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Oman NRI: How To Diversify My SBI-Only Portfolio?

Ramalingam

Ramalingam Kalirajan  |9255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 02, 2025

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - May 15, 2025Hindi
Money

Hi , i am NRI (residing in Oman) and i have an NRE account in SBI from where i started my investment journey. All my portfolio holds SBI funds. Please guide me through for better investments in funds other than SBI funds. ( i tried opening demat account in groww, angelone etc but they declined staying IPS outside india).

Ans: You have taken the right step by starting early. As an NRI, you have some limitations, but also many possibilities. Let’s explore everything with a complete 360-degree approach.

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Understanding Your Current Position

You are living in Oman as an NRI. This gives you some flexibility.

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You have an NRE account with SBI. Your mutual fund holdings are only with SBI.

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You tried platforms like Groww and AngelOne. They rejected your application due to NRI rules.

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You want to expand your portfolio beyond just SBI mutual funds.

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You want better diversification. This is the right thought at the right time.

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Where SBI Funds Stand Today

SBI Mutual Fund is a trusted brand. But it is not enough alone.

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SBI has some good funds. But not all their funds are top-performing.

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Relying on a single AMC (Asset Management Company) is not good.

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There is concentration risk. That can affect your long-term growth.

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You are missing out on better funds from other fund houses.

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Why You Should Diversify AMC-Wise

Different AMCs have different strengths in categories.

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For example, one AMC may manage midcaps better. Another may lead in hybrid funds.

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A mix gives you better consistency across market cycles.

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Diversification reduces volatility and improves long-term returns.

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Your investments will be better balanced across styles and strategies.

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Restrictions You Face as an NRI

Many investment apps reject NRIs from US, Canada, and sometimes Middle East.

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The reason is FATCA, KYC, and compliance complications.

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Not all AMCs are NRI-friendly.

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Not all platforms have licenses to deal with NRIs.

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You faced rejection from Groww, AngelOne, etc., because of this.

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Best Investment Route for NRIs

Do not try DIY route if you are NRI. It leads to dead ends.

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Go through a certified MFD (Mutual Fund Distributor) registered with a Certified Financial Planner.

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They understand NRI rules. They also handle operational work for you.

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They can help invest in regular mutual funds across top AMCs.

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You won’t need to open a demat account. That’s the advantage.

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Why Regular Funds Are Better for You

Direct funds are promoted as lower-cost. But they are not NRI-friendly.

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With direct funds, you are on your own. That leads to poor decisions.

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A regular fund through a CFP-backed MFD gives personalised guidance.

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You get portfolio reviews, rebalancing, and NRI compliance help.

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The extra expense ratio is worth the professional support you receive.

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Problems with DIY Platforms for NRIs

Platforms like Groww, Zerodha, etc., focus on residents.

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Their systems block applications based on IP or NRI status.

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They do not provide end-to-end onboarding for NRIs.

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Even if you bypass initial steps, redemption and tax issues come later.

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How to Expand Beyond SBI Funds

Start investing in at least 3 other leading AMCs.

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Choose a mix of large cap, midcap, hybrid, and international options.

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Focus on consistent performers with experienced fund managers.

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Use SIPs or STPs to move money gradually.

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Avoid investing lump sum during market peaks.

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Asset Allocation Strategy for You

As an NRI, your goal must be wealth creation with capital protection.

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Consider 60% in equity mutual funds (diversified across 3–4 categories).

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Put 20% in debt mutual funds (short duration and low duration).

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Keep 10% in gold mutual funds (not ETFs, since you are outside India).

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Leave 10% in liquid funds for emergency use.

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Gold Mutual Funds Over ETFs – Here’s Why

ETFs need demat and trading accounts. That is complex for NRIs.

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You said you trade gold ETFs for profit. This works like speculation.

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Gold Mutual Funds are better suited for NRIs.

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They are managed by fund houses. You can invest without a demat.

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SIP or STP helps accumulate steadily, not emotionally.

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Problems with Gold ETF Trading Approach

Your current approach is return chasing.

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Selling after 3% profit is not strategic.

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You may lose out on bigger gains in the long run.

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Trading gold ETFs frequently attracts short-term capital gains tax.

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A proper long-term asset allocation works better.

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Better Way to Hold Gold in Portfolio

Use gold mutual funds, not ETFs, due to NRI restriction on trading accounts.

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Allocate 5% to 10% only in gold. Don’t overdo it.

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Stay invested for minimum 5 years to beat inflation.

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Avoid tracking gold price daily. Focus on portfolio balance.

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Review Your Tax Position as NRI

Use only NRE/NRO accounts for investing and redemption.

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Interest earned in NRE account is tax-free.

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Gains in mutual funds will attract TDS.

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Equity MF LTCG above Rs 1.25 lakh taxed at 12.5%.

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STCG taxed at 20%. Debt fund gains taxed as per your slab.

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Plan your redemptions to manage tax smartly.

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What Next You Must Do

Stop investing only in SBI mutual funds. Add better AMCs.

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Do not open demat account in India. Use regular mutual funds route.

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Partner with a CFP-backed MFD. They handle end-to-end NRI service.

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Set financial goals – retirement, property back home, child education.

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Link your mutual fund investments to goals.

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Avoid direct stocks or gold ETF trading from overseas.

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Focus on long-term SIPs, not frequent switches.

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Do an annual review of your portfolio with a CFP.

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Checklist to Act Now

Keep your NRE and NRO account active and KYC-compliant.

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Identify a trustworthy MFD tied to a CFP with NRI experience.

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Start SIPs in 3–4 AMCs, not just one.

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Switch from SBI funds only if the new fund is stronger.

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Invest in gold mutual funds instead of ETFs.

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Use a goal-based investing model with a 10–15 year view.

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Stop treating gold as a trading bet.

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Finally

You have started well. But too much reliance on one AMC limits your returns. Being an NRI, you need a better-managed approach.

Platforms like Groww will not serve your needs. You need a process-oriented investment partner, not a do-it-yourself website.

Let your focus shift from frequent trades to purposeful investment. Gold, equity, and debt all have roles. But discipline is more important than excitement.

NRIs must build wealth peacefully, not through trial and error.

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Best Regards,
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K. Ramalingam, MBA, CFP,
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Chief Financial Planner,
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www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment
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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Ramalingam

Ramalingam Kalirajan  |9255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 23, 2024

Asked by Anonymous - Jul 22, 2024Hindi
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Money
I am NRI from USA/Canada. Which mutual funds I can invest in? Which mutual funds you would you recommend? Which MF I can invest directly from here (without having to visit India)?
Ans: Investing in Indian mutual funds as an NRI from the USA or Canada can be more complex due to regulations like FATCA (Foreign Account Tax Compliance Act). Not all mutual fund houses accept investments from NRIs in these countries, and some have additional requirements.

Mutual Funds Accepting Investments from US/Canada NRIs

While the list can change, here are some mutual fund houses known to accept investments from US/Canada NRIs:

Aditya Birla Sun Life Mutual Fund
SBI Mutual Fund
UTI Mutual Fund
ICICI Prudential Mutual Fund
Tata Mutual Fund
L&T Mutual Fund
PPFAS Mutual Fund
Sundaram Mutual Fund
Nippon India Mutual Fund
Direct Investment Options

Some mutual fund houses allow NRIs to invest directly online without visiting India:

Aditya Birla Sun Life Mutual Fund
SBI Mutual Fund
UTI Mutual Fund
Important Considerations

KYC (Know Your Customer) Verification: You'll need to complete KYC verification as per Indian regulations.
NRE/NRO Account: You'll need an NRE or NRO account in India to invest in mutual funds.
FATCA/CRS Compliance: Be aware of the implications of FATCA and Common Reporting Standard (CRS) on your investments.
Investment Goals: Clearly define your investment goals, risk tolerance, and investment horizon.
Diversification: Consider diversifying your investments across different asset classes and fund categories.
Professional Advice: If you're unsure about investment decisions, consult with a financial advisor who specializes in NRI investments.

Recommended Types of Mutual Funds
Equity Funds
Large-Cap Funds: These invest in stable, large companies. They offer moderate returns with relatively lower risk.

Mid-Cap Funds: Invest in medium-sized companies with potential for higher growth. They come with higher risk compared to large-cap funds.

Small-Cap Funds: These funds target small companies. They offer high growth potential but come with high risk.

Debt Funds
Short-Term Debt Funds: Ideal for conservative investors seeking stable returns. They invest in short-term debt instruments.

Corporate Bond Funds: These invest in high-rated corporate bonds. They offer higher returns compared to government bonds.

Liquid Funds: These are low-risk funds suitable for parking surplus cash. They provide quick liquidity and moderate returns.

Hybrid Funds
Aggressive Hybrid Funds: These invest in a mix of equity and debt. They offer a balanced risk-return profile.

Conservative Hybrid Funds: These have a higher allocation to debt, suitable for conservative investors.

Direct vs Regular Funds
Disadvantages of Direct Funds
Lack of Guidance: Direct funds do not offer advisory services. Investors may lack professional advice.

Time-Consuming: Managing direct investments requires significant time and knowledge.

Benefits of Regular Funds
Expert Advice: Certified Financial Planners provide valuable insights. They help in selecting and managing your investments.

Better Monitoring: Regular funds come with ongoing support and portfolio reviews. This helps in better management of your investments.

Final Insights
Investing in Indian mutual funds as an NRI is a viable option. Ensure you comply with all regulations and choose funds that align with your goals.

Consider seeking advice from a Certified Financial Planner. They can provide tailored recommendations and ongoing support. This ensures your investments are well-managed and aligned with your financial objectives.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |9255 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Sep 16, 2024

Asked by Anonymous - Sep 16, 2024Hindi
Money
Hi, I stay in Germany as NRI for past 2.5 years. I do invest in India through my SBI account through mutual funds (SIPs) as INR 10K per month but I have leverage to invest upto INR 40K per month. Can you please suggest below? 1) Can I directly invest in India through my NRE account or I first need to transfer funds to NRO account for transactions in India? 2) If I need a corpus of INR 10 Cr in next 10 years, is investing 40K per month enough? If not please suggest alternate strategy. 3) Please suggest some good mutual funds for investments as per my requiremets.
Ans: You have an excellent opportunity to grow your wealth by investing in mutual funds from Germany. Your current monthly SIP of Rs 10,000 can be increased to Rs 40,000 to align with your future financial goals. Let’s address your queries step by step.

1) Can You Invest Through an NRE Account?

As an NRI, you can invest in Indian mutual funds using either an NRE (Non-Resident External) or NRO (Non-Resident Ordinary) account. Here's a breakdown of how both accounts work for investment purposes:

NRE Account: You can invest directly through your NRE account. The money you transfer from abroad into your NRE account can be used for investments in mutual funds. Funds invested through the NRE account are fully repatriable, meaning you can easily transfer the money back to your foreign account, including the profits.

NRO Account: If your money is in an NRO account, it generally consists of funds sourced from within India (such as rent or dividends). Investments made from an NRO account are subject to certain repatriation limits, and the tax implications are different. This option is more suitable if you have Indian income sources that you wish to invest.

Recommendation: Since you are based in Germany and earning abroad, investing directly from your NRE account is simpler and tax-efficient. You won’t need to transfer funds to an NRO account unless you have local income in India.

2) Is Rs 40,000 Monthly Enough for a Rs 10 Crore Corpus?

Your goal of accumulating Rs 10 crores in 10 years is ambitious and achievable with the right strategy. However, investing Rs 40,000 per month alone may not be sufficient, depending on the expected rate of return. Let’s evaluate this:

Assumed Rate of Return: Equity mutual funds in India have historically given returns ranging from 12% to 15% per annum. However, achieving a corpus of Rs 10 crores in 10 years with a Rs 40,000 SIP would require an extraordinarily high return, which is highly improbable.

Possible Scenario: With Rs 40,000 per month, even assuming a 12-15% return, your corpus might reach around Rs 1.5 to Rs 2 crores. To bridge the gap between Rs 2 crores and Rs 10 crores, you would need to significantly increase your monthly investments or consider other strategies.

Alternative Strategy to Achieve Rs 10 Crore:

Increase SIP Amount: To reach Rs 10 crores, you would likely need to invest more than Rs 40,000 per month. Depending on the returns, increasing your SIP to Rs 1 lakh or more per month could bring you closer to your goal.

Lump Sum Investments: Consider making additional lump sum investments when possible. This can come from bonuses, salary hikes, or any other windfall earnings.

Diversify Investments: While equity mutual funds should be the core of your investment portfolio, you could also consider other avenues such as international funds to hedge currency risk and provide better returns. However, stay focused on your risk tolerance and long-term goals.

Stay Invested for Longer: If you can extend your investment horizon beyond 10 years, it becomes easier to reach your Rs 10 crore target with consistent SIPs. The longer you stay invested, the more power compounding has to grow your wealth.

3) Recommended Mutual Funds for Your Investment:

For a long-term goal like yours, equity mutual funds are ideal because of their potential to deliver inflation-beating returns. Here are some fund types that would suit your needs:

Small-Cap Funds: Small-cap funds can deliver higher returns, but they come with increased volatility. Over a long horizon, they can be an excellent wealth builder, provided you have the risk appetite.

Mid-Cap Funds: Mid-cap funds offer a balance between risk and return. They have the potential to outperform large-cap funds in the long run and are a good mix for a growth-focused portfolio.

Large-Cap Funds: Large-cap funds provide stability. They invest in the top 100 companies and are less volatile compared to small-cap and mid-cap funds. For a 10-year horizon, having a portion of your portfolio in large-cap funds is essential for risk mitigation.

Flexi-Cap/Multicap Funds: These funds invest across market capitalizations. They offer flexibility, allowing fund managers to shift between small, mid, and large caps based on market conditions. This adds diversification and balance to your portfolio.

Sectoral/Thematic Funds: If you want to bet on a specific sector like technology or banking, thematic funds are an option. However, they carry a higher risk as they are concentrated in one sector. Consider them only if you understand the sector well.

Active Management over Passive Investments:

Avoid index or passive funds for your goal. Actively managed funds have the potential to outperform the benchmark over the long term, especially in a growing economy like India. Passive funds, while lower in expense, will only deliver market-level returns and may not help you achieve a 10-crore target.

Regular Plans over Direct Plans:

While direct mutual funds have lower expense ratios, they require active monitoring and decision-making. Since you are an NRI, it is more beneficial to invest through a certified financial planner (CFP) via regular plans. The guidance from a CFP will ensure proper asset allocation, fund selection, and regular portfolio rebalancing based on market conditions and your life stage.

Other Important Considerations:


Rebalancing Portfolio: Over time, as markets change and your financial situation evolves, rebalancing your portfolio is essential. For example, you may want to move from high-risk small-cap funds to more stable large-cap or debt funds as you approach your goal.

Regular Reviews: Keep reviewing your portfolio at least once a year. This will help ensure that your investments are aligned with your financial goals. If required, make adjustments based on market conditions or your personal life changes.

Finally: A Path to Rs 10 Crore

Achieving a corpus of Rs 10 crores in 10 years is an ambitious goal. Here’s a quick action plan for you:

Invest through your NRE account for simplicity and repatriation benefits.

Increase your monthly SIP to more than Rs 40,000 to stay on track for your Rs 10 crore goal.

Diversify your investments across small-cap, mid-cap, and large-cap funds for optimal risk-adjusted returns.

Consider additional lump sum investments and stay disciplined with your long-term investment strategy.

Work with a certified financial planner (CFP) who can help you monitor and adjust your portfolio as needed.

With a well-planned strategy and disciplined investments, you can grow your wealth significantly and get closer to your goal.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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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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