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ADAG’s m-cap touches $100 b
GoM meet on fuel price hike put off
Govt to revive 14 closed tea gardens
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Rationalise duties, paper industry urges FM
India, UK to sign two MoUs
ICICI Bank Q3 net up 35 per cent
Aviation Notes
Investor Guidance
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ADAG’s m-cap touches $100 b
Mumbai, January 19 "The company's board has fixed the issue price at top-end at Rs 450 per share for the Reliance Power issue and for retail investors at Rs 430 per share," Reliance Power chairman Anil Ambani told reporters here today. Following the IPO, the largest ever in the country, Anil Dhirubhai Ambani Group (ADAG) has become the second largest corporate house in the country with market cap touching $100 billion, he said. A record Rs 1,15,000 crore of capital has been deposited in the banking system as application money, Ambani said. The IPO closed yesterday. The IPO received record subscription of Rs 7,50,000 crore, which is largest ever subscription in an IPO in the history of the global capital markets. The company has also received $100 billion from foreign investors. Without naming them, Ambani said all the big investors across the world have invested in the IPO. The IPO received an overwhelming response from retail investors also with the retail portion being oversubscribed 14.4 times. The company received 19.5 lakh applications from retail investors. With 50 lakh retail investors, Reliance Power will have the largest number of shareholders in the world, Ambani said, adding, "my desire is that every applicant gets the bare minimum share." The Qualified Institutional Buyers (QIB) stood at Rs 5,00,000 crore. The company received wide participation from nearly 500 domestic and international QIBs. Ambani pointed out that the country's largest IPO was launched within 8 working days of receiving approvals. It received ROC approval on January 2 and issue opened on January 15. The group's market capitalisation now stands at Rs 3,94,409 crore ($100 billion) from Rs 16,000 crore ($4 billion) in June 2005. After Reliance Industries market cap of Rs 5,04,316 crore ($128.4 billion), Reliance ADA group has become the second largest business house in India with market capitalisation of $100.4-billion. Tata Group remained third with market cap of Rs 2,86,488 crore. The market cap of ADA group includes Reliance Power's Rs 1,01,700 crore, Reliance Energy's Rs 50,234 crore, RNRL's Rs 33,602 crore, Adlabs's Rs 6,471 crore, Reliance Capital's Rs 57,558 crore and Reliance Communications's Rs 1,44,845 crore. The Reliance Power shares will be listed in the first week of February "as we have to process nearly 5 million applications", Ambani said, adding that the company has no plans of equity dilution. The company also has no plans of listing abroad, he said. — PTI
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GoM meet on fuel price hike put off
New Delhi, January 19 External affairs minister Pranab Mukherjee, who heads the GoM on fuel prices, had on January 17 indicated today for re-convening the inconclusive GoM meet of that day. However, since four of the seven members of GoM are unavailable today, the meet has been put off, official sources said. The core group of UPA may meet Monday morning on the issue of raising petro prices. — PTI
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Govt to revive 14 closed tea gardens
New Delhi, January 19 ''The research wing of the six organisations should be given the same status as the ICAR in terms of salary, work environment and perks, so that we can attract young talent and retain our existing scientists,'' Ramesh said. Meanwhile, the minister also informed that with a view to revive tea industry, the government is likely to float expression of interest (EoI) for reopening 14 closed tea gardens across the country next week. ''The law ministry's clearance is awaited and hopefully we will issue the EoI for the tea gardens next week,'' Ramesh said. The EoI will be as per the provisions under Section 16 (e) of the Tea Act, 1953, which empowers the state to take over closed tea gardens, the minister said. He said out of the 14 closed tea gardens, nine are in West Bengal and the |
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Rationalise duties, paper industry urges FM
New Delhi, January 19 In a memorandum to the government recently, IPMA has urged the finance minister to rationalise the excise duty from 12 per cent to 8 per cent on all varieties of paper and paperboard. “Despite the paper industry’s critical importance for the educational sector and significant forward linkages to other manufacturing industries, paper and paper products face direct and indirect taxation of approximately 20 per cent. This includes the current excise at 12 per cent, VAT, octroi, etc. Also, there are different rates of 8 per cent and 16 per cent prevailing for some categories,” it pointed out. “The rationalisation to a union rate of 8 per cent in excise duty will add back Rs 292 crore over a short span to the exchequer once the size and scale of the industry touches a new high on the back of enabling growth policies,” IPMA secretary general R Narayan Moorthy said. In the case of custom duties, IPMA has sought retention of customs duty at 10 per cent along with re-introduction of SAD to maintain parity in global production costs.
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India, UK to sign two MoUs
New Delhi, January 19 The MoUs will signed in the presence of the visiting UK secretary of state for business, enterprise and regulatory reform, John Hutton and commerce and industry minister Kamal Nath. The MoU between UKSkills and WorldSkills India will be signed by CII general secretary, General Mehta, and the chief executive of UKSkills, Simon Bartley. This MoU will further enhance cooperation between India and UK in vocational skills. Ranbaxy CEO Malvinder Singh and the chairman on i2india Holdings, Chris Mathias, will also sign a Statement of Intent, which will focus on commercialisation of intellectual property developed in India. The MoU will have a significant impact on India's innovation ecosystem.
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ICICI Bank Q3 net up 35 per cent
Mumbai, January 19 The bank clocked a total income of Rs 10,338 crore in the October-December quarter as compared to Rs 7,581 crore in the year-ago period, an increase of 36 per cent. Meanwhile, ICICI Securities, the brokerage arm of ICICI Bank, today decided to offload 15 per cent of its equity by way of an initial public offer and private placement of shares. The shares of ICICI Securities will be listed on stock exchanges in about six months, Chhanda Kochhar, joint managing director and CFO of ICICI Bank, said here. The board of directors of ICICI Securities approved the proposal at a meeting today. The company's equity capital is Rs 61 crore. Without indicating the size of the IPO, she said it is not necessary that the bank will sell the shares out of the present holding. There may be a fresh issuance of shares and 15 per cent of the post-issue capital will be with public.
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Aviation Notes
For several months, the GMR's Delhi International Airport Limited, a private agency, in its own anxiety to steal mileage and publicity, put up hoardings and huge boards at pivotal positions en-route airport.
In doing so, the name of the Indira Gandhi International Airport (IGIA) got hidden from public view and passengers travelling to and from the airport. None, not even the Airports Authority of India (AAI) or any other government agency, noticed it. Some of the Members of Parliament, on the Consultative Aviation Committee, noticed it. Santosh Bagrodia and others raised this issue and asked who had given authority to the private operators to remove the actual name of the airport? The minister for civil aviation, Praful Patel, immediately reacted and assured the meeting that he would get this mistake rectified. World's two main manufacturers, Airbus Industrie and Boeing, have been screaming that people are safer in the four-engine modern aircraft than at their own homes. In a way, they are right because more than 90 per cent fatal accidents have occured because of human fallibility instead of machine failure. Similarly, passengers in two-engine helicopters are safer than in one-engine plane, according to commanders and officials connected with flying. If one engine fails, another continues to work and helicopter lands without any casualty, add commanders. "But, in the event of one-engine helicopter, if it fails or develops snag, it means serious trouble", opine captains. The aviation authorities, in the consultative meeting, have gone on record as saying that “...reliability factor in terms of safety is the same in both single and twin-engine helicopter. Under emergencies, both types of helicopter function similarly. The difference is only in the payload and range of the helicopter". If this is so, how and why the ministry of home affairs has specifically directed that the twin-engine helicopter be used for the VVIPs. The in-depth study shows that the performance of the Pawan Hans Helicopter (PHHE) is very consistent. Its services should be increased to reduce congestion on Delhi and other international airports. The PHHE is one of the few PSUs which is functioning and serving the cause of flying and other social obligations from its own kitty instead of getting any susbsidy from the government.
Many, connected with aviation, are of the firm view that this sector needs to developed in right earnest. During 2005 Mumbai floods, it did tremendous job in evacuating marooned people. It suffered heavy losses but it is continuing to serve the `social eventualities' like Indian and Air India. |
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Investor Guidance
Q: Do reinvested dividends from an ELSS Scheme qualify for rebate under Sec. 80C? A: Yes. It is a fresh investment in the ELSS and will be entitled to the deduction u/s 80C within the overall ceiling of Rs 1 lakh in the FY during which the investment is made. Withdrawals from PPF a/c
Q: I had opened a PPF a/c in 1989, which I had extended in 2004 at the end of 15 years. Balance at the time of extension was Rs 7 lakh. Now the balance is Rs 10 lakh. How much money I can withdraw now? I have never withdrawn a rupee till today from the account. As per my bank I can withdraw only Rs 3.5 lakh i.e., 50% of 2004 balance at the time of account extension. Please help me by your clarification. A: Your bank is under a wrong impression that the amount of withdrawal is 50%. It is 60%. A subscriber, continuing his account with fresh subscriptions, can withdraw up to 60% of the balance to his credit at the commencement of each extended period in one or more installments, but only one per year. You should be allowed to withdraw Rs. 4.2 lakh. Stripping restriction
Q: Can an investor strip his losses arising out of sale of his original shares (post bonus issue) against his short-term capital gains (STCG)?. If so, should he get invested 3 months before the record date and stay invested for 9 months after the record date, just like Mutual funds? A: The stripping restriction are applicable only to bonus units and not Bonus shares. Again, the stipulation of 9 months is applicable only to MFs and not to shares. The total provisons related with striping are reproduced hereunder for your benefit : The 4 conditions applicable for Sec. 94(7) to be operational are - 1. The purchase of securities (including stocks and shares) or units has to be within 3 months before the record date for dividends. 2. The sale of these securities or units has to be within 3 months after the record date for dividends. 3. The dividend has to be tax-free. 4. The transaction has to result in a loss. If all these conditions are simultaneously satisfied, the loss arising to the taxpayer on the sale to the extent it does not exceed the income has to be ignored for computing the income. There was no provision for bonus stripping. In the case of units of an MF, Sec 94(8) inserted w.e.f. FY 04-05 the period of 3 months after the record date has been extended to 9 months. Moreover, where bonus units have been issued, and the transactions result in satisfying the 4 conditions mentioned above, the loss resulting from sale of all or part of original units while continuing to hold all or any of the additional units, will be ignored. The amount of such loss shall be considered as the cost of acquisition of the remaining bonus units. Evidentally, these strippings become inapplicable if securities or units are purchased, say 3 months and 1 day in advance of the record date. I hope that the MFs begin declaring their record date more than 3 months in advance. TDS on PF interest
Q: Recently I received instructions from my Head Office, that on the interest accrued on PF for the period beyond the date of retirement, tax is to be deducted at source. The explanation for this is given as under: - “As per clause 2(f), of part ‘A’ of Fourth Schedule, the accumulated balance due to an employee means the balance to his credit or such portion thereof as may be claimable to him under the regulations of the fund, on the day he ceases to be employee of the employer maintaining the fund.” “On reading the Section 10(12), in conjunction with the definition of ‘accumulated balance due to an employee’, it is apparent that once the employee-employer relationship ceases to exist, the interest payment, subsequent to that date will attract the provision of Section 194A, as if interest payable to a third party” It has been further clarified that, there is no TDS for amount of interest below Rs. 5,000 and also in case the recipient is other than the ex-employee, i. e, a nominee in case of deceased ex employee, there is no TDS. Until now, we were treating this interest on PF totally tax-free. Kindly clear my doubt on this issue, so that retired employees are not put to any hardship due to
TDS. A: Your office is taking the view expressed in the case of ONGC Ltd. v Income-tax Officer (TDS), Dehradun ITAT Delhi Bench ‘A’. Understandably, if the interest is to be treated as taxable income, TDS will be applicable, as provided by the ITA. The authors may be contacted at
wonderlandconsultants@yahoo.com |
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Mumbai, January 19
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