FDI of upto 49 pc allowed in stock exchanges
Mumbai: The Reserve Bank of India has allowed foreign investment up to 49 per cent in stock exchanges, depositories and clearing corporations. Till now FDI with the prior approval of the Foreign Investment Promotion Board, had been capped at 26 per cent while the limit on Foreign Institutional Investment (FII) was 23 per cent.

An RBI release said FIIs can pick up stakes only through secondary market purchases and "shall not seek and will not get representation on the Board of Directors."

In a separate release, the SEBI stipulated that "no foreign investor, including persons acting in concert, will hold more than 5 per cent of the equity in these companies". This will apply only to stock exchanges.

In November, the SEBI had capped individual investment, direct or indirect, at five per cent. It had also stipulated that persons (or persons acting in concert) must meet eligibility requirements set down by the SEBI to acquire more than one per cent of the paid up equity capital of a recognised stock exchange.

Dr R.H. Patil, chairman of Clearing Corporation of India Ltd said the directive will have a more direct impact on the Bombay Stock Exchange rather than the NSE which has been a corporate entity since its inception. The only impact, if any, would be if the existing shareholders of NSE decide to sell their shares thereby allowing some FIIs to purchase them. Given that it is a profit making organisation, there appears to be no reason for NSE to tap the market to finance any of its expansion plans," Dr Patil said.
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Actis to offload stake in Punjab Tractors
New Delhi: UK-based private equity firm Actis looking to exit from its stake in Punjab Tractors Ltd and financial services firm Citi has been given the mandate to call bids from potential buyers for this.

There are indications that possible bidders may include the two largest tractor players in the country, along with a consortium of domestic and foreign investors. The Burmans, promoters of the Dabur Group, are also likely contenders for the stake who already hold 14.15 per cent stake in PTL. In case they do decide to up their stake in the tractor company to beyond the 15 per cent mark, an open offer (for 20 per cent of the shareholding of PTL) would be triggered. The Burman nominee on the PTL board, P.D. Narang, is also the non-executive chairman of the tractor firm. Actis is currently is the single largest shareholder in PTL with a stake of 29 per cent. The private equity firm had acquired 23.45 per cent of the stake in mid-2003 from the Punjab Government at Rs 153 per share.

The PTL scrip closed at Rs 225.70 on the Bombay Stock Exchange on Friday. Actis has invested about $60 million in PTL till now. The firm's investment was one of the first successful private equity-backed privatisations in the country.
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Ban may not affect Gammon IPO
Mumbai: The proposed initial public offering (IPO) of Gammon Infrastructure Projects (GIPL) may not be affected by the recent Securities and Exchange Board of India's (Sebi) order barring Gammon India from raising money from the capital market for the next one year.

GIPL, which filed its draft application with the Sebi on March 29, is now expecting the regulator to clear its 'request for qualification' document and wishes to tap the markets as early as possible.

"Sebi in its order has not mentioned that the restriction over Gammon India, the promoter company of Gammon Infrastructure, halts the IPO," GPL managing director Pervez Umrigar said.

He said the order meant Gammon India would not be able to raise any money for one year from the date of the order, as well as it could not sell its holding in GIPL for a period of three years after the GIPL issue was through.

At present, Gammon India holds 82.5 per cent stake in GIPL, which is likely to come down to nearly 20 per cent after the latter's maiden float comes through.

Abhijit Rajan, who holds 29 per cent in Gammon India through as a promoter, will individually have 4.5 per cent in GIPL, post-IPO.
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SEBI imposes penalty on HSBC Investment Bank
Mumbai: The Securities and Exchange Board of India has imposed a penalty of Rs 10 lakh on HSBC Investment Bank (Netherlands) NV for issuing participatory notes against the purchase and sale of Bharat Petroleum Corporation Ltd (BPCL) shares during the period August to September 2002 to UBS Global Management and Union Invest. The investment bank was also alleged for not reporting the issuance of participatory notes to SEBI.
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Omaxe files prospectus with SEBI for IPO
New Delhi: Omaxe has filed its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India for a public issue of up to 1.78 crore equity shares. Of the total issue, up to 1.75 crore equity shares are reserved for the public, while the balance of up to 2.96 lakh shares are reserved for eligible employees of the company. Additionally, there will also be a greenshoe option of 17.5 lakh equity shares.

The issue would constitute 11.20 per cent of the fully diluted post issue paid-up capital of the company (assuming the green shoe option is exercised) and shall constitute 10.30 per cent of the fully diluted post issue paid-up capital of the company (assuming the green shoe option is not exercised).

While the face value of the equity shares is Rs10 each, the pricing of the issue is to be determined through 100 per cent book building process.

A minimum of 60 per cent of the net offer to the public shall be allocated to qualified institutional buyers, up to 30 per cent shall be available for allocation on a proportionate basis to the retail bidders and 10 per cent shall be available for non-institutional bidders. The shares would be listed on Bombay Stock Exchange and National Stock Exchange.
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Sebi makes PAN mandatory for demat accounts
New Delhi: Enhancing the "Know Your Client" norms, the Securities and Exchange Board of India has made Permanent Account Number (PAN) mandatory for opening demat accounts on or after April 1, 2006.

In respect of demat accounts opened before April 1, 2006 it is mandatory for the account holders to provide PAN to depositories by December 31, 2006. Where PAN is not provided, the demat account would be 'suspended for debit' after December 31, 2006 till it is provided, government said in a statement.

Similarly, SEBI has made PAN mandatory for trading in cash segment of exchanges with effect from 1st January 2007. It was already mandatory for trades in the futures and options segment of exchanges.
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