Valuation of Tanishq Gold Harvest Offer


If you are in India and watch Television, then you surely must have watched this ad –

 

 

The ad is targeted towards working women who take charge of their lives and planning their future on their terms. The ad which is timed brilliantly is launched in sync with the India International Jewelry Week, talks to the right sentiments, however the product itself is questionable.

Tanishq Gold Harvest Offer is a scheme where one has to make 11 monthly payments and at the end of the year, you get the same value in jewelry. At a first glance, I thought that the financial returns amount to roughly 8% of the investment. Turns out that I had valuated it in the wrong way from the start itself, the formula to be used should have been XIRR, and it gives a 15% return.

Jyothi, our resident content creator then pointed out that it’s a loss making investment. Consider the inflation of gold (or the Indian Rupee for that matter) over the period of one year, and you end up with a loss-making product. Average Indian Consumer, beware of this product!

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