SEBI makes IPOs more transparent

The Securities and Exchange Board of India, SEBI, issued a new investor protection guideline that prevents companies doing IPO from sharing information, which is not available for the outside world, with their IPO arrangers.

Previously, a company going for an IPO shared key financial information with the investment bank arranging the IPO; information which is available only to the bank and not to others. The investment bank would then prepare research reports which are based on this extra information. The reports are shared with institutional investors prior to the filing of the prospectus and are not available to retail or ordinary investors.

So, one could easily make out that the additional information would make IPO estimations by the investment bank dealing with the IPO more accurate and give institutional investors an unfair advantage against other investors. Given this situation, the tweak from SEBI which says,

“no selective or additional information or information extraneous to the offer document shall be made available by the issuer or any member of the issue management team/syndicate to any particular section of the investors or to any research analyst in any manner whatsoever including at road shows, presentations, in research or sales reports or at bidding centers”

shall provide a level playing ground for investors alike and would bridge problems associated with information asymmetry.

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Now Interest Rate Futures can be traded in National Stock Exchange

After a gap of six years, the National Stock Exchange (NSE) of India re-launched trading in Interest Rate Futures. This will give the investor an opportunity to speculate and trade with these advanced financial instruments.

Interest Rate Futures allow institutions to hedge risk associated with interest rate fluctuations. They can reduce the risk associated with cash flows resulting from underlying assets such as home loans, long term fixed deposits etc.

However, in India, the underlying asset on which the interest rate future is based on is a 10 year notional coupon bearing government security. Have a look at this small series that came in ET, which talks about few things one has to consider before trading in interest rate futures.

Inflation rates of India (2009)

This post tracks inflation rates of India for the year 2009, like Inflation rates of India (2008) did for 2008. Before that, a few facts about inflation rate calculation in India.

- Inflation in India is based on Wholesale Price Index
- A set of 435 commodities are used for the WPI based inflation calculation
- The base year for WPI calculation is 1993-94
- WPI is available at the end of every week (generally Saturday), for a period of 1 year ended that day
- It has a time lag of 2 weeks (WPI for the year ended two weeks back will be available this week)

Latest Inflation Rate
- 2009 Nov - 4.78% (via)
(for 12 months ended on the given month)

Previous Inflation Rates (for 12 months ended on given date/month)
- 2009 Oct - 1.34% (via)
- 2009 Oct 17 - 1.51% (via)
- 2009 Oct 10 - 1.21% (via)
- 2009 Oct 03 - 0.92% (via)
- 2009 Sep 26 - 0.70% (via)
- 2009 Sep 19 - 0.83% (via)
- 2009 Sep 12 - 0.37% (via)
- 2009 Sep 05 - 0.12% (via)
- 2009 Aug 29 - (-0.12)% (via)
- 2009 Aug 22 - (-0.21)% (via)
- 2009 Aug 15 - (-0.95)% (via)
- 2009 Aug 08 - (-1.53)% (via)
- 2009 Aug 01 - (-1.74)% (via)
- 2009 Jul 25 - (-1.58)% (via)
- 2009 Jul 18 - (-1.54)% (via)
- 2009 Jul 11 - (-1.17)% (via)
- 2009 Jul 04 - (-1.21)% (via)
- 2009 Jun 27 - (-1.55)% (via)
- 2009 Jun 20 - (-1.30)% (via)
- 2009 Jun 13 - (-1.14)% (via)
- 2009 Jun 06 - (-1.61)% (via)
- 2009 May 30 - 0.13% (via)
- 2009 May 23 - 0.48% (via)
- 2009 May 16 - 0.61% (via)
- 2009 May 09 - 0.61% (via)
- 2009 May 02 - 0.48% (via)
- 2009 Apr 25 - 0.75% (via)
- 2009 Apr 18 - 0.57% (via)
- 2009 Apr 11 - 0.26% (via)
- 2009 Apr 04 - 0.18% (via)
- 2009 Mar 28 - 0.26% (via)
- 2009 Mar 21 - 0.31% (via)
- 2009 Mar 14 - 0.27% (via)
- 2009 Mar 07 - 0.44% (via)
- 2009 Feb 28 - 2.43% (via)
- 2009 Feb 21 - 3.03% (via)
- 2009 Feb 14 - 3.36% (via)
- 2009 Feb 7 - 3.92% (via)
- 2009 Jan 31 - 4.39% (via)
- 2009 Jan 24 - 5.07% (via)
- 2009 Jan 17 - 5.64% (via)
- 2009 Jan 10 - 5.60% (via)
- 2009 Jan 3 - 5.24% (via)

Related Articles
- Inflation rates of India (2008)
- How is WPI inflation rate calculated in India?
- Commodities and their weight-ages in WPI calculation of India
- Base year and number of commodities used for inflation calculation in India
- The magic of Inflation

New Income Tax Slabs

In the union budget for financial year 2009-10, the Finance Minister has announced new tax slabs.

General
Till 1,60,000 – 0%
1,60,001 – 3,00,000 – 10%
3,00,001 – 5,00,000 – 20%
Above 5,00,000 – 30%

Women
Till 1,90,000 – 0%
1,90,000 – 3,00,000 – 10%
Remaining tax rates are same as general

Senior Citizen
Till 2,40,000 – 0%
2,40,001 – 3,00,000 – 10%
Remaining tax rates are same as general

As you can see, compared to the last change, there is a 10,000 rupees increase in the first slab across all categories, while the remaining slabs remain unchanged. This would lead to a maximum savings of 1000 rupees for a tax payer whose income falls above Rs. 1,60,000. This may not be a significant saving for many.

However the interesting thing to note is that there is no 10% surcharge for incomes above 10 lakhs. This is a welcome move because I feel progressive taxation is counter productive to an aspiring population. Eventhough these tax sops would make holes in government's revenues, I guess the government is looking to increase the expendable surplus of the populace so as to boost up the economic downturn.

Indian Inflation turns negative

For the first time since 1977, India's WPI Inflation rate fell to -1.61% for the week ended on June 6 2009!