Thursday, 28 March 2013

Bharti Airtel arm raises USD 500 mn, shares soar 3%

Country's largest telecom operator Bharti Airtel  gained more than 3 percent on Tuesday after its subsidiary Bharti Airtel International (Netherlands) BV raised USD 500 million notes (additional notes).

The company says it is in addition to the recently concluded transaction of USD 1,000 million 5.125 percent fixed rate senior unsecured guaranteed notes due 2023.

Additional notes issued at a premium and priced at 100.625 percent to yield 5.044 percent will be consolidated and formed in a single series along with the USD 1,000 million 5.125 percent guaranteed senior notes issued on March 11, 2013.

This is the largest ever telecom transaction out of Asia ex-Japan. "High participation by fund managers for an Indian Issuance and real money investor participation of 77% demonstrates the superior quality of the order book and the confidence the global investors have in the fundamentals and credit of the company," Harjeet Kohli, group treasurer of Bharti said.

At 15:15 hours IST, shares rose 3.02 percent to Rs 297.15 on Bombay Stock Exchange.


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Wednesday, 20 March 2013

Supreme Court approves Sistema Shyam operation in 8 circles

The Supreme Court today cleared the way for Sistema Shyam Teleservices (SSTL) to provide its services in eight telecom circles in which it was the lone bidder for the 800 MHz spectrum.
"The applicant (SSTL) is entitled to continue services in eight circles," a bench comprising justices G S Singhvi and K S Radhakrishnan said.
SSTL's counsel Vikas Singh said there was no other bidder for the CDMA service and the company participated in the second round of fresh auction after the Department of Telecommunication reduced the reserved price.
Senior advocate P P Rao also informed the court that the auction has concluded and SSTL made the bid for eight circles and there was no competition.
Sistema Shyam (SSTL) was the lone bidder in today's auction and it bid Rs 3,639 crore for eight circles in the 800 MHz spectrum range.
The auction for 2G spectrum for GSM players held in November last year had fetched the government Rs 9,407 crore.
SSTL said it won spectrum in 800 MHz band in Delhi, Kolkata, Gujarat, Karnataka, Tamil Nadu, Kerala, Uttar Pradesh (West) and West Bengal.
With SSTL bidding for only eight circles, it will have to close operations in Mumbai, Maharashtra and UP East, where the company has over 15 lakh subscribers.
The company is a joint venture of Russia's telecom giant Sistema and India's Shyam Teleservices.
The apex court on February 2, 2012 had cancelled SSTL's 21 out of 22 licences for the 2G spectrum.

 
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Tuesday, 19 March 2013

Odisha to miss iron ore e-auction April deadline

Odisha may miss April deadline to conduct iron ore e-auction on behalf of miners of the state as the  steel and mines ministry is undecided over the issue. The online auction conducting agency MSTC Ltd said it is ready with all necessary infrastructure and is awaiting the government nod.

"As of now we have all necessary infrastructure ready to conduct the e-auction via our Kolkata office. We are awaiting government order to go ahead,” said an official of MSTC.

In November last year , the state government decided to sell entire iron ore and manganese ore  produced in the state through online auction route by April 2013 by employing state-run miner Odisha Mining Corporation (OMC) as the canalizing agent in order to address the issue of raw material supply problems for domestic steel units.

It has even constituted a committee comprising of cabinet ministers and headed by finance minister  to chalk out the modalities of the trading.

The committee, whose term ends in April, is yet to give its recommendation to the state government for coming up with a notification for sale of minerals through on line trading platform. As the state assembly session will end on Apr 6, it is unlikely that the proposal will come before May.

Meanwhile, the steel and mines ministry has abandoned the proposal to canalise the iron ore trade via OMC and instead, a special committee set up under the ministry will carry on the task in association with MSTC Ltd.

The committee will also take over the charge of chrome ore e-auction currently conducted by OMC as part of the recent proposal, said a government source.

According to current practices, steel manufacturers procure raw material from miners at a negotiated price, while others depend on mines run by OMC, which announces iron ore rates every quarter.

Many sponge iron makers and other secondary steel producers of Odisha, Chhatishgarh and West Bengal depend on state-based miners to run their units. Some steel makers based in south India have also started sourcing the raw material from the state after Goa recently banned mining following a probe panel recommendation. In Karnataka, even though the Supreme Court has lifted the ban on mining after 13 months, production is yet to resume in full scale.

Currently, central government PSU National Mineral Development Corporation (NMDC) conducts e-auction of iron ore in Karnataka following the Supreme Court direction. A couple of private miners are also offering the ore via MSTC in Karnataka.



Sandip Ginodia
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Monday, 18 March 2013

Tata Technologies to focus on Engineering Innovation

Tata Technologies has announced that it has setup its new Innovation Center in Troy, Michigan. The centre will leverage the local R&D talent pool to provide design and consulting services for automotive companies globally.  The 10,000 square feet facility will initially staff 60 engineering professionals and the company plans to increase the headcount to 100 by end of this year (December 2013). This compliments the Novi, Michigan NA headquarters and brings the total NA employee strength to 700+.
The new Engineering and Innovation Center will be the North American home to the Tata Technologies Vehicle Programs Development (VPD) Group, headed by Mr. Kevin Fisher, President – VPD. The VPD Group is responsible for the development of the landmark eMO (Electric Mobility) EV study released at the 2012 North American International Auto Show in Detroit. The VPD Group currently supports automotive OEMs worldwide from its CoEs in Detroit, Coventry (UK), Pune (India), and Stuttgart (Germany).
Kevin Fisher, President – Vehicle Programs Development said “The inauguration of our new centre is a proud moment for Tata Technologies as we are now increasing our presence in the world’s leading automotive market. This will further enable us to develop innovative solutions for our global customers. This investment also reflects our commitment to the local NA market.”


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TATA Appointed Consultants for Dangote’s $1.9bn Fertiliser Plant

Determined to ensure its on-going $1.9 billion fertiliser plant in Edo state is of world-class standard, the Dangote Group has appointed TATA Consulting Engineering as its management consultants for the project.
The appointment of TATA came after the Pan-African Conglomerate signed the contract for the construction of the largest fertiliser plant in Africa with Saipem.
President of Dangote Group, Aliko Dangote, while speaking on the partnership deal, said his company was poised to putting a place a global standard fertiliser plant which will help revolutionise agriculture in the country and Africa as a whole, adding that this informed his choice of renowned partners in the construction of the plant.
According to him, the plant with a production capacity of 2,200 metric tonnes per day (MTPD) of Ammonia and 7,700 MTPD of granulated Urea (two 3,850 MTPD-capacity trains), will be the largest fertiliser plant in Nigeria, Africa. “Our ultimate goal is to build a world-class plant that meets the highest global standards”, Dangote noted.
Said he; “We trust TATA Consulting Engineers with this project as we believe they have capabilities to handle such a large scale project with multiple dimensions ,Our ultimate goal is to build a world-class plant that meets the highest global standards.”
He explained that TATA Consulting Engineers Limited, an integrated engineering solutions consultant will assist the Dangote Group with review engineering, construction management, quality management, health and safety management and the entire gamut of project management services.
TATA Consulting Engineers, Dangote said, have a track record of delivering complex projects working seamlessly with several entities, stating that the teams from the Dangote Group and TATA Consulting Engineers would work together to complete the project on schedule.
In his remark, the Managing Director of TATA Consulting Engineers Limited, Mr. J. P. Haran, expressed delight at the partnership deal between his company and the Dangote Group, pointing out that the contractual agreement would offer his organisation an opportunity to provide the world-class services that TATA is known for globally.
He described Dangote Group as one of the most diversified groups in Africa and known for its business excellence and quality products.

Sandip Ginodia
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Saturday, 16 March 2013

Temasek Holdings invests Rs 140 crore in HealthCare Global Enterprises

 Temasek Holdings, Singapore's state-owned investment company, has invested Rs 140 crore in Bangalore-headquartered cancer care provider HealthCare Global Enterprises (HCG).
The deal, which closed this week, values the company around Rs 1,000 crore, with HCG's founder and chairman BS Ajaikumar retaining a 26-28% stake, according to a person with direct knowledge of the deal.
Temasek joins existing investors Premji Invest, an investment entity owned by Wipro chairman Azim Premji, and Milestone Religare in a primary equity issuance by the company.
"We are pleased to invest in this firm which has redefined cancer care in India," said Rohit Sipahimalani, who heads the India practice for Temasek. The investment firm's $157-billion portfolio counts Bank of China, telecom firm Airtel and Singapore Airlines among its major companies.
Temasek's investment in HCG has also paved the way for Dubai-based alternative investment house Evolvence Capital to exit. The firm which had invested 30 crore in HCG almost five years ago out of itsEvolvence India Life Sciences Fund has gained close to 2.3 times return on investment.
This is the second time that a private equity fund has made a successful exit from HCG. The medical care provider initially raised Rs 50-crore from IDFC Private Equity almost seven years ago. When HCG raised a subsequent round of 240 crore from Premji Invest and Milestone, it enabled IDFC to exit the venture last year in April.
"Investors are chasing single-speciality chains instead of multi-speciality, as the model is more profitable, focused and it is easier to predict the outcome," said Harish HV, partner at Grant Thornton India.
Private equity and venture capital investments in the healthcare industry in India are increasing rapidly as supply is woefully low and demand continues to surge. Last year, the industry absorbed $1.2 billion across 48 deals, according to research firm Venture Intelligence. In 2011, there were 38 deals in the sector worth $421 million.
 
Sandip Ginodia
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Friday, 15 March 2013

Bharti Airtel slapped Rs. 350 crore fine by telecom department over 3G roaming

The Department of Telecommunications (DoT) has slapped a penalty of Rs. 350 crore on Bharti Airtel for not stopping third-generation (3G) mobile data services through roaming pacts outside its licensed zones in seven circles. It has also asked the telco to stop 3G roaming services outside its licensed zones immediately.

The DoT, in a notice, has also asked Bharti to file a compliance report within three days.

Last year, the DoT sent show-cause notices to Airtel, Vodafone and Idea Cellular among others, asking them to stop providing 3G mobile data services through roaming pacts outside their licensed zones as it deemed the pacts "illegal".

The government sold 3G airwaves in an auction in 2010 that attracted much higher bids than expected, and no single company managed to get spectrum for all of the country's 22 zones.

The government passed an order, asking telecom companies to stop offering 3G services beyond their licensed circles or zones under mutual roaming agreements. Several telecom companies -- including Airtel, Vodafone, Idea, Aircel and Tata Teleservices -- had filed petitions in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), challenging the December 23, 2011, directive of DoT to scrap their intra-circle roaming pacts within 24 hours.


Sandip Ginodia
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Catholic Syrian Bank to double its net worth

Thrissur-based Catholic Syrian Bank (CSB) is planning to double its business and increase net worth to Rs 1,100 crore from Rs 600 crore, said S Santhanakrishnan, its chairman.

"We will be raising the net worth to Rs 1,100 crore with our initial public offering (IPO), rights issue and private placement," said Santhanakrishnan.

On March 7, the bank has opened the rights issue to raise Rs 78.4 crore. "The rights issue will not only be fully subscribed, but will be over-subscribed," he noted.

In addition, the bank will raise Rs 250 crore via private placement and Rs 500 crore via IPO. The bank's total business is expected to touch Rs 40,000 crore within a couple of years. CSB also intends to increase the number of branches from the current 390 to 500 within a few years' time.

"We might need 1,000 young staff during the period, of which 500 will be hired immediately," Santhanakrishnan said. But, Santhanakrishnan is taking a very cautious path regarding bank's growth. We will go for an internal change, rather than an external one. As part of it, we will educate people and will go to the un-banked areas in the villages," he said.

Santhanakrishnan, the founder of Chennai-based chartered accountancy firm PKF Sridhar & Santhanam, also stated that CSB will remain as a regional bank.

"Our medium-term strategy is to continue as a bank with strong regional presence. What I mean by the region is entire south India. However, Gujarat and Maharashtra will be added to this because of the GDP growth in those states. By 2020, the centenary year, we are planning to reach Rs 1 lakh crore business," he added.

The bank's new managing director Rakesh Bhatia will join on May 1, subject to the receipt of Reserve Bank of India's approval.

Bhatia, a senior HSBC official, is expected to improve CSB's foreign exchange, merchant banking and credit quality. "Above all, he is willing to buy 1% shares, which would cost Rs 7 crore, and it shows his commitment to the bank," Santhanakrishnan said


 
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Monday, 11 March 2013

Tata Power looks for fuel cell technology partners

Tata PowerBSE 2.28 % is scouting for partners to pursue opportunities in the area of fuel cell technologies, as part of efforts to strengthen its presence in clean energy space.

Fuel cells run on variety of fuels such as hydrogen, methanol and ethanol, and are also seen as a replacement for diesel generator sets.

Tata Power, which has an installed generation capacity of about 8,500 MW, including 852 MW from renewable energy sources, said it is actively looking for fuel cell technology partners to pursue opportunities in the Indian market.

"Tata Power is working on putting together a workable business model in place to seek technology partners for fuel cells," it said in a statement.

These cells are considered as highly efficient and a good source of clean energy.

According to the company, using hydrogen directly for fuel cells is a challenge since it involves cost and safety issues, among others.

Besides, the company is evaluating new technology for fly ash utilisation and opportunities in overseas markets are also being explored in this regard.


Sandip Ginodia
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Tata Capital meets media agencies

Tata Capital, the financial services provider from Tata Sons, is currently on the lookout for a media agency. The process began a couple of weeks ago and is taking place in Mumbai.
The Lintas Media Group has handled the media duties for the brand since 2008.
Tata CapitalLeo Burnett is the creative agency on the account. The agency's latest work for the house loans arm of the company includes the print campaign, 'Kyunki yaadein ghar nahin badla karti', launched in December, 2012. Earlier, the company released a campaign in 2011, which conveyed the message that with Tata Capital's Home Loans, one can begin to feel the joy of owning a home.
Another campaign for the brand came out in December, 2011, which asserted that 'We only do what's right for you' or 'Kare Vahi Jo Aapke Liye Sahi'. Launched in 2007, the brand is considered nascent in the category.
The different financial services offered by the company include commercial finance, which is offered through an arrangement with select banks; investment banking through Tata Securities Limited (TSL); travel related services through TC Travel and Services; foreign exchange through TT Holdings & Services Limited; securities, offered through Tata Securities Limited; wealth management through Tata Capital Wealth Management; and consumer loans, including home loans, auto loans, personal loans, business loans, education loans, loans against property and loans against shares.
The three products that are served directly by Tata Capital are private equity, infrastructure finance and Tata Cards, the credit card services.
For the record, Tata Tea, another subsidiary of Tata Sons, recently awarded its media duties to Maxus.


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Otis presses core button

Otis Elevator Company (India) Ltd is looking to cash in on the country’s infrastructure growth.
The company is betting big on the upcoming 19 metro rail and 20 airport modernisation projects in India.
By 2016, the domestic elevator market is expected to grow to 70,000 units from 45,000.
While Otis will bid for the metro and airport projects, the vertical expansion of residential and office complexes will create additional opportunities.
Otis, part of the US-based diversified United Technologies Company (UTC), is also expanding its Bangalore manufacturing unit. The capacity will be ramped up to 10,000 units from 3,500 units. Work is likely to be completed by August 2013. The company remained tight-lipped on the investments.
“India is the second-largest elevator market in the world. There are issues in the economy. Real estate has been down with a year-on-year growth of 10 per cent, while the expected growth was 15 per cent. However, there is an inherent demand for infrastructure,” said Sebi Joseph, managing director of Otis Elevator Company (India).
Globally, Otis has a 25 per cent market share in elevators, recording $12.4 billion sales revenue in 2011, of which 80 per cent were from outside the US. 

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Friday, 8 March 2013

Bharti Airtel gains on Credit Suisse outperform report

Shares of country's largest telecom operator Bharti Airtel  gained 1 percent on Friday morning as the foreign research house Credit Suisse keep an outperform rating on the stock with a target price of Rs 385.

Credit Suisse expects the company's revenue per minute to surprise on the upside led by continued tariff hikes.

India's top mobile phone carrier had raised voice call prices to account for rising costs in January 2013.

The company had said in a statement it did not increase headline tariffs but reduced promotional benefits and free minutes offered to customers, adding that the price change was in line with the increase in its costs.

Other positive news - According to Reuters, Bharti Airtel is looking to sell up to a quarter of its satellite TV services arm and is in talks with several potential suitors, two sources with direct knowledge of the situation said.

India's top telecommunications carrier is looking at a valuation of little over USD 1 billion for the unit that had 7.9 million digital television customers as of December, one of the sources said.

At 09:44 hours IST, shares moved up 0.86 percent to Rs 323.20 on Bombay Stock Exchange


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Wednesday, 6 March 2013

Otis' new lift uses sunlight or batteries

Farmington's Otis Elevator Co. is introducing a simpler, plug-in lift also capable of being powered by the sun, and has a backup battery in the event the power goes out.
Otis says its trademarked Gen2 elevator is rolling out to customers in the U.S., Europe, India, South East Asia, and Central and South America.
Otis claims the Gen2 consumes less energy and is up to 75 percent more efficient than traditional elevators.
Otis is a division of Hartford conglomerate United Technologies Corp.


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Platform for UNLISTED SHARES in the US


Nasdaq OMX Group Inc (NDAQ.O) will form a marketplace for trading in shares of unlisted companies in a joint venture with small trading platform SharesPost Inc, tapping into increasing investor interest in private firms , in an effort to capitalize on the need for liquidity among companies that shun IPOs.
Specific terms of the transaction were not disclosed, but the companies said Nasdaq will retain a majority stake in the new pre-IPO market.
Dubbed the Nasdaq Private Market, the exchange is expected to launch later in 2013 and aims to provide another avenue for employees and early investors of still-private companies like Twitter and Pinterest to cash out.
“The support of entrepreneurs is a fundamental element of our DNA,” Bruce Aust, executive vice president of Nasdaq, said in a statement. NPM will “provide private companies additional flexibility as they plan for their future and, at the same time, bring the investment community unique opportunities.”
The companies said NPM, which will be open to all broker-dealers, will offer a “complete, end-to-end solution” that will allow a private company “to control the marketplace for its shares.” They also note that “an increasing number of companies are choosing to remain private longer,” requiring a need for an efficient marketplace.
SharesPost has already gained attention as a web-based pioneer in the private exchange industry that services pre-IPO companies and employees, including Facebook (FB) before its May 2012 debut on Nasdaq.
NPM will be based in San Francisco and led by SharesPost founder Greg Brogger as its president. The companies said SharesPost’s broker dealer and RIA businesses will continue to operate separately from this new venture.
Nasdaq “has a long history of pioneering capital markets solutions for companies and creating more efficient markets," said Brogger. "Its dedication to that mission, and SharesPost's best-in-class trading platform, will create a new kind of private market and will help NPM solve the critical challenges facing today's private companies.


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Sunday, 3 March 2013

Update on Air Asia and Tata Sons JV

Air Asia and Tata Group which have proposed to set up a domestic airline along with Arun Bhatia of Telestra Tradeplace, have sought approval for renting and leasing of aircraft, besides carrying of air freight.

According to sources, in its application to the FIPB, the partners have also sought permission for engaging in ancillary activities.

"Other activities for which they have sought permission include air transport carriers (of freight), cargo handling, renting and leasing of aircraft," a source said.

The application for renting and leasing of aircraft, however, does not include financial leasing.

The Malaysian budget carrier had sought the government nod to launch a new airline through a joint venture with the Tata Group and Bhatia.

Air Asia CEO Tony Fernandes has said that the new airline may take to the sky by this year-end with 3-4 Airbus A-320s, and his company will initially invest around $50 million.

An application has already been moved by Air Asia's investment arm, Air Asia Investment Ltd (AAIL) before the Foreign Investment Promotion Board (FIPB) to seek approval for acquiring 49 per cent equity in the company.

Tata Sons is likely to pick up 30% and one of Bhatia's companies, Hindustan Aerosystems, 21%.

After the FIPB approval, the JV will make an application to the aviation regulator DGCA for the Air Operators Permit to carry out flying operations.

Fernandes has said the new airline will be based in Chennai and in the initial phase concentrate on destinations in South India where Air Asia already operates. It will focus on providing connectivity to Tier-II and III cities.

The proposed airline's Board will have six directors. Air Asia will have two board members - Fernandes and Kamarudin Bin Meranun apart from Fernandes. Tata Sons will also have two members - R Venkataramanan and Bharat Vasani, while Telestra Tradeplace will be represented by Arun Bhatia.

The sixth board member will be an Indian national, who will be appointed as non-executive Chairman.

FIPB is likely to take up Air Asia's application for the joint venture on March 6.

Tamilnad Mercantile Bank gears up for an IPO

It’s almost a year and half now since the Nadar community dominated TMB (Tamilnad Mercantile Bank) has been hinting about an IPO (initial public offering).
Mr. Nagendra Murthy, Chief Executive, TMB said, "The paperwork & ground work is almost done. We are ready. But the timing can be decided only after the court sets the date for the AGM’.
This 92 year old bank is in the meantime strengthening itself. With a paid-up capital of a mere Rs 28 lakh & reserves (excluding revaluation reserve) in excess of Rs. 1.634 crore, the bank has grown despite various constraints/controversies.
TMB's shares (with face value of Rs. 10 per share) are said to be traded at over Rs. 55,000 per share in the grey market.

Shares of TMB are available please contact the undersigned . 


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Saturday, 2 March 2013

Ratnakar Bank targets pan india presence

Kolhapur-based Ratnakar Bank today said it is aiming for a nationwide presence by the end of 2014-15 fiscal and hopes to grow at 35 to 40 per cent per annum, a top executive of the bank said here today. Vishwavir Ahuja, Managing Director and CEO of Ratnakar Bank, said by the end of the current fiscal the bank is expected to touch Rs 13,000 crore business mark. "By March 2015, I would say we would be reasonably pan-India. We are currently around Rs 12,000 crore in terms of business size. By March we may take it to Rs 13,000 crore. If we maintain disciplined growth in terms of our overall financial matrix, we would like to grow between 35 to 40 per cent per annum," Ahuja said at a press conference.
The bank recently received approval to increase its foreign holding share from the current 43 per cent to 55 per cent. Last year, it partnered with Infosys to upgrade its core banking system to the latest version of Finacle and tied up with HDFC for home loan business.
On its exposure to cash-strapped Deccan Chronicle Holdings, Ahuja said: “the exposure is small and we have recovered a part of it.”


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Friday, 1 March 2013

Buy backs by Unlisted Shares to be taxed : Budget 2013


Union finance minister P Chidambaram in his budget 2013 has decided to levy a withholding tax of 20 % on profits distributed by unlisted companies to shareholders through buyback of shares. The move will deter unlisted companies opting for buyback of shares.

Tax consultants Doshi, Chatterjee, Bagri & Co managing partner A K Doshi claims the move is an attempt to plug a loophole in the Income Tax Act.
"Income Tax Act presently taxes dividend payout by both listed as well as unlisted firms at 16.5 %. However, distribution of dividend through buy-back of shares by both listed as well as unlisted companies attracts lower rate of tax or is not taxed at all. It is for this reason alone that the finance bill 2013-14 has proposed this amendment," Mr Doshi said.

The move will bring about a parity between distribution of dividend and distribution of money by way of buyback of shares by unlisted companies. Rough calculations by tax consultants suggest that the new levy will amount to 22.66 % (including a surcharge of 10 % and education cess of 3 %) on the difference between the original issue price and the amount received from buyback of shares.

A company, having distributable reserves, usually has two options to dis-tribute the same to its shareholders - through dividend, or buyback of shares at a consideration fixed by it. In the first case, payment by company is subject to Dividend Distribution Tax (DDT) and income in the hands of shareholders is exempt. In the second case, the income is taxed in the hands of shareholder as capital gains.

Unlisted companies have been resorting to buy back of shares instead of payment of dividends in order to avoid payment of DDT. "The new levy will curb tax evasion to an extent," said another consultant.



Sandip Ginodia
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