Starting 1st April , for dividends paid to mutual fund investors who have opted to be in the dividend plans, the fund houses will have to disclose to every investor how much of the dividend is from appreciation on net asset value and how much from capital distribution.
This change in norm, announced by Securities and Exchange Board of India in October, was meant to discourage fund houses from indulging in dividend stripping that was being used by high networth investors to evade tax.
Mutual funds sometimes used a small-sized scheme to facilitate the method of dividend stripping. MFs wants more AUM to earn profits and by helping HNIs they can get more funds. MFs help the HNIs by paying huge amount of dividend from principal amount so that NAV would drop and they can book huge capital losses and evade taxes. The investments needed to be introduced in three months earlier than the dividend cost and needed to be held 9 months after the date for them to be eligible for taxation advantages.
This practice died out as the government and subsequently, the capital markets regulator modified the tax legal guidelines and guidelines.
The government plugged the loophole within the FY21 funds, making dividends taxable within the arms of buyers. Until then, the dividend payer paid the taxes. This has made dividend stripping unsuitable for decreasing tax outgo.
In July 2010, the Supreme Court dismissed the tax department’s petition against a Bombay HC ruling that the loss incurred by assessees in dividend stripping transactions cannot be disallowed on the ground that it was tax planning.

The Supreme Court on Tuesday 23rd March 2021 directed that there should be no charging of compound interest, interest on interest or penal interest on the installments which were due during the loan moratorium period from 1st March 2020 to extended date 31st August 2020 on any borrower, irrespective of the loan amount. If such interest has already been collected, it should be either refunded to the borrower or adjusted towards the next installments. And allowed banks to declare NPAs
The moratorium was only for the deferral of EMIs and not the waiver of interest. There were demands by the borrowers that the banks should waive off the interest amount during those six months and extend the moratorium period beyond six months. The banks refused the total waiver of interest as the cost would be huge. Thus, various trade associations, power sectors, and real estate sectors filed a pleas seeking an extension of the term loans’ moratorium period and waivers of interest for six months because of the pandemic.
The government submitted to the Supreme Court that if it allows interest waiver on all loans and advances to all borrowers for the six-month moratorium period, then the inevitable amount would be more than Rs.6 lakh crore. If the banks had to bear this burden, it would wipe out a substantial part of their net worth affecting their survival as the banks have to pay interest to depositors, pensioners and have to meet administrative expenses as well. There may be several welfare funds schemes that might be surviving on the interest earned from deposits. Thus, the RBI provided for deferred payment of instalments and not a waiver of interest.
The judgment relieved for banks and lenders with the court lifting its nearly six-month bar on them from declaring accounts of borrowers as non-performing assets (NPAs). In October last year, the apex court had stopped banks and lenders from declaring accounts of borrowers as NPAs. At the same time, the Court observed that it was not possible to order complete waiver of interest during the loan moratorium period
The categories in which the Centre and the RBI agreed to waive compound interest during the loan moratorium period are upto ₹2 crore: MSME loans, Education loans, Housing loans, Consumer durable loan Credit card dues, Automobile loans crore, Personal loans to professionals, Consumption loan.


The direction for loan more than ₹2 crore has not been given yet regarding the compound interest. According to rating company ICRA the compound interest on loan more than ₹2 crore across all the lenders is between ₹13500 crore – ₹14000 crore.
Banks have refunded interest on interest of about ₹6500 crore to the borrower less than ₹2 crore

Goldman Sachs Group Inc., Cerberus Capital Management and Edelweiss Financial Services Ltd. bought into a junk-rated rupee bond with credit rating of D (ratings by CRISIL), issue yielding as much as 21%. This three companies has invested in the Rs 1,600-crore issuance from Kesoram Industries Ltd. through various vehicles and carry coupon that increases in stages the longer they are outstanding.
Kolkata-based Kesoram, whose history dates back over 100 years defaulted on its debt last year and is working to restructure repayments. And in this month kesoram-a cement manufacturer has allotted equity shares and preference securities to 10 creditors as part of its plan to restructure debt. Proceeds from this bond sale will be used in part to repay existing loans and overdue liabilities. The investments reflect growing interest in Indian distressed assets
With this new issue of bond they hadn’t complied any financial covenants to protect the bond holders and has defaulted on ₹460 crore of debt as of Dec. 31, the company said in a statement last month.

Giant container ship, the Ever Given, which got stuck diagonally across the canal on Tuesday(23rd March 2021), has blocked traffic in both directions on one of the world’s busiest shipping routes.
India’s shipment of oil, textile, furniture, cotton, auto-components and manufacturing parts to Europe, North America and South America are stucked and it can be delayed by 15-20 days. The blockage of this canal can result in 5%-15% hike in Freight charges according to estimate by Shipsy-a Import/Export automation platform.
India’s trades through this canal is around $200 Billion. The rise in freight charges, as well as shortages in some crucial components, such as computer chips, have raised fears that both producer and consumer prices will rise more rapidly. The blockage has caused a huge traffic jam of more than 160 ships along the 193-kilometer (120-mile) canal.
On an average day more than 50 ships cross the canal that connects the Mediterranean sea and Red sea. With the canal currently shut to new traffic, some shipping firms may opt to take the re-routing around southern Africa, but that comes at a cost in time and money.

Vodaphone Idea have assured the bondholders that all the principal value and interest payment will be matured that are coming due in later year. Bonds worth ₹674 crore where traded in the early months of year 2021 as compared to October-December of the previous year has shown transaction worth just ₹90 crore. The yield has came down to 26% – 29% from the October 2019 having YTM of 42.9%. Investors have gained confidence in this company as they have not defaulted or delayed and payment in due.
The largest trade happened on 3rd March 2021 in telecom sector worth ₹263 crore at 15% price discount with yield of 28.78%. This rise in bonds are attracting many wealthy and foreign investor to take on this bet as Vi has never defaulted on their bonds.
Vodaphone needs to raise additional capital to remain stabilize at cliff in their business sector. They have added new customer in this year after a gap of 14 months with no new customer. Local lenders are averse to lend any new money with no capital flow from foreign institution of by parent company in their Convertible bonds.
Vodaphone is said that they have approached US based private equity funds KKR and Carlyle Group for ₹14500 – ₹18100 crore after its recent talk with Oak hill – led consortium went fail.

Most of the Retail investor invest in IPOs based on grey market premium and easy financing leads to oversubscription and no proper price discovery. Retail investor invest in IPOs just for listing gains.
Most of the IPOs in 2020-2021 have oversubscribed and are trading below their listing price. Because oversubscription led by QIB and HNIs sometimes mislead the retail investor. Most retail investor think that if a HNI are investing than there might be a scope of income and they invest likewise.
Lets take a look at some recent IPOs:
Easy trip planner , this issue was subscribed 159.33 times with QIB(78) , HNI(384.26), Retail(70.78) times was listed at ₹212.25 and was issued at ₹186-₹187. Similarly, Nazara technology was subscribed 175.46 was listed at ₹1,971 and currently trading 15.8% below at 1660. Mr Bector foods specialities was subscribed 621 times currently trades at 366.4 which is 26.9% below listing price of 501.

Aditya Birla Sun Life (ABSL) Mutual Fund has proposed to reset the maturity date of seven of its fixed maturity plans (FMP) that are coming up for redemption in the coming financial year between April 5 and April 20. FMPs are close end funds with no liquidity and the quality of these investment are not known because there is lowest interest among investors in these types of investments.
These schemes collectively manage ₹2,800 crore as of February.
An investor can reset its maturity date ( probably 1.5 – 2 years) to get indexation benefit of long term capital gain by just staying invested with 5.5%- 6% gain over 1.5 – 2 years as RBI has pushed the rate down. An investor don’t want to reset their maturity date can get their maturity value. And an investor redeem their value on current maturity date and again invest cannot get indexation benefit.
For investors who have a investment period time frame greater than 5 years are recommended to redeem their value on the current maturity date and invest that fund in Index funds/ETFs.
FMPs are close end funds with no liquidity and the quality of these investment are not known because there is lowest interest among investors in these types of investments.

On 18th March 2021 the Road Transport and Highways Ministry unveiled the much awaited voluntary-vehicle fleet modernization program or “vehicle scrapping policy” which is aimed at creating an Eco-system for phasing out of Unfit and Polluting Air and improve road and vehicle safety, better fuel efficiency and boost the auto industry. According to the ministry of road transport and highways, there are 17 lakhs old medium and heavy commercial vehicles in India without a valid certificate. Also, the number of light motor vehicles older than 20 years is more than 51 lakhs
Under the new policy, commercial vehicles of more than 15 years and passenger vehicles of more than 20 years have to undergo a fitness test . A vehicle failing fitness test or failing to get a renewal of its registration certificate may be declared as ‘End of Life Vehicle’ and will have to be mandatorily scraped. A New measure has increased fees for fitness certificate and fitness test may be applicable for commercial vehicles after 15 years from the date of initial registration.
Vehicle owners who would voluntarily scrap their vehicles will get a rebate on road tax in the range of 15% to 25% and complete waiver of registration fees on the next new vehicle purchase. Automobile manufacturers will also have to offer a discount of 5% against a certificate of vehicle scrapping. Also, vehicle owners will get a value for their old vehicles from scrap yards which will be around 4-6% of the price of a new vehicle.
Gadkari said the new policy will boost the Indian automotive industry’s turnover by 30 percent to Rs 10 lakh crore in the coming years. from the current ₹4.5 lakh crore
As a direct result of the policy being put in place, up to 50,000 jobs and investments of around Rs 10,000 crore are expected to be generated.
Gadkari added that India’s automotive sector will be amongst those offering the highest employment opportunities in the country going forward.
Automobile manufacturers such as Maruti Suzuki, Toyota and Mahindra and Mahindra have already announced their investments for setting up vehicle dismantling centres across the country as these carmakers expect these centres to generate significant revenue in the next few years once scrapping of vehicles becomes a practice. Other vehicle manufacturers are also likely to open their scrapping centre. Overall, the policy will bring down cost of auto components as the scrapping yard of vehicle will also supply scrap steel and other components to automobile manufacturers and other industries and can increase India’s exports.
Rules for fitness centres and scrapping centres will come into effect from October 1st 2021, scrapping of government vehicles over 15 years can be done by April 1, 2022. Heavy CVs and other category vehicles must be mandatorily tested fitness by April 1, 2023, and June 1, 2024, respectively.

The Road Transport and Highways Ministry has notified on March 12, 2021 the vehicle recall policy for manufacturers defaulting in their production which will come into effect from April 1 ,2021 . According to the policy, depending on the number of complaints and types of vehicles (two-wheelers, three-wheelers, four-wheelers, among others) that have to be recalled, the Government can impose fine of up to ₹10 lakh, ₹20 lakh, ₹50 lakh or ₹100 lakh.
India, at present, follows a voluntary vehicle recall policy, and this is likely to be a part of shift towards mandatory vehicle recall policy.
Under the new Motor Vehicles act, 2019 the manufacturer of the defaulted vehicle has to re-imburse the buyer at full cost or replace it with better specifications.
The transport ministry has provided minimum number of complaints for different types of vehicles that are required for initiating vehicle recall.



Vehicle Sales(units) no of complaint for recall
Three wheeler, Cars, ≤500 20% of Sales or 100
SUVs. 501-10000. 150
>10000. 1250

Two wheeler. Upto 3000. 600

Large passenger vehicle, 3% of Annual sale
Trucks, Buses

The delisting attempt by the promoters had failed previously as influential institutional investors such as Life Insurance Corp. of India (LIC) were not willing to tender shares at the low price. LIC had suggested a per share price of ₹320 in the reverse book building process last year
Vedanta Resources Ltd (VRL)-the metals and mining giant wants to buyback its stake in an Indian subsidiary Vedanta Ltd by buying 17.51% stake (with total stake of 72.6% if all the shareholders tenders their shares) at ₹235 a piece from ₹160 earlier.
Even crude prices are on a rise and that is improving Vedanta’s earnings and cash flow expectations further. The oil and gas business contributed 31% to Vedanta’s FY20 operating profit. The per barrel crude oil prices have rebounded to around $70 levels now from sub-$20 levels in March 2020.

The company’s shares had earlier traded much higher and were near the ₹300 level during the peak of the commodity cycle. Hence, investors are expecting a higher price for an exit.

Edelweiss Securities Ltd expect total debt (standalone) of VRL to increase to $8.2 billion. VRL plans to service the debt required to buy the additional stake through the higher dividend received from the downstream investment.