India is all set to become a $25 Tn economy by 2025, growing at a rate of 7%-10% over the next five years. The path to this commendable growth rate has been long and hard, but India is steadily walking along it now. So, what is triggering this growth and how can the average Indian make the most of it?
Over the last decade, India has seen an increased influx of foreign direct investment (FDI). Besides, more and more MNCs have been opening their offices and expanding their businesses here, resulting in a wealth of job opportunities. The result: India’s cautious middle class has more disposable income in its hands than ever before.
Even as Indians are increasingly adopting the consumerist culture — albeit much later than their western counterparts — most of them still want to do more with their disposable incomes than just buy more things. Invest, for one.
Investing for higher returns has become an important factor in the average Indian’s financial planning. While there are many wealth management firms targeting high networth individuals (HNIs) and their impressive portfolios, there aren’t many players in the market helping the average Indian invest his/her hard-earned savings and realise profits from otherwise idle assets. This is where Minance steps in to make a difference.
Investing is laced with its own perils and complications, which keeps small investors from benefiting from the larger returns of a varied portfolio. They prefer to play it safe and stick to traditional saving methods, which offer slow and low returns.
Minance is aiming to change that by helping investors from all walks of life invest in products that were earlier available only to the ultra-rich. Right from financial handholding, transparent dealing of investments through a customer-friendly dashboard, to centralisation of investments and taxation, Minance is giving the Indian consumer financial independence in the true sense of the term.
Minance: Managing Risk And Investments
Founded in 2014 by Anurag Bhatia, Minance manages the investments of its partners (Minance refers to clients as partners, given the model they employ) across a range of asset classes — from equities and derivatives to mutual funds and stocks of fast-growing private companies and startups.
Anurag Bhatia, CEO & Head of Investments, Minance
In just four-and-a-half years, Minance has roped in 3,000 partners and has an Asset Under Management (AUM) of over $41 Mn (INR 300 Cr). The company also provides taxation services and is expanding to insurance, credit, and international equities.
Its vision is to be a one-stop solution for investors’ financial needs. “Our internal tagline is ‘The Money Company’ and we want that to be a reality. To that end, we will soon be expanding into insurance and credit,” says Bhatia.
Minance took off informally while Bhatia was still employed with Amazon. A lot of employees had vested their Amazon stocks but didn’t know what to do with the money. Bhatia had a reputation of being the “stock market guy” in the office and people came to him for advice. Before Amazon, Bhatia had worked at investment firms such as Motilal Oswal and was a successful investor in his own right.
Bhatia would chalk out a deal in which he would manage his colleagues’ investments in return for 1/5th of the profits.
As his expertise became increasingly sought after, Bhatia thought of making a proper venture out of it and founded Minance. The company, which initially offered just derivatives, soon gained traction among investors because of its low investment ceiling of INR 25,000.
But, the big push came once Bhatia became a top writer on Quora. Impressed with his knowledge of the markets, people started pouring in to invest through Minance.
The young founder says that he’s been humbled by the overwhelming response to his company. “The journey has been challenging at times. What we set out to do hadn’t been done this way before and we had to build a lot of things from scratch, especially the technology,” he says.
Carving Out A Niche In Financial Services
The asset management space in India is choc-a-bloc with established players, including the likes of Tata, HDFC, Future Capital, Kotak Mahindra Capital, Edelweiss Stock Broking, and many more. So, what made Bhatia feel he could carve out a niche in this competitive market with his startup?
He says he found a gap in the market. “Small retail investors were catered to by mutual funds and the ultra-rich (investments of INR 30 Cr and more) went with players like ASK, HDFC, Kotak, etc. We take care of the needs of those in the middle, people who can invest anywhere between INR 5-10 Lakh to a few crores,” he explains.
Minance’s products are designed to cater to a range of risk profile needs. So, whether you’re a heavy risk-taker hungry for returns or a conservative investor looking for stable and consistent gains, Minance has a product for you.
Talking about the most popular mutual fund product people use — systematic investment plans (SIPs) — Bhatia says SIPs are popular because they are built to be easy and convenient — money is auto-debited every month and the AMC takes care of the rest.
But SIP investments come with their own problems — people forget to monitor them and when market conditions change, 5-star funds can very quickly turn into losses. Regular monitoring and rebalancing are needed, for which Minance offers managed mutual funds. Bhatia points out that one of the most sought-after products Minance offers is a mutual fund-enabled product called Assets Pay Cash, which is designed to generate around 12% additional returns per annum over and above what the mutual fund makes.
He adds that investing through SIPs in stocks are harder since you need to gauge the market and track multiple stocks, which is time-consuming. “We are making this easier with our equity product (Bloom). Investors can set up a SIP with us, the money is parked into liquid debt funds while we wait for the right time to deploy. This way your money is still invested and we get to pick the right time to enter the market,” explains Bhatia.
Current Offerings From Minance
- Arbor: Minance’s core derivatives product catering to aggressive investors, Arbor is designed to generate returns of up to 35%. The product is market neutral, meaning it will generate returns regardless of the market direction.
- Bloom: Minance’s long-term equity product is designed to grow your wealth over a three-five year period. Both Arbor and Bloom feature five risk profiles to balance risk appetite with returns.
- Private Equities: The company offers shares of promising private companies such as PayTm, Ola, Kurlon Mattresses, Nazara, etc.
- Assets Pay Cash: An innovative product that uses one’s existing mutual funds as collateral and works the money to take very conservative derivative positions. This lets the partner make around 12% more returns on top of their mutual funds with no additional investment.
- Mutual Funds: The company helps its partners identify and manage the most lucrative funds for a given risk level, based on the Efficient Frontier Theory.
- Global Equities: Minance’s latest product enables its partners to invest in a diverse global portfolio comprising US tech giants, European manufacturers, Asian infrastructure firms, and more.
- TaxSafe: An overlooked part of investing is how complicated tax filing can become. TaxSafe is Minance’s online vault which stores users’ tax documents and enables them to file their taxes in a fast and hassle-free way.
The Minance Advantage
What differentiates Minance from the big asset management companies (AMCs ) is the level of personalisation it offers to its partners. “One of the biggest things users of online investing sites miss out on is personalisation. They don’t have qualified investment advisors to talk to you and can understand your specific risks, goals, and needs. We do,” says Bhatia.
Apart from personalisation, the reason Minance has been able to garner such a sizeable clientele in such a short time is the diversification of investments it offers along with a superior partner experience.
Minance Partner Dashboard
“While most investment firms offer only equities and derivatives, our offerings go far beyond that. We offer mutual funds, private equity, as well as international investments. We have also started offering taxation services so that our partners don’t have to worry about filing complicated tax returns,” explains Bhatia.
He adds that the partner experience is far more personal compared to what one gets on online platforms. Once an investor becomes a Minance Partner, he/she gets a dedicated investment manager who acts as a single point of contact for their investment needs. They also act as financial advisors, helping partners make financial decisions to invest in products outside Minance as well.
Minance’s typical investors are in their early 30s, successful, and want their money to work for them. They are businessmen, senior managers, and startup employees. Their investment needs vary — some look at periodic investments while others want growth.
According to Bhatia, another big advantage Minance offers its partners is its pricing structure. Unlike traditional fund houses, which take a set percentage of one’s investments, Minance works on a profit-only model. “Our fees are 10% of the profits made, no other charges,” he says.
Investments Made Easy And Accessible
Minance partners have access to all these advantages while being able to maintain complete ownership and control of their money. One of the most popular features is a sure shot investor pleaser — the ability to redeem funds anytime. By allowing complete liquidity, Minance takes away whatever apprehensions investors generally have, which make them wary of investing.
Minance also enables its partners to access their accounts anytime they wish to see how their funds are doing. It offers a web dashboard through which partners receive updates and insights about the companies they have invested their funds in. This helps them stay in the loop without having to set up additional tickers on their desktop.
Wealth management is an important concern for people living in a country burgeoning economically, technologically, and in many other aspects. The art of balancing lifestyles and ensuring financial independence is one not every individual is well-versed in, but should be, keeping in mind the contingent nature of money itself.
Minance helps investors as well as novices strike this balance and provides them the perfect platform to spread their wings and experience ultimate financial freedom.