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
5.4 -0.0
Consumer Sentiments Index
Base September-December 2015
95.6 0.0
Consumer Expectations Index
Base September-December 2015
95.7 -0.3
Current Economic Conditions Index
Base September-December 2015
95.5 +0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Sep 17 Dec 17 Mar 18 Jun 18
New projects 1.25 1.49 3.60 2.27
Completed projects 1.25 1.15 1.42 0.82
Stalled projects 0.69 0.88 3.41 0.30
Revived projects 0.34 0.22 0.26 0.22
Implementation stalled projects 0.78 0.71 1.92 0.03
Updated on: 17 Jul 2018 8:20PM
Quarterly Financials of Listed Companies
(% change) Sep 17 Dec 17 Mar 18 Jun 18
All listed Companies
 Income 7.9 12.0 10.2 18.1
 Expenses 9.0 13.0 17.0 21.4
 Net profit -18.0 -14.3 -81.9 8.4
 PAT margin (%) 5.5 4.8 1.2 17.4
 Count of Cos. 4,501 4,491 4,283 45
Non-financial Companies
 Income 8.2 13.3 11.8 18.5
 Expenses 8.1 12.3 12.7 22.7
 Net profit -6.1 13.2 -2.5 6.7
 PAT margin (%) 6.2 6.4 6.5 18.1
 Net fixed assets 9.2 11.9
 Current assets 2.9 8.0
 Current liabilities 11.0 10.3
 Borrowings 3.4 1.8
 Reserves & surplus 7.9 7.8
 Count of Cos. 3,460 3,463 3,315 32
Numbers are net of P&E
Updated on: 17 Jul 2018 8:21PM
Annual Financials of All Companies
(% change) FY15 FY16 FY17 FY18
All Companies
 Income 5.6 1.8 5.8 12.3
 Expenses 5.7 1.9 5.8 17.9
 Net profit 0.1 -9.3 26.2 -51.0
 PAT margin (%) 3.0 2.8 3.5 3.6
 Assets 9.5 10.2 7.3 14.1
 Net worth 8.5 11.3 7.0 11.0
 RONW (%) 5.8 4.9 5.9 4.8
 Count of Cos. 26,056 24,316 21,815 218
Non-financial Companies
 Income 4.8 1.0 5.7 9.8
 Expenses 5.0 0.3 5.9 9.3
 Net profit -8.5 20.4 21.4 11.9
 PAT margin (%) 2.0 2.5 3.0 13.4
 Net fixed assets 13.3 17.4 6.5 21.2
 Net worth 7.0 12.0 5.7 5.3
 RONW (%) 4.6 5.2 6.1 17.7
 Debt / Equity (times) 1.1 1.1 1.0 0.2
 Interest cover (times) 1.9 1.9 2.1 16.0
 Net working capital cycle (days) 66 65 62 -12
 Count of Cos. 21,269 20,387 18,246 150
Numbers are net of P&E
Updated on: 04 Jul 2018 4:50PM