Therefore the situation is different compared to last time. Last time there was significant participation seen, while this time around, I am not too sure as to what is the kind of response that they may be getting. In fact, they might have a problem getting a good response from their investors.

Q: Coming to the point that Harit was making about taxation. Do the taxation issues involved make even less sense or benefit to you?

Madan: Though the idea was what I relayed, here the difference of the price prevailing in India and on the ADR is just 10%. And if 10% of the shares are accepted and one gets a premium of 10% on top of that, then it translates to 1%. And you may end up paying a higher taxation on that 1%.

Now it is in my long term portfolio, so even if I sell in the domestic market, I don’t pay any tax, but on the off market transaction, I will end up paying my business income, which will be closer to one-third of what I make. So eventually at the end of the day, I could come out with two-third of a percent gain on the whole, for doing this whole exercise, which doesn’t seem interactive enough. So I lose on what I have been holding for such a long period of time. Therefore, I would like to stick around with my holding and take it forward.
 
Q: For a person who wants to do an arbitrage, people who generally do cash futures arbitrage kind of deals for them, is it appealing to scalp this 1% less tax? Could you explain how long this whole process would take because the amount of lock-in for the shares is also important, if you are playing an arbitrage?

Shah: If you are talking about a short-term investor, then it would be some sort of an appealing thing to do. As far as the time period is concerned, the company, in its release to BSE, did say that the last date for which the shares would be held in Escrow is somewhere around February 2007. December 4 is the date on which they would effectively show the kind of acceptance of shares that has happened.

So you would have to wait for some time. As of now, it is the beginning of November, so at least one and half to two months is the waiting period and beyond that of course, they will attempt to return the shares back as fast as possible.

Again, for a person with a short-term perspective, it may be attractive depending on the kinds of returns that you are looking at. But for a longer-term investor, it is not really appealing.

Q: For somebody who runs a company himself, which end of market are you most bullish on now?

Purohit: Midcap sales are going to do well. The total economy is booming and we don’t see a reason for the economy to slow down at any point of time in the next year or two.

If you go through all these studies, which the Certified International Investment Analyst (CIIA ), Federation of Indian Chambers of Commerce and Industry (FICCI ), etc have done, then all sectors of the economy are going to do well and considering that, the share market is also going to do well.