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Listing of IndiaBulls Power shares in NSE

Here goes the listing of IndiaBulls Power share in NSE today (30-Oct-09)


Open price  Rs. 45.05
High           Rs. 45.05
Low           Rs. 35.35
Vol            143,094,006 shares (till 2.30pm)



The shares got listed at Rs.45.05 (the issue price and that was the highest price reached so far today @ 2.30pm). It immediately fell to Rs.35 levels and regained to settle at Rs.40 levels.


Our poll results were bang on...great guess by the participants.


Hope the share price will go down further and anyone interested for long term investment can consider the same once it reaches Rs.30 levels.


Happy investing...


Cheers,
Gopal
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50th Post - DEDICATED TO YOU ALL

I just realised that I have made so far 49 postings in this blog and want to dedicate this 50th post to YOU ALL. I feel really happy and thankful to you all for the support and guidance all throughout this 9 months. Of late, I have made it a point to make regular postings to the blog.

The statistics is as follows: 
  • First Blog Posting : 25th Jan 2009 on IFRS
  • Visitors so far : 5800+
  • Indiblogger ranking - 73 (higher the better). Was 49th earlier.
I get lot of mails on Stock Market. So, you can see more posting on that. With the IFRS getting the attention, you can expect more on IFRS in this space.

I could see from the clustrmaps (visitors locations) that I have friends in more countries. The following are the list of locations of the visitors (from 30th Sep 2009, when I added this gadget), in the order of highest number of visits to lower number of visits:
  1. India (IN)
  2. United States (US)
  3. United Kingdom (GB)
  4. United Arab Emirates (AE)
  5. France (FR)
  6. Singapore (SG)
  7. Vietnam (VN)
  8. Slovakia (SK)
  9. Belgium (BE)
  10. Canada (CA)
  11. Germany (DE)
  12. Norway (NO)
  13. ussian Federation (RU)
  14. Ireland (IE)
  15. Korea, Republic of (KR)
  16. Kuwait (KW)
  17. Oman (OM)
  18. Philippines (PH)
  19. Malaysia (MY)
  20. South Africa (ZA)
  21. Saudi Arabia (SA)
  22. Taiwan (TW)
  23. Asia/Pacific Region (AP)
  24. Israel (IL)
  25. Australia (AU)
  26. Japan (JP)
I thank you once again for your support, without which I would not have got into blogging and becoming an addict. Special thanks to Anand & Bala for forcing me to blog my thoughts (which is the caption for this blog), Raghavan for chasing me to post, Sendil & Yashoda for keeping a tab on my posting and encouraging AND YOU for giving valuable comments and feedbacks.

With more and more requests coming in, it makes me to read a lot before posting.

Cheers,
Gopal
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Getting connected - Power of Internet !!!

Orkut, Facebook, Linkedin, Twitter......you can add sites to the list ! These sites help people to get connected, socially. During my school, college & start of my career, there were no internet facility or emails. We were working on DOS - not Denial of Service, Disk Operating System. No windows even. Because of that, I could not be in touch with most of my friends (School, College, past employements)

Why we need to get connected? You will realise the power of networking and joy of getting connected to your friends, only when you experience it !

With so many friends and lived in pre-Internet, pre-Mobile era and where telephone at home was a luxury, I am trying all my best to get connected to them. Thanks to the internet and social networks.

Had these sites been there.....we would not have a BILLU (the Barber) or Kuselan movie. The way the friends unite after a long time was really touchy.

Till date, I have created so many Yahoo and Google groups to stay connected to my classmates, colleagues of past employment and feel very happy for that. Though networking is my passion, connecting to people whom you know is a pleasure.

In a recent incident, yesterday, my ex-colleague (Siva) sent me a request to connect with me in Linkedin. It was a pleasant surprise, as I was looking to catch hold of my ex-colleagues and could not get much success. From yesterday evening to today, we got connected to about a dozen of our colleagues in that organisation!. I have created a Yahoo group for us, so that we don't get disconnected.

I was searching for a close of mine (who was my CS batchmate) for a long time and found him after a gap of 8 years through Linkedin and we are now united through a group along with out batchmates.

I have created a group in Linkedin for my schoolmates and have many joined (though only 2 from my class). But am happy that we have a professional school alumni in Linkedin.

Friends, be in touch and don't forget to send atleast a mail in a month (it can be a email forward or a special note) to your friends (including me !), so that we can feel the warmth of friendship.

Cheers,
Gopal
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Do you know about ASBA?

You might of seen IPO advertisements saying that ASBA facility available for the IPO. What is this ASBA? ASBA stands for - Applications Supported by Blocked Amount.

It is a process by which your money is in your account only and being blocked  (by your authorisation) to the extent you applied for the IPO. You cannot use the blocked amount, till the allotment is over. Once the allotment is over, the bank will release the amount pertaining to your investment and release the hold on the balance blocked amount.

Features:
  • The ASBA process shall be available in all public issues made through the book building route.
  • Only certified banks can offer this ASBA facility. To get certified the banks has to submit a certificate in the prescribed format to SEBI. Then the certified bank is called a Self Certified Syndicate Bank (SCSB)
  • An ASBA shall be deemed to have entered into an agreement with the issuer and shall be required to offer the ASBA facility to all its account holders for all issues to which ASBA process is applicable.
Now, the question arises as to who are all eligible for this ASBA facility?

An Investor shall be eligible to apply through ASBA process, if he/ she :
  1. is a “Resident Retail Individual Investor”;
  2. is bidding at cut-off, with single option as to the number of shares bid for;
  3. is applying through blocking of funds in a bank account with the SCSB;
  4. has agreed not to revise his/her bid;
  5. is not bidding under any of the reserved categories
ASBA helps in many ways:
  • Your money is in your account
  • It earns interest
  • No need to run around for refunds
  • Easy to monitor

For more details on the ASBA process, please refer to the SEBI circular SEBI/CFD/DIL/DIP/31/2008/30/7 July 30, 2008.

The list of SCSBs are as below. For details of designated branches click on respective banks below:
Happy investing.

Cheers,
Gopal 
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IndiaBulls Power - IPO - Poll results

Thanks for your participation. In all, 14 people responded to the poll and here are the results:

Less than Rs. 41 - 42%
Rs. 42 to Rs. 44  - 28%
Rs. 45 to Rs. 47  -   7%
Rs. 48 to Rs. 50  - 14%
Rs.50 & above    -   7%

I saw today that the IPO price is fixed at Rs.45 (The highest band price)!. This shows the confidence of the company that the shares may get listed at a good price. The issue was subscribed nearly 22 times, with the qualified institutional section subscribed 40.5 times, the high networth individual (HNI) portion 5.8 times and the retail tranche 1.1 times.

In my opinion, it may get a small premium of say5% (~ Rs48) on listing and will go below the issue price soon. With the market range-bound and looking not that good, let us see at what price the share get listed.

Cheers,
Gopal

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Weekly Digest - 25 Oct 2009

Contents

Legal & Tax
  • Taxing times ahead for foreign BPOs
Economy

  • Top execs of bailed-out cos to take 50% pay cut
  • RBI unlikely to alter repo, reverse repo; but CRR may be hiked
Management

  • Developing Your Leadership Presence - Harvard Business
Off-beats

  • Tirupathi Laddus - caught in controversy
  • 6 Indian cities among global BPO hotspots
Taxing times ahead for foreign BPOs
The Central Board of Direct Tax (CBDT), the apex direct taxes body,has withdrawn a 40-year old circular, which has the potential to increase the tax that India can claim on a foreign company that has operations in India through a ‘business connection’.
Will it have any impact on the BPO businesses? To know more, CLICK HERE.

Top execs of bailed-out cos to take 50% pay cut
Cracking the whip on the practice of exorbitant salaries, the US government's pay czar has slashed the compensation of top executives by 50 per cent at seven largest bailed-out firms including Citigroup and AIG. The drastic move comes in the wake of widespread criticism of executives being paid huge salaries even as their companies survive on tax payers' money. CLICK HERE FOR FURTHER READING

RBI unlikely to alter repo, reverse repo; but CRR may be hiked
The RBI is unlikely to alter the repo or reverse repo rates at its October meeting, believes Moody’s Economy.com. But a 50-basis point hike in the cash reserve ratio is expected, signaling a tightening bias. Excluding food prices, inflation is at a fairly weak level comparable with the rest of the region. A recent surge in food prices is likely to feed inflation expectations. CLICK HERE FOR FURTHER READING.

Developing Your Leadership Presence
What about when you are pushed in front of the microphone or given very little prep time for something like an introduction of a guest speaker?
This question came from Tonya in response to my previous post on developing your leadership pitch. CLICK HERE FOR FURTHER READING

Tirupathi Laddus - caught in controversy
Early next month, the Madras high court will hear a unique case -- a petition challenging the geographical indications protection given to the famous Tirupati laddu produced by the Tirumala Tirupati Devasthanam. CLICK HERE TO READ FURTHER.

6 Indian cities among global BPO hotspots
Six Indian cities are among the eight top global destinations for outsourcing according to a new survey. Manila and Dublin also figure in the top list of 8 outsourcing destinations according to Tholons Top 50 emerging outsourcing destinations survey. CLICK HERE TO READ FURTHER

Cheers
Gopal
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Don't give up - POSSIBLE is within imPOSSIBLE

Yesterday (24-Oct-09), I attended the IIM Alumni monthly meeting. Everytime, the alumni association invite successful people from various spheres of life and they will share their thoughts.

Yesterday, it was little different. They invited Malathi Holla, an international athlete. What so special about it? It is special. She was affected by the deadly polio at the age of one and struggled her way throughout her life. She was trained and educated in a rehabilitation center in Chennai and moved to Bangalore for her PU. She is from Mangalore belonging to a lower middle class and had about 30 odd surgeries todate.

Sheer determination, courage, spirit made her to shine in the sports (both National and International) world and also in her career as a Bank Officer. She is currently Bank Manager with Syndicate Bank, Bangalore. She has won over 300 medals (Gold, Silver & Bronze) at State, National, International levels at the Paralympics , Asian, World Masters, Open Champinships.

She was conferred the prestigious Arjuna, Padma Shri & Ekalavya Awards. Apart from these, she was awarded the KK Birla Award, Women of the year (1999) by American Biographical Institute, USA, International Women of the year 1999 by International Biographical Center, Cambridge, England. In all she has won close to 30 awards.

What came out of the speech by Malathi is that do not look at your weakness, which is there with everyone in one form or the other. Start living your life the way you want. Motivate yourself. You can change the world if you have courage.

She is running an NGO called Mathru Foundations, a Charitable trust for people with disability. For more info on Mathru Foundation, CLICK HERE

What I have written about Malathi is little, for more reading, you can visit http://www.adifferentspirit.com/home-page.html.  "A different spirit", an authorised biography of Malathi K Holla - published by The Inspired Indian Foundation and authored by M.Anantha Krishnan. The part proceeds of the book sale goes to Mathru Foundation and those who were present bought those books for the Unlimited Inspirations of Malathi and for a noble cause.

Thanks to the IIMB Alumni for organising such a wonderful session, which had an attendance of about 100 (including the family members of the Alumni members).

Let us take things in the positive way and always look for our way, instead of depending on others and waiting for others to help us.

Cheers,
Gopal


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Weekly Digest - 17 Oct 2009


Friends, I just collate the news that I read during the week. I could not do much reading this weekend and hence less contents, but good contents.

Let me take this opportunity to wish you all a HAPPY & SAFE DIWALI

Contents


Economy 
  • India may see 8% salary hike this yr, 10.9% in 2010 
  • UID scheme: Fingerprinting or iris scan during 2011 census
  • Learning from Crises - Lecture delivered by Mrs. Usha Thorat, DG, RBI
  • Emerging Market Concerns: An Indian Perspective - Dr. Subbarao, Governor, RBI 
Legal & Tax

  • Revised procedure for acceptance of address proof alongwith PAN application 
Management
  • How to Handle the Pessimist on Your Team - Harvard Business
  • The Smart Way to Influence Your Boss - Harvard Business

India may see 8% salary hike this yr, 10.9% in 2010

India Inc is expected to witness an average eight per cent salary increase this year and as much as 50 per cent of companies have strong hiring plans for the next three months, a survey by global HR consultancy Mercer says. The Mercer India Monitor quarterly survey also shows an optimistic sentiment for 2010, with salaries expected to rise by as much as 10.9 per cent next year.

"Despite the fact that past year saw slowest growth in a long time, the economy is expected to grow at over six per cent and industry is estimated to see overall average salary hikes at 8 per cent for 2009," Mercer's information product solutions business India leader Gangapriya Chakraverti said. CLICK HERE FOR FURTHER READING


UID scheme: Fingerprinting or iris scan during 2011 census

The upcoming 2011 census will see the government capturing all your 10 fingerprints or do an iris scan for the National Population Register that will come in handy for the ambitious Unique Identification Number project.

The Unique Identification Number scheme, which is expected to roll out the first number in 12-18 months, will be first conferred on the beneficiaries of the the centre's flagship programme under the National Rural Employment Guarantee Act. CLICK HERE FOR FURTHER READING


Learning from Crises - Lecture delivered by Mrs. Usha Thorat, DG, RBI

CLICK HERE to read the lecture given by Mrs.Usha Thorat during the The 'Institute of Banking and Finance (IBF) Distinguished Speaker Series' lecture at Singapore on October 12, 2009. Interesting one.


Emerging Market Concerns: An Indian Perspective

CLICK HERE to read the remarks by Dr. D. Subbarao, Governor, Reserve Bank of India at G-30 International Banking Seminar in Istanbul on October 5, 2009 organized on the occasion of the IMF-World Bank Annual Meetings 2009.

Revised procedure for acceptance of address proof alongwith PAN application

AS per the circular no 321 the additional procedure for acceptance of proof of address alongwith PAN applications received from Individuals and HUF are as under:

1. While accepting “Application for allotment of PAN (Form 49A)” if both the addresses (residence and office) are mentioned in the application form and office address has been selected as communication address, then POA has to be collected for residence as well as office address. CLICK HERE TO READ FURTHER



How to Handle the Pessimist on Your Team - Harvard Business


Turning Negativity into Productivity
Dealing with a pessimist on your team can be a frustrating and time-consuming experience. Attempts to ignore or counter frequent negative comments may simply incite further negativity. Good news: by being proactive you can help the pessimist change his behavior and enable your team to achieve greater productivity. CLICK HERE TO READ FURTHER

The Smart Way to Influence Your Boss - Harvard Business

How can I sell this idea to my boss?
This is something that executive coaches hear regularly. It usually comes from someone seeking to lead from the middle. To begin to answer this question, let me tell you a story. TO READ THE STORY, CLICK HERE

Cheers,
Gopal
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IndiaBulls Power IPO - Analysis & Vote for the listing price


Indiabulls Power's IPO was subscribed 5 times, as the issue opened on 12th Oct 2009 (today). The issue details are as follows:

No of Equity Shares                                    39.07 crore
Value of each share                                    Rs.10
Price offered (band)                                    Rs.40 to Rs.45
Minimum lot                                                150 shares
Further lot in multiples of                           150 shares
Issue Closes on                                         15-Oct-09


With the recent power issues (Adani & NHPC) quoting below or near the issue price, I do not think that the retail investors would be interested in this issue.

My concerns:
  • The price of Rs.40 (the lower band) is itself high
  • Adani & NHPC available at good valuations in the secondary market
  • The promoters have no experience in mega Power projects
  • No operating history, as the company is just 2 years old
  • Long gestation period for the 5 projects, though some are in the advance stages
If at all there are any positive in this IPO, they are:
  • Listing gains (if the market maintains it momentum) of about 3%
  • The promoters have access to capital market (Indiabulls Securities) and can sustain the price above the issue price.
Here are 2 questions:
  1. What would be the issue price?
  2. At what price the stock would be listed?
I have created a poll on the right hand top of this blog page. You can vote and let us see where we are in terms of understanding the market?

Cheers,
Gopal

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Weekly Digest - 10 Oct 2009

Contents:


Stock Market & Investment
  • Dividend Payouts shrunk to conserve cash
  • Over 50% firms listing in 2 yrs trading below issue price 
  • Unit Linked Insurance Policy (ULIP) - Beware
  • The Gold price may soar ahead of Diwali - Good Investment?
Legal & Tax
  • Clarity on the goods and service tax (GST) rate is expected
  • Bonuses on LIC policies are taxable: Revenue Secy
  • Get affidavit for gift over Rs 50,000 from kin
Economy
  • Indian annual inflation at 0.7 pc Sept 26: Govt
  • Stimulus to continue: Prime Minister
  • Economy to pick up pace from 2nd half: Pranab Mukherjee 
................................................................................................................

Dividend Payouts shrunk to conserve cash
Investors in large-cap firms who saw their wealth erode by some 37% because of a drop in share prices last fiscal also saw smaller dividend cheques as firms decided to conserve cash during the credit crunch. A Mint study of large-cap firms that constitute the Bombay Stock Exchange’s (BSE) bellwether equity index, the 30-stock Sensex, and the broader 50-stock Nifty showed that the dividend payout ratio, or the proportion of net profit distributed to shareholders, declined to a seven-year low. The analysis covers 29 Sensex stocks and 45 Nifty stocks for which comparable data is available. Barring one, all Sensex firms are part of the Nifty. CLICK HERE FOR FURTHER READING 

Over 50% firms listing in 2 yrs trading below issue price
In sharp contrast to the euphoria in the primary market, more than half of the companies, which got listed on bourses in the past two years, are trading well below their issue prices. According to an analysis of the performance of companies listed on the Bombay Stock Exchange in the past two years, as many as 27 out of the 40 stocks studied are trading much below their issue prices, which are fixed after their initial public offers. CLICK HERE FOR FURTHER READING  

Unit Linked Insurance Policy (ULIP) - Beware
There is a concerted attempt by many insurance distributors to take you for a ride when you buy a ULIP or unit linked insurance plan. Over the past five years, more than Rs 60,000 crore has been paid by investors as commissions to agents. In return, many have suffered huge losses as they were wrongly advised. As we discovered, rather than cracking down on this malpractice, companies seem more eager to continue paying hefty commissions. And all of it comes from your pocket. Click HERE for the VIDEO (Ensure your speakers volume is adjusted and not in MUTE)


The Gold price may soar ahead of Diwali - Good Investment?
Analysts feel that the Gold price may not come down in the near future and may soar ahead of Diwali season. Investing in  Gold Benchmark Exchange Traded Scheme (Gold BeES). Watch a video on the Gold price that may go up ahead of Diwali. CLICK HERE TO WATCH THE VIDEO


Clarity on the goods and service tax (GST) rate is expected
Clarity on the goods and service tax (GST) rate is expected by the end of October. The Empowered Committee of State Finance Ministers is slated to meet Union Finance Minister Pranab Mukherjee on October 27. The reason for the meeting is to settle the controversial outstanding issues. CNBC-TV18’s Abhijit Neogi and Akanksha Sethi report. CLICK HERE FOR FURTHER READING


Once I get a clear picture on the GST Roadmap, I will post on that.

Bonuses on LIC Policies are taxable : Revenue Secy
The new Direct Tax Code does not seem friendly towards investors of LIC policies. Revenue Secretary PV Bhide today indicated that bonus amounts received on maturity of LIC policies will be liable to tax. "The broad principle is whatever has accrued by March 31 will remain with you as benefit. But that does not apply to bonuses paid after that."

He also ruled out any tax concession for special economic zones under the new Direct Tax Code. "We are looking at long gestation period projects separately." 
Source: MoneyControl.com


Get affidavit for gift over Rs. 50,000 from kin
From now on, when you get gift-in-kind valued at more than Rs 50,000 from your parents or other relatives, make sure you have a sworn affidavit declaring the donor as your kin. CLICK HERE TO READ FURTHER

Indian annual inflation at 0.7 % Sept 26: Govt
India's wholesale price index rose 0.7 % in the 12 months to Sept. 26, lower that previous week's annual rise of 0.83 %, government data showed on Thursday. It compared with a median forecast of a 0.99 % rise in a Reuters poll. CLICK HERE FOR FURTHER READING.

I could not understand how they calculate these numbers.


Stimulus to continue: PM
“The stimulus package has to continue till the economy operates at full capacity. The consequences of the stimulus package on inflation are minimal,” the Primie Minister said at a press conference in Hyderabad. CLICK HERE TO READ FURTHER

Economy to pick up pace from 2nd half: Pranab Mukherjee
Finance minister Pranab Mukherjee on Thursday said the rate of economic expansion in the July-September second quarter is not expected to be much faster than the 6.1% pace set in the previous three-month period, but saw acceleration happening starting next month. CLICK HERE TO READ FURTHER. CLICK HERE FOR VIDEO

Cheers,
Gopal


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Piapavav Shipyard IPO

Pipavav Shipyard came with an IPO which was open between Sep 16 and Sep 18, 2009. The price band was fixed between Rs.55 - Rs.60. Finally, the price was fixed at Rs.58 (may be knowing that it cannot sustain Rs.60 in the market).

The issue was subscribed about 9 times and the company raised about Rs.500 crores by way of this IPO.

Why this IPO? Pipavav plans to fund the IPO funds for their expansion plan - Constructing new facility for their shipbuilding, repairing of ships and offshore businesses.

If you compare it with the near competing shipyard like ABG Shipyard and Bharati Shipyard, this price is really high.
                                         <------------- on 9-Oct-09------------------>
                                              Price            PBV           EPS          PE

ABG Shipyard                     213               1.29           33.92      6.28
Bharati Shipyard               191               0.75           48.08      3.96
Piapavav Shipyard             57             14.65            0.08        712

(source: Moneycontrol.com & Pipavav's RHP)
For a copy of the 510 page Red Herring Prospectus, Click HERE

It is very clear that the price is fixed at a very high level, taking into consideration of the future businesses. The market players are very much educated and they are taking good calls on the prices.

Let us see how the share performed during the first day of listing (i.e 9th October 2009)

                                            NSE                            BSE
Opened at                       61.10 (5.34%)            60.05 (3.53%)
High Price                       61.10                            64.70
Low price                        53.85                            53.85
Close price                      56.70 (-2.24%)        56.80 (-2.07%)

Given the fact that all the current IPOs are trading below or around their issue price, it is advisable to wait for listing and take a call on investment for long term, instead of applying and worrying.


Cheers,
Gopal

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Transparency in IPO Pricing and ulitilsation of the IPO funds

With the recent public issues not giving much returns (though the market is bullish), I feel that the pricing is not proper. It has to be noted that the issues are subscribed fully and also by many number of times. It is not only the non-retailers, but also the retail investors subscribe more. All the IPOs were issued at a price band and almost all fixed the price at the highest price band. Adani Power came with a price band of Rs.90-100 and fixed the price at Rs.100. NHPC came with a price band of Rs.30-36 and fixed the price at Rs.36. Same is the case with Oil India. Both NHPC and Adani Power are quoting near or below their issue price. I am not looking at listing gains. But in the bull run, is it not fair to expect a share to quote above the issue price, given the fact that the issue is fully / over subscribed?

In a recent interview, on the NHPC and Adani Power IPO listings, Bhanshali (Chairman, Enam Securities) said that the dismal performance of the listings were being hyped, adding there was enough money on the market, he said, “if you have invested in the power sector, whose story is for 15 years, its fate cannot be decided in 15 days." (Source: MoneyControl.com)

My observations:
  • If it is 15 years story, why the pricing is higher. Is the issuer playing with the investors money?
  • Does it mean that the investor is better positioned to value the IPO than the Lead Managers?
  • Why block your money in the IPO, when you can get it at a cheaper rate after listing?
  • In a bull run, if the shares cannot go up, it is clear that the price fixed for IPO is based on future earnings and not the current one.
The IPOs are rated by rating agencies. But what message is being sent? Let us see some of the recent IPOs and how it is being treated in the market.


If you see the last column, only few has a positive return (that too about 10%). Edserv returns 129% on IPO price, as the issue was done during the period when the market was down. So, when the market went up, it has given a good return to the investors!

The current practice of fixing the final price of an IPO is arrived at after the book building process. It is high time that a price regulation or transparency in pricing is being put in place. The price band is being advised by the Investment Banker, but the reason for such pricing is not disclosed to the investors. They just advise the IPO price on seeing the demand and the quantum of over-subscription.

Fine. Why people still look for IPOs and why the IPOs are over-subscribed? The answer is there are some genuine investors, who believes the IPO pricing and the others are greedy investors, who looks for listing gains. What is a listing gain? Normally, when an IPO is made, the shares (depending on the market sentiment) will be listed little higher than the IPO price. So, those who got the shares, will off-load to make gains, when listed. Nowadays, the listing gains are not that great. Again, depending upon the quantum of over-subscription, your application will be considered. If it is 3 times and you applied for 300 shares, you may get 100 shares (it will differ from case to case basis). So, you need to apply for (block also your money) 300 shares to get 100 shares. With the current market trend, I would rather wait and watch ! Buy after the shares are listed and decide on the quantum to buy. Look at the investor in Reliance Power!!!

Here is some good news. The Ministry of Corporate Affairs (MCA) and SEBI are working in tandem to make the IPO a transparent one. Following is an excerpt from a Press Trust of India release (Source: Business Standard). For full text, CLICK HERE
--------------------------------------------------------------------------------------
The Ministry of Corporate Affairs (MCA) is talking to market regulator Securities and Exchange Board of India (SEBI) for evolving guidelines for the price band for public offers by India Inc, to make the process transparent and ensure funds are not diverted.

Asked what steps government could take to prevent companies from fixing arbitrarily IPO (initial price offer) price band at a very high level, Minister for Corporate Affairs Salman Khurshid told PTI: “We are examining it. Some very good people with experience of capital markets are helping us on this. This is a matter in which we are in close consultation with Sebi... It will take 3-4 months, may be six months (to come out with the guidelines).”

On some kind of limits on fixation of price bands by companies, the minister said: “We are looking at how there can be greater objectivity and transparency... (when) we get the suggestions that we are seeking, (we) would narrow down the options.

Pointing out that misuse of money collected through IPOs was within the purview of MCA, he said: “That is something we are very careful about and keeping ourselves very alert... Early Warning System (being evolved by the MCA) will watch the misuse of IPO money.
--------------------------------------------------------------------------------------

Let us wait and watch what happens to Pipavav Shipyard, Euro Multivision and Thinksoft Global IPOs. Waiting to see a good measures from the MCA and SEBI for protecting the investors, so that their faith in the stock market is not lost.

Cheers,
Gopal
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Weekly Digest - 02 Oct 2009

Contents:

  • Ernst & Young (Hong Kong) in trouble
  • Ex-CFO of Satyam, PW auditors guilty: ICAI
  • Good news for those who live on Savings Bank interest
  • Gift in kind above Rs.50,000 is taxable from 1-Oct-09
  • IMF says after recession, world economy to grow by 3% in 2010
  • Indian economy to grow 5.4% in 2009 : IMF
  • Why the Bharti-MTN deal failed
=========================================
Police in Hongkong raided Ernst & Young amid fraud =========================================

The Hong Kong offices of accounting giant Ernst & Young were raided by police as part of a fraud investigation linked to the city’s biggest corporate collapse, local media said Wednesday.The search, which occurred Tuesday, came after Ernst & Young was accused in court earlier this month of falsifying documents to shield itself from a negligence claim brought by the liquidators of electronics company Akai Holdings, the South China Morning Post reported. Continue Reading Source : TaxGuru.in


====================================
Ex-CFO of Satyam, PW auditors guilty: ICAI
====================================

The Institute of Chartered Accountants of India (ICAI) has found two top officials of Satyam Computer and four auditors of Price Waterhouse prima facie guilty in the Rs 7,800-crore fraud case, a top ICAI official said on Monday.


Besides, the apex body of chartered accountants has also found audit firms — Price Waterhouse, Kolkata and Price Waterhouse, New Delhi — prima facie guilty of misconduct. “The director (discipline) has found two officials of Satyam Computer, Price Waterhouse and its four auditors prima facie guilty of professional misconduct in the Satyam case,” ICAI president, Uttam Prakash Agarwal, said. Click for further reading. Source : Times of India


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Payment of Interest on Savings Bank Account on a Daily Product Basis ========================================================
Now, your savings bank account earns interest around 3% on the lowest balance maintained between the 10th and the last date of a calendar month. From April 1, 2010, the interest will be calculated on the daily balance. How is this beneficial? For example,

  • your balance is Rs.10,000 on 1oth of a month
  • deposit Rs.10,00,000 on 11th of that month
  • withdraw the Rs.10,00,000 on 29th of that month.
You will earn interest only on the 10,000, which was the lowest balance between 1oth and the end of that month and your deposit of Rs.10,00,000 will not earn any interest though you kept it for 19 days.


With the new rule coming in, you will get interest on this Rs.10,00,000 also. Click here for the RBI circular. Source : RBI Website

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Gift in Kind above Rs.50,000 value to become taxable from 1st Oct 2009 ==============================================================

Any gift in cash above Rs.50,000 was taxable and did not cover the gift in kind. Now the new Finance Bill 2009 made it (with effect from 1-Oct-2009) clear that any gift in KIND (other than Cash) is also taxable, if it exceeds Rs.50,000.
Why this is, most of the people trying to avoid the tax incidence, gift non-cash items (like gold, silver, shares) and escape the tax. Later the person, who received the gift can sell those items and take cash.
Now it is not possible. Further reading
Source : CAClubIndia

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IMF says after recession, world economy to grow by 3% in 2010
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As the world economy comes out of a deep global recession, global activity is forecast to expand by about 3 percent in 2010 after contracting by about 1 percent in 2009, according to the International Monetary Fund (IMF) projections. Click for further reading. Source : Times of India

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Indian economy to grow 5.4% in 2009 : IMF
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The International Monetary Fund on Thursday retained its projection for Indian economic growth at 5.4 per cent in 2009, implying a slower growth in the second half of this calendar year. In its twice-yearly World Economic Outlook released in Istanbul, the Fund lowered the projection for the next year by 0.1 per cent to 6.4 per cent.

The Indian economy grew by 5.8 per cent in the first quarter and 6.1 per cent in the second quarter of this calendar year. Click for further reading. Source : Times of India



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Why the Bharti-MTN deal failed

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The fate of the unsuccessful Bharti-MTN deal was sealed by the South African government s treasury as much as three weeks back, according to sources. CNBC-TV18 now learns that the treasury wrote to MTN Phuthuma Nhleko on September 11 insisting that for the deal to go through, the potential merged company should remain domiciled in South Africa and should be listed in both companies, something that was not a possibility under existing Indian laws.

MTN, South Africa s largest telecom company, and India s Bharti were exploring a deal that could lead to a merger between the two companies resulting in a USD 23 billion entity. This was the second failed attempt between the two companies to strike a deal. Earlier in May 2008, the two companies had initiated talks to explore the possibility of a similar deal. Click for further reading. Source: MoneyControl.com

Happy Birthday to Gandhiji !!!

Cheers & Have a nice and long weekend,
Gopal
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