Hedgemantra is a simple and effective tool that helps in evaluating, analyzing various alternatives to hedge one's forex exposure. https://www.hedgemantra.com/ For further information/quesries, please write to us on info@hedgemantra.com

1. Hedgemantra
fx Hedging Alternatives Evaluation Portal
www.hedgemantra.com

2. Reality Check
2012 - 2013
Indian Export Trade Volume
$ 309.1 bn
Indian Import Trade Volume
$ 488.6 bn
SME Segment’s contribution
to Exports and Imports
45%
Source: Economic Times
Indian Foreign Trade
2012 -2013
Small/ Medium Enterprises
Other large enterprises
Total Exports and Imports $ 897.7 bn
55% 45%

3. Reality Check
Most small & medium enterprises who have foreign
exchange exposure.
• Do not hedge their exposure due to limited
knowledge on the mechanics of hedging
OR
• Average loss on foreign exchange fluctuations is
considered as input cost in product costing
Hence a potential $ 359 billion is unhedged.

4. USD – INR Fluctuation
Feb 7, 2013 - Feb 5, 2014
9.308 (17.51 %)

5. Other currencies Fluctuation
GBP 23.22 (27.69%)
JP YEN 0.16 (31.37%)
Argentinian Peso ( 29.05%)
Euro ( 13.88%)
All exchange rate base to the INR

6. What does all this mean to
YOU?
An company in the auto components industry has a
monthly forex exposure of $100,000 on account of imports
Forex Exposure
Exchange Loss
Spot rate
Maturity Date
30 May 13
$ 100,000
Spot rate
Transaction Date
1 Nov 13
Rs 56.0847 / $
Rs 61.7286 / $
$ 100,000 * ( 61.7286- 56.0847)
Rs 564,390 is 9.15% of import value
Rs. 564,390

7. Hedging 101
• Forex Hedging means protecting against potential
losses on account of exchange rate (Fx)
fluctuations.
• Fx rates are highly volatile and change real time.
• Some changes are in favour while others result in
losses.
• The objective of hedging is not to make
speculative gains but to protect against possible
losses due to Fx rate fluctuations.

8. What Hedging does for
YOU?
An company in the auto components industry has a
monthly forex exposure of $100,000 on account of imports
Forex Exposure
Spot rate
Maturity Date
30 May 13
$ 100,000
Spot rate
Transaction Date
1 Nov 13
Rs 56.0847 / $
Rs 61.7286 / $
Forward
Rate
Rs 57.34/$
Payment(Without Hedging )
$100,000 * Rs 61.7286
Rs 61,72,860
Payment (With Hedging ) *
$100,000 * Rs 57.34
Rs 57,34,000
Potential Savings
* Hedging is done using forward contract
Rs 438,860

9. Hedgemantra
• Hedgemantra is a platform to evaluate hedging
alternatives and provide all information required
to make an informed Hedging decision
• Forward contracts, Futures and Options are used
to evaluate the cash flow projections.
Forward
Contracts
• Issued by
banks
• Personalized
instruments
Futures
Options
• Issued and
traded on the
NSE/BSE
• Available in
USD/Euro/GBP
and Yen
• Issued and
traded on the
NSE/BSE
• Available only
in USD

10. Mechanics
Hedgemantra
•Currency
•Exposure Amount & Due date
•Payable or Receivable ?
Input
•Hedgemantra simulates cash
flow projections based on the
input provided .
•The in-built algorithm provides
the Future Spot Rate and works
out the projections
•Comparative Cash flow
projections based on the inputs
using Forward contracts,
Future, Options or if unhedged
Output

11. Input form
Information required: Amount, Currency and due date of exposure

12. Output form
A comprehensive output form showing the cash flow projections
using various hedging instruments.

13. Options
The output form showing the cash flow projections using Options
based on Hedgemantra’s Future Spot Price prediction.

14. Futures
The output form showing the cash flow projections using Futures
based on Hedgemantra’s Future Spot Price prediction.

15. Forward Contract
The output form showing the cash flow projections using Forward
Contracts.

16. Unhedged
The output form showing the cash flow projections when the
exposure is unhedged where in the future spot price provided by
Hedgemantra/user is used .

17. Comparative Analysis
In case the user has a different Future Spot Price (FSP) the user is
free to use the same to compute the cash flow projections.
Hedgemantra provides a comparitive analysis between the cash
flow projections based on both the FSPs.

18. Value added services
1 year worth of historical data referenced by RBI
https://hedgemantra.com/forex
Crisp, 500 word blogs on various forex eventspast and present from across the globe.
https://hedgemantra.com/blog/
Easy videos on how to use and navigate through
Hedgemantra
https://hedgemantra.com/video_tutorials
Quick, effective, basic 101 lessons on the various
hedging instruments
https://hedgemantra.com/learnabout