Buyback Tax

Why the concept of buyback tax is fundamentally flawed When KPR Mills cancelled its proposed buyback last week, it was the first signal that Indian companies and investors were unhappy with the buyback tax imposed in the Budget 2019. Why the buyback tax? In the last 3 fiscal years, the average annual buyback value was…

Inflation & Growth

How the CPI and IIP data point towards a likely rate cut by RBI The Ministry of Statistics and Program Implementation (MOSPI) announced the CPI inflation and IIP growth during the week. While the CPI inflation came in slightly above expectations, the IIP growth continued to disappoint. What are the highlights of these macro numbers…

Credit Rating

New SEBI norms could bring a big shift in credit ratings business For a long time, the credit raters have been in the news for the wrong reasons; both in India and abroad. In India, the issue first came up back during Lehman crisis but Indian rating agencies really came under fire for downgrading Amtek…

Macro Cues

Inflation and IIP growth a positive; Trade deficit widens It was a week of key macro data announcements. The week saw key data points being announced on inflation (both retail and wholesale), IIP growth and the trade data. There are some interesting signals coming from data. What’s the inflation message? CPI inflation has come under…

Side Pocketing

Why Mutual Fund side-pocketing is not taking off in India? In the aftermath of the crisis faced by debt funds holding bonds and CP of IL&FS and DHFL, the regulator decided to permit the side pocketing of debt funds. Here, the toxic assets in the fund will be hived off into a separate side pocket…

Modi 2.0 – Lessons

Opposition needs to learn some key lessons from the elections As much as the victory of the NDA in general and the BJP in particular was emphatic, it also left some very critical lessons for the opposition. How they read the lessons will determine their future. Every healthy democracy needs a strong opposition and it…

Modi 2.0 – Markets

Why stock markets are so excited about Modi 2.0 A market skeptic asked me after the results; why are markets so excited about Modi? He had a point. During the last 5 years, the Nifty gave an average return of around 9.5%, which is lower than the 11.5% CAGR that the Nifty returned since inception.…

Modi 2.0 – Economy

What are the economic challenges that Modi must address urgently The victory of the BJP and the NDA has not only been emphatic it has been largely decisive too. While India has maintained above 7% growth in the five years of the Modi government, it gets a lot more complicated now. The global slowdown, higher…

Regulating NBFCs

Government has to walk the thin line between regulation and growth Back in 1997 there were around 40,000 NBFCs operating in India. Then in 1998 the RBI came up with stringent capital adequacy and asset classification norms for NBFCs to reduce the systemic risk after the CRB fiasco. By 2002 there were just about 10…

Pharma Stocks

Why pharma companies must take the lawsuit seriously The pharma stocks had a bad week with the pharma index down by over 4% in the first day of the week itself. It all started with a Reuters news item stating that 44 states in the US had decided to file a lawsuit against 20 generic…