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Vivek

Vivek Shah  |60 Answers  |Ask -

Financial Planner - Answered on Feb 24, 2023

Vivek Shah is a SEBI registered investment advisor and certified financial planner from FPSB India. He has over 18 years of experience in financial planning.
Shah founded Finrise, a financial planning and wealth management firm, in 2011. He believes that equity investment is the only way to generate long term wealth.
He has an MBA in finance, a degree in chartered accountancy and is a registered life planner from Kinder Institute of Life Planning, USA.... more
Sashi Question by Sashi on Jan 27, 2023Hindi
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is it wise to enter adani green energy now

Ans: Hello Sashi,

First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at this points and also the allegations done by Hindenberg, i am fine to believe that there few acts which they taken for granted and manipulate the exchange and listing rules but calling Adani company as CON or Fraud is not what i would call this company. Companies margin are very low as compared to their cost of capital but being an infrastructure led company its takes long gestation period to realise the cash flows. Adani is playing important role in building infrasturcture in India with ports, power, airports etc and even though company is highly levered to build the assets and cash flow, the company has good physical assets in the balance sheet. Even though it may not a investible company for a retail invstor with the sort of volatility and margins they are earning.

Valuations are very much stretch with last 2 years price going to the roof. As a retail investor, one should avoid this company due to many uncertainties going forward.


Disclaimer: This is just for educational purpose and this should not be taken as advise for buy or sell.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Vivek

Vivek Shah  |60 Answers  |Ask -

Financial Planner - Answered on Feb 27, 2023

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Is it good to buy Adani Power now?
Ans: Hello Banibrata,

First of all we need to understand the questions being asked by Hindenberg and try to evaluate whether the allegation made by them makes any sense. If anyone goes through the Hindenberg report than the allegations and questions asked can be bifurcated into below broad categories:

1) Violations of Exchange and listed rules
2) Dubious Intra- Party Transactions
3) Use of Shell companies outside india ( Mauritius) to manuipulate the stock price
4) Money laundering through private Adani companies in listed companies of Adani inorder to look Balance sheet good.
5) Inexperienced Chartered accountants to audit the companies.
6) Using stocks as collateral for debt.

Looking at this points and also the allegations done by Hindenberg, i am fine to believe that there few acts which they taken for granted and manipulate the exchange and listing rules but calling Adani company as CON or Fraud is not what i would call this company. Companies margin are very low as compared to their cost of capital but being an infrastructure led company its takes long gestation period to realise the cash flows. Adani is playing important role in building infrasturcture in India with ports, power, airports etc and even though company is highly levered to build the assets and cash flow, the company has good physical assets in the balance sheet. Even though it may not a investible company for a retail invstor with the sort of volatility and margins they are earning.

Valuations are very much stretch with last 2 years price going to the roof. As a retail investor, one should avoid this company due to many uncertainties going forward.


Disclaimer: This is just for educational purpose and this should not be taken as advise for buy or sell.

..Read more

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Janak

Janak Patel  |17 Answers  |Ask -

MF, PF Expert - Answered on Feb 13, 2025

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In early 2018, I had faced some financial problems (monthly Rs. 10,000 deficit) as I was working with a public sector enterprise. At that time, I was searching for a loan and got an agency that can provide Rs. 10,000 as Payday loan (monthly basis maximum 35 days) and rate of interest was 1% per day. These loan products were from NBFCs. I took this loan and this was the starting point. Due to my financial problems, I started taking these type loans from various agencies and rate of interest 0.7%-1% per day. In 2022, I had almost 15 payday loans amounting Rs. 10 lakhs. After that, I have been applying for a loan from almost all banks and NBFCs to close these paydays, but nobody is able to provide a loan due all payday loans have been shown in CIBIL as well as few bounces of my personal loan I had already with Kotak Bank. Now the situation is like that I have more than 25 payday loans amounting to more than Rs. 15 lakhs. Last 2 years I have been applying for a personal loan to close these but no banks and NBFCs are not providing. Every month I am giving and taking payday loans and the interest amount is too high. I have a Tata AIA pension policy as well as PF, both cannot be surrendered at this moment. Now, the major issue is how to overcome this financial mess I did. I don't have any options left at this moment. So I would request you if anybody can provide me assistance through your sources / channels to solve my financial problem. I can return the amount on a monthly installment basis and give my Tata AIA pension policy as well as PF documents for security. I have been working in an engineering consultancy firm and monthly income is almost Rs. 2 lakhs
Ans: HI Jitu,

In summary, you have 15 lakhs loans at 1% per day interest (= 365% per annum). No options to borrow from any other organized sources like Bank/NBFC. So monthly Interest is 4.5 lakhs.
Monthly Income is 2 lakhs.

This is called a Debt Trap, where your income is less than your outflow (debt), so you are in a negative balance always and keep borrowing to fill the gap. No point in going into the history of the situation but I hope this has been a big life lesson for you.

Borrowing against you Pension policy can be considered but depends on the company and note that this will be at a high interest rate.
Borrowing from PF funds is only under certain situations (e.g. illness, education, marriage) and so even that is ruled out.
I assume you have already considered all/any asset you may own to repay.

The solution cannot be a very simple one. But I can recommend a couple of options which you can see if they help. You plan should simple -
1. Find a source of funds to repay your current loans
2. Stay with bare minimum requirement for next few years and repay maximum amount towards new loan
3. Do not take any new loans and stay on track for next few years, no matter what.

With a salary of 2 Lakhs, you should take a hard look at your living expenses and cut out all except the basic necessities. At least on paper come up with a number that you can discuss with prospective lenders mentioned below. Give them confidence of your ability to pay back every month with a realistic number e.g. over 1 lakh per month. Make this as high as you can make it. Make compromises everywhere possible and evaluate each expense to see what you can eliminate for the next couple of years, except food and absolutely basic needs, compromise on everything else. And ensure you make this work no matter what. You will have to be strong willed to achieve this and make it work.

Check with any close friends/family members/relatives who will trust you and provide you with some loan and provide you with time to repay. Offer to pay them interest which is higher than FD but reasonable for you and you can go as high as 20% per annum. At 20% you can pay back 55~60K per month for 3 years and payback the loan with interest.

Assuming you have a bank account for direct salary deposit, approach the bank and explain your situation truthfully to them and request an overdraft/loan and offer them to recover an agreed amount at an agreed interest rate from your account directly as soon as your salary is deposited. Again the interest rate will be high but if this works, you will be on your way to recovery. Even if they offer an interest rate of 30%~40% per annum and recover in 3 years, your EMI will be around 62K~70K per month.

Approach your employer and discuss if a loan can be provided to you at a reasonable rate of interest and recovered from your salary each month. If you have been employed with them for over a year or longer, and if they consider to extend a loan this may be the best solution you can get. You can offer to sign a contract for this (stay with employer for a period or until loan is paid up).

Is there any other source of funds you can approach with a similar proposal then do so, as long as you can get a chance to payoff your current set of loans and have a manageable EMI amount to pay back over the next few years, just take the best option and keep every desire aside and stay focused on getting back on track.

Please note that borrowing from an alternate source is not going to work if you take a loan and relax after that. You have already impacted your CIBIL score which makes lenders stay away. Now your top priority will be to find a source of funds at reasonably high interest rate between 20% to 40% resulting in an EMI of 55K to 70K for 3 years, and ensure you do not default the payments and clear this ASAP. If you can pay higher amount each month, then do that and get out of these loans as quickly as possible.

With honesty and sincerity if you continue to stay on track, you can eventually start coming back to normal life where you can plan your expenses and save and invest too. But do remember to live within your means and save as much as possible. Over time build back your CIBIL score for future requirements.

Hope this is helpful in some way.

Thanks & Regards
Janak Patel
Certified Financial Planner.

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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