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Blog Posts (53)

  • Vodafone: Out of Ideas

    Background This is the story of Vodafone Idea, a David who could not beat Goliath. Vodafone India was a subsidiary of the UK-based Vodafone Group PLC, set up to bridge the gap between its customers and a better future by providing them with better digital services. In August 2018, it merged with another leading company in the telecom industry, i.e., Idea Cellular and rebranded itself as Vodafone Idea. Things started to fall apart for the company from the day Jio was born. In April 2015, Vodafone Idea had a market capitalisation of Rs. 729.2 bn, touching a low of Rs. 84.8 bn in November 2019, the current market capitalisation of the consolidated company stands at around Rs. 272.34 bn. But how did a lucrative company which was once worth billions of dollars fell from grace and is now being traded for Rs 9.05 per share? The crisis It was not one, not two but many crises that had a domino effect on Vodafone’s troubles. Following are the two major reasons that plagued the company. There’s a new sheriff in town Amidst the notable recognition of Vodafone India and Idea Cellular, these companies were inflicted with a serious crisis when a fresh competitor, Jio protruded above the veteran companies in September 2016. As a new force of wave surged over the market, the organisation, which was formerly two different entities viz., Idea Cellular and Vodafone India were merged as one to counteract the competition brought by their new rival. During its initial stage, Vodafone Idea was trading at the price band of Rs.50 - Rs.70. However, it didn’t take long for its stock price to fall to Rs. 10 the following year and subsequently, hit rock bottom when it traded as low as Rs 3.40. Although the merger awarded them with a comparative advantage of 38 per cent share in the total subscribers, the new prodigy would soon seize their market. Jio accumulated 35 per cent of the market share followed by Bharti Airtel with 29 per cent and left VI with 25 per cent. As a result, the company lost over 130 million subscribers and this was concurrent with the introduction of the 4G spectrum that provides fast connectivity. The notorious degree of competition and paper-thin profit margin wasn't kind to VI as well. While its competitors, Jio and Airtel, enjoyed a higher Average Revenue Per User (ARUP) of Rs. 124 and Rs 129, respectively, Vodafone struggled to stay afloat due to an ARUP of Rs. 108 per user only. The debt balloons Vodafone's tussle began way back in 2008 when they executed a deal overseas to acquire a controlling stake in Hutchison Essar at $11.2 billion. This led to a series of severe consequences. The tax department stated that the company should've withheld tax and issued a notice seeking Rs 11,281 crores later augmented to Rs 7,900 crore. Experts believe that this judgement had sealed the fate of Vodafone. The judgement brought about an unfathomable series of events that would drastically derange the company from its real potential. As a result, VI owes the government more than Rs 1.68 lakh crore as cumulative fees for AGR and spectrum and another Rs 23,400 crore as international debt by April 2023. As of March 31, 2022, the company was debt-ridden with total debts amounting to Rs 1,97,878.2 crores. Future It has been a spiral of unending problems for Vodafone Idea. The woes of the company multiplied when the Birla Group abandoned the company and sold its shareholding to the government on August 6, 2021. This further blemishes the faith in the company's future. The company has fallen into a cyclical nature of unending burnout of cash reserves and Rs 8,160 crore payment due over 12 months. Meanwhile, many analysts believed that only the government can revive the dying company by bailing out the company and revamping the AGR systems to relieve the weight of the company. So, it will be a test of time and the rules and regulations imposed by the policymakers whether Vodafone Idea will avert bankruptcy and find solutions to the problem to present a long-term plan for its shareholders. Another question to ponder is if the government of India will allow the Indian telecom market to transfer into a duopoly. Sources: Fortune India business line Business Standard The Economics Times Author: Hausianmuan Samte Illustration By: Tanmay Chowdhary

  • A DRACONIAN CANVASS: AN APPLE OR AN APPLE?

    An apple a day keeps the doctor away, but does the Apple you read about on the internet, satiate your thirst, or does it keep you coming back for more? With Apple continuing to assert dominance over the tech market, they have been found guilty with tons of alibis proving them to be the finest. Nevertheless, a crucial question remains, How do they maneuver such a gambit? Hold tight, because you might be taken aback to realize that the answer is YOU. TWO APPLES IN A POD? With the launch of their new series of iPhones on 7th September, Apple made several headlines, in continuance with their tradition, leaving everyone chomping at the bit for the most awaited 14 series. While the internet is heated with arguments where some are claiming that there are little to no changes, Apple fanatics have come forward in Apple's defense to prove that the company has lived up to its reputation. Each main concern deals with the irrational decision to leave the 13 and go for the newer version. In financial terms, the new release persevered to witness a hike in the share prices by 3.9% due to the ginormous pre-orders the 14 series have garnered and already making it a success before the series have actually been released. It’s 14, but is it different? The internet doesn’t think so; the tweets don’t seem to overlook the minimal changes that the new series accommodates. A discreet being wouldn't walk the extra mile to get his hands on the 14 at an exorbitant price of $799 when the 13 version is readily available at his fingertips at a steal price of $699. WHAT’S THE DIFFERENCE? THEN HOW DO WE EXPLAIN THE BAFFLING APPLE FEVER? Simple. Apple deploys emotional advertising in its favour to ramp up its sales; Its pride band iWatch marketing strategy, black lives matter emoji, and other gimmicks act as a catalyst to captivate the minds of its consumers and presents an image that the brand cares about them. This instils an emotional unity of thought among its users. However, the 13 vs 14 debate can be concluded by stating that the result will leave Apple Inc. prosperous anyhow, regardless of whether people switched to the new version. At the end of the day, Apple creates a problem and solves that problem at the expense of your cost, while they keep the extra profits. CONSUMER BEHAVIOUR AND THE WALLED GARDEN Consumer behaviour is an ever-changing dynamic force, with improper fluctuations that can arbitrate with retrospect to the economic climate. Any simulation can easily deter the ingrained habits of consumers that could easily leave anyone bamboozled. The tech tycoon has no issues with tracing along the thin walls of their consumer behaviour. Humans seek and want superiority; they are willing to spend a fortune to get it. And Apple excels in doing precisely that. Their innovative and creative schemes lured people to taste a fraction of the perfect world they have framed inside the walled garden. Once in, there is little to no way outside the four walls. They are subject to a cycle of an ecosystem where apple products are only compatible with apple products, thus allowing them to thrive seamlessly in an unmatched environment. Apple builds its ecosystem strategically in a way that its products interact smoothly with one another. FaceTime, iMessage, and iPad, for example, are built with the ability that allows you to carry on your iPhone conversations on a tablet. The same was implemented as a new feature on the Macs in addition to supporting full phone calls. A habitual use greases the oil for a more effective and efficient performance among its devices. This ecosystem induces its users to ply along the inner walls of the ecosystem, without any fascination to try something different. REPACKAGING MODEL “Think Different”. Apple is living up to its tagline, but not in the way you might've speculated because its products say otherwise. Is this a sign that the iPhone has reached its peak? While the strategy of trapping consumers may work in their favour, it is evident that the company has reached its product peak from the minute changes in its new product. Each year, a new Apple iPhone and iWatch series are launched and its revenue is incessant. At the onset of its launch on 13 October 2020, the iPhone 12 was considered the ideal phone for any user. Everything was crisp; embodied all that you want in a smartphone. The subsequent release of the 13 and 14 are perceived as gimmicks of the 12, and one finds it difficult to tell them apart. Trying to justify upgrading is a handful. Then why are people going crazy over the launch of the 14 series? Because, it’s Apple; a symbol of class, repute, and finesse. The revenue graphs of the tech giant show higher and higher bars with the release of a new series of its products every year. Suppose, a user wants to upgrade to the new series today. What would the user do with the older iPhone? Sell it or in most cases throw it away. Millions of users may be doing the same. This generates tons of e-waste which harm the environment. In 2019 alone, $7.49 billion worth of raw materials were dumped as e-waste. As a global tech giant, whose primary focus is on producing planned obsolete goods rather than durable goods, Apple is partially accountable for this global issue. Is Apple imprudent to this global issue? Not necessarily, because they have adopted an exchange program as a part of their business model. This allows you to turn in your old phones for a company credit score and a discount on your next purchase of an Apple product. It also refurbishes and later re-sells them to earn a quick profit. Stats show that due to this recycling model, they recovered $40 million worth of gold in FY 2015. Apple benefits again! Create a problem, solve and market it; Apple’s way to wear a tech crown. THE REALISATION: SHOT ON IPHONE The launch of the 14 series has seen a wave of mixed emotions in the public, the revenues tell a story, and the technical tells a different one. But what really is all this 13 vs 14 debate for? It all comes back to us, our expectations from the tech giant. The 12 series was a whole new upgrade, the upgrade looked like one. The 13 looked different from the 12 series, the design, the features, once again, UPGRADE! Apple didn’t leave a chance to amaze us with so many technological changes in the series that followed in the past years. It led us to crave more, we expected it to add something different every time it launched anything new; forcing us to ask WHAT IS ENOUGH? It would be an understatement to say that expectations were high this 7th of September, and the iphone 14 proved to be a disappointment. If you have a free shot, you would upgrade to the 14th. But at the cost of your expense, will you want to upgrade to the 14th? With that being said, the appreciation the iPhone 14 fetched is an enigma that baffles everyone. Is this a certainty that Apple's consumers are lost within the labyrinth of the walled garden? Authors: Mananpreet Kaur and Hausianmuan Samte Illustration by: Muskan Bansal

  • The curious case of Suzlon Energy

    BACKGROUND Who knew the world’s fifth largest wind turbine manufacturer would end up becoming a stock that’s not even worth Rs.10? What started as a textile company soon turned into a global energy provider that harnessed the power of the wind to provide electric supply to its customers, and later succumbed to crippling debt and the unpalatable ambitions of its promoters. The need for a quality uninterrupted power supply inspired a man named Tulsi R Tanti to bring into existence, Suzlon energy, in 2001. Tulsi R Tanti, a commerce graduate and a holder of a diploma in Mechanical Engineering, would later become the fourth richest Indian behind Premji, Ambani and Lakshmi Mittal with the listing of the energy company on the stock markets. Suzlon energy was listed on the stock market in 2005, with its shares being oversubscribed 51 times. The shares debuted at Rs. 692 a piece making Tulsi’s stake of 69.78% worth billions and the man, an instant billionaire. By 2008, both Tulsi and Suzlon were even bigger. It acquired the German-based Senvion and become the fifth largest wind turbine manufacturer in the world. All was going great until turbulence stuck… THE CRISIS 1. The Lehman Brothers Collapse Suzlon’s order book comprised mainly of orders from foreign countries such as the US, UK, Germany, Brazil and so on. Thus, when the Global Financial Crisis of 2008 set in and the whole world prepared itself for a recessionary phase, orders from the two biggest energy markets of the world, Europe and the US, paused completely and indefinitely. With losses and debt rising significantly to around $1.3 billion, the company decided to sell 35% of its stake in Hansen for $370 million, as part of its debt restructuring program. Suzlon’s flawed business model required only 25% of the cost upfront from the consumers, While the other 75% was financed through bank loans, resulting in a highly leveraged balance sheet. Thus, when the liquidity crunch came into existence, the company couldn’t find the right time to participate in stake sales and asset monetization to reduce its debt burden. Source: ndtv.com 2. Neglecting India for unpalatable ambitions Suzlon’s promoters had been ambitious from the start. Tanti never really considered India to be a prospective market for wind energy. Every time, he was asked about it, the general excuse was that there were no sufficient incentives given by the government. In Tanti’s interview with Forbes Magazine, he was himself heard saying, “three years ago, I did not put up a single turbine for Madhya Pradesh because it was not a priority for me. At that time, opening up another country was my priority.” Thus, when the company was investing significantly in other developing countries such as Brazil, India was ignored blatantly. With time, the company lost its top spot in the Indian market to companies like Gamesa, GE, Vestas and so on. While Suzlon was flirting with customers overseas, global MNCs like GE worked to develop wind turbines tailored to fit India’s conditions. As debt started to accumulate, the company continue to find itself short of cash to fulfil even the existing orders, let alone take new ones resulting in the organisation’s downfall. What does the future look like? Things have improved a bit for Suzlon Energy but not so significant to tantamount a turnaround for the company. The investment by Dilip Shanghvi (founder of Sun Pharmaceuticals) to purchase a 23% stake in the energy provider for $258 million along with the sale of the company’s stake in Senvion, the debt restructuring has helped the company stay afloat but the question of its sustainability remains. The global market outlook for renewable energy looks highly positive as countries target to reach net zero by the end of this century. Moreover, with PM Modi’s push to improve the renewable energy sector’s infrastructure in India, will Tanti be able to ride the winds and capitalise on it or is Suzlon Energy a thing of the past now? Sources: Why Suzlon failed - Shashwat DC Economictimes.indiatimes.com Livemint.com Author: Neeraj Agarwal Illustration by: Divya Jha

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  • Technical Team | Finance and Investment Cell Hansraj

    Technical Team From posters to videos to infographics to the ends of visual representation, the creative wizards of the cell can do it all. about us The Technical Team of Finance and Investment Cell, Hansraj college works on how to present society to the outer world. Professionalism runs through their veins and creativity shows on their screens. From designing this website to making intriguing videos and graphics, everything falls under their regime. They are responsible for keeping a check of the cell's technical requirements in the normal course of operations. They remain behind the scenes but their creativity shines through their designs. The technical department of FIC is very well known in the DU circuit for their extremely creative infographics and posters. Our work Contact us fichrctech2022@gmail.com Text us on WhatsApp Our Team Ramya Sehgal

  • Editorial & Marketing | FIC Hansraj College

    Editorial & Marketing Department The EDM department integrates the public in the FIC family by getting them subscribed and associated with us by reaching out to them. Through the writing prowess of the members, it strives to provide the best content to its special pool of readers and followers. about us The Editorial and Marketing Department (EDM) plays a pivotal role in the daily functioning of the cell. Details regarding any activity of the cell, be it any event, session or publication has to reach the public in the crispest yet intriguing manner so that justice is done to the tremendous efforts put behind curating these articles. Swami Vivekananda rightly said,” Think of the power of words”. The words knitted in a beautiful piece of article on any finance topic can do wonders and go a long way in letting our audience know everything under the sun of finance. This is what the department stands for. The EDM department is responsible for maintaining the social media presence of the Cell across all platforms. This holds paramount importance as every content that goes out on the social media pages constitutes the face of the Cell. Functioning in tandem with the Tech department, especially among the other departments, EDM releases its own set of financial articles through the weekly post and story series. From the recent market trends in news to lesser-known trivia facts about finance, the Cell has got it covered. The Hansraj Finance Gazette was another initiative of the EDM department that started in 2020 and springboarded to success in a short span of time. Marketing is the heart and soul of the department. The elite activities conducted by the Cell should be voiced out to every realm so that the maximum number of people can reap the benefits. The department ensures extensive marketing is done through moment marketing posts, collaborating with other societies, and tapping several other channels. 1500+ registrations in Empresa’ 21 and 400+ registrations in the Young Investors’ Fellowship Programme’21 is a testimony to the efforts put in by the department. CONTACT US pr.fichrc@gmail.com Text us on WhatsApp Our Team Neeraj Aggarwal

  • Finance & Investment Cell | Hansraj College | Delhi University

    Finance and Investment Cell Hansraj College about us The Finance and Investment Cell, Hansraj College embarked upon its journey to promulgate financial literacy in the year 2014. Since then, we at FIC have been disseminating quintessential information on finance and related concepts. Be it organizing multifarious events or hosting regular speaker sessions with eminent personalities, the Cell has managed to build a significant presence for itself and has lived up to its reputation of being one of the finest societies in the Delhi University circuit. Know More About FIC 6K+ Event Footfall 750+ Fellowship Registrations 8500+ Newsletter Subscriptions ₹900K+ Cash Prizes Given We Take Pride in Our Numbers 12k+ Facebook Likes 7 Years of Service 6 Finance Platter Speaker Sessions 9 M&C Projects Our Past Partners 1/15 BLOG | FIC Hansraj Refined FIC Hansraj Jun 19 4 min A Wallet full of Dilemmas The article elaborates how the use of e-wallets proves to be heavy on your pockets and leads people to spend more. FIC Hansraj Jun 17 5 min Parametric Insurance Most people have had a poor experience with a regular insurance policy, where they have to wait for ages to get their payout. FIC Hansraj Jun 13 5 min Nailing the Economic Change This article examines the relationship between the price of nails and its insight into economic change over the last few centuries Check out all the articles Our Services Mentorship and Consulting, FIC Hansraj College Mentorship and Consulting (M&C) Department The Finance and Investment Cell realizes the dynamic industry needs advanced skillsets. The Consulting wing was set in motion to help students apply their skills by undertaking live projects. The wing has executed live projects spanning Financial Modelling, Technical Analysis, Market Research, etc. Know About MNC Collaborate With Us Organizing and ponsorship, FIC Hansraj College Organizing and Sponsorship (O&S) Department The Organizing and Sponsorship department works with outside entities to bring in sponsorship for FIC, Hansraj College and organizes all kinds of events for the society. The work consists of converting clients into a mutual agreement over sharing deliverables. Know About O&S Our Social Responsibility Mentorship and Consulting Social Wing The Social Wing of the Finance and Investment Cell, Hansraj college is an initiative to spread financial awareness especially among the less privileged strata of the society. This initiative has been undertaken to fulfill the social responsibility towards the society and help bring the needed change in the community. Know About Social Wing Our Departments Technical Department The Technical Team of Finance and Investment Cell, Hansraj College works on how to present the society to the outer world. Professionalism runs through their veins and creativity shows on their screens. Words don't define the Technical Department, their graphics do. Know About Graphics Team Editorial and Marketing Department (EDM) The Editorial and Marketing Department (EDM) handles the social media pages which constitute the face of the Cell. It disseminates knowledge about recent market trends in news to lesser-known trivia facts through intriguing financial articles. Know About EDM Research and Development Department The Research and Development Cell aims to spread awareness about everything finance and beyond. The department attempts at breaking conventionally complex financial concepts and news into a simplified manner by hosting interactive discussions, sessions with industry experts etc. Know About R&D Our Events Empresa'21 Read More > Young Investors' Fellowship Programme'21 Read More > Finance PLatter'20 Read More > The Hansraj Finance 'Gazette' The Hansraj Finance Gazette is a specially curated monthly newsletter that sums up everything related to finance under one roof for the readers. ​ It contains breaking financial headlines of the month, intriguing articles on trending issues and core concepts, specially curated informative opinion pieces from the editors, a finfun section containing financial games, puzzles, recommendations and much more. Gazette Subscription Volume 3 ~ Sept-Oct 2021 The consolidated edition of the Hansraj Finance Gazette presents in its cover story an indepth analysis of the plans for implementation and implications of the National Monetization Pipeline Volume 3 ~ July2021 Marking the launch of the 3rd volume of the Hansraj Finance Gazette, the latest July offering takes our subscribers on a tour across the vast domains of finance Volume 3 ~ August 2021 The August issue of the Hansraj Finance Gazette provides a holistic view of the Taliban’s takeover of Afghanistan and its economic impacts See More > Meet the team Jayesh Rungta President Harsh Aggarwal Vice President Eesha Goyal Vice President The Core Harsh Jaglan General Secretary Manuj Bengani Joint Secretary Meet the Department heads Khatwang Gupta Chief Advisor

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