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By:

Abhijit Mulye

21 August 2024 at 11:29:11 am

The Iron Ore Revolution

Gadchiroli transforms from ‘Red Corridor’ to steel hub Gadchiroli: Once synonymous with the shadow of the Naxal insurgency, Gadchiroli is undergoing an unprecedented and rapid transformation, poised to emerge as a powerhouse of the Indian steel industry and a model for socio-economic development. With security issues largely contained, the district is now witnessing a massive Rs 3 lakh crore investment pipeline, signaling a monumental shift from conflict to commerce. District Collector...

The Iron Ore Revolution

Gadchiroli transforms from ‘Red Corridor’ to steel hub Gadchiroli: Once synonymous with the shadow of the Naxal insurgency, Gadchiroli is undergoing an unprecedented and rapid transformation, poised to emerge as a powerhouse of the Indian steel industry and a model for socio-economic development. With security issues largely contained, the district is now witnessing a massive Rs 3 lakh crore investment pipeline, signaling a monumental shift from conflict to commerce. District Collector Avishyant Panda detailed the comprehensive development agenda, underscoring that the focus has squarely moved to building world-class industry and infrastructure, matched by crucial human resource development. The heart of this transformation is the colossal investment in steel production, leveraging the district’s rich iron ore deposits. The combined efforts of major industrial players are set to make Gadchiroli a steel manufacturing giant. JSW Steel is setting up what is projected to be the world’s biggest single-location steel plant, with a massive capacity of 25 MT (Million Tonnes). Lloyds Metals and Energy Ltd. has already commenced operations, establishing a 10 MT steel plant at Konsari, while Surjagadh Ispat is adding to the capacity with a committed 5 MT plant. The total planned production capacity of 40 MT in the coming years will not only generate significant wealth from the district’s natural resources but also anchor a vast auxiliary industrial ecosystem. “The district that was once being ruled with the barrels of a gun is now rapidly transforming into an advanced hub that thrives on the riches gained from the iron ore,” Collector Panda asserted. Infrastructure Leap Crucial to sustaining this industrial boom is a massive upgrade in connectivity, which has long been a major bottleneck. The long-awaited Railway link is soon expected to bring Gadchiroli onto the national rail map, drastically reducing logistics costs and time for the heavy steel industry. The district administration has already identified three locations for the construction of an airport. A final clearance and nod from the Ministry of Aviation is anticipated soon for one of these sites, which will facilitate rapid movement of VVIPs, critical goods, and eventually, commercial traffic. Digital Integration To ensure no corner of this vast district (which is comparable in size to the state of Nagaland) is left behind, a massive digital push has been executed. Mobile towers have been erected across all 1,550 hamlets in over 450 gram panchayats, with an additional 550 towers set up along key roads, ensuring robust communication and online service delivery. Skilled Manpower While security and infrastructure challenges are being systematically resolved, the single biggest issue that remains is the availability of skilled manpower to service the highly technical steel and allied industries. Recognizing that human capital is the critical factor for sustaining the district’s monumental industrial investment, Gondwana University, Gadchiroli, has embarked on an ambitious global partnership to cultivate a highly skilled local workforce. The university, in collaboration with the private sector and a leading international institution, is transforming its academic focus to directly align with the demands of the emerging Steel Hub of India. The linchpin of this strategy is the formation of a University Institute of Technology (UIT) in Gadchiroli. This institute, established with the full financial backing and corporate social responsibility commitment from Lloyds Metals and Energy Ltd, is primarily dedicated to providing free diploma-level technical education to tribal and economically disadvantaged students from the district’s most remote areas. A landmark agreement has been signed with Curtin University, Australia, a globally renowned institution particularly strong in mining studies. This tripartite Memorandum of Understanding (MoU) with Gondwana University and Lloyds Metals & Energy Ltd aims to combine global academic rigour with local employment opportunity. The new UIT is currently offering three specialized, industry-relevant diploma courses: Mining Technology, Steel Technology, and Computer Science with Mining Applications. Each stream is designed to enroll 30 students in its initial phase, with the curriculum being jointly developed by the academic and industry partners to ensure the training is both theoretically sound and commercially applicable. Formation of District Transformation Committee (DTC) provides a crucial institutional framework for coordinating the implementation of key central and state schemes, specifically focusing on skill development, education, and health to fast-track the district’s comprehensive development. New Horizons The developmental model is deliberately holistic, encompassing agriculture and social infrastructure. Progressive farmers, with active support from the district administration, are experimenting with high-value crops like Water Chestnut and Strawberry, moving beyond traditional paddy farming to explore profitable agricultural diversification. The Ekal Training Centres are undertaking a unique program aimed at empowering Gram Sabhas (Village Councils) to enhance and sustainably manage forest produce, ensuring that the tribal populace receives the maximum benefit from their natural wealth. Social Infrastructure Upgrade The education and health infrastructure is seeing a significant overhaul. New hospitals are being established in the remotest areas, with much of the funding and support coming directly from the industries setting up base in the region, creating a true public-private partnership for social good. Gadchiroli’s story is no longer one of adversity, but a vibrant narrative of economic resurgence, connectivity, and development. The collective focus on capitalizing on its mineral wealth while simultaneously nurturing its people’s skills and social well-being marks the dawn of a new, industrial era for this once-neglected frontier.

Loans against mutual fund are not ideal for long term expenses: Krishna Kanhaiya

Updated: Oct 21, 2024


Loans against mutual fund are not ideal for long term expenses: Krishna Kanhaiya

As mutual fund units are emerging as the new collateral for pledging beyond conventional gold and real estate, The Perfect Voice spoke with Krishna Kanhaiya, Director and CEO, Mirae Asset Financial Services – a NBFC that lends against mutual fund units and securities to gather more insights on the subject. Excerpts…


It has been over two years since you launched loan against mutual funds. How has been the journey of your loan book so far in terms of the type of retail investors?

Launched in July 2022, our loan book has doubled from December 2023 till date after having surged from January to December 2023. With our digital first approach, we have seen borrowers in the age group of 30-50 years for their needs including marriage, home renovations, children’s education, and travel.


What is the market size of loan against mutual funds in India and how seamlessly can an individual complete the process?

Unfortunately, there isn’t a published report that specifically outlines the market size for loans against mutual funds. This type of loan is typically categorized under the broader umbrella of loans against securities, which also includes loans against shares, insurance policies, gold, property, and other assets.

However, we believe that the potential market size for loans against mutual funds is significant. This belief is rooted in the current scale of individual investors’ Assets Under Management (AUM), which, as of July 2024, stands at an impressive Rs 39.50 lakh crore.


Compare to gold loan or loan against property, how convenient and cost effective it is, in terms of interest rate, to borrow against MF units

Some of the challenges with a loan against properties include valuation of the property, depending on the condition of the property and the time-consuming and tedious process along with high processing fees and other charges. Moreover, the borrower has to submit income documents to prove his or her repayment capability, even if it is a secured loan and interest rate may differ on credit score of the borrower, age, type of property and repayment capability among others.

In case of availing gold loans, interest rate is higher compared to loan against mutual funds and the process is physical as the borrower has to visit the branch or the relationship manager has to collect gold from the applicant’s place. Valuation of gold is based on gold purity and yellow metal below 18K is not accepted and the entire value of ornament is not considered.


What are the risks including margin call that an individual should bear in mind while borrowing against MF units? Any of your experience of default so far.

If the market falls, your eligible loan limit is revised as per the current market value of the pledged mutual funds on a daily basis. Where the borrower’s utilized amount is higher than his or her revised eligible limit, you receive a margin call to regularize your loan account within the stipulated timeline either by depositing additional funds or by pledging additional mutual fund units as collateral.

We recommend our clients to not utilise 100% of the loan limit and to maintain a buffer to avoid such margin calls. Pledged mutual funds may be invoked if the borrower fails to regularize the account or repay your over-dues within the stipulated time period. Till the units are pledged, redemption will not be possible. Loans against mutual fund are not ideal for long term expenses and against short term investments and they should not be used for speculative purposes in the capital market.


Are all mutual fund units eligible to be pledged for borrowing or are there any restrictions?

Not all mutual fund units are eligible for pledging to borrow against them. Close-ended mutual fund schemes are not eligible for pledging as they cannot be invoked in case of default. Hence, only open-ended schemes can be pledged to avail loan against mutual funds. Tax saving schemes (ELSS) outside of the lock-in period can be pledged to avail the overdraft facility.


Is the borrower entitled to receive benefits like dividend and other benefits if any, from the pledged units during the period?

Yes, the borrower is entitled to receive benefits such as dividends and other related benefits from the pledged units during the period of the loan. When a borrower pledges their mutual fund units as collateral for a loan, they retain full ownership of those units. This means that, even though the units are pledged, the borrower continues to be the legal owner and thus is entitled to all the benefits that come with ownership.

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