National Institute of Securities Markets (NISM)

NISM – Commitment to Capacity Building and Investor Education

Posted on January 21, 2026January 22, 2026 by Auburn Solutions

For NISM, 2025 was defined by a renewed commitment to capacity building and investor education. Anchored by our mandate from the Securities and Exchange Board of India, NISM’s initiatives in education, capacity building, certification, and financial literacy continue to enhance the quality of market participants.

In 2025, we reintroduced two of our flagship on-campus programs – the Post Graduate Diploma in Management (Securities Markets) and the LL.M. (Investment & Securities Law). Our ongoing 1-year Post-Graduate Program in Investments and Securities Markets, and 15-month Post-Graduate Program in Securities Market (PM/AI/RA), continued to be much sought after.

We stepped up our professional training and capacity-building initiatives in 2025. Management Development Programs, advanced workshops, and leadership programs for market infrastructure institutions, intermediaries, and government stakeholders were curated to enhance the operational and regulatory understanding of a wide cross-section of participants. To cater to the increasing demand from market participants for digital offerings, we have developed a portfolio of 36 Skill Development Modules and 27 eLearning courses, covering almost every facet of the securities market. These courses are now being offered on the iGOT Karmayogi platform and the SWAYAM Plus portal, thus extending their reach even further.

NISM takes its role of maintaining high standards of competence and conduct among market professionals very seriously. To this end, we have significantly expanded our certification ecosystem and our engagement in Continuous Professional Education. We have upgraded our testing platform and our LMS platform, expanded our test centre coverage, and increased our testing capacity to cater to over 500,000 candidates annually.

Investor education and financial literacy are core to NISM’s mission. In 2025, we rolled out many initiatives to foster greater investor awareness. These include investor awareness sessions, the National Financial Literacy Quiz, webinars with market experts, and the NISM Masterclass series. We have also partnered with over 500 higher education institutions to connect with India’s youth.

At NISM, we are committed to nurturing the next generation of market professionals and informed investors. We are grateful to our partners, our students, the market participants, and the wider investment community, whose continued engagement and support make our work at NISM more meaningful and impactful.

On behalf of the NISM community, I wish you a productive, secure, and prosperous 2026.

Author: Shri. Sashi Krishnan, Director NISM

The Critical Need for Robust AML/CFT Framework

Posted on January 21, 2026January 21, 2026 by Auburn Solutions

The threats of money laundering (ML) and terrorist financing (TF) have grown exponentially due to the increasingly interconnected nature of the global financial landscape. These illicit activities severely impact the economy by causing distortions and eroding trust in financial markets and institutions.

In dynamic ecosystems like the International Financial Services Centre (IFSC), Gift City, India and India’s securities market, a robust AML/CFT framework is essential. Specifically, the IFSC ecosystem faces heightened exposure to ML and TF risks due to increased cross-border transactions, global investor participation, and multi-currency operations.

AML and CFT policies are primarily derived from the 40 recommendations issued by the Financial Action Task Force (FATF), which was established by the G7 nations in 1989.

India, as a member of the FATF and the Asia/Pacific Group on Money Laundering (APG), implements these international standards through various domestic frameworks:

The Prevention of Money Laundering Act (PMLA), 2002.
SEBI’s AML guidelines.
The compliance framework mandated by the International Financial Services Centres Authority (IFSCA).

Core Pillars of AML/CFT Compliance

The international framework focuses on several key components that institutions must adopt:

Risk-Based Approach (RBA): Financial institutions must proactively identify and assess their specific ML/TF risks.
Customer Due Diligence (CDD): This includes adhering to proper Know Your Customer (KYC) norms and verifying the beneficial ownership of accounts.
Record Keeping and Reporting: Institutions are mandated to timely report suspicious transactions to national financial intelligence units, which in India is the FIU-IND.
International Cooperation: Collaboration between global agencies and countries is crucial for fighting cross-border financial crime.

Strengthening Capacity: The NISM Certification Initiative

To strengthen professional capacity and promote ethical compliance, the National Institute of Securities Markets (NISM) has introduced dedicated Certification Examinations focused on AML and CFT in the Securities Market and the IFSC Ecosystem. This initiative is pivotal for aligning India’s financial systems with international best practices and enhancing awareness among market participants.

The key objectives of these certifications, targeting professionals such as fund managers, brokers, compliance officers, and intermediaries, include:

Enhance Understanding of AML/CFT Frameworks: Covering Indian laws, FATF standards, and IFSCA guidelines.
Promote Compliance Culture: Empowering professionals to effectively implement AML controls, conduct due diligence, and report suspicious activities.
Develop Risk Awareness: Educating participants on how to identify vulnerabilities and mitigate risks in both domestic and cross-border transactions.
Align with Global Standards: Ensuring the Indian securities and IFSC ecosystem maintains parity with global AML/CFT expectations.

Details of the examinations are available on the NISM website www.nism.ac.in

Author : Mitu Bharadwaj, DGM, CCC, NISM

How much risk is hidden in your CAGR?

Posted on January 20, 2026January 20, 2026 by Auburn Solutions

One thing we all love is speed. We love it when groceries are delivered in 10 minutes, we want to reach our destinations faster, and, of course, we want to grow our wealth faster through higher returns.

“Nobody wants to get rich slowly,” Warren Buffett once said. I think about this often.

In our cars, we have a speedometer that tells us exactly how fast we are going. While it shows our accurate speed, it fails to show us how much additional risk we take on as we accelerate.

Let’s look at the math of a 50km drive on a highway.

Speed (km/h)	Time Taken (min)	Time Saved	Risk Level
40	75	—	Low
60	50	25 min	Moderate
80	37.5	12.5 min	Manageable
100	30	7.5 min	Elevated
120	25	5 min	High
140	21.4	3.6 min	Lethal

Notice how the incremental time saved becomes negligible compared to the surge in risk:

Accelerating from 40 to 60 km/h saves a significant 25 minutes (High utility).
Accelerating from 60 to 80 km/h saves another 12.5 minutes (Moderate utility).
However, pushing from 120 to 140 km/h is drastically more dangerous.

At that speed, your braking distance has increased significantly, your margin for error is nearly zero, and a small pothole can become a life-threatening event.

All this risk for what? To arrive just 3 minutes and 36 seconds earlier??

Your portfolio works in the same way

Your portfolio works like that highway journey. Most investors focus solely on the CAGR (the speedometer), but they ignore the Volatility (the risk of a fatal crash).

Here is how different portfolio mixes performed over the last 9 years. Notice how volatility drops when you add uncorrelated assets into the mix:

Scenario	Equity %	Debt %	Gold %	CAGR	Volatility (Risk)	Volatility (Risk) change %
A	50	25	25	13.2%	8.8%	0%
B	60	20	20	13.5%	10.1%	15%
C	70	15	15	13.8%	11.6%	31%
D	80	10	10	14.1%	13.1%	49%
E	90	5	5	14.3%	14.7%	67%
F	100	0	0	14.4%	16.3%	85%
Source: NSE, AMFI, Bloomberg \| Data is from: 07 Nov 2016 to 31 Dec 2025 Equity: Nifty 50 TRI, Debt: 10Y G-Sec, Gold: Nippon India ETF GoldBees

Think about this:

Would you accept 41% higher risk (volatility) for just a 0.6% extra CAGR? (Comparing C to F)
Would you accept 85% higher risk for a 1.2% extra CAGR? (Comparing A to F)

This isn’t merely due to the recent outperformance of gold.

Look at the difference between Scenario D and Scenario F, where the allocation to gold is only 10%. To generate just 0.3% of extra CAGR, the risk (volatility) increases by 24%.

Your specific allocation will vary based on your risk appetite, goals, and age.

However, this analysis highlights the hidden dangers of chasing that last bit of return. Before you floor the accelerator, ask yourself if the marginal gain is worth the risk of a fatality.

Or in terms of investing, Is the extra return high enough to lose your mental peace?

Author: Nihit Kshatriya, Head of Investor Relations, Capitalmind Mutual Fund.

Lacunae in the SME IPO Markets

Posted on January 12, 2026January 12, 2026 by Auburn Solutions

Mitu Bhardwaj & Kuldeep Thareja

Small and Medium Enterprises (SMEs) have fuelled a sharp surge in Initial Public Offerings (IPOs) on dedicated platforms such as BSE SME and NSE Emerge. In 2025, as many as 268 SME IPOs collectively raised ₹12,111.55 crore, with a significant proportion of these issues coming toward the end of the year. This marks a substantial expansion from just 43 SME IPOs in 2015. Over the same period, funds mobilised have increased more than forty-fold, from about ₹260 crore in 2015 to over ₹12,111 crore in 2025.

Growth of SME IPOs in India

years	Number of SME IPOs	Amount Raised (₹ crore)
2025*	268	12,111.55
2024	240	8,760.89
2023	182	4,686.11
2022	109	1,874.85
2021	59	746.14
2020	27	159.10
2019	51	623.80
2018	141	2,286.94
2017	133	1,679.50
2016	67	537.27
2015	43	260.21

Source: Chittorgarh (2025 figures provisional)

Despite this impressive growth trajectory, the SME IPO segment has been increasingly marred by weak post-listing performance, rising regulatory scrutiny, and several instances of fraud and misuse of funds. While the segment provides a crucial capital-raising avenue for growing enterprises, inflated valuations, poor governance standards, and opaque disclosures have resulted in significant investor losses. Nearly 65% of SME listings in 2024 and around 57% in 2025 are currently trading below their issue price, signalling a clear shift from listing-day exuberance to more sobering market realities.

Key Issues Facing SME IPOs

Overvaluation and Post-Listing Underperformance

A large number of SME IPOs have entered the market at hype-driven valuations, but haven’t been able to sustain the post-listing gains. In 2025, nearly 37% of SME IPOs closed below their issue price on the very first day of trading, compared with only about 9% in 2024. Further, unlike 2024—when close to 30 SME IPOs delivered extraordinary listing gains in the range of 100%–300%—such outcomes were far less common in 2025.

Several factors have contributed to this trend:

Investor over-optimism and low awareness: Retail participation, often influenced by greymarket premiums and momentum trading, has not always been backed by adequateunderstanding of underlying business models. As regulatory scrutiny tightened, unrealisticpricing assumptions were quickly exposed.
Excessive valuations: Many issuers accessed the SME platform during periods of broader market euphoria, with IPO pricing frequently ignoring fundamentals such as revenue sustainability, profitability, and cash-flow strength.
Market weakness: Secondary market volatility and global economic uncertainties highlightedthe fragility of weaker business models, leading to rapid erosion of listing gains.

Market Manipulation, Misuse of Funds, and Fraud

Governance failures have emerged as a serious concern in several SME listings:

Misuse of IPO proceeds: Funds raised for expansion and growth are often diverted through related- party transactions (RPTs) or shell entities. Nearly one out of two listed SMEs reports RPTs exceeding ₹10 crore, raising concerns of circular transactions and inflated financial statements.
Misleading disclosures: Inadequate or misleading disclosures, including inflated revenues and undisclosed pre-IPO arrangements, have significantly undermined investor confidence.
Suspensions and liquidity stress: Approximately 10–12% of SME-listed companies on BSE and NSE face trading suspensions due to non-compliance, leaving investors trapped in illiquid securities with minimal trading volumes.

Promoter Dominance and Governance Gaps

SME issuers are typically characterised by high promoter shareholding and limited institutional oversight. This concentration of control often enables promoters to exercise disproportionate influence over corporate decisions, sometimes prioritising personal liquidity over long-term business growth. Prior to recent reforms, Offer for Sale (OFS) components were frequently large, allowing promoters to partially exit at the IPO stage without materially strengthening the company’s balance sheet.

Broader Economic and Structural Risks

Low liquidity: Thin trading volumes exacerbate volatility and make orderly exits difficult for investors.
Higher vulnerability to shocks: SMEs are more exposed to supply-chain disruptions, competitive pressures, and economic downturns than larger firms.
Restrictions on debt repayment: SEBI regulations limiting the use of IPO proceeds for debt reduction often compel SMEs to continue servicing high-cost borrowings, constraining financial flexibility.

Tightening of the Regulatory Framework

SEBI approved a series of reforms in December 2024 through amendments to the SEBI ICDR and SEBI LODR Regulations, after considering public feedback on its consultation paper which to a great extent tries to address these concerns. Key measures include:

Profitability requirement: SMEs are required to demonstrate a minimum operating profit of ₹1 crore in at least one of the preceding three financial years.
Cap on Offer for Sale: The OFS component in an SME IPO has been capped at 20% of the total issue size, and no single selling shareholder can offload more than 50% of their pre-issue shareholding on a fully diluted basis.
Stricter promoter lock-ins: A minimum promoter contribution of 20% is locked in for three years, with excess holdings released in a phased manner (50% after one year and the balance after two years).
Enhanced oversight of RPTs: Material related-party transactions—exceeding 10% of turnover or ₹50 crore—now require approvals broadly aligned with main-board norms.
Measures to curb speculation: A 90% listing-day price cap (introduced in July 2024) and a 20% pre-open price floor (effective August 2025) aim to reduce excessive volatility and speculative spikes.

SEBI is also reviewing further changes to the ICDR framework, including a proposal to mandate a separately hosted and concise “Summary of the Offer Document” on the websites of the issuer, stock exchanges, and SEBI. Such a summary would enable investors to quickly grasp key risks, financials, and use of proceeds, which are otherwise embedded in lengthy offer documents.

Way Forward

While recent regulatory interventions are a positive step, their effectiveness will ultimately depend on robust enforcement and stronger gatekeeping by market intermediaries. Merchant Bankers and Book Running Lead Managers (BRLMs) must significantly enhance their due diligence standards, as investors often place considerable reliance on the reputation and credibility of these intermediaries when evaluating SME IPOs. Greater accountability for issuers and intermediaries, improved quality of disclosures, and heightened investor awareness are essential to restore confidence and ensure that the SME IPO market develops into a transparent, credible, and sustainable capital-raising platform for genuine growth-oriented enterprises.

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Authors work for NISM and views are personal.

Author: Mitu Bhardwaj, DGM, CCC, NISM & Kuldeep Thareja, DGM, CCC, NISM

Portfolio Management Services: A Perspective for Investors

Posted on January 9, 2026January 9, 2026 by Auburn Solutions

Those who plan to invest in stocks and bonds through a portfolio management service should be aware of its salient aspects and how a PMS is different from mutual funds and alternative investment funds. Here are the key features of investing through a PMS.

Model portfolio and customization

A provider of portfolio management services (PMS) doesn’t operate as a mutual fund or alternative investment fund would, managing a pool of money for investments in shares and bonds.

Instead, each PMS portfolio should be unique as it is supposedly curated by the provider for the client/investor. However, it is not possible to run exclusive portfolios for each investor. That would involve tracking too many stocks and bonds as well as many different portfolios.

What PMS providers typically do is run a model portfolio and replicate it for all clients. Individual client portfolios may vary from the model, but only marginally. In that sense, it operates like a fund with a manager investing a client’s money in stocks or bonds as per the mandate and runs similar portfolios for all investors.

Taxation

For taxation purposes, a PMS is called ‘pass through’—that means a client invests directly in those stocks/bonds. A PMS provider is not a separate entity for taxation purposes, as in the case of mutual funds. The usual rules of taxation apply for those securities.

As an example, listed equity stocks held for less than a year are taxable at 20% plus surcharge and cess. For a holding period of more than one year, the tax is 12.5%. For listed bonds held for less than one year, capital gains tax is applicable at the investor’s marginal income tax slab rate, and for a holding period of more than a year, it is 12.5%.

Mutual funds don’t pay tax because they are tax-free trusts. Tax is applicable for unitholders (investors). When a MF scheme books profit in a stock or bond, it does not pay tax, and the profit remains in the NAV (net asset value).

When the unitholder redeems an investment, tax is applicable. This differential between taxation of a PMS and an MF becomes more pronounced when an instrument is held for less than one year, as the tax rates for short-term and long-term holding are different.

Liquidity

In a PMS, when an investor requires liquidity, an instrument has to be off-loaded in the secondary market. The applicable tax would depend on the period of holding—long or short term. If there is a lock-in clause of say, one year, you would not get liquidity in that phase. If there is an exit load, that penalty would be applicable.

Flexibility

PMS regulations are more relaxed than those of MFs because it is not a mass-market product. In a MF, the maximum exposure per instrument is 10% of the portfolio. In a PMS, there is no such limit. Hence, it is possible to run concentrated portfolios in PMSs. We have discussed customization earlier, which is possible only in a PMS.

Ticket size

In a PMS, the minimum ticket size is ₹50 lakh, but the provider may ask for more in the form of cash, securities or a combination of both. If the PMS provider runs model portfolios in different asset classes, it is possible to have portfolio diversification within the minimum quantum.

If the provider has expertise in equities and bonds and requires ₹50 lakh, you can mandate ₹30 lakh in equities and ₹20 lakh in bonds. Or the allocations can be among various equity strategies of the same provider.

Costs/fees

Apart from the fixed fees, referred to as management fees, there may be profit-sharing. Beyond a certain defined level of profit in a financial year, called the hurdle rate, the returns may be shared between the investor and the PMS provider.

If the hurdle rate is 12% and profit-sharing is 80:20, then returns beyond 12% in a year would be shared in the ratio of 80% to the investor and 20% to the provider. Brokerage expenses for transactions in stocks/bonds may be charged separately.

Every investment option has its pros and cons. You can weigh the options—discretionary PMS (where the fund manager decides), advisory PMS (you pay the fees, take advice and invest yourself), MFs and AIFs—as per your suitability.

Article originally published in The Mint

Author: Mr. Joydeep Sen, Corporate Trainer, Columnist

India’s Financial Markets Must Evolve with Retail Participation Surge

Posted on January 8, 2026January 9, 2026 by Auburn Solutions

India’s financial markets today reflect the energy of a nation on the move. Each day, over eight crore individual investors log into trading apps, browse through market dashboards, and partake in the story of India’s growth. The number of demat accounts has surpassed 15 crores, nearly doubling in the last four years, a milestone that positions India among the world’s most retail- active markets.

This surge in participation is a remarkable achievement. It demonstrates public confidence in market institutions, seamless digital access, and forward-looking regulation. It also signifies a profound cultural shift, from physical savings to financial ownership. However, with this scale and speed of inclusion, markets are beginning to face new forms of complexity that require continuously evolving strategies safeguards.

Complexity and Opportunity In Derivatives

The derivatives segment clearly demonstrates this transformation. In just five years, equity- index options trading has grown more than eight times, making India one of the largest derivatives markets globally by notional value. Technology has allowed trades to be squared off in milliseconds, and the involvement of younger, tech-savvy investors has made derivatives a mainstream part of the financial landscape.

However, this velocity also introduces new dynamics. On certain trading days, especially near expiry, deep out-of-the-money option contracts have shown nearly vertical price jumps, sometimes increasing by several multiples within minutes. While these instances are rare, they demonstrate how concentrated order flows and algorithmic trading can intensify movements in strikes that are far out of the money with low liquidity. Although these episodes are brief, they underscore the need for closer monitoring in a market where scale amplifies every movement.

Volatility and Global Linkages

Periods of increased volatility often align with foreign portfolio investor (FPI) outflows as global funds rebalance their holdings. In 2024 alone, India experienced net FPI withdrawals exceeding Rs 1.2 lakh crore amid global uncertainty, even as domestic inflows from retail and mutual funds helped maintain stability. Retail investors, now representing nearly 38 per cent of cash-market activity, have become the stabilising counterbalance to global fund flows.

That confidence, however, depends on trust that market prices reflect real demand and supply rather than distortions. Maintaining that trust is not about enforcement; it is about consistency, making sure markets stay fair, efficient, and trusted.

From Regulation to Anticipation

India’s regulatory framework has consistently shown foresight. Features like dynamic price bands, real-time risk management, and cross-market surveillance have helped ensure that, despite global challenges, our markets keep running smoothly. The next step is proactive supervision, identifying emerging structural risks before they affect market participants.

Global experience shows that successful derivatives markets are not those with unrestricted access but those with smart safeguards. The United States responded to its rise in zero-day-to- expiry (0DTE) options by enhancing algorithmic monitoring and margin sensitivity rather than imposing restrictions, thereby allowing innovation to continue with robust risk controls. Following its KOSPI-200 incident, South Korea adjusted its market design by tightening strike ranges, increasing margins for out-of-the-money contracts, and establishing a dedicated derivatives-risk monitoring team, thereby restoring stability without limiting liquidity.

Taken together, these models suggest a practical framework for India, one that integrates data- driven, real-time surveillance with adaptable strike rationalisation, tiered margining, and participant-level suitability standards. This approach would enhance transparency, safeguard investors, and boost market confidence, ensuring India’s derivatives ecosystem remains both innovative and institutionally robust as it develops into a global benchmark.

Empowering Investors for The Long Term

India’s new investors are digital-native and aspiring. A generation ago, only a few million individuals participated in stock- market trading; today, tens of millions do so every day. As participation grows, financial literacy and risk awareness must grow too. Focused investor- education modules on derivatives, position management, and volatility can help retail investors better navigate modern markets responsibly.

The Competitive Edge

India’s journey toward a USD 10 trillion economy depends on how effectively its markets convert household savings into productive investments. Improved supervision, increased transparency, and shared accountability among the players in the market ecosystem will ensure that the growing base of trading activity continues to serve the broader goal of nation-building. Safeguarding investor interests is not just about caution, it is a pledge to progress. As India’s markets expand and become more vibrant, trust and transparency will remain their most valuable assets. Protecting that trust is what will support India’s rise, ensuring growth, innovation, and integrity advance together toward a resilient and inclusive financial future.

Article originally published in Business World.

Author: Mr. Venkatachalam Shunmugam, partner, MCQube

Your retirement kitty – How much is enough?

Posted on December 22, 2025December 23, 2025 by Auburn Solutions

With a host of opinions and views floating around, it is important to make your own estimate

Context

Nowadays, you get a lot of inputs through internet, which is beneficial for you. Social media also gives a lot of inputs, but it is not regulated by any financial market regulator. There is a trend on social media, by a section of financial planners or advisors, of putting forth an amplified number on your required retirement corpus. The logic given there may be correct: increased cost of living in today’s world, your lifestyle, inflation in future reducing the purchasing power of your money, etc. However, the inherent message in those social media posts, though not explicit, is that you require “so much” of money to retire, hence you “come to me” for advice and I will help you create that corpus.

Taking advice from a professional financial planner is always desirable. However, the inducement to do so should not be due to an amplified number propagated on social media to communicate an element of fear. More money you have the merrier, but the estimate has to be in tune with your income and expense level. In today’s article, we will discuss the perspective to look at the requisite retirement kitty.

Estimation of expenses

While it is true that people’s lifestyle expenses have moved up and inflation eats into your kitty, it is about your own lifestyle and expenses, which is unique to you. To each his / her own. Even in today’s world of increased expenses, some families manage their monthly regular expenses at Rs 50 thousand, whereas some families find it difficult at Rs 2 lakhs. Some families have the burden of EMIs, while some families are free on that aspect. Hence it is not correct to propagate one number as the required retirement kitty.

This is a function of your current expenses, your estimate of expenses post retirement and inflation for the remaining years till retirement. It is a common perception that after retirement expenses would move up – apart from inflation – due to medical expenses. However, certain lifestyle expenses cool down after retirement. Today you may desire a fancy car or a fancy phone. With maturity, just a car to travel or a phone to talk would suffice. You may like to visit clubs or eat out today, but in your golden years you would become more sedate. You may have EMIs today, but that will be repaid in due course. Let us take an example. Your current expenses – the usual, regular expenses and not the EMIs or sudden expenses – are Rs 50,000 per month. Let us assume inflation at 5 percent per year. If you have 10 years to go for retirement, due to inflation over 10 years, it becomes Rs 81,445 per month. If you have 20 years to go for retirement, it becomes Rs 1,32,665 per month due to inflation. If your expenses are Rs 2 lakh per month, on the same assumptions, it becomes Rs 3,25,779 after 10 years and Rs 5,30,660 after 20 years.

You have to break down your expenses in terms of components and estimate which are the heads that would remain similar 10 or 20 years down the line, apart from inflation, which ones may move up (like medical) and which ones may come down (like eating out). On the estimated expenses, you inflate it for the number of years to retirement.

Years to Retirement	30	25	20	15	10	5
Expenses at current price levels (Rs / month)	50,000	50,000	50,000	50,000	50,000	50,000
Assumed Inflation / year	5%	5%	5%	5%	5%	5%
Expenses post retirement (Rs / month)	2,16,097	1,69,318	1,32,665	1,03,946	81,445	63,814

Years to Retirement	30	25	20	15	10	5
Expenses at current price levels (Rs / month)	2,00,000	2,00,000	2,00,000	2,00,000	2,00,000	2,00,000
Assumed Inflation / year	5%	5%	5%	5%	5%	5%
Expenses post retirement (Rs / month)	8,64,388	6,77,271	5,30,660	4,15,786	3,25,779	2,55,256

Estimation of corpus required

This is a function of multiple variables and assumptions. This is best done by a professional financial planner or adviser as per your requirements. Here we will give an outline so that you get an idea.

You have arrived at an estimate of the expenses per month post retirement. Then the variables are number of years left i.e. your life span, where you would invest your corpus, how much your portfolio would yield, and inflation. For the sake of illustration, let us say you would retire at age 60 and will live till 80 i.e. 20 years to go after retirement. The investment of your corpus for those 20 years would yield a return of 10 percent per year. Inflation is assumed at 5 percent per year. As per formula, net of inflation, your kitty will earn 4.76 percent per year. Your expenses per month, at that stage of life, are Rs 3 lakh per month. You do not want to leave any legacy out of this amount i.e. it may become nil at the end of those 20 years.

Estimation of corpus is, the amount that would give you Rs 3 lakh per month, for 20 years, when the amount invested earns 4.76 percent per year. Under the assumptions, that quantum of money is Rs 4.8 crore. For a requirement of Rs 1 lakh per month during retired life, the amount is Rs 1.6 crore and for Rs 5 lakh per month, it is Rs 8 crore.

The required kitty

Required amount per month (Rs)	1,00,000	2,00,000	3,00,000	4,00,000	5,00,000
Required corpus under the assumptions (Rs)	1,59,90,270 i.e. Rs 1.6 cr	3,19,80,539 i.e. Rs 3.2 cr	4,79,70,809 i.e. Rs 4.8 cr	6,39,61,078 i.e. Rs 6.4 cr	7,99,51,348 i.e. Rs 8 cr

Conclusion

Taking inputs from your environment is good, it broadens your horizon and gives you perspectives. However, you have to figure out what works for you. Otherwise, you would get lost in the multiplicity of views and opinions. To use an analogy, if you want to loose weight, you will get a plethora of advices and videos on social media. Those may be correct in their own way. Somebody would advice running, somebody would advice walking or dieting or something else. May be they got their results that way. However, you have to figure our what suits your conditions. Similarly, the expenses you incur currently and expect to incur in your golden years, is unique to you. There is no need to get swayed by opinions.

Article originally published in the Outlook Money.

Author: Mr. Joydeep Sen, Corporate Trainer, Columnist

Investments in Mutual Funds the other perspective

Posted on December 22, 2025December 22, 2025 by Auburn Solutions

When we think of investments in Mutual Funds, we think of investments in schemes i.e. products offered by Mutual Funds. But, there is another way to play this buoyant segment. And that is, equity stocks of listed Asset Management Companies. As the industry grows along with the growth of investors coming into the fold and the products they offer, the stocks also would grow. Let us look at the growth of the sector and the factors contributing to it.

The amount of money managed by the MF AMC industry, referred to as Assets Under Management (AUM) stood at Rs 67.4 lakh crore as on March 2025 and currently it is nudging Rs 80 lakh crore as on October 2025. As per projections by Crisil, AUM would touch Rs 150 lakh crore by March 2030. For a perspective, MF AUM to GDP ratio stood at 11.1 percent as on March 2020. As on March 2025, this pushed up to 19.9% of GDP. Global average of this metric is 64 percent and in the USA is at 124 percent. The fact that it is at 19.9 percent shows the scope for growth. What would lead to this growth? It can be bifurcated into two categories: macro factors and industry-specific factors. We start with the macro factors.

India is growing, and will remain growing, at the fastest pace among major economies of the world. In the first half of this financial year, April to September 2025, our GDP has grown at 8 percent. That apart, the trend growth rate i.e. sustainable growth rate as per economists, is in the range of 6.5 to 7 percent. India has the highest working age population in the world, which is driving earnings, savings, consumption and investments in financial products. Our gross domestic savings rate, at 29.2 percent, is a shade higher than the global average of 28.2 percent. Along with growth of the economy, per capita income and disposable income are growing as well. The increase in disposable income can fuel growth in various investment assets, including mutual funds. With increasing financialization of savings i.e. from land / building / property to deposits / stocks / bonds / mutual funds, the share of the pie is going to increase. As per RBI data, share of Mutual Funds in the stock of financial assets of households has increased from 8 percent in 2021-22 to 11 percent in 2023-24. The number of demat accounts in India, which was 5.5 crores as on March 2021 and 15.1 crores as on March 2024, has now touched 21 crores. This has led to more investors coming into the fold of Mutual Funds; the industry specific factors are discussed below.

Number of investor folios (investor accounts), as per AMFI, has moved up to 25.6 crores as on October 2025. As on March 2020, number of investor folios were 8.9 crores. There are overlaps in folios i.e. one investor can have multiple accounts in multiple AMCs. Number of unique investors, identified as per PAN number, was 5.3 crore as on March 2025, as per AMFI. This also shows the scope for growth: in a country with a population of 145 crore with wide use of digital means and spread of banking, this should grow exponentially.

Systematic Investment Plan (SIP) has been a pillar of inflows for the industry, even in periods when inflows through the usual means of lump-sum subscription have waned. SIP AUM stood at Rs 13.4 lakh crores as on March 2025. As per Crisil projection, it would be Rs 41 to 44 lakh crores by March 2030. Investments through systematic investment plans have become a popular form of investing in mutual funds as they offer customers the opportunity to invest smaller amounts over longer periods and help mitigate the risk of market timing. Popularity of equity funds, rising participation of investors, recent investor education initiatives, and apparent benefits of SIPs to households that traditionally did not invest in mutual funds, indicate that growth in inflows from SIPs is expected to accelerate. Investor profile is now skewed towards individuals. As on March 2020, 52.4 percent of investors in the MF industry were individuals. As on March 2025, it increased to 60.6 percent.

The industry is witnessing a notable shift, with smaller cities, referred to as Beyond 30 (B-30) cities, emerging as significant growth drivers, alongside the established Top 30 (T-30) cities. Coming to processes in the industry, integration of technology has reduced processing times, streamlining tasks that once required days, weeks, or multiple in-person visits, into mere seconds, accessible through a smartphone.

Majority of assets in the industry are in equity, which get valued at market prices for NAV. If we take the growth in equity as the nominal GDP growth rate, it is expected to grow at low double digit, plus new investors coming into the fold. There are currently 6 listed Mutual Funds: HDFC AMC and Nippon AMC in mid-cap category and Birla AMC, UTI AMC, Canara Robeco AMC and Shriram AMC in small-cap category. There are two biggies in the pipeline.

The initial public offer (IPO) of ICICI Prudential AMC is from 12 to 16 December 2025, in the price band of Rs 2,061 to Rs 2,165. This is an Offer for Sale (OFS) from UK based Prudential Corporation, offloading 9.9 percent of their stake of 49 percent, to the public. Reportedly, SBI MF is in the offing for their IPO, but it is still about a year away. The new offerings would increase the listed space for investors in stocks of MFs, apart from their products.

Article originally published in the Outlook Money.

Author:

Mr. Joydeep Sen, Corporate Trainer, Columnist

SIP and EMI: three-letter synonyms, but diametrically opposite

Posted on December 2, 2025December 3, 2025 by Auburn Solutions

SIP and EMI: three-letter synonyms, but diametrically opposite

You are king of your money or slave to your expenses

SIP and EMI are similar in the sense a fixed amount hits your bank account every month on a given day. However, these two are vastly different: it is about your approach to managing your finances. In SIP, you are in control, you are saving and investing your money and will enjoy the fruits later, when you want. In EMI, you have spent the money, and you are bound by it – you do not have a choice but to foot the bill. Not just that, in SIP, you are getting the returns whereas in EMI you are paying the interest, apart from the principal.

Approach to your finances

In this discussion, when we mention EMI, we will keep purchase of house out of purview. This is the accommodation where you stay, not a second real estate for investment purposes. The home where you stay has emotional and other aspects attached to it, and there are a handful of reasons why you should purchase your residential property even on EMI. In this article, we are talking of other expenses on EMI such as purchase of expensive mobile phone, going on holiday, purchase of a better car when you have one, fancy wedding, etc.

It is important to have a balance in your expenses. We are not saying no to any of those purchases on EMI, but your life should not be based on the culture of buy-now-pay later (BNPL). You are earning money and should enjoy your life, but should not end up in a debt trap where you are struggling to manage your EMIs. A classic example of this debate between investment and enjoyment is that if you purchased the equity stock of Enfield thirty years ago, instead of buying a bike, the current value is many-fold higher and you would have earned handsome returns. On the other hand, the enjoyment you would have had from the bike at age thirty, you would not have at age sixty.

Having said that, at age thirty, if you binge on BNPL through EMIs or credit cards or other schemes, you become slave to your expenses. If a bad period befalls your job or business or profession, you will be in a soup. The ballpark guidance is, your EMIs should not exceed 40 percent of your net-of-tax income.

In SIP, you are saving from your monthly income and investing in suitable funds. You are earning market-based returns through the tenure of the SIP. If there is a cash-flow issue, you may not do one-or-two SIPs; the invested amount continues to earn. At the end of the tenure, you decide how you want to enjoy – purchase of a car or bike or foreign holiday. You are not taking any loan and you are king of your own money.

Illustration

You are considering a purchase of Rs 5 lakh, on EMI for five years. We will compare EMI and SIP for five-year tenure. On SIP, there would be inflation as well, as you will purchase that item after five years. Let us assume inflation at 5 percent per year. Post inflation, the cost becomes Rs 6.38 lakh. We are assuming a rate of return (in SIP) and rate of interest (in EMI) of 12 percent per year, for simplicity.

Equated Monthly Instalments
Your cost Rs	5 lakhs
Rate of Interest %	12 /year or 1 /month
Tenure	5 years (60 months)
Time of payment	end of month
EMI Rs / month	11,122

Computation of EMI in Excel
PV	5,00,000
Rate	1.0%
NPER	60
Type	0
FV	0
PMT	?
PMT	₹ -11,122

Explanation of the computation:

PV is present value, which is Rs 5 lakh
Rate of interest we have taken at 1 percent per month
NPER is the number of instalments, which is 5 X 12
Type 0 means payment at the end of the month
FV is future value, which is nil as you have paid back the loan
PMT is the PMT formula in excel, which gives us the final output.

Systematic Investment Plan
Your future cost Rs	6.38 lakh
Rate of return %	12 /year or 1 /month
Tenure	5 years (60 months)
Time of payment	beginning of month
SIP Rs / month	7,736

Computation of SIP in Excel
PV	0
Rate	1.0%
NPER	60
Type	1
FV	6,38,141
PMT	?
PMT	₹ -7,736

Explanation of the computation:

PV is present value, which is nil as you are starting from scratch
Rate of return we have taken at 1 percent per month
NPER is the number of instalments, which is 5 X 12
Type 1 means payment at the beginning of the month
FV is future value, which is Rs 6,38,141 post inflation
PMT is the PMT formula in excel, which gives us the final output.

Observation from the calculations

In EMI, you are satisfying yourself today, by preponing the purchase. However, you are paying interest, apart from the principal, over the next five years. Your monthly outgo is Rs 11,122 and you end up paying Rs 6.67 lakh. In SIP, you are postponing your purchase for five years, hence the cost goes up due to inflation. Even then, you are earning on your instalments, by virtue of which your monthly outgo is Rs 7,736 and your principal amount is Rs 4.64 lakh.

Conclusion

With changing value systems, more and more people, particularly the younger generation, are leaning towards BNPL. There is nothing wrong in enjoying your life, but if you become a slave to it, the enjoyment would be impacted.

Article originally published in the Economics Times.

Author: Mr. Joydeep Sen, Corporate Trainer, Columnist

Value Investing Lessons from India’s ICC Women’s World Cup Triumph

Posted on November 26, 2025 by Auburn Solutions

Watching the finals of the ICC Women’s World Cup Final, where the Indian Women’s Cricket Team defeated the South African Women’s Cricket Team by 52 runs, was no less than watching a masterclass in discipline and patience, and of seizing the right moment. Their performance reminded me of how Warren Buffett described value investing using a baseball analogy. Buffett said that the lesson for investors is that you don’t need to swing at every pitch. He famously said, “The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling ‘Swing, you bum!’ ignore them.”

For the Women in Blue, every loose ball was a clear opportunity to get on the front foot and turn the chance into runs. Like in value investing, when fear drives valuations down, and quality businesses get offered at a discount, the disciplined investor steps forward and puts her money to work.

Despite losing some early wickets and finding themselves under pressure, the Indian team, with their measured approach, defended their total and waited for the opponents to make mistakes. Similarly, value investors know that in bull-market phases, they might need to get on the back foot – to preserve capital and avoid overpriced froth. But sooner or later, the market will correct. Value investors then shift to the front foot – deploy capital and buy with conviction. Value investing, like cricket, is not about being aggressive all the time, but being patient and opportunistic.

The Indian fielders supported the bowlers and seized chances, especially that outstanding catch in the mid-wicket region, off the bat of the South African captain. This gave the team a significant “margin of safety” – a cushion that helped them seal the final. Value investors always seek a “margin of safety” – buying businesses whose intrinsic value is significantly higher than the price they pay so that they are protected. Just as the smart fielding and disciplined bowling gave the Women in Blue a buffer against the South African tail-enders!

For the Women in Blue, winning the World Cup final wasn’t about 50 overs – it was about planning, adapting, and enduring. Value investing is no different. It isn’t about timing a quick trade—it’s about owning high-quality companies for years, letting compounding work, and ignoring the noise around you.

The Indian team’s journey, from group stage setbacks, knock-out tension, and the final triumph, is a metaphor for enduring market cycles, staying disciplined, and ultimately triumphing with the right strategy. The pitch may be rough, the bowlers aggressive, the crowd roaring – but the value investor stays alert for the loose ball, knows when to defend and when to strike, builds in margins of safety, buys when prices are low, and plays the long innings.

Article Originally published in NISM Newsletter November 2025.

Author: Mr. Sashi Krishnan, Director – NISM