Further Pay Revision for PSU Officers

payrevision About four lakh officers of central public sector enterprises will benefit from a government decision today giving them a further increase in salary and allowances, over and above the hikes announced last year. The decision to improve the salary structure of officers at board level and below, along with supervisory staff, was taken at the Cabinet meeting presided over by Prime Minister Manmohan Singh.
The improved pay packages will also include increase in house rent allowance and retirement benefits. The decisions are based on the recommendations of the committee of ministers headed by Home Minister P Chidambaram, which went into the revised salary and allowances notified earlier in November last year by the government. PSU officers, particularly in the oil sector, forced the government to revisit their revised pay scales when they went on strike in January this year.
Briefing reporters after the Cabinet meeting, Chidambaram said the revision in the pay structure would vary from company to company. (Source : PTI News)

Stay tuned for detailed post on above.

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Withdraw Cash from any ATM from Apr.1, Free of charge

atm Thinking of changing your Bank because the ATM of that Bank is not near to your Office or Home ! Forget it , No more would you be bothered about where is the ATM of your Bank located. Come April 1st,2009 and you can withdraw money and do Balance Enquiry from any ATM irrespective of which Bank you hold you account without any charges being deducted for this service.

Earlier some banks had created their own network where ATM withdrawal of the participating bank customers was not charged. However, there was lack of awareness and clarity on these mechanisms. The customer was not aware of what charges will be deducted on using other bank’s ATM as the charges differed from one bank to another. There was a confusion among the customers as to what will be the charge for withdrawing Cash from their Bank Accounts from some other Bank’s ATM and this facility was being used by customers only in case of extreme emergencies (where charges do not matter!).

RBI had issued a circular on March10,2008 directing all Banks to not charge more than Rs. 20 with effect from March 31,2008 for use of any Bank’s ATM. The circular further mentioned that with effect from Apr1, 2009 all banks should provide these service FREE of cost to the customers.

What will still be Charged ?

Banks may still charge customer for the following Services :

a) cash withdrawal with the use of credit cards
b) cash withdrawal in an ATM located abroad.

If you are interested in reading the Notification of the RBI in this Regard, click the link below

RBI Notification for Customer Charges for Use of ATM’s for Cash Withdrawal & Balance Enquiry

Update : 22nd August ,2009

From Oct 15, only 5 'other bank ATM' transactions a month would be Free

The party is Over for bank cutomers who had been awarded the liberty of Free withdrawal from any ATM just 5 months back. Based on the demand from Indian Bank's Assocation, RBI has agreed to limit the numbers of free withdrawal from "Third Party" ATM to 5 per month. If you withdraw more than 5 times from other Bank's ATM, you may have to pay a fee ranging from Rs 12 -Rs 20 for this. However, banks have been given the liberty not to charge any fee for more than 5 transaction per month in case they wish to do so.

RBI is also limiting the amount of cash that can be withdrawn from "Other Bank's" ATM to Rs. 10,000 per transaction.

(This post has been updated on 22nd August, 2009 in view of new development which impacts the relevance of this post)

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IPO’s continue to haunt Investors

The heartthrobs of Year 2007 and some part of 2008, IPO’s are no longer common Investor’s attractive hub. IPO’s that have listed in Year 2009 have the same story to tell. See for yourself. 


There are companies who have deferred their plan to float IPO’s due to the current turmoil in the market. Bharat Oman Refineries, Photon Infotech and NHPC are among the companies who have deferred their IPO plans. Other companies who have filed the DRHP include Mayajaal Entertainment, Pradip Overseas, Sea TV Network, Great Eastern Energy Corporation & Texmo Pipes and products.

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Only Buyers in Matrix Labs on Delisting plans

001 The share price of Matrix Labs has been soaring high on news that Mylan Laboratories (the majority shareholder in Matrix) is proposing to delist the company from stock markets at an indicative price of upto Rs.150. This is part of strategic move by Mylan to consolidate its holding in the company. The stock was quoting at Rs.141 up by 20% with no sellers and pending buy orders of more than 8 Lac shares. The stock has nearly doubled in last three months.

Mylan Laboratories had acquired 71.16% Controlling Interest in Matrix Laboratories in Jan 2007. As per the latest Shareholding pattern the Foreign Institutional Investors (FII’s) hold 16% stake in the company.

Matrix Labs has a book value of Rs. 44 Per share and the stock is currently trading at Price to Book value of 3.22

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Brandhouse Retails Limited to list on March 27, 2009

bhrl The shares of  Brandhouse Retails Limited (An entity demerged from S Kumars Nationwide) will get listed on BSE and NSE from Friday, 27th March,2009. Earlier Shareholders of S Kumars Nationwide Limited(SKNL) were allotted 1 Share of Brandhouse Retails for every 5 Shares of SKNL held by them pursuant to demerger of its Retail Business Division as a separate entity(Record date was fixed as 02 May,2008).

The issued, subscribed and paid-up equity capital of the company post arrangement comes to Rs.51.99 Crores consisting of 5,19,94,195 equity shares of Rs.10/- each fully paid up. Out of these, around 1.07 Crore Shares are under lock-in period upto April 30,2012 . The Scrip is expected to list in a price Range of Rs.13-14 and settle around Rs. 12 after initial euphoria.

The Scrip Code is 533059 and the ISIN No. is INE317J01011

Current Shareholding Pattern

Promoters                    55.7%

FII’s                             24.0%

Body Corporates         10.1%

Trusts                           6.9%

Others                          3.3%

About Brandhouse retails (BHRL)

Brand Portfolio

With retail business of Skumars in its pocket, Brandhouse retail boasts of brands like Reid & Taylor, Stephens Brothers, Carmichael House, Belmonte and Dunhill.


For Year ended 31st March,2008 the company had posted a turnover of Rs. 313 Crore against 55 crore in previous year.

Net Profit after tax stood at Rs. 13.1 Crore against 9 Lacs in previous year.

The Earnings per share stood at Rs. 2.56 Company has minimal Cash of Rs. 42.5 Lacs on its Balance sheet. It has huge Debtors of 77.5 Crore and Inventories of Rs. 63 Crore which is typical of such business.

Some of the major Expense of company includes Rentals (20 Crore), Salaries (7 Crore), Exhibitions (2 Crore), Interest on NCD (3.6 Crore) and Brokerage charges(1.5 Crore)

Recent Developments

BHRL announced its joint venture with Italy’s leading apparel brand ‘Oviesse’. This brand would address young India and provide affordable ‘fast fashion’ for men, women and kids. The total equity investment in the JV will be Rs. 161 crores over 5 years for setting up of 190 stores across Metro/Tier1/Tier2 cities. In the terms of the agreement Brandhouse will hold 62.5% of the total equity while the balance 37.5% of the equity will be in the hands of Oviesse.

Oviesse is a part of Gruppo Coin, Italy’s leading clothing retailer with a turnover of over 1.1 billion Euros. Based in Mestre, Italy, Oviesse is a benchmark in fast fashion with over 11 million customers shopping at their store every year, which amounts to a sale of over 100 million garments at a revenue of over €820 million.

Related Posts

Skumars Demerger

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Akruti City kicked out of F&O, Stock plummets

NSE vide its circular NSCC/F&O/C&S/932 dated 19th March,2009 has barred trading in shares of Akruti City in the Futures and Options Segment. The stock will continue to trade in Cash Segment. The share prices of Akruti City has skyrocketed by 290% since January 15th,2009. The stock reacted quickly to the news and was down 28% to Rs.1590. The stock had risen continuously despite the sever fall in stock markets and had raised doubts on the trading pattern.

Fallout of NSE Circular
1. All existing contracts in the underlying AKRUTI i.e. contracts with expiry dates 26 March 2009, 30 April 2009 and 28 May 2009 shall expire on 26 March 2009 and shall be finally settled at the relevant settlement price.

2. The settlement price to be reckoned for the purpose of final settlement shall be the closing price of AKRUTI in the Capital Market segment of NSE on 26 March 2009.

3. The details of final settlement in respect of AKRUTI shall be available in the F_PS03 and F_PS04 reports downloaded to members on 26 March 2009.

4. All positions in the existing futures and options contracts on the underlying AKRUTI shall cease to exist pursuant to the final settlement on 26 March 2009.

5. The Pay in/pay out of final settlement of all F&O contracts on AKRUTI shall be on 30 March 2009 (T+1 day). Read More!

Stock in News: Apollo Hospital Enterprise

Apollo’s time to move on with Aircel’s Delhi Operations

delhi_banner1 It’s time for Delhi to cheer up as the telecom war in this circle is set to intensify. Aircel, which is a joint venture between between Maxis Communications of Malaysia and Apollo Hospital Enterprise Ltd of India, with Maxis Communications holding a majority stake of 74%, has launched its operation in Delhi.

Aircel will offer a lifetime validity scheme for prepaid mobile customers that allows users to make local calls at Rs one for the first minute, 60 paise for the second minute and 40 paise for the third minute onwards. Aircel has put on offer different tariff plans to cater to various segments of mobile users. Delhi already has six mobile operators -- Airtel, Vodafone, Idea, MTNL, Tatas and Reliance Communication. The entry of Aircel will result in reworking of the rules of the game. These Operators may come up with similar plans in near future to stop erosion in their customer base.

About Aircel

Aircel commenced operations in 1999 and became the leading mobile operator in Tamil Nadu within 18 months. In December 2003, it launched commercially in Chennai and quickly established itself as a market leader – a position it has held since.

Aircel began its outward expansion in 2005 and met with unprecedented success in the Eastern frontier circles. It emerged a market leader in Assam and in the North Eastern provinces within 18 months of operations. Till today, the company gained a foothold in 14 circles including Chennai, Tamil Nadu, Assam, North East, Orissa, Bihar, Jammu & Kashmir, Himachal Pradesh, West Bengal, Kolkata, Kerala, Andhra Pradesh, Karnataka and Delhi.

The Company has currently gained a momentum in the space of telecom in India post the allocation of additional spectrum by the Department of Telecom, Govt. of India for 13 new circles across India. These include Delhi (Metro), Mumbai (Metro), Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra & Goa, Rajasthan, Punjab, UP (West) and UP (East).

Aircel, which sponsors Indian Premier League team Chennai Superkings and has M S Dhoni as its brand ambassador, is India's fifth largest GSM mobile service provider with 17 million users and Delhi is the 14th circle for the company. The company plans to expand coverage to 18 of India's 22 telecom zones in the next few days and coverage will extended to the rest of the country over the next 24 months. The company also plans to list itself on Indian bourses once the economy picks up.

Apollo Hospitals stock posts modest gains

The company holds 26% stake in Aircel. The stock remained insensitive to the launch of Aircel’s Delhi Operations which is considered as a lucrative market for this sector. The stock gained Rs. 5.75 and closed at 371.9 against yesterday’s closing of 366.15. The stock has a Book Value of Rs. 203 Per share and currently trades at a PE of 20. The stock has fallen 25% in last 1 year and 15% in last 3 Months. The Health care sector is considered to be less affected by Recession and hence the fall in this sector is generally much lesser than overall market.

More Info on Aircel

Aircel’s Prepaid tariff plans in Delhi

Start-up Kit                  Business Card-Rate cutter

Recharge Vouchers     E Recharge

Aircel’s Post-paid tariff plans in Delhi

Plan 50              Plan 125                         Double Benefit 100 Plan

Add on Packs     Double Plus 250 Plan     Double Plus 450 Plan


Prepaid     Postpaid

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All that glitters is not gold !

Don’t get carried away by recovery, further downside ahead

recession Stock markets stage good recovery last week with BSE gaining nearly 5% and NSE gaining around 4 %. The recovery was backed by similar story in the global markets. However, Investment Guru is of the view that one should refrain from buying at current levels and should actually try to get out if one is getting good price or recovery in any stock. The global economic downtrend continues unabated and we are still in the mid of economic slowdown. The pull back rally should not be considered as a sign of recovery of economy. Let’s take a look at some indicators.

FII’’s continue to be Sellers


Looks like Foreign Institutional investors have forgot buying ! They have been net sellers to the tune of 53,000 Crore in Year 2008 and have already become net seller to the tune of 9,217 Crore in Year 2009. There has been a significant drop in the FII attraction towards the emerging markets more so due to higher redemptions faced by India Centric funds. Same has been the case with MF’s who have seen rise in redemption pressure and have been net sellers of 2,983 Crores in 2009 as against Net buyer of 11,728 Crores in 2008. With US economy already in Recession and European countries joining the list, the probability of FII’s Investment returning to India in big way is ruled out even at current levels. This is further going to put pressure on Indian markets who are looking for buying support ….but investors seem to be in mood to loose more and are waiting for dust to settle before they make a call.

India witnesses Slowdown in growth

The claims of 10% growth rate are a thing of past. Realistic targets are being talked about in view of global meltdown and the new estimates are somewhere between 4-6% of GDP growth for India. Though it has been though for the markets to digest these numbers after they became used to hear about 10% growth, Investment guru is of the view that even at these lower levels India would be second only to china in terms of growth rate. Look at china, these guys have virtually forgot to talk in terms of single digit after delivering double digit growth for years and are now set to post a single digit growth of 6-7%. Most of the developed economies are expected to post negative growth confirming their recessionary trends.

The slowdown in growth coupled with deflationary trend trends in economy would act as a deterrent to the sensex to move up sharply. There is a need to readjust our expectation in line with current growth estimates and I think the current levels of sensex are not extremely cheap. Corporate profits are bound to shrink resulting in shortfall in tax collection targets of government and reduced expenditure on infrastructure and public spend. The deflationary economy would create a situation of deferred consumption which may further detoriate the situation. There is a further downside left in markets and current rally would be just a eye wash.  These short spurts would keep coming and going due to short term demand –supply mismatch and market reactions to short term developments. Use them to adjust your portfolios.

Global Economy Updates

US is still in pretty bad shape. Looks like the giants have still not learnt the lesson, AIG is learnt to pay retention bonuses from the bailout package it received. The company was saved after a $170 billion bailout package by US Treasury. The recession gripping the U.S. deepened last month as factories and home builders scaled back even more. Bloomberg reports that industrial output fell by 1.3% in February. Former St. Louis Federal Reserve Bank President William Poole said the U.S. is “in a terrible situation,” led by officials who are unsure how to avert the rescue of financial companies and unwind current bailouts.

Morgan Stanley has said in its outlook that the S&P 500 Index may fall 25 percent in the next few months as earnings slump for a seventh quarter and the recession deepens. U.S. stocks are still expensive even after the S&P 500 dropped 52 percent in 17 months, according to a method used by Benjamin Graham, the father of value investing and mentor of Warren Buffett. He measured equities against a decade of profits to smooth out distortions, a method that shows the S&P 500 traded at 14.5 times earnings yesterday, according to data compiled by Yale University Professor Robert Shiller. At the bottom of the three worst recessions since 1929, the average ratio fell below 10. To reach that, the S&P 500 would have to sink more than 30 percent.

There is a interesting Global recession Status update on Moody’s Economy.com website. You can see the chart here. It shows the whole of US, Canada, Russian Federation, Most of the European region, African region, part of Asia such as Singapore, Thailand and Japan already under recession and Countries such as India, Brazil,Argentina,Mexico, China, Middle East Asia, Australia and Pakistan under Risk of recession. 

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India inches towards deflationary economy

deflation China’s National Bureau of Statistics has announced that the nation’s consumer price index fell 1.6% in February from a year earlier, the first year-on-year drop in more than six years. Meanwhile, the producer price index in February dropped 4.5% from a year earlier, a steeper fall than January’s 3.3% decline.

With China officially announcing its entry into a deflationary economy, India is close on the heels to follow suit. After witnessing months of increasing inflation, people may sigh relief to see a sharp decrease in inflation but they are in for a much bigger surprise. India is soon moving into deflation zone!! But is it really a sign of relief when we are witnessing a slowdown in economy ? It may actually start a new series of trouble for the economy and drift the growth rate down further

Deflationary Economy & India

  • Deflation occurs when Inflation rate falls to below Zero %. As per last data released India’s Inflation stood at 3.03 % as against 12.9% in August 2008.
  • Experts are of view that India will reach deflation by Apr’09. This will be India’s first face-to-face wit deflation after March, 1976.
  • The fall in inflation is primarily led by falling crude prices and commodity prices.
  • Though a deflationary trend might be a welcome move for the government in an election year, this would induce further slowdown in economy if not dealt with properly

Impact of Deflationary Economy

What happens when an economy moves into deflationary trend ? For people like us, who have been born and brought up in a inflationary economy, the realities of deflationary trends might require us to understand the real impact. Deflation in commodities bring a shift in consumer buying pattern and people start deferring their buying in anticipation of further price drops. This is true even for Investments as people tend to hoard cash instead of investing in securities as they fear that the value of their investments would depreciates. This is turns stalls the growth of the economy. In this situation Banks would be forced to further reduce their lending rates to drastically low levels (even to zero if deflation persists for a long duration).

However, deflationary trends in India are expected to remain till end of the year as it counts on its ever increasing population to counter the evils of slowdown and bring back faster pace of growth. What would finally happen, lies unfolded in the arms of the Future, but India needs to prepare itself to counter with this phenomenon in such a way that the impact on growth is minimal.

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Bharti Airtel down on stake sell by CEO

The share price of Telecom major Bharti Airtel plummeted by 4.5% after news that Manoj Kohli, CEO of Bharti Airtel has sold his entire holding of 1.2 Lac shares in the company on March 6 and Mar 9 due to personal reasons.

Bharti Aritel had declared a addition of 2.73 Million new subscribers in the month of February 2009. At the end of February 2009, Bharti Airtel held a market share of 32.88% with a total of 91.11mn customers, while Vodafone Essar had a market share of 23.79% at 65.92mn subscribers. BSNL accounted for 15.94% of the GSM market at 44.18mn customers and Idea held a market share of 14.98% at 41.51mn.

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Tax Planning : Capital Gains on Sale of Shares


As an Investor, you often need to be aware of the Income Tax provision on capital gains tax liability arising on your Investment Decisions.  Awareness of these provisions would certainly help in minimizing the tax incidence on capital gains and hence effectively increasing your return on Investments. I will briefly explain you the concept and things to remember in a simple manner.

When does Tax liability arise ?

1. When you Sale shares, you attract capital gain tax based on period of your holding. A share if sold within 1 Year of buying will be taxed as Short Term Capital Gain. If you sale a share after holding it for more than 1 year, it will be treated as Long Term Capital Gain. For example if you bought 100 shares of Company “X” on 15th March,2008 and sold them on 1st March,2009 the period of your holding is less than 1 year and hence it would qualify for Short Term Capital Gain.  If you sell these shares after 15th March,2009, i.e., after holding it for more than 1 year, it will qualify as Long Term Capital Gain.

2. Short Term capital gain is taxable @15% while Long Term Capital Gain on Sale of Shares is Tax free ! Yes, the tax liability on Short Term and Long Term Capital gains makes it important for you to plan your moves carefully. In the above example, suppose you bought 100 shares of company ‘X” @ Rs.100 and Sold the same @Rs.150. If you sell these shares before 15th March , you will be liable to pay short term capital gain tax on the profit earned. In this case your tax liability will be Rs.750 i.e 15% of ( 100*(150-100)). However, you would have sold your shares on or after 15th March,2009,  the profit earned (Rs, 5000 in the above example) would be treated as Long term capital gain and would be Tax free.

3. You are liable to pay tax on Net Short term Capital Gains. This means that If you have earned Rs. 5000 on trading in Company “X” and booked a loss of Rs., 3000 on sales of shares of company “Y” (both should qualify as short term capital transaction), then your tax liability would be calculated on Rs. 2000 i.e., 15% of Rs. 2000. In other words, Short term capital gain can be offset by Short Term Capital Loss. However , you cannot offset a Short Term Capital Gain with Long Term Capital Loss. capital gain

4. Bonus Shares should be considered at Nil Cost of acquisition while calculating the gains. the period of holding should be computed from date of issue of Bonus shares.

5. You can claim cost of acquiring shares such as Brokerage charges, Demat charges while calculating capital gains.

Tax Planning Tips

1. Whenever you plan to sell a share, make sure to look at period of your holding. If you are earning profit on a transaction, you may decide to wait for few more days to convert a short term capital gain to a long term capital gain and enjoy tax free earnings.

2. At the end of financial year, say in the month of March, take a stock of all your holdings and see positions where you can book short term capital loss to offset short term capital gain that you have earned during the year. This way you would reduce your capital gain tax liability for the year. You can again take a position the stock on 1st April. This way you have saved paying tax on your capital gains for the year and still holding shares you have sold to book losses and hence offset the gain. This involves incurring transaction cost on buying and selling the shares and hence keep this in your mind while calculating your net gains.

3. If you are incurring huge loss on a position in any share, and if it is nearing a holding period of 1 Year, you would be better off to sell the shares as Long term capital loss cannot be offset with short term capital gain and hence selling it before 1 year holding period would help you to minimize your capital gain tax liability.

Update March 12th : Chinmay has rightly pointed out that Short term Capital Gain Tax has been increased from 10% to 15% with effect from Financial Year 2008-09. Investors should calculate Short term Capital Gain Tax @15% for their earning in year 2008-09. To avoid confusion I have updated the post accordingly.

Nitin had a query on treatment of capital gain on split Shares. When a company splits its shares, the value of the shares also gets allocated accordingly on the record date. Hence in this case the cost of these shares also gets proportionately divided. In this case , the period of holding will continue to be the same as period of holding of original shares.

For example suppose you bought 100 shares of company “X” with face value of Rs.10 @Rs. 100 Per share. Suppose the share is currently trading at Rs. 150. Now if the company announces a stock split by reducing the face value from Rs. 10 to Rs. 5, you will now hold 200 shares of the company and on the record date, the stock exchanges will publish a proportionately reduced price of the share say Rs. 74 in this case. Since your shareholding has increased from 100 to 200, your cost of acquisition per share has also come down from Rs. 100 to Rs. 50. Now you hold 200 shares of the company at Current price of Rs. 74. If you sell these shares your capital gain will be calculated as (200*(74-50). The period of holding will be determined based on the date of purchase of original shares.

Treatment of Shares related to Rights Issue

If a company has issued Shares through issue of Rights, the cost of acquiring these shares would be the actual price paid to acquire the rights. The period of holding would be counted from date of allotment of rights.

In case you transfer these rights instead of acquiring the shares, the cost of acquisition would be treated as “Nil” and the sale price of the transferred rights would be treated as capital gains.

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RIL-RPL Merger : Consolidating Synergies

The Reliance Industries Limited board is meeting today to discuss merging Reliance Petroleum with itself. The move may convert RIL into one of the biggest refineries in the world. The Swap ratio has been fixed at 16:1. This means that 16 Shares of RPL would convert into 1 Share of Reliance. The merger is going to be effective from 1st April,2008. The merger would result in addition of Rs 1,300 crore to RIL's net profit. Post-merger, the equity shareholding of the promoters in RIL would come down from the current 44% to 34%.

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