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<p>In the latest budget announced by the Indian government, a significant change was introduced regarding the taxation of Long-Term Capital Gains (LTCG) on unlisted shares. Previously, LTCG on unlisted shares was taxed at 20% with the benefit of indexation. However, the new policy has reduced the tax rate to 12.5%, but the benefit of indexation has been removed. This article will analyze how this change impacts investors, using an example to illustrate the differences and show that even for shares purchased as far back as 2012, the new tax regime proves to be more beneficial.</p> <h4>Understanding the Change</h4> <p><strong>Old Tax Regime:</strong></p> <ul> <li>LTCG on unlisted shares: 20%</li> <li>Indexation benefit: Available</li> </ul> <p><strong>New Tax Regime:</strong></p> <ul> <li>LTCG on unlisted shares: 12.5%</li> <li>Indexation benefit: Not available</li> </ul> <p><strong>Note:</strong> Short-Term Capital Gains (STCG) tax remains unchanged.</p> <h3>Example Scenario</h3> <p>Let's consider an investor who bought NSE shares in various years (from 2012 to 2020) at INR 1000 per share. The investor sells these shares in 2024 at INR 6000 per share. We will calculate the LTCG under both the old and new tax regimes.</p> <h3>Assumed CII Values:</h3> <ul> <li><strong>2012-13:</strong> 200</li> <li><strong>2013-14:</strong> 220</li> <li><strong>2014-15:</strong> 240</li> <li><strong>2015-16:</strong> 254</li> <li><strong>2016-17:</strong> 264</li> <li><strong>2017-18:</strong> 272</li> <li><strong>2018-19:</strong> 280</li> <li><strong>2019-20:</strong> 289</li> <li><strong>2020-21:</strong> 301</li> <li><strong>2023-24:</strong> 348 (for calculation purposes)</li> </ul> <h3>LTCG Tax Calculation for Different Purchase Years<br /><br /><img src="https://unlistedzone.com/storage/knowledge-logo/app_image-1721791472.png" alt="" width="100%" /></h3> <h3>Comparative Analysis</h3> <p>Let's break down the calculations to understand the impact of the change:</p> <p><img src="https://unlistedzone.com/storage/knowledge-logo/app_image-1721788871.png" alt="" width="100%" /></p> <h3>Observations</h3> <p>From the table, it is evident that in none of the years (2012 to 2020) the old tax regime with indexation is more beneficial compared to the new tax regime with a reduced rate of 12.5% without indexation. The new tax regime always results in lower tax payable.</p> <h3>Implications for Investors</h3> <ol> <li> <p><strong>Simplified Calculation:</strong> The removal of the indexation benefit simplifies the tax calculation process, making it easier for investors to compute their tax liability without needing to adjust for inflation.</p> </li> <li> <p><strong>Lower Tax Rate:</strong> The reduced tax rate of 12.5% offers immediate tax savings compared to the previous 20% rate. As demonstrated in the example, the investor saves significantly in taxes across all purchase years.</p> </li> <li> <p><strong>Long-Term Impact:</strong> For long-term investors, the removal of indexation could mean higher taxable gains as the benefits of adjusting for inflation are no longer available. However, the lower tax rate still results in overall tax savings.</p> </li> <li> <p><strong>Investment Decisions:</strong> Investors might find unlisted shares more attractive due to the reduced tax burden, potentially increasing investments in startups and private companies.</p> </li> </ol> <h3>Conclusion</h3> <p>The recent budget changes bring a mix of benefits and considerations for investors in unlisted shares. The reduction in LTCG tax from 20% with indexation to 12.5% without indexation generally results in tax savings for investors. However, the magnitude of these savings varies depending on the year of purchase due to the effect of indexation.</p> <p>By understanding these changes, investors can make more informed decisions about their investments in unlisted shares, potentially optimizing their tax liabilities and enhancing returns. Investors should consult with their financial advisors to understand the full impact of these changes on their portfolios and make informed decisions based on their specific financial situations.</p>
<p>India's leading private bank, HDFC Bank Ltd., has given preliminary approval to initiate the listing process for its subsidiary, HDB Financial Services Ltd., through an initial public offering (IPO). The company's board has authorized a committee of directors to oversee the necessary steps for this endeavor, according to an announcement made in an exchange filing on Saturday.</p> <p>The requirement for the listing arises from the Reserve Bank of India's October 2022 circular, which mandates that entities classified as Upper Layer NBFCs must go public by September 2025. HDFC Bank's Chief Financial Officer, Srinivasan Vaidyanathan, mentioned in a January analyst call that the bank aims to start preparatory activities within the coming months to ensure flexibility in timing the market entry.</p> <p>HDB Financial Services, which expanded its footprint with 16 new branches in the quarter ending December, now operates 1,618 branches across 1,125 cities, serving 14.6 million customers.</p> <p>In financial results, HDFC Bank reported a 2% decrease in net profit quarter-on-quarter for the three months ending June, totaling Rs 16,174.75 crore, compared to Rs 16,510 crore in the previous quarter. The bank's net interest income, or core income, saw a 2% sequential increase to Rs 29,837 crore, while other income rose by 16% to Rs 10,668 crore. This decline in net profit was attributed to slower core income growth and higher tax expenses.</p>
<p>HDFC Bank Ltd is in preliminary discussions with private credit funds to sell a stake in its lending arm, HDB Financial Services, which is preparing for an IPO. The bank is evaluating HDB Financial's value, with five domestic credit funds each considering acquiring a 4-7 percent stake in the non-bank lender. These talks are at an early stage, and valuations are crucial for the deal to proceed.</p> <p>Previously, HDFC Bank's negotiations with large investors stalled due to valuation disagreements. Some potential investors sought board seats, particularly those aiming for a significant stake of around 20 percent. Clarity on this matter remains limited.</p> <p>HDFC Bank holds a 94.64 percent stake in HDB Financial, whose loan book was over Rs 90,000 crore as of March 31. The lender is seeking a valuation of 4-5 times its book value, which stood at Rs 144.52 per share for FY23, with shareholders' funds at Rs 11,437 crore. However, given the financial sector's recent valuation declines, including for leaders like Bajaj Finance, HDB Financial's desired valuation seems high in the current market.</p> <p>A secondary share sale by HDFC Bank is seen as essential for price discovery before HDB Financial's IPO. RBI regulations require significant NBFCs like HDB Financial to list by October 2025. HDB Financial's IPO has been in the pipeline for several years, heavily backed by former HDFC Bank CEO Aditya Puri, who aimed for a listing before his tenure ended in October 2020.</p> <p>Following new NBFC regulations from October 2022, major unlisted NBFCs must go public within three years. While Bajaj Housing has made progress towards its IPO, other companies, including HDB Financial, are moving slower, with limited discussions about the IPO, according to investment bankers.</p>
<p>Oyo, the Indian startup known for its budget hotel aggregation services, is in advanced discussions to raise INR 1,000 crore (USD 120 million) in new funding. This initiative follows Oyo’s decision to withdraw its IPO application earlier this year.</p> <p>Oyo is now focusing on securing investments from prominent family offices, which manage the wealth of affluent families. Among the potential investors are the family offices of Anand Jain, a former executive at Reliance, and the Juneja brothers, founders of Mankind Pharma. This move underscores the increasing role of family offices in funding Indian startups, particularly those exploring alternatives after facing public market challenges.</p> <p>The new funding round values Oyo at USD 2.5 billion, significantly down from its peak valuation of USD 9 billion in 2021. This 72% reduction mirrors a broader correction in the startup valuation landscape, with many companies experiencing similar declines recently. Additionally, Oyo is nearing the final stages of negotiations with Malaysia’s sovereign wealth fund, Khazanah Nasional, for further investment, which could increase the total raised in this round.</p> <p><br />Oyo has streamlined its operations to concentrate on core markets such as India, Europe, Malaysia, and Indonesia, while exiting less profitable regions like the US and China. The company has also implemented significant cost-cutting measures, including an 82% reduction in employee benefits and a 60% cut in marketing expenses. These efforts have improved Oyo’s financial health.</p>
<p>B9 Beverages Ltd, the company behind the craft beer brand Bira 91, is preparing for an initial public offering (IPO) slated for 2026. The company, which claims a 5% market share in key regions, is recognized as the fourth-largest beer producer in India.</p> <p>According to sources familiar with the matter, B9 Beverages has engaged Morgan Stanley to assist with its pre-IPO activities. CEO Ankur Jain confirmed the planned IPO, highlighting that it depends on the company achieving specific operational milestones.</p> <p>In the previous month, Bira 91 secured $25 million (approximately INR 208 crore) through external commercial borrowing (ECB) from its current investor, Kirin Holdings. Established in 2015 by Ankur Jain, B9 Beverages has built a reputation for its range of beers, ciders, and seltzers. The company’s investors include Peak XV Partners, Sofina, and DS Group, contributing to its total funding of $449 million to date.</p> <p>Bira 91 boasts a presence in 550 towns and cities across 18 countries. In December 2022, the company transitioned to a public entity and rebranded as B9 Beverages Ltd, as reflected in its regulatory documents.</p> <p>Despite its growth, B9 Beverages reported a net loss of INR 445.4 crore for the financial year 2022-23 (FY23), a 12% increase from the previous year's loss of INR 396 crore, driven by rising expenses and excise duties.</p>
<p>HDB Financial Services Limited has announced its financial results for the first quarter of FY2025, showcasing notable growth. As per the consolidated financial statements, the total revenue of the Company increased 6% to Rs. 3884 crore as against Rs. 3667 crore in the previous quarter, March 31, 2024 and increased 14% compared to Rs. 3387 crore the same quarter previous year. The Net Interest Income (NII) surged by 26.9%, reaching ₹3,264 crore. </p> <p>The total expenses of the Company increased 11% to Rs. 3100 crore as against Rs. 2786 crore in the previous quarter and increased 18% as against Rs. 2626 crore in the same quarter previous year. Notably, the firm successfully reduced its Employee Benefit Expenses by 11.9%, bringing them down to ₹906 crore.</p> <p>During this period, the Company reported an 11% drop in its profit before tax to Rs. 784 crore as against Rs. 882 crore and 3% increase compared to Rs. 761 crore in the same quarter previous year. </p> <p>The net profit in this quarter dropped 11% to Rs. 582 crore as against Rs. 656 crore in the previous quarter and increased 2.6% as against Rs. 567 crore in the same quarter previous year. </p> <p>The company also reported a significant improvement in asset quality, with the Gross Non-Performing Assets (GNPA) ratio declining to 1.93% from 2.48% the previous year. These results highlight HDB Financial Services' solid financial health and improved asset management, positioning the company for continued growth.</p> <p>While the overall financial performance was robust, there were increases in certain costs. The finance cost escalated by 39.5%, totaling ₹1,496 crore, and provisioning expenses rose by 54.3% to ₹412 crore. Tax expenses increased slightly by 4.7%, reaching ₹202 crore. </p> <p>The earning per share of the Company during this period was Rs. 7.33 as against Rs. 8.28 in the previous quarter while it was Rs. 7.16 in the same quarter previous year. </p> <p>HDB Financial Services Limited (HDBFS) is a leading non-banking financial company (NBFC). It is a subsidiary of HDFC Bank, one of India's premier private sector banks. Established in 2007, HDBFS was founded to offer a wide range of financial services and products to individuals and businesses.</p>
<p>Tata Sons, the principal investment holding entity and promoter of Tata companies, is contemplating a strategic reduction of its ownership in Tata Capital. Currently, Tata Sons holds approximately 97% of Tata Capital's shares but is considering a gradual divestment to lower its stake below 50%, according to sources from ET NOW.</p> <p>This move is in anticipation of a potential initial public offering (IPO) for Tata Capital, where Tata Sons plans to sell shares incrementally. The objective is to solidify Tata Sons' position as it seeks an exemption from the Reserve Bank of India (RBI)'s mandate, which requires both Tata Sons and Tata Capital to be publicly listed by September 2025 unless an exemption is granted.</p> <p>Under RBI regulations, both Tata Sons and Tata Capital are classified as upper-layer non-banking financial companies (NBFCs), necessitating their listing unless they obtain a waiver.</p> <p>Following the successful public offering of Tata Technologies, which garnered substantial investor interest, Tata Capital is also generating significant demand in the unlisted market. Reports suggest that Tata Capital's shares are trading around Rs 1,100 each in this market.</p> <p>Tata Capital Limited, a subsidiary of Tata Sons, was established in 2007 with the vision of becoming a trusted, customer-centric, and one of the leading financial services providers in India. As part of the prestigious Tata Group, Tata Capital aimed to leverage the group's reputation and values to offer a wide range of financial products and services including commercial finance, consumer loans, infrastructure finance, wealth management, and investment banking.</p>
<p>Oyo's parent company, Oravel Stays Ltd, is preparing to appoint Sumer Juneja, Managing Partner and Head of EMEA & India Investing at SoftBank Vision Fund, as a non-executive director on its board. This appointment is pending shareholder approval, which will be sought at an upcoming Extraordinary General Meeting (EGM). </p> <p>Juneja's addition to the board will be as SoftBank's nominee director, indicating the investment giant's renewed confidence in Oyo, particularly following the company's recent profitability milestone.</p> <p>For the financial year 2023-24, Oyo achieved a significant milestone by becoming profitable, recording net earnings of approximately Rs 100 crore. This achievement was announced by Oyo's founder, Ritesh Agarwal, on the social media platform X (formerly known as Twitter).</p> <p>"SoftBank is demonstrating strong support for Oyo and is keen to bolster the company's international market growth," said an insider who requested anonymity.</p> <p>Juneja's appointment follows the departure of Munish Varma, SoftBank's former nominee on Oyo's board, who stepped down in September 2021. Since then, SoftBank has not had a representative on Oyo's board.</p> <p>Currently, Oyo's board comprises founder Ritesh Agarwal, Bejul Somaia from Lightspeed Venture Partners, former Indigo Executive and Akasa Air Co-Founder Aditya Ghosh, Paralympian Dr. Deepa Malik, former Starbucks COO Troy Alstead, and former president of the American Accounting Association W Steve Albrecht.</p> <p>Sumer Juneja, who joined SoftBank in 2018, has played a pivotal role in establishing its investment presence in India before expanding his responsibilities to oversee activities in EMEA. Prior to his tenure at SoftBank, Juneja was a Partner at Norwest Venture Partners, focusing on growth equity and venture investments in Indian companies across various sectors. He also co-founded Goldman Sachs' Asian Special Situations Group in India. Juneja holds a Bachelor of Science degree in politics and economics from the London School of Economics.</p>
<p>Indosolar Limited, part of Waaree Energies Limited, has announced the opening of its latest solar module manufacturing plant in Noida. This new facility, with a production capacity of 1.30 GW, marks a major milestone in boosting local manufacturing capabilities. The plant is expected to create numerous job opportunities and contribute significantly to India's goal of achieving net-zero carbon emissions.</p> <p>Hitesh Doshi, the Chairman and Managing Director of Indosolar, highlighted the company’s focus on innovation and environmental stewardship. "This facility underscores our dedication to pushing the boundaries of solar technology and fostering sustainability. By leveraging our cutting-edge manufacturing processes and the expertise of our skilled team, we aim to accelerate India's renewable energy initiatives while generating jobs for the community. This plant is designed to address the increasing demand for top-quality solar panels nationwide. We are committed to collaborating with our partners to promote the widespread adoption of solar energy, paving the way for a sustainable future," Doshi commented.</p> <p>Waaree Energies Limited (WEL), founded in 1990, stands as India’s leading solar PV module manufacturer, boasting a total installed capacity of 12 GW as of June 30, 2023, according to a CRISIL Report. Since its start in 2007, WEL has concentrated on producing high-quality, cost-effective solar PV modules to provide sustainable energy solutions worldwide. The company's initiatives are aimed at reducing the carbon footprint and enhancing the quality of life. WEL operates four manufacturing facilities in India and has an international presence.</p>
<p>In a significant move to enhance amenities for travelers, Cochin International Airport Limited (CIAL) has launched fast-charging stations for electric vehicles (EVs) at both the domestic and international terminals. Each station is equipped with two 60 kW Electric Vehicle Direct Currency (EVDC) chargers, allowing four EVs to charge simultaneously.</p> <p>The initiative is part of CIAL's ongoing efforts to provide better services for airport users, according to an official press release. Users of the new charging stations can manage their charging sessions and payments through a dedicated app, which offers various charging plans.</p> <p>Looking ahead, CIAL has partnered with Bharat Petroleum Corporation Limited to set up a hydrogen fuel station, further expanding its sustainable energy infrastructure.</p> <p>The airport's parking facilities currently accommodate 2,800 cars, with additional space for 600 more vehicles under development. To support its green energy initiatives, solar panels have been installed on the roofs of the parking structures, generating approximately 20,000 units of electricity daily.</p>
<p>Cochin International Airport Limited (CIAL) has commenced extensive renovation of the canals surrounding the airport. This significant project spans approximately 24 kilometers and requires an investment of ₹11 crore, as per a recent press release. </p> <p>During the inauguration of the project, Industries Minister P. Rajeeve highlighted that the airport is experiencing a period of substantial growth. The canal renovation initiative, gaining momentum after the devastating floods of 2018, is a collaborative effort by CIAL to ensure unobstructed water flow.</p> <p>CIAL has consistently emphasized the well-being of the numerous workers involved in the airport's daily operations. Additionally, the airport authority has plans to permanently resettle individuals who lost their homes and properties due to the airport's expansion. Another notable initiative includes the formation of a society for headload workers. Furthermore, the construction of an overbridge near Akaparambu is also being considered, according to Minister Rajeeve.</p>
<p>Private equity giant Advent International is set to sell its stake in Manjushree Technopack, targeting a valuation of $1 billion to $1.2 billion. Talks are already underway with prospective buyers. At the same time, Advent is in advanced stages of negotiations to sell Bharat Serums and Vaccines.</p> <p>Manjushree Technopack, India's largest provider of rigid plastic packaging, was acquired by Advent International in 2018. This involved purchasing a 40% stake from Kedaara Capital, valuing the company at around ₹2,400 crore, along with additional shares from the founding family, bringing the company under professional management.</p> <p>Since then, Manjushree Technopack has shown significant returns, leading Advent to consider an exit. The firm is engaging with both private equity firms and packaging companies for the sale.</p> <p>In FY23, Manjushree Technopack's revenue rose to approximately ₹2,100 crore, a marked increase from ₹924 crore in FY18 before Advent's acquisition. Despite this growth, the packaging industry has faced challenges due to volatile raw material prices, affecting the company's profitability last fiscal year.</p> <p>Under Advent’s ownership, the company has expanded rapidly. In 2020, it opened a new manufacturing plant in Silvassa, followed by new facilities in Visakhapatnam and Mysuru in 2023.</p> <p>The company has also grown through acquisitions. It acquired Napla, a manufacturer of pumps and triggers, in 2019. In 2021, it bought the B2B business of Pearl Polymers and Classy Kontainers. In 2022, it acquired two manufacturing units from Hitesh Plastics in Maharashtra, entering the specialized caps and closures market.</p> <p>Active in India since 2007, Advent International has invested over $6 billion in 18 Indian companies, with a significant portion of these investments made in the last five years.</p> <p>Advent's strategy of combining organic expansion with strategic acquisitions has been instrumental in driving Manjushree Technopack's growth. The company’s new facilities and acquisitions have not only increased its production capacity but also expanded its product offerings, enabling it to cater to a broader market.</p> <p>Furthermore, the addition of advanced manufacturing units has bolstered Manjushree's position in the highly specialized caps and closures market, which is expected to see significant demand in the coming years. This diversification is likely to make Manjushree an attractive acquisition target for both strategic buyers and financial investors looking to capitalize on its established market position and growth potential.</p>
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