Wednesday, April 18, 2012

Investment Banking - Securities Market - News - India

Important news regarding investment banking and securities markets in India.

India - Business and Economy Dailies


India Growing Higher Than China - It Started
India growth in 2010 10.4%; China's growth 10.3%  IMF stats
Rising Valuation and Rate Hike Fears Prompt Analysts to Reduce "Buy Recommendations on India Stocks 
(Economic Times, p.21)
As the country's stocks surpassed China, strategists are cutting buy recommendations on India.

IDR Issue of Stanchart cleared by RBI

Conditions laid: Stanchart can raise a maximum 5% of its capital from a single IDR issuance. Cannot accept subscriptions from investors who borrow money and invest. No single entity can pick up moe than 5% in an IDR. The same guidelines may apply to IDR issues of other banks.

Issue of Capital and Disclosure Requirements - 2009 (ICDR-2009)

Detailed knols

Issues of FCCBs

Sesa Goa raised $500 million (Rs.2,399 crore) through FCCBs.
Welspun gujarat Stahl Rohren raised $134 million (Rs. 634 crore) through FCCBs.(ET, 26.9.2009).

Dual Listing linked to Full Convertibility

Pranab Mukherjee, The Finance Minister of India said, dual listing is linked to full convertibility in the context of Bharti-MTN deal.

A good blog on Securities Markets of India

An article on depository receipts
Depositary Receipts: Concept, Evolution and Recent Trends by Manoj Kumar, Faculty, IIM Lucknow.

Takeover norms revised; ADRs at par with domestic shares

The Securities and Exchange Board of India revised takeover norms by bringing ADRs/GDRs with voting rights on par with the domestic shares, which makes an open offer mandatory if 15 per cent stake is bought in a company through these securities.
Regarding Voting Rights of ADRS/GDRs RBI clarification
vii)  Voting rights on shares issued under the Scheme shall be as per the provisions of Companies Act, 1956 and in a manner in which restrictions on voting rights imposed on ADR/GDR issues shall be consistent with the Company Law provisions. Voting rights in the case of banking companies will continue to be in terms of the provisions of the Banking Regulation Act, 1949 and the instructions issued by the Reserve Bank from time to time, as applicable to all shareholders exercising voting rights.

Relaxation of FII investment norms

SEBI is coming out with a concept paper that focuses on relaxations in FII investment norms. Individuals may have a direct access to the Indian Markets according to the proposals in the concept paper.

Issue of Capital and Disclosure Regulations Issued by SEBI

SEBI Informal Guidance to Bharti Airtel Limited regarding issue of GDRs to MTN shareholders

SEBI Board Meeting - Decisions

The Board met today and took the following decisions:
(i)     Listing of IPO on stock exchange with nationwide trading terminals
An unlisted company making an IPO shall list the securities on at least one stock exchange having nationwide trading terminals.  This would provide a liquid trading platform to investors in securities of the company.
(ii)    ‘Anchor Investor’ in public issues
An issuer making a public issue of shares through book building may allocate on a discretionary basis up to 30% of the QIB portion of the issue to anchor investors (AIs), who is a QIB. The minimum size of application by AIs would be Rs. 10 crore.  They would bring in a margin of 25% on application and the balance 75% within 2 days of the date of closure of the public issue. There will be a lock-in of 30 days on the shares allotted to these investors from the date of allotment. No person related to the promoter/promoter group/BRLMs can apply as anchor investor. This would bring more certainty to transactions.
 (iii)  Holding period for shares offered for sale
Under the current guidelines, a shareholder can make an offer for sale of the equity shares if he has held them for a period of at least one year. Board decided that in case equity shares which are received on conversion of fully paid compulsorily convertible securities, including depository receipts are being offered for sale, the holding period of such convertible securities as well as that of resultant equity shares together would be taken into account for the purpose of eligibility.
(iv)  Issue of shares with superior voting rights
No listed company can issue shares with superior voting rights. This will avoid the possible misuse by the persons in control to the detriment of public shareholders.
(v)   Rationalisation of disclosure norms for rights issues
Since rights issues are made to existing shareholders, who are in possession of basic information about the company and have been receiving reports regarding major developments in the company on a continuous basis, it has been decided to rationalize disclosures in rights issue offer document by doing away with or modifying existing disclosure requirements. Disclosures that have been done away with include summary of the industry and business of the issuer company, promise vs. performance with respect to earlier/ previous issues, ‘Management discussion and analysis’. The disclosures relating to financial statements, litigations, risk factors, etc. have been simplified. The revised set of disclosures would make the process of rights issues faster for companies and also reduce the overall cost of such issuances.
(vi) Transparency in payment of commission to Mutual Fund distributors
There shall be no entry load for the schemes, existing or new, of a Mutual Fund.  The upfront commission to distributors shall be paid by the investor to the distributor directly. The distributors shall disclose the commission, trail or otherwise, received by them for different schemes/ mutual funds which they are distributing or advising the investors.

Full Backing of Assets for Secured Debentures

A week ago, the Securities and Exchange Board of India (SEBI) had decided that companies raising money through 'secured bonds' and debentures should make sure that the papers issued are fully backed by assets.

(Source: The Economic Times, 28.5.2009, page 1).

Knol Started

Knol started on 28.5.2009 to accumulate news related to investment banking in India and thus provide the status of investment banking sector in India. As the knol is kept on open collaboration, authors and visitors can share information they know.

Original knol - 1221

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