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Number of delisted companies on the rise; bourses may see more exits The NSE delisted 100-odd companies in the past one year Despite a record line-up of debuts on the bourses this year, India’s listed universe is shrinking, and shrinking fast. Around 1,000 companies were compulsorily delisted in the past two years on the BSE and the National Stock Exchange (NSE). And, by some estimates, another 1,000-2,000 may be shown the door, effectively contracting the universe of listed shares by 30-50 per cent. Around 5,900 companies were listed on the BSE on March 31, 2016. The number has now reduced to 5,035. A majority on the list have been compulsorily delisted, sources said. The NSE delisted 100-odd companies in the past one year. At present, around 1,600 companies are listed on the NSE. Compared to the spate of exits, far fewer companies, around 70 in number, entered the market in the last two financial years. In May 2016, Sebi announced measures to delist companies from stock exc

RBI may keep repo rate unchanged at 6% in April policy review: BS Poll But surprisingly, there is a narrow chance that the central bank may cut rates in the future: BS Poll There is a clear consensus that the six-member monetary policy committee of the Reserve Bank of India (RBI) would keep the repo rate unchanged at 6 per cent next week. But surprisingly, there is a narrow chance that the central bank may cut rates in the future, according to a Business Standard poll of 15 economists and treasurers. This is an emergent view, which was missing in previous polls undertaken by the newspaper. Surely, any change in rates or stance is not expected in the first bi-monthly monetary policy review for 2018-19 on April 4-5. But the inflation trajectory has surprised many and stagnant growth could compel the RBI to go for a rate cut, according to some economists. The consumer price index (CPI)-based inflation in February came at 4.4 per cent, below the RBI’s March projection of 5.1 pe

Slow take-off for GST e-way bill likely as traders stock up early The system has gone through three rounds of testing for its load-bearing capacity It could take at least a fortnight for the e-way bill generation to take off, though it would be introduced at midnight of March 31 for inter-state movement of goods worth over Rs 50,000. Not many e-way bills might be generated in April since businesses had stocked up in advance to lengthen the time required to shift to the new system, experts said. However, the authorities seem to be prepared this time after the collapse of the portal in the first phase of the roll out. For the past several weeks, awareness campaigns have been carried out across the country to educate people about the new system. The e-way bill portal collapsed on the very first day of its introduction on February 1, when only 480,000 bills were generated. To avoid a repeat, the load has been increased to 7.5 million this time. The system has gone through three rou

Markets brace for LTCG tax, STT in FY19 For foreign investors, LTCG and securities transaction tax (STT) together have increased the complexity and the cost of investing in India.  For 14 long years, stock market investors have taken all their long-term capital gains (LTCG) to the bank. That ends from 1 April 2018. While the markets have taken it in their stride, the government will be anxious to see if the LTCG tax indeed brings in revenues; else, it could end up as a measure that attracts more criticism than revenue Starting 1 April, LTCG tax on the sale of equities will be applicable on gains exceeding Rs1 lakh in a financial year. The tax rate is 10%. While domestic brokerages say they have witnessed some profit booking and do not foresee any further impact, there are questions about foreign flows For foreign investors, LTCG tax and securities transaction tax (STT) together have increased the complexity and the cost of investing in India when compared to other jurisdictions

Sebi clamps down on derivative markets; algo trading made more accessible Accepts most of the Kotak panel recommendations The Securities and Exchange Board of India (Sebi) on Wednesday tightened the derivative markets framework to curb the excessive speculation and prevent small investors from entering the high-risk space. The market regulator, at its board meeting held on Wednesday, also accepted majority of the recommendations made by the Uday Kotak Committee on corporate governance but deferred decision on key proposals such as one on sharing of information with promoters Sebi announced steps to make algorithm trading more accessible and reduced the cost of buying equity mutual funds. It also proposed to introduce a new compliance framework for stocks undergoing insolvency proceedings and an “entirely new” set of buy-back regulations. To ensure derivatives and cash market move in sync, Sebi enhanced the eligibility criteria on stocks allowed to trade in this segment. It fu

 IBC tweaking: List of offences likely to bar offenders from bidding The panel also suggested bringing the definition of "persons acting in concert" in sync with the Sebi A 14-member committee on reviewing the insolvency and bankruptcy code has recommended that a list of offences be prepared and those who fall in the list be barred from sending resolution plans, say sources. This would provide clarity to those willing to bid for insolvent companies since the existing Code debars offenders from submitting their bids, but does not specify offences. Also, disqualification will be limited to six years from the day of conviction, if the recommendations are accepted. Currently, there is no limit. The committee also recommended doing away with a provision that considers financial creditors who are connected with the debtor company by virtue of converting their debt into equity as a related party. Lawyers stated that this would essentially take out bankers or any other fi

 Sebi OKs Kotak Panel Proposals to Boost Corporate Governance Split of CMD post from April 2020, enhanced disclosure norms, algo restrictions on cards The Securities and Exchange Board of India (Sebi) approved sweeping changes proposed by the Uday Kotak panel on improving corporate governance standards such as splitting the post of chairman and managing director, tighter rules for independent directors, enhanced disclosure of related-party transactions and mandatory secretarial audits for listed entities and their material subsidiaries. “Out of 80 odd recommendations (of the Kotak panel), 40 were accepted without modification, 15 with modifications, eight were referred to government and other departments,” Sebi chairman Ajay Tyagi told reporters after the board meeting on Wednesday. About 18 suggestions were rejected, he said, including those on sharing information with promoters and significant shareholders, an increase in the number of independent directors on board, minimum