Shruti Sharma MBA 2 ( C ) ET Weekly News24th Oct.- 30th Oct.
Retail investors lost $15 bn opportunity: Reliance Capital Retail investors could have gained over $15 billion by investing just 5 percent of their savings in Indian capital markets in the past 30 months -- an opportunity that was tapped better by foreign funds, says a top fund manager. Savings rate in India at over 25 percent is one of the highest in the world and amounted to nearly $700 million in the last 30 months. Over 90 percent household savings is lying in bank deposits and only 3 percent is invested in the capital market.
Contd… Group chairman Anil Ambani said earlier this month that Reliance Capital will offer specialised financial services for infrastructure projects with a target of Rs.50,000 crore ($11.1 billion) as asset base and 18-20 percent return. Foreign institutional investors have invested nearly $25 billion in the Indian equities market this year, leading the 15-percent-plus rally in the country's benchmark index Sensex. These funds have cumulatively pumped over $350 billion in the Indian market.
200 top American CEOs coming with Obama With trade high on his agenda, some 200 odd top US business chiefs, including soft drink giant Pepsico's India-born CEO IndraNooyi , are expected to join US President Barack Obama on his India visit next month. Also expected are Honeywell CEO David M Cote, who co-chairs the India-US CEO Forum with Tata group chairman Ratan Tata . Terry McGraw, CEO of leading publishing house McGraw Hill, who took over from Nooyi as the chairman of the US Indian Business Council
Contd… Two more of 12 US forum members, Louis Chênevert, CEO of aerospace major United Technologies Corp, and Ellen Kullman, chief executive of chemicals giant DuPont , may also be joining. But there is no word yet whether Citigroup's Indian-American CEO VikramPandit is going.
Retail investors to be allowed Rs 2 lakh in IPO Retail investors will get to double their bets on initial public offerings as the market regulator is set to raise the limit to Rs 2 lakh, the first revision in five years, as it attempts to keep pace with the eroding value of the rupee. The proposal, likely to be approved by the board of the Securities & Exchange Board of India on Monday, will cut the numerous applications investors sometimes make in the name of relatives to get more shares.
Contd… Some say the hike will enrich the wealthy more than the middle class if it is done without an increase in the overall allocation for the retail segment, which is capped at 35%. Unlike most developed markets where investment bankers have the discretion to allot shares to their favoured clients in an IPO, the Indian regulator has mandated specified portions that go to funds, wealthy individuals and retail investors. But with the upswing in sentiment, retail investors have demanded more of the IPO slice. The rate of inflation has more than doubled to 12% in the past five years.
Contd… In case of public issues done on a book-building basis, the rules now in place mandate that 35% of the offering should be allotted to retail investors, 15% to non-institutional investors and the remaining 50% to institutions.