Public investors make big bucks on D-Street even after PE exits

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Private equity investors make big money in IPO exits. This is well known. But what is less known is that retail and other investors have also been making decent money after the exits. The largest IPO exits in the last three years made 1-14 times returns for private equity firms. But after listing, retail, HNIs and institutional investors have gained 9-156% in these firms, thanks to a strong stock market, data from Venture Intelligence show.

If the market rises further, the gains will only increase and private equity-like, super sized returns may still be possible. Investment bankers attribute this to the rising interest in equity market as well as strong fundamentals. “Stocks being valued attractively and appetite for IPOs have helped these companies,“ said Dharmesh Mehta, MD, Axis Capital. Financial stocks have obviously beaten the rest with RBL Bank surging 156% since listing in August 2016 followed by Ujjivan Financial Services with a gain of 87%.

Other gainers include Dr Lal PathLabs which has jumped 76% and Dilip Buildcon which has moved up 71%. In FY17, PE firms sold their complete stakes in 14 IPOs, as compared to 16 in FY16 and seven in FY15. According to Ajay Saraf, executive director, ICICI Securities, a PE exit augurs well for investors as the company could be expected to have better corporate governance and better fundamentals.

PE firms usually enter into sectors that have potential to do well and this gives comfort to investors while buying these stocks, said Saraf. “The PE exit trend is likely to gain further momentum going ahead,“ added Saraf.

Source:  http://economictimes.indiatimes.com/articleshow/58157676.cms

India Inc’s March M&A deal tally jumps 4-fold to $28 billion

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Cross Border Transactions, M&As, Joint Ventures, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

India Inc’s M&A deal tally in March rose four-fold to $27.82 billion, led by the Vodafone-Idea merger, taking the overall figure to $31.54 billion in the first quarter of 2017, says a report.

Overall deal activity in the January-March quarter witnessed an unprecedented three-fold year-on-year rise in value terms, driven solely by the Vodafone-Idea mega merger, which accounted for 80 per cent of the total values.

“The Indian deal activity was dominated by big-ticket mergers and acquisitions (M&As) this quarter. The quarter witnessed one of the largest deals in the country with Vodafone and Idea’s merger, which is estimated at around $27 billion,” Grant Thornton India LLP Partner Prashant Mehra said.

The January-March quarter recorded $33.7 billion across 300 deals marking a sharp increase in value as compared to $10.9 billion in the same period last year while volumes declined by 27 per cent.Without the Vodafone-Idea mega merger, estimated to be a $27 billion transaction, the deal activity would have recorded 39 per cent decline in values, assurance, tax and advisory firm Grant Thornton said.

M&A market activity has so far been driven solely by the big-ticket deals, while on the other hand number of transactions continued to slip for the third straight quarter.

“Primary driver for M&A growth was consolidation in the domestic market with deal values growing by 10 times on the back of healthy capital markets and easing credit conditions. This enabled companies strike big ticket deals either to slash debt or consolidate market share,” Mehra said.

Meanwhile, the cross-border deal activity is yet to pick up pace in 2017 as compared to previous quarters due to looming uncertainties in the global economy.

Going forward M&A activity this year is expected to stay positive owing to the sustained interest in Indian economy.

Mehra believes consolidation and expansion is set to be the major theme that will drive the deal activity, especially in healthcare, telecom, e-commerce and infrastructure sectors.”In financial services sector, the possibility of new business models emerging post demonetisation, continued fund raising by NBFCs and a consolidation push by micro finance firms will play a big role,” he added.

Source:   http://economictimes.indiatimes.com/articleshow/58160464.cms

Flat solar power tariff drops to all time low of Rs 3.15 per unit

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The levelised solar power tariff has dropped to all time low of Rs 3.15 per unit in an auction of a 250 MW project at Kadapa in Andhra Pradesh.

Earlier in February, the lower capital expenditure and cheaper credit had pulled down solar tariff to a new low of Rs 2.97 per unit for the first year in an auction conducted for 750 MW capacity in Rewa Solar Park in Madhya Pradesh.

However, the levelised tariff for Rewa project worked out to be Rs 3.30 per unit.

“The price bid opened and reverse auction carried out for 250 MW (1×250) solar project at Kadapa in AP under developer mode. Solairdirect has won this project with quoted levelised tariff of Rs 3.15/KWh,” a senior official said.

The official said, “Rewa Ultra Mega Solar record of levelised tariff is RS 3.30 which has been broken by NTPC auction today.”

Commenting on this Power Minister Piyush Goyal has tweeted, “Clean affordable power for all: Solar achieves another record low of Rs 3.15/ unit (flat rate) during auction in Kadapa, AP by NTPC.”

In Januray last year, solar power tariff had dropped to a new low, with Finland-based energy firm Fortum Finnsurya Energy quoting Rs 4.34 a unit to bag the mandate to set up a 70-MW solar plant under NTPC’s Bhadla Solar Park tender.

In November 2015, the tariff had touched Rs 4.63 per unit following aggressive bidding by US-based SunEdison, the world’s biggest developer of renewable energy power plants.

Source:  http://www.businesstoday.in/current/economy-politics/solar-power-tariff-low-rs-3.15-per-unit/story/249884.html

As Narendra Modi government gets set to crack GST whip on tax evaders, India Inc voices concern

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, Income Tax,e-Filing- Individuals, Firms, Companies | 0
According to Section 132 of the Central GST Bill cleared by the Lok Sabha recently, the taxman can also proceed against anyone for wrongly availing input tax credits.

Many functionaries from corporate India and tax experts have voiced concerns over the government’s plan to give unprecedented teeth to the country’s indirect tax administrators by making tax evasion above `5 crore a “cognizable and non-bailable offence” in the upcoming Goods and Services Tax (GST) regime. According to Section 132 of the Central GST Bill cleared by the Lok Sabha recently, the taxman can also proceed against anyone for wrongly availing input tax credits or refunds above the same threshold, treating it as a cognizable and non-bailable offence, where the police have the authority to arrest the person concerned without warrant.

While non-remittance of tax deducted at source could lead to non-bailable warrant under the Income-Tax Act, this has been sparingly used – one recent instance was that of the Bengaluru High Court denying a request of the I-T department to issue a non-bailable warrant against the beleaguered businessman Vijay Mallya.  The punitive provisions under indirect tax laws have, however, been less biting.

The service tax department had invited the Delhi high court’s ire last September for arresting a senior executive of travel portal MakeMyTrip for failing to deposit tax after collecting it from those who booked hotel room nights via the portal. Disturbed over the fact that the arrest took place without even issuing a show cause notice to the firm and giving it an opportunity to defend itself, the court awarded costs to the travel portal and asked the taxman to refund the service tax collected after the arrest. The tax department went in appeal against the court’s decision and the matter is now before the Supreme Court.

“It may be reasonable to make “collection of tax but non-payment to government’ a non-bailable offence, as there is very little room here for interpretation in such case. But availing tax credits through wrong invoices or obtaining higher-than-admissible refunds are subject to technical interpretations in the early days of GST and it would be extremely stringent to make these non-bailable offences,” Bipin Sapra, Indirect Tax partner at EY said. Echoing the view, Anita Rastogi, partner-indirect tax, PwC India said the country’s indirect laws have never had such tough provisions against tax evasion.

Section 132 of the CGST Bill also spells out the punishment for tax evasions above Rs.1 crore: if the amount evaded exceeds Rs. 5 crore, imprisonment up to five years is possible along with fine, Rs. 2-5 crore evasion could lead to imprisonment extending to three years and fine, Rs.1-2 crore evasion could invite up to 1-year jail term and fine.

Source: http://www.financialexpress.com/economy/as-narendra-modi-government-gets-set-to-crack-gst-whip-on-tax-evaders-india-inc-voices-concern/613908/