EPFO to monetise investments in ETFs to generate additional cash flow

Yet to finalise modalities, EPF interest rate for 2017-18

by Arjit Singh Bhambra

The Employees’ Provident Fund Organisation (EPFO), along with its consultants, is finalising the modalities in order to monetise its investments in exchange traded funds (ETFs), as per a report in Indian Express. This will allow the retirement fund to cash in on the current uptrend in the equity markets, realise actual monetary gains instead of notional profits and generate additional cash flow. According to senior government officials, the profits realised could have a bearing on the finalisation of the EPF interest rate for 2017-18. Discussions are ongoing to decide the optimal rate of return for selling the ETF holdings. Besides, plan to transfer the ownership of the rest of the ETF units from the EPFO to the subscribers in the ratio of 85:15 is also underway. It is expected that the EPFO will start crediting the subscribers’ accounts from April 2018.

References
1. http://indianexpress.com/article/business/market/amid-market-rally-after-2-year-gestation-epfo-looks-to-cash-in-on-market-bets-5007978/4
CMIE STATISTICS
Unemployment Rate
Per cent
4.8 +0.0
Consumer Sentiments Index
Base September-December 2015
97.2 -0.2
Consumer Expectations Index
Base September-December 2015
96.5 0.0
Current Economic Conditions Index
Base September-December 2015
98.2 -0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Mar 17 Jun 17 Sep 17 Dec 17
New projects 4.01 2.11 1.18 0.84
Completed projects 1.95 0.86 1.03 0.90
Stalled projects 0.74 2.67 0.67 0.92
Revived projects 0.86 0.30 0.29 0.20
Implementation stalled projects 0.33 0.69 0.73 0.58
Updated on: 23 Jan 2018 9:20AM
Quarterly Financials of Listed Companies
(% change) Mar 17 Jun 17 Sep 17 Dec 17
All listed Companies
 Income 10.2 9.7 7.9 10.7
 Expenses 11.9 10.0 9.2 10.3
 Net profit 16.1 -19.8 -20.0 16.1
 PAT margin (%) 6.0 5.3 5.4 14.2
 Count of Cos. 4,460 4,389 4,313 183
Non-financial Companies
 Income 11.8 10.3 7.7 10.6
 Expenses 15.6 10.6 7.8 10.5
 Net profit -2.3 -25.2 -7.9 15.0
 PAT margin (%) 6.2 5.2 6.1 14.4
 Net fixed assets 6.9 9.0
 Current assets 2.7 78.0
 Current liabilities 8.8 10.6
 Borrowings 4.9 10.1
 Reserves & surplus 6.3 4.8
 Count of Cos. 3,448 3,407 3,348 135
Numbers are net of P&E
Updated on: 23 Jan 2018 9:21AM
Annual Financials of All Companies
(% change) FY14 FY15 FY16 FY17
All Companies
 Income 10.0 5.3 1.4 6.6
 Expenses 9.9 5.4 1.5 7.1
 Net profit -2.5 1.6 -12.6 18.7
 PAT margin (%) 3.1 3.2 2.9 5.7
 Assets 12.3 9.4 9.8 8.3
 Net worth 9.6 8.7 10.8 7.2
 RONW (%) 6.1 6.1 5.1 8.3
 Count of Cos. 24,439 24,353 22,049 8,816
Non-financial Companies
 Income 9.7 4.5 0.5 6.4
 Expenses 9.4 4.6 -0.3 7.6
 Net profit -3.1 -5.5 12.5 11.8
 PAT margin (%) 2.2 2.1 2.6 5.3
 Net fixed assets 11.7 13.3 15.6 7.3
 Net worth 8.2 7.1 11.2 5.3
 RONW (%) 5.0 4.9 5.4 9.0
 Debt / Equity (times) 1.1 1.1 1.1 0.8
 Interest cover (times) 2.0 1.9 2.0 2.9
 Net working capital cycle (days) 69 67 65 52
 Count of Cos. 19,688 19,805 18,467 6,761
Numbers are net of P&E
Updated on: 21 Jan 2018 12:27PM

Data added for HPI at Assessment prices and HPI at Market prices