Weekend Bites: Adani casts off Hindenburg curse, and demons in Angel Tax

For about a decade or so, it seemed no one could stop Gautam Adani. His eponymous business group has climbed to new heights in diversified businesses. Count me in, man, he zoomed the list of the world’s richest people to, for a while, number two.

Then, on January 24, Hindenburg Research, a US-based short-selling firm, released a report making serious allegations and raising concerns about the group’s debt and valuation. Things turned upside down. Adani’s companies’ share prices plummeted, dropping her chiefs’ ranking on the rich list.

Now, the group and the man seem to be emerging from the depths.

Story of the week: Take me out of the woods

Tuesday was the third day in a row sharp gains As for the Adani shares, two of them almost erased all the losses caused by the Hindenburg. This was the day that US-based GQG Partners raised its investment in the group and indicated its willingness to support any of the “new offerings” of the Adani Group.

In an interview with bloombergGQG Chief Investment Officer Rajeev Jain said, “Within five years, we would like to be one of the largest investors in the Adani Group.” Without specifying the companies, he said that GQG had increased its stake in the group by 10 percent, and that its holdings were valued at $3.5 billion.

GQG made a huge opposition call on Adani by investing Rs 15,000 crore when the Hindenburg-induced erosion was in full swing.

The Interim Report of the Supreme Court-appointed Committee of Experts, which said it had found no hard evidence to support Hindenburg’s claims, was another source of Adani’s support. For its part, the group has been moving heaven and earth to reduce its debt.

investment bankers said business standard Notable non-GQG investors can also be He looks positively at Adani. Abu Dhabi Investment Authority, International Holding Company and Hinduja Group appear to have shown interest in the upcoming sale of shares of Adani Group of Companies.

In other news…

The Digital India Bill will have special provisions for Protect childrenRajiv Chandrasekhar, Minister of State for Electronics and Information Technology, told Business Standard. The draft bill will be released by the first week of June for public consultation.

2,000-rupee banknotes circulate at Posta Bazar, north of Kolkata, one of the largest wholesale markets for perishable goods in eastern India. Posta Bazar stands for The urgency to use notes – By everyone from jewelers and wholesalers to neighborhood fruit sellers, mall shopkeepers, and petrol pumps.

Watch it: From The Morning Show

What is obsessing over Suveen?

A report in The Economist in March said the origin of India’s so-called landlord tax lies in a scandal. A government official allegedly funneled the money through a shell company and declared the proceeds to be investments rather than taxable income.

Pranab Mukherjee, as the Finance Minister who presented the budget in 2012, added a clause to curb this tax evasion. If investors buy shares in unlisted companies by paying more than their fair market value, recipients will have to pay tax on the excess funds.

In this, as sometimes happens with sweeping policies, the baby was dumped with bathwater. The kids, in this case, were startups, typically operating on meager returns, usually incurring losses, yet getting high valuations during investment rounds because of the promise they hold. Therefore, the fair value in the present can differ strikingly from the value that investors see in their future.

With the effects of the landlord’s tax sinking in, came the exemptions. Startups were exempted if they did not complete 10 years, had a turnover of less than Rs 100 crore, and had a paid-up capital of less than Rs 25 crore. Most importantly, startups did not have to pay taxes if they raised money from foreign entities.

Nerves calmed down. But that was until this year’s budget sought to apply the tax to funds from foreign investors, including venture capital firms and pension funds not registered with SEBI, the securities markets regulator.

In April, Income Tax Department Notifications sent for startups to raise capital at an “excessive premium” from local investors between the 2018-19 and 2020-20 evaluation years. To make matters worse, the budget and notifications came in the middle of India’s so-called startup funding winter. This prompted our page editorial team to write an animated piece: “Let the startups live. ”

However, Singapore, Ireland, the Netherlands, the United Arab Emirates and Mauritius found no mention. Mauritius and Singapore investment vehicles are used by global investors to invest in unlisted Indian companies. Experts say it’s not clear whether special-purpose vehicles in unspecified countries will get tax immunity.

It’s good to see the wheels turning. Are you turning enough?

One thing is for sure, we haven’t completely exorcised the landlord tax demons.

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