Rajkot Investment Trust Ltd Management Discussions.


Rajkot Investment Trust Limited was incorporated as a public limited company under the Companies Act, 1956, on June 29, 1982. Company is also categorized as Non-Banking Financial Company (NBFC)-Loan Company and was registered with the Reserve Bank of India (RBI) on 05/08/1999 with certificate Registration 01.00308.

The Company is managed by qualified professionals having experience in the Finance sector. The Qualifications and Experiences of the people on board are key factors for the growth achieved by the company in recent period. The Management is strictly applying its internal control through optimization of funding costs, identification of potential business areas, cost efficiencies, strict credit monitoring and raising the level of customer service.


To be the most trusted and preferred Investment and financing company, excelling in customer service delivery through committed and empowered employees.


To be a dynamic and responsive organization catalyzing economic development by identifying and financing commercially viable industries, providing valued advisory & consultancy services, promoting entrepreneurship through effective mentoring, skill development and capacity building of the small and medium enterprises.


The Company is a Registered as Non-Banking Finance Company (NBFC) with Reserve Bank of India and presently carrying out the business activities relating to investment and loan Company under the prescribed guidelines of RBI.


Global Economy:

• The global economy slowed to 3.6% in 2018 (Source IMF) from 3.8% in 2017 as the Eurozone economies weakened, crude prices became volatile, commodity prices remained subdued, uncertainty around Brexit persisted and the ongoing US-China trade tensions heightened the rhetoric around protectionism.

• The US witnessed strong economic growth of 2.9% in 2018 (2.2% in 2017) owing to strengthening dollar, neutral unemployment and minimal inflation. Growth in the Eurozone dipped to 1.8% (2.4% in 2017) due to sluggish domestic demand while China remained squeezed between issues at home and abroad. The US, however, bucked the trend, growing at 2.9% in 2018 (2.2% in 2017) on the back of a stronger US dollar, neutral unemployment and low inflation.

Indian Economy:

• The Indian economy posted a growth of 6.6% in FY 2017-18 compared to 7.1% in FY 2016-17, as the first round of effects of demonetisation and the implementation of GST played out. However, a host of other policies, implemented during and before FY 2017-18 – such as the Insolvency and Bankruptcy Code, reforms in the real estate sector in the form of RERA, allowing of FDI in various industries, fast-tracking of project clearances, various measures for financial inclusion, etc. - are expected to propel growth upwards, going forward. While the IMF projects that Indias GDP will increase at 7.4% in FY 2019 and 7.8% in FY 2020, the World Bank expects growth to reach 7.3% in FY2019 and rise further to 7.5% in FY 2020.


India has a diversified financial sector undergoing rapid expansion with many new entities entering the market along with the existing financial services firms.

The sector comprises commercial banks, insurance companies, NBFCs, Housing Finance Companies, Cooperatives, Pension Funds, Mutual Funds and other smaller financial entities. Another vital element of the nations financial sector is the rapidly growing insurance industry. The Reserve Bank of India (RBI) recently allowed new entities such as payment banks and small finance banks to commence operations, focusing on specific segments of transactional banking and small-ticket lending, respectively.

Some recent developments that have happened in this sector are:

• Launch of India Post Payments Bank (IPPB) for better rural penetration of banks.

• Under the Union Budget 2018-19, there has been an allocation of Rs. 3 trillion (USD 46.3 billion) towards the Mudra (Micro-Units Development & Refinance Agency Ltd.) Scheme.

• The Securities and Exchange Board of India (SEBI) has limited the Total Expense Ratio (TER) charged by mutual fund houses having equity assets up to Rs. 500 billion (USD 7.1 billion) to 1.05%.

• NBFCs are gaining eminence in retail finance by financing more than 80% of the equipment leasing and hire purchase activities in India.

• The governments focus on the infrastructure sector is providing an impetus to NBFCs engaged in the infrastructure financing space.


• Simplifying digitalization – Business is becoming more about the user experience. Automated user interfaces can go a long way in aiding this transformation, and implementing digitalization is key to making it happen. The upcoming year will be about the simplification of processes and digitalization.

• Banking regulations – 2018 will be a turning point in financial regulation. Alongside General Data Protection Regulation (GDPR) and Markets in Financial Instruments Directive (MiFID II), the requirements for central clearing and the second Payments Services Directive (PSD2) will bring out significant changes to the banking environment, with the visionaries emerging as the winners.

• FinTech collaboration - One of the largest technology revolutions in banking in recent years has been the use of advanced data analytics techniques to nail rogue trading activities within banks. In 2018, banks will have to decide whether to service clients in-house or through a third party, to stay competitive.


• Non-Banking Financial Companies (NBFC) are an integral part of the Indian Financial system, augmenting competition and diversification in the financial sector and complementing the banking system. The Indian NBFC sector has been providing credit to customers in the underserved and unbanked areas. Their channelling the savings and investments of customers and the subsequent capital formation is necessary for Indias economic growth and development. Their ability to innovate products in conformity with the needs of their clients is well established.


• Strengths

• Distinguished financial services provider, with local talent catering to local customers.

• Vast distribution network especially in rural areas and small towns, diversified product range and robust collection systems.

• Simplified and prompt loan request appraisal and disbursements.

• Product innovation and superior delivery.

• Ability to meet the expectations of a diverse group of investors and excellent credit ratings.

• Innovative resource mobilization techniques and prudent fund management practices.

• Weakness

• Regulatory restrictions - continuously evolving Government regulations may impact operations.

• Uncertain economic and political environment.

• Opportunities

• Demographic changes and under penetration.

• Large untapped rural and urban markets.

• Growth in Commercial Vehicles, Passenger Vehicles and Tractors market.

• Use of digital solutions for business/ collections.

• Threats

• High cost of funds.

• Rising NPAs.

• Restrictions on deposit taking NBFCs.

• Competition from other NBFCs and banks.


• Your Company believes that people perform to the best of their capability in organisations to which they feel truly associated. Your Company focuses on widening organisational capabilities and improving organisational effectiveness by having a competent and engaged workforce. Our people are our partners in progress and employee empowerment has been critical in driving our organisations growth to the next level.


• The Company has put in place an adequate internal control system to safeguard all its assets and ensure operational excellence. The system also meticulously records all transaction details and ensures regulatory compliance. The Company also has a team of internal auditors to conduct internal audit which ensure that all transactions are correctly authorised and reported. The reports are reviewed by the Audit Committee of the Board. Wherever necessary, internal control systems are strengthened, and corrective actions initiated.


• Certain statements in the Management Discussion and Analysis describing the Companys objectives, predictions may be "forward-looking statements" within the meaning of applicable laws and regulations. Actual results may vary significantly from the forward-looking statements contained in this document due to various risks and uncertainties. These risks and uncertainties include the effect of economic and political conditions in India, volatility in interest rates, new regulations and Government policies that may impact the Companys business as well as its ability to implement the strategy. The Company does not undertake to update these statements.

Registered Office By order of Board of Directors
16, Second Floor, Kalyan Building,
Kuvadva Road, Rajkot-360003, For, Rajkot Investment Trust Limited
sd/- sd/-
Manish Sharma Rupesh Jain
Director Chairman cum Managing Director
Date: 31/08/2019 (DIN: 02921783) (DIN: 06836912)
Place: Rajkot