52 6.60
61.61 96.20 233.9
2,632.09 2,498.23 2,263.2
5 Profit before tax (3-4) 1,249.71 1,291.22 1,036.4
6 Tax expense
Current tax expense (Net of MAT credit entitlement) 396.94 289.36 110.7
Deferred Tax (Credit) / Charge (80.49) 33.91 121.8
Total Tax Expense 316.45 323.27 232.6
7 Profit for the Period / Year (5-6) 933.26 967.95 803.8
8 Other comprehensive income
Other comprehensive income / loss (net of tax) 202.83 (70.25) 1,130.6
70
9 Total comprehensive income (after tax) (7+8) 1,136.09 897.70 1,934.4
10 Paid-up Equity Share Capital 85.34 85.32 84.87
11 Earnings per Share (EPS) before extraordinary items
Earnings per Share (EPS) after extraordinary items
12 Items exceeding 10% of Total Expenses
-ECL for Loan assets / Bad Debts Written Off (Net) 8.10 53.38 192.3
13 Debt Equity Ratio
(Loan Funds / Own Funds)
71
14 Debt Service Coverage Ratio
[(Earnings before Interest and Tax for the period/year) + (Principal collected from Customer
during the period/year)] / [(Interest Expense for the period/year) + (Principal repaid of the
borrowings during the period/year)]
15 Interest Service Coverage Ratio
(Earnings before Interest and Tax / Interest Expense)
Notes to the Financial Results:
1 The Company has adopted Indian Accounting Standards ('Ind AS') notified under Section 13
('the Act') read with the Companies (Indian Accounting Standards) Rules, 2015 from April 01,
such transition is April 01, 2017. Such transition has been carried out from the erstwhile Ac
under the Act, read with relevant rules issued thereunder and guidelines issued by the Nati
(Collectively referred to as 'the Previous GAAP'). Accordingly, the impact of transition has be
reserves as at April 01, 2017. The corresponding figures presented in these results have been
previously published results under previous GAAP for the relevant periods, duly re-stated
adjustments have been reviewed by the statutory auditors.
These financial results have been drawn on the basis of Ind AS accounting standards that are
at September 30, 2018 based on MCA Notification G.S.R.111(E) and G.S.R. 365(E) dated Febru
2016 respectively. There is a possibility that these financial results for the current and pre
adjustments due to changes in financial reporting requirements arising from new standards,
standards, guidelines issued by Ministry of Corporate Affairs and NHB or changes in the u
assumptions from full retrospective application of certain Ind AS permitted und
72
(Rupees in Crores)
Six
Reconciliation between financial result previously reported (Previous GAAP) and Quarter Mon
Ind AS 3 Statement of Assets and Liabilities: ended in
(Rupees end
30.09.17 30.0
Particulars (Unaudite (Unau
Crores)
d) d)
Total profit as per Previous GAAP 796.07 1,53
Adjustment on account of effective interest rate / derivatives valuation (90.90)
As at (15
Adjustment due to fair valuation of employee stock options (16.54) (2
Adjustment on account of expected credit loss (14.75) (1
Particulars
Adjustment on account of gain from excess interest spread on assignment transactions 30.09.18 112.45 17
and Securitisation
Other Adjustments 15.84 1
Tax Impact on above including reversal of Deferred Tax Liability on 36 (1) (viii) for the (Unaudited)
1.66 2
quarter
Net profit under Ind AS 803.83 1,55
ASSETS
Other comprehensive income / loss (net of tax) 1,130.63 1,12
Non-current assets
Property, plant and equipment 103.22
Other Intangible 10.15
73
Financial assets
-Loans 91,392.14
Other Financial Assets 1,174.22
Other non-current assets 302.68
Sub-total - Non-current assets 100,169.15
Current assets
-Trade Receivables 10.62
-Cash and cash equivalents 3,314.45
-Bank Balances other than above 350.50
-Loans 11,016.13
-Other financial assets 809.13
Current tax assets 481.13
Other current assets 368.88
Sub-total - Current assets 30,619.07
TOTAL- ASSETS 130,788.22
EQUITY AND LIABILITIES
Equity
Equity share capital 85.34
Other equity 16,527.06
74
Total Equity 16,612.40
Liabilities
Non-current liabilities
- Borrowings 64,430.81
- Other financial liabilities 423.95
Provisions 143.13
Deferred Tax liabilities 240.83
Other non current liabilities 303.70
Sub-total - Non-Current Liabilities 65,542.42
75
Current liabilities
- Trade Payables 29.02
- Other financial liabilities 19,972.
Current tax liabilities (net) 47.60
Provisions 8.24
Sub-total - Current Liabilities 48,633.
TOTAL EQUITY AND LIABILITIES 130,788
The standalone financial results of Indiabulls Housing Finance Limited ('IBHFL', 'the Compa
months ended September 30, 2018 have been reviewed by the Audit Committee and subseque
of the Board of Directors held on October 15, 2018. The standalone financial results have b
review by the Statutory Auditors of the Company.
The income received/recognised by the Company from its Cash equivalents and Current
Dividend Income on Units of Mutual Funds, Dividend from
Subsidiaries, Profit on appreciation of Mutual Funds (unquoted) and Profit on sale of Current
Other Income above.
The Company has availed the exemption provided by Securities and Exchange Board of Ind
CIR/CFD/FAL/62/2016 in respect of disclosure requirements pertaining to disclosure of finan
Assets and Liabilities for the year ended and as at March 31, 2018. Accordingly, the financia
Assets and Liabilities for the year ended and as at March 31, 2018 is not d
During the current quarter, upon exercise of Stock options by the eligible employees, the Comp
of 102,855 (One Lakh Two Thousand Eight Hundred and Fifty Five) Equity shares of face valu
to the said allotment, the paid-up Equity share capital of the Company stands increased
divided into 426,592,821 Equity shares of face value Rs. 2/- each to Rs. 853,391,352/- divid
shares of face value Rs. 2/- each.
During the current quarter, ICRA has assigned / reaffirmed the following
76
During the current quarter, CARE has reaffirmed the following Ratin
During the current quarter, CRISIL has reaffirmed the following Ratin
Non-Convertible Debentures of Rs. 343.00 Billion CRISIL AAA/Stabl
Total Bank Loan Facilities of Rs. 245.4998 Billion Long Term Rating - CRISIL AAA/
Long term Bank Facilities of Rs. 470.00 Billion [ICRA]AAA (Assigned)
Non-convertible debenture programme of Rs. 452.00 Billion
Term Rating - CRISIL
[ICRA]AAA (Reaffirmed)
Subordinated Debt Programme of Rs. 50.0 Billion [ICRA]AAA (Reaffirmed)
Commercial Paper Programme of Rs. 250.00 Billion [ICRA]A1+ (Reaffirmed)
Retail Bonds of Rs. 150.00 Billion
Retail bonds Programme of Rs. 150.00 Billion
CRISIL AAA/Stabl
[ICRA]AAA (Reaffirmed)
ShortofTerm
Non-convertible debentures Non-Convertible
Rs. 413.00 Billion Debenture of Rs.
CARE10.00
AAA (Outlook:Stable) CRISIL A1+
Subordinate Debt of Rs. 50.00 Billion CARE AAA (Outlook:Stable)
Billion CARE AA+ (Outlook:Stable)
Perpetual Debt of Rs. 2.00 Billion
Long-term / Short-term Bank Facilities of Rs. 525.00 Billion CARE AAA (Outlook:Stable) / CARE A1+
Public Issue of Non-Convertible Subordinated Debt of Rs. 25.0 Billion
Debentures of Rs. 68.0114 Billion CARE AAA (Outlook:Stable) CRISIL AAA/Stabl
Public Issue of Subordinate Debt of Rs. 1.9886 Billion CARE AAA (Outlook:Stable)
Commercial Paper Programme of Rs. 250.00 Billion CRISIL A1+
77
During the current quarter, Brickwork has reaffirmed the following Ratings:-
NCD Issue of Rs. 270.00 Billion BWR AAA (Outlook: St
Subordinate Debt Issue Program of Rs. 30.00 Billion BWR AAA (Outlook: St
Perpetual Debt Issue of Rs. 1.50 Billion BWR AA+ (Outlook: St
Secured NCD (Public Issue) and Subordinated Debt BWR AAA (Outlook: St
(Public Issue) of Rs. 70.00 Billion
The Company’s main business is financing by way of loans for purchase or construction
of residential houses, commercial real estate and certain other purposes in India. All
other activities of the Company revolve around the main business. Accordingly, there
are no separate reportable segments as per IND-AS 108 dealing with Operating
Segment.
The second interim dividend of Rs. 10/- per equity share (500% of the face value of Rs.
2/- per equity share) was approved at the meeting of the Board of Directors of the
Company held on August 02, 2018 and the Company had transferred Rs. 426.59 Crores
(excluding corporate dividend tax) on August 06, 2018 and Rs. 0.10Crore (excluding
corporate dividend tax) on August 13, 2018 into the designated Dividend Account.
The Board of Directors of the Company at its meeting held on October 15, 2018 has
declared third interim dividend of Rs. 10/- per equity share.
Figures for the prior year / period have been regrouped and / or reclassified wherever
considered necessary.
Registered Office: M-62&63, First Floor, Connaught Place, New Delhi- 110 001.For and
on behalf of the Board of Directors
Place : Mumbai Gagan Banga
Date : October 15, 2018 Vice-Chairman, Managing Director & CEO
78
Indiabulls Housing Finance Limited (as standalone entity)
(CIN: L65922DL2005PLC136029)
Unaudited Standalone Financial Results for the six months ended Septem
Additional Information in Compliance with Chapter V (Obligations of Listed Entity Wh

Convertible Debt Securities) of Securities And Exchange Board Of India (Listing Oblig
Requirements) Regulations, 2015
(a) Details of Credit Rating
During the current quarter, ICRA has assigned / reaffirmed the followin
Long term Bank Facilities of Rs. 470.00 Billion [ICRA
Non-convertible debenture programme of Rs. 452.00 Billion [ICRA]
Subordinated Debt Programme of Rs. 50.0 Billion [ICRA]
Commercial Paper Programme of Rs. 250.00 Billion [ICRA
Retail bonds Programme of Rs. 150.00 Billion [ICRA]
During the current quarter, CARE has reaffirmed the following Rat
Non-convertible debentures of Rs. 413.00 Billion CARE AA
Subordinate Debt of Rs. 50.00 Billion CARE AA
Perpetual Debt of Rs. 2.00 Billion CARE AA
Long-term / Short-term Bank Facilities of Rs. 525.00 Billion CARE AAA (Ou
Public Issue of Non-Convertible Debentures of Rs. 68.0114 Billion CARE AA
Public Issue of Subordinate Debt of Rs. 1.9886 Billion CARE AA
During the current quarter, CRISIL has reaffirmed the following Rat
Non-Convertible Debentures of Rs. 343.00 Billion CRIS
Total Bank Loan Facilities of Rs. 245.4998 Billion Long Term Rat
79
Shor
Retail Bonds of Rs. 150.00 Billion CRIS
Short Term Non-Convertible Debenture of Rs. 10.00 Billion
Subordinated Debt of Rs. 25.0 Billion CRIS
Commercial Paper Programme of Rs. 250.00 Billion
During the current quarter, Brickwork has reaffirmed the following R
NCD Issue of Rs. 270.00 Billion BWR AA
Subordinate Debt Issue Program of Rs. 30.00 Billion BWR AA
Perpetual Debt Issue of Rs. 1.50 Billion BWR AA
Secured NCD (Public Issue) and Subordinated Debt (Public Issue) of BWR AA
Rs. 70.00 Billion
(b) Asset Cover available
The listed Non-Convertible Debentures of the Company aggregating Rs. 45,002.77Crore a

are secured by way of paripassu charge on the Company's current assets (both present
future loans assets (including monies receivable thereunder) and certain properties. The
the required cover to be maintained for the said debentures.
Particulars As on S
(c) Debt Equity Ratio
(Loan Funds / Own Funds)
80
(d) Previous due dates for the payment of interest / repayment of Details
principal of Non Convertible Debentures
(e) Next due date for the payment of interest/ dividend of Non-
Convertible Preference Shares /Principal along with the amount of
interest/ dividend of Non-Convertible Preference Shares payable and
the redemption amount
(f) Debt Service Coverage Ratio
[(Earnings before Interest and Tax for the period/year) + (Principal

collected from Customers during the period/year)] / [(Interest
Expense for the period/year) + (Principal repaid of the borrowings
during the period/year)]
(g) Interest Service Coverage Ratio
(Earnings before Interest and Tax / Interest Expense)
(h) Outstanding Redeemable Preference Shares (quantity and value)
(i) Capital Redemption Reserve (Rs. in Crores)

1
(i) Debenture Redemption Reserve (Rs. in Crores)

2
(j) Net worth (Rs. in Crores)
(k) Net Profit after Tax (Rs. in Crores)
(l) Earnings per Share (EPS) - Basic (Amount in Rs.)
81
Detail of Payment of Interest of Non Convertible Debentures from 1st April 2018 to 30th
September 2018- Annexure -1 (a)
S.No. ISIN No. Date of Date of Principal Amount Due Date of

issue Maturity
Interest
1 INE148I0710 03-Apr-12 03-Apr-22 1,250,000,000 3-Apr-18

0
2 INE148I07BR 30-Mar-15 04-Apr-18 200,000,000 4-Apr-18

1
3 INE148I07HF 06-Apr-17 06-Apr-22 10,000,000,000 6-Apr-18

3
4 INE148I07IH 27-Dec-17 06-Apr-21 2,750,000,000 6-Apr-18

7
5 INE148I07EJ 12-Apr-16 12-Apr-19 250,000,000 12-Apr-18

2
6 INE148I07EK 12-Apr-16 12-Apr-21 250,000,000 12-Apr-18

0
7 INE148I07EL 12-Apr-16 11-Apr-26 350,000,000 12-Apr-18

8
8 INE148I07HK 20-Apr-17 20-Apr-20 300,000,000 20-Apr-18

3
9 INE148I0799 21-Oct-14 20-Apr-18 150,000,000 20-Apr-18

3
10 INE148I07HO 21-Apr-17 19-Sep-19 250,000,000 21-Apr-18

5
11 INE148I07BM 19-Mar-15 25-Apr-18 240,000,000 25-Apr-18

2
12 INE148I07AX 30-Dec-14 27-Apr-18 40,000,000 27-Apr-18

1
13 INE148I07EM 29-Apr-16 29-Apr-26 2,070,000,000 30-Apr-18

6
14 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-Apr-18
82
7
15 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-Apr-18

1
16 INE148I07EN 10-May-16 10-May-21 250,000,000 10-May-18

4
17 INE148I07EO 10-May-16 08-May-26 250,000,000 10-May-18

2
18 INE148I07BV 19-May-15 19-May-25 250,000,000 19-May-18

3
19 INE148I07EP 23-May-16 21-May-21 250,000,000 23-May-18

9
20 INE148I07ES 30-May-16 29-May-26 250,000,000 30-May-18

3
21 INE148I07FL 09-Aug-16 09-Aug-18 5,000,000,000 11-May-18

5
22 INE148I07FL 09-Aug-16 09-Aug-18 1,000,000,000 11-May-18

5
23 INE148I07FP 11-Aug-16 10-Aug-18 2,900,000,000 11-May-18

6
24 INE148I07FP 11-Aug-16 10-Aug-18 1,100,000,000 11-May-18

6
25 INE148I07FP 11-Aug-16 10-Aug-18 700,000,000 16-May-18

6
26 INE148I07FQ 11-Aug-16 10-Aug-18 350,000,000 16-May-18

4
27 INE148I07FL 09-Aug-16 09-Aug-18 250,000,000 16-May-18

5
28 INE148I0811 23-May-13 23-May-23 200,000,000 23-May-18

6
29 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-May-18

7
30 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-May-18
83
1
31 INE148I07EU 01-Jun-16 29-May-21 100,000,000 1-Jun-18

9
32 INE148I0763 05-Jun-14 05-Jun-24 250,000,000 5-Jun-18

9
33 INE148I07EV 07-Jun-16 07-Jun-21 150,000,000 7-Jun-18

7
34 INE148I07EW 07-Jun-16 05-Jun-26 250,000,000 7-Jun-18

5
35 INE148I07CC 11-Jun-15 11-Jun-20 500,000,000 11-Jun-18

1
36 INE148I07FB 30-Jun-16 13-Jun-18 700,000,000 13-Jun-18

6
37 INE148I07GQ 15-Mar-17 15-Jun-18 500,000,000 15-Jun-18

2
38 INE148I07HR 15-Jun-17 14-Jun-19 250,000,000 15-Jun-18

8
39 INE148I07GV 17-Mar-17 15-Jun-18 500,000,000 15-Jun-18

2
40 INE148I07HQ 16-Jun-17 17-Jun-19 10,850,000,000 18-Jun-18

0
41 INE148I07HQ 16-Jun-17 17-Jun-19 150,000,000 18-Jun-18

0
42 INE148I07EY 20-Jun-16 20-Jun-18 1,000,000,000 20-Jun-18

1
43 INE148I07HL 20-Apr-17 21-Jun-18 6,500,000,000 21-Jun-18

1
44 INE148I07IV8 23-Mar-18 22-Jun-21 3,000,000,000 22-Jun-18
45 INE148I07EZ 23-Jun-16 21-Jun-19 500,000,000 23-Jun-18

8
46 INE148I07CN 26-Jun-15 26-Jun-25 10,000,000,000 26-Jun-18

8
84
47 INE148I07CM 26-Jun-15 26-Jun-18 1,000,000,000 26-Jun-18
0
48 INE148I07FA 28-Jun-16 28-Jun-18 400,000,000 28-Jun-18

8
49 INE894F0755 28-Jun-12 28-Jun-22 8,000,000,000 28-Jun-18

0
50 INE148I07HD 31-Mar-17 29-Jun-18 250,000,000 29-Jun-18

8
85
Detail of Payment of Interest of Non Convertible Debentures from 1st April 2018
to 30th
September 2018- Annexure -1 (a) (Continued)

issue Maturity
Interest
51 INE148I07FC 30-Jun-16 16-Aug-18 700,000,000 30-Jun-18

4
52 INE148I07FD 30-Jun-16 11-Jun-19 100,000,000 30-Jun-18

2
53 INE148I07FE 30-Jun-16 28-Jun-19 2,850,000,000 30-Jun-18

0
54 INE148I07FF 30-Jun-16 15-Jul-19 750,000,000 30-Jun-18

7
55 INE148I07FG 30-Jun-16 30-Jun-26 2,000,000,000 30-Jun-18

5
56 INE148I0774 30-Jun-14 30-Jun-24 250,000,000 30-Jun-18

6
57 INE148I07GR 15-Mar-17 13-Mar-20 1,600,000,000 15-Jun-18

0
58 INE148I0812 03-Jun-13 03-Jun-23 1,250,000,000 3-Jun-18

4
59 INE894F0808 05-Jun-12 05-Jun-27 1,100,300,000 5-Jun-18

7
60 INE894F0807 05-Jun-12 05-Jun-22 150,000,000 5-Jun-18

9
61 INE894F0810 28-Jun-12 28-Jun-27 1,000,000,000 28-Jun-18

3
62 INE894F0809 28-Jun-12 28-Jun-22 1,000,000,000 28-Jun-18

5
63 INE148I0821 29-Jun-16 29-Jun-26 6,097,000,000 29-Jun-18

5
64 INE894F0811 30-Jun-12 30-Jun-27 496,500,000 30-Jun-18
86
1
65 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-Jun-18

7
66 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-Jun-18

1
67 INE894F0754 06-Jul-12 06-Jul-22 200,000,000 6-Jul-18

3
68 INE148I07IL9 29-Dec-17 09-Jul-21 3,400,000,000 9-Jul-18
69 INE148I07FI1 18-Jul-16 18-Jul-18 2,000,000,000 18-Jul-18
70 INE148I07BC 03-Feb-15 19-Jul-18 750,000,000 19-Jul-18

3
71 INE148I07FJ 22-Jul-16 22-Jul-26 250,000,000 23-Jul-18

9
72 INE148I07CV 20-Jul-15 25-Jul-18 160,000,000 25-Jul-18

1
73 INE148I07HT 25-Jul-17 25-Jul-19 600,000,000 25-Jul-18

4
74 INE148I07HU 25-Jul-17 24-Jul-20 3,600,000,000 25-Jul-18

2
75 INE148I07HU 25-Jul-17 24-Jul-20 50,000,000 25-Jul-18

2
76 INE148I07HV 25-Jul-17 25-Jul-22 1,000,000,000 25-Jul-18

0
77 INE148I0817 17-Jul-14 17-Jul-24 100,000,000 17-Jul-18

3
78 INE148I0819 21-Jul-15 21-Jul-25 81,500,000 21-Jul-18

9
79 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-Jul-18

7
80 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-Jul-18

1
87
81 INE148I07BF 09-Mar-15 01-Aug-18 450,000,000 1-Aug-18
6
82 INE148I07CX 07-Aug-15 07-Aug-20 150,000,000 7-Aug-18

7
83 INE148I07FL 09-Aug-16 09-Aug-18 250,000,000 9-Aug-18

5
84 INE148I07FM 09-Aug-16 09-Aug-18 1,750,000,000 9-Aug-18

3
85 INE148I07FN 09-Aug-16 09-Aug-19 550,000,000 9-Aug-18

1
86 INE148I07FP 11-Aug-16 10-Aug-18 3,000,000,000 10-Aug-18

6
87 INE148I07FQ 11-Aug-16 10-Aug-18 900,000,000 10-Aug-18

4
88 INE148I07FR 11-Aug-16 09-Aug-19 50,000,000 10-Aug-18

2
89 INE148I07FS 11-Aug-16 11-Aug-21 100,000,000 10-Aug-18

0
90 INE148I07CZ 13-Aug-15 13-Aug-20 150,000,000 13-Aug-18

2
91 INE148I07FC 30-Jun-16 16-Aug-18 700,000,000 16-Aug-18

4
92 INE148I07FT 16-Aug-16 16-Aug-21 5,250,000,000 16-Aug-18

8
93 INE148I07DA 20-Aug-15 20-Aug-18 250,000,000 20-Aug-18

3
94 INE148I07H 22-Aug-16 22-Aug-19 30,250,000,000 22-Aug-18

W8
95 INE148I07FV 23-Aug-16 23-Aug-21 1,350,000,000 23-Aug-18

4
96 INE148I07HS 25-Jul-17 24-Aug-18 3,250,000,000 24-Aug-18

6
88
97 INE148I07DC 27-Aug-15 27-Aug-18 600,000,000 27-Aug-18
9
98 INE148I0735 29-Aug-13 29-Aug-23 10,000,000,000 29-Aug-18

7
99 INE148I07IE4 27-Dec-17 30-Aug-19 2,000,000,000 30-Aug-18
100 INE148I07DD 31-Aug-15 31-Aug-18 200,000,000 31-Aug-18

7
101 INE148I07FX 02-Sep-16 02-Mar-20 1,000,000,000 31-Aug-18

0
102 INE148I07FW 02-Sep-16 31-Aug-18 60,000,000 31-Aug-18

2
89
Detail of Payment of Interest of Non Convertible Debentures from 1st April 2018
to 30th
September 2018- Annexure -1 (a) (Continued)

issue Maturity Interest
103 INE148I0820 03-Aug-15 03-Aug-25 1,650,000,000 3-Aug-18

7
104 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-Aug-18

7
105 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-Aug-18

1
106 INE148I07DE 04-Sep-15 04-Sep-20 10,000,000,000 4-Sep-18

5
107 INE894F0736 07-Sep-11 07-Sep-21 5,000,000,000 7-Sep-18

0
108 INE148I07HX 08-Sep-17 08-Sep-27 14,500,000,000 8-Sep-18

6
109 INE148I07BJ 09-Mar-15 09-Sep-18 400,000,000 9-Sep-18

8
110 INE148I07HY 12-Sep-17 12-Sep-17 1,250,000,000 12-Sep-18

4
111 INE148I07EC 23-Mar-16 12-Sep-18 2,250,000,000 12-Sep-18

7
112 INE148I07DF 18-Sep-15 18-Sep-20 4,250,000,000 18-Sep-18

2
113 INE148I07G 21-Mar-17 21-Mar-22 6,000,000,000 21-Sep-18

W0
114 INE148I07GX 22-Mar-17 22-Mar-22 1,600,000,000 21-Sep-18

8
115 INE148I07HZ 22-Sep-17 20-Sep-19 5,000,000,000 21-Sep-18

1
116 INE148I07IA2 22-Sep-17 22-Sep-20 15,000,000,000 21-Sep-18
90
117 INE148I07HC 30-Mar-17 30-Mar-22 3,500,000,000 28-Sep-18
0
118 INE148I0789 29-Sep-14 29-Sep-19 950,000,000 29-Sep-18

4
119 INE148I07H 22-Aug-16 22-Aug-19 500,000,000 24-Sep-18

W8
120 INE148I0828 08-Sep-17 08-Sep-27 1,000,000,000 8-Sep-18

0
121 INE148I0829 08-Sep-17 08-Sep-27 9,000,000,000 10-Sep-18

8
122 INE148I0813 23-Sep-13 23-Sep-23 250,000,000 23-Sep-18

2
123 INE148I0814 27-Sep-13 27-Sep-23 250,000,000 27-Sep-18

0
124 INE148I07GJ 26-Sep-16 26-Sep-26 136,946,000 26-Sep-18

7
125 INE148I0823 26-Sep-16 26-Sep-26 24,171,000 26-Sep-18

1
126 INE148I07FY 26-Sep-16 26-Sep-19 267,128,000 26-Sep-18

8
127 INE148I07FZ 26-Sep-16 26-Sep-19 5,619,200,000 26-Sep-18

5
128 INE148I07GA 26-Sep-16 26-Sep-19 653,152,000 26-Sep-18

6
129 INE148I07GD 26-Sep-16 26-Sep-19 56,037,000 26-Sep-18

0
130 INE148I07GE 26-Sep-16 26-Sep-21 33,896,263,000 26-Sep-18

8
131 INE148I07GF 26-Sep-16 26-Sep-21 13,112,298,000 26-Sep-18

5
132 INE148I07GH 26-Sep-16 26-Sep-21 74,385,000 26-Sep-18

1
91
133 INE148I07GK 26-Sep-16 26-Sep-26 9,907,552,000 26-Sep-18
5
134 INE148I07GL 26-Sep-16 26-Sep-26 4,044,991,000 26-Sep-18

3
135 INE148I07GN 26-Sep-16 26-Sep-26 243,432,000 26-Sep-18

9
136 INE148I0824 26-Sep-16 26-Sep-26 1,500,000 26-Sep-18

9
137 INE148I0825 26-Sep-16 26-Sep-26 1,953,479,000 26-Sep-18

6
138 INE148I0827 26-Sep-16 26-Sep-26 9,466,000 26-Sep-18

2
139 15-Sep-16 15-Oct-19 13,300,000,000 15-Sep-18
Total 335,950,885,000
92
Details of Repayment of Principal of Non Convertible Debentures
from
1st April 2018 to 30th September 2018- Annexure -1 (b)
S.No. ISIN No. Date of Due Date Principal Amount
Issue
1 INE148I07BR1 30-Mar-15 04-Apr-18 200,000,000
2 INE148I07993 21-Oct-14 20-Apr-18 150,000,000
3 INE148I07BM2 19-Mar-15 25-Apr-18 240,000,000
4 INE148I07AX1 30-Dec-14 27-Apr-18 40,000,000
5 INE148I07FL5 09-Aug-16 09-Aug-18 5,000,000,000
6 INE148I07FL5 09-Aug-16 09-Aug-18 1,000,000,000
7 INE148I07FP6 11-Aug-16 10-Aug-18 2,900,000,000
8 INE148I07FP6 11-Aug-16 10-Aug-18 1,100,000,000
9 INE148I07FP6 11-Aug-16 10-Aug-18 700,000,000
10 INE148I07FQ4 11-Aug-16 10-Aug-18 350,000,000
11 INE148I07FL5 09-Aug-16 09-Aug-18 250,000,000
12 INE148I07FB6 30-Jun-16 13-Jun-18 700,000,000
13 INE148I07GQ2 15-Mar-17 15-Jun-18 500,000,000
14 INE148I07GV2 17-Mar-17 15-Jun-18 500,000,000
15 INE148I07EY1 20-Jun-16 20-Jun-18 1,000,000,000
16 INE148I07HL1 20-Apr-17 21-Jun-18 6,500,000,000
17 INE148I07CM0 26-Jun-15 26-Jun-18 1,000,000,000
18 INE148I07FA8 28-Jun-16 28-Jun-18 400,000,000
19 INE148I07HD8 31-Mar-17 29-Jun-18 250,000,000
93
20 INE148I07GR0 15-Mar-17 13-Mar-20 1,600,000,000
21 INE148I07HQ0 16-Jun-17 17-Jun-19 10,850,000,000
22 INE148I07FI1 18-Jul-16 18-Jul-18 2,000,000,000
23 INE148I07BC3 03-Feb-15 19-Jul-18 750,000,000
24 INE148I07CV1 20-Jul-15 25-Jul-18 160,000,000
25 INE148I07HT4 25-Jul-17 25-Jul-19 600,000,000
26 INE148I07HU2 25-Jul-17 24-Jul-20 3,600,000,000
27 INE148I07BF6 09-Mar-15 01-Aug-18 450,000,000
28 INE148I07FL5 09-Aug-16 09-Aug-18 250,000,000
29 INE148I07FM3 09-Aug-16 09-Aug-18 1,750,000,000
30 INE148I07FP6 11-Aug-16 10-Aug-18 3,000,000,000
31 INE148I07FQ4 11-Aug-16 10-Aug-18 900,000,000
94
Details of Repayment of Principal of Non Convertible Debentures
from
1st April 2018 to 30th September 2018- Annexure -1 (b) (Contd.)
S.No. ISIN No. Date of Due Date Principal Amount

Issue
32 INE148I07FC4 30-Jun-16 16-Aug-18 700,000,000
33 INE148I07DA3 20-Aug-15 20-Aug-18 250,000,000
34 INE148I07HS6 25-Jul-17 24-Aug-18 3,250,000,000
35 INE148I07DC9 27-Aug-15 27-Aug-18 600,000,000
36 INE148I07DD7 31-Aug-15 31-Aug-18 200,000,000
37 INE148I07FW2 02-Sep-16 31-Aug-18 60,000,000
38 INE148I07FT8 16-Aug-16 16-Aug-21 5,250,000,000
39 INE148I07FV4 23-Aug-16 23-Aug-21 1,350,000,000
40 INE148I07BJ8 09-Mar-15 09-Sep-18 400,000,000
41 INE148I07EC7 23-Mar-16 12-Sep-18 2,250,000,000
42 INE148I07HW8 22-Aug-16 22-Aug-19 500,000,000
Total 63,500,000,000
95
Details of Due date of Repayment of Principal of Non Convertible
Debentures from 1st October 2018 to 31st March 2019- Annexure
-1
(C)
S.No. ISIN No. Date of Issue Date of Principal
Maturity Amount
1 INE148I07BZ4 02-Jun-15 08-Nov-18 580,000,000
2 INE148I07CA5 02-Jun-15 22-Nov-18 520,000,000
3 INE148I07GO7 25-Nov-16 23-Nov-18 5,000,000,000
4 INE148I07CO6 29-Jun-15 13-Dec-18 630,000,000
5 INE148I07DI6 06-Nov-15 27-Dec-18 50,000,000
6 INE148I07IB0 07-Nov-17 07-Dec-18 4,150,000,000
7 INE148I07IF1 27-Dec-17 28-Dec-18 4,700,000,000
8 INE148I07IJ3 28-Dec-17 28-Dec-18 5,500,000,000
9 INE148I07CU3 16-Jul-15 14-Jan-19 65,000,000
10 INE148I07DS5 19-Jan-16 19-Jan-19 1,000,000,000
11 INE148I07DX5 23-Feb-16 22-Feb-19 500,000,000
12 INE148I07DY3 24-Feb-16 22-Feb-19 500,000,000
13 INE148I07ED5 23-Mar-16 11-Mar-19 500,000,000
14 INE148I07EF0 29-Mar-16 29-Mar-19 833,332,500
15 INE148I07EH6 31-Mar-16 29-Mar-19 1,000,000,000
16 INE148I07HP2 25-Apr-17 25-Mar-19 2,250,000,000
17 INE148I07ID6 22-Dec-17 14-Mar-19 2,500,000,000
18 INE148I07IU0 20-Mar-18 21-Mar-19 5,000,000,000
96
Total 35,278,332,500
97
Details of Due date of Payment of Interest on Non Convertible
Debentures from 1st
October 2018 to 31st March 2019- Annexure -1 (d)
S.No. ISIN No. Date of Date of Principal Due Date of

issue Maturity Amount Interest
1 INE148I073 08-Oct-13 08-Oct-23 250,000,000 8-Oct-18

73
2 INE148I079 13-Oct-14 13-Oct-19 150,000,000 13-Oct-18

69
3 INE148I07A 31-Oct-14 30-Oct-19 100,000,000 31-Oct-18

G6
4 INE148I07H 06-Apr-17 06-Apr-22 10,000,000,000 5-Oct-18

F3
5 INE148I07I 29-Dec-17 22-Oct-21 2,500,000,000 22-Oct-18

M7
6 INE148I080 09-Oct-12 09-Oct-22 350,000,000 9-Oct-18

25
7 INE148i080 22-Oct-12 22-Oct-22 400,000,000 22-Oct-18

33
8 INE148I080 31-Oct-12 31-Oct-22 250,000,000 31-Oct-18

41
9 INE148I081 24-Oct-13 24-Oct-23 50,000,000 24-Oct-18

57
10 INE148I07G 26-Sep-16 26-Sep-26 136,946,000 26-Oct-18

J7
11 INE148I082 26-Sep-16 26-Sep-26 24,171,000 26-Oct-18

31
12 INE148I070 22-Nov-11 22-Nov-21 1,000,000,000 22-Nov-18

76
13 INE148I071 06-Nov-12 06-Nov-22 150,000,000 6-Nov-18

42
98
14 INE148I071 19-Nov-12 19-Nov-22 150,000,000 19-Nov-18
59
15 INE148I073 21-Nov-13 21-Nov-23 4,000,000,000 21-Nov-18

81
16 INE148I07A 14-Nov-14 14-Nov-19 150,000,000 14-Nov-18

J0
17 INE148I07A 27-Nov-14 27-Nov-19 3,000,000,000 27-Nov-18

O0
18 INE148I07B 02-Jun-15 08-Nov-18 580,000,000 8-Nov-18

Z4
19 INE148I07C 02-Jun-15 22-Nov-18 520,000,000 22-Nov-18

A5
20 INE148I07D 20-Nov-15 20-Nov-20 1,200,000,000 20-Nov-18

J4
21 INE148I07D 20-Nov-15 20-Nov-22 100,000,000 20-Nov-18

K2
22 INE148I07D 20-Nov-15 20-Nov-25 1,700,000,000 20-Nov-18

L0
23 INE148I07G 25-Nov-16 23-Nov-18 5,000,000,000 23-Nov-18

O7
24 INE148I07I 07-Nov-17 07-Nov-22 2,900,000,000 7-Nov-18

C8
25 INE148I07J 04-Oct-18 04-Nov-19 3,500,000,000 5-Nov-18

J1
26 INE894F081 15-Nov-12 15-Nov-27 326,000,000 15-Nov-18

37
27 INE894F081 15-Nov-12 15-Nov-22 11,000,000 15-Nov-18

29
99
Debentures from 1st
October 2018 to 31st March 2019- Annexure -1 (d) (Continued)

28 INE148I07G 26-Sep-16 26-Sep-26 136,946,000 26-Nov-18

J7
29 INE148I082 26-Sep-16 26-Sep-26 24,171,000 26-Nov-18

31
30 INE148I071 18-Dec-12 18-Dec-22 150,000,000 18-Dec-18

83
31 INE148I0719 31-Dec-12 31-Dec-22 50,000,000 31-Dec-18

1
32 INE148I0719 31-Dec-12 31-Dec-22 150,000,000 31-Dec-18

1
33 INE148I0719 31-Dec-12 31-Dec-22 150,000,000 31-Dec-18

1
34 INE148I074 24-Dec-13 24-Dec-23 250,000,000 24-Dec-18

15
35 INE894F076 31-Dec-12 31-Dec-22 150,000,000 31-Dec-18

67
36 INE148I07A 02-Dec-14 02-Dec-19 2,000,000,000 2-Dec-18

Q5
37 INE148I07A 08-Dec-14 08-Dec-19 1,000,000,000 8-Dec-18

U7
38 INE148I07A 16-Dec-14 16-Dec-24 250,000,000 16-Dec-18

V5
39 INE148I07B 31-Dec-14 31-Dec-24 250,000,000 31-Dec-18

A7
40 INE148I07C 29-Jun-15 13-Dec-18 630,000,000 13-Dec-18

O6
100
41 INE148I07D 06-Nov-15 27-Dec-18 50,000,000 27-Dec-18
I6
42 INE148I07D 30-Dec-15 30-Dec-20 1,350,000,000 31-Dec-18

M8
43 INE148I07D 30-Dec-15 30-Dec-25 950,000,000 31-Dec-18

N6
44 INE148I07D 31-Dec-15 31-Dec-25 100,000,000 31-Dec-18

O4
45 INE148I07I 07-Nov-17 07-Dec-18 4,150,000,000 7-Dec-18

B0
46 INE148I07IF 27-Dec-17 28-Dec-18 4,700,000,000 27-Dec-18

1
47 INE148I07I 27-Dec-17 24-Dec-20 250,000,000 27-Dec-18

G9
48 INE148I07IJ 28-Dec-17 28-Dec-18 5,500,000,000 28-Dec-18

3
49 INE148I07I 29-Dec-17 29-Dec-22 10,000,000,000 29-Dec-18

N5
50 INE148I080 04-Dec-12 04-Dec-22 200,000,000 4-Dec-18

58
51 INE148I081 23-Dec-13 23-Dec-23 200,000,000 23-Dec-18

65
52 INE148I07G 26-Sep-16 26-Sep-26 136,946,000 26-Dec-18

J7
53 INE148I082 26-Sep-16 26-Sep-26 24,171,000 26-Dec-18

31
54 INE894F077 16-Jan-13 16-Jan-23 350,000,000 16-Jan-19

17
55 INE148I07C 16-Jul-15 14-Jan-19 65,000,000 14-Jan-19

U3
101
Debentures from 1st

Amount
issue Maturity Interest
56 INE148I07D 07-Jan-16 07-Jan-21 3,000,000,000 7-Jan-19

P1
57 INE148I07D 15-Jan-16 15-Jul-19 500,000,000 15-Jan-19

Q9
58 INE148I07D 19-Jan-16 19-Jan-19 1,000,000,000 19-Jan-19

S5
59 INE148I07D 19-Jan-16 19-Jan-21 1,000,000,000 19-Jan-19

T3
60 INE148I07IP 24-Jan-18 24-Jan-25 2,250,000,000 24-Jan-19

0
61 INE894F080 31-Jan-12 31-Jan-22 362,000,000 31-Jan-19

38
62 INE148I080 14-Jan-13 14-Jan-23 250,000,000 14-Jan-19

66
63 INE148I080 30-Jan-13 30-Jan-23 100,000,000 30-Jan-19

74
64 INE148I07G 26-Sep-16 26-Sep-26 136,946,000 26-Jan-19

J7
65 INE148I082 26-Sep-16 26-Sep-26 24,171,000 26-Jan-19

31
66 INE148I0720 26-Feb-13 26-Feb-23 250,000,000 26-Feb-19

9
67 INE148I0748 18-Feb-14 18-Feb-21 200,000,000 18-Feb-19

0
68 INE894F075 27-Feb-12 27-Feb-22 5,000,000,000 27-Feb-19
102
19
69 INE148I07D 08-Feb-16 07-Feb-26 500,000,000 8-Feb-19

V9
70 INE148I07D 08-Feb-16 08-Feb-21 250,000,000 8-Feb-19

U1
71 INE148I07D 08-Feb-16 08-Feb-21 500,000,000 8-Feb-19

U1
72 INE148I07D 23-Feb-16 22-Feb-19 500,000,000 22-Feb-19

X5
73 INE148I07D 24-Feb-16 22-Feb-19 500,000,000 22-Feb-19

Y3
74 INE148I07I 22-Feb-18 22-Feb-28 30,000,000,000 22-Feb-19

Q8
75 INE148I07I 23-Feb-18 23-Feb-28 250,000,000 22-Feb-19

R6
76 INE148I07I 28-Mar-18 22-Feb-28 600,000,000 22-Feb-19

Q8
77 INE148I07J 21-Aug-18 21-Feb-20 10,000,000,000 21-Feb-19

G7
78 INE148I07J 21-Aug-18 21-Feb-28 10,000,000 21-Feb-19

H5
79 INE894F080 22-Feb-12 22-Feb-22 200,000,000 22-Feb-19

53
80 INE148I080 18-Feb-13 18-Feb-23 250,000,000 18-Feb-19

82
81 INE148I07G 26-Sep-16 26-Sep-26 136,946,000 26-Feb-19

J7
82 INE148I082 26-Sep-16 26-Sep-26 24,171,000 26-Feb-19

31
83 INE148I072 19-Mar-13 19-Mar-23 1,000,000,000 19-Mar-19

41
103
Debentures from 1st

84 INE148I072 25-Mar-13 25-Mar-23 50,000,000 25-Mar-19

66
85 INE148I07B 27-Mar-15 27-Mar-20 200,000,000 27-Mar-19

P5
86 INE148I07E 14-Mar-16 13-Mar-26 250,000,000 14-Mar-19

A1
87 INE148I07E 23-Mar-16 11-Mar-19 500,000,000 11-Mar-19

D5
88 INE148I07E 29-Mar-16 29-Mar-19 833,332,500 29-Mar-19

F0
89 INE148I07E 29-Mar-16 30-Mar-20 833,335,000 29-Mar-19

F0
90 INE148I07E 31-Mar-16 29-Mar-19 1,000,000,000 29-Mar-19

H6
91 INE148I07G 15-Mar-17 13-Mar-20 900,000,000 15-Mar-19

R0
92 INE148I07G 21-Mar-17 21-Mar-22 6,000,000,000 21-Mar-19

W0
93 INE148I07G 22-Mar-17 22-Mar-22 1,600,000,000 22-Mar-19

X8
94 INE148I07G 27-Mar-17 27-Mar-20 250,000,000 27-Mar-19

Z3
95 INE148I07H 30-Mar-17 30-Mar-22 3,500,000,000 29-Mar-19

C0
96 INE148I07H 18-Apr-17 13-Mar-20 250,000,000 18-Mar-19

H9
97 INE148I07H 25-Apr-17 25-Mar-19 2,250,000,000 25-Mar-19

P2
98 INE148I07I 22-Dec-17 14-Mar-19 2,500,000,000 14-Mar-19

D6
1
99 INE148I07I 19-Mar-18 19-Mar-21 6,000,000,000 19-Mar-19
S4
2
Source: indiabulls.com
These are the key highlights of the annual results shown above:
Year ended March 31, 2009 compared to Fiscal Year ended March 31,
2008
• Consolidated Total Revenues up 18.8% to Rs. 2,005.8 crore in FY 09
from Rs. 1,688.8 crore in FY 08
• EBITDA before extraordinary items (i.e. excluding Profit / (Loss) on
sale of investment) up 34.9% to Rs. 1,445.9 crore FY 09 from Rs.
1,071.6 crore in FY 08
• Operating Profit down 41.1% to Rs. 430.49 crore in FY 09 from Rs.
731.3 crore in FY 08
• Consolidated Profit After Tax down 81.8% to Rs. 105.9 crore in FY 09
from Rs 580.6 crore in FY 08
• Consolidated Net-worth of Rs 3,529.9 crore, as compared to Rs.
3,500.8 crore of consolidated net worth on March 31, 2008.
3
Total outstanding & serviced loans as on March 31, 2009 were Rs.
8,931.9 crore compared to total outstanding & serviced loans of Rs.
10,441.0 crore as on March 31, 2008
• Average annualized yield on Rs. 8,931.9 crore outstanding and
serviced portfolio is 19.92%.
• Gross NPAs of Rs 142.5 crore which represents 1.60% of the total
loan portfolio.
The vast majority of Delinquency and Credit costs are driven by the
small-ticket personal loan business which is in run-off mode. Total
outstanding small ticket personal loans were Rs. 161.8 crores as on
March 31, 2009 which constitutes about 1.8% of the current loan
portfolio as compared to Rs. 383.5 crores as on March 31, 2008 which
constituted 3.7% of the then portfolio
The following graph shows the Borrowing Profile of the company:
Source: indiabulls.com
4
Analysis of Key Ratios:
Earnings Per Share(EPS):
EPS means the portion of a company's profit allocated to each
outstanding share of common stock. Earnings per share serve as an
indicator of a company's profitability.
Calculated as:
EPS is generally considered to be the single most important

variable in determining a share's price. It is also a major
component used to calculate the price-to-earnings valuation ratio.
In case of the scrip IFSL, the EPS over the years has been quite
healthy as compared to other financial services companies.
The EPS for the company has been better than the rival like M&M
Financial services Ltd. but last year the income of the company saw a
significant decline with the last quarter of FY 2008 being the worst of
the lot.
During this period the Basic EPS of the company saw a decline of more
than 55% from the level of 15.08 to 6.78 as on March 31st 2009. The
decline in EPS can largely be contributed to more than 53% decline in
sales of the company in the last quarter of FY 2008 itself from Rs.
544.83 Cr to Rs.253.60 Cr.
This is a significant decline when we compare the performance of the
company with other financial services giants like M&M Financial
Services and Reliance Capital Ltd. both of which registered more than
250% growth in EPS during the last quarter of FY 2008.
This happened mainly because of the fact that while the sales figure
and hence the operating profit of the two competitors went up, IBFSL
registered a negative growth in the sales while the operating profit was
down by as high as 110%.
5
Dividend-Payout Ratio:
The Dividend-Payout ratio means The percentage of earnings paid to
shareholders in dividends.
It is calculated as:
The payout ratio provides an idea of how well earnings support

the dividend payments. More mature companies tend to have a
higher payout ratio.
The Dividend-Payout Ratio, as per the company’s financial results

published for the period of 31st March, 2009 stood at 29.5%. This
is a major decline from the earlier figure of 56.36% in the FY
2007. There are mainly two reasons behind this decline in the
DPR.
The first reason obviously is decline in the dividend announced by
the company. Last year, the company had announced a dividend
of 425% on the face value of the share, that means a dividend of
Rs. 8.5 per share but this year the dividend proposed in the
annual report is 100% on the face value of the share and that
means a dividend of Rs. 2 per share.
Secondly, the income has been affected because of the liquidity
crunch faced by the financial companies all over the world. The
companies parked its surplus money in fixed deposits and banks
instead of going for mutual funds that could have yielded high
interests but were risky also. This brought down the income
earned from the interest significantly that was reflected on the
Dividend-Payout ratio.
Despite this fact, the Dividend-Payout ratio of the company is higher
than rival companies in the market. While M&M Financial Services
6
had a DPR of 28.8% last year the DPR was a meagre 15.41% for
Reliance Capital and the company score over these two rivals in this
aspect. This can be attributed to the fact that while last year M&M
Financial Services offered a dividend of 45% and Reliance Capital 55%,
IBFSL offered a dividend of 425% far greater than its competitors. This
year too, the company offered 100% dividend while M&M Financial
Services offered 55% and Reliance Capital 65% dividend.
7
P/E Ratio:
P/E ratio is a valuation ratio of a company's current share price
compared to its per-share earnings.
Calculated as:
EPS is usually from the last four quarters (trailing P/E), but
sometimes it can be taken from the estimates of earnings
expected in the next four quarters (projected or forward P/E).
In general, a high P/E suggests that investors are
expecting higher earnings growth in the future compared to
companies with a lower P/E. However, the P/E ratio doesn't tell
us the whole story by itself. It's usually more useful to compare
the P/E ratios of one company to other companies in the same
industry, to the market in general or against the company's own
historical P/E. The P/E is sometimes referred to as the "multiple",
because it shows how much investors are willing to pay per dollar
of earnings.
The P/E ratio of IBFSL for the last FY (2007-08), which means at
the end of 31st March, 2008 was 18.08% while for the FY ended
March 31st, 2009 it was 28.28%. It is quite higher than its
competitors like Reliance Capital Ltd, Motilal Oswal Finance, and
M&M Financial Services Ltd which have P/E ratios in the range of
10-12% for the FY 2009 but the bigger cause of concern for the
company is that while all the three companies mentioned above
have increased their EPS by increasing their Net Income, the Net
Income of IBFSL has dropped significantly. So, even the higher
P/E ratio does not improve the fundamental situation of the
company until it returns to a higher growth trajectory than its
rivals. At this time, the P/E ratio should be even better also
because of the fact that the scrip has not been able to capitalise
on the current market rally as much as the rivals did.
8
PEG Ratio:
PEG ratio is used to determine a stock's value while taking into
account earnings growth. The calculation is as follows:
PEG is a widely used indicator of a stock's potential value. It is

favoured by many over the price/earnings ratio because it also
accounts for growth. Similar to the P/E ratio, a lower PEG means
that the stock is more undervalued.
The PEG ratio for the company is not impressive because of the
negative growth in the EPS from last year. The annual (Basic) EPS
growth is – 85.98% and that itself tells the whole story. The PEG ratio
for the company for this FY comes out to be – 32.89% and this
represents a very grim picture of the company as most of its rivals
have registered some amount of positive growth in EPS.
9
TECHNICAL
ANALYSIS
10
Share Price Movement on Yearly Basis:
Support Level Resistance Level
Year High: Rs. 374.25, Date-17/06/2008 Resistance Level: Rs.120
Year Low: Rs. 85.05, Date- 06/03/2009 Support Level: Rs. 92
Though the scrip is trading above resistance level because of huge rise in the price after
the election results were announced, these levels indicates the trend for the past
months.
High Low Close
The scrip used to show a good amount of variations when the prices
were in the range of Rs. 300-400 but as the price dipped the intraday
variations also went down, making the share less volatile but not too
good for the stock brokers who are interested in generating brokerage.
In recent times, the scrip also showed an unusual trend. The share
used to open at a level of 5% higher and the upper circuit was applied
for the rest of the day. The variations have come down significantly.
11
Historical Data Analysis of the scrip: Indiabulls Financial Services Ltd.
We are taking the figure for the last 20 months, that is, from October
2007, to May 2009.
For the sake of convenience we have divided the whole period into
three major categories:
Pre-Recession Period; when the economy was booming and there was
an unprecedented rise in the sensex as well as the share prices of
almost all the stocks.
Recession Period; this was the time when market reached its peak and
the FII started pulling their money back from the system that resulted
in tremendous downfall in the market.
Finally, the post-recession era; when the Indian economy started
showing signs of recovery from global turmoil because of the various
Monetary and Fiscal measures taken by the government.
Pre-Recession Period:
This was the time when everything was going very smoothly in the
share market. Because of the high inflow of Foreign Investment (Both
in terms of FII and FDI), the economic activity was reaching to an
unprecedented high. The experts had very high opinion about the
economy and their expectations were also very bright. We named it
pre-recession period because the impact of recession on the Indian
economy was not visible at that time.
On October 1st, the SENSEX closed at 17328.62 up by 37.52 points
from the previous close, a rise of 0.21%; and the share price of
Indiabulls Financial Services Ltd closed at Rs. 616, up by 17.4, a rise
of 2.9%.
Now, let’s see the graph of the share prices of Indiabulls Financial
Services Ltd (IBFSL) for the period of October 2007 to December 2007.
12
The trend for this quarter is clear from the graph. The share price of the
company reached a new level of Rs. 1000 during this period thanks mainly
to the huge investment by FIIs, good liquidity and positive sentiment in the
market. But the prices were highly volatile during this period with the
average range of the share price movement (difference between intra-day
high and intra-day low) was as high as 54.23 with the standard deviation of
24.45 during this quarter. The prime factor behind this was that the market
as well, was quite volatile during this period which was mainly because of
the uncertain nature of the foreign investors in the stock market. The
resistance and support level can be misleading because of the
unpredictability in the way the share behaved during that period. The net
inflow of foreign investment was positive in October and December, whereas
it was negative in the month of November.
Resistance Level: Rs. 830 Support level: Rs. 690
Closing Price
The above two graphs clearly shows the kind of influence the FIIs have on
the Indian Stock market. The market is primarily driven by the FIIs and
13
they capitalize on this fact. To get the more clear understanding of the
behaviour of this stock, we will do monthly analysis.
Charting for the month of October 2007:

Closing Price
In the first 10 days the share price didn’t show much movement because of
relatively stable market and continuous net inflow of foreign investment but
the stock price declined by more than 20% in just 3 trading session (16 Oct-
18 Oct) because of heavy outflow of cash from the market. This shows that
the scrip is heavily correlated with the activity of the institutional investors
and the movement of foreign money in the stock market as well as the
speculation in the consumers’ mind determines the stock price of this scrip.
In the latter part of the month the share showed steadily movement thanks
to the positive sentiment and the overall good economic indicators surfacing
at that time. The month High figure was Rs. 717.15 on 30/10/2008 while
the month low figure was Rs. 498 on 18/10/2008. The support level for this
period was 588 whereas the resistance level was at 638.
14
Charting for the month of November 2007:
The scrip showed the same trend of being stable in the first 10-13 days of
the month with the average trading price remained at the level of sub 700.
The stock suddenly picked up and showed an upward movement of almost
21% from 14 Nov-19 Nov. It also touched the 800 level during this rally and
went to all time high of 836.9. Then the price gradually came down again
because of net negative outflow of the money from the market. The month
High figure was Rs. 836.9 on 19/11/2008 while the month low figure was
Rs. 682.8 on 01/11/2008. The support level was Rs. 693 and the resistance
level was Rs. 745 during this month.
15
Charting for the month of December 2007:
The share price touched a historical high of Rs. 1,000 on 27th December and the
correction in the share was due. After the peak the share started showing signs of
correction. The support and the resistance level were Rs. 840 and Rs. 915 respectively.
This concludes the analysis for the first part. Now, let’s analyse the market and the
corresponding performance of the scrip in the year of financial crisis that is; in 2008.
When we look at the overall figure for the whole quarter, the impact of buoyant Indian
Financial Market is quite evident. The share started the quarter at the level of Rs. 600
and at the end of the quarter the share price was at Rs. 976.05, an increase of more
than 62%. This is a mind-blowing figure especially because of the fact that the share
outperformed the market quite considerably as the growth in the market for the same
period was 14.58%. This was the most opportune time to invest in the market and that’s
why this was considered as the pre-recession period.
Performance of BSE and IBFSL in the Recession Period:

For the analysis, the 14 month-period from January, 2008 to
February, 2009 has been taken as Recession period because this was
the time when the impact of recession was most severe on the Indian
economy and the period saw a huge correction in the market as well as
the price of many overvalued share. Though the Indian economy has
not recovered from the recession yet but the several economic
indicators have started showing positive signals in the last three
months, which is from March, 2009 with the sensex is on the road to
recovery. The inflation (CPI) has come down; IIP is showing signs of
improvement in the industrial sector.
The year didn’t start too well for the scrip and though the market
gained 341.69 points and continued its long rally, the scrip crashed by
260 points, more than 26% in spite of the positive sentiment in the
16
market at that time. The signs of global slowdown were surfacing
slowly but surely as the credit crunch in USA forced the FIIs and other
big players, who had invested a huge sum of money in the market;
started booking profit and drove their money back from the market.
The SENSEX as a result crashed from an all time high of 20873.33 on
8th January, 2008 to 8451.01 on 20th November, 2008. It was a
tremendous decline of about 60% which was a result of factors like
Credit Crunch in the Global Market, Net sales by FIIs on a large scale
on a continuous basis throughout the year, high inflation rate at that
time that reduced the purchasing power of investors and the volatility
in the market that made the customers more and more apprehensive
about the safety of their money. The total outflow of the Foreign
institutional investment was Rs.53,051.70 Crore (Source:
Moneycontrol.com) during this year and comparing this figure of net
inflow of Rs. 70,940 Crore of FII in the previous year, one can easily
see through the grave situation. The share prices of many companies
like ICICI Bank, DLF, Reliance Communications Ltd. and others came
down to a historic low. The fall of Wall Street had a significant impact
on the market and the economies world over felt the pinch.
The share price of IBFSL is very much positively correlated with the
movement of the market and it behaved in almost the same way as the
market did during the whole year. The scrip remained volatile so did
the SENSEX. The share price of IBFSL reached to Rs. 922 on 3rd
January, 2008 and the successive fall in the market brought the price
back to Rs. 87 on 10th of October the same year, which was a fall of
more than 90% in a span of just 10 months. The price of the scrip
started moving upwards towards the end of the year thanks to the
improvement in the consumer demand and some signs of recovery in
Indian Market.
Now, let’s take a close look at the movement of share prices of IBFSL in
different months of the year 2008.
17
Technical Analysis:
The main focus of our analysis will be the behaviour and movement of
the share price of IBFSL from March onwards. The current trends are
the best tool to understand the behaviour of the share in the short
term. The following graph shows the closing price of IBFSL from March
to May 2009.
Analysis:
The share is recovering well for the last three months and is on a
growth trajectory. The announcement of election results on 16th May
acted as a launching pad and the scrip gained about 50% in a matter
of just one week that followed. The coming months will decide whether
the bull phase in the scrip will contine or not.
Now, we use some technical tools to analyse the scrip for the last three
months.
Bollinger Band Analysis:
Bollinger Bands are curves drawn in and around the price
structure that define high and low on a relative basis. The base of
the bands is a simple moving average. A measure of volatility,
standard deviation, is used to set the width of the bands making
them fully adaptive to changing market conditions. The defaults
are bands spread above and below a 20-day simple moving average
by two standard deviations. Bollinger Bands are used in numerous
ways. They can be used to aid chart pattern recognition. They can
18
be combined with other indicators to identify entry and exit
points. They can be used to identify areas of compression and to
spot the ends of extended moves.
The purpose of Bollinger Bands is to provide a relative definition
of high and low. By definition, prices are high at the upper band
and low at the lower band. This definition can aid in rigorous
pattern recognition and is useful in comparing price action to the
action of indicators to arrive at systematic trading decisions.
The following graph shows the movement of share price of IBFSL
from March 2nd to June 19th, 2009 along with the Bollinger Band.
While analysing the historical price and volumes, a very

interesting trend has been seen in this scrip. The share has shown
downward trends most of the times whenever the volumes have
been rising while the upward trend is led by relatively less
volume. This is quite critical as the volumes have been rising over
the past few days and the share has started showing downward
movement already. Contrast this to the fact that the volumes
were quite low when the price of the share was moving up the
ladder. To put this into the numbers, when the price of the share
rises to more than 50% from a level of Rs. 145.8 to Rs. 220.45,
the average volume for this 12 trading session was 2.47 Lakhs
while when the rally stopped and the scrip lost about 8% in 6
trading session from 12th June; the average volume was 8.5 Lakhs.
This consequent rise in the volume, with the last two trading
session registered volume of more than 1.1 million, is indicating
further downtrend in the prices. This belief is further
19
strengthened by the analysis of Bollinger Band over the past few
months. The Band is narrowing at the end of the month with the
price of the scrip touching the lower band. This gives an
indication of movement out of the range of Bollinger Band and
probably the downward movement will be seen in the coming
week.
Analyst’s Recommendation:
The price will come down for the week and the price will stabilise
at the level of Rs. 158-160 for the week June 22nd – June 26th,
2009 and the surge in the prices will be neutralised till the share
reach to that level. But the share will quickly move upwards after
this. However, the Budget is going to be announced in two weeks
that is on 6th July, 2009 and the positive measures taken by the
government might result in significant improvement in the prices
of the share.
MACD Analysis:
Moving Average Convergence Divergence (MACD) is a trend-
following momentum indicator that shows the relationship
between two moving averages of prices. The default MACD is
represented as the difference between a 26-day and 12-day EMA of
the price. A 9-day EMA of the MACD, referred to as the signal (or
trigger) line, is plotted on top of the MACD to indicate buy/sell
opportunities. Divergence, the difference between the MACD and
the signal, is also plotted as a histogram. The MACD is most
effective in wide-swinging trading markets.
The following graph shows the movement of share price of IBFSL
from March 2nd to June 19th, 2009 along with the MACD.
20
Over the last few days, the scrip is falling continuously and the MACD
line is justifying that trend as the line crossed down through the red
line (signal line) on 4th June. The divergence between the lines has also
not shown any signs of bottoming out and the share might drop a bit
before rising again in the week succeeding the Budget. The correction
would be to the level of Rs. 158-160 for the week June 22nd to June
26th, 2009 and then the price will pick up.
The government is considering to scrap the STT and that might push
the positive sentiment for the market as a whole and ultimately the
share will benefit from that. Therefore, the price of the share may see
an upward revision in the budget week.
RSI Analysis:
The Relative Strength Index ("RSI") is a popular oscillator. It was
first introduced by Welles Wilder in an article in Commodities
(now known as Futures) Magazine in June; 1978.The Relative
Strength Index (RSI) measures the price of a security against its
past performance in order to determine its internal strength (in
an attempt to quantify the security’s price momentum).
21
When Wilder introduced the Relative Strength Index, he
recommended using a 14-day Relative Strength Index. Since
then, the 9-day and 25-day Relative Strength Indexs have also
gained popularity. The Relative Strength Index is a price-following
oscillator that ranges between 0 and 100. A popular method of
analyzing the Relative Strength Index is to look for a divergence
in which the security is making a new high, but the Relative
Strength Index is failing to surpass its previous high. This
divergence is an indication of an impending reversal. When the
Relative Strength Index then turns down and falls below its most
recent trough, it is said to have completed a "failure swing." The
failure swing is considered a confirmation of the impending
reversal.
Tops and Bottoms. The Relative Strength Index usually tops

above 70 and bottoms below 30. It usually forms these tops and
bottoms before the underlying price chart.
The RSI has reached to a level not seen since April 1, 2009 as the
index has moved up in the recent past from a much higher level but
due to recent surge in the share price since April could bring the index
a bit down farther. Again, the tool is giving an indication of slight
22
correction before the upward movement of the share starts after
correcting to the level of Rs. 158-160.
23
FACTS
AND
FINDINGS
24
The detailed study of the share of IndiaBulls Financial Services Ltd
provided many crucial things related to the behaviour of the share.
The Key Findings can be grouped as follow:
The scrip is positively correlated with the BSE sensex and the
movement of the sensex do affect the movement of the share.
Despite the positive correlation, the scrip could not keep up with the
pace of sensex in the recent times. This is because of the fact that
there is circuit limit of 5% on the scrip that restricts its sudden
movement either side.
The scrip lost more than 75% of its value between mid August to mid
October, 2008 and that was the worst phase for the share.
The investment in the share a year ago would have yielded a return of
– 47.63% which is quite lower than – 12.16% decline in the value of
sensex.
Despite global slowdown that affected the Banking sector all over the
world, the Bankex is among the four sectoral indices that yielded a
positive return of 7% on the investment done a year ago. (1st June,
2008 – 29th May, 2009).
The BSE-PSU was the major gainer of 19.04% while the Realty index
showed a decline of 45.50%.
One of the major findings of the research was that despite the
correlation of a particular share with various indices, the share
behaves in its own particular manner and the correlation can lead to
wrong calculations while investing or intra-day trading in that
particular share.
The news plays a very important role in deciding the movement of a
share or the sensex as a whole on a particular day.
25
CONCLUSION
AND
SUGGESTION
26
The Indian stock market has recovered from the impact of recession
and the confidence of the investors and FIIs is restoring in the market
again. The market has seen the bottom phase and so did the share of
IndiaBulls Financial Services Ltd.
The share will move upwards from here and there is strong possibility
of it, crossing Rs. 225 mark over the next three weeks. The overall
positive sentiment in the market could push the price of the share
further. With the first quarter results for FY 2009 due to come in July
that will definitely be better than the last quarter, the share of IBFSL
will definitely see an appreciation. The following action is
recommended:
Current Price: Rs. 168.90 (24/06/2009)
Date: 26/06/2009:
Action: Buy
Target Price: Rs. 183
Stop Loss: Rs. 173
Week: 10th June – 10th August, 2009

Action:
Buy at the level of Rs. 180 and Sell at the level of Rs. 230
27
BIBLIOGRAPHY
Books:
Portfolio Management : S. Kevin
Financial Management : I M Pandey
Financial Management : Dr. M Y Khan
Websites:
http://www.moneycontrol.com
http://rbi.org.in
http://nseindia.com
http://bseindia.com
http://www.indexmundi.com
http://www.allbankingsolutions.com/Chronology-CRR-Rate-India.HTM
http://www.economywatch.com/economy_2009/
https://www.cia.gov/library/publications/the-world-factbook
http://www.imf.org/external/pubs/ft/weo/2009
http://www.country-data.com
http://www.tradingeconomics.com/Economics/GDP
Growth.aspx?Symbol=RUB
http://www.thehindubusinessline.com
http://planningcommission.nic.in
http://labour.nic.in
http://indiabudget.nic.in
http://indiabulls.com/
28

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PROJECT REPORT

INDIA BULLS FINANCIALSERVICES LTD.

Submitted in partial fulfillment for

MASTER OF BUSINESS ADMIMISTRATION

KCC INSTITUTE OF TECHNOLOGY AND MANAGEMENT

This is to certify that Ms. Sweta Kumari of Kcc Institute of

I express my sincere thanks to my project guide, Mr. Anuj

S.NO. PARTICULARS PAGE NO.

6. INTRODUCTION TO EQUITY VALUATION 16

10. TECHNICAL ANALYSIS 112

11. FACTS AND FINDINGS 125

12. CONCLUSION 127

13. BIBLIOGRAPHY 129

Mr. Vivek Rana Chairman / Managing Director

Mr Rajiv Balhara Director

Mr. Kuldeep Sharma Director

Mr. Yajur Chaudhary Director

Mr. Rajneesh Aggarwal Director

Mr. Bipin Kumar Director

Mr. Gajraj Singh Director

Mr. Anil Kaushik Director

What is Equity Valuation?

To conduct a company stock valuation and predict its probable price evolution,

To make a projection on its business performance,

To evaluate its management and make internal business decisions

To calculate its credit risk

The end goal of performing fundamental analysis is to produce a value that an

In fundamental analysis, one can use either a top-down or bottom-up approach:

The bottom-up investor starts with specific businesses, regardless of their

1.TO examine the calculation & effectiveness of Equity

Since my project deals with the research on a listed company, the

The dynamics of Indian economy is changing and one of the

The recent trends in GDP growth:

Index of Industrial Production:

The recent trend in IIP is quite dismal as far as the performance of

The following figure shows a comparative performance of different

Source: CIA, World Fact Book

Foreign Trade (Annual and Monthly)

Month US dollar million

Export Import Balance

April 15,961 24,823 -8,862

May 15,550 26,684 -11,134

June 16,522 25,734 -9,213

July 17,072 29,054 -11,982

August 15,900 29,040 -13,140

September 14,131 26,417 -12,285

October 12,814 22,724 -9,910

November 10,206 22,405 -12,198

December 12,151 18,419 -6,267

January 11,422 16,415 -4,993

February 11,913 16,823 -4,910

March 11,516 15,561 -4,045

Source: DGCI & S and Ministry of Commerce & Industry.

The following guidelines are provided by RBI for a company venturing

Listing Details - Indiabulls Financial Services

Year Ending Month Mar

AGM Date (Month) Sep

Book Closure Date (month) Aug/Sep