PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Product Construct - Uncomplicated

1
*Please Note: The prices assumed in this presentation are for illustrative purpose only. The actual pricing at the time of hedging might differ.
Issuer - ARGFL PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Protected Call (55% Coupon) – Payoff Scenarios

Key Terms & Specifications Payoff Table Pre Tax IRR * 13.95%
Underlying Nifty
Final Fixing Levels Nifty
Capital Guarantee Principal is not protected at maturity Product Returns
^ Performance
Tenor (days) 1225
Initial Fixing Level Trade Date Nifty Level 9840 20.00% 55.00%
104% of Initial Fixing Level rounded to the next higher multiple 9020 10.00% 55.00%
Contingent Level
of 100 Contingent 8200 0.00% 55.00%
Final Fixing Level June 27, 2019
8036 -2.00% 49.00%
Nifty Performance (NP) (Final Fixing Level/Contingent Level)-1 Initial
7850 -4.27% 42.19%
Contingent Coupon 54% to 55%
Decay Multiple(DM) 3 7708 -6.00% 37.00%
If Final Fixing Level is at or above 7544 -8.00% 31.00%
Contingent Coupon
Contingent Level 7380 -10.00% 25.00%
Payoff
If Final Fixing Level is less than Max(-100%,(Contingent 7216 -12.00% 19.00%
Contingent Level Coupon + NP*DM))
7052 -14.00% 13.00%
Payoff Chart 6888 -16.00% 7.00%
6724 -18.00% 1.00%
6642 -19.00% -2.00%
6560 -20.00% -5.00%
6396 -22.00% -11.00%
6232 -24.00% -17.00%
6068 -26.00% -23.00%
*Pre-Tax IRR is calculated assuming coupon to be 55%
^Initial level is assumed as 7850

Notes: Terms and specifications of the product are subject to change.

Debentures are non principal protected, Unlisted and unrated in nature
Fee Structure: Upfront 1% to 3.0% plus service taxes
 PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Construction of Protected Call – 55%

• Invest the Initial Investment of Rs.100 in ARGFL @ 9.00% for 1225 days.
Step 1
• Yields Rs.133 at maturity

• Sell 3 ATM Puts @(100%) Nifty for Rs.16.5 ~(Rs. 5.5 per put)
Step 2 • To illustrate – its like selling an Insurance policy on an Equity Portfolio that covers losses if Final Nifty < 100%. We are selling 3
such policies. This results in a premium inflow of Rs. 16.5

• The Total Premium from Step 2 of Rs.16.5 is also invested in ARGFL @9.00% for 1225 days.
Step 3
• Yields Rs.22 at maturity.

Payoff Output Payoff Input

NIFTY Investment STEP-1: STEP-2: STEP-3:

Performance Performance Initial Value of 3.0 ATM Put Premium
Investment Put @ 100 to Treasury
Investment to Treasury = 17@9.00%
155%

Performance 100@9.00% NIFTY perf.

155 133 - 22 105%
105% 155
155 133 - 22 100%
100% 155
Input = 149 133 -6 22 98%
98% 149
Output 140 133 -15 22 95%
95% 140
90% 125 125 133 -30 22 90%
82% 101 101 133 -54 22 82%
80% 95 95 133 -60 22 80%
Issuer - ARGFL PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Nifty Accelerator Plus (80% Coupon) – Payoff Scenario

Key Terms & Specifications Payoff Table Pre Tax IRR * 19.14%
Underlying Nifty Final Fixing Nifty Product
Capital Guarantee Principal is not protected at maturity Levels ^ Performance Returns
Tenor (days) 1,225
Initial Fixing Level Trade Date Nifty Level 13120 60.00% 80.00%
Final Fixing Level June 27, 2019 10660 30.00% 80.00%
Nifty Performance (NP) (Final Level/Contingent Level) – 1
Contingent Coupon (CC) 79% to 80% 9840 20.00% 80.00%
104% of Initial Fixing Level rounded to the next higher multiple of 9184 12.00% 80.00%
Contingent Level
100
Participation Rate (PR) 783% to 792% 9020 10.00% 64.17%
Decay Multiple (DM) 1.25 8856 8.00% 48.33%
If Final Fixing Level is above
MIN (CC, (NP*PR) - 15%) 8692 6.00% 32.50%
Contingent Level
Payoff
If Final Fixing Level is at or 8610 5.00% 24.58%
MAX(-100%, (NP*DM) - 15%)
below Contingent Level
8364 2.00% 0.83%
Payoff Chart 8282 1.00% -7.08%
Contingent 8200 0.00% -15.00%
Initial 7850 -4.27% -20.34%
7380 -10.00% -27.50%
6970 -15.00% -33.75%
6560 -20.00% -40.00%
* Pre-Tax IRR is calculated assuming coupon to be 80%
^ Initial Fixing Level is assumed as 7850
#The product return is calculated assuming Contingent Coupon of 80%, Contingent level to be
104% of initial level (i.e. 8200), Participation Rate of 791.67% and Decay Multiple of 1.25

Notes: Terms and specifications of the product are subject to change. Debentures are not
principal protected, not listed and not rated in nature
Fee Structure: Upfront 1% to 3.0% plus service taxes
 PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Construction of Nifty Accelerator Plus 80%

• Invest the Initial Investment of Rs.100 in ARGFL @ 9.00% for 1225 days.
Step 1
• Yields Rs.133 at maturity

•Sell 1.25 Naked PUT* @ 112% of Nifty for Rs. 11 ~ (Rs. 9 per PUT)
Step 2 •To illustrate – Its like Selling 1 .25 Insurance policy on an Equity Portfolio that covers losses if Final Nifty < 112% for which will receive
Premium of Rs. 11

•Sell ~6.75*Put Spreads @ (112%-100%) Nifty for Rs. 24 ~(Rs. 3.5 per spread)
Step 3 •To illustrate – Its like selling an Insurance policy at 112% of Initial Nifty & Buying another insurance policy at 100% of Initial Nifty. We are
selling such 6.75 policies. This results in a premium inflow of Rs. 24

• The Total Premium (from Step 2 & Step 3 ) of Rs. 11 + 24 = 35 is also invested in the ARGFL @ 9.00% for 1225 days.
Step 4
• Yields Rs.47at maturity

Payoff Output Payoff Input

NIFTY Investment STEP-1: STEP-2: STEP-3: STEP-4:

Performance Performance Initial Value of 1.25 Value of 6.75 Put Premium
Investment Naked Put @ Spread @ to Treasury
Investment
180%

to Treasury 112 (112- 100) = 35@9.00% NIFTY

Performance 100@ 9.00% perf.
180.00 133 - - 47 115%
115% 180.00 133 - - 47 112%
180.00
112% 180.00 Input = 164.00 133 -2.5 -13.30 47 110%
110% 164.20 Output
105% 124.70 124.00 133 -8.75 -46.55 47 105%
100% 85.00 84.00 133 -15 -79.92 47 100%
95% 78.50 77.50 133 -21.25 -79.92 47 95%
By Selling 6.75 PUT Spreads the loss @100% Nifty level comes out to be -16%, whereas in reality only 6.66 PUT Spreads are sold giving a loss of -15% @ 100% Nifty
Issuer - ARGFL PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Nifty Accelerator (66% Coupon) – Payoff Scenario

Key Terms & Specifications Payoff Table Pre Tax IRR * 16.3%
Underlying Nifty Final Fixing Nifty Product
Capital Guarantee Principal is not protected at maturity Levels ^ Performance Returns
Tenor (days) 1,225
Initial Fixing Level Trade Date Nifty Level 13120 60.00% 66.00%
Final Fixing Level June 27, 2019
Nifty Performance (NP) (Final Level/Contingent Level) – 1 9840 20.00% 66.00%
Contingent Coupon (CC) 66% 9184 12.00% 66.00%
104% of Initial Fixing Level rounded to the next higher multiple of
Contingent Level 9020 10.00% 58.50%
100
Participation Rate (PR) 375% 8856 8.00% 51.00%
Decay Multiple (DM) 2.1
If Final Fixing Level is at or 8692 6.00% 43.50%
MIN (CC, (NP*PR) + 21%)
above Contingent Level
Payoff 8528 4.00% 36.00%
If Final Fixing Level is below
MAX(-100%, (NP*DM) + 21%) Contingent
Contingent Level 8200 0.00% 21.00%
Payoff Chart 8036 -2.00% 16.80%
Initial 7850 -4.27% 12.03%
7708 -6.00% 8.40%
7544 -8.00% 4.20%
7380 -10.00% 0.00%
6970 -15.00% -10.50%
6560 -20.00% -21.00%
* Pre-Tax IRR is calculated assuming coupon to be 66%
^ Initial Fixing Level is assumed as 7850

Notes: Terms and specifications of the product are subject to change. Debentures are not
principal protected, not listed and not rated in nature
Fee Structure: Upfront 1% to 3.0% plus service taxes
 PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

Construction of Nifty Accelerator 66%

• Invest the Initial Investment of Rs.100 in ARGFL @ 9.00% for 1225 days.
Step 1
• Yields Rs.133 at maturity

•Sell 2 Naked PUT @ 112% of Nifty for Rs. 18 ~(Rs. 9 per PUT)
Step 2 •To illustrate – Its like Selling 2 Insurance policy on an Equity Portfolio that covers losses if Final Nifty < 112% for which will receive
Premium of Rs.18

•Sell ~1.75 Put Spreads @ (112%-100%) Nifty for Rs. 7 ~(*Rs. 3.5 per spread)
Step 3 •To illustrate – Its like selling an Insurance policy at 112% of Initial Nifty & Buying another insurance policy at 100% of Initial Nifty. We are
selling such 1.75 policies. This results in a premium inflow of Rs. 7

• The Total Premium (from Step 2 & Step 3 ) of Rs. 18 + 7 = 25 is also invested in the ARGFL @ 9.00% for 1330 days.
Step 4
• Yields Rs.33 at maturity

Payoff Output Payoff Input

NIFTY Investment STEP-1: STEP-2: STEP-3: STEP-4:

Performance Performance Initial Value of 2 Value of 1.75 Put Premium
Investment PUTs @ 112 PUT Spreads to Treasury
Investment
166%

to Treasury @ (112- 100) = 25@9.00% NIFTY

Performance 100@ 9.00% perf.
166.00 133 - - 33 112%
112% 166.00 133 -8.0 -7 33 108%
151.00
108% 151.00 Input = 121.00 133 -24 -21 33 100%
100% 121.00 Output
95% 110.50 111.00 133 -34 -21 33 95%
90% 100.00 101.00 133 -44 -21 33 90%
85% 89.50 91.00 133 -54 -21 33 85%
Please Note: In Reality we sell 2.1 Naked PUTs and1.65 PUT Spread, but for simplicity we have take 2 Naked PUTs and 1.75 PUT Spreads, due to which maturity values will change.
 PRIVATE WEALTH MANAGEMENT – INVESTMENT ADVISOR DIVISION

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