Fund raising via rights issue hits 5-yr high of Rs 9,239-cr

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0

Indian firms raised a staggering Rs 9,239 crore through rights issue in the past fiscal, making it the highest fund mobilisation in five years.

The huge fund-raising was primarily driven by Tata Motors’ rights issue.

Most of the funds were mopped-up for expansion, repayment of debt and working capital requirements.

In the rights issue mode, shares are issued to existing investors at a pre-determined price, normally at a discount, in proportion to their holdings.

Companies garnered Rs 9,239 crore in the past fiscal, which was 37 per cent higher than Rs 6,750 crore raised in the preceding financial year, according to an analysis.

This was the highest fund-raising since 2010-11 , when firms had raked in Rs 9,594 crore.

In terms of number, the past fiscal witnessed 12 companies using the rights route as compared to 17 firms in 2014-15.

The largest rights issue during the period was from Tata Motors which alone raked in Rs 7,498 crore.

It was followed by IL&FS Transportation (Rs 740 crore), Sun Pharma Advanced (Rs 250 crore) and Fortune Financial Services (Rs 204 crore).

Source: http://www.business-standard.com/article/pti-stories/fund-raising-via-rights-issue-hits-5-yr-high-of-rs-9-239-cr-116040800804_1.html

I-T dept launches tax calculator; e-filing of few ITRs begins

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0
The calculator works once a filer correctly feeds his basic details and information, as notified for the current assessment year by the government.

E-filing of income tax returns for the assessment year 2016-17 was launched today for a select category of entities and individuals even as the IT department provided an online calculator for filers to do an easy check and obtain their annual tax liability.

“Two Income Tax Returns have been activated over the official e-filing portal of the department today.

The two are ITR 1 (SAHAJ) meant for individuals having income from salary and interest and ITR 4S (Sugam) meant for individuals, HUF, partnership firms having income from presumptive business,” a senior tax department officer said.

The other ITRs will be hosted on the same portal soon, the officer said.

The ‘tax calculator’ is an online computer-based programme hosted on the website of the tax department and is meant to help taxpayers or filers assess their tax liability.

The calculator works once a filer correctly feeds his basic details and information, as notified for the current assessment year by the government.

Last year, the e-filing commenced on July 1 as there was delay in finalisation of the ITR forms because of the controversy generated over a 14-page document requiring assesses to disclose bank account and foreign travel details.

Later the form was simplified and the number of pages was reduced to three.

This year, the Central Board of Direct Taxes notified the new forms on March 30 and ITRs can be filed till the stipulated deadline of July 31.

At the time of filing the form, the taxpayer has to fill in his PAN, personal information and information on taxes paid and TDS will be auto-filled in the form.

Officials said the calculator has been updated and calibrated by the department as per the new announcements made in respect of tax rates in the latest Budget.

The facility can be used by any taxpayer whether individual, corporate or any other entity, to compute their tax liability.

However, there is a word of caution from the tax department that filers should not solely rely on it as complicated cases of ITR have different requirements which may not be addressed by the ‘calculator’.

“The calculator is only to enable public to have a quick and an easy access to basic tax calculation and does not purport to give correct tax calculation in all circumstances.

“It is advised that for filing of returns the exact calculation may be made as per the provisions contained in the relevant Acts, Rules etc,” the tax department said in a disclaimer.

The official said the calculator has been hosted on the website of the department, for the ease of all who either do e-filing or manual filing of ITR.

The calculator has been enabled to compute the total tax liability of an individual or any other category of taxpayer under various heads like income from house property, capital gains, profits and gains of business or profession and agricultural income, among others.

A total of nine such ITRs have been notified which include the Sahaj (ITR-1), ITR-2, ITR-2A, ITR-3, Sugam (ITR-4S), ITR-4, ITR-5, ITR-6, ITR-7 and an acknowledgement form called the ITR-V.

People with an income of more than Rs 50 lakh per annum and who own luxury items like yacht, aircraft or valuable jewellery will now have to disclose these expensive assets with the IT department in the new ITRs.

ITR 1-SAHAJ, 2 and 2A can be used by individual or Hindu Undivided Families whose income does not include income from business.

ITR 4S – SUGAM can be used by an individual or HUF whose income includes business income assessable on presumptive basis.

It can also be filed by a firm, other than a limited liability partnership firm.

CBDT processes 6.53L online rectification requests in ITR

by | posted in: Corporate Updates, Income Tax,e-Filing- Individuals, Firms, Companies | 0

CBDTThe tax department has processed over 6.53 lakh online rectification applications in 2015-16 fiscal and asked the assesses to make use of the e-filing portal for correcting mistakes in Income tax returns.

The Central Board of Direct Taxes (CBDT) in a statement said the e-filing portal of the I-T department provides the utility for online filing and tracking of rectification requests.
CPC has already processed 6,53,763 online rectification requests in 2015-16 till February 29, 2016.
Section 154 of the Income-tax Act provides the taxpayer with an option to seek rectification of mistakes in record.
CBDT said a detailed user manual for filing online rectification is available on the e-filing portal, on which the taxpayer can also monitor the status of disposal of rectification request.
It said in case of any mistake in data entry of tax payment or TDS details, taxpayer can select the “Rectification Request Type->Taxpayer is correcting data for Tax Credit mismatch only” and use the option of pre-filling the correct details.
In case of data entry mistake in any other Schedule or omission of any details, the taxpayer can select the option “Taxpayer is correcting Data in Rectification” and the reason for seeking rectification.
In any other case taxpayer can select the option “No further Data Correction Required, Reprocess the case” where the mistake in processing may have occurred due to non-reporting of TDS by deductor etc, CBDT said.
“CBDT is committed to ensuring accuracy in processing of returns and determination of refunds and seeks the active cooperation of taxpayers in ensuring correctness of data while submitting the return or rectification request,” the statement added.

Source: http://policypulse.com/news/india/story/1116.html

Private sector lender Federal Bank to support startups

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs | 0

Jumping on to the startup bandwagon, Kerala based private sector lender Federal BankBSE -1.38 % is opening incubation centres in Bangalore and Ernakulam exclusively for startups. These would be specialised lounges within Federal Bank branches meant for funding advisory, regulatory support and if required even for direct investment.

“We have a dedicated startup fund worth Rs 25 crore which we would like to use to fund or lend to promising startups. These lounges, named Launchpad, with fast internet connections, support staff from the financial world and advisory mechanisms would be the perfect breeding ground for future entrepreneurs,” said Shyam Srinivasan, managing director, Federal bank.

The lounge would be manned by bank officers who would be capable of dealing with the financial requirements of the startups as well as local specialists who would be able to advise on regulatory issues that entrepreneurs need to handle.

“We are talking to 3 or 4 startups daily. The challenge for a bank is to move away from a conservative credit mind set to a more entrepreneurial mind set and to accept the fact that out of 40 or 50 investments only one might take off. So even we are in the process of understanding how to engage with startups better,” he said.

The bank follows the footsteps of HDFC Bank and Bank of Baroda to integrate their platform with mobile payments application Chillr. The addition that Federal Bank brings to the Chillr app is that they would allow even non Federal Bank users to instantly open a Federal Bank account through a selfie and Aadhar identification number and allow them to receive payments through Chillr.

“This is just another offer in the suite of offerings for the customer. We are in the major discovery process slowly there would be convergence in this field,” said Srinivasan.

Japan’s NTT Data, Dell seal $3-bn deal

by | posted in: Corporate & Business Advisory Services, Corporate Updates, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

NTT Data Corp, a unit of Japans former telephone monopoly, agreed to buy technology services businesses from Dell for $3.055 billion.

The acquisition was announced by the unit of Nippon Telegraph & Telephone Corp in a statement to the Tokyo Stock Exchange Monday. The company didn’t give a date for when it will acquire the Dell units.

NTT Data will acquire the divisions to strengthen its footprint in North America, and enhance cloud service and business-process outsourcing, or BPO service, according to its filing. The company will hire the 28,000 employees located mainly in North America and India from Dell, according to the statement.

The acquisition would be NTT Data’s largest, helping increase its sales outside Japan, where a shrinking and aging population has stymied economic growth. Dell, which paid $3.9 billion for what was formerly known as Perot Services in 2009, is selling some assets before completing a record deal – the $67-billion takeover of software and storage systems provider EMC Corp.

Dell plans to sell the division as part of a wider effort to raise as much as $10 billion from the disposal of assets that aren’t core to its business, Re/code reported earlier.

NTT Data has spent more than 72 billion yen ($634 million) buying companies since 2011, about 62 billion yen of it outside Japan, according to data compiled by Bloomberg. Overseas sales had risen to 450 billion yen by the year ended March 31, 2015, compared with more than 208 billion yen in the 12 months to March 2012.

Global rivals of NTT Data including Cognizant Technology Solutions Corp, Tata Consultancy Services Ltd and Atos SE had also previously participated in an auction for Perot Systems that failed to generate a deal, according to the Nikkei, Reuters and the website Re/code, which all cited people familiar with the matter.

The NTT unit has spent more than 72 billion yen on buying companies since 2011, about 62 billion yen of it outside Japan, according to data compiled by Bloomberg. By the year ending March 31, 2015, overseas sales had risen to 450 billion yen, compared with more than 208 billion yen in the 12 months to March 2012.

“Perot Systems has a large base of US clients in medical and other markets, so it fits NTT Data’s strategy to increase its presence there,” Hideaki Tanaka, an analyst at Mitsubishi UFJ Morgan Stanley, said before the deal was announced. “NTT Data can win big contracts in Japan, but in the US, it is less well-known.”

The systems unit of Japan’s former telephone monopoly has more than doubled in market value since 2011 on rising sales to financial and health care businesses using the company’s data centres and software. Profit will probably surge 85 per cent to a record 59.6 billion yen for the year ending March 31, according to average analyst estimate.

NTT Data services are used at hundreds of hospitals and thousands of health care facilities in the US, according to the company’s website.

The Tokyo-based company provides software and systems for functions including electronic medical records, surgery management, billing, insurance claims.

NTT Data cash, near cash and short-term investments stood at 183.1 billion yen as of Dec. 31, according to data compiled by Bloomberg.

Dell acquired Perot with plans to expand in the fast-growing market for data services. Perot was built H. Ross Perot, the billionaire who ran for US president in 1992 and 1996, and sold his first major company Electronic Data Systems to General Motors for $2.5 billion in 1984.

Dell’s Perot unit has won government contracts for health care IT services and work for the Defense Department, NASA, Homeland Security and Education departments.

Source: http://www.business-standard.com/article/international/japan-s-ntt-data-dell-seal-3-bn-deal-116032900020_1.html

How FIIs outsmart domestic investors

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

Domestic investors have a lot to learn from their foreign institutional counterparts, who seem to have mastered the art of timing, raking in the moolah in the midst of market volatility.

On the other hand, domestic investors mostly buy when foreign institutional investors (FIIs) are booking profits at higher valuations, limiting their own upside.

For example, in the current rally, most of the FII purchases were in 2012 and the first half of 2013, when the price-to-earnings (PE) multiple of BSE 500 companies had hit a multi-year low.

In contrast, most of the accumulation by domestic investors, through mutual funds and insurance companies, occurred in 2015 when BSE 500 companies were trading at a multi-year PE high. FIIs accumulated India’s top-listed companies at an average valuation of around 16 times and offloaded it to domestic investors at around 24 times their value (see chart).


In all, FIIs’ stake in BSE 500 companies was up 550 basis points between March 2012 and March 2015, at an average PE of around 16 times the companies’ combined trailing 12-month net profits. FIIs stake peaked in the March 2015 quarter, coinciding with the peak in valuations of BSE 500 companies. One basis point is one-hundredth of a per cent.

The analysis is based on the end-of-quarter shareholding pattern, market capitalisation and quarterly net profit of BSE 500 companies, beginning the March 2006 quarter. The sample is based on the data for 358 companies where the data is comparable across the period.

Analysts attribute this to the steady nature of fund flows FIIs receive, while domestic institutional investors are at the mercy of inflows from retail investors, which tend to take place late in the cycle.

“When FIIs were buying in 2012-13, insurance companies and mutual funds were still facing redemption, forcing fund managers to sell their holdings even when the valuations were low. Inflows turned positive only in late 2014 and 2015, when domestic retail investors were convinced about the rally,” said Dhananjay Sinha, head, institutional equities, Emkay Global Financial Services.

In comparison, FIIs receive a significant portion of their funds from large institutional investors in Europe and the US, whose investment sentiment remains steady over a long period.

Others also point to differences in the investing styles of FIIs and their domestic counterparts.

“FII investments are largely fundamental and research-driven compared to domestic investors, most of whom tend to get swayed by market sentiment and herd mentality,” said G Chokkalingam, the founder and chief executive officer of Equinomics Research & Advisory.

This explains why a majority of domestic investors fail to make money in the market, he added.

A similar trend was visible in the rally before the global financial crisis, when FIIs were net sellers for nearly two years in the run-up to the September 2008 crash while domestic investors were buyers.

Despite the trends, some analysts differ.

Nitin Jain, the president and chief executive officer of global asset and wealth management firm Edelweiss Capital, said there is no evidence of domestic investors being less smart than their foreign counterparts.

“We should not paint all FIIs with the same brush. Investment flows from exchange-traded funds, which is retail money – as volatile and sentiment-driven as domestic retail and mutual funds flows. FIIs, on the other end of the spectrum, also get pension money and sovereign wealth funds, which are long-term and their investment style is similar to that of domestic insurance companies,” said Jain.

Source: http://www.business-standard.com/article/markets/how-fiis-outsmart-domestic-investors-116032800052_1.html

E-commerce sees major money inflow

by | posted in: Corporate Updates, Economy, Business Updates, Corporate Affairs, India & International - Corporate updates | 0

It is not only Uber, the American taxi-hailing app, that is going all guns blazing in India with massive investment plans. Its biggest competitor, Bengaluru-based Ola, as well as e-commerce entities Flipkart and Amazon, are all planning to pump in big money to stay ahead, even in a scenario when investors are not as ready as earlier in opening their purse-strings.

Uber India has readied itself for another $500 million (Rs 3,300 crore) investment in the next three months, reports suggest. The app service had only nine months earlier committed $1 billion (Rs 6,600 crore) in India. Uber could not be reached for a comment.

For foreign giants such as Amazon, Uber and Alibaba, this country is a big market they all want to capture. Experts believe this is a trend which will continue, as a global economic slowdown will push a chunk of new investments towards India.

“We can clearly see a slowdown in overseas markets, while India is still managing annual growth of seven to eight per cent. So, companies such as Uber, Amazon and Alibaba want to bet big on India. While Amazon was not able to make a dent in China and Alibaba in Europe, they do not want to lose out on India. We will see this trend through the year,” says Amarjeet Singh, partner – tax, KPMG in India.

Ola, rival of Uber in the same segment, is on track to invest a chunk of its $1.3 billion (Rs 8,650 crore) capital raised so far. The firm recently announced it would invest Rs 200 crore in the Delhi-National Capital Region area over the next six months, “towards innovative green fuel technology, leasing of CNG cars and strengthening the system to catalyse greater CNG adoption in the region”, Rahul Maroli, its vice-president for strategic supply initiatives had said.

According to sources, Ola will further make strategic investments in all metro cities, as well as in Tier-II and Tier-III towns. “The company plans to add at least another 550,000 vehicles by the end of this year,” said one. Ola has at least 350,000 cabs and 80,000 auto rickshaws on its platform across 102 cities in the country.

American e-commerce major Amazon had said in October 2014 it was investing $2 billion (Rs 13,200 crore) in India. Later, its executives said the group had an open chequebook for the market. In February, it bought Noida-based payments services provider Emvantage, its first acquisition. This is aimed to help Amazon accelerate the development of payment solutions for customers.

As for Alibaba, the Chinese e-commerce giant, it already has a foothold in Indian e-commerce through its investments. The group is majority stakeholder in One97Communications, owner of mobile payments giant Paytm. Also, online marketplace major Snapdeal raised $500 million (Rs 3,300 crore) from a group of entities last year which included Alibaba.

The Chinese company now plans to directly enter India.

“We plan to enter the e-commerce business in India in 2016,” recently said J Michael Evans, group president. “We have been exploring very carefully the opportunity in this country, which we think is very exciting against the backdrop of (the) Digital India (programme of the government).”

Indian e-commerce giant Flipkart had, in March, infused Rs 338 crore into its online fashion store, Myntra, documents filed with the registrar of companies stated. Flipkart has so far raised $3 billion (nearly Rs 20,000 crore).

Source: http://www.business-standard.com/article/companies/e-commerce-sees-major-money-inflow-116032800986_1.html