India Inc's quarterly net profit reached a record high of Rs 1.64 trillion in the third quarter ended December 31, 2020, mainly due to gains from higher commodity prices and a big swing in banks' earnings. The combined net profit of 3,323 listed companies that have declared results so far was up 68.6 per cent year-on-year (YoY). In comparison, earnings were up six times (534 per cent) in the second quarter and 6.5 per cent in the corresponding period last year.
As per the Budget proposals, migration of a fund to a fund in IFSC will not be regarded as transfer if done on or before March 31, 2023. Transfer of units will be tax neutral. Grandfathered investments of the fund to continue to enjoy capital gains exemption on future sale by the IFSC fund. There is no impact on carry forward of losses for the investee company.
The combined net sales of 42 listed construction and capital goods companies that have declared their third-quarter results so far were down 2.3 per cent year-on-year in Q3FY21 while core operating profit was up just 4.9 per cent YoY during the quarter.
Companies wanting to consider treaty benefits and deducting tax at a lower rate will have to examine the qualitative factors. They will have to consider whether FPIs are liable to tax and whether they are the beneficial owner of dividend income.
While the market may remain volatile this year, analysts expect equities to deliver positive returns by outperforming inflation and government bonds, supported by the fiscal stimulus in the US.
Market cap of government companies has remained unchanged in the past 8 years.
'Rationalising TDS on dividends for FPIs to reduce it to treaty rates ranging from 5 to 15 per cent, depending on the country of residence of FPIs from current rate of 20 per cent will provide a big cash flow relief for FPIs.'
Market participants are hoping for a few tweaks on the taxation front which will encourage consumers and businesses to spend.
'If an investor is ready to stay put for the next five years, one can consider investing in mid- and small-cap funds, but through SIPs.'
Last year's Budget had created uncertainty about the quantum of tax to be withheld on dividends paid to non-residents, as the exact tax rate was not specified under section 195.
BSE-listed companies' market capitalisation reached Rs 197.7 trillion on January 21, against India's nominal GDP of Rs 190 trillion during 12 months ended December 2020.
Outflows are likely to continue, experts say, till such time as the markets see a significant correction.
Over the three-month period, Airtel's stock price has rallied from Rs 432 to Rs 540, while Vodafone Idea has risen from Rs 9.2 to Rs 11.8 per share.
Equities in India saw record FPI inflows of $16.8 billion in November and December, taking the benchmark indices to new highs.
This is first time in 25 years that a benchmark equity index in India is trading at a P/E multiple of 40x or higher.
Indian equities are no longer cheap vis-a-vis global markets, and only a short distance away from being the most expensive they have ever been.
The country's m-cap is now 4.3x India's, whose m-cap grew just 17 per cent to $2.5 trillion in CY20 -- 2.4 per cent of the global m-cap.. Ashley Coutinho reports.
Tata Sons stake in the group's listed companies is now worth Rs 9.28 trillion, up 34.4 per cent on a year-on-year (YoY) basis. In comparison, the Government of India's stake in listed central public sector undertakings (PSUs) is currently valued at Rs 9.24 trillion
More people seemed to be returning to their workplaces towards the end of the year, even as railway and electricity numbers disappointed. Most other indicators held on to their gains.
According to the new proposals, resident promoters or a foreign promoter from a FATF jurisdiction can set up a market infrastructure institution.
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