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.
Operational and compliance challenges foreseen for fund houses in deducting tax at source, resulting in possible TDS mismatches and disputes with investors.
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.
The SME segment has been grappling with lack of liquidity and lacklustre institutional participation.
'If Covid peaks at around 250,000 cases, I don't see the market fall much. If it becomes uncontrollable and goes up to 600,000 a day, then the market may fall.'
'Start-ups that generate a majority of their income in India are likely to opt for an Indian listing.'
The listing day gain-to-loss ratio for FY21 was 71 per cent, the highest since FY17, when it was 85 per cent.
Experts believe the new norms may be an indirect way for Sebi to apply the brakes on dividend option plans in MFs.
'Whenever markets rally, the IPO pricing gets aligned to the prevailing market conditions.'
Listed companies have seen equity deals worth Rs 23,500 crore in March.
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.
Banking and financial stocks got more than their fair share of foreign portfolio investor (FPI) flows in February. Overseas investors pumped in $3.56 billion into domestic equities last month. Of this $1.96 billion went into financial stocks, data analysed by Edelweiss shows. "The sector now has 34.8 per cent of FPI assets, up from 33.8 per cent in January.
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.
The dozen firms to have listed following their IPOs have seen an average listing day gain of 49 per cent. IPO applicants have made money on all the deals, barring two, which saw modest declines on listing day.
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.
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.
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