Market regulator to discuss sweeping changes to share buyback norms
The board of the Securities and Exchange Board of India is set to approve several proposals, including sweeping changes to share buyback norms, tighter disclosure rules for listed companies, stronger governance at market infrastructure institutions like stock exchanges, and a regulatory framework for fintech platforms providing execution services in direct plans of mutual fund schemes to investors. The board is scheduled to meet on December 20 to discuss these proposals.
Why it’s important: The regulator may phase out share buybacks from the open market through stock exchanges as these are prone to misuse. It will instead nudge companies to use the book building route to ensure wider shareholder participation.
GST authorities send 50,000 notices to companies after comprehensive audit
The GST authorities have issued around 50,000 show-cause notices to companies and partnership firms across business sectors, including real estate and jewelry, after findings of an audit exercise started earlier in the current financial year. This is the first comprehensive audit exercise since the inception of the GST regime. It was in addition to the GST audit that firms do if the turnover of registered taxpayers is Rs 2 crore and above in a financial year.
Why it’s important: Such audit exercises are significant as they help detect irregularities in the payment of indirect taxes and are therefore able to fix business issues and improve tax returns.
Advance tax collections rose 13 per cent to Rs 5.21 lakh crore between April and December
Cumulative advance tax collection in India, comprising both corporate and personal, has surged 12.83 per cent to Rs 5.21 lakh crore compared with Rs 4.62 lakh crore a year ago, the Central Board of Direct Taxes has said. Of the total, the corporation advance tax mop-up between April 1 and December 17 stood at Rs 3.97 lakh crore. The advance personal income tax collection stood at Rs 1.23 lakh crore.
Why it’s important: Advance tax payments are a leading indicator of prevailing economic sentiment. Such high growth in such collections indicate improved economic activities and expectations of higher earnings.
Samara Capital leads race to acquire Aditya Birla Insurance Broker at Rs 1,000 crore valuation
Amazon’s Indian private equity partner Samara Capital has emerged as the lead runner to buy the insurance broking unit of Aditya Birla Capital. The discussions are at an advanced stage and a deal at a value of Rs 800-1,000 crore could be announced in the next few days.
Why it’s important: This would be one of the largest transactions in the broking space in India. The sale is part of Aditya Birla Capital’s strategy to reorganize its financial services operations.
Tata Group set to buy majority stake in UTI Asset Management Company
The Tata Group is in final talks to buy a majority stake in UTI Asset Management Company from four state-owned financial entities. Punjab National Bank, Life Insurance Corporation of India, State Bank of India and Bank of Baroda together own a 45.16 per cent stake in UTI AMC. A final agreement is being sought on the deal valuation. Internal approvals have been secured and Tata has received in-principle nod from the other big investor in the AMC, global investment management firm T Rowe Price Group, which holds around 23 per cent.
Why it’s important: UTI AMC is India’s eighth-biggest mutual fund. Once the deal goes through and Tata AMC and UTI AMC are merged, the combined firm will be the fourth-largest asset manager in India.
Reliance Capital’s floor bid amount pegged at Rs 6,5000 crore in first round
The administrator of Reliance Capital has informed resolution applicants that they will need to offer at least Rs 6,500 crore to participate in the auction for the company. The Piramal-Cosmea combine, the Hinduja Group, Torrent Investment and Oaktree Capital are expected to take part in the auction of Anil Ambani’s erstwhile core investment company. The auction is scheduled for December 21 in Mumbai.
Why it’s important: The threshold bid amount will increased in each successive round. The challenge mechanism will end if the administrator does not receive a higher bid for three consecutive rounds.
Poonawalla Vision Fund to invest Rs 1,000 crore in growth stage companies
Adar Poonawalla, chief executive of Serum Institute of India, has sought regulatory approval to set up the Poonawalla Vision Fund to invest in growth-stage companies from its corpus of Rs 1,000 crore contributed by his family. An application to the Securities and Exchange Board of India was made on 29 September for registration as a category-II alternative investment fund. The application is under process.
Why it’s important: Domestic institutional investors are increasingly placing bigger bets on India’s growth story. Institutional investors and family offices are backing early and growth stage funds by increasing the capital allocation in the past 2-3 years, indicating greater risk appetite. Fund sizes have also been increasing.
Ola to compete with Mahindra and Tata with plan to make electric commercial vehicles
Ola Electric is set to enter the commercial vehicle segment by launching electric small commercial vehicles with three and four wheels. It will be competing with the two top commercial vehicle companies, Tata Motors and Mahindra & Mahindra. In May, Tata announced the launch of the electric Ace EV, a four-wheel pickup, deliveries of which are expected to begin shortly. Mahindra is the dominant player in the three-wheel electric cargo market with its Treo Zor.
Why it’s important: Small commercial vehicles are typically used for last mile deliveries. This is a segment that is ideally suited for an electric transition in the country and Ola wants to make the most of it.
Car sales in India may hit a record 3.8 million in 2022 calendar year
Automakers in India are projected to end this calendar year with sales of 3.8 million passenger vehicles, exceeding the previous record by more than 400,000. Personal vehicle sales are set to increase by nearly a fourth this year, the fastest growth among major global economies, compared with 2021. Sales in the first 11 months have already breached the previous annual record of 3.39 million sold in 2018. The estimated sales growth for this year is 23 per cent, compared with a 27 per cent expansion in 2021.
Why it’s important: The record sales are driven by sustained demand and improved component supplies post the pandemic that helped automakers to step up production.
Online gaming policy may ask for age verification mechanism for money games
The electronic and IT ministry is close to finalizing a policy to regulate online gaming. It will likely mandate an age verification mechanism and know-your-customer norms for all real-money games. The rules, which will address concerns around user safety and financial harm from money games, will be inserted into the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021. The policy is expected to be released within two-three weeks.
Why it’s important: The online gaming industry has come under the scanner after the proliferation of games like cards, casinos and fantasy sports among the youth led to addiction and financial losses, with some reported cases of suicide.
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