India 66th Independence back to 1991

imagesToday India wake up to the 66th anniversary of free India with reduced freedom. The Reserve Bank of India (RBI) on Wednesday reversed the long-term secular trend of easing capital controls by severely limiting the amount of money citizens can remit abroad, and businesses can invest in foreign ventures. Gold imports are being further squashed.This gives me the feeling of 1991.

RBI put a spoke in their collective wheel by indicating that Indian companies can invest only amounts equal to their current net worth abroad through the automatic route – as against four times their net worth currently. If this norm had been in place 10 years ago, the Tatas would have thought thrice about buying Corus or Jaguar Land Rover, the Birlas would have found it tough to buy Novelis and Bharti Airtel may not have bought Zain. All these deals would have had to pass through tedious government clearances.  Continue reading “India 66th Independence back to 1991”

QIP In India

1MeaningQualified institutional placement (QIP) is a capital-raising tool, primarily used in India, whereby a listed company can issue equity shares, fully and partly convertible debentures, or any securities other than warrants which are convertible to equity shares to a qualified institutional buyer (QIB). Apart from preferential allotment, this is the only other speedy method of private placement whereby a listed company can issue shares or convertible securities to a select group of persons. QIP scores over other methods because the issuing firm does not have to undergo elaborate procedural requirements to raise this capital.   Continue reading “QIP In India”