Latest news with #RakeshGangwal
Mint
a day ago
- Business
- Mint
A loophole lets retail investors bid for some small-business IPOs
Regulations barring retail investors from the high-risk initial public offerings of tiny businesses have failed to prevent the category from participating in at least a few such issues. The reason: a loophole in the rules. National Stock Exchange and BSE Ltd, in consultation with the Securities and Exchange Board of India (Sebi), amended rules to raise the minimum bid for the IPOs of small and medium enterprises (SMEs) to more than ₹2 lakh for offers filed with the exchange after 8 March. The change in Regulation 267 of the Issue of Capital and Disclosure Requirements (ICDR) effectively prevents retail or small individual investors from such issues, since they cannot invest more than ₹2 lakh. However, IPOs approved before the 8 March cut-off can still offer small investors a chance to bid below ₹2 lakh. That's because exchanges give companies a window of one year from the date of approval to launch their maiden offer. Also read: Sebi's co-investment plan wins fund favour; lawyers warn of tax, legal cracks Unless the bourses issue circulars offering clarity, retail investors may be unable to participate in fresh SME IPOs but may be able to bid in older offers, according to analysts. 'A handful of SME IPOs that filed their prospectus before March 2025 are yet to open for subscription. These IPOs still allow applications for around ₹1 lakh to ₹1.2 lakh amounts that are significantly more accessible for individual investors," said Rohit Jain, managing partner at law firm Singhania & Co. 'However, it's a narrow window, as most of these IPOs are expected to hit the market in the next few weeks." Small firms whose IPO prospectuses were filed before the cut-off include 3B Films Ltd, LGT Business Connextions Ltd, Mahendra Relators and Infrastructure Ltd, and Everstims Technologies Ltd. 3B Films' offer, which is open for subscription from 30 May to 3 June, has received 177 applications from the retail category and is planning to raise ₹33.75 crore from the offer. Its minimum bid quantity is 3,000 shares, which means a minimum investment of ₹1,50,000 as the offer price is ₹50. Nikita Papers and Blue Water Logistics' offers, which closed on 29 May, also received bids from retail investors. Also read: IndiGo's promoter Rakesh Gangwal to sell $803 mn stake Around 348 companies have announced their intention to raise money on the SME platform, according to Prime Database. However, exchanges reveal the names of the companies launching offers a couple of days before an issue opens. Sebi rules Sebi tweaked the rules as retail participation surged in SME IPOs even as the regulator found cases involving misuse of proceeds and misconduct. Small businesses raised ₹9,120 crore through IPOs in FY25 against ₹5,971 crore in FY24, ₹2,235 crore in FY23, and ₹965 crore in FY22, according to data shared by Prime Database. That mirrors the record ₹1.62 trillion mop-up from the main board IPOs in FY25. Sebi regulates the mainboard IPOs, while exchanges oversee the SME segment in consultation with the regulator. 'We are still seeing DRHPs getting filed, which have a quota for retail applications. However, it will depend on the exchange to either accept or reject the retail quota," said a senior executive at an investment management firm, speaking on the condition of anonymity. The exchanges are said to be working to address this gap, according to a person aware of the development, who spoke on the condition of anonymity. Queries emailed to the NSE and BSE on this loophole remained unanswered. Retail investors were excluded from the IPO of NR Vandana Tex Industries Ltd., with a minimum bid amount of ₹2.44 lakh. The cotton textile company filed its red-herring prospectus on 21 May. Unlike the other SME IPO bids, the company's offer, which closed for subscription on Friday, received bids from 33,597 individual investors who are not retail investors. '…the rules (barring retail investors applying in SME IPOs) only apply to companies filing their prospectus after March 2025," Mohit Mehra, vice president of primary markets and payments at Zerodha, said in a post on X (formerly Twitter). 'Since prospectuses remain valid for a year, companies going public now may still allow retail participation if they filed before March 2025." Also read: Asset manager Abakkus plans mutual fund foray to ride retail demand Sebi, ahead of amending the rules, had cited increased retail participation in SME IPOs for its decision. 'Considering that SME IPOs tend to have a higher element of risks and investors getting stuck if sentiments change post listing, in order to protect the interest of smaller retail investors, the limit was increased," the regulator had said in a consultation released on 19 November. 'In recent times, instances have been observed of diversion of issue proceeds to related parties and shell companies and inflation of revenue was shown by circular transactions," Sebi had said.
Yahoo
a day ago
- Business
- Yahoo
British American Tobacco sells $1.5 billion stake in India's ITC via block deal
By Scott Murdoch (Reuters) -British American Tobacco has sold a $1.5 billion stake in Indian consumer goods company ITC at 413 Indian rupees per share, according to a term sheet seen by Reuters. The company sold 313 million shares in ITC, representing 2.5% of ITC, according to the term sheet. This final amount exceeded its initial plan to sell up to 290 million shares in the deal, valued at approximately $1.4 billion. The final sale price represented a 4.8% discount to ITC's closing price of 433.90 rupees on Tuesday. Shares of ITC dropped nearly 3% to 421.70 rupees on Wednesday. The stock was the top loser on both Nifty 50 and the FMCG index. BAT will remain ITC's largest shareholder after the deal, according to LSEG data. Goldman Sachs and Citigroup led the deal, the term sheet showed. The deal is the second major block trade in India this week after IndiGo co-founder Rakesh Gangwal sold a 5.7% stake in the low-cost carrier worth $1.36 billion. BAT said it would increase its 2025 1.1 billion pounds ($1.49 billion) share buyback programme by 200 million pounds as a result of the deal, which is not expected to have any other impact on its annual outlook. The London-listed cigarette maker had last year sold 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion in what was India's third-largest block deal ever. The British firm in February forecast 1% growth in its annual revenue, citing tax headwinds in key markets such as Bangladesh and Australia. ($1 = 0.7401 pounds) Sign in to access your portfolio
Time of India
2 days ago
- Business
- Time of India
British American Tobacco sells $1.5 billion stake in India's ITC via block deal
HighlightsBritish American Tobacco sold a $1.5 billion stake in Indian consumer goods company ITC at 413 Indian rupees per share, exceeding its initial plan to sell up to 290 million shares. The sale of 313 million shares in ITC represented 2.5% of the company, with ITC's stock dropping nearly 3% to 421.70 rupees following the announcement. British American Tobacco plans to increase its 2025 share buyback program by 200 million pounds as a result of the deal, while remaining ITC's largest shareholder. By Scott Murdoch - British American Tobacco has sold a $1.5 billion stake in Indian consumer goods company ITC at 413 Indian rupees per share, according to a term sheet seen by Reuters. The company sold 313 million shares in ITC, representing 2.5% of ITC, according to the term sheet. This final amount exceeded its initial plan to sell up to 290 million shares in the deal, valued at approximately $1.4 billion. The final sale price represented a 4.8% discount to ITC's closing price of 433.90 rupees on Tuesday. Shares of ITC dropped nearly 3% to 421.70 rupees on Wednesday. The stock was the top loser on both Nifty 50 and the FMCG index. BAT will remain ITC's largest shareholder after the deal, according to LSEG data. Goldman Sachs and Citigroup led the deal, the term sheet showed. The deal is the second major block trade in India this week after IndiGo co-founder Rakesh Gangwal sold a 5.7% stake in the low-cost carrier worth $1.36 billion. BAT said it would increase its 2025 1.1 billion pounds ($1.49 billion) share buyback programme by 200 million pounds as a result of the deal, which is not expected to have any other impact on its annual outlook. The London-listed cigarette maker had last year sold 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion in what was India's third-largest block deal ever. The British firm in February forecast 1% growth in its annual revenue, citing tax headwinds in key markets such as Bangladesh and Australia.
India.com
2 days ago
- Business
- India.com
This Indian called his business ‘Paan Ki Dukaan' but earned Rs 300000000000 from it by selling…, his name is…, business is…
India's largest airline, IndiGo, is again in the spotlight over its co-founders, Rakesh Gangwal and Rahul Bhatia. Gangwal had once likened IndiGo to 'paan ki dukaan' (betel shop). The company he once criticized has given a huge amount of profits. Recently, Rakesh Gangwal and his family trust on Tuesday trimmed their holdings by divesting a 5.72 per cent stake in the airline for Rs 11,564 crore through open market transactions. IndiGo's Dispute IndiGo Airlines was co-founded in 2006 by Rahul Bhatia and Rakesh Gangwal. It had become India's largest domestic airline. However internal conflicts also started between two co-founders. Gangwal raised concerns about the board's functioning, transparency, and corporate governance. He started reducing his stake in the company, and tensions between the two founders came openly into public domain. The high point was in 2019 when Gangwal spoke on the company's governance by calling it a 'paan ki dukaan'. In response, Bhatia told the media, 'If it's a paan ki dukaan, it's running very well.' Gangwal started being away from the company's control but also earned huge profits from shares sold. Gangwal's Huge Profit In Shares Since February 2022, Gangwal and his wife Shobha Gangwal have been offloading their shares in IndiGo. In September 2022, Rakesh Gangwal and Shobha Gangwal sold a 2.74 per cent shareholding for Rs 2,005 crore. In February 2023, Shobha divested a 4 per cent stake in the company for Rs 2,944 crore. Later in August, she sold a nearly 2.9 per cent stake in the company for a little over Rs 2,800 crore. In August 2024, Rakesh Gangwal's family trust sold a 5.24 percent stake in the airline for Rs 9,549 crore. Before that, he had sold shares in March. U p to date, he has earned over Rs 30,000 crore from his stake in IndiGo. Despite the rift between its co-founders, IndiGo is still the largest of the Indian Airlines.
Time of India
3 days ago
- Business
- Time of India
High valuations trigger global investor cashout
Representative image NEW DELHI: The surge in repatriation or disinvestment by investors was driven by overseas players seeking to cash in on higher valuations in India. They exited through IPOs, stock market sales, and "private arrangements," with Singtel's share sale in Bharti Airtel, IndiGo co-founder Rakesh Gangwal's sale through block deals in IndiGo parent Interglobe, and Hyundai's dilution through the public issue in its Indian arm being the top contributors. Official data accessed by TOI showed that during the last financial year, 95% of the disinvestment or repatriation was related to these three categories, with two-thirds of all divestments happening through the stock market route. Overall, 58% of the remittances were linked to stock market transactions, while another 28% were on account of private arrangements, including private placements and preferential allotments. As Gangwal sold more shares in Interglobe and BAT announced a fresh sale in ITC, the trend has continued into the current fiscal year as well. The two transactions in as many days between them garnered a little under Rs 25,000 crore (around $2.9 billion). Latest data released by RBI pegged disinvestment of shares in Indian entities during the last financial year at over $51 billion. Along with outward FDI of $29 billion, this resulted in net FDI inflows of just under $400 million, 96% lower than the previous year. In its monthly Bulletin, RBI described it as "a sign of a mature market where foreign investors can enter and exit smoothly, reflecting positively on the Indian economy. " Govt sources, however, said that too much should not be read into the numbers as foreign players, particularly private equity investors, were exiting a part of their investment in domestic companies at a premium. Apart from the Hyundai parent, investors in Swiggy and rival Eternal (formerly Zomato) also decided to book profits on their investments in the two food delivery companies. When it comes to outward FDI, the Mittals of Bharti Group acquired a stake in BT Group in the UK, apart from several other companies seeking to tap into opportunities overseas. "That Indian overseas direct investment increased nearly by $12.5 billion during FY25, even as uncertainty reigned in the world, warrants attention, especially given their cautious attitude towards domestic investment," the finance ministry's monthly economic report said. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
