1.  adityashriramvarma Says:
Tuesday, July 22, 2008, 04:43:00 PM
Private equity investments in listed firms have suffered a loss of as much as 850 million dollars so far in 2008 amid continuous downfall and tough market conditions, a latest study reveals.

An analysis of private investment in public equity (PIPE) in 2007 shows that these deals in the country have lost funds to the tune of 850 million dollars till July 14 2008.

The loss can be attributable to high entry valuations and the downward revision of risk appetite of the capital markets this year, NEXGEN Capitals, the merchant-banking arm of brokerage firm SMC Global Securities, said in its latest report.

Overall till-date-return on PIPE deals of 2007 on volume basis has declined by 16.08 per cent, the report added.

An industry wise return percentage so far this year highlights that "wealth creation is highly imbalanced in different sectors".

In IT and ITeS sector, there was sharp dip in current mark-to-market values of around 41 per cent in PIPE deals of 2007. While, in infrastructure sector the decline was 52 per cent, in healthcare 44 per cent and in manufacturing 34 per cent.

Real estate sector also witnessed a sharp decline of 46 per cent in the values so far this year largely due to correction in some real estate pockets in the country and worsening capital market perception of the same.

Though PIPE deals performance in real estate sector has disappointed on capital markets, realty companies overall financial performance is still encouraging despite tough real estate markets and slowing economy, the report said.

Barring BFSI, telecom and retail sectors, all other segments like IT and ITeS, infrastructure, healthcare and life sciences, manufacturing and real estate reported negative returns.

HDFC, Bharti and Provogue deals in BFSI, Telecom and Retail segments respectively stood out the volatile capital market conditions.

While, the PIPE deals in BFSI sector have yielded an overall marginal positive return of 8 per cent so far th

2.  adityashriramvarma Says:
Tuesday, July 22, 2008, 04:42:35 PM
Private equity investments in listed firms have suffered a loss of as much as 850 million dollars so far in 2008 amid continuous downfall and tough market conditions, a latest study reveals.

An analysis of private investment in public equity (PIPE) in 2007 shows that these deals in the country have lost funds to the tune of 850 million dollars till July 14 2008.

The loss can be attributable to high entry valuations and the downward revision of risk appetite of the capital markets this year, NEXGEN Capitals, the merchant-banking arm of brokerage firm SMC Global Securities, said in its latest report.

Overall till-date-return on PIPE deals of 2007 on volume basis has declined by 16.08 per cent, the report added.

An industry wise return percentage so far this year highlights that "wealth creation is highly imbalanced in different sectors".

In IT and ITeS sector, there was sharp dip in current mark-to-market values of around 41 per cent in PIPE deals of 2007. While, in infrastructure sector the decline was 52 per cent, in healthcare 44 per cent and in manufacturing 34 per cent.

Real estate sector also witnessed a sharp decline of 46 per cent in the values so far this year largely due to correction in some real estate pockets in the country and worsening capital market perception of the same.

Though PIPE deals performance in real estate sector has disappointed on capital markets, realty companies overall financial performance is still encouraging despite tough real estate markets and slowing economy, the report said.

Barring BFSI, telecom and retail sectors, all other segments like IT and ITeS, infrastructure, healthcare and life sciences, manufacturing and real estate reported negative returns.

HDFC, Bharti and Provogue deals in BFSI, Telecom and Retail segments respectively stood out the volatile capital market conditions.

While, the PIPE deals in BFSI sector have yielded an overall marginal positive return of 8 per cent so far th

3.  shriramajayvarma Says:
Tuesday, July 22, 2008, 04:42:14 PM
The stock markets have dropped and interest rates are rising. And fixed deposits (FD) have become the flavour of the month. In the recent months, the stock markets had an edge over fixed deposits, because of the booming stock indices.


Also, the government's saving schemes, especially the post office saving schemes, had an edge over the FDs. However, the recent changes have again brought investments in FDs into the limelight . The contributing factors include the decision to give tax breaks in terms of coverage under Section 80C of the Income Tax Act. Another important factor has been the gradual increase in the interest rates on FDs.


These deposits have been brought on par with the small savings schemes. Investments in term deposits offering a tax deduction will have a lockin period of five years. The government notification says that no term deposit can be encashed before five years from the date of investment. The ceiling on investments is Rs 1 lakh for tax deduction. The interest earned on these deposits will attract tax either on an accrual basis or on receipt basis. If the deposit is made with a joint holder, the tax benefit will be available only to the first holder.


Investors can include the option of fixed deposits to complete their investments under Section 80C. In case of investments in National Savings Certificates (NSC) the return is eight percent. The tenure is six years. However, you can pledge the NSCs as collateral for a loan. The accrued interest is considered as a further investment and hence, it is also eligible for Section 80C benefits. The investments are totally secured in nature. They constitute a medium term investment avenue. The income generated in the form of accrued interest is taxable each year.


On the other hand, an investment in the Public Provident Fund (PPF) is for long-term investors. The investment is totally secure. The interest is exempt from tax. The deposits are exempt from wealth tax. The rate of return

4.  uma nadimpalli Says:
Tuesday, July 22, 2008, 04:09:30 PM
NRIs should make their trips to the homeland shorter if they want to avail themselves of the gift tax exemptions, says a recent ruling by a tax tribunal.


The gift tax exemptions will not be available to an NRI if he loses his special status on account of overstaying in India, the Income Tax Appellate Tribunal (ITAT) said.


Giving a ruling in a case involving levy of tax on a gift made by an NRI from his Non-resident (External) Account, the tribunal said, “He was in India for 182 days or more during the relevant previous year...thus the assessee is clearly not entitled to exemption (on gift tax)”.


The tribunal agreed with the Assessing Officer and Commissioner of Gift Tax in Kanpur who held that the person who had stayed in India for more than 182 days in a year ceases to be an NRI and cannot claim exemption under the section 5 (1) of the Gift Tax Act.


Levy of tax is governed by the Gift Tax Act under which a resident outside India is exempted from the tax if he gives a gift from his NRE Account.


However, in a current case the assessee, according to the tribunal, could not be considered as a resident outside India because he had stayed in the country for longer than 182 days during the financial year when the gift was made.


The tribunal dismissed the submissions of the assessee that his resident or non-resident status at the time of giving the gift of Rs10 lakh through cheques was that of an NRI.


The residential status of an individual is determined by the Section 6 of the Income Tax Act which among other things says that an individual will be treated as a resident in India he has stayed for more than 182 days in a financial year.