The regulator is more carefully scrutinising applications by infrastructure investment vehicles that have a limited number of investors. They have been asked to broaden their investor base before application approval, according to two people familiar with the matter. The Securities and Exchange Board of India is concerned about the structure being used for getting around tax requirements, according to one of the sources.
'It is critical that the Covid curve does not have a fat tail and the chain is broken quickly.'
Only 10 per cent of stocks account for 93 per cent of investments.
Top officials said asking employees other than the fund management team to mandatorily invest a fifth of their salary goes against the principle of natural justice.
Industry players estimate the average payouts to be in the range of 50-75 per cent of the bankers' annual salaries. For the top performers, the bonuses could be 100-125 per cent.
The government has been in discussions to promote such international financial services centres within India as alternatives to places like Singapore.
Operational and compliance challenges foreseen for fund houses in deducting tax at source, resulting in possible TDS mismatches and disputes with investors.
Discussions are said to have been heating up over how long a tax indemnity clause, which is part of such deals, should run, according to multiple people familiar with the matter.
The Nifty Bank index has come off 15 per cent from its peak in February, underperforming the benchmark Nifty which is down 6%.
Debt funds typically held 0-5 per cent of their portfolio in cash and cash equivalents before this Sebi diktat.
Stocks mutual funds had invested in had risen almost to pre-pandemic levels in March.
The SME segment has been grappling with lack of liquidity and lacklustre institutional participation.
'Start-ups that generate a majority of their income in India are likely to opt for an Indian listing.'
Experts believe the new norms may be an indirect way for Sebi to apply the brakes on dividend option plans in MFs.
This year is set to be the third consecutive year when India's share of IPOs has fallen relative to the rest of the world.
Mutual funds (MFs) are set to be net sellers of Indian equities for the first time in the past seven financial years, having sold stocks worth about Rs 1.27 trillion so far in 2020-21 (FY21), making it the highest net sales on record in a financial year. MFs had been net buyers in the previous six financial years, including purchases of over Rs 1.41 trillion in FY18, Rs 88,152 crore in FY19, and Rs 91,814 crore in FY20. The last time they offloaded Indian equities was in FY14, when they net sold stocks worth Rs 21,159 crore. In contrast, foreign portfolio investors (FPIs) have ramped up buying in FY21, purchasing more than Rs 2.6 trillion worth of shares.
Sebi has asked intermediaries to stagger the offerings as much as possible, said people in the know and ensure adequate capacity building.
Ultra-long term equity investments have been a lot more rewarding than debt, a study published by Credit Suisse Research Institute in collaboration with London Business School shows. "Over the last 121 years, global equities have provided an annualised real return (in dollar terms) of 5.3 per cent versus 2.1 per cent for bonds," shows the study, which has looked at returns for 23 countries since 1900. In the Indian context, equity returns are even more favourable. Since 1953, equities have generated annualised returns of 6.5 per cent and government bonds only 0.4 per cent.
The regulator typically meets overseas investors in the US and UK in the first half of a financial year, and had opted for a virtual meet last year too.
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