Dhruv Arora

Meera, a high flying corporate executive, was bent on using the money earned from her ESOPs to buy a second house as an investment which could be passed on to her children later. Her spouse Karan was against it as it would mean postponing their retirement plan. My article in Business Standard on how Karan and I managed to convince Meera to invest the money into financial assets instead. "You do not buy a cow today just because you may need milk years later. You make sure you have the money to buy the cow should you require it later" was one of the arguments that helped to convince Meera. What do you think? Please do give your comments. Article link https://bit.ly/4be2qTu NAPFA - National Association of Personal Financial Advisors Association of Registered Investment Advisers (ARIA) Fee Only Investment Advisers LLP (SEBI Regn No: INA00014836 Circle Wealth Advisors Private Limited #personalfinance #realestateinvesting

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Yesterday's budget has a promising note for Startups, VC & PE funds. 1. Abolition of Angel Tax 2. Unlisted securities to be taxed at 12.5% instead of 20% - More secondary deals to happen. 3. Creation of VCCs (They have been very popular in Singapore, and started in 2020). - Provides greater flexibility for pooling funds and repatriation of funds 4. REITs - For the Fractionalization of RE (SME REITs) - The holding period has been reduced from 36 months to 12 months. Will write in detail about VCC in the coming days. #startups #vc #pe #angeltax #vcc #reits

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Key Lessons from “The Dhandho Investor” Thank you very much Mohnish Pabrai for sharing your wisdom in "The Dhandho Investor" (2007). It was like having an enlightening chat with a cool uncle, filled with stories, anecdotes, lessons and tons of wisdom. "Heads, I win; tails, I don't lose much" was the simplest yet most potent concept that resonated with me. It's all about probabilistic thinking. Pabrai clarifies that entrepreneurs, much like value investors, aim to minimize risk in their pursuit of wealth, aligning with the meaning of 'Dhandho.' Facing a wide array of potential outcomes, entrepreneurs focus on diminish the likelihood of permanent capital loss and creating 'Low Risk, High Uncertainty' businesses. Wall Street often confuses the notions of "risk" and "uncertainty." Humans inherently dislike uncertainty. When a company's uncertainty increases, its market price tends to plummet, creating potential "Low Risk but High Uncertainty" investment opportunities. The cases of Stewart Enterprises (P/E below 3x!) and Frontline (at 1/3 of its liquidation value!) are just mind blowing. In his podcast, "Chai with Pabrai," you can also hear about the cases of Ipsco (P/E ex-cash at 2x!) and Reysas (trading at less than 5% of its replacement value!). Key Lessons to Revisit Often: The thesis should be concise and straightforward: If it takes more than one short paragraph or requires Excel, reconsider it, advocating the principle of "Simplicity after Complexity." Despite the necessity for in-depth research, the investment thesis should be expressed simply. The Margin of Safety's role is to make precise future predictions unnecessary. Rather than analyzing multiple cases simultaneously, thoroughly study one at a time. Silence distractions and avoid discussing real-time portfolio positions. Independence of thought in investments is crucial. Value Investing is inherently contrarian. Seek out opportunities where the market displays disdain (lowest valuations, highest dividend yields, 52-week lows, etc.). Employ a checklist to identify potential thesis pitfalls. Though the book provides several checklist questions, Mohnish formulated a comprehensive checklist in 2008 based on his and other investors' mistakes. The 3 main themes are Leverage, Misunderstanding of the competitive advantages, and nature of management/ownership. Continue research until all answers are obtained. If an investment remains unprofitable after 3 years, it usually indicates a misjudgment of intrinsic business value or crucial value drivers, or the intrinsic value has decreased. Accepting a loss at this point can become a rich learning resource. Dhandho framework: Invest in existing business, Invest in simple business in low-changing industries, Invest in distressed business in distressed industries, Invest in business with durable moats, “Few bets, big bets and infrequent bets”, Margin of safety always, Invest in “low-risk, high uncertainty” businesses

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I’ve been turning down all media requests for a post election analysis but talk of whether alliances will hold post elections reminded me of something I wrote 26 years ago - before a Lok Sabha Election result.   The basic premise: one who holds 30 seats may have the same power, or even more, as compared to someone who holds 245 seats.   A mathematical Power Index explains how   Quote Let’s get on with the “Power Indices” of the various political parties.   Think of it this way : suppose you require a 50% plus majority to form a government and there are 3 parties in the parliament with the following seat tally : 44%, 39% and 17%.   Now, any two of these can join together to form the government and therefore all three of them have exactly equal power, no matter that Party 3 has got less than half the number of seats that the first two have. This is a concept that is of use in any ‘majority wins’ decision rule from shareholder resolutions to jury decisions.   Suppose there are 4 parties in the fray this time around: A, B, C and D parties, having 35%, 34%, 17% and 14% of the seats resp. Again if a simple majority is needed to form a government, any two out of A, B & C can form a government whereas the Party D’s support is never really crucial to anyone.   If this party’s 14% is added onto the percentages of any of the first three parties, the sum does not exceed 50% and any larger coalition of parties doesn’t require its support anyway. Party D is therefore called a ‘dummy’ - an apt term for someone whose vote can never change a losing coalition into a winning one or vice versa.   The dummy has no power, while all the other three parties i.e. A, B and C have equal power.   This is inspite of the fact that Party C has far fewer seats than A and B and only a few more than the smallest one i.e. Party D   For those interested, there is a technical concept called the Banzhaf Power Index (BPI) of a group, party or person which is defined as the number of ways in which that group, party or person can change a losing coalition into a winning one or vice versa.   In the preceding example, the BPI of parties A, B and C are equal and that of Party D is zero.    In fact as an individual MP, you are better-off being a part of Party C than Party A or B because as part of the government you get a disproportionate share of the goodies. This is exactly what happened in U.P. where virtually every MLA of a marginal party who joined the BJP government was made a minister - something that was a remote dream for most BJP MLAs.   Unquote (First Global's weekly 'Markets, Majorities and Maths', January 1998)   Thus if a few smaller partners can hold whichever coalition government to ransom, it introduces uncertainty.   “The more things change, the more they stay the same” Hence, I can repeat a 1998 piece which has contemporary parallels   We may be in for some interesting times.   History also shows coalition governments have been pretty good for the economy and markets.

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My thoughts on PDD (4): If you are an investor of PDD, you would know by now, it is not a conventional company. As the management has said in various occasions: In PDD, we want to isolate from external noises, focus on what we do well and solve the immediate problem as soon as we can. Indeed, PDD is very concentrated on its core business, maintaining its competitive advantage at home and expanding overseas with rebellious determination. PDD is reluctant to be swayed by investors' pressure and expectation, public and shareholder opinions are secondary to them and the company is intentionally shielding from requests for information, reminiscent of Amazon's early days. In his first shareholders letter in July 2018, Colin Huang the founder of PDD wrote: "It is not easy to take the leap of faith believing in such an unconventional company. The pursuit and focus of our long-term vision and intrinsic value may not always translate into near-term profits. Instead, we hope to show you the true colors of our company no matter how bumpy or rough the numbers may seem to be. We ask you to ride the journey with us for the long term. We believe it will be wonderful." The roller coaster ride with PDD share price is far from a "wonderful" journey, and their lack of communication is to be addressed. However we have stayed invested with PDD because its consistent executions of long term goals and solid quarterly financial performances. At the end of day, if I remain to be an investor in PDD, I ask myself whether I can endure the volatilities of its share prices, accept its unconventional approach, be patient with the investment cycles that PDD sets out to achieve to become a great company ? I have the answers already.

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While the market has entered into a correction phase, it is time to invest in high growth Indian companies. Small Caps - are no longer ‘small’ as the largest small cap has a market cap of Rs 35k cr+ - offer much wider set of companies for Fund Manager to choose from Example - 32 small caps in infrastructure vs 1 in large cap - exposure to multiple high growth themes can be taken only through small caps - have a track record of generating higher numbers of multibaggers Many interesting aspects of current markets, macros, growth outlook, asset allocation, relative valuation discussed threadbare with Jyoti Rai 🇮🇳 TRUST Mutual Fund TRUST #mutualfundssahihai #mutualfunds

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My thoughts on SEBIs consultation paper on a new asset class I honestly don’t share the enthusiasm of my fellow fraternity members and media, for the following reasons: 1. Fundamentally speaking, a hedge fund is not an asset class. It’s a strategy, a differentiated product. Industry practice might be to classify them as an asset class (they get clubbed under "alternates"), the regulator I feel should try and address that, instead of contributing. 2. Indians in general are return seekers. Concepts like risk adjusted returns are not well understood or appreciated even amongst the high net worth. Barring a few family offices, allocations to hedge funds as a category is very low. So I am not sure how well such products, strategies will get received. 3. Most importantly - India remains a grossly under-advised and heavily over-sold market. That just a few hundred wealth managers are legally allowed to give holistic advice is a testimony. Positioning such strategies in client portfolios requires a high quality advisory approach. I am witness to how these products get pitched even to the high net worth - without properly explaining the risk and rewards. On a lighter note, some of the sales pitches can be good content for stand-up comedy. Commissions are usually high. Which usually becomes the key driver. The real need of the hour is to focus on investor education. On how an investor needs to approach investing and how they should allocate between asset classes and strategies. The regulator might not have the necessary budgets, which is why they depend on the investment industry. The challenge is what I mentioned in point 3. I feel correcting this should be the highest priority for the regulator. As only when you have a disproportionately larger number of advisors (as against product pushers), a larger number of Indian households will have access to quality advice. This needs both a carrot and stick approach. Carrot to those following the law. And stick to those who aren’t. Majority of the advisors are not legally allowed to give advice and on top of that they continue to earn their income by way of commissions. This lot includes armies of relationship managers across banks and financial institutions and now a large section of social media 'finfluencers'. Despite repeated assertions and measures by the regulator to caution all concerned on the valuations, small cap funds and thematic funds continue to get large allocations. For sure advisors who earn from their clients aren’t responsible for this. This lot is suggesting investing in large cap or flexi cap funds. It’s obvious to me that this frenzy is being driven on the back of commissions. Small cap funds pay the highest commissions. Now in this kind of industry structure, innovations like what the regulator proposes to introduce can really wait. Attention ought to be on more important matters.

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India/SE Asia-focused private markets fund manager Everstone Group adds to their executive ranks former Indian sovereign wealth entity National Investment and Infrastructure Fund (NIIF) Managing Director and CEO Sujoy Bose, who was also previously Global Head of Infrastructure and Natural Resources at leading Washington DC-based development finance institution IFC - International Finance Corporation. This is a significant move at a significant inflection point for Everstone Group who have been investing in India, SE Asia and the US as one of the few remaining early market movers since 2007 with strategies across #privateequity, #renewableenergy and #climate #infrastructure, #realestate, #logistics, and #growthcapital. While India fund returns to limited partners, especially on a US dollar basis, have had challenges pre-2014, Everstone Group India's more recent Fund III and Fund IV seem to be making commendable progress and I have heard praise from co-investors in #japan and #unitedstates for successful realized co-investments in India with Everstone Group. With India being one of the more sought out markets for private and public capital investors, it will be interesting to track Everstone Group's further realizations to LPs and fundraising plans. You should too! #alternativeassets #privatemarkets #india #singapore #seasia #fundmanagers #capitalmarkets #fundraising #japan https://lnkd.in/g3yXuWib

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Indian market - Is it really just a correction or a medium term top( 2- 3 years!) in place ? Mkt still down only 10% , at least another 10% to go. Everyone still in buy on dip mentality. Lets wait out a little longer. Too much euphoria, too many underlying issues including stretched valuations, weakness in domestic demand led by stretched consumer at the mass level, weak corporate earnings growth, low domestic private sector investment, high taxation, capital gains tax etc etc. Markets have a strange way of preceding/de-coupling with underlying economy, both on the upmove and the downmove. I remain in the latter camp, I think Indian market has topped out for 2-3 years or so, of course with intermediate mini-rallies. Only time will tell. Pain has just about begun.

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A significant milestone on the Sarvagram journey and we are very excited to continue our support to the stellar team. When we invested in 2022, we saw a distinctive company which was serving an unaddressed segment in a very large market i.e middle class households in rural India. The narrative around rural financing has primarily focused on farmers and low-income populations. However, there's a huge gap in addressing the needs of the aspirational rural middle class—the 80-100 million households with annual incomes ranging from ₹3-5L, spread across multiple income sources. This demographic is eager to improve both their income levels and quality of life, yet their financial needs have often gone unmet. Banks and microfinance institutions have targeted agriculture or low-income women but the rural middle class is a large whitespace. Though they may have access to product financing like two-wheeler or car loans, a significant portion of their aspirations remains unaddressed. SarvaGram is stepping into this gap with a holistic, customer-centric platform that offers a diverse range of financial services—from lending products and farm mechanization solutions to insurance offerings — as opposed to a mono-line strategy, which we believe works better in denser urban markets. In addition to our thesis on rural lending, we have found working with the stellar team, led by Utpal Isser and Sameer Mishra, a collaborative and insightful partnership. Their exceptional execution and understanding of the rural market have enabled SarvaGram to create lasting impact and drive sustainable growth. It has been equally enjoyable to learn from their experiences and we truly appreciate the openness of team. We have also appreciated working with our co-passengers from #Elevar, #Elevation and #Temasek and look forward to the #Peak XV team. With this fundraise, SarvaGram is on track to continue its impressive growth trajectory and we are excited to be part of this journey of SarvaGram driving meaningful change for rural middle-class households. Utpal Isser SarvaGram Sreeraman V TVS Capital Funds #FundingSuccess #RuralIndia

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From yesterday, we are hearing words like 'surprise', 'disaster' 'shocker' leading people from conviction to doubt. CLSA also published a report with that title and one of the managers believe its start of a bear market. Frankly, it's so easy to get lost amidst all these and get into 'inaction' mode. And many a times that's a good strategy. We can always pick up when there is more clarity. But then when does good price come with good news? But if I pause for a minute and think, this is what I realize - - It's almost certain that we will have the same government with some new actors - Most of the policy level reforms/law changes have been done and only execution left. So this may not get hampered - Lots of chatter around populist measures may not be true as they did not lose election because of that In short, we are almost at the same place we were last week with some bargains in hand. Many pockets of markets were expensive and in fancy. Many people believed they have found a panacea and stock investing is easy. This needed correction. Some of that is in place and others will get there soon. The trend is in our favor (most of the markets are in uptrend) and a large segment of the market is yet to perform (read largecaps). We may not see a bear market before that. Kehte hai na - 'Darr ke aage jeet hai' And hence we have initiated fresh deployment today and will not take much time to get in. We were waiting for this correction (whatever could be the reason) and will be disciplined enough to make use of it rather than get our 'views' come in the way. That's the learning we are not going to forget this time. Dua me yaad rakhna 😉 #markets #strategy #correction #deployment #fear Abhishek SoniYogesh DugarAnirudh MahanotAnsu GotawatRuchira BhargavaAloke VohraAmit KotechaSantosh Maheshwari

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🔔 𝐌𝐚𝐫𝐤𝐞𝐭 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐚𝐭 𝐭𝐡𝐞 𝐂𝐥𝐨𝐬𝐢𝐧𝐠 𝐁𝐞𝐥𝐥! 📈   Will be live at 2:30 pm today on CNBC Bajar, Gujarati business channel. Whether you're an investor or a trader, this session will provide valuable perspectives for your financial decisions. #CNBCBajar #ClosingBell

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Continuation Funds are emerging as a vital strategy for investors amid limited exit opportunities through IPOs, mergers and acquisitions (M&As), and buybacks in the private equity (PE) and venture capital (VC) market. General Partners and Limited Partners are increasingly turning to Continuation Funds as an alternative to traditional exit routes. In 2023, global GP-led transactions reached approximately USD 52 billion, with continuation funds leading the charge, making it the second most active year on record. Here’s how Continuation Funds work – - Rather than liquidating assets at the end of a fund's term, the PE/VC firm transfers them to a new fund called Continuation Fund. - Existing investors then transition into this new fund, maintaining their investment in the same assets. - Continuation Funds allow investors to prolong their investment in PE assets beyond the typical fund term. The increasing popularity of Continuation Funds can be attributed to one key factor - future fundraising success depends on a firm's ability to provide liquidity to existing investors. For PE/VC firms, Continuation Funds represent a way to strategically infuse cash into the portfolio companies and unlock future growth. They provide flexibility and continuity in managing investments, ensuring sustained support for portfolio companies' expansion and development. Here’s a cheat sheet explaining the basics of Continuation Funds. #cheatsheet #PrivateEquity #investing #CreateWealth #Dezerv

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We are delighted to announce the close of Kedaara IV at USD 1.738bn, our fourth fund. We had a one and only close, and we completed the entire fund-raise in 4 months. This is an important milestone in Kedaara Capital's 12 year journey and comes at a time when the PE industry is fending off fierce headwinds and a challenging fund-raising environment. This is all thanks to our incredible family at Kedaara, where we have brought together a team with extremely sharp minds, diverse areas of expertise and a real passion to create a unique firm. It is made possible by the terrific entrepreneurs and owners of quality companies who give us the opportuity to partner with them. On top of that, we have an absolute solid set of thoughful Limited Partners/Investors who have backed us from our start in 2011, and continue to do so today, despite various challenges in the macro and the micro which crop up occasionally. And of course, a final thanks to our friends at Clayton Dubilier & Rice, who we partnered with early on in our journey... For us, with all humility, this is just the beginning... At the end its never about size, its about performance. Its about giving back many times more than what we take - to our investors, to our portfolio companies, and to our team - As India sets itself for even bigger strides in the coming decade, we hope that we, as Kedaara Capital, can play our small role in accerating that, even as we provide disproportionately high (relative to the risk taken) returns to our Limited Partners... As always, we welcome your thoughts.... https://lnkd.in/dWYePTKg

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As I reflect on the year gone by at the Asia Rising Fund, I can't help but smile at the fact that as a team doing BOTH Growth Investments AND Fintech for the FIRST time, we had as exciting and active a year as we did, investing in 6 different companies across 3 countries, most of which were incredibly differentiated and competitive deals in market-leading businesses! If I had to put a finger on one major thing that allowed us to hit the ground running and enjoy this level of success (at least from a sourcing and deal-making POV), and why seasoned founders were so keen on partnering with a first-time fund (apart from SMBC's hefty backing :P), it was because of our incredibly thesis-driven approach towards investing. This often contradicts popular wisdom in financial services investing where the approach is to be purely company and metrics-driven given the vastness of the market (the argument that a rising tide lifts all boats; unlimited TAM due to a severe hunger for credit, financing etc.), the standardisation of metrics (RoA tree for lending businesses) and ubiquity of benchmarking data (given the maturity of the financial services ecosystem in India). I believe however, in taking a different approach where, as an investment professional, one does a lot of detailed and in-depth work to articulate a specific POV and a DESIGN that one believes will allow a business to not just be successful but to outperform and outcompete their peers and become a timeless and generational business! A strong command over macro-economics, geo-politics, industry depth and financial numbers are critical enablers of this strategy, combined with deep thinking and reflection on the decisions one makes. Yes, a rising tide may lift all boats but I am insistent on finding the boat that rises the highest! And so in every single deal, we scoured not just India but at times THE WORLD to find THE BEST possible company in a particular sector and in many cases where we couldn't find companies that showed true design differentiation (apart from decent metrics and TAM), we declined to make any investment in the entire sector at all, choosing instead to wait for the RIGHT company to come along. My core learning from these experiences over the last year is that if you have depth, are deliberate and have done the work to educate yourself, founders will resonate with you and want to partner towards building exceptional businesses.

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After extensive research, our team at INVasset PMS has collectively produced an exclusive fundamental report on how CAPEX is a pivotal element of the India growth story. Capital expenditure (CapEx) is essential for long-term asset creation, upgrades, and economic growth. The interim budget boosted CapEx to ₹11.71 trillion for FY24, reflecting India’s focus on infrastructure and asset creation. Over the years, CapEx has shown an upward trend, peaking at 4.6% of GDP in the 2024-25 budget estimate. This growth signifies India’s commitment to sustainable development and economic efficiency. The trend analysis from 2016-17 to 2024-25 reveals significant investments in capital assets, with effective CapEx projected to reach ₹15.0 lakh crore in 2024-25. Investing in CapEx is crucial for enhancing economic performance and competitive edge. Visit now for more such insightful reports. https://lnkd.in/davhaab5

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WealthMax by Bajaj Capital Ltd La Premier: A true story of how vision of Sanjiv Bajaj coupled with the dynamism of Uttam Agarwal, at gave my team and me Aabhinna Suresh Khare the opportunity to build a fabulous product thats creating waves in Wealth Industry 🇮🇳 🇮🇳 🇮🇳 𝐄𝐋𝐄𝐕𝐀𝐓𝐈𝐍𝐆 𝐋𝐄𝐆𝐀𝐂𝐘: 𝐂𝐑𝐀𝐅𝐓𝐈𝐍𝐆 𝐅𝐎𝐑 𝐈𝐍𝐃𝐈𝐀’𝐒 𝐔𝐋𝐓𝐑𝐀-𝐖𝐄𝐀𝐋𝐓𝐇𝐘-𝐔𝐋𝐓𝐑𝐀 𝐑𝐈𝐂𝐇 🇮🇳 🇮🇳 🇮🇳 FACT 𝑰𝒏𝒅𝒊𝒂 𝒉𝒂𝒔 797,714 𝑯𝑵𝑰𝒔 (𝒂𝒔𝒔𝒆𝒕𝒔 𝒘𝒐𝒓𝒕𝒉 $1𝑴+) 8.35 Crore Rs. 𝒂𝒏𝒅 13,263 𝑼𝑯𝑵𝑾𝑰𝒔 (𝒏𝒆𝒕 𝒘𝒐𝒓𝒕𝒉 $30𝑴+) i.e 250 Cr Rs 𝒂𝒔 𝒐𝒇 2022-23 𝐓𝐡𝐞 6 𝐊𝐞𝐲 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 of an HNI UHNI are 6️⃣ Portfolio Overlap: Investors unknowingly duplicate investments across multiple mutual funds, as they don't know if AMCs are investing in the same stocks. 5️⃣ Fund Selection: With 1,386 mutual fund schemes in India, selecting the right funds becomes overwhelming - like finding a needle in a haystack. 4️⃣ True Diversification: While everyone talks about diversification, understanding the correlation between investments is difficult due to lack of proper analysis tools. 3️⃣ Market Monitoring: Keeping up with fast-moving markets during volatile times (Ukraine-Russia War, Israeli conflict, US Elections) is nearly impossible to track effectively. 2️⃣ Sector Selection: Different sectors perform differently each year, and conflicting advice from various fund managers makes it difficult to know where to invest. 1️⃣ Personalization: Generic investment advice rarely fits specific individual situations and goals, and general tips don't work for personalized portfolios. We have solved all these challenges with the Wealthmax Tool. To read more about it visit here https://lnkd.in/ga2aW6gs

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The Symbiotic Relationship Between Banks and Fintechs The banking and financial technology (fintech) sectors are often viewed as opposing forces, but in reality, they share a symbiotic relationship that fosters growth and innovation. Just as the ancient concept of yin and yang symbolizes complementary forces, banks and fintechs can work harmoniously together to create a dynamic financial ecosystem. Banks provide the solid foundation, resources, and regulatory expertise, while fintechs inject agility, technological prowess, and a customer-centric approach. By collaborating and learning from each other, these seemingly contrasting entities can unlock new opportunities, drive innovation, and better serve the needs of a diverse clientele. It's time to embrace the yin and yang of banking and fintech to shape the future of finance. #BanksAndFintechs #CollaborationOverCompetition #FinancialInnovation #india #marketing #leadership #linkedin https://lnkd.in/dKQr3f7E

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