On 14th November, The Economic Times helpfully reported a key item on SEBI's board agenda. It said, SEBI planned to amend the Disclosure & Investor Protection (DIP) guidelines to force a uniform face value of one rupee for shares of all listed companies. What does this move imply? In June 1999, SEBI amended its guidelines to allow companies to choose the face value of their shares. Until then,...
Why had companies opposed the reduction in face value to one rupee? Their argument was that investors tend to create multiple folios thereby increasing the cost of servicing shareholders. Many companies came up with examples of how the ability to buy one share was already raising costs-add to this a face value of one rupee and there will be a servicing nightmare. In a paperless system, we are...
The capital market is now in dangerous territory and many large investors believe that upward bursts as well as troughs smack of desperate manipulation by over-leveraged investors. There is also a serious concern about the quality of money flowing into the market. In the last fortnight, our attempts to get to the bottom of this endless rush of money willing to bet on stratospheric share prices...
