Investor Issues
Jignesh Shah hints at launching SME platform on MCX-SX

 

Shah said that at least 1% of the 30 million SMEs have strong balance sheets to get AAA ratings and can look at raising money from the primary market
 
Mumbai: Announcing MCX Stock Exchange's intent to have a dedicated platform for small businesses, the soon-to-be-launched bourse's promoter and vice-chairman Jignesh Shah on Friday said small and medium enterprises (SMEs) should aspire to raise up to $20 million annually through such platforms, reports PTI.
 
"Our entrepreneurs are best in class. They require risk capital. If China can raise $12 billion in fresh capital, I think we have to aspire to raise a minimum $10-$20 million of fresh capital by SMEs," Shah said speaking at an industry conference.
 
The country's first privately promoted bourse MCX-SX, which has announced to go live before Diwali (November) after a protracted battle with the regulator Securities and Exchange Board of India (SEBI), will definitely be launching a dedicated SME platform as has been done by its rivals BSE and NSE, Shah told PTI on the sidelines.
 
However, he declined to share a timeline for the same.
 
Shah said that at least 1% of the 30 million SMEs have strong balance sheets to get AAA ratings and can look at raising money from the primary market.
 
Citing the studies and roadshows done by MCX-SX in the recent past, he said many SMEs depend on the informal system for their financing needs, paying up to 2% per month for debt.
 
He cited how in spite of such a high cost of servicing debt, the businesses continue to remain competitive and wondered the benefits which will accrue if they shift to the formal way of finance and access the equity markets.
 
Both the BSE and NSE have launched dedicated SME platforms earlier in the year amidst fanfare after the Sebi gave its nod for such exchanges to boost the small businesses.
 
Already a few companies have listed on these two platforms.
 
"We should not be happy (only) about inaugurating an exchange for SMEs, but there should be a market model structure which suits SMEs' requirements, then only it will work," Shah said.
 
He further said private equity, venture capital and angel funds will invest in companies only if they are confident of an exit route, which can be made easy by the formally platforms like exchanges.
 
Shah also welcomed the decision to amend the FCRA (Forward Contracts Regulations Act) taken by the Cabinet yesterday, saying it is a very big positive step.
 
The government yesterday cleared the new FCRA Bill which seeks to provide complete autonomy to the commodities FMC and to introduce new categories of products.
 

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Telcos move HC against Panchayats levying fees for mobile towers

The petition, filed by Vodofone Infratel, Bharati Infratel and Indus Tower alleged that Gram Panchayats in rural Maharashtra are collecting exorbitant fees in the name of 'Development Charges' for granting NOC

 
Mumbai: A petition in the Bombay High Court has alleged that Gram Panchayats in rural Maharashtra were collecting exorbitant fees in the name of 'Development Charges' for granting 'no objection certificate' (NOC) to companies erecting mobile towers in villages under their jurisdiction, reports PTI.
 
This has not only seriously affected their business but also deprived people in the rural areas of mobile network services, the petition, filed by Vodofone Infratel, Bharati Infratel and Indus Tower, contended.
 
The petition further alleged that some members of Gram Panchayats go in for negotiations with the companies and demand cash for granting NOC. It becomes difficult for the companies to pay cash without getting receipts as this money cannot be accounted for.
 
Development Charges collected by Gram Panchayats for allowing mobile tower in villages range from Rs30,000 to Rs1 lakh or more, the petition submitted.
 
The petition contended that the Rural Development Ministry of the State Government had recently written a letter to the CEOs of all Zilla Parishads in Maharashtra asking them to take action against Gram Panchayats who were collecting money for granting NOC to mobile towers in villages.
 
The letter had mentioned that the practice of collecting money by Gram Panchayats for issuing NOC to mobile towers was not correct and should not be followed.
 
The petition demanded immediate implemention of this letter issued by the Rural Development Ministry.
 
It was further alleged that some Gram Panchayats also demand Property Tax for errecting mobile towers and this was six times more than the prescribed limit. The petition demanded that property tax may be charged as per normal rates.
 
The petition is expected to be heard on 15th October by a bench headed by Justice AM Khanvilkar.
 

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Supreme Court halts mining in Goa

Taking note of the Shah Commission report, the apex court also restrained mining companies in Goa from exporting and selling ores which has already been extracted

 
New Delhi: Mining operations in all the 90 mines in Goa were on Friday ordered to be halted by the Supreme Court on the basis of the Justice MB Shah Commission report which estimated a whopping Rs35,000 crore to the exchequer due to illegal mining in the last 12 years, reports PTI.
 
Mining companies have also been restrained from exporting and selling ores which has already been extracted.
 
A three judge bench headed by Justice Aftab Alam took note of the Commission's report and issued notice to the Centre and State government.
 
The bench also asked the apex court-appointed Central Empowered Committee to submit its report on the illegal mining in the state within four weeks.
 
The bench passed the order on a PIL filed by an NGO, Goa Foundation, seeking probe in the illegal mining activities in the state.
 
The state government had on September 10 temporarily suspended all mining operations till October 2012, but the petitioner alleged that suspension did not affect the trade as the private companies are transporting the ores from mines.
 
The court is already seized of the illegal mining cases in Karnataka where, after halting all mining activities for more than year, it had on 3rd September allowed operations in only 18 mines out of more than 100 mines where the irregularities were minimum.
 

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