SEBI to Notify New Norms for e-IPOs

Telecom regulator Securities Exchange Board of India (SEBI) plans to notify new norms to sell shares through electronic Initial Public Offers (e-IPOs).

e-IPOs will help in fast-track the public offer process and lower costs, besides allowing investors to apply for shares and buy them at a click on computers without the need for signature on bulky physical documents.

The move, aimed to revitalize the primary market was also taken to tighten rules to find manipulators with tougher norms being finalized for insider trading.

Currently, applications for IPOs can be uploaded on a real-time basis only through ASBA (application supported by blocked amount), only self-certified syndicate banks are authorized to manage and offer ASBA, which allows application money to stay in an investor's bank account until the shares are allotted.

The board of Sebi had already approved the proposal to use secondary market infrastructure for public issuance called e-IPOs and revamping insider trading norms to prevent the menace.

The Securities and Exchange Board of India (Sebi), will soon notify regulations for selling shares through e-IPO, sources said. This will faciliate more retail investors in IPOs and the issuance process is likely to undergo a sea change, resulting in reduction in timelines, they added.

At present, the time taken for a company to get listed after initial share sale is around 12 days. Sebi may reduce the post issue timelines from T+12 days (12 days from issue closure to listing and trading) to T+6 days.

Once the process gets stabilised, timelines could be further curtailed to T+2/3 days, the sources said. Besides, only six main-board IPOs came to the market. The entire year saw just one follow-on offer. This was by state-run Engineers India Ltd (EIL), which also happens to be the biggest public offer with an issue size of Rs 495 crore.

RBI Changes External Commercial Borrowings Norms

India’s central bank, the Reserve Bank of India introduced changes in external commercial borrowings (ECB) norms under which authorized money changing banks have been allowed to create a charge on securities.

In a notification, the RBI said the decision was taken "with a view to liberalizing, expanding the options of securities and consolidating various provisions related to creation of charge over securities for ECB at one place.

At present, the choice of security to be provided to the overseas lender or the supplier for securing ECB is left to the borrower. The relaxations are with immediate effect.

India FII Investment Hits $26 Billion In 2014

India received Rs 1.6 lakh crore ($26 billion) as investment from Foreign Institutional Investors in 2014 on account of high interest rate and Modi government’s reform agenda.

The inflow by Foreign Institutional Investors in 2014 has significantly contributed to taking the cumulative net investments into the Indian debt markets since being allowed over two decades ago, in November 1992, to Rs. 2.6 lakh crore.

The latest round of inflow came after they pulled out around Rs. 51,000 crore ($8 billion) in 2013.

These investors got re-christened as FPIs or Foreign Portfolio Investors in 2014 under a new regulatory regime that promises to make it easier for them to invest in India.

This huge investment inflow, which belies commonly used nomenclature of ‘hot money’ because such funds can be withdrawn anytime, has come at a time when foreign companies have been mostly reluctant on their FDIs (Foreign Direct Investments) that carry a common perception of being longer-term in nature.

Besides, FIIs have poured a net of Rs. 98,000 crore in equities. While inflows into bonds have been significantly higher than the equities in 2014, the overseas investors had kept away from the debt market in 2013 and had pulled out a net sum of Rs. 51,000 crore in that segment due to weakness in the Indian currency.

Interestingly, most of the inflows this year into Indian debt market has gone into government securities.

Market experts said that overseas investors remained bullish on the Indian debt markets throughout 2014, barring the month of April. The sentiments had been bullish even during the first half of the year, mainly on hopes that a strong reform-oriented government will come to power at the Centre.

These positive sentiments continued after a new government took over in May and got a further boost from the reform measures announced subsequently.

Mining Ban Hits 1 Million Jobs

One million jobs are affected by the mining ban imposed by Karnataka and Goa, a joint study conducted by Yes Bank and the Associated Chambers of Commerce and Industry (Assocham) said.

The study titled, ‘Mining: Building a sustainable development framework for inclusive growth.’ said after the global meltdown and export ban in Goa and Karnataka, a significant decline was registered in the production of minerals. This had a major consequence on iron ore exports that declined markedly from over 117 million tons (mt) in 2009-10 to about 14 mt in 2013-14 thereby leading to massive job loss.

The Assocham-Yes Bank study has suggested the Government to take progressive policy initiatives like single window clearances for Greenfield and Brownfield projects to encourage private sector participation by enhancing domestic availability of major raw materials, improving financing avenues across mineral value chain and initiating steps to promote sustainable practices through larger community engagements and responsible mining.

Rapid urbanization coupled with growth in manufacturing sector would fuel up to 9-11 per cent annual growth in demand for various metals and minerals which is further expected to grow 4-5 times during the next decade, added the study.

The Indian mining industry, which largely comprises small and medium enterprises (SMEs) involved in surveying, exploration and other mining activities, needs to evaluate and tap into some innovative funding sources accessed by its global peers, more so as recent judicial and regulatory developments in the sector have further dried up new funding areas from banks, the study said.

US Finally Allows Oil Exports after 40 Years

After over 40 years, the US has finally allowed "some" companies to sell lightly treated condensate abroad. Condensate is a form of ultra-light crude.

The Obama administration on Tuesday bowed to months of growing pressure allow exports of most domestic crude, taking two steps expected to unleash a wave of ultra-light shale oil onto global markets.

The Bureau of Industry and Security, or BIS, which regulates export controls, said it had granted permission to export.  Some two dozen energy companies had asked the agency for clarification on permissible exports earlier this year, but until Dec 30 2014 those requests had been put on indefinite hold.

The BIS also released guidance in the form of frequently asked questions, or FAQs, to explain what kind of oil was generally allowed under the ban, the first effort by the administration to clarify an issue that has caused confusion and consternation in energy markets for more than a year.

Domestic pressure has also grown. Several lawmakers in the House of Representatives and Senate have said that unless energy companies can export oil to Asia and Europe, the drilling boom will eventually choke on its own output.

A domestic drilling boom of the past six years has transformed the US into an energy powerhouse, boosting US production by more than 50 per cent and reversing decades of decline.

Lack of Toilets Cost India $50 Billion A Year

India’s shortage of toilets costs the country more than $50 billion a year, mostly through premature deaths and hygiene-related diseases, according to a World Bank study.

The news among others prompted Prime Minister Narendra Modi to launch a nationwide online programme to check whether people are using toilets as part of his cleanliness drive.

From January 2015, officials will head out with mobile phones, tablets and iPads to report on whether toilets are being used in rural India, with results uploaded onto a website in real time.

Since taking office in May, Modi has repeatedly lamented the poor state of sanitation and public cleanliness in India, vowing to solve the problems within the next five years.

The government has doubled spending on a toilet building programme and requested financial donations from some of the country’s largest companies to help.

“Earlier, the monitoring was done only about the construction of toilets, but now the actual use of toilets will be ascertained,” the government said in a statement .In October, Modi annoyed government officials by ordering them to come to work to clean toilets on a national holiday.

About 626 million Indians defecate in the open compared with 14 million in China, the World Health Organization said in a report.

LPG Consumers to Get Subsidy via Bank from Jan 1

PAHAL or Pratyaksh Hanstantarit Labh or PAHAL will replace Direct Benefit Transfer Scheme for LPG from January 1, 2015 as LPG consumers across the country will start getting cash subsidy into their bank account so that they can buy the cooking fuel at market price.

Cash equivalent to the difference between the current subsidized rate and the market price is transferred to the bank account of a consumer the moment he or she makes the first booking for a cylinder after joining the scheme.

The moment a consumer takes delivery of the cylinder, another advance cash subsidy is transferred to the bank account. DBT (direct benefit transfer) is designed to ensure that the subsidy meant for the genuine domestic customer reaches them directly and is not diverted.

The ambitious plan, launched by the previous UPA government in June 2013 but abruptly stopped earlier this year following court orders, has been modified to exclude the requirement of unique identification number (Aadhaar) for availing the cash subsidy.

The scheme has been rolled out in 54 districts from 15th November and will extend to rest of the country from 1st January. Government is looking at saving Rs 10,000 crore in subsidy by curbing diversions and pilferages. Under the scheme, consumers will now receive SMS at every stage of enrollment in the scheme.