As per the earlier norms, in case of buyback the company was required to accept the shares tendered by the shareholders in proportion to the shares tendered by the shareholder and not in proportion to the shares held
New Delhi: Market regulator Securities and Exchange Board of India (SEBI) has reduced the timeline for completion of buyback of shares by companies to 34-44 days, a decision which could facilitate the government in getting closer to its ambitious disinvestment target of Rs40,000 crore for the current fiscal, reports PTI.
Earlier, the buyback process could take anywhere between 63 to 114 days.
These changes form a part of amendments made by the regulator in the SEBI (Buyback of Securities) Regulations, 1998. They have come into effect from 3rd January.
“The timeline for various activities involved in the buyback process have been revised which shall result in substantial reduction of time taken for completion of buyback,” SEBI had said while announcing the changes.
The government has fixed a mammoth Rs40,000 crore disinvestment target for the fiscal, but till date it has only managed to raise Rs1,145 crore by selling its shares in the Power Finance Corporation (PFC). The state-owned companies had to put their public issues on hold in view of volatile stock markets.
But with time running out to meet the target, the government has been exploring other routes, including the buyback mode, to raise funds through disinvestment.
Under the buyback mode, the government can raise money by selling its equity in the company to the PSU itself.
The Department of Disinvestment (DoD) has sought Cabinet approval to use the buyback mode for disinvestment. The government, however, could not take any decision due to inter-ministerial differences and the reluctance of PSUs to part with cash.
The DoD had also pointed out to the SEBI that the current buyback norms are not in line with the principle of equitable treatment to shareholders in the acceptance of shares through tender offer.
The regulator has also effected changes in buyback through tender offer.
As per the earlier norms, in case of buyback the company was required to accept the shares tendered by the shareholders in proportion to the shares tendered by the shareholder and not in proportion to the shares held.
However, this has been modified.
SEBI has also made changes in the ‘record date’ and requirement of public notice and public announcement norms in the buyback regulations.
While markets have appreciated by only about 5% in the 10 days of trading so far in 2012, the total gain in valuation for this period stands at about Rs4 lakh crore
New Delhi: The New Year seems to have begun on a good note for India Inc in the stock market, as just 10 days of trading in 2012 has helped them recover one-fifth of the total loss suffered in its valuation during entire 2011, reports PTI.
It is the large corporate houses like Ambanis and financial conglomerates like ICICI and HDFC groups that are leading the gains in stock markets, after taking a huge beating in the previous year.
All listed companies together lost nearly Rs19.5 lakh crore worth valuation in 2011, when the stock market tanked by nearly 25% amid global headwinds.
While markets have appreciated by only about 5% in the 10 days of trading so far in 2012, the total gain in valuation for this period stands at about Rs4 lakh crore.
Out of this, 10 leading business houses together account for nearly one-fourth or over Rs1 lakh crore of the gain.
As per the BSE data, the cumulative market value of all listed firms in the country stands at Rs57,40,194 crore currently, as against Rs53,48,645 crore at the end of 2011.
The market benchmark Sensex has gained nearly 700 points or about 5% so far in 2012, after falling by more than 5,000 points during 2011.
The stock market data shows that market valuations have improved significantly for almost all the large corporate houses so far in 2012, barring a few like Bharti group, Infosys and HUL, and the experts are optimistic about a rebound on these counters as well.
Among the large business houses, Mukesh Ambani-led Reliance Industries group has gained over Rs13,000 crore in its valuation, while Anil Ambani-led Reliance Group has seen its market value surging by about Rs12,500 crore.
The net gain for Tatas is comparatively lower at about Rs8,000 crore, largely due to a sharp plunge of about Rs15,000 crore in the value of IT giant TCS.
Otherwise, only four Tata group firms—Tata Motors, Tata Steel, Tata Power and Titan—have registered a gain of close to Rs20,000 crore in their cumulative valuation.
Financial services conglomerate HDFC group has gained Rs15,000 crore of valuation so far in 2012, while ICICI group has also added over Rs12,000 crore to its market value.
Aditya Birla group has gained about Rs5,000 crore, Adanis have added over Rs9,000 crore, L&T about Rs12,000 crore, ITC about Rs4,000 crore and Mahindras about Rs2,000 crore.
The Vijay Mallya-led UB group, whose shares were heavily battered in 2011 mostly because of debt troubles at Kingfisher Airlines, has also gained about Rs3,400 crore of value, which accounts for about 20% of gain.
In percentage terms, the gain is the highest for Anil Ambani Reliance group at about 25% among these business houses, while groups like ICICI, L&T and Adani have also gained over 10% each.
The Anil Agarwal-led Vedanta group has also gained about 10%, while Mukesh Ambani-led Reliance group has added about 6% to its valuation; HDFC group has gained about 8%, Mahindras about 3%, Birlas about 5% and Tatas about 2%.
Tatas are the country’s most valued group with a total valuation of close to Rs4 lakh crore, while other leading corporate houses include Reliance Industries group (Rs2.4 lakh crore), HDFC Group (Rs2.1 lakh crore), Vedanta (Rs1.7 lakh crore) and ITC (Rs1.6 lakh crore).
Most of these groups had lost heavily during 2011 and the continuing weak cues from global markets and on domestic economic front, marketmen are wary of some short-term headwinds across the market.
However, experts are generally optimistic about the longer-term gains across the market, including in the shares of those groups also that have already registered smart gains in the first two weeks of 2012.
The simple act of listing all pending cases publicly, will go a long way in restoring citizens’ confidence in these institutions, and also act as self- regulating check
I had made a commitment when I was made an Information Commissioner that I would ensure that I decided most of the cases before me in less than three months. By and large, I have been able to fulfil this promise and perhaps the average time for decisions must be around two months. Sometime in June 2011, a RTI (Right to Information) application was received by my PIO (public information officer), asking for the decision in a case registered in May 2010. My staff could not locate the decision anywhere! I realized that the case had not been listed for hearing inadvertently, and no decision had been given. I realized that if a mistake had been made in one case, it could have been made in some others as well. A careful search of 2010 cases revealed another 110 cases which had been forgotten and missed completely!
We listed these for hearing and in one of them, there was a heartrending story. A government employee had died in 1993 leaving his widow and young children. The widow was illiterate and poor. Since 1993 she had been struggling to get the pension she was entitled to. Since she was illiterate, she probably could not pursue the matter properly and each time there was a great delay, the system required many more proofs to establish her claim. By the time she barely managed to submit the required papers, it took years and office inefficiencies would not take decisions for some years! The lady appeared before me with her son who was an unskilled labourer, and both of them could not describe the exact sequence of events. The PIO however assured me that all the papers had been put in order and she would get her pension and all the dues soon. It will always haunt me for my life—that despite running a reasonably efficient set-up—after her 17 year struggle, I was instrumental in delaying succour to her by a full year.
This set me thinking and I realized that there could be many such mistakes, which could result in untold suffering to citizens who approach judicial and quasi-judicial bodies. In most cases there is no list which citizens can access which will tell them, whether their cases are in queue, and whether any logic is being applied in taking up the matters waiting in this queue. I feel upset when I see anyone jumping a queue at the airport, and in judicial and quasi-judicial bodies, the citizen cannot even see the queue. It is necessary that there is transparency in this matter, and citizens can see the queue and also feel assured that it is being dealt with in a transparent non-arbitrary manner. All judicial and quasi-judicial bodies should first ensure that this queue is very short and also give visibility to citizens in the way they take up the cases.
I took up the matter of listing pending cases in the Central Information Commission (CIC) with the Chief Information Commissioner, who readily agreed. The ‘list of pending cases’ has been displayed on the website of the CIC at www.cic.gov.in and will be updated every month. In the Central Information Commission which is just six years old, this will lead to an opportunity for us to correct mistakes and also reassure citizens that there is fairness in taking up their cases. In most commissions and judicial bodies, citizens suspect arbitrariness and corruption in the listing of cases. The simple act of listing all pending cases publicly, will go a long way in restoring citizens’ confidence in these institutions, and also act as self- regulating check.
(Shailesh Gandhi is the Central Information Commissioner for the RTI. The views expressed here are his personal views and may not represent the views of the commission.)