Market will be very choppy for next few weeks: Jigar Shah

GAAR is playing on the minds of the people. Those people who are directly affected and those who are not affected, both are looking at some clarity on this issue and perhaps that is detering people to probably use their cash.

The second aspect is whether the central bank will cut the interest rate or not. That is also going to be very crucial because the market is lacking a trigger. It is not that the market is having lots of risk factors which are unknown. That was the situation four-five months back but now most of the things are known and they are priced in. But there is no trigger yet for the market to go up and that is because of the interest rate.

Interest rate will be a key determinant and if it is pushed back to let's say June, that is not going to be very good for the sentiment of the market and people would still keep their cash with them or probably invest in some high yielding debt. So I feel market will be very choppy and range bound for the next few weeks. 





bipin kumar karn
pgdm2sem
roll no-8

Expect Indian shares to correct even if RBI cuts rate:


Indian shares may continue to drift lower even if the Reserve Bank of India cuts interest rates in April, as uncertainty on taxation of foreign portfolio investment from some destinations is weighing on the rupee as well as equities, said Bank of America.

Foreign brokerages have started complaining at recent Indian provisions to tax indirect investments and combat tax evasion, saying they are couched in ambiguous language and could also be used to target overseas market investors.

The views are split on a possible rate cut by the RBI in April as oil prices remain higher even as the country's economic growth is slowing.

Dollar demand from oil companies and a slowdown in foreign institutional investment flows in March have resulted in a 3.5 percent depreciation of the rupee.

While foreign investors are yet to turn heavy sellers of Indian stocks, historically the rupee's depreciation has been negative for the market, according to strategists.

"Looking at all periods of sharp rupee depreciation (more than 3 percent in a month), markets were negative on 75 percent of the occasions and fell by an average of 4.2 percent," said BofA in a note.
ASHRAF HUSSAIN
PGDM-2nd semester

six blacklisted companies close

New Delhi, Mar 29 (ANI): Defence Minister A.K Antony on Thursday said that six companies - four foreign and two Indian - have been blacklisted from the defence procurement process for 10 years for alleged involvement in a multi-crore ordnance factory scam.
"Six companies have been blacklisted for 10 years by the government. The banned entities included four foreign companies and two Indian companies and the action against them was taken following recommendations by the Central Bureau of Investigation (CBI)," Antony said at a press conference at the DEFEXPO here.
"In the process of procurement, if it is established at any stage of the contract that there is malpractice then we will cancel the contract. Even after signing the contract if anything is found we will take action, we have very strong safe guards," he said.
"We have cancelled many major contracts following corruption charges. We have very strong safeguards on integrity form. For any contract beyond Rs 100 crore integrity pact is a must. In the integrity pact, strongest action will be taken against anybody found to be involved in malpractice. We will protect our interest and money," he added
Antony further said that the current offset policy incorporated into defence contracts with foreign companies need to be expanded, as the present policy would not be able to absorb the ongoing offset amount.
The six blacklisted companies include the Singapore Technologies, Israeli Military Industry, Germany's Rheinmetall Air Defence, Corporation Defence of Russia, Delhi-based T S Kisan and Co Pvt Ltd and R K Machine Tools of Ludhiana. (ANI)


bipin kumar karn

Moody's takes actions on 7 Portuguese banks; Outlook negative

The debt and deposit ratings of Banco Santander Totta (a subsidiary of Banco Santander S.A.) were lowered by two notches to Ba1.

Moody's Investors Service has taken rating actions on seven Portuguese banks and banking groups. The senior debt and deposit ratings for four banks were downgraded by one notch, aligning their ratings at the same level or one notch below the ratings of the Portuguese government, which was downgraded to Ba3 from Ba2 on 13 February 2012. The debt and deposit ratings of Banco Santander Totta (a subsidiary of Banco Santander S.A.) were lowered by two notches to Ba1. The debt and deposit ratings of Banco Comercial Portugues (BCP) and of Caixa Economica Montepio Geral (Montepio) were confirmed at Ba3. All ratings have a negative outlook.

The downgrades of most of the banks' debt and deposit ratings reflect Moody's downgrades of their standalone bank financial strength ratings (BFSRs), which are driven by the following key factors:
  • Expected further deterioration of banks' domestic asset quality and profitability given the country's poor economic outlook which is driven in part by the austerity measures needed to address the sovereign's weakening credit profile
  • Additional asset risks stemming from banks' substantial holdings of government-related debt
  • Prolonged and ongoing lack of access to private wholesale funding sources;
While none of these pressures are new, in Moody's view they continue to mount against the backdrop of the ongoing euro debt crisis. Positively, Moody's recognises the supportive stance toward the Portuguese banking system by its government and the euro area authorities including the ECB. However, as discussed further below, Moody's has concluded that this supportive stance does not fully offset the aforementioned negative drivers.

All of the banks' standalone credit assessments have negative outlooks, reflecting the very challenging operating environment, which will likely continue to exert negative pressure on the banks' operating performance. The negative outlooks on the banks' debt and deposit ratings reflect the negative outlook on their standalone credit assessments and on the Portuguese government's Ba3 bond rating.

Today's rating actions conclude the review for downgrade of Portuguese banks, initiated on 15 February 2012 (see "Moody's Reviews Ratings for European Banks"). That review was part of Moody's wider review of European financial institutions driven in part by (i) the difficult European operating environment caused by the prolonged euro area crisis; and (ii) and the deteriorating creditworthiness of certain euro area sovereigns (including Portugal).

Moody's has also concluded its review of systemic support currently incorporated in the ratings of subordinated debt of Portuguese banks, which was initiated on 29 November 2011, and removed all systemic support from these ratings.

As a result, the subordinated debt (and, where applicable, junior subordinated debt) ratings of two banks (Banco Comercial Portugues and Banco Espirito Santo) have been affected, since the ratings on those securities are now being notched off these banks' adjusted standalone credit assessments, which do not incorporate government support assumptions. This action reflects Moody's view that creditors holding subordinated debt of Portuguese banks are more likely to suffer losses than holders of their senior unsecured debt in the event that the government provides financial support to the banking system.

Rating Actions Overview
  • Caixa Geral de Depositos (CGD): The standalone BFSR was downgraded to E+ (mapping to B1 on the long term scale) from D (Ba2) and the debt and deposit ratings were downgraded to Ba3/Not Prime from Ba2/Not Prime.
  • Banco Comercial Portugues (BCP): The standalone BFSR was downgraded to E+ (B2) from E+ (B1) and the debt and deposit ratings was confirmed at Ba3/Not Prime.
  • Banco Espirito Santo (BES): The standalone BFSR was downgraded to E+ (B1) from D- (Ba3) and the debt and deposit ratings were downgraded to Ba3/Not Prime from Ba2/Not Prime. Espirito Santo Financial Group (ESFG, the parent of BES): The debt ratings were downgraded to B2/Not prime from B1/Not Prime.
  • Banco BPI (BPI): The standalone BFSR was downgraded to E+ (B1) from D (Ba2) and the debt and deposit ratings were downgraded to Ba3/Not prime from Ba2/Not Prime.
  • Banco Santander Totta (BST): The standalone BFSR was downgraded to D- (Ba3) from D+ (Ba1) and the debt and deposit ratings were downgraded to Ba1/Not Prime from Baa2/Prime-2.
  • Caixa Economica Montepio Geral (Montepio): The standalone BFSR was confirmed at D- (Ba3) and the debt and deposit ratings were confirmed at Ba3/Not Prime.
  • Banco Internacional do Funchal (Banif): The standalone BFSR was downgraded to E+ (B2) from D- (Ba3) and the debt and deposit ratings were downgraded to B1/Not Prime from Ba3/Not Prime.

Ratings Rationale

Rationale for Downgrades of Standalone Credit Assessments
In Moody's view, the intrinsic credit strength of Portuguese banks is weakening, primarily owing to the three drivers mentioned above and discussed below:

Asset Quality and Profitability likely to deteriorate in difficult conditions
Portugal's increasingly challenging economic prospects will exacerbate the intense pressure on Portuguese banks' already weak profitability and asset quality. Moody's expects loan loss provisions to absorb an increasing portion of banks' pre-tax income. At the same time, margins will be further pressured in light of the expected increase in non-earning assets, higher funding costs (particularly of retail deposits) and continued balance sheet deleveraging.

The Portuguese economy, which Moody's expects to shrink by 3.6% during 2012, is weighed down by the weakening sovereign credit profile (reflected in the recent government bond rating downgrade to Ba3 from Ba2 on 13 February 2012), by the government's austerity programme needed to consolidate the sovereign's debt position and by an increasingly restricted supply of credit, as banks seek to reduce risk assets given the demands on them to deleverage from investors and regulators. The recapitalisations orchestrated (and most likely funded) by the Portuguese government as a means of supporting the solvency of the Portuguese banking system and perhaps ultimately bolstering confidence in it are likely, in the short term, to further inhibit credit creation.

Additional Risks from Banks' Government Bond Holdings
Portuguese banks, like most banks, have substantial exposures to their domestic sovereign. Holdings of government bonds averaged around 80% of core capital as of end-December 2011 for the seven banks covered by today's announcement. This direct exposure, together with exposure via counterparties and customers who are themselves sensitive to the sovereign, means Portuguese banks are highly sensitive to the sovereign's weakening credit profile (see "Moody's adjusts ratings of 9 European sovereigns to capture downside risks" and "How sovereign credit quality may affect other ratings", 13 February 2012).

Prolonged and Ongoing Lack of access to Private Wholesale Funding sources
Portuguese banks face a prolonged loss of access to private sources of wholesale funding. They are, to all intents and purposes, unable to operate on a standalone basis without external funding. Moody's has taken into account the extensive routine and extraordinary financing made available by the Portuguese government and the euro area authorities in preserving the banks' BFSRs and debt and deposit ratings in the 'B' and 'Ba' category. The rating agency also acknowledges the generally supportive stance of the euro area authorities including the supportive effect of recent ECB operations, which have sharply reduced the risk of any bank failing because of illiquidity.

However, this supportive stance does not mitigate Moody's concerns. Such extraordinary support will ultimately buy time, however there is still significant uncertainty about how that time will be used to resolve the underlying problems driving the euro area debt crisis or to enable the Portuguese banks to re-enter the markets. The recent downgrade of the Portuguese sovereign reflects the heightened uncertainties over the government's ability to achieve its debt targets given, for example, the weakening of the Portuguese economy.

In such an environment it is very difficult to see the Portuguese banks re-entering the private markets in the foreseeable future. The longer the banks remain reliant on public sector support, the greater the probability that conditions come to be attached to continued funding and liquidity support, with negative consequences for creditors including bondholders. Moody's has therefore concluded that it should continue to place only limited additional weight on the availability of routine and extraordinary funding and liquidity support arrangements in assessing the banks' standalone strength, and in determining the appropriate uplift factored into debt and deposit ratings. 


By RAZI ANWAR (PGDM 2nd sem)

WB TO SET FINANCIAL ASISTANCE TO STATE

BHUBANESWAR: The World Bank pledged to step up financial assistance to the State to help it pursue the goal of sustainable and inclusive growth by better utilisation of financial aid.
The issue of raising financial support was discussed here at a meeting on Wednesday between visiting World Bank President Robert B Zoellick and Chief Minister Naveen Patnaik.
The discussions, according to a World Bank release, also focused on how its $ 600- million programme for the State could better address developmental challenges. The sectors identified for possible future focus included mining and water management.
“Odisha has made good development progress and the Government should be congratulated on achieving fiscal stability and for its focused efforts to overcome poverty, Zoellick said adding, the State’s vast mineral resources can make a substantial contribution to India’s growth in strategic sectors and also mitigate global pressure on commodity prices.
In addition to World Bank-assisted projects, the International Finance Corporation (IFC), the private sector arm of the Bank, has initiated a new Odisha inclusive growth partnership to help the State generate potentially transformative investments in key areas like agribusiness, downstream metal manufacturing and tourism, Zoellick told a media conference.
Responding to a query on expansion of the Integrated Coastal Zome Management (ICZM) programme and TRIPTI, the livelihood programme, the World Bank Chief said ICZM was recently launched. Good experience learned from the pilot project will be extended to west coast and beyond the country.
TRIPTI is a part of the livelihood programme under the National Rural Livelihood Mission (NRLM) launched in 10 districts of the State and the Government of India will take a decision on the extension of the programme.
To a question on further assistance to the power sector reforms in the state, the Zoellick said distribution sector is facing challenges in many parts of the country and this needs to be strengthened. “The World Bank has been a development partner for the State and we hope to continue a mutual engagement in addressing these issues,” he added.
Zoellick, who is on a five-day India tour, is visiting Odisha to gain first-hand view of the State’s economic and social challenges and also to find out how best the Bank could support it. He visited Bhitarkanika Wildlife Sanctuary in Kendrapara district on Wednesday.
DHANANJAY SINGH
PGDM   2ND semester

Essar Oil completes refinery expansion project

The Vadinar Refinery is now India’s second largest single-location refinery, with an annual capacity of 18 million tonnes (375,000 barrels per day) and a complexity of 11.8, which also makes it among the world’s most complex refineries.

Essar Oil Ltd (EOL) has announced the completion of the Rs. 8,300-crore expansion of its Vadinar Refinery with the successful commissioning of the final Delayed Coker Unit (DCU), which is amongst the world’s largest.
The Vadinar Refinery is now India’s second largest single-location refinery, with an annual capacity of 18 million tonnes (375,000 barrels per day) and a complexity of 11.8, which also makes it among the world’s most complex refineries.
The capacity expansion and complexity enhancement gives the Vadinar Refinery the capability to process much heavier crude diet. The share of ultra heavy crude, which currently constitute 20% of crude basket, will go up to 60%; and as a result the overall share of heavy and ultra heavy crude will go up to 80% of the refinery’s total crude basket. The company has already entered into long-term crude sourcing contract with global suppliers, including several national oil companies from Latin America.
In terms of product yield, the Vadinar Refinery now has the flexibility to produce higher value, high-quality products, including Gasoline (petrol) and Gasoil (diesel) conforming to Euro IV and V norms, that have growing acceptance in both domestic and international markets. Close to 80% of its production will now be of valuable light and middle distillates; and 50% of the production of Gasoil (diesel) and Gasoline (petrol) will meet Euro IV and Euro V specifications.  EOL is targeting newer markets like Australia, New Zealand and north-west Europe, in addition to countries in the Indian subcontinent for exporting high quality fuels. However Essar Oil will continue to market a majority of its products in the domestic market.
The Vadinar refinery benefits from a fully integrated infrastructure including India’s only captive coal fired power plant (nearing completion) to provide power and process steam, a port, pipelines and tankage with multi modal product despatch facilities through rail, road, and sea, giving it a unique cost advantage.
Prashant Ruia said: “We are delighted to announce the completion of the refinery expansion programme. This expansion will greatly improve our product offering, margins and competiveness. Our capital expenditure programme is now nearing an end. We have invested close to $5 billion until date in the refinery complex and our cost per complexity barrel is one of the lowest in the industry.”
Naresh Nayyar, CEO of Essar Energy, said: “After starting commercial production just four years ago, we are proud of achieving a size and scale that can match the best in the world. It underlines our commitment to building a world-class, integrated, low-cost energy company that is focused on India’s energy growth story.”
LK Gupta, MD & CEO, Essar Oil, said, “The timely completion of our expansion project is a testimony to the untiring commitment of the Essar Oil team as well as teams from other Essar Group companies who worked seamlessly under highly demanding conditions to bring this dream project to life.”
The Rs. 8,300-crore refinery expansion project was implemented using the Group’s in-house capabilities—construction and overall project management, for instance, was managed by Essar Projects.
The DCU is a key addition to any modern refinery because of its ability to convert bottom-of-the-barrel vacuum residue into valuable products like Gasoline (Petrol), Gasoil (Diesel) and VGO (Vacuum Gasoil). It has capacity of 7.5 MMTPA, and is licensed by CB&I LUMMUS. The DCU at the Vadinar Refinery is not only amongst the world’s largest unit of its kind but also one of the most advanced to be used in any refinery worldwide, giving the company a higher flexibility to process heavy and ultra heavy crude and produce high value products.
Alongside the expansion, an optmisation project is also underway at the Vadinar Refinery that will further increase the capacity to 20 MMTPA (405,000 bpd) by September 2012.


By RAZI ANWAR (PGDM 2nd sem)

India's infrastructure growth rebounds in February

India's infrastructure sector growth jumped to 6.8% in February 2012 versus 6.4% in the same month a year earlier, the Government said on Thursday.

Growth in India's eight core sector industries rebounded in February 2012, with all the constituents of the widely tracked gauge showing material improvement over the previous month. 

India's infrastructure sector growth jumped to 6.8% in February 2012 versus 6.4% in the same month a year earlier, the Government said on Thursday.

Core sector growth stood at a measly 0.7% in January of this year.

The Index of Eight core industries has a combined weight of 37.90% in the Index of Industrial Production (IIP) with base 2004-05.

India's infrastructure sector output expanded by a healthy 6.7% in November after touching a six-year low in October.

Core sector growth turned back up in December (4.6%) before sliding again in January.

The Index of Eight core industries stood at 145.6 in February as against 136.4 in February 2011. It was at 149.30 in January and 149.4 in December.

Core sector growth during April-February 2011-12 stood at 4.4% versus 5.8% in the corresponding period last year.

Coal production registered a growth of 17.8% in February compared to 7.5% in January. Petroleum Refinery production surged by 6.2% in February as against a drop of 4.6% in January.

Electricity Generation expanded by 8% in February versus 3.2% in January. Steel production rose by 4.3% in February as against a contraction of 2.9% in January.

Cement production registered a growth of 10.8% in February compared to 10.6% in January. Crude Oil production inched higher by 0.4% in February versus a fall of 2% in January.

Fertilizer production rose by 4.1% in February as against 4% in January. Natural Gas production dropped by 7.6% in February compared to a decline of 10.4% in January.

By RAZI ANWAR( PGDM 2nd sem)

RBI asks banks to improve NPA management

The Reserve Bank today asked banks to improve their ability to manage stressed assets, but said there was nothing alarming about an unexpected rise in the NPA levels this fiscal.

"Concerns (on NPA) are there. Banks have to improve their ability to manage NPAs. We have told banks what is their lacuna. They have to improve their information system. But we see that the situation is not alarming. Though this is our concern. Hope banks will be able to manage them," deputy governor K C Chakrawarthi  told reporters on the sidelines of a function organised by YES bank here.

It can be noted that following the continued slowdown in economic activities on the back of rising interest rate regime, banks, especially the state-run ones, have been reporting higher NPAs in their books since the second quarter.

The country's largest lender SBI had reported record gross NPAs in Q3 at Rs 40,080 crore and saw an 87.5 per cent spike in its provisioning. But private lenders are better off.

The total NPAs in the system are set to top 3 per cent of the total assets this fiscal, against a 2.3 per cent last fiscal at Rs 98,000 crore. 


Posted By- Nitesh Kumar Singh
PGDM 2nd sem

Gold-FOREX Correlations Shift Back to Anti-Dollar as Traders Await FOMC, Data and Treasury budget leads light calendar

Today's economic calendar is very light, with the Treasury's February budget set to be released at 2 p.m. ET. The consensus forecast is $-229 billion compared with the previous $-27.4 billion. Estimates range from $-229.4 billion to -$25 billion.Tomorrow the calendar includes retail sales figures and the Fed's rate decision for March. Economists expect rates to remain unchanged at 0.25 percent when the decision is released at 2:15 p.m.

LONDON (AP) -- Markets were steady Monday ahead of a meeting of European finance ministers that is expected to pave the way for a second massive bailout for Greece that will prevent the debt-ridden country's imminent bankruptcy. Ministers from the 17 countries that use the euro are meeting later and Greece will again be at the top of the agenda. 

The greenback continue to gain ground on Monday, with the Dow Jones-FXCM U.S. Dollar index climbing to a fresh monthly high of 10,018, and the rally may gather pace over the next 24-hours of trading should the Federal Reserve continue to soften its dovish tone for monetary policy. DJ FXCM Dollar IndexThe Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.17 percent higher on the day as market participants scaled back their appetite for risk, and the bullish sentiment underlining the greenback may gather pace over the near-term as the fundamental outlook for the world(TM)s largest economy improves. Indeed, the more robust recovery limits the Fed(TM)s scope to push through another large-scale asset purchase program, and we may see the central bank talk down speculation for additional monetary support as growth and inflation picks up.


DEEPAK SETH
PGDM 2ND
PG/11/12

  

SEBI lifts ban on Tayal entities in Bank of Rajasthan case

According to SEBI, when promoters, the Tayals, had indicated that they were reducing their stake in Bank of Rajasthan from 44.71% to 28.61% to comply with an RBI directive, they had actually increased their stake to 55%.

Market regulator, Securities and Exchange Board of India, has lifted the ban on 100 entities associated with the promoters of Bank of Rajasthan, reports said.

In March 2010, SEBI had banned these entities from dealing in the securities market for allegedly violating several rules, which included takeover norms, and indulging in fraudulent trade practices.

According to SEBI, when promoters, the Tayals, had indicated that they were reducing their stake in Bank of Rajasthan from 44.71% to 28.61% to comply with an RBI directive, they had actually increased their stake to 55%.
Prashant Saran, Whole-time Member, SEBI, in his order said, “I am of the opinion that such an offence would have been considered as very serious or fatal if the wrongful disclosures would have led genuine investors into trades that would eventually expose them to much greater risk.”
“I have noted that there is no allegation as to any price or volume manipulation by the promoters. Therefore, I am of the opinion that purely from a securities market point of view, the severity of the offence could be considered not very grave,” he added.

Further he said in his order: “There is no allegation that the entities indulged in any other kind of manipulation in the securities market. Therefore, it would be reasonable to assume that on the basis of the material available on record, there is no indication of a likelihood that the entities shall indulge again in wrongful disclosures of their holdings of which they have been charged with in the first place.” 


By  ANAND PRAKASH (PGDM 2nd SEM)

UK's economy shrinks more than expected in Q4

The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%.

The UK economy contracted at a faster-than-expected pace in the fourth quarter of 2011 as output of the dominant service sector declined. 

The British economy shrank by 0.3% in the final three months of 2011 compared to the previous quarter, the UK Office for National Statistics (ONS) reported on Wednesday. The ONS had previously estimated a 0.2% quarterly contraction. 

The UK's GDP in the October-December period rose by 0.5% over the year-ago period compared to an earlier estimate of 0.7%. 

Chancellor of the Exchequer George Osborne yesterday said that Britain was now in the recovery phase. 

The UK economy received a boost from net trade in the fourth quarter. Business investment fell 3.3%, less than the 5.6% fall previously estimated. Consumer spending rose 0.4% in the fourth quarter, though this was less than the 0.5% previously forecast. 

Real household disposable income fell 0.2% in the fourth quarter, the second successive quarterly decline. The savings ratio - the share of post tax income put aside - fell to 7.7% from 7.9%.

The UK economy grew by 0.7% in 2011, with output in the fourth quarter 0.5% higher than the same period a year earlier, revised down from a previous estimate of 0.7%.

A separate report showed today that the UK's current-account deficit narrowed to 8.5 billion pounds in the period from a downwardly revised 10.5 billion pounds, as the trade gap fell.

By RAZI ANWAR(PGDM 2nd sem)

GAAR proposal disappointing, says Jim Rogers

NEW DELHI: Stating that bureacracy in India is the worst in the world, Jim Rogers, Chairman, Rogers Holdings told ET Now that he was disappointed with the General Anti-Avoidance Rules (GAAR) proposal announced by Finance Minister Pranab Mukherjee in the Union Budget 2012-13.

Rogers is of the opinion that these regulations will discourage global investors. "I would prefer other markets than India if GAAR is implemented," he told ET Now. Rogers believes that India would develop faster if the markets are less regulated. 

Rogers maintains his view on commodities and expects oil to rise in the future. 

Finance Minister Pranab Mukherjee on Tuesday evening said he may modify some provisions of the GAAR prescribed in this year's budget, holding out hope that the government could adopt a lenient position on the issue of taxing short-term capital gains of Mauritius-based foreign institutional investors (FIIs).  



Earlier on Tuesday, finance ministry mandarins said the government had no intention of targeting participatory note (PN) trades, triggering a 205-point rise in the 30-share BSE Sensex. But experts said uncertainty will remain till an amendment is passed to specifically exclude PNs from the ambit of the relevant section of the income-tax law. 

The budget has spooked investors on two fronts. First, GAAR gives the tax authorities, among other things, the power to override the tax avoidance treaty between India and Mauritius to tax FIIs that invest through special purpose vehicles without setting up an office or permanent establishment in the tax haven. 

A finance ministry official said the government did not have participatory notes in mind when it introduced a provision in the budget that makes it clear that deals involving Indian assets, such as Vodafone's acquisition of Hutchison Essar, will be subject to tax even if the transactions are struck overseas between foreign entities. 

A panel has been formed which will formulate procedures and also specify threshold for transactions," said the official.


DEEPAK SETH
PGDM 2ND 
PG/11/12