Rajiv Gandhi Equity Scheme norms to come by month end

Under the investment scheme, 50% tax deduction would be allowed to retail investors with annual income less than Rs10 lakh, for investment up to Rs50,000, with a lock-in period of 3 years.


New Delhi: The Finance Ministry is likely to come out with details of the Rajiv Gandhi Equity Scheme, which is aimed at boosting retail investments in capital market, by the last week of July, reports PTI.

"RGESS norms will come out by last week of July," a senior finance ministry official said.

In order to encourage savings and improve investment in capital markets, former Minister for Finance, Pranab Mukherjee in 2012-13 Budget had announced Rajiv Gandhi Equity Scheme, under which 50% tax deduction would be allowed to retail investors with annual income less than Rs10 lakh, for investment up to Rs50,000, with a lock-in period of 3 years.

A retail investor can avail the scheme only once in a life time. This was the first-ever tax benefit scheme announced by the government to encourage retail investors participation in the equity market.

By offering this scheme, the government aims at channelising household savings into stock markets.

To make the scheme more attractive for retail investors, the ministry is also considering reduction in the lock-in period under the scheme to one year from the proposed three years.

Recently, market regulator Securities and Exchange Board of India (SEBI) has asked the government to route tax-saving Rajiv Gandhi Equity Savings Scheme (RGESS) through MF to minimise risk associated with direct stock investment for new investors.


Avantha Power revives plan to raise Rs1,000-Rs1,500 crore through IPO

The Gautam Thapar-led Avantha group company is trying to enter capital markets again after failing to do so it two years ago due to adverse market conditions


New Delhi: Avantha Power and Infrastructure is planning to revive plans to hit the capital market with an initial public offer (IPO) to raise Rs1,000-Rs1,500 crore, after having failed in its first attempt about two years ago, reports PTI.

The company, part of the Gautam Thapar-led Avantha group, is currently in the process of finalising its initial plans for the IPO, which would include roping in bankers to prepare the draft documents for market regulator Securities and Exchange Board of India (SEBI), sources said.

It may look at raising Rs1,000-Rs1,500 crore through the share sale, sources added.

A spokesperson of Avantha group did not reply to queries about the IPO plans.

Avantha Power & Infrastructure is a power generation company with 191 MW of operational thermal power capacity, 2,460 MW of generating capacity under various stages of implementation and 1,320 MW of generating capacity under planning.

Once all of these projects have achieved commercial operation, the company will have total installed capacity of 3,971 MW. Global private equity giant KKR has reportedly invested in the company.

Avantha Power had filed draft IPO documents with SEBI way back in March 2010 and the regulator gave its go-ahead a few months later in August that year for the public offer.

While the company had firmed up its plans to hit the market in October, adverse market conditions forced it to postpone the IPO.

Earlier, the IPO was said to have been postponed till the last quarter of the fiscal year 2011-12, but persisting sluggishness in the market conditions had kept the company's IPO plans on hold.

However, a relative improvement witnessed in the past few weeks seems to have led to the company reviving its IPO plans, sources said.

As SEBI's previous go-ahead for the IPO has already expired, the company would have to again file the draft prospectus with the regulator.

APIL's 191 MW operational power capacity is primarily captive in nature. It has four wholly-owned power plants in Ballarpur and Bhigwan (both in Maharashtra), Yamunanagar (Haryana) and Sewa (Orissa). It also has a 59% stake in a gas-fired plant at Malanpur (Madhya Pradesh).

APIL's two thermal power projects in Raigarh (Chhattisgarh) and Seoni (Madhya Pradesh) are under various stages of implementation and one thermal power project in Gujarat is under planning.

APIL sells and intends to sell the power generated from its operational, under implementation and under planning projects through power purchase agreement (PPAs) of various durations and also on a merchant basis.

It is part of the US four-billion Avantha Group whose listed group companies include Crompton Greaves Limited and Ballarpur Industries Ltd (BILT).


FII inflows into Indian market set to cross $10 billion

The hefty FII inflows have not resulted into a upward movement in the broader market with the Sensex down about 200 points, or 1.2% so far in the month


New Delhi: The investment by overseas investors into Indian stock market since the beginning of 2012 is set to cross the $10 billion level, out of which more than $1 billion were pumped in the first two weeks of July, reports PTI.

The total investment so far in 2012 by foreign institutional investors (FIIs) in to the Indian equity market to $9.82 billion (Rs49,349 crore), according to data available with capital market regulator, the Securities and Exchange Board of India (SEBI).

It seems foreign investors are reversing their bets on Indian equity market as after pulling out funds for the past three consecutive months, they have again infused $1.3 billion (about Rs7,356 crore) so far in July so far.

However, the hefty inflows have not resulted into a upward movement in the broader market with the Sensex down about 200 points, or 1.2% so far in the month to close at 17,430 points on Friday.

FIIs had pulled out Rs1,957 crore from equities in April-June quarter this year, in contrast to a whopping Rs44,000 crore investment in stocks in the previous quarter.

The nearly Rs2,000 crore outflow was mainly due to concerns of economic growth and depreciating rupee, say analysts.

They attributed the change of guard at Finance Ministry having prompted foreign investors to re-consider Indian equity market for investment purposes.

With the Prime Minister Manmohan Singh taking additional charge of the finance portfolio, investors are hopeful that the Prime Minster would take steps to revive the economy.

"The FII movement is partly because of fundamental factors and some optimism generated as the PM taking over as Finance Minister. Besides, potential implications of GAAR are also being seen as a very big positive. This inflow would sustain when all the policy talk translates into action," a stock broker said.

During 3rd July to 13th July, FIIs were gross buyers of shares worth Rs24,626 crore, while they sold equities amounting to Rs17,270 crore, translating into a net investment of Rs7,356 crore ($1.3 billion).

The foreign fund houses also infused Rs1,724 crore ($309 million) in the debt market so far this month. This takes the overall net investments by FIIs into debt markets to Rs22,585 crore ($4.32 billion) so far this year.

FIIs had mostly stayed away from Indian equities in 2011.

They flocked towards the debt market last year with a net investment of Rs20,293 crore, while pulling out Rs2,812 crore from equities.

As on 13th July, the number of registered FIIs in the country stood at 1,754 and total number of sub-accounts were 6,358 during the same period.


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