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Future Retail Files New Case Against Amazon Over Deal – Top Indian Market News

Future Retail Files New Case Against Amazon Over Deal

Kishore Biyani’s Future Retail has filed a fresh lawsuit against Amazon in the Supreme Court. Amazon owns a critical stake in Future Retail. Amazon won an arbitration order that stalled Reliance’s decision to acquire Future Group. Future Group has argued that if the deal with Reliance doesn’t go through, it would cause unimaginable damage to the group, It could mean possible job losses for 35,575 employees and risk Rs 28,000 crore in loans and debentures.


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Ami Organics IPO to Open Next Week

Specialty Chemical maker Ami Organics is set to launch its IPO next week on September 1, 2021.  The company manufactures different types of Advanced Pharmaceutical Intermediates and Active Pharmaceutical Ingredients (API). The company has three manufacturing plants in Gujarat situated at Sachin, Ankleshwar & Jhagadia, with an installed capacity of 6,060 MTPA. The company intends to raise Rs 570 crore through the IPO. The price band is set at Rs 603 to Rs 610 per equity share

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Airtel to Get Investment From Google

According to a TOI report, Google is now planning to invest money in telecom operator Bharti Airtel. It is reported that Google’s investment in Airtel could be substantially large running into several thousand crores of rupees. Google has invested a whopping Rs 33,737 crore and currently holds a 7.73% stake in rival platform Reliance Jio.

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EPF-Aadhar Link Mandatory From September 2021

The Employees’ Provident Fund Organisation(EPFO) has tweaked some rules regarding PF accounts. As per the latest update, your employer can credit money to your PF account only if your account is linked to your Universal Aadhar Number(UAN). 

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Grasim to Invest Rs 5000 Crore in Paints Business

Aditya Birla Group’s Grasim Industries has approved a Rs 5000 crore CAPEX mainly towards its paint business. It has earmarked Rs 2600 crore CAPEX for the current financial year FY22. The proceeds would be mainly towards its viscose staple fiber (VSF) and chemicals business.

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FDI Equity Inflows Up 168% to Rs 1.3 Lakh Crore in Q1

Foreign direct investment (FDI) into the country increased twofold to Rs 1.3 Lakh Crore or USD 17.57 billion during April-June this fiscal. The rise is attributed to measures such as policy reforms and ease of doing business. The FDI in the same quarter last year was USD 11.84 billion or Rs 87,000 Crore.

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Jandhan Bank Accounts Rise to 43 Crores, Amount to Rs 1.46  Lakh Crore

As of August 18, 2021, Pradhan Mantri Jan Dhan Yojana accounts stood at 43 crores, totaling a Rs 1.46 crore balance in beneficiary accounts. Of this close to 55.47 percent (23.87 crores) Jan-Dhan account holders are women and 66.69 percent (28.70 crores) holders are in rural and semi-urban areas. Moreover, 36.86 crores or 85.6 percent are operative, and the average deposit per account is Rs 3,398, as per the statement

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Editorial

How Does Your Provident Fund Work? Does the Employees’ Provident Fund Lack Transparency?

Are you a salaried individual? Do you avoid investing in shares and bonds thinking they are quite risky? You might not know but you are unwittingly investing in them through your Provident Fund. That’s right, the Employees’ Provident Fund Organization or EPFO  is required to invest up to 15% of its corpus in the equity markets. The remaining 85% is invested in Fixed Income instruments like Bonds, Treasury Yields, Government Bonds, etc. 

So how exactly does your Provident Fund work? Does it lack Transparency and Efficiency?

The Concept Of Provident Fund

In a provident fund, you give a portion of your salary to the EPFO, your employer also contributes a similar amount to the EPFO. The EPFO then invests that money over a long period, in bonds, equities, and other securities and multiplies the money. By the end of a few years, depending on when you choose to withdraw your money from your Provident Fund, you get your principal amount, plus the interest rate applicable on principal. The interest rate keeps changing and is decided by a Central Board. Currently, the interest rate applicable is 8.5% per annum as of FY2021.  

One can claim their Provident Fund after only retirement or a certain period of unemployment. As of 2021, one can withdraw PF after Unemployment for 1-2 months. 75% of EPF can be withdrawn after unemployment of 1 month of unemployment. The remaining 25% can be withdrawn after 2 months of unemployment. One can also withdraw before retirement in case of purchase of flat/house/site, the marriage of dependents in family/self or for medical expenses or during a natural calamity or emergency. 

Where Is The Provident Fund Money Invested?

The total Assets Under Management(AUM) by EPFO is close to Rs 11 lakh crore. Employees if EPFO isn’t well-trained finance professionals and may not be apt to handle such huge amounts of money. Therefore, EPFO hires fund managers, organizations like SBI, UTI, ICICI, and other well-known organizations to manage their funds and invest in markets. In 2019, EPFO appointed SBI Mutual Fund and UTI Asset Management Company as its fund managers for a period of three years. These fund managers on behalf of EPFO invest their corpus in Exchange Traded Funds(ETFs) and Fixed Income instruments. EPFO does not invest directly in shares and equities of individual companies, rather in ETFs. EPFO invests in SBI Mutual Funds, UTI ETFs, CPSE ETF, and Bharat 22 ETF. 

To Know More About Exchange Traded Funds(ETFs), Click Here.

Provident Fund and COVID-19

EPFO lost money with the onset of the COVID-19 pandemic. In March 2020, there was a huge selloff in markets with the onset of the COVID-19 pandemic. The COVID-19 lockdown added to the injury. Naturally so, as people lost employment, they had to depend on savings and provident fund money to survive. Provident Fund withdrawals rose. EPFO closed 71.01 lakh EPF accounts between April 2020 and December 2020. 

Right after the lockdown was announced in March, the government allowed subscribers to withdraw an amount not exceeding their three months’ basic pay and dearness allowance from their EPF accounts. Due to COVID-19, the EPFO settled 60.88 lakh withdrawal claims and disbursed  ~Rs 15,255 crore till January 31, 2021. 

Post lockdown, EPFO data is now an indicator of a recovering economy. It managed to add 12.54 lakh subscribers in December 2020 and 13.36 lakh subscribers in January 2021. This is a ~28% percent increase in net subscribers YoY. EPFO added close to 2.61 lakh female subscribers in January, which is 30% more than the previous month. 

Does EPFO Need To Diversify and Be More Transparent?

The asset allocation of the EPFO corpus is pretty opaque. Nobody knows where the money goes to or where the money comes from. An average PF account holder doesn’t know where the money is going. Quite a fraction of this information is in the public domain. There have been instances where senior economists have suggested that EPFO must become transparent and diverse when it comes to investments. In public opinion, Bharat 22 and CPSE ETFs have been deemed not appropriate for a pension fund like EPFO. Moreover, these funds haven’t yielded great returns either. The government is aiming to restructure the EPFO with the creation of a separate cadre of officers for it and bringing financial expertise into the organization. Do you find EPFO to be a poorly managed organization? Let us know in the comment section in the marketfeed app.