Latest Expert Exchange Queries

Make your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: empanelment :: VAT Audit :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: articles on VAT and GST in India :: cpt :: VAT RATES :: due date for vat payment
 
 
General »
 Non-performance: I-T dept transfers 245 commissioners
 Income Tax efiling: Tax implications resulting from clubbing of income
 Guidelines for selection of cases for scrutiny during the financial-year 2017-2018-regd
  GST: How companies are gaming the system
 Goods And Services Tax transparency: Elimination of added taxes to boost investment in realty
 In a first, Income Tax department to charge govt official under new benami law
 Income Tax Return Filing: 10 common mistakes people make while filing return of income
 Income Tax efiling: A few essential facts for senior citizens to keep in mind
 Pre-GST discounts get Maharashtra 16% more sales tax in three months
 Here’s how self-employed should efile their taxes
 Advance tax given by individuals in June quarter rises more than 40%

RBI rule on equity sales wont apply to insurers: IRDA
June, 21st 2010

Promoters of insurance companies, who have cut deals with their foreign partners to sell equity at fixed price, will now be able to stick to the contract. The insurance regulator has clarified that RBIs pricing guidelines for equity shares will not apply to insurance companies.

The company most affected by this notification would be Bajaj Finserv the holding company for Bajaj Allianz Life and General insurance. In May, the stock price of Bajaj Finserv shot up after a research report by a broking firm said RBIs guidelines would mean that Allianz would have to pay market price for increasing its stake in the life insurance venture.

Earlier, analysts had assigned only a 26% value to the companys holding in Bajaj Allianz because way back in 2001, Bajaj Auto had committed to allow Allianz increase its stake in the life venture up to 74% in exchange for an upfront premium.

In a clarification released on Thursday, IRDA said RBIs guidelines dated May 4, 2010, are applicable to Indian companies in sectors other than the financial sector. In view of the same, it is clarified that provisions of the said circular continue to be not applicable to the insurance sector.

According to insurance sources, besides Bajaj Allianz, there could be a few other insurance joint ventures where promoters have promised to allow foreign partners to increase stake to 49% as and when regulations allow.

But most of the companies where the management is predominantly controlled by foreign shareholdes do not enjoy the kind of market valuations enjoyed by Bajaj Allianz.

Last month, RBI came out with revised pricing guidelines for transfer of shares to foreign investors. Under the norms, shares of unlisted companies can be transferred at a price not less than the fair value to be determined by a Sebi-registered category merchant banker or chartered accountant as per the discounted free cash flow method.

Soon after the guidelines, JM Financial came out with a report stating that the revised guidelines could have a positive impact of around Rs 480 per share on Bajaj FinServ.

According to JM, of the Rs 390 share price, Rs 259 comes from Bajaj Allianz Life and Rs 57 from Bajaj Allianz General Insurance. This valuation assumes that Bajaj has only a 26% economic interest in the life business and 50% in the general business. The report adds that the revised guidelines would put the value of the life business at Rs 737 per share for the Indian parent if Bajaj FinServ had a 74% economic value.

As per the 2001 agreement between Bajaj Auto and Allianz, the German insurer has the call option to increase its stake in the life insurance joint venture from 26% to 74% at a pre-determined price if allowed under applicable laws and subject to regulatory approvals.

If the option is exercised by July 30, 2016, the pre-determined price would be Rs 5.42 per share, plus interest at 16% per annum, compounded annually from July 31, 2001, to the date of payment. After 2016, Allianz would have to pay the market price.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions