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And now, many firms are unsure if they should hit the market right away, even though they have got the `green signal' from the regulator. While key indices have recouped their losses suffered in January, investors remain wary of realty firms. The poor performance of the recent offerings in the sector is the main reason, while liquidity concerns because of the year-end factor is also keeping IPO-bound companies in check, say market watchers.

"We have received the required clearances from Sebi and are looking forward to coming out with our IPO in the near future," said Abhishek Lodha, MD, Lodha Developers, without specifying a deadline.

Lodha Developers, Ambience, Emaar MGF and Nitesh Estates are the leading companies that are yet to open their books for subscription despite getting the blessings of Sebi. Together, these four companies are looking to mop up around Rs 8,000 crore through their IPOs.

"Primarily, the market sentiment towards realty has not been very encouraging. Hence, a lot of players are waiting," said S Subramanian, head of investment banking, Enam Securities.

Source: Economic Times By Supriya Verma Mishra IPO-Bound Realtors Sitting On Fence Despite Sebi Nod

Besides, the Securities and Exchange Board of India (Sebi), in its meeting here decided that institutional investors will have to pay upfront 100 per cent money in primary issues like retail investors.

Briefing newsmen about the board meeting, Sebi chairman C B Bhave said, it has been decided to establish a mechanism for physical delivery of shares in the derivative segment and it will also work on raising the time period of derivatives contract from three years to five.

The decision to extend the scope of employees quota, Bhave said, will apply to employees of those companies whose accounts are consolidated with the issuing entity.

The decision would be applicable from the date of notification and not with the retrospective effect, he said.

At present, employees are entitled for allotment of shares up to 10 per cent of the issue size.

As regards the decision on Qualified Institutional Buyers (QIBs) for payment of 100 per cent money upfront in public issues, the regulator said that "the decision will bring parity between retail and QIBs...This will apply from May 1, 2010."

SMALL businessmen will soon be able to get collateral-free loans for up to Rs 10 lakh from banks following an RBI-panel proposal to double the guarantee provided under a government scheme.

Finance minister Pranab Mukherjee, on Saturday released a report by Reserve Bank of India (RBI) where it was proposed that banks do not insist on collateral or guarantees for loans from small businesses up to Rs 10 lakh. In such loans, the security will be provided under a guarantee by Credit Guarantee Fund Trust for medium and small enterprises (CGTSME).

The report includes a proposal to reduce guarantee fees for women entrepreneurs and for enterprises in the North-East. The working group was set up to review the Credit Guarantee Scheme of the Credit Guarantee Fund Trust by RBI in its monetary policy in April '09. Launching the report, the finance minister said: "This constitutes an important initiative by government for MSMEs to avail bank credit without the hassle of collateral or third-party guarantee." The proposal to double the guarantee provided comes seven months after RBI told banks that they cannot ask for collateral security for loans up to Rs 5 lakh extended to micro and small enterprises in manufacturing and service sector.

On Saturday, following a meeting with Sebi, the finance minister has an interaction with the members of the board of RBI. "Various aspects of budget proposal were analysed and board members gave their comments and inputs about budgetary proposals" said Mr Mukherjee.

Later the finance minister said that the government would consider consolidation among public sector banks in consultation with RBI if the banks themselves came forward with proposals. "So far the regional rural banks have come forth and consolidation among RRBs have taken place. I have also made proposal that there should be licences for new banks and of course they should meet the criteria fixed by the RBI," the finance minster added.

Source: Economic Times RBI Panel Proposes Collateral-Free Loans    

"The Sebi Board has decided to allow physical delivery in the derivatives segment. There has been a demand for this for some time now and the Board felt that there was some substance in this," Sebi Chairman, C B Bhave, told reporters here today.

Sebi will discuss with the stock-exchanges and institute an appropriate mechanism for physical delivery in derivatives market, he said.

"This issue would now be discussed with the stock-exchanges and an appropriate mechanism for physical delivery in derivatives would be evolved," Bhave said.

"There will be a need for proper risk-containment systems," he added.

Source: Economic Times SEBI allows physical delivery in derivatives segment

The Securities and Exchange Board of India (Sebi) on Saturday saidinstitutional investors have to pay 100 per cent of the value of

shares in all new share sales at the time of application from May 1,2010, bringing them on par with retail investors. At present, the

Qualified Institutional Buyers (QIBs) are required to pay only 10 per cent of the value of the shares at the time of application.

In another significant move, the regulator has also decided to allow physical delivery of shares in equity derivatives, but the date of its implementation will be decided only after consultation with stock exchanges. Sebi has also decided to allow 5-year contracts in derivatives segment, besides introducing new derivative contract basedon the volatility index.

The Board also decided that the reservation for employees in

public/rights issues would be available to employees of subsidiaries and material associates of the issuer whose financial statements are consolidated with the issuer's financial statements.

Source: Mydigitalfc.com Sebi Asks QIBs To Put 100 % Bid Amount During Public Issues

A company making a quali- fied institutional placement (QIP) will have to provide the stock exchanges with details of its shareholding before and af- ter the sale, Securities and Ex- change Board of India (Sebi) said.

The QIP details will be made available on the website of the stock exchange where the firm is listed.

Sebi's latest move is aimed at allaying concerns on the identities of investors in a QIP and the utilization of money raised through this route.

As the Indian economy re- covered from a slowdown, cash-strapped firms--mostly in construction and real es- tate--turned to QIPs to access funds. Between April and Feb- ruary, 60 QIPs were issued, raising a total of Rs41,552.19 crore for the issuing firms.

Source: Live Mint Necessary Disclosure : Companies Required To Identify QIP Investors

Private sector lenders ICICI Bank Ltd and Kotak Mahindra Bank Ltd as well as the largest mortgage player, Housing De- velopment Finance Corp. Ltd (HDFC), withdrew special home loan schemes on Thurs- day.

Other commercial banks such as Axis Bank Ltd, Union Bank of India, Canara Bank, Punjab National Bank, Bank of India and IDBI Bank Ltd dis- continued special home loan schemes after the Reserve Bank of India (RBI) an- nounced a two-phase 75 basis
points hike in the cash reserve ratio (CRR) in its January re- view of monetary policy.

One basis point is one-hun- dredth of a percentage point.
CRR is the portion of deposits that banks are required to maintain with RBI.

HDFC Bank Ltd, IDBI Bank and Kotak Mahindra Bank have also raised interest rates on auto loans.

anita.b@livemint.com

Source: Live Mint By BY ANITA BHOIR Higher Rates : Banks Hike Home, Auto Loan Costs

" The project will be implemented in 27 offices of EPFO by the end of this financial year and in the remaining 92 offices by 2010- 11 financial year," minister of state for labour and employment Harish Rawat said.

In a written reply in the Rajya Sabha, he said the project is being implemented in collaboration with the National Informatics Centre ( NIC). The implementation of the project was approved by the Central Board of Trustees of EPFO in its 182nd meeting. Rawat also said the implementation of the project is being reviewed from time to time.

Credit enhancement can be done through issue of capital market instruments such as debentures and bonds.

Credit enhancement will be permitted to be provided by multilateral/regional financial institutions and Government-owned development financial institutions, the RBI said in its notification on External Commercial Borrowing policy for structured obligations.

The underlying debt instrument should have a minimum average maturity of seven years and prepayment and call/put options would not be permissible for such capital market instruments up to an average maturity period of 7 years.

Guarantee fee and other costs in connection with credit enhancement will be restricted to a maximum 2 per cent of the principal amount involved.

Source: Realty Plus RBI allows credit enhancement facility to infra firms

Cash-rich PSEs contend that the annual loss to them on account of not being allowed to invite bids for depositing their surplus cash is an estimated Rs 5,000 crore. The government, in February last year, had directed CPSEs not to invite bids for depositing their surplus.

Instead, they have to go in for bulk deposits with banks at card rates (special interest rates for such deposits), which is currently around 7%-10% for most banks.

PSEs argue that if bids are allowed, the interest rates offered would be much higher as it would lead to competition amongst banks.

“We’ve received requests from companies such as ONGC, NTPC and SAIL (for being allowed to invite bids). A review is now necessary considering the loss that state-run firms are currently bearing,” said a government official who did not wish to be named.

Source: Economic Times By Dheeraj Tiwari & Subhash Narayan Public sector cos may get to park more with pvt banks

According to a senior MHA official, security agencies had scrutinised some high-value insurance policies, often running into crores and involving a one-time premium, and traced them to suspicious clients.

Even a look at the money trail of terrorist and insurgent outfits, including those active in northeast, revealed parking of huge money in insurance policies. As this translated into huge business for the insurance companies, both in the public and private sector, no questions were asked while issuing the high-value policies.

Keen on preventing subversive elements from misusing lax insurance policy registration norms to invest terror/insurgency funds, MHA is now insisting on all insurance companies following a proper KYC (know-your-customer) drill. This would involve verifying the identity and address of the policy holders and also making it mandatory for PAN no to be quoted in all insurance policies.

"The decline in the states' own tax revenues is a matter of concern," said the RBI in its study titled State Finances ¬ A Study of Budgets of 2009-10.

On the non-tax front, the states' non-tax revenue at around 10 per cent of the total revenue receipts appears to be low by international standards, it said.

"The states may, there- fore, make efforts to increase their reliance on non-tax revenues by levying appropriate user charges such as time-bound revision of water supply tariffs, introduction of user charges in health, education and veterinary services and cost recovery from social and economic services," the RBI said.

The RBI study said states may also rein in tax expenditure, which is revenue fore- gone because of preferential provisions of the tax structure, including exemptions, deductions, credits, deferrals and reduced tax rates to arrest the fall in tax receipts.

It further said state governments might consider strengthening their tax ad- ministrations through measures such as computerisation of commercial taxes, online registration and online filing of returns and computerisation of land records.

"These measures may help the states to augment their revenue bases in the medium and long run," RBI has said.

The National Electronic Fund Transfer (NEFT), which allows bank customers to transfer funds electronically, has been a highly successful service ever since it was launched in late 2005.

In a circular to the chiefs of all member-banks providing the NEFT service, the RBI has asked the banks to take necessary measures to "strengthen the NEFT system in terms of availability, convenience, efficiency and speed" from March 1

Life insurers said they were selling Ulips, which had been approved under Section 2 (11) of the Insurance Act. The law, they said, allowed Ulips to be part of insurance. They said insurance was explicitly excluded from the collective investment scheme of Sebi under the Act. A large life insurer also sought to highlight the difference between a Ulip unit and a share, industry sources told Business Standard.

“The units issued in unit-linked insurance products do not fall within the definition of the term ‘security’ on account of their clear exclusion under the SCRA (Securities Contract Regulation Act) or even under the definition of the term ‘unit’ since these units do not form one undivided share in the assets of a scheme,” the letter said. The Insurance Regulatory and Development Authority (Irda) also quoted SCRA and said Ulips were neither securities not securities-related transactions under the law.

An insurance company said Ulip units were much more than the undivided share in case of a life insurance contract. “They include a death benefit which is linked to the premium paid and in case of unit-linked pension annuity contracts; they are based on traditional policies which do not issue any ‘unit’ under the said policies,” it said.

Sebi’s notices to 13 life insurance companies said the structure of Ulips was similar to that of mutual funds and was in the nature of collective investment schemes, which come under its purview. It had also written to Irda. In response, Irda questioned the market regulator’s notices to insurers on conceptual, legal and structural grounds.

The Industrial Production figures suggest the economy will grow by 7.5 per cent this fiscal and perhaps over 8.5 per cent in the next fiscal, Mukherjee told reporters.

The Index of Industrial Production, or the measure of the country's factory output, surged to a 16-year-high of 16.8 per cent in December, led by a robust performance by manufacturing, particularly consumer durables, indicating that demand was picking up across sectors.

Analysts say the industry is set for a good showing in January as well. Research services provider Dun &Bradstreet expects industrial production to have grown by 13.5-14.5 per cent for the month.

D&B revised upwards its growth forecast for the third quarter to 7.3 per cent after taking into account the stunning performance by the industry.

"We have revised our GDP forecast for Q3 to 7.3 per cent, from the earlier 6.8 per cent, given the buoyancy witnessed in industrial activity in this quarter," D&B said in a release.