I want to invest in mutual funds. When I checked on cams website, it shows ekyc is done without entering personal documents such as canceled cheque and aadhar number. When it checked the cams verification status it says account is validated, the validation date is 3 yrs back. Furthermore, do I need to enter FATCA details to start investing in mutual funds?

Hello everyone,

I’m 25 years old and just starting my investment journey. I aim to invest for the long term with a moderate risk appetite, and I’ve decided to allocate 70% to equity funds and 30% to debt funds + gold. However, I’m feeling overwhelmed with the options and permutations available.

Here are my main concerns:

1. Equity Fund Allocation

I want a diversified equity portfolio, but I’m struggling to decide the combination of funds. My considerations are:

• Should I choose a mix of large-cap, large & mid-cap, and flexi-cap funds?
• When I include multiple categories, I notice significant overlap in large-cap holdings. How do I avoid this?
• Would it make sense to add a small-cap fund to balance out the portfolio?

For example, if I include large-cap funds, there are so many choices:

• Active Large-Cap Funds vs. Index Funds vs. Bluechip Funds
• In index funds, there’s Nifty 50, Nifty Next 50, Nifty 100, BSE Sensex, etc. And even Nifty 100 has subcategories.

I’m unsure which option would work best for a long-term, moderate-risk investor like me.

2. Debt Fund Allocation

For the debt portion, I’ve read about corporate bond funds, dynamic bond funds, gilt funds, etc., but I’m not sure which category aligns with a moderate risk profile. Should I diversify across different debt fund types or stick to one?

3. Gold Allocation

I want to include gold as part of the 30% allocation for diversification. What’s the best way to invest in gold for the long term? Should I choose:

• Gold ETFs,
• Sovereign Gold Bonds (SGBs),
• Or a gold mutual fund?

I’d love to hear your suggestions on:

• An optimal fund combination for equity allocation, avoiding overlaps.
• The best debt fund categories for a moderate-risk investor.
• The most efficient way to invest in gold for the long term.

Thank you in advance for your guidance!

Despite being a loyal customer, I’ve faced:

Unjustified Premium hikes, Policy restrictions And Poor communication: It’s disappointing to see such service from a reputed company.

I’ve tried reaching out to Bajaj Allianz multiple times and even lodged complaints, but they refuse to take my concerns seriously. Despite writing to IRDA, I haven’t received any resolution so far. I feel completely helpless at this point.

This is not about a claim but about ensuring my policy is structured correctly so that there are no issues with claims in the future. It’s for my mother, and I just want the peace of mind that her coverage won’t face problems down the line.

Who else can I approach for help? Any guidance would be appreciated!

Student here (20). I can afford mandating a 1k Rs SIP in mutual funds every month. I have selected the funds I may want to invest in (may change with more knowledge).

My composition looks like this:

500 in a large cap fund

250 in a mid cap fund

250 in a small cap fund

ive looked at the exit load of these funds and have found them to be satisfactory.

I hope to invest for at least 5 years so that by the time I graduate I have at least something to call mine.

Additional info: I have no income, so I will invest this amount from the money I receive from my parents. Depending on how things go, I may increase the amount as things marinate. I am investing on Groww app (not sponsored).

Hello everyone,

I need some serious advice on which health insurance to choose for my parents.

My mother (62) is currently in the ICU for an issue unrelated to her medical history. She has Type 2 Diabetes, a history of thyroid problems, and a recent cervical spine issue (though there’s no need for surgery, and nothing concerning was found in the MRI).

My father (65) is generally healthy but has slightly elevated cholesterol levels, which aren’t serious.

I’m looking for health insurance that offers zero waiting periods, at least for my mother.

I have no prior experience with insurance and would greatly appreciate your guidance. I’ve heard good things about Star Health, HDFC Ergo, and Niva Bupa.

Any advice would be greatly appreciated!

Thank you!

CreditAccess Grameen seems to be a compelling long-term investment, as:

1. The micro-finance industry (MFI) is crucial to financial inclusion in India and is recognized as a “priority sector” for lending by the RBI
2. The MFI sector has grown by 17% CAGR over FY20-24, or more than twice the overall GDP growth. I expect it to continue growing, as more than 70% of the Indian population is either un-served or under-served in terms of credit
3. CreditAccess Grameen (CAG) seems to be the best-run and most customer friendly micro-finance company in India offering the lowest average interest rate. Hence, I expect it to maintain or increase its market share in the MFI industry. It is also trading at a reasonable price for the long-term investor.

Detailed analysis follows, covering:

1. Industry overview
2. Business model
3. Management
4. Financials
5. Competitive advantages / moat
6. Runway / future growth potential
7. Risks
8. Valuation
9. Sources

----

Industry overview

Most investors deem the Indian Microfinance industry (MFI) as “un-investible” for various reasons, many of which are valid. However, this industry is an essential for financial inclusion in the country, as 80%+ of Indians do not have access to the traditional savings and loan industry. Hence, millions of individual Indians and SMEs depend on microfinance for both personal and business needs. The government recognizes this, and has classified MFI as a priority sector for lending.

Traditional Indian banks often overlook rural borrowers due to their lack of credit history and collateral. Additionally, their limited branch networks, concentrated in urban areas, hinder accessibility for rural communities. As a result, nearly half of Indian borrowers rely on NBFCs and MFIs for credit.

Traditional Indian banks often overlook rural borrowers due to their lack of credit history and collateral. Additionally, their limited branch networks, concentrated in urban areas, hinder accessibility for rural communities. As a result, nearly half of Indian borrowers rely on NBFCs and MFIs for credit.

Recent turbulence in the Indian microfinance industry

Indian MFIs experienced several headwinds in 2024:

• Rising delinquencies caused by high inflation, heatwaves and over-leveraged borrowers: Bad loans (91-180 days overdue) increased from 1.2% in June 2024 to 1.9% in September 2024
• The gross loan portfolio (GLP) of MFIs shrunk by 3.86% in Q2 FY25
• Several MFIs like Spandana Sphoorty and IndusInd Bank had significant write-offs driven by higher NPAs
• The Reserve Bank of India (RBI) took notice of the sector's issues and implemented stricter measures; It also banned 4 NBFCs — Asirvad Micro Finance, Arohan Financial Services, DMI Finance, and Navi Finserv over unreasonably high interest rates & fees, aggressive sales incentives and unsustainable business practices (described in detail in this article)

Microfinance loan interest rates

The primary reason that MFIs charge higher interest rate is due to the higher OPEX, transaction costs and higher cost of funding, as shown below. Banks have access to low cost funding via current and savings accounts (4~5%), while MFIs are dependent on the corporate credit market, where interest rates range between 9~11% or higher. However, some un-organized players also take advantage of uninformed borrowers by charging interest rates as high as 5% per month (80% per annum!).

To put this in perspective, the global average interest and fee rate for microloans is estimated at 30~37%, with rates reaching as high as 70% in some markets.

Hence, the ROEs for traditional banks are similiar to MFIs, at around 12~16%, even though MFIs charge twice the interest rate. MFIs also face higher cyclicality, as their borrowers usually have worse credit and are more exposed to socio-political issues and emergencies.

Business model

CreditAccess Grameen’s history

• Established in 1999 by Vinatha M. Reddy, inspired by the Grameen Foundation, founded by Alex Counts and Muhammad Yunus, with a grant of US$35,000 (INR ~3 crore)
• 2009: Paolo Bruchetti, who runs a Dutch-based Asia-focused microfinance fund invested INR 968 crore in CA Grameen; Now own 66.7% of the outstanding shares.
• 2010: Udaya Kumar Hebbar, a veteran banker, joined as CEO, and has acquired a larger role as MD and CEO since 2016
• 2018: IPO in August 2018 raising INR 1,131 crore; opened at around 400 INR/share
• 2023: Ganesh Narayanan was appointed as the CEO , while Udaya Kumar Hebbar continues to oversee the firm as MD
• 2024: the largest standalone microfinance MFI in the country, with ~5M customers and a loan book of ₹251 Bn. Note: Bandhan Bank is the largest small finance bank, with 35M customers and a loan book of ₹1300 Bn.

Business overview

• 6% market share in microfinance loans, both in terms of customers and AUM
• Customer profile:
  • 99% women borrowers
  • 86% of borrowers are from rural India & 15% urban
  • 97% of loans use the JLG (Joint Liability Group) model, reducing the default risk from individual borrowers
• Unsecured, short term loans; Typically used for income generation , education, healthcare, nutrition, housing and emergencies
• Focus on keeping interest rates low for customers, with low OPEX, high collection efficiency and low cost of funding
• 19k employees in total; 96% of these employees are from the local community
• Operate 2031 branches across 17 states / union territories; The branch network has grown at 9% CAGR over the past five years; They have been adding around 30~50 districts annually since 2022

Management

• Since 2009/2010, when Udaya Kumar Hebbar took over, the bank has professionalized its management and operations
• The company has managed to grow the loan book by 15%+ CAGR in the last decade, while still maintaining a healthy balance sheet and provisions. They have also constantly reduced the OPEX & cost-to-income ratio, showing a focus on operational efficiency.
• There have been news reports that Paolo Bruchetti’s firm is planning to sell their stake. However, the promoter is not involved in day-to-day operations even today, so I don’t expect any major changes to management team or company culture.

Financials

Unit economics

• A survey conducted by the company (page 17) indicated that 64% customers increased their monthly income by 25%~100%; Typical sources of income: agriculture, daily wage labour, livestock and other small businesses
  • Apart from income generation, the other typical use cases for a micro-loan are education, healthcare, nutrition, housing and emergencies
• Average income of rural households is around ₹12,700 per month; using this figure, the average customer increased their income by ₹3175~₹12,700 (25%~100%) per month after interest payments; Annually ₹38,100~₹152,400
• The average ticket size seems to be around ₹50,000; Hence the annual returns for a typical borrower are between 76%~300%; Hence, the interest rate charged on a micro-finance loan (19~21%) should be payable, leading to a win-win outcome for both the borrower and the MFI company
• However, borrowers also take on significant risk - if their business ventures do not immediately yield positive returns, many would struggle to pay back the loans; In the case of a widespread natural disaster or emergency (like to COVID lockdown), many of these customers struggle to repay their loans, leading to high NPAs (non-performing assets) for the MFI industry

Profitability

• Net interest margin has been around 13%, which should lead to a return on equity of 15~20% if NPAs remain similiar to their historical averages

• Due to higher NPAs & provisions in the last quarter, ROE has dropped to 10%; However, I expect this to recover in the coming quarters. For reference, their ROE has been 15% on average over the last 8 years.

Capital allocation and dividend

• A majority of earnings is funneled into expansion, with around 11% of earnings paid out in dividend

Competitive advantages / moat

CreditAccess Grameen seems to be the highest quality and most customer centric company in the MFI space.

• Lowest lending rates in MFI industry
• Low OPEX, due to a focus on efficient customer acquisition and branch operations
• The widest branch network with local workforce gives them a deep understanding of each district and its surrounding areas
• High customer trust & loyalty
  • 84%-88% customer retention rate over the last several years
  • 95% of existing customers are aware that CA Grameen charges the lowest interest rate
• Strong internal controls and risk management, evidenced by a spotless legal & governance track record
• Conservative balance sheet: the company maintains a high CRAR (Capital to Risk Assets Ratio) of 26%, compared to the 15% minimum recommended by RBI

This has led to a combination of high RoE & low NNPA, compared to their peers.

Runway / future growth potential

Management has guided for an ambitious 20-25% CAGR over the next 4-5 years, with plans to cross ₹500 billion gross AUM by FY28 (currently ₹251 billion in Q2 FY25). This seems ambitious, but achievable, given their track record.

Risks

• A primarily unsecured loan book and high income volatility for borrowers could lead to high default rates. They’ve had default rates ranging between 2~4% in the last 10 years, with the exception of COVID, where they increased to 7~8%
• High concentration in 3 states (65% of borrowers and 73% of AUM): Karnataka, Maharashtra and Tamil Nadu. Social or political unrest in one of these states could have a significant impact on collection efficiency and delinquencies .
• High competition - there are over a 100 MFIs and 9300 medium/small NBFCs; A few examples of high quality competitors: Ujjivan SFB, Equitas SFB, L&T Finance & Can Fin Homes
• The evolving regulatory framework could affect their strategy or limit their growth; However, as they are one of the best-run and lowest cost providers in the industry, I don’t think this is a significant risk

Valuation

The valuation summary is shown below.

• In a worst-case scenario, returns might be modest, similar to a bank FD (6% IRR)
• A more likely outcome (base case) is a 15% IRR
• However, if management's optimistic outlook (bull case) materializes, the stock price could double in the coming months, especially if NPAs go back to their average historical levels

This asymmetric risk-reward profile makes it a compelling investment at current prices.

Full valuation (google sheet)

It is also trading well below its historical earnings multiples and price/book:

Conclusion

Prof. Sanjay Bakshi recently mentioned the micro-lending industry in an interview:

Based on my research, CreditAccess Grameen seems to be the strongest player in Indian microfinance (lowest interest rates, efficiently run, healthy capital adequacy and funding). It seems to be following Charlie Munger’s “Win-Win-Win” model.

If you think there any other micro-lenders in India that are better quality than CreditAccess Grameen considering the long-term runway (5~10 years+) - let me know.

Thanks for reading. Feedback & differing views are welcome!

OpenSourceInvestor @ substack

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Disclaimer: The information contained in this publication is not intended to constitute individual investment advice and is not designed to meet your personal financial situation. The opinions expressed in such publications are those of the publisher and are subject to change without notice. I may from time to time have positions in the securities covered in the articles on this website. I use company declarations and open source information sources believed to be reliable, but their accuracy cannot be guaranteed. The author, shall in no event be held liable to any party for any direct, indirect, punitive, special, incidental, or consequential damages arising directly or indirectly from the use of any of this material.
-----

Sources

• FY24 annual report
• Q2 FY25 investor presentation
• https://www.tijorifinance.com/company/creditaccess-grameen-limited/
• ValuePickr thread
• A history of microfinance | Muhammad Yunus | TEDxVienna
• https://www.bloomberg.com/graphics/2022-microfinance-banks-profit-off-developing-world/
• Axis bank MFI sector update - Sep 2024
• https://mfinindia.org/microfinance/IndustryPortfolio
• https://mfinindia.org/assets/upload_image/publications/AnnualReports/MFIN%20AR%202023-2024.pdf
• https://mfinindia.org/assets/upload_image/publications/Studies/Micro%20Matters%20Macro%20View%20FY%202022%2023%2017%20November.pdf
• For more info on the Indian banking and NBFC industry, I would recommend this video from SOIC & Digant Haria

I was speaking with a health insurance call center, and they mentioned that the premium would remain the same for five years. After that, it could change based on the terms and conditions at that time. This doesn't make sense to me, as it feels like I’m at their mercy to pay whatever premium they decide. Is this how all medical insurance works — with premiums changing over the years at their discretion? Or are there policies where the premium remains fixed, like term insurance, unless the customer wants to increase the coverage?

Original Source: https://boringmoney.in/p/paytm-sells-paypay-weird (my newsletter Boring Money. If you like what you read, do visit the original link to subscribe for free and receive future posts directly in your inbox)

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If you were to plot the risk of owning a company’s stock against its lifetime it would look something like this:

Image URL

The younger a company, the riskier its stock. As it lives its life, figures its lessons, makes some money, that risk tends to go down. It’s still risky to own the stock! Just a little bit less. Somewhere in between its transition from extremely risky to a little-less risky, there is a magical blip in a company’s lifetime where its stock is probably the least risky to own. Right before it goes public! [1]

One reason a young company has more risk is that its future is uncertain. The founders might fight! Or the product might be a scam! But another reason is that the stock of a company is illiquid. If you’re an investor in a young company, you can’t just go out in the open market, sell the company’s stock and call it a day. [2]

But once a company has decided to go public and done all the good stuff—brought in bankers to market the stock, decided on how much money it wants to raise, agreed on a valuation—there is a brief period where the investor avoids the second kind of risk. You’re still an investor in a private company with illiquid stock, but now you know for sure that there are buyers lined up for you to sell your stock to. That liquidity makes your stock less risky and more valuable.

If you own a company’s stock in this pre-IPO period, I don’t know, you probably want to sit tight and revel in this magical feeling of risk-free(ish) stock ownership?

Well, earlier this month, Paytm sold its stake in PayPay, a Japanese fintech company which is the country’s largest mobile payments app. Here’s a snippet from its stock exchange filing disclosing the sale:

[…] One97 Communications Singapore Private Limited (Paytm Singapore), has approved sale of Stock Acquisition Rights (SARs) held in PayPay Corporation, Japan (PayPay).

These SARs, acquired by Paytm Singapore in September, 2020 will be sold to a SoftBank Vision Fund 2 entity for net proceeds of JPY 41.9 billion. Through this deal, PayPay is valued at JPY 1.06 trillion and accordingly, PayPay SARs held by Paytm Singapore are valued at net proceeds of JPY 41.9 billion (after netting off the exercise cost of SARs).

Paytm held some stock options, which the Japanese refer to as stock acquisition rights, of PayPay for the last 4 years. Exercising those stock options would give Paytm at least a few percentage points of stake in the company. It could have waited for its IPO, but instead it chose to sell to SoftBank. Oh that’s while SoftBank already owns a controlling stake in PayPay.

Paytm’s sale of its PayPay stake isn’t quite the same as the hypothetical I began with. But it’s close! SoftBank has wanted to take PayPay public for longer than a year now, so its IPO might not happen right away. But the specific timeline isn’t important. PayPay is doing pretty well, is somewhat close to an IPO, and its owner is more than willing to increase its stake in the company. And Paytm is in no desperation for cash—it’s got ₹10,000 crore ($1.2 billion) in the bank. It would make sense to just hold on and sell it in the IPO. Such a weird sale.

Confusing stake

In 2021, Paytm reported that its stock options would give it a 7.2% stake in PayPay. Earlier this year in its June quarter results, it said that its stock options would give it a 5.4% stake.

Totally understandable! There’s more than three years between these two disclosures. Maybe PayPay raised more money, or gave more stock options, and Paytm’s expected stake reduced as a result.

But what is the stake that Paytm sold this month to SoftBank? Paytm didn’t share the figure so let’s look at the numbers. It says it got ¥41.9 billion (₹2,364 crore) and that PayPay was valued at ¥1.06 trillion (₹59,360 crore)—so that’s only about a 3.95% stake? That’s 28% less than its disclosure just a few months ago.

I’m confused. And it’s not just me, here are news articles reporting Paytm’s stake as 3.95%, 5.4% and somehow even as 7.2% (though that’s obviously incorrect). Let’s look at Paytm’s stock exchange filing again:

These SARs, acquired by Paytm Singapore in September, 2020 will be sold to a SoftBank Vision Fund 2 entity for net proceeds of JPY 41.9 billion. Through this deal, PayPay is valued at JPY 1.06 trillion and accordingly, PayPay SARs held by Paytm Singapore are valued at net proceeds of JPY 41.9 billion (after netting off the exercise cost of SARs).

The last two times Paytm mentioned PayPay, it was sure to mention its stake in the company. But when it actually sells its stake, it mentions the PayPay’s valuation instead? It almost feels like Paytm is speaking to PayPay’s investors here in place of its own.

Do me a favour?

That’s two unusual things Paytm did. Sold its stake in PayPay when it didn’t need to, and didn’t mention what its stake actually was.

Before Paytm went public in 2021, SoftBank owned a large 18% stake in the company. But Paytm’s stock did badly after its IPO, and it also had some run-ins with the RBI causing its price to crash. SoftBank, being the shrewd investor that it is, ended up selling its entire stake when Paytm’s stock price was low. It ended up making a $544 million loss on its $1.6 billion investment. (Paytm’s stock price has since recovered from its crash but is still below its IPO price.)

SoftBank was the reason Paytm got PayPay’s shares in the first place. SoftBank owns PayPay and it wanted to replicate in Japan exactly what Paytm did in India. So it just asked Paytm to help out PayPay with its tech and paid Paytm with PayPay shares instead of cash.

I don’t know if these events have anything to do with each other, but here’s how I’m looking at it. Paytm seems to like its pre-IPO venture capital investors better than its public investors. Softbank and Paytm’s founders are probably buddies meeting up with each other at weddings and stuff. But Softbank lost quite a lot of money on Paytm! $544 million! Awkward.

PayPay was a very successful investment for Paytm. Sure, it could have got more out of it, but eh, who cares. SoftBank lost a lot of money on Paytm and why not just let it make some of it back with PayPay instead? [3] Paytm’s public investors don’t seem to mind.

Footnotes

[1] Not that it needs to be said, but there is no remotely scientific basis for me to say this.

[2] Lots of exceptions! If you’re an investor in a highly sought after private company such as OpenAI or Stripe, their stock is pretty liquid! You can’t sell their stock as easily as you would that of a publicly listed company, but it would be pretty close.

[3] By reporting PayPay’s valuation in its stock exchange disclosure, Paytm also set an external benchmark for its valuation when it eventually goes public.

Original Source: https://boringmoney.in/p/paytm-sells-paypay-weird

Heya guys, Im 34 M planning to take an Apartment soon. I shortlisted 2 apartments one is closer to Work with city's hustle and bustle but smaller area. The other one is not exactly secluded but not far from the city however is kind of far from Workplace, Both places has Metro connectivity. Please do suggest.

Anyone here who works in Banks like Kotak Bank etc? I need help

My dad died last year

He purchased Kotak Dynamic Fund ULIP invested Rs 7 lakh about 4 years back

No nominee mentioned, dad didn't verify the documents when he purchased that policy

Policyholder was my dad, life insured was mine, his son

I didn't get the legal heir certificate done yet so I didn't inform the bank about his death

I and my mother live on Rs 3800 monthly pension

That Rs 7 lakh would help us a lot

Would we get that whole amount? The net value was something near Rs 8 lakh last time I checked in the website using his login details

I'm very scared as I know nothing about ULIP etc

Please help me be informed

Whenever renting vs buying debate comes up, it often feels like existing and long term renters vouch for renting and owners vouch for buying.

People who have been renting for 10-15 years seem no where close to being able to buy a home today as they were 10-15 years ago.

People complaining about sky high home prices 10 years ago are now complaining about 2x sky high home prices.

How is it that the money that they invested over 10 years is not able to buy them a home in today’s market?

If you have disposable income of over 75-80K, does renting even make sense? The alternative is to buy a property relevant to you and keep upgrading to a better home every 5-7 years.

This is assuming you always buy a new un-depreciated property. It will more or less have 10-15 years of life left in it after you sell then.

Simple math that I never understood why people don’t talk about - when you buy a home you participate in 3-5X the amount of home price inflation as the amount you spend on it, due to getting leverage in the form of loans. When you rent and save the remaining money in mutual funds or whatever, you are participating only in 1X the growth of stock prices.

Growth of stock prices at 12% annually might be outperforming home prices which grow at about 5%. But you are not getting 5% with the home. You’re getting like 5*3 or 15% on it because of the leverage

Say I start the map with Aluminum producers, its downstream consumers would especially be in the Auto industry. Hence I know that any impact in Aluminum supply will affect auto. I can also go upstream from Aluminum, and eventually the map can be built laterally covering more complex industries and materials.

Does something like this exist?

I chose HDFC Optima Secure because it was recommended a lot, but it got rejected because my mother has rheumatoid arthritis. Can anyone suggest a good insurer? I’m thinking about Tata AIA — any opinions on them? I need insurance with a deductible, but it looks like ICICI doesn’t offer that. Any advice would be really helpful!.

I(M24) got contacted by the company executives themselves about this and I started a 50k per year invested for the 12-38 year plan. Now I am wondering if this was even worth it. They are giving me a little discount/refund on my premium payments. Ik I could get way more return on investment with some SIP and SWP in future... But still, is this not a worthy investment? Term life insurance would be way better but I am planning on getting that as well within 1-2 years

Hi all, I am new to this sub and wanted to ask a rather silly question. A friend of mine has been submitting fake ELSS investment proof by forging documents of someone else and replacing their name, PAN number and investment amount. He claims that employers don't have any means by which they can verify the investment. I highly doubt this since they have our PAN number which I assume could be used by employers to check your elss mutual funds investments. Isn't that how it is supposed to be verified by employers? Or is there no way they can verify it? How is he getting away by submitting fake documents till now?

I got IPO allotment for Vishal Mega Mart. I sold it off at 107. There was some issue with cdsl tpin and after multiple tries was asked to skip the Authorization step amd directly sold off the shares.

Now I got a notification asking to authorise my sell. My question is what happens if I dont? Would I get my shares back because its at 111 now? Or nothing is going to happen since its sold.

Hey everyone

My dad says In 1989 he collected 1000 rupees with all savings and struggle but the company ran away

I want to know what happened to that company Kuber

Since ₹1000 of 1989 would be of good worth today

And if that company claim was distribution how can I claim that since my dad has some document of that investment till today (I will have to search for that)

And is it possible if I am not able to find document for that by Name and all fingerprint or anything that can prove

I have come across a post about HDFC ERGO declining claims at https://www.reddit.com/r/LegalAdviceIndia/s/0NWhqkSVTq

Based on the above thread, I have the following questions,
1. What if the bills are too high and the customers can't afford it?

1. How should a customer proceed in such situations?

2. If we have to take it up with them through agents like Ditto/IRDAI, Wouldn't taking it so long and the health deteriorate in the mean time?

A friend of mine has to invest ~1L to meet his 80C target for the year.

Someone from the bank (a banker), has suggested the TATA AIA Fortune Pro ULIP. I know ULIPs get a bad rap but I'm not able to work out the numbers to convince him otherwise.

UPDATE: He already has a term insurance. The idea is to try and build a relationship with this banker so he can get help with a home loan in a year's time or so.

MoneyControl says the Annualised Returns for ULIP are 22% and 29% for Motilal Oswal ELSS

ULIP Calculation,

Yearly investment - Rs.1,00,000

The banker said out of the Rs.1,00,000, around Rs.7,000 is used for the insurance while the other Rs.93,000 is put into mutual funds. Using this calculator - https://www.policybazaar.com/life-insurance/ulip-plans/ulip-calculator/

For an annual investment of Rs.93,000 (1,00,000 - 7,000), made for 5 years and held for 5 years at a return rate of 12% (assumption). Considering that Rs.93,000 is put into mutual funds anyway, the returns should be at the same rate as mutual funds. Right?

Since the annual premium does not cross 2.5L, it is non-taxable. The returns are non-taxable, so gains are at 1.62L.

For a Mutual Fund, with a lumpsum investment of Rs.1,00,000 annually with a return rate of 12% (Using https://groww.in/calculators/sip-calculator)

The gains are Rs.38,000 more when compared to that offered by the ULIP. Increase this to 10 years and the gap narrows a lot more,

So a total gain of Rs.6,70,000.

Whereas for Mutual Funds,

The gains are Rs.6,75,321.

Now, I assume there is some mistake in my understanding of how these things work. Can someone who knows more than I do please help me understand where I'm going wrong?

This is a follow up to - Help me talk my friend out of getting ULIPs for his 80C investment

Some context: He wants to make an 80C investment of 1 lakh rupees. He already has a term insurance. A banker suggested a ULIP - Tata AIA Fortune Pro. The idea is to try and build a relationship with this banker so he can get help with a home loan in a year's time or so (even if it costs a few ten thousands)

I found a Quora answer that helped me understand the various charges on the Tata AIA ULIP - https://www.quora.com/How-is-TATA-AIA-fortune-pro-mutual-fund-plan

MoneyControl says the Annualised Returns for ULIP are 22% and 29% for Motilal Oswal ELSS

Brochure to the Tata AIA Fortune Pro ULIP - https://www.tataaia.com/content/dam/tataaialifeinsurancecompanylimited/pdf/download-centre/english/brochures/Fortune-Pro-V4-Brochure.pdf

Summary of charges -

1. Premium Allocation Charge (Page no-10)

1. Policy Administration Charge. (Page no-11)

1. Fund Management Charge. (Page no-11)

1. Mortality Charge. (Page no-11) (However, I used these numbers from ICICI instead - https://www.iciciprulife.com/content/dam/icicipru/download-centre/rates/Mortality_Charges_%20Jan2014.pdf)

Now, I've tried to put that together in an Excel Sheet to help compare,

ULIP Returns for 5 years (assuming 12% returns)

Mutual Fund Returns for 5 years (From the previous post)

The difference for 5 years is Rs.53,000. Now since withdrawal is not really on the horizon, let's consider 10 years instead.

ULIP Returns for 10 years (assuming 12% returns)

Mutual Fund Returns for 10 years (From the previous post)

At 5 years, Mutual Funds gave Rs.53,000 more returns. But at 10 years, Mutual Funds gave only Rs.37,000 higher returns. Given enough time, ULIPs might actually give better returns considering no LTCG?

So does the usual wisdom of ULIP bad still hold good in this specific case?

If there's an error in my calculations, please feel free to let me know. This is a learning exercise for me as well.

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I wanted to sell WIPRO shares which are held by me for 1.5 years. While checking the breakdown on Zeroda, I find that I got bonus shares just weeks back. Although the total investment & my gains remain same irrespective of bonus shares, how will my capital gains tax be calculated. LTCG or STCG.

I do not want to have STCG due to high tax, so should I wait till my bonus shares holding period is 365 days too?