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Volume 4, Issue 4, March 2018

Artha - March 2018

Editorial

 

This issue of Artha is the first one after Budget 2018. Since lots have already been written on the budget, we have decided not to overload you with more opinion on budget. Indian financial sector is passing through a challenging time. Massive bank frauds and large volume of non performing assets in the balance sheet of most of the banks are the talking point in any deliberations on Indian banking industry today. The Securities and Exchange Board of India (SEBI) has this month tightened the regulations of financial markets. In order to curb ‘advantage’ of algo traders who are operating from co-location facilities, SEBI has decided that co-location services will be shared and algo traders will now have to pay congestion charges for choking the limit order book. In order to ensure that derivatives and cash markets move in tandem, SEBI has stipulated that derivatives on stocks, that do not meet certain eligibility criteria, would have to be settled through physical delivery. This stipulation may bring down number of stocks that are presently traded in derivatives segment of the markets. The impact of these recent changes will surely be felt in near future.

The first article is a multi-part essay that discusses various valuation technique applicable for start-ups. This will cover various methods of valuation of start-ups from idea stage to public listing. This article looks at valuation of ideas.  The second article discuss the decision taken by Supreme Court of India of banning of BS-III compliant vehicles. This will lead India achieving emission standard as par developed countries. However, the path is not so smooth. The third piece deals with the loose monetary policy of Central Banks which is a sign of return of inflation and growth in an inter connected global economy and the near identical mindset of the central bankers. In the fourth article, the author highlights that in a market where traders are self-taught, deep-learning networks, if something goes wrong, how do we know who to blame?.

The Market Watch section in this issue deals with the banking frauds that have come to light recently.

You may send your comments and feedback on this issue to ashok@iimcal.ac.in

Happy reading!

Ashok Banerjee

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Valuing Start-ups- Part I

Author: Ashok Banerjee ( From IIM Calcutta )

The start-ups in India, as in other parts of the world, are having a dream run over the past four years. The startup India campaign of the Government was able to create a friendly ecosystem that has emboldened young minds to innovate, take risk, raise funds, and flourish. Private equity and venture capital funds are […]

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Health or Wealth? An Automotive Dilemma

Author: Samit Paul ( From IIM Calcutta )

The debate on ‘environment vs development’ is undying and in spite of various polarized views on this debate, the world is always looking for a sustainable trade-off. Gradual change of climate, especially global warming, is a continuous threat towards the society. Hence, committed efforts from all stakeholders across countries are highly desired to achieve that […]

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Central banks act in tandem to unwind a decade of easy money

Author: Balachandran R ( Alumni Corner )

Long before the Great Recession that struck the United States in the aftermath of the financial crisis, Japan was in the throes of a multi decade era of low growth and deflation following a boom and bust phase. Years of zero or negative interest rates failed to move the needle on inflation. Emerging market denizens […]

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Who Do We Blame?

Author: Ayan Bhattacharya ( Voice of America )

For the past few weeks, India has been fixated on the Nirav Modi-PNB saga—with every passing day exposing some new or unexpected affront of the regulatory system. Investigative authorities have finally begun swooping in on the details, and like every time, there is the hope that at least this time, the guilty would be brought […]

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The Billion-Dollar Fraud That Shook The Nation

Author: Tanmay Srivastava ( Market Watch )

Public Sector Banks (PSBs) in India had for long been the poster boys of steady growth in the country. The customers seemed happy with the healthy returns they got on their deposits, stashed away safely – largely insulated from market risk. The bankers were content with the stability, esteem and relative autonomy associated with their […]

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