Flame Newsletter - July 30, 2014


"First and foremost products need to be simple. Customers need to be able to easily fathom what they are ‘giving’ and what they are getting" - Yateesh Srivastava, COO, Aegon Religare Life Insurance


What is IRR & how to calculate it?

You invest a certain amount every year in some financial instruments like mutual funds, ULIPs, etc. After five, 10 years or 15 years, you may want to redeem your investments. At that time, we usually calculate the money which we originally invested with the maturity amount that we received to understand how much did we gain. But do you think this is the right method to check how much did we gain? We need to know how much return we got on our investments. This requires some basic calculations. Let’s try to understand the concept of IRR or internal rate of return.

What is NPV?

It’s impossible to understand the concept of IRR without understanding net present value (NPV), so let’s begin with NPV. The cash that we have today is more valuable than the cash that we will receive after five years due to inflation. Hence, when you decide to invest money each year, you need to first check how much that money is worth today. This is called net present value of money... Read more

What are participatory notes?

Foreign investment in India can broadly be classified into two categories—Foreign direct investment (FDI) and investment made by foreign institutional investors (FIIs). In both of these cases, foreign money enters the Indian markets and fuels growth of economy, industries and capital market.

However, with the number of increasing regulations in India, it is not easy for foreign money to enter the markets.

There are strict guidelines laid down by market regulator SEBI (Securities and Exchange Board of India) for seeking approvals and documentation for FDI. Also, there are several restrictions laid down on the exit of this money.

On the other hand, FII is mainly characterised as portfolio investment i.e. quick money entering the Indian capital market for short-term. Due to its short-term nature, the regulators have laid down fewer guidelines on FII than on FDI. But, the fact remains that foreign money cannot enter Indian markets without regulatory approvals... Read more


P/E Ratio: P/E is short for the ratio of a company's share price to its per-share earnings. As the name implies, to calculate the P/E, you simply take the current stock price of a company and divide by its earnings per share (EPS):

P/E Ratio = Market Value per Share / Earnings per Share (EPS)


Annual General Meeting: An annual general meeting (AGM) is a meeting that official bodies, and associations involving the general public (including companies with shareholders), are often required by law to hold. An AGM is held every year to elect the board of directors and inform their members of previous and future activities. It is an opportunity for the shareholders and partners to receive copies of the company's accounts as well as reviewing fiscal information for the past year and asking any questions regarding the directions the business will take in the future.


Need for consolidated statement is for investor: SEBI

No retro tax on debt mutual funds: Govt

Cabinet approves SEBI Amendment Bill


FLAME (Financial Literacy Agenda for Mass Empowerment) is an IIFL initiative to promote financial literacy amongst the masses in order to make them an integral part of India’s spectacular growth story.

In an era of accelerating GDP and rising per capita growth, financial literacy has become more critical than ever before such that we all reap the tangible benefits of the nation’s economic prosperity. Financial inclusion has been quite high on the governmental agenda, given its emphasis on widening the Banking & Financial services network across the country. IIFL’s FLAME initiative stands committed to complement this effort by helping common people gain financial growth and security though better awareness and education on the variety of financial products while avoiding the lure of and loss from unrealistic claims made by unscrupulous agents and ponzi schemes.

Our objective is to light a FLAME, as the name suggests, which will set ablaze a chain of FLAMEs across the country. The new-found light of knowledge will undoubtedly dispel the dark clouds of financial illiteracy and ensure the bright sunshine of financial growth and prosperity.

This portal is but one of the various IIFL initiatives that would be part of FLAME.

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