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Transcript of Phillip Report
TABLE OF CONTENTS
ACKNOWLEDGEMENT.....................................................................................................................3
INTRODUCTION ABOUT PHILLIP CAPITAL.................................................................................4
COMPETITIVE ANALYSIS................................................................................................................5
COMPETITORS...................................................................................................................................7
PRODUCTS........................................................................................................................................10
IDENTIFICATION OF TRADING OPPORTUNITIES.....................................................................19
ACKNOWLEDGEMENT
We take this opportunity to express our profound gratitude and deep regards to our
mentor Mr. Sharad Kumar, Assistant Vice President (Sales), Phillip Capital, with more
than eight years of experience of working in financial services industry for his exemplary
guidance, mentoring and constant encouragement throughout the course of this project.
The help and guidance given by him from time to time shall carry us a long way in the
journey of life on which we are about to embark.
We also take this opportunity to express a deep sense of gratitude to Mr. Vinit Lodaya, a
relationship manager with Phillip Capital India Pvt Ltd., with more than five years of
experience in trading and research with financial companies, for his cordial support,
valuable information and guidance, which helped us in completing this project through
various stages.
We also take this opportunity to express a deep sense of gratitude to Prof. Debashish
Ghosh, faculty guide and a professor of Finance, for his timely guidance, cordial support,
valuable information which helped us in completing this project through various stages.
Mr. Sharad Kumar Prof. Debashish GhoshAssistant Vice President (Sales) Faculty GuidePhillip Capital India Pvt. Ltd. NMIMS
INTRODUCTION ABOUT PHILLIP CAPITAL
Phillip Capital is a Singapore headquartered multinational brokerage firm. Began in 1975,
Phillip Capital has Assets under management worldwide which totals more than USD 18
Billion with shareholders' funds in excess of USD 1 Billion. It is an integrated financial
institution which offers a full range of quality and innovative financial services to retail,
corporate and institutional customers. The comprehensive suite of financial services from
Phillip Capital include fund management, unit trusts, insurance planning, investment
research and broking in bonds, securities, futures, foreign exchange, precious metals and
commodities.
It operates in the financial hubs of 16 countries, with offices in India, Singapore,
Malaysia, Indonesia, Thailand, Hong Kong, China, Japan, Sri Lanka, United Kingdom,
France, Turkey, Australia, Dubai and USA.
Phillip Capital expanded business in India by the mode of acquiring MF Global’s Indian
Assets. Phillip Capital (India) Pvt Ltd is headquartered in Mumbai and offers online,
offline equity and derivatives trading for retail customers as well as execution and
clearing services for financial institutions.
Phillip Capital (India) Pvt Ltd. is a trading and clearing member of the NSE & BSE for
Capital Market segment AND Futures and Options segment. IN Currency Derivative
Segment, it is trading & Clearing member of NSE & MCX-SX. It is also a depository
participant with NSDL and CDSL.
Phillip Commodities India Pvt Ltd is a 100% subsidiary of Phillip Capital (India) Pvt Ltd.
Phillip Commodities India Pvt Ltd is a trading and clearing member of MCX, NCDEX.
In spot Market segment, it is member with National Spot Exchange of India (NSEL),
NCDEX Spot and Indian Energy Exchange (IEX).
COMPETITIVE ANALYSIS
Phillip Capital India provides various services, which give them an edge over their
competitors. The services available are:
Institutional Client Group
The company provides highly developed systems for institution and corporate traders,
including comprehensive trading capabilities such as automated trading, algorithm
trading and spread legging.
Retail Client Group
The company offers retail clients a full range of options in trading, investment and protection. The different facilities available are:
Trading – Dealing Desk
A strong dedicated dealing desk and client servicing team is available at Phillip
Capital that supports their partners for a seamless experience to add human
touch to their trading experience.
Investment
Investment objectives are different for each individual. So the company
designed multiple investment options to cater to all categories of individuals.
Protection
The company has associations with some of the best life and general insurance
companies provide clients with a wide range of options to suit their insurance
needs and objectives.
Business Associate Group
The company offers a complete suite of products with best in-class technology for sub-
brokers to service their clients effectively.
Private Client Group
The company offers a personalized approach by dedicating a Relationship Manager and
giving the clients an advantage over others in equity research, trade execution and
settlement.
Online Trading
The company offers trading in NSE, BSE, MCX-SX, MCX and NCDEX and products
ranging from Forex, commodities, cash and F&O equities.
Margin Funding
Margin funding is provided to clients to get instant liquidity from their investment
without selling them.
Clearing Services
As a Clearing Member, the company is responsible for clearing and settlement of clients'
trades as well as trades of other Trading Members & Custodial Participants.
Equity, Commodity & Currency Research
The company has dedicated resources providing research services by product (equities,
commodities or Forex), segment (Large, Mid and Small Cap) and industry specific.
COMPETITORS
Phillip Capital faces tough competition from various brokerage firms available in India.
Some of them are:
Angel Broking
Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel
has emerged as one of the most respected Stock-Broking and Wealth Management
Companies in India. It provides the maximum number of online trading platforms like
Angel Eye, Angle Speedpro, Angel Swift, and Angel Lite etc.
The brokerage charges are as follows:
Account Opening Charge: Rs. 390
Annual Maintenance Charge: Rs. 300 (1st year free)
Brokerage: 30p (delivery), 6p (intra-day)
Access: Online, Branch
ICICI Direct
ICICI Direct is by far the biggest and best know stockbroker in India. They have good
service and easy to use interface. They provide a unique 3 in 1, 2 in 1 online trading
account, which makes trading much more easily. Their services include seamless trading,
award winning research, rich content, speed and control.
The brokerage charges are as follows:
Account Opening Charge: Rs. 975
Annual Maintenance Charge: Rs. 500/450
Brokerage: 0.55% (delivery), 0.05% (intra- day)
Access: Online, Phone, Branch
India Infoline
India Infoline is popularly known as IFL and they are engaged in stock broking industry
for quite a number of years now. Recently, they earned recognition for Securities Trading
and Clearing Memberships from Singapore Exchange and thereby they received the pride
of being the first company to earn membership from SGX in India. In addition to stock
broking service, they offer a wide range of services like investment banking, wealth
management service, insurance, credit & finance, commodities and equities.
The brokerage charges are as listed below:
Account Opening Charge: Rs. 750
Annual Maintenance Charge: Rs. 0 (lifetime free)
Brokerage: 50p (delivery), 5p bothsides (intra-day)
Access: Online, Branch
Sharekhan
Share Khan stock broking company offers equity related services like trade execution on
online trading, depository services, commodities, derivatives, NSE, BSE and they also
offer investment advice.
The brokerage charges are as follows:
Account Opening Charge: Rs. 750 Rs. 160 franking charge
Annual Maintenance Charge: Rs. 441 (1st year free)
Brokerage: High of 0.5% (delivery), 0.1% (intra-day)
Access: Online, Branch
Indiabulls
Indiabulls Securities Limited is a leading stock broking company in India with large
network branches all over the country. They have a customer base of more than seven
lakh-satisfied customers with online stock trading platform. Some of their products and
services are depository services, integrated trading terminal, mobile power Indabulls,
Indiabulls equity analysis, tradelite, currency derivatives, etc.
The brokerage charges are as follows:
Account Opening Charge: Rs. 1350
Annual Maintenance Charge: Rs. 450
Brokerage: 0.30% (delivery), 0.05% (intra-day)
Access: Online, Branch
PRODUCTS
Daily Basket
Daily Basket (DB) is a market neutral intraday cash market trading strategy initiated on
liquid stocks in the derivatives segment. The genesis of the trade is buying or selling
strength of a stock. It is the continuation of trend or directional movement in stocks.
Daily Basket captures the strength in a disciplined way by initiating buy / sell intraday
position in stocks for the day, every day. The stocks which are in an uptrend are bought
where as stocks in a down trend are sold. In total 10 stocks are bought / sold, i.e. 5 buy
and 5 sell. After initiation, DB tries to capture the profit which is almost equal for all the
trades buy / sell. The stop loss is also almost equal for all the trades initiated. This
strength following intraday cash market trading strategy is initiated at 9:30 am is closed
out at 3:15 pm.
The 5 underlying building blocks of Daily Basket are
• “Market Neutral”
• “Strength”
• “Liquid Stocks”
• “Equal Exposure”
• “Profit / Stop Loss”
Features
• Intraday Cash Market Trade
• Liquid scrips from FnO segment
• Equal Exposure per scrip
• Trade initiated at 9:30 am
• Exit Trigger - Predecided Profit / Stop Loss / Square up at 3:15 pm
An investment of Rs 5 lakhs per stock is fixed at the start of the trade and the amount of
profit and stop loss limit is also pre decided before the trade is executed. The amount of
profit fixed for each stock is 7500 and the amount of stop loss limit is 2500 for each
stock.
The performance table below shows the performance of DB over a couple of months on
an investment of Rs 50 lakhs, 5 lakhs each for 10 stocks.
Performance table given below is net of charges based on exposure per stock of Rs 5
Lakh.
Month Net Profit and Loss
August 12 40,512
September 12 59,385
October 12 -84,611
November 12 75,046
December 12 -11,112
January 13 37,195
An example of a trade executed in Daily Basket is shown below.
500000BUY Prev
Close QtyULTRACEMCO 1978.2 253INDUSINDBK 493.2 1014HDFC 885 565TATAMOTORS 300.25 1665POWERGRID 114.75 4357SELLACC 1215.4 411IOC 291.8 1714HINDPETRO 304.8 1640
DRREDDY1998.75 250
SAIL 63.25 7905
The quantity of stocks bought / sold is the quotient of the investment of Rs 5 lakhs in
each stock and the previous closing price of the stock.
500000 7500 2500BUY Prev
Close Qty 9:30Live / Exit Profit SL
PL Status NET
ULTRACEMCO 1978.2 253 1995.5 1995.95 2025.15 1985.6 114
782
INDUSINDBK 493.2 1014 490.5 490.95 497.9 488 456
HDFC 885 565 897.65 897.5 910.95 893.2 -85
TATAMOTORS 300.25 1665 301.8 301.8 306.35 300.25 0
POWERGRID 114.75 4357 114.15 114.1 115.9 113.55 -218
SELL #N/A #N/A
ACC 1215.4 411 1214.1 1214.1 1195.85 1220.2 0
IOC 291.8 1714 290.45 290.15 286.05 291.95 514
HINDPETRO 304.8 1640 305 305 300.4 306.55 0
DRREDDY 1998.75 250 1990.55 1990.55 1960.55 2000.55 0
SAIL 63.25 7905 63.35 63.35 62.4 63.7 0
The net profit figure is the total of the profits generated from all the trades executed. The
Live/Exit price is the current price of the stock, minutes after the stock market opens.
500000 7500 2500BUY Prev
Close Qty 9:30Live / Exit Profit SL
PL Status NET
ULTRACEMCO 1978.2 253 1995.5 2004 2025.15 1985.6 2151
-20981
INDUSINDBK 493.2 1014 490.5 488 497.9 488 -2535 SL
HDFC 885 565 897.65 893.2 910.95 893.2 -2514 SL
TATAMOTORS 300.25 1665 301.8 300.25 306.35 300.25 -2581 SL
POWERGRID 114.75 4357 114.15 113.55 115.9 113.55 -2614 SL
SELL #N/A #N/A
ACC 1215.4 411 1214.1 1220.2 1195.85 1220.2 -2507 SL
IOC 291.8 1714 290.45 291.95 286.05 291.95 -2571 SL
HINDPETRO 304.8 1640 305 306.55 300.4 306.55 -2542 SL
DRREDDY 1998.75 250 1990.55 2000.55 1960.55 2000.55 -2500 SL
SAIL 63.25 7905 63.35 63.7 62.4 63.7 -2767 SL
The stocks marked in red are those for which stop loss has been hit and the trade has been
settled by the end of the trading day. The maximum loss on each stock is nearly 2500 as
decided beforehand. The ratio of profit to loss that can be generated on each stock is 3:1.
NIBOTS
New Intraday BreakOut Trading Strategy (NIBOTS) is systematic break out trading
strategy initiated on many liquid stocks. The genesis of the trade is capturing the trend or
directional movement in stocks.
NIBOTS captures the trend by buying & selling stocks which break above the high or
breaks below the low. After initiation the NIBOTS tries to capture the profit which is
almost equal for all the trades buy / sell. The stop loss is also almost equal for all the
trades. This break out intraday cash market trading strategy initiated at 9:30 am is closed
out at 3:15 pm.
The 5 underlying building blocks of NIBOTS are:
• “Break Out”
• “Liquid Stocks”
• “Buy / Sell”
• “Equal Exposure”
• “Profit / Stop Loss”
Features• Intraday Cash Market Trade
• Top 20 scrips decided for the month
• Out of these 20 scrips, stocks for the day are decided on live price
• Equal Exposure per scrip
• Initiation trigger is High / Low of the previous day
• Exit Trigger - Predecided Profit / Stop Loss
The performance table given below shows the performance of NIBOTS based on
exposure of Rs 1 Lakh per stock.
Month Net Profit and Loss
October 12 -45,420
November 12 10,799
December 12 -27,103
January 13 -20,620
An example of a trade executed in NIBOTS is shown below.
A list of 20 stocks or scrips is decided by the research team for a particular month and the
stocks are picked for NIBOTS out of those 20 stocks. An investment of Rs 1 lakh is made
in each of the stock decided for NIBOTS.
The stocks marked in red are those for which stop loss has been hit and the stock in green
is one for which the profit target has been achieved and the trade has been closed during
the day.
Nifty FuturesHigh 6067Low 6027
New Intraday Break Out 2213Stock Action Trade
PriceTrgt SL Exposure Qty Live /
Exit Price
PL Comments
HDFC BUY 860.8 877.90 852.25 100000 117 877.9 2001 TargetHDFCBANK BUY 689.9 703.70 683.00 100000 145 695.7 841HINDUNILVR BUY 582.75 594.35 576.95 100000 173 586.65 675ICICIBANK BUY 1172 1195.30 1160.35 100000 86 1160.35 -1002 SLINFY BUY 2361.75 2408.30 2338.45 100000 43 2338.45 -1002 SLITC BUY 336.6 343.35 333.20 100000 298 342.45 1743LT SELL 1560 1528.25 1575.90 100000 63 1560.2 -13RELCAPITAL SELL 380.3 372.60 384.15 100000 260 379 338SBIN BUY 2264 2309.50 2241.25 100000 44 2253.1 -480TATASTEEL BUY 326.4 332.90 323.15 100000 308 323.15 -1001 SLTCS BUY 1478.85 1508.30 1464.10 100000 68 1480.5 112
Option Trading Strategies
These strategies are used to create extraordinary payoff profiles.Some of the most
common trading strategies used are:-
Covered Call
Protective put
Spread
Butterfly
Straddle
Strangle
Collor
Strip
Strap
1) Long Straddle: - Bought Both Call and Put at the same strike price of 2300.
125 call were bought at a price of 67.75 each and 125 puts were bought at a
price of 63.15 each.
Profit realised was Rs. 1431.25
2) Option Trade Recommendation: Nifty Ratio Put Strategy
1. Short Nifty June 5800 Put @44.6
2. Short Nifty June 5900 put @ 72.9
3. Long Nifty June 6000 Put @ 112.9
Strategy is profitable above 5695.4 of Nifty,
Above 6000 of Nifty we will get 4.6
Maximum Profit @ 5900 of Nifty
Argument: Market is expected to trade in between the 5800 to 6100 levels in June series. If it goes around 5700 levels still we will be in profit. The strategy would be in loss only below 5695.4 levels at expiry.
http://www.moneycontrol.com/news/market-outlook/nifty-to-hover58406150-for-few-weeks-icici-direct_888380.html
Payoff of Put Strategy:-
3) Short Strangle:-
SEIP
Phillip Capital - Systematic Equity Investment Plan (SEIP) is a systematic investment in
top 10 holdings of the mutual fund instead of the Net Asset Value (NAV) of the fund.
The points below explain Phillip Capital - SEIP idea of investing in top 10 holdings.
Key Features:
• Investing in Top 10 holdings instead of NAV of the fund
• Quarterly investment from April 2010 till October 2012
• Investment of Rs 10,000 per scrip every quarter or 1 Lac at NAV per quarter
• Total Investment of 11 Lakhs over 11 quarters
The table below compares the performance of the top 10 holdings and the NAV of the
fund.
FundTotal
Investment
Value of Top 10
Scrips
Value ofNAV
Comments
Canara Robeco Equity
Tax Saver(G)1,100,000 1,172,983
1,255,94
0
Mutual Fund OutPerformance after May
2011
DSP Top 100 Equity 1,100,000 1,201,3251,227,33
2
Phillip Capital SEIP OutPerformance
approx 70% of Time between April10 to
Dec12
Franklin India Blue
Chip1,100,000 1,171,276
1,222,24
5
Mutual Fund OutPerformance after April
2011
HDFC Top 200(G) 1,100,000 1,188,7491,202,63
7
Phillip Capital SEIP OutPerformance
approx 80% of Time between April10 to
Nov12
IDENTIFICATION OF TRADING OPPORTUNITIES
Identification of trading opportunities was an exhaustive task, because every person has
different risk appetite, different required rate of return and a different capacity to invest.
Investments in SLBS
By having an initial look at the profile of the investor, it can’t be predicted that what kind
of trading strategy will suit him. But still primary call serves the purpose. By way of cold
calls, we get firsthand information about the investor.
The following categories of investors are more interested in SLBS
1. People who have large holdings lying idle in their portfolio
2. People who have shares in physical form ( paper form & not in dematerialized
form)
3. Senior citizens
4. People who are highly risk averse
5. People who don’t have much time to invest but have portfolios for future
obligations
But above all the basic requirement is that the investor should have stocks which are
traded in F&O section. From July onwards, stocks of A group companies will also be
available for SLBS.
Now, once the appointment is fixed, face to face interaction with the client helps to
understand the profile of the investor in a much broader way.
Investments in NSEL
A wide group of investors generally refrain from investing in commodities; they consider
it as a highly risky venture. But when explained further the following categories of
investors looks to be interested –
1. HNI’s
2. CA’s, Lawyers
3. Businessman
Once a client is convinced that it is an opportunity they will get good returns as compared
to FD’s they are ready to park in their funds. But again the basic requirement here is the
margin money. So, people who are having big amount to invest only they finds it feasible.
Unlike the SLBS, where no fresh funds were required, here margin money is required to
start trading.
It has happened many a times when the client wants to invest but don’t have large funds,
so there are some options available in agricultural commodities which requires less
amount of margin money to start with.
Investments in Daily basket
Clients who do intraday trading and are willing to put in the margin money finds it
interesting. Again the following category of investors invest in DB-
1. Intraday traders
2. Risk taking individuals
3. HNI’s who want to earn high profits but don’t have time to study the market
Here the category of investors is entirely different from that of NSEL and SLBS, there
people were demanding assured returns and were highly risk averse here the clientele
wants supernormal returns and is willing to take large risk.
Investment in NIBOTS
Similar category of clients is interested in NIBOTS.
Apart from most general way of identification of trading needs there are other ways also
by which investors are educated about investment opportunities-
1. Corporate seminars
2. Webinars
3. Emails
Corporate seminars
It is a very useful way of educating the client, people in group sit together to see
the presentation given by the equity research analyst. It serves as a substitute to
cold calling, where we can make investors aware of the products in group and they
can ask relevant questions. People who seems interested call the company or leave
their personal contact no. after which a continuous follow up leads to a successful
closure.
Here the client has a vast array of products to choose according to his trading
needs.
Webinars
Webinars are usually conducted every week by the analysts of the company and
are of around 30 minutes. Here the investor learns a specific trading strategy every
time and can ask his doubts at the moment. It is a short and easy way of
understanding the trading strategy.
Emails
A brief presentation on the products is available in the softcopy format also, which
is mailed to the prospective clients. Many a times, before fixing an appointment
the client urges to first get some basic information on products, so that he can go
through them, understand the product and can be prepared for asking queries.
Arbitrage
An arbitrage transaction is defined as the simultaneous purchase and sale of an asset in
order to profit from a difference in the price. It is a trade that profits by exploiting price
differences of identical or similar financial instruments, on different markets or in
different forms. Arbitrage exists as a result of market inefficiencies; it provides a
mechanism to ensure prices do not deviate substantially from fair value for long periods
of time.
When used by academics, an arbitrage is a transaction that involves no negative cash
flow at any probabilistic or temporal state and a positive cash flow in at least one state; in
simple terms, it is the possibility of a risk-free profit at zero cost.
Arbitrage is possible when one of three conditions is met:
1. The same asset does not trade at the same price on all markets ("the law of one
price").
2. Two assets with identical cash flows do not trade at the same price.
3. An asset with a known price in the future does not today trade at its future
price discounted at the risk-free interest rate (or, the asset does not have negligible
costs of storage; as such, for example, this condition holds for grain but not
for securities).
Arbitrage is not simply the act of buying a product in one market and selling it in another
for a higher price at some later time. The transactions must occur simultaneously to avoid
exposure to market risk, or the risk that prices may change on one market before both
transactions are complete. In practical terms, this is generally possible only with
securities and financial products that can be traded electronically, and even then, when
each leg of the trade is executed the prices in the market may have moved. Missing one of
the legs of the trade (and subsequently having to trade it soon after at a lower price) is
called 'execution risk' or more specifically 'leg risk'.
Arbitrage in SLB
Reverse arbitrage involves selling a stock in the cash segment and simultaneously buying
it in futures to benefit from the price difference.Stock lending facilitates this as investors
can borrow the shares and tend them in cash segment while simultaneously creating a buy
position in the futures segment.The second leg of this transaction involves closing the
positions later by reversing transactions.
Shares such as those of the State Bank of India (SBI), Punjab National Bank, Mundra
Port and LIC Housing Finance are among the large caps trading at a considerable
premium in the cash market compared with their one-month forward prices.
The stock lending mechanism basically involves borrowing the share from others for a
specified period of time through approved intermediaries such as the clearing
corporations of stock exchanges, primarily to short them in cash.The lenders, on the other
hand, are mainly long-term investors, get lending fees in return without losing on the
benefits associated with owning the shares such as dividends or splits or bonus. Currently,
regulations allow retail or institutional investors to borrow or lend the shares listed in
futures and options segment for a maximum tenure of 12 months. The buyers are usually
institutional clients such as domestic proprietary desks which want to capitalise on
arbitrage opportunities while the long-term investors act as lenders. The segment
currently does not attract any STT charges, which is an added incentive.
Speculation
The act of trading in an asset, or conducting a financial transaction, that has a significant
risk of losing most or all of the initial outlay, in expectation of a substantial gain. With
speculation, the risk of loss is more than offset by the possibility of a huge gain;
otherwise, there would be very little motivation to speculate. While it is often confused
with gambling, the key difference is that speculation is generally tantamount to taking a
calculated risk and is not dependent on pure chance, whereas gambling depends on totally
random outcomes or chance. Speculation can in principle involve any tradable good or
financial instrument. Speculators are particularly common in the markets
for stocks, bonds, commodity futures, currencies, fine art, collectibles, real estate,
and derivatives. The role of speculators is to absorb excess risk that other participants do
not want, and to provide liquidity in the marketplace by buying or selling when no
participants from the other categories are available. Successful speculation entails
collecting an adequate level of monetary compensation in return for providing immediate
liquidity and assuming additional risk so that, over time, the inevitable losses are offset
by larger profits.
Currency hedging
Fluctuations in the price of Indian Rupee vis-à-vis other say US dollar, Britain Pound etc.
create problem of cash flow management for a company. To eliminate such problems of
managing the cash flow, companies opt for hedging their risk through financial products like
forwards, futures and options. While the forward contracts done over the counter are mainly
provided by banks, the futures and options are the exchange products.
Currency futures were first created in 1970 but it was introduced in India by RBI and SEBI
only in may 2008. Phillip Capital India provides currency hedging through National Stock
Exchange (NSE) using the futures contract. These are used by both exporters and importers
to hedge their risk against any future currency fluctuations. Exporters hedge their risk by
selling currency futures while importers by purchasing the currency futures. The currency
pairs available on the exchange platform are USDINR, EURINR, GBPINR and JPYINR.
Currency future
Currency future is a futures contract where it is agreed upon to exchange one currency for
another at a specified date in the future at a price that is fixed on the purchase date.
Export Houses
Export companies expecting cash flow in foreign currency on future date will face a risk of
losing money if the exchange rate (Ex USDINR) goes down. These companies in order to
minimize this risk will lock in the exchange rate by selling currency futures contracts on NSE
that expires on the date of cash flow. Phillip Capital acts as a broker to provide customers
with the platform on NSE to enter into such contracts.
Apart from providing currency hedging, Phillip capital also helps export companies in the
Pre-shipment financing which is a flexible short term lending facility that assists in the
purchasing and/or manufacturing of goods prior to export to the ultimate buyer. It also helps
the export businesses in their Post-shipment financing. Post-shipment finance is a loan or
advance granted to an exporter of goods from India. This facility is available to an exporter
subsequent to the date of shipment of goods up to the date of realization of export proceeds.
Import Houses
Import companies expecting a cash outflow in foreign currency on future date will face a risk
of losing money if the exchange rate (Ex USDINR) goes up. These companies in order to
minimize this risk will lock in the exchange rate by purchasing currency futures contracts on
NSE that expires on the date of cash flow. Import houses uses the service of Phillip capital to
hedge their risk in these matters.
Apart from providing currency hedging for importers, Phillip capital also help import houses
in their non-fund based limit like letter of credit etc. Phillip capital also helps in financing for
import houses for their working capital and product manufacturing.