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SEBI drops IPO grading to ease fund raising process
RBI warns against Bitcoin use in India
GAIL asked to explain why it seeks price reopening
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Maruti to focus on rural areas
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SEBI drops IPO grading to ease fund raising process
Mumbai, December 24 The SEBI’s Board approved the proposal to make the IPO grading system voluntary as against the current provision of being mandatory. The move is part of the regulator's effort to boost the dormant primary market and reduce the reliance on rating agencies, who have been under scanner globally for their role in overall financial sector. The IPO market had been dormant for almost three years. SEBI-approved IPO proposals worth Rs 72,000 crore are yet to hit the market, according to Prime Data, a market research and consulting firm. The last major IPO was from Coal India in 2010. This move follows requests from market participants and investor associations among others. In another measure to prop up the capital markets, SEBI’s Board allowed shelf-prospectus for corporate bond issues. Domestic corporate bonds are a small portion of a market that is now dominated by government securities. A shelf-prospectus enables companies to issue corporate bonds utilising the same documents more than once, which will help cut costs and save time. SEBI extended the facility to file shelf prospectus for issuing non-convertible debt securities for non-banking finance companies, including infrastructure debt funds (IDFCs), besides public sector financial institutions, public sector banks and scheduled banks. The regulator has also suggested allowing issuers authorised by the Central Board of Direct Taxes (CBDT) to make public issue tax free secured bonds to file shelf prospectus. According to the Companies Act, 1956, any public financial institution, public sector bank or scheduled bank, whose main object is financing, was allowed to file a shelf prospectus. To avoid fragmentation of the issues, which will affect the floating stock and thereby liquidity, SEBI said only a maximum of four issuances can be made under a shelf prospectus. Further, companies filing a shelf prospectus with the Registrar of Companies are not required to file prospectus afresh at every stage of offer of securities, within the period of validity of such shelf prospectus i.e. one year. They are required to file only an information memorandum, containing material updation, with respect to subsequent issues. NBFCs and other listed issuers would be eligible to file shelf prospectus only if they meet certain criteria, including having a networth of at least Rs 500 crore. — PTI Mechanism made easier
* SEBI has made the IPO grading system voluntary as against the current provision of being mandatory *
The move is part of the regulator's effort to boost the dormant primary market and reduce the reliance on rating agencies *
SEBI-approved IPO proposals worth Rs 72,000 crore are yet to hit the market *
The last major IPO was from Coal India in 2010 |
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RBI warns against Bitcoin use in India
New Delhi, December 24 Bitcoin, which has been defined as an experimental new virtual currency by its website, has become somewhat of a fad in some developed countries with lots being written about it. While some are comparing it to a digital form of gold others are saying that in the longer term it could be a counter to the dollar as a universal currency. However, it is very early for it to gain traction and as of now there is only small use of it globally. Its price fluctuates and its website says the price of a bitcoin can unpredictably increase or decrease over a short period of time due to its young economy, novel nature, and sometimes illiquid markets. “Consequently, keeping your savings with Bitcoin is not recommended at this point. Bitcoin should be seen like a high-risk asset, and you should never store money that you cannot afford to lose with Bitcoin”, the website adds. According to reports, there have been more than 35,000 downloads in India since the launch of Bitcoins on November 9. Several India-based trading platforms have come up allowing users to purchase Bitcoin in rupees. The RBI today cautioned the users, holders and traders of virtual currencies (VCs), including Bitcoins, about the potential financial, operational, legal, customer protection and security related risks that they are exposing themselves to. RBI said the creation, trading or usage of “Decentralised Digital Currency” or “Virtual Currency' (VCs), including Bitcoins, litecoins, bbqcoins and dogecoins as a medium for payment are not authorised by any central bank or monetary authority. "No regulatory approvals, registration or authorisation is stated to have been obtained by the entities concerned for carrying out such activities," the RBI said, adding it is keeping a watch on the developments, including media reports. Stating that virtual currencies have no underlying or backing of any assets and their value seems to be a matter of speculation, the RBI said, "The users are exposed to potential losses on account of volatility in value." Since VCs are stored in digital or electronic media, called electronic wallets, they are prone to losses arising out of hacking, loss of password, compromise of access credentials and malware attack, the RBI cautioned. It added that there have been several media reports of the usage of VCs, including Bitcoins, for illicit and illegal activities in several jurisdictions. “The absence of information of counterparties in such peer-to-peer anonymous/pseudonymous systems could subject the users to unintentional breaches of anti-money laundering and combating the financing of terrorism laws”. What is Bitcoin
* Bitcoin is a peer-to-peer payment network and digital currency based on an open source protocol, which makes use of a public transaction log. Bitcoin was introduced in 2009 by pseudonymous developer Satoshi Nakamoto. It is called a cryptocurrency because it uses public-key cryptography. When paying with bitcoin, no actual monetary exchange takes place between buyer and seller |
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GAIL asked to explain why it seeks price reopening
New Delhi, December 24 Petronet LNG Ltd, a private firm whose chairman is Oil Secretary, had in August 2009 signed a 20-year deal to buy 1.44 million tonne per annum of liquefied natural gas (LNG) at a price equivalent to 14.5% of ruling oil rates. This translates into $14.5 per million British thermal unit price at $100 per barrel oil price. After adding shipping costs, 5% import duty and the cost of converting liquid gas back into its gaseous state, the Australian gas will cost close to $18 at Indian ports. After adding pipeline transportation costs, taxes and margins, the delivered price to a customer will be around $21-22, a rate which GAIL feels will not find many takers. GAIL, which is a co-promoter of Petronet, in July asked the company to seek renegotiation of the deal, sources said. Petronet in turn has now asked GAIL to explain the basis on which a signed contract can be reopened, they said. The contract for Gorgon gas, Petronet feels, has no clause for renegotiation of rates. — PTI
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Maruti to focus on rural areas
New Delhi, December 24 MSIL chairman RC Bhargava said, “They are not planning to buy (additional stake) now but the chairman (Osamu Suzuki) has been quoted in media saying they may consider it in future”. SMC, which currently owns a 56.2% stake in MSIL, is considering a range of options to increase its holding in the Indian company. It could look at a share buyback, which would mean an open offer, buying from the market or going for creeping acquisition of shares (up to 5% every year). It could also opt for preferential issue of shares. MSIL contributes as much as 50% of its total unit sales and 25% to sales revenues of Suzuki’s global operations and it is the Suzuki’s largest overseas subsidiary. "At the moment, rural sales contribute about 30% of our sales. That market has been growing during this financial year at 18% whereas the urban markets have not," said Bhargava. "In the next four months, this 30% will go up to maybe 32%. But, the urban markets are not going up." Suzuki may hike stake
* At present, Suzuki Motor Corp has 56.2% stake in Maruti Suzuki India * Suzuki could look at a share buyback or go for acquisition of shares (up to 5% every year) *
MSIL contributes as much as 50% of total unit sales and 25% to sales revenues of Suzuki |
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GSK’s open offer for buying stake from Feb 7-21 India Post launches inward remittance service Jet Airways launches mobile application for iOS TOTO opens first exclusive outlet for northern region
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With virtual currencies like Bitcoin becoming an online fad, the RBI today cautioned against its use stating that these are unauthorised and unregulated instruments.
