Listing guidelines for non-life insurers by March: IRDA

As per the draft norms, only insurance companies that have completed 10 years of operation and have strong financials will be allowed to access the capital market. Currently, there are 24 players in both the life and non-life insurance industry

New Delhi: The Insurance Regulatory and Development Authority (IRDA) today said the guidelines for listing of non-life insurance companies will be issued by March 2012, reports PTI.

“General/non-life insurance listing rules will be issued by March,” IRDA chairman J Hari Narayan told reporters here.

According to the Insurance Act, promoters with 26% stake can offload equity after 10 years of operation. The legislation also empowers the government to reduce the mandatory period.

As far as the life insurance companies are concerned, the draft norms for listing have already been issued by the IRDA.

As per the draft norms, only insurance companies that have completed 10 years of operation and have strong financials will be allowed to access the capital market. Currently, there are 24 players in both the life and non-life insurance industry.

User

Dim Diwali for realty: Soaring inflation, high inventories and high interest rates

The National Housing Bank has instructed Housing Finance Corporations to charge the same rate on loans for both old and new customers, a blow for the customer and the industry. Debt-plagued builders, inflation and high interest rates are also not helping the sector

The realtors really need a bright Diwali this time, but it looks like things are not going to be so easy. It is a difficult time, with soaring inflation, uncertain markets and high interest rates—with talks of another rate hike starting to circulate.

No wonder, the outlook is not that optimistic. Unlike other years, this Diwali is seeing hardly any new offers. A Thane-based broker told Moneylife, “We are not offering much discounts; and a lot of the stock is left over. We are not expecting sales like we saw earlier.”

On top of that, the National Housing Bank has instructed Housing Finance Corporations to charge the same rate on loans for both old and new customers. The blow has been softened by a waiver of prepayment charges, but experts believe that sales will be impacted negatively. An IDFC Securities report says, “With the price of a new home loan going up, the growth in new home sales and mortgage portfolios would be impacted negatively in the current high interest rate scenario.”

Buyers too, seem to be unsure about their purchases, because they are hoping for price cuts instead of other offers. Builders, however, are in no mood to slash prices, citing several reasons. “Most builders have run up huge debts, and so are holding back in the hope of realising their investments and recovering high construction costs,” said an analyst preferring anonymity.

Mr Anuj Puri, chairman and country head of Jones Lang LaSalle India told Moneylife, “The festive season looks a bit subdued for property buyers this year. The price corrections that were anticipated in the primary cities have not materialised, at least not in the hoped-for magnitude.”

Delayed approvals, too, seem to have added to the woes. Mumbai’s civic body BMC (Brihanmumbai Municipal Corporation) seems to have held back a lot of approvals, as the restructuring of floor space index (FSI) norms is yet to be finalised. As a result, there have been very few launches this season; as was seen in the MCHI exhibition. In fact, some developers say that prices may go up after Diwali, and in the exhibition, some builders had raised the price up to 15%, while offering discounts on spot payments.

The real-estate sector is yet to pick up pace after the disastrous ‘Shraadh’ season—an inauspicious time. According to a Prabhudas Lilladher report, sales registrations for the month of September are down 10% month-on-month and 22% year-on-year, to 4,137—which is a 29-month low. The report adds, “The response to the festive season would only be visible in the December 2011 registration numbers as registrations happen with a two-month lag.”

User

IPO manipulation is back with a bang. Five firms with one director, and a profit of nearly Rs9 crore

M and B Switchgear, with ‘below average’ fundamentals, closed at a premium of 71% after falling 34% from its listing price on 20th October. Five firms controlled by a common director seem to have made a consolidated profit of Rs8.41 crore from the opening day's trading alone

Yesterday (Is IPO price manipulation back? Two recent issues have witnessed extreme gains & losses ), we had reported on how newly-listed company M and B Switchgears, had closed at a premium of 71% (after falling 34% from its listing price during the course of the day). Moneylife has highlighted cases of IPO (initial public offering) manipulation a number of times in the past—and the article on 20th October had analysed three IPOs, to examine whether the players are back at their game again.

Now that really seems to be the case.

After going through the bulk deals available on the website of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), we unearthed some startling facts. Three firms —A Jain and Company Pvt Ltd, Prabudh Securities Pvt Ltd and Satvik Securities Pvt Ltd, traded 1 lakh shares (of M and B Switchgear) each on the BSE and another two firms—Eshan Financial Services Pvt Ltd and Vimal Finstock Pvt Ltd traded 1 lakh shares each of the same company on the NSE.

This may seem like no big deal to some. However, all of the above firms entered within a price band of Rs128-Rs130—the intraday low for M and B Switchgear on the BSE was Rs118 on 20th October. Not only did all these entities enter at the same price, they shockingly exited within a price band of Rs296-Rs298.

And here’s the clincher. The director of all the five firms is the same person—Anoop Jain. All the mentioned companies are registered in Delhi and made a consolidated profit of Rs8.41 crore from this IPO deal on 20th October. And of course, all this is happening right under the nose of the market regulator and the stock exchange.

Why is this case suspicious? First, why would anyone sink Rs6.50 crore into an IPO, which by nature is a volatile offering? And more important, M and B Switchgear’s IPO was rated with ‘Grade 2’, indicating ‘Below Average’ fundamentals. On 19th October, Taksheel Solutions’ IPO had tanked from Rs150 to Rs55 after listing. Seeing the volatility and risk in the IPO market only a brave—or very foolish—person or entity would have invested in these offerings, unless they had some prior information that the share price would shoot up.

Further research by Moneylife showed that stockbroker A Jain and Company has been charged by market regulator SEBI (the Securities and Exchange Board of India) for committing irregularities in respect of contract notes, not maintaining segregation between client funds and own funds, dealt with brokers of other exchanges without SEBI registration as a sub-broker, did not report off-the-floor transactions to the exchange and defaulted in maintenance of stock register. However, no regulatory action has been taken so far. A Jain and Company had been suspended in 2003—for just 6 months—by the market regulator.

Moneylife has reported many times in the past that SEBI has made a mockery with its consent orders. We have often seen that offences—that required strict corrective action—were let off with a slap on the wrist. The regulator has been somnolent throughout these price-riggings in the past—and sadly, it has not yet woken up to the reality if this case is any indication.

User

COMMENTS

sanjay

6 years ago

I know of certain bombay and delhi based operators who trap unsuspecting small investors in these IPO's .. I have been a victim of this to the tune of lakhs . Suggest we should unite to form a group to fight these evil monsters ..

PPM

6 years ago

SEBI is supposed to be active in manipulations in the market by the brokers community...but what SEBI does is screwing up the MF industry...as it seems SEBI is afraid of they being sidelines if the MF industry come up well....

Is SEBI bosses being taken care by brokers as so many consent orders are being metted out to the erring brokers.

Rajesh

6 years ago

All these play is happening only because of the non existence of circuit filter on day one. So, on listing day trading should be permitted only on delivery basis .Then the price will be discovered by true buyers and sellers and from next day onwards it should removed from T2T and circuit filter should be applicable. This will help to discover a true price.

REPLY

sanjay

In Reply to Rajesh 6 years ago

Hi rajesh, is there any regulatory mechanism which could help small retail investors to tackle these rampant market manipulators .

Rajesh

In Reply to sanjay 6 years ago

Hi Sanjay
SEBI will make an enquiry later and collect some money based on a consent order.By that time operators will make crores and crores and share a part of it with the parties who are investigating .So no strict action against these culprits .Only loosers are retail investors.

nagesh kini

In Reply to Rajesh 6 years ago

The toothless tigers Regulators don't get any wiser even after the event.
Imprisonment exceeding 10 years and not consent which are any way picked up by the companies.
Send the perpetrators to jail a la Rajrathnam in the USA.

Roopsingh

6 years ago

It looks like that people will be much more happy and comfortable if these stock exchanges (now they should be called govt sponsered casinos) are closed along with the so called BULLDOG siiting inside casinos(our regulator SEBI)-then atleast people will have more money to sepnd on diwali crackers,we dont need these falsyfying institutions anymore now.because they have lost their actual purpose and they are acting totally in favour of ELITE ruling class of this country,JUST SCRAP THEM FOR WELFARE OF THE SOCIETY.

arun adalja

6 years ago

sebi must impose restriction on bulk deal such as if shares are purchased under big deal cannot be sold on the same day and it is to kept atleast 30 days in case of ipo/fpo etc.i think this measure can avoid manipulation.

R

6 years ago

SEBI is either unwilling or unable to catch manipulators, unless there is a vested interest. If they are unwilling, then there is no difference between them and the manipulators. Perhaps some of them are hand in glove. If they are unable, which seems more likely, it looks lika a fit case for closing down an agency which is unable to do anything.
It seems to be developing in to a post mortem specialist rather than a preventive or curative one.
There should be a public debate on whether SEBI should cease to appoint people from govenment service at all. The problem seems to start from there.

Dr Vaibhav Dhoka

6 years ago

SEBI,NSE &BSE board members and higher officials have coterie and are all anti small investors.Their all actions are only to benefit Big brokers,and CONSENT ORDER system is like convicting murder accused u/s 302 and let him free by just giving him warning.Now is festive season and coterie needs funds for celebration and there will be no action.Scores site is a defunct aborted baby from SEBI giving false hope for small investors.My complaint against Kotak Sec Ltd is pending for last 7 1/2 years SEBI officials joining hand with this high profile broker who is member on advisory group on Securities regulation SEBI wants investors to take arbitration route which is a perfect case of CORRUPTION at SEBI,NSE & BSE.These things are bound to happen in cyclical manner.

rajesh

6 years ago

pardon my french but with such bullsheee---------t going on is it any wonder there ae so few (relative to general investors community) retail investors in the stockmarkets ?
again hats off to you for tracking down such scamsters
by the way all 5 companies being private comps from where did get info on the directors ?
if such info is freely available in the public domain please tell your readers how to get such info on pvt investment companies we see popping up everyday on the bulk deals section?

REPLY

nagesh kini

In Reply to rajesh 6 years ago

Try SEBI and/or BSE and/or ROC. Good luck!

sanjay shah

6 years ago

First of all no new co.is allowed to enter the market with ipo,if it had no consecutive track record of profit in past 3 years.There should b guideline in charging premium.After the isssue if market price of share falls below issue price then co.has to compulsory buy back shares at issue prise upto 3 weeks from date of listing. This will prohibit unnecessary premium & manipulation in share price. Circuit is to applied on day of listing.

REPLY

nagesh kini

In Reply to sanjay shah 6 years ago

This book-binding valuation is a sham. The good old Controller of Capital Issues was a saint in comparison to the satan in SEBI.

rajesh

In Reply to nagesh kini 6 years ago

Tnks Nagesh the names of directors putting crores in onelife will surely make interesting reading

gaurang

6 years ago

Sebi, Nse and Bse know what's happening. who knows they are also part of the game? corporate affairs minister bhi ye sab kuch jante honge apne desh me ye sab log public ko bevkoof bana rahe hai. sub kuch bhagwan k bharose chal raha hai yaha kisi ko kuch nahi hone wala

Hemant

6 years ago

Well, all the market people know how this things are allowed.We all know the NOBLE INTENTIONS of all the regulators & have no sympathy for so called naive small investors,who indulge in such scripts.If anyone is serious abt these things then they should allow trading in new scripts for first 15 days in Trade for Trade segments only.

Vikas Gupta

6 years ago

Thanks once again to Moneylife Team to bring the facts of manuplation of Stock prices by Stock Brokers to the Common man. About SEBI, NSE, BSE or other Industry Watch Dogs, they are meant for small players only. They don't take any actions against Big Players themselves instead they don't give any heed to Complaints against Big Players. Corruption might be one of the reasons behind them. I myself have registered many complaints to SEBI through SCORES against HDFC Mutual Fund, Karvy MFS & Stock Broker M/S S S Corporate Securities Ltd., Delhi about many anamolies I had come across while dealing with them but till date I have not received any response.

Prem

6 years ago

Sebi, Nse and Bse know what's happening. who knows they are also part of the game?

Nagesh Kini FCA

6 years ago

Jeson has a great report.
Sets us thinking whether our Market Regulator has already gone into the Diwali vacation!
If the SEBI fails to act in such blatant violations and breaches of their so-called effective 'checks and balances' it is high time the MCA steps in to wind it up - it is neither a tiger that can bite, let alone roar, it isn't even a cat that purrs, leave alone being a watch dog.

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