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BANGALORE: Even as Rishad Premji spearheads <keyword id="10862" type="CITY" weightage="80" keywordseo="Wipro">Wipro</keyword>'s $100-million corporate venture arm that invests in startups, the central strategy office under him also functions like an in-house venture capitalist that funds ideas from within the company. 
 
The strategy office runs what it calls the H2H3 (Horizon 2, Horizon 3) Investment Program to nurture ideas coming from various business units that have the potential to scale up over a two- or three-year timeframe and generate substantial revenues. 
 <keyword id="818742" type="UNKNOWN" weightage="80" keywordseo="The-move">The move</keyword> is an encouragement for employees who think up such ideas, as also potentially a booster for the company given the need to differentiate itself from rivals. 
 Recently, the program funded the idea of a commodities trading and <keyword id="444072" type="ORGANIZATION" weightage="100" keywordseo="risk-management">risk management</keyword> (CTRM) platform that has the goal to grow to a $50-million practice in three years. 
 
CTRM is expected to drive growth across the banking and energy and utilities verticals. Bangalore startup Eka Software has a very successful commodities platform. 
 
Other H2H3-funded practices are in the areas of mobility, cloud and analytics. Wipro said it could not comment on the program. The H2H3 program identifies ideas in solution creation, white spaces, product-led services, new lines of business and new geographic penetration. 
 The program is said to have not only invigorated business unit team leaders to come up with proposals that have the potential to generate a revenue upside, but also compete internally to receive mentoring and <keyword id="6357455" type="EVENT" weightage="60" keywordseo="Funding">funding</keyword> support. 
 By the end of 2012 fiscal, 28 ideas were rolled back into the business units out of which 9 ideas generated revenues. A performance-management solution was one of the successful ideas; it used analytics to predict outcomes for data sourced from <keyword id="35450" type="COMPANY" weightage="80" keywordseo="insurance">insurance</keyword> companies. Sources told TOI the solution brought revenues of $0.75 million in the first year of incubation. By the third year, it recorded $33 million in revenues and was rolled back into the BFSI unit. 
 
Another approved idea was in information lifecycle management initiated by the business application services unit. Though it didn't show revenue opportunity in the first year, it generated over $6 million in revenues in the second year and grew to $35 million and $45 million respectively in the third and fourth years. A smart grid solution, part of the energy and utilities practice, touched over $17 million in revenues in three years. 
 
Some ideas are killed if they don't bring expected revenues within a certain period. Among abandoned ventures have been one solution in airline revenue enhancement and another in logistics optimization

Wipro Pumps In Funds To Grow In-House Startups

<ul><li>Jarvis Protect will help an investor to book profits and minimize losses. </li><li>Automated-algorithm based portfolio management tools are free from human bias and also lead to cost savings. </li><li>Such platforms also help investors scan and identify relevant stocks. </li></ul><keyword id="14326591" type="General" weightage="20" keywordseo="jarvis-invest" source="Orion">Jarvis Invest</keyword>, an AI-powered stock advisory tool platform, launched Jarvis Protect, a <keyword id="16413128" type="General" weightage="20" keywordseo="risk-management-service" source="Orion">risk management service</keyword>. The service will enable investors to book profits, and cut losses from any portfolio uploaded on the JARVIS system. Often, Do-It-Yourself (DIY) investors build their stocks portfolio based on unsolicited tips and rumours, without any authentic and validated exit calls. This leads to accumulation of junk or irrelevant stocks costing investors their fair returns. Jarvis Protect is designed to address the challenge that DIY retail investors face – knowing when to exit a stock/strategy and thus book profits or minimize losses. This service will act as an efficient risk management tool for investors thereby helping them turn their underperforming portfolio into a winning one. The service will be available at affordable prices for any portfolio in the Indian equity markets. Sumit Chanda, founder and CEO, Jarvis Invest says, “Jarvis Protect will provide investors with timely stock exit strategies and portfolio rebalancing. Our AI-driven model has a high downside accuracy which makes Jarvis Protect relevant to all investors.” Growing breed of robo-advisors Jarvis Invest is one among a growing breed of robo-advisors that uses AI. The idea of <keyword id="3306737" type="General" weightage="20" keywordseo="robo-advisors" source="Orion">robo advisors</keyword> is to provide automated, algorithm-based portfolio management with negligible human intervention. In the process, there is negligible human intervention and human biases do not creep into the decision making process. Plus, since it is automated, it leads to substantial cost savings for the investor as there is no human involvement and interaction. In most cases, these robo-advisors ask clients to fill up a questionnaire with details like goals, risk appetite and so on. AI is used to process these data points and provide a customized investment portfolio to their investors. Jarvis’ AI-powered personalized portfolio costs ₹399 a month. Robo-advisors help a client not only to build a portfolio but also to manage their risk and rebalance their portfolio at regular intervals. StockEdge, an app which helps track stocks on NSE and BSE, uses algorithms to process, scan and identify the relevant stocks for retail investors. In January, it launched an AI powered chart pattern recognition feature where an AI-enabled algo processes all stocks and after further streamlining, prepares a list of stocks where specific patterns have been formed. This helps a trader get clarity about market trends and take position in the market. AI based robo-advisory tools can thus benefit both long-term investors and traders. Based on AI, these help an investor make better investing decisions and reduce human bias when it comes to investments. SEE ALSO <a href="https://www.businessinsider.in/personal-finance/news/how-you-can-handle-the-higher-home-loan-emi-burden/articleshow/97725816.cms">Don't be in a hurry to prepay but plan EMIs better, say experts as home loan burden set to rise</a> <a href="https://www.businessinsider.in/business/auto/news/last-mile-deliveries-food-aggregators-to-drive-electric-two-wheeler-growth-says-redseer/articleshow/97654131.cms">Last mile deliveries, food aggregators to drive E2W growth says Redseer</a>

Jarvis Invest’s risk management service to help investors know when to exit a portfolio

The <keyword id="69007" type="ORGANIZATION" weightage="60" keywordseo="World-Economic-Forum">World Economic Forum</keyword> surveys a range of global experts to find out their biggest fears for its <a href="http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2013.pdf">yearly Global Risks report.</a>
Coming into 2013, those experts feel that a number of big economic risks are growing, including the negative consequences of regulation, a possible hard landing for China or other emerging markets, and "chronic labor market imbalances," more popularly known as <a href="http://www.businessinsider.com/training-and-the-skills-gap-2012-11">the skills gap.</a>
Another financial crisis would have the most disastrous impact, and people think it's more likely that it was last year. 
Here's the report's map of where risks have headed since 2012. The Y axis shows the rating on potential impact, and the X axis the likelihood it will occur. 
<table class="image-container" width="200"><tr><td><div class="image"></div><a href="http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2013.pdf">World Economic Forum</a></td></tr></table>
The fastest growing <keyword id="27263" type="ORGANIZATION" weightage="60" keywordseo="risk">risk</keyword> when you combine both is the potential consequences of regulation. It's notoriously hard to know what regulation's going to do to businesses until it actually comes into effect. From the biggest provisions of Obamacare, which are coming into effect, to the continuing implementation of Dodd Frank, it's essential to keep an eye out for unintended consequences.
Find the full report <a href="http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2013.pdf">here</a>
NOW READ: <a href="http://www.businessinsider.com/massive-risk-of-antibiotic-resistant-bacteria-in-three-charts-2013-1">Three Scary Charts On The Post-Antibiotic Era</a>

The Most Probable And Damaging Big Business Risks Over The Next Decade

<table class="image-container float_right" width="200"><tr><td><div class="image"></div><a href="http://www.youtube.com/watch?v=PepNnCM7R4E">PBS Newshour</a></td></tr></table>Legendary MIT finance professor and recognized <a href="http://www.businessinsider.com/andrew-lo-time-100-most-influential-people-2012-4">world-influencer</a> <keyword id="1765303" type="PERSON" weightage="60" keywordseo="Andrew-Lo">Andrew Lo</keyword> is warning we should all stop picking <keyword id="6354298" type="ORGANIZATION" weightage="60" keywordseo="stocks">stocks</keyword>.
In an interview on Consuelo Mack's "Wealth Track" (via <a href="http://www.valuewalk.com/2013/01/andrew-lo-on-how-to-invest-in-increasingly-complex-markets-30-min-video/">ValueWalk</a>), Lo says market volatility has become so extreme that investors must spend far more of their energy focused on managing <keyword id="27263" type="ORGANIZATION" weightage="60" keywordseo="risk">risk</keyword> than gaming returns:
In the old days, when volatility was relatively steady, when the risk of investing in the stock market was relatively well known and stable over time, then active versus passive was a sensible dichotomy. The problem is that over the last few years, because of the changing macro landscape, volatility itself has shifted so dramatically, I think there's a third category of investing: to be passive on the alpha side, meaning you're not trying to look for great stocks, not going to try do do stock picking, you're going to be passive about investing in asset classes; but at the same time, you can also be active in <keyword id="444072" type="ORGANIZATION" weightage="60" keywordseo="risk-management">risk management</keyword>. 
Lo uses last year's S&amp;P 500 movement to make his case. For the year, it was up 14.5 percent. But through July, the year-to-date return was zero, he notes. "If you had taken money out, then you would have missed that 12 percent or 16 percent gain."
"Now, owning the S&amp;P is like owning one big asset that's exposed to [macro] factors." 
Lo says the best way execute his plan is to use <a href="http://www.investopedia.com/articles/optioninvestor/05/070605.asp#axzz2KE0E2eqm">managed futures</a> that invest across the widest variety of assets, in addition to stocks.
Macro risks are now too great, and can have such a disproportionate impact, that trying to time the market is close to impossible.
"There's a difference between market-timing and risk-timing, and individual investors should not be trying to market-time at home," Lo says.
Watch the whole interview at <a href="http://www.valuewalk.com/2013/01/andrew-lo-on-how-to-invest-in-increasingly-complex-markets-30-min-video/">ValueWalk</a>.

ANDREW LO: Don't Waste Your Time Picking Stocks

The five-letter word ‘Speed’ is as prized a commodity as gold in financial markets across the globe. Faster is access to the market information, faster can one put into action a pre-programmed trading strategy to execute a greater volume of trades, efficiently and swifter than what a single dealer at a trading desk can do. 
 
While much has evolved since the time of Reuters, which used pigeons to disseminate information to its clients about stocks traded in the Paris Stock Exchange faster than the post train, the need for ‘speed’ in the quest for greater profits has continued to remain a constant. 
 
While the open outcry trading in the pit gave way to manual trading using computers, the next inflection in the trading evolution is what we are experiencing today with ‘Algorithms’ that are programmed to release orders and execute trades. 
 
With the advent of low latency trading architecture, ‘speed’ is that deciding factor that separates profits from the ‘BIG’ profits. More importantly, the same can also be attributed to losses as well. Either ways, race to zero latency has gone very far and now is the time to re-evaluate how fast is fast enough. 
 
The more complex a trading system, greater the risk 
 
As much as Algorithmic-based programmed trading can be a boon, in terms of increasing the probability of greater profits, the collateral damage that it can unleash, if implemented without a proper risk management apparatus, can be quite catastrophic. 
 
Organizations such as Deutsche Bank, Knight Capital, Goldman Sachs and Credit Suisse serve as examples that testify the fact that increasingly complicated trading systems have given rise to an increasing likelihood of inadvertent errors (multi million to multi billion dollars) that cause wealth erosion. 
 
With the evolution of markets and trading systems nature of risk has also come a long way. While systemic risks continue to remain the same for manual rule based traders and mechanized traders, the impact of operational or system related risk is far more pronounced for the latter. 
 Justifiably so, markets regulators and exchanges foresee the looming threat of such evolved trading methodologies and have called for greater circumspection. While the process of periodic audits and existing regulations pertaining to <keyword id="6377626" type="COMPANY" weightage="20" keywordseo="Algo-Trading">Algo trading</keyword> such as pre-order checks and monetary penalties for high order to trade ratios are robust enough in India, one should demystify the scope for errors and underscore the need to constantly improve the risk management infrastructure for the overall good of the market participants. 
 
Imperative for traders and software programmers to be on the same page 
 
Algo trading entails strategies formulated by traders but eventually executed by software programmers. Coming from disparate fields, the lack of common knowledge or cross functionality is one of the biggest challenges to overcome. Uploading the wrong trading modules in the Complex Event Processing (CEP) engines by the software programmer can lead to adverse consequences on the trading front. Thorough stress testing of the Algo is imperative before it gets live in a market. 
 
<keyword id="3128662" type="UNKNOWN" weightage="20" keywordseo="Secondary-Risk-Management-Systems">Secondary Risk Management Systems</keyword> (SRMS) 
 
Primary risk management systems are typically integrated within the trading platforms and may fail to spot the programming gaps, stale data or any other corner scenarios. To ensure proper functioning of the automated trading system, different technological components including risk management must function well in real time. 
 
With so many changes happening within the trading system to optimize latency, enhanced algos logic changes, it may not be possible to validate performance of risk management in live markets comprehensively. And sometimes it does so happen that risk management system may fail without even the algo trader being aware of it. 
 
The flow of a single trading and risk management system is as shown below. Same software is used for trading and risk engine. This works well in 99.99% cases but in rare cases, it fails and algos can go haywire and cause market disruptions. 
 
 
 
To address this problem, a Secondary Risk Management System (SRMS) can be very useful by acting as a second line of defense to safeguard against issues in primary system. This workflow is elaborated below. 
 
 
 
Such offline system will not reduce the latency of live trading. All the orders, trades, modifications etc. will be captured in the offline risk management system which could be used to do the following, 
 
- Do all the risk checks primary system is meant to be doing. Act as a second line of defense and provide alerts within microseconds. Such a system for example could have saved Knight capital’s $400mn loss in 2012 as it had taken them 45 minutes to realize what went wrong and rectify it. A secondary risk management system could have caught it within seconds. 
 
- Perform more comprehensive risk checks over and above the exchange/regulator mandated checks like Greeks’ exposure (gamma, vega, theta, etc.) for options, margins utilized, and various other risk parameters. 
 
- Aggregate the risk checks across the servers, various algo trading software (including FPGA driven), etc., as depicted below. This will lead to a firm wide risk management, which is not possible today otherwise. The aggregation process is depicted in the image below. 
 
 
 
 
SRMS when implemented in the existing set up can go a long way in instilling confidence among all market participants. After all, one develops the confidence of stepping on the accelerator of a car only if the safety measures are in place, brakes are fool proof and the back up hand bake is there too. 
 
Time for India to accelerate. 
 
(Kunal Nandwani is Founder and CEO of uTrade Solutions) 
 
(Image: bankers-anonymous.com)

Why participants in the Indian financial market need to adopt secondary risk management systems

<ul><li>Risk management must be driven by the understanding of what is good for the corporate, said M Damodaran, Chairperson, Excellence Enablers and former Chairman, Sebi.</li><li>FICCI-GRMI Model Risk Code is a toolkit to sensitise senior officials and corporate boards on risk assessment and mitigation processes.</li><li>The Securities and Exchange Board of India (Sebi) mandates that the top 1000 companies listed must have risk management procedures. </li></ul>Risk management must be driven by the understanding of what is good for the corporate, said M Damodaran, Chairperson, Excellence Enablers and former Chairman, Sebi."The success of the risk code will be when people look at it, not as a direction or something that is mandated, but as the distilled wisdom of persons in corporate India and see how to apply that to their own corporate," the former chairman said at the release of the FICCI -- GRMI Model Risk Code on Friday. FICCI-GRMI Model Risk Code is a toolkit to sensitise senior officials and corporate boards on risk assessment and mitigation processes. The Securities and Exchange Board of India (Sebi) mandates that the top 1000 companies listed must have risk management procedures. However, while releasing the Model Code, Damodaran said risk management could be a voluntary exercise for others. "I am not a great believer in something being drafted into law", he said, adding, "if they don't see the value, it might end up as one more tick box," but whether it will add to corporate well-being is suspect. "Don't mandate because mandating comes with a cost". On occasion, <keyword id="462786" type="General" weightage="80" keywordseo="sidharth-birla" source="Orion">Sidharth Birla</keyword>, Past President, FICCI, said evaluating and addressing risk is a critical attention area for boards. "Any framework that helps businesses take more informed and risk-intelligent decisions should be most welcome," he said. In this context, he added, the Model Risk Code addresses entities of all sizes, including non-listed and private entities and can be of great significance in building risk maturity, should they choose to draw upon the Code. "This code will support boards as accountability increases with each passing day," he said. During the launch ceremony, <keyword id="838661" type="General" weightage="80" keywordseo="subodh-bhargava" source="Orion">Subodh Bhargava</keyword>, GRMI Board Chairman, said the Code was going to be a toolkit to bring about a change in the mindset of corporate boards and senior officials, and make risk assessment and risk mitigation processes a part of their DNA. Subhashis Nath, Founder and CEO - GRMI, former Senior Vice President and Service Line Leader for Enterprise Risk and Compliance, Genpact, said there was a significantly increased expectation from the corporate world, which requires corporate India to be more resilient, agile, and future proof. He added, "the model risk code intends to be a playbook, a guide or toolkit, to ensure boards and CEOs have an effective enabler to embed risk into their DNA." Anita George, Independent Director, Piramal Enterprise and former Executive Vice President and Deputy Head of CDPQ Global, said that while the risk was always there, the pace, unpredictability, volatility, and the myriad types of risks that are coming at us are making us aware that we need to have someone in the organisation who is firefighting, not just on a day-to-day basis, but more strategically. <keyword id="216369" type="General" weightage="80" keywordseo="richard-rekhy" source="Orion">Richard Rekhy</keyword>, Board Member of KPMG Dubai and former chief executive officer of KPMG India, noted that risk management was entirely about the business and has to be led by the CEO. Alluding to the Covid crisis, Rekhy noted that "post-Covid, the companies that bounced back faster are the ones that had better risk management practices." <keyword id="245593" type="General" weightage="80" keywordseo="mukesh-butani" source="Orion">Mukesh Butani</keyword>, Founding and Managing Partner, BMR Legal, <keyword id="204991" type="General" weightage="80" keywordseo="rajan-saxena" source="Orion">Rajan Saxena</keyword>, former Vice Chancellor of the SVKM's NMIMS, and Ritu Chawla Kochhar, India Head, Spencer Stuart, were also present at the occasion. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/government-invites-suggestions-for-union-budget-2023-24/articleshow/95799750.cms">Government invites suggestions for union budget 2023-24</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/india-needs-1000-pilots-annually-but-training-infra-in-short-supply/articleshow/95799701.cms">India needs 1,000+ pilots annually, but training infra in short supply</a>

Risk management must be driven by understanding of what is good for corporate: Ex-chairman Sebi

<ul class="summary-list"><li>Davis Clarke, a risk management advisor at Citizens, has gained quite a following on social media.</li><li>His motivational videos are all about bringing positivity to the everyday routines of office life.</li></ul>You don't have to look far on social media to find people who are sick and tired of their office jobs.But one office worker has gained a following for his unabashedly upbeat and positive content. And his videos aren't anything crazy — they're all about his daily commute, quarterly meetings, spreadsheet certification, and the other mundanities of the 9-to-5 workday.Davis Clarke, who works at Citizens Bank in Boston, has become something of a social media sensation with his <a target="_blank" href="https://www.instagram.com/davis.clarke/?hl=en">Instagram</a> videos, amassing 700,000 followers over the last few months. His content is overflowing with motivational content, to the point of corniness or even cringe-worthiness.But Clarke says he's not focused on trying to build his audience."I'm not an influencer," he insisted to Business Insider, who met up with Clarke on one of his lunch breaks. If his message of unfailing, everyday positivity resonates with people, it's because they can probably relate to his unremarkable routine.In one <a target="_blank" href="https://www.instagram.com/reel/C6EGfe1uLTZ/?utm_source=ig_web_copy_link&amp;igsh=MzRlODBiNWFlZA==">video</a>, he's walking through downtown on a Monday morning, ready to start "hammering spreadsheets and chugging waters." In <a target="_blank" href="https://www.instagram.com/reel/C3sScVWup-W/?utm_source=ig_web_copy_link&amp;igsh=MzRlODBiNWFlZA==">another</a>, he's in the office on a Friday. "The heavy hitters of America are about to be shaking in their boots," he tells the camera, "seeing that the young people are actually motivated to work." "Everyone now has to study, they have to work," he told BI. "And so I'm just going in and saying, 'Hey, it's gonna be a good day.'"In just a few months, the 27-year-old risk management advisor has found himself getting recognized offline. While meeting with BI in Boston, Clarke was approached by several people walking by, including a college student, an Amazon tech worker, and a middle-aged lawyer, who all asked for selfies."It's just inspiring. That's it," Ryker Puls, the Amazon employee on vacation from Seattle, said of Clarke's content.Invariably, Clarke will ask his fans about their day, where they work, and maybe even the name of their dog. After a few minutes of conversation, he'll often urge them to "stay locked in" or "get fired up."Tom Ranucci, an IT worker and food blogger, met Clarke at the University of Massachusetts at Amherst. He described Clarke was "full of energy," someone excited to meet anyone and everyone and chat about anything and everything."He's the exact same person" in real life, Ranucci told BI.The two stayed in touch after college thanks in part to their shared interest in running (Clarke's explosive finish at the Boston Marathon last month went <a target="_blank" href="https://www.boston.com/news/boston-marathon/2024/04/17/davis-clarke-boston-marathon/">viral</a>). Ranucci never expected his friend's social media following to skyrocket the way it did earlier this year — though he wasn't surprised that the message found an audience."In my mind, it was only a matter of time," he said.For his part, Clarke never expected to become a phenomenon. Besides a barely-used Facebook account, his digital footprint was almost nonexistent until a class project his freshman year of college. The assignment? Build a social media account and use it to show the world the values he cared about."When I first set out, I truly just wanted to get people confident and fired up to go after their goals. I try to stay true to that vision," he said.He isn't under any illusions about the nature of his content. Clarke knows there are people out there doing "way more" interesting things than his daily routine."I think just showing normal life, and the good side of it, is what gets people going," he said. "And it's interesting because so many people out there are working hard, doing all these same things every day."His positive outlook doesn't mean everybody loves his content. Some doubt that he, or anyone, can seemingly always be so genuinely enthusiastic. Other commenters just think it's repetitive or annoying.But Clarke says he's not worried about the hate — and, if anything, he's glad that it's getting more people to engage with his content."It just gives me a chance to say, 'Hey, we're going to try to take someone who's negative and make them pause. Let's show them what we're doing, show them why we're doing what we're doing.' Just try to earn their respect."He added that he thinks some of the comments are good-natured trash talk, rather than people being "genuinely mean.""Some people say the comments are like a community of their own, so maybe that's good," he said. "People will be creative, they'll come up with funny things like they'll be like 'bad day to be a spreadsheet,' 'bad day to be a whatever.' I don't think I ever came up with that at all. "Ranucci said he "certainly" thinks that Clarke's content gets people to approach their boring, everyday routine differently, "just because how infectious his energy is.""It's contagious," he told BI. "It's like a laugh.""People see that and, you know, it's hard to not to join right in, and take that same love and passion into what they're doing" in their own lives, he added.

This 'locked-in' risk management advisor gets his followers hyped about 'hammering spreadsheets' and quarterly meetings

In order to succeed in a volatile business environment, <a href="http://www.businessinsider.in/searchresult.cms?query=Tata+Sons+">Tata Sons</a> chairman <a href="http://www.businessinsider.in/searchresult.cms?query=Cyrus+Mistry+">Cyrus Pallonji Mistry</a> has advised leaders of group firms to focus and work on sustaining profitable growth and develop agile businesses. 
 
The chairman requested the leaders to achieve the company’s Vision 2025 and said sustainable profitable growth is the key building block for long term stakeholder value creation, reported the Economic Times. 
 Addressing <keyword id="6355725" type="CITY" weightage="80" keywordseo="Tata-Group">Tata group</keyword>'s annual group leadership conference (AGLC) on Wednesday, Mistry said that the <a href="http://www.businessinsider.in/searchresult.cms?query=conglomerate">conglomerate</a>'s revenues increased 5.3% during 2014-15 to $108.78 billion, or Rs 6,85,314 crore, with international business accounting for 68% of it. 
 
Giving details about they can push the group to achieve the its Vision 2025, which is a quarter of the world's population experiencing the Tata commitment to improving the quality of life of communities and customers, the chairman asked group companies to create an omni-channel marketplace that will integrate store shopping and online buying. 
 For the group to sustain profitable growth and develop agile business amidst a changing world business environment, he advised that it should focus on developing unique consumer insights, diversification of profit pools, creation of <keyword id="388837" type="UNKNOWN" weightage="80" keywordseo="intellectual-property">intellectual property</keyword> rights, deployment of robust <keyword id="444072" type="ORGANIZATION" weightage="60" keywordseo="risk-management">risk management</keyword> processes, creation of financial flexibility to seize opportunities, and minimizing impact on the environment. 
 
In FY15, Tata group invested $10 billion, or about Rs 63,000 crore, and its market <a href="http://www.businessinsider.in/searchresult.cms?query=capitalisation+">capitalisation</a> increased 17% to $134 billion, or about Rs 8,44,200 crore, according to the financial daily. 
 
<a href="http://www.businessinsider.in/searchresult.cms?query=Digital+">Digital</a> businesses were part of the conference and, according to a statement by the company, over 35 examples from across 19 Tata companies that are successfully harnessing digital capabilities in their strategies were showcased. 
 
A consultant who works with the group said like all other brick and mortar companies, Tata group will have to move towards digital as a channel to reach consumers. 
 
"The transition, however is not going to be easy. However, as the consumer gets comfortable, the company has no other choice," said the person who requested not to be named. According to the company statement, Mistry also highlighted opportunities across the world including those that are "presented by a rapidly growing <keyword id="47445" type="UNKNOWN" weightage="100" keywordseo="Indian-market">Indian market</keyword> whose relative importance in the <keyword id="47890" type="ORGANIZATION" weightage="60" keywordseo="global-economy">global economy</keyword> would substantially increase by 2030". He said Tata companies need to build strategic and organisational agility to steer through these changes. 
 
(Image: Reuters)

Focus on profitable growth, Cyrus Mistry advises Tata companies

Markets regulator <keyword id="19901201" type="General" weightage="100" keywordseo="Sebi" source="keywords" meta.keywordsubtype="org" meta.entityname="Sebi" meta.hostid="153" meta.entityid="Sebi">SEBI</keyword> has asked the <keyword id="20677983" type="General" weightage="20" keywordseo="mutual-fund-industry" source="keywords">mutual fund industry</keyword> to proactively conduct stress tests, a key component of <keyword id="20383727" type="General" weightage="20" keywordseo="risk-management" source="keywords">risk management</keyword> for the financial sector, which will help strengthen the ecosystem, its whole-time member Ananth Narayan Gopalakrishnan said on Friday. The regulator's stress testing emphasizes the need to assess and manage liquidity risks, especially in small and midcap equity schemes. Speaking at a mutual fund event, Gopalakrishnan highlighted the importance of modelling stress scenarios not just for individual schemes or fund houses, but for the entire mutual fund ecosystem. "It is also important to model stress scenarios for the entire composite mutual fund ecosystem. I would strongly encourage the industry and <keyword id="20090036" type="General" weightage="20" keywordseo="AMFI" source="keywords" meta.keywordsubtype="org" meta.entityname="AMFI" meta.hostid="153" meta.entityid="AMFI">AMFI</keyword> to take the lead and proactively conduct objective and credible industry wide stress tests. themselves," Gopalakrishnan said. He also emphasized the need to find better ways to communicate the risks associated with different mutual fund schemes. The SEBI official mentioned that while the current risk measurement system is straightforward and has had a significant impact, it doesn't fully capture the differences in risks among various investment schemes. According to him, many schemes are just labelled as high risk, even though they have different kinds of risks. The goal is to improve this system to better reflect those differences, while keeping it simple and easy to understand. One possible approach is to consider the portfolio's volatility and liquidity from stress tests to give a clearer picture. "While ensuring simplicity and ease of understanding remains a key objective, perhaps the underlying volatility of the portfolio along with the liquidity of the portfolio from stress tests could be used to provide better colour all around," he added. This comes at a time when the holdings of mutual funds by <keyword id="20234284" type="General" weightage="20" keywordseo="domestic-institutional-investors" source="keywords">Domestic Institutional Investors</keyword> (DIIs) and individuals have risen from about 54.3% of free float of all mid cap and small cap companies, as of March 2020 to 60.6% as of March 2024. Several fund houses have proactively stopped lump sum investments in some small-cap schemes and also capped the amount that can be invested through <keyword id="20675888" type="General" weightage="20" keywordseo="systematic-investment-plan" source="keywords">Systematic Investment Plan</keyword> (SIP) into small-cap schemes. He also highlighted the potential mismatch between the demand for paper and the supply of fresh paper coming into the ecosystem. Gopalakrishnan said the industry can make more progress in streamlining operations and improving efficiency for investors. "At a time when instantaneous fund transfers have become ubiquitous in our country, perhaps we should look to improve our internal processes and the security settlement ecosystem, to ensure that funds are passed on to investors on the day of the settlement itself, rather than a day after or two days after," he added. Over the last few years, the mutual fund industry has made impressive strides, and is now playing a crucial role in channeling financial savings towards risk capital formation. This was driven by stable macros, increased formalization, robust corporate earnings, digitisation and user friendly access. Moreover, the number of mutual fund investors has grown significantly from about 2 crore as of March 2019 to nearly 4.7 crore as of June 2024, an impressive compounded annual growth rate of 18% during that period. Gopalakrishnan mentioned that several exciting initiatives are in the works, developed with input from all stakeholders. These include a proposed low-ticket SIP, further breaking down regular SIPs into smaller, more accessible units (sachetisation and tokenization), and the introduction of "mutual funds lite" regulations. These new regulations will simplify rules for passively managed funds, reducing the compliance burden and encouraging competition and innovation. Additionally, a new class of higher-risk schemes is proposed for investors with a greater capacity to handle risk.

SEBI asks mutual fund industry to proactively conduct stress test

MUMBAI <keyword id="222693" type="COMPANY" weightage="40" keywordseo="The-National">The National</keyword> Housing Bank is considering a proposal that seeks to allow lenders to give up to 90% of the property value as <keyword id="6354730" type="UNKNOWN" weightage="40" keywordseo="Home-loan">home loan</keyword>. The proposal is for above Rs 20 lakh loans that carry mortgage guarantee cover. 
 At present, lenders offer maximum 80% of the property value as home loan. “We will discuss the matter of increasing LTV (loan-to-value) ratio for loans that carry mortgage guarantee cover from companies registered with the RBI,” said RV Verma, chairman and managing director of National Housing Bank (NHB), the regulator for <keyword id="100080" type="ORGANIZATION" weightage="40" keywordseo="housing-finance">housing finance</keyword> companies. Housing <keyword id="25455" type="ORGANIZATION" weightage="40" keywordseo="finance">finance</keyword> companies (HFCs) enter into a contract with mortgage guarantee companies at the time of loan origination. 
 
The measure helps mitigate default risk. This can also prove financially viable when they securitise home loan portfolios. People with knowledge of the matter said NHB’s efforts are aimed at increasing the LTV ratio for loans above Rs 20 lakh to 90% from 80% now. LTV ratio at 90% means a home loan borrower can avail a loan of Rs 90 lakh against a property value of Rs 1 crore. 
 
Securitisation means selling loan portfolios to other lenders to obtain an upfront payment sacrificing some costs. Recently, Dewan Housing Finance (DHFL) concluded the first-ever mortgage guaranteebacked securitisation deal for a pool of Rs 37.83 crore home loans coming from 288 loan accounts, a person familiar with the matter told ET. Each loan is below Rs 25 lakh, falling in the priority sector category. 
 DHFL is said to have sold the portfolio to India’s largest private sector lender <keyword id="6653" type="CITY" weightage="40" keywordseo="ICICI-bank">ICICI Bank</keyword> after taking 30% (of loan size) mortgage-backed guarantee from <keyword id="1125471" type="COMPANY" weightage="40" keywordseo="India-Mortgage-Guarantee-Corporation">India Mortgage Guarantee Corporation</keyword>. This will help the bank attain its priority sector lending target mandated at 40% of net bank credit. 
 IMGC is the country’s first mortgage guarantee company. It was established in 2012 as a joint venture with NHB, Asian Development Bank, International Finance Corp and Genworth Financial. Its guarantee can be invoked if DHFL borrowers default on those loans. <keyword id="6431877" type="COMPANY" weightage="40" keywordseo="Care-Ratings">Care Ratings</keyword> has given the loan pool an AAA (SO) rating. Structured obligation (SO) is an issue-specific rating. 
 As a company, DHFL has a rating of AA+. DHFL has assigned the pool to a special purpose vehicle, Nirmaan RMBS Trust – Series IV – 2014, which has issued a passthrough certificate where the bank has invested. “Mortgage-backed guarantee is an important <keyword id="444072" type="ORGANIZATION" weightage="40" keywordseo="risk-management">risk management</keyword> tool for housing finance lending,” said Vijay Agrawal, joint general manager at Care Ratings. “This will pave the way for future growth in this space.” According to NHB’s Verma, mortgagebacked guarantee provides protection from possible defaults, long-term lending for home loans up to 20 – 25 years. 
 
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