Aiming to deepen the convertible securities segment for listed entities and provide additional avenues to investors, market regulator Securities and Exchange Board of India (Sebi) on Tuesday floated a discussion paper to review the framework for public issuance of such instruments.

Sebi has proposed to limit the tenure of such instruments to five years as against the current norms that offer no specific tenure of convertible securities issued to public. The regulator has sought public comments till December 23.
Sebi has proposed to “explicitly permit the existing holders of convertible securities to sell their securities to public”. Presently, existing shareholders are permitted to sell their shares to public but there is no specific mention about convertible securities.

The regulator has also mandated companies to make up-front disclosure on the methodology of price conversion of such instruments – either pre-fixed at the time of issue or linked to market price at the time of conversion.
Presently, whether an issuance can be made on a fixed price basis or through the book building route depends on issuer meeting the specified eligibility criteria.

Between 1990 and 2001, the Indian markets saw 284 issues of convertible debentures with a total fund raising of around Rs 14,000 crore, with 57 issues being larger than Rs 50 crore, the markets regulator noted. However, since 2000 the market for public issue of convertible securities has dwindled.

“Market participants have assigned variety of reasons for the same including popularity of instruments like FCCB, which were permitted since mid-90s, lower tenure for convertible instruments issued in India, higher tax incidence on convertibles as compared to equity, etc,” it added.

Sebi has suggested same tenure for unlisted company desirous of making a public issue of compulsory convertible securities as well as for Optionally Convertible Debentures (OCDs) and Optionally Convertible Preference Shares (OCPs).

In case an unlisted company is desirous of making a public issue of compulsory convertible securities, Sebi has proposed such firms will have to comply with all the requirements as prescribed under Sebi (Issue of Capital and Disclosure Requirements) Regulations in this regard.

Further, the listing of such securities is proposed to be done on the institutional trading platform.

Centre today floated an idea of a gold exchange, a transparent platform where jewellers can buy and sell the precious metal locally instead of depending on the international market. (Reuters)

Centre today floated an idea of a gold exchange, a transparent platform where jewellers can buy and sell the precious metal locally instead of depending on the international market.

“This is just an idea… can we think of a gold exchange where there can be transparent trading. A platform where those who have surplus gold can sell it to those in requirement,” Shaktikanta Das Secretary Department of Economic Affairs Ministry of Finance said.

“There is a jeweller who needs gold temporarily, so instead of importing he can buy it locally,” Das said addressing the third India International Bullion Summit organised by Indian Bullion & Jewellery Association here.

On the recently-launched gold monetisation scheme, he said, “It is too early to give a verdict… and the government is committed to make a success of the scheme. It is not easy to convince people to part with their jewellery, which has emotional value attached to it.

“We need to change this mind set and understand the psyche of the people,” Das added.

Asking the industry to give suggestion to make this scheme a success, he said, “there are huge challenges and there is a need to involve a lot of jewellers, who can talk to their traditional customers and bring them into the gold monetisation scheme.”

He informed the Bureau of Indian Standards (BIS) has invited applications from over 13,000 licenced jewellers to act as a Collection and Purity Testing Centres (CPTCs) in the scheme, provided they have tie-up with BIS licenced refiners.

Early November, the Centre launched two gold schemes, sovereign gold bond and gold monetisation, with a view to contain bullion imports, which have been a big drain on the foreign exchange reserves. These schemes were aimed at bringing down the physical demand for gold or jewellery.

While the maiden sovereign bond scheme has been a success the demand for paper gold coming in at Rs 246 crore the monetisation scheme has been a big flop with only under 500 grams worth of jewellery being monetised.

About the Gold Bond, he said, 63,000 applications amounting to Rs 246 crore have been received. “This scheme saw an overwhelming response from investors throughout the country and initial figures show that about 63,000 applications were received for a total of Rs 246.20 crore by banks and post offices for 917 kg of gold. We expect even better response in the second tranche of the scheme,” he added.

On economic growth, Das said overall, the growth is expected to be in the vicinity of 7.5 per cent in 2015-16.

IBJA president Mohit Khamboj urged the Centre to create a dedicated gold bank for the sector that will boost the industry.

However, Das said, a dedicated bank of a particular sector is not an feasible idea.

J K Dadoo, Additional Secretary and Financial Advisor, Commerce Ministry said there is 22,000 tonnes gold, valued at USD 1 trillion, lying in the country of which 90 per cent are in the temples and the religious places.

“It will not be easy for them to part with the gold. However, if the Economic Affairs Ministry can talk to them and convince them to part with this yellow metal then the market will be flooded with gold and the will get 1,000 tonne gold annually. This gold can be bought by SBI and MMTC and converted into coins,” he added.

Former SBI Chairman O P Bhatt opined that the maturity period for the gold bond should be 10-15 years instead of the 8-10 years now to make the scheme more attractive.

Dena Bank share price soared as much as 13.17 per cent on Tuesday after the bank informed stock exchanges that a meeting of the Board of Directors will be held on December 03 (Express photo by Heena Khandelwal)

Dena Bank share price soared as much as 13.17 per cent on Tuesday after the bank informed stock exchanges that a meeting of the Board of Directors will be held on December 03 to consider raising AT1 and Tier 2 capital upto an amount of Rs 1,500 crore and Rs 1,000 crore, respectively, in one or more tranche. The bank will also consider to raise equity capital of the bank by diluting the government of India’s (GOI) holding upto 52 per cent on obtaining necessary approval.

At 2.49 pm, the share price of Dena Bank was trading 7.83 per cent up at Rs 45.45. The scrip opened at Rs 42.20 and had touched a high and low of Rs 47.70 and Rs 41.80, respectively, intrade so far. Sensex was marginally up 0.12 per cent at 26,168.64.

The bank reported 24.85 per cent fall in its net profit at Rs 38.76 crore for the quarter ended September 30, 2015 as compared to Rs 51.58 crore for the same quarter in the previous year.

Gross non-performing assets (NPAs) of the bank have increased to 6.84 per cent for the quarter as against 5.12 per cent in the same quarter previous year. Besides, bank’s net NPA stood at 4.65 per cent in Q2FY16.

In the past one year, the share price of Dena Bank declined 30 per cent to Rs 42.15 on November 30. Sensex slid 8.45 per cent during the same period.

The share price of the company climbed as much as 9.75 per cent to Rs 452.40, its 52-week high, on BSE.

Shares of Jubilant Life Sciences hit a new 52-week high on Tuesday after the company informed stock exchanges that it has received Abbreviated New Drug Application (ANDA) final approval from the US Food and Drug Administration (US FDA) for its generic version of antidepressant Paxil tablets.

The share price of the company climbed as much as 9.75 per cent to Rs 452.40, its 52-week high, on BSE.

At 1.38 pm, the share price of Jubilant Life Sciences was up 8.55 per cent at Rs 452.85. The scrip opened at Rs 414 and had touched a high and low of Rs 452.40 and Rs 411.50, respectively, in trade so far.

In a release, the company said, “Jubilant Life Sciences has received Abbreviated New Drug Application (ANDA) final approval from the USFDA for Paroxetine Tablets USP, 10 mg, 20 mg, 30 mg and 40 mg,
the generic version of Paxil Tablets, 10 mg, 20 mg, 30 mg, and 40 mg® (of Apotex), which is
used as an antidepressant.”

As on September 30, 2015, Jubilant Life Sciences had a total of 820 filings for formulations of
which 391 have been approved in various regions globally.

This includes 71 ANDAs filed in the US, of which 39 have been approved and 46 Dossier filings in Europe.

Tree House Education share price hit upper circuit after the company updated BSE that it has successfully received all amounts related to preschools and franchise operations that were outstanding as on 30 Sept 2015. (Express Photo)

Tree House Education & Accessories share price hit upper circuit on Tuesday after the company updated BSE that it has successfully received all amounts related to preschools and franchise operations that were outstanding as on 30 September 2015.

The share price of the company surged 9.99 per cent to Rs 167.30. The scrip opened at Rs 145 and had also touched its new 52-week low of Rs 138.10 on December 1.

In a release, the company said, “At present, outstanding receivables stands at Rs 27 crore as compared to Rs 63 crore as on September 30. The management is focused on continuing its aggressive collections strategy, expected to further reduce overall debtors from this level.”

Tree House continued to operate its business as usual with over 700 preschools spread across the country. The company said, “We reiterate that business growth remains healthy and progressing as per our plans and we are on schedule with our preschool expansion plans.”

On a net worth of Rs 679 crore, Tree House has net debt of only Rs 30 crore while its operating EBITDA was Rs 74 crore in the first half of FY16.