The Securities and Exchange Board of India (Sebi) has granted approval for five firms, marking a significant step towards their initial public offerings (IPOs). Among them are India Shelter Finance, DOMS Industries, Jana Small Finance Bank, Shiva Pharmachem, and Onest Ltd. The regulator’s issuance of observation letters, indicating the green light for IPO launches, follows the submission of draft papers between July and August.
India Shelter Finance’s Rs 1,800-crore IPO Plan
India Shelter Finance, a leading affordable housing finance company, is set to launch a Rs 1,800-crore IPO. The offering includes a fresh equity share issue of Rs 1,000 crore and an Rs 800-crore offer for sale (OFS) by investor shareholders. Funds raised will support onward lending and general corporate purposes.
DOMS Industries: Penciling Growth in Rs 1,200-crore IPO
Pencil manufacturer DOMS Industries plans a Rs 1,200-crore IPO, comprising a fresh issue of Rs 350 crore and an Rs 850-crore OFS by promoters. The capital will fuel the establishment of a new manufacturing facility and enhance production capabilities.
Jana Small Finance Bank’s IPO for Capital Augmentation
Jana Small Finance Bank’s IPO, totaling Rs 575 crore, involves a fresh issue and an OFS by existing investors. The bank aims to bolster its Tier-1 capital base to meet future capital needs for organic growth and expansion.
Shiva Pharmachem’s Rs 900-crore OFS IPO
Shiva Pharmachem’s IPO, solely an OFS of Rs 900 crore by promoters, will channel all proceeds to selling shareholders, with the company not receiving any funds.
Onest Ltd’s IPO to Fund Working Capital and Corporate Needs
Onest Ltd’s IPO, a blend of a Rs 77 crore fresh issue and an OFS of up to 32.5 crore shares, will direct fresh issue proceeds towards working capital requirements and general corporate purposes.
In a recent study titled ‘Decoding Digital Payments: A Retailer Perspective,’ NeoGrowth, an MSME-focused digital lender in India, sheds light on the evolving digital payments landscape among Indian retailers. Drawing from a dataset of 3,000 retailers and a survey of 1,000 retailers across the country, the study encompasses 25-plus cities and 70-plus industry segments.
Ubiquity of UPI in MSME Sales
The study reveals a significant trend among Micro, Small, and Medium Enterprises (MSMEs), with 70% reporting that half of their payments to suppliers are conducted through the United Payments Interface (UPI). Moreover, 7 out of 10 retailers anticipate that over half of their sales will be transacted via UPI in the next three years.
Preference for On-the-Go Digital Payments
The survey underscores UPI’s higher adoption compared to other digital payment methods like cards and online banking. It indicates a shift in consumer behavior, with customers preferring on-the-go purchases using digital payment options. Retailers, recognizing this preference, are increasingly embracing digital transactions, with UPI emerging as their preferred mode due to its customer convenience and swift payment processing.
Digital Transformation in Retail
As the study delves into the dynamics of digital payments adoption in the retail sector, it becomes evident that UPI’s prominence is reshaping the way MSMEs conduct transactions. The convenience and speed offered by UPI are driving both retailers and consumers towards a more digitally-driven retail landscape.
In the realm of business documentation, the Letter of Authorization for GST registration emerges as a critical component, streamlining representation before the GST department. This guide aims to unravel the concept, outlining its purpose, importance, format, and associated responsibilities.
Essence of Authorization Letter for GST
Delegating powers effectively is crucial in the multifaceted landscape of business ownership. The Authorization Letter, a legally binding document, plays a pivotal role in assigning specific powers to an authorized signatory. This ensures operational efficiency and mitigates the risks of mismanagement.
Significance in GST Registration
When obtaining a GST number, the Letter of Authorization becomes essential. Accompanied by the acceptance of authorization, it empowers a designated individual to act on behalf of the company in dealings with the GST department. Every entity, excluding sole proprietorships, requires an authorized signatory letter for GST registration.
Responsibilities of an Authorized Signatory
The authorized signatory bears key responsibilities integral to GST compliance. From applying for GSTIN to handling amendments, cancellations, and departmental correspondences, they are pivotal in GST-related activities. Their role extends to signing crucial GST documents, ensuring timely filing of returns, and representing the firm during assessments.
Crafting the GST Authority Letter
While the GST Act doesn’t prescribe a fixed format, certain elements are crucial. These include firm details, contact information, taxpayer and authorized signatory names, Aadhar and PAN details, and date, place, and signatures. Issuing the letter on official letterhead is essential.
Important Considerations in Drafting
Adhering to specific guidelines ensures the validity of the authorization letter. Issuing it on business letterhead, attaching proof of the principal place of business, appointing an authorized signatory for solo entrepreneurs, supporting the letter with a board resolution for companies, and ensuring all partners sign partnership firm authorization are vital considerations.
The repo rate, a pivotal tool in financial systems, influences the cost of credit and borrowing across the economy. As the central bank’s mechanism for lending to commercial banks, fluctuations in the repo rate have cascading effects on economic landscapes.
Credit Cost and Borrowing Impact
When the repo rate rises, borrowing becomes costlier for commercial banks, prompting them to pass on the added expenses to customers and businesses. This domino effect leads to higher loan interest rates, discouraging borrowing, and potentially stifling economic growth by limiting investments and employment opportunities.
NBFC Challenges and Profit Margins
Non-banking financial companies (NBFCs), crucial in extending financing to sectors overlooked by traditional banks, face challenges during high repo rate periods. Relying on a mix of loan and equity, NBFCs see a rise in the cost of debt, narrowing profit margins. Unlike traditional banks with access to low-cost financing, NBFCs, lacking such privileges, must lend at higher interest rates, impacting affordability for consumers.
Impact on SMEs and Low-Income Borrowers
The repercussions are felt keenly by small and medium enterprises (SMEs) and low-income borrowers. High lending rates hinder their ability to invest, expand, or achieve personal financial goals, exacerbating challenges in securing affordable credit.
Policy Challenges and the Road Ahead
Policymakers face the intricate task of balancing inflation management and sustaining economic growth amidst high repo rates. Crafting nuanced policies that consider the diverse needs of businesses and individuals is essential. Supporting financial inclusion and enabling NBFCs to access capital at reasonable rates contribute to building a more resilient and inclusive financial system.
Monetary Policy Complexity
The intricate relationship between high repo rates, expensive loans, and NBFC struggles underscores the complexities of monetary policy. Central banks and policymakers must make sophisticated decisions to foster a robust and inclusive economy, recognizing the evolving dynamics of the financial landscape.
Private general insurers in India have solidified their market standing, escalating their combined market share to 53.58% in gross direct premium underwritten during the first half of the current financial year, up from 50.81% in the same period last year. According to data released by the Insurance Regulatory and Development Authority of India (Irdai), 31 insurers in the non-life industry collectively underwrote gross direct premiums of Rs 1.43 lakh crore in the first half of the current fiscal year, marking a 14.86% annual increase.
Segment-Wise Insights
Health insurance emerged as the largest non-life segment up to September 2023, closely followed by motor (total) and crop insurance. Notably, private general insurers exhibited a robust growth rate of 21.13%, expanding their market share compared to the previous year. In contrast, PSU general insurers held a combined market share of 31.99%, experiencing a growth rate of 12.16%.
Top Insurers and Market Dynamics
The largest insurer in the landscape is the New India Assurance Company, commanding a market share of 13.09%, trailed by ICICI Lombard General Insurance Company (8.67%) and Bajaj Allianz General Insurance Company (7.69%). These top three insurers collectively hold a market share of 29.46%, showcasing a growth rate of 18.45%.
Segment-Wise Performance
While health insurance, motor (total), and crop insurance flourished, certain segments such as marine cargo, marine hull, crop insurance, and liability (total) experienced negative growth rates. Additionally, several segments, including fire, motor third party, overseas medical insurance, credit insurance, and others, recorded growth rates lower than those observed in the corresponding period of the previous year. The nuanced dynamics within these segments reflect the evolving landscape of the non-life insurance industry in India.
The High Court of Karnataka has raised concerns over the prima facie impact of exempting private medical establishments (PMEs) from the obligation to secure trade licenses and produce occupancy certificates (OC) during registration. The court, comprising Chief Justice Abhay Shreeniwas Oka and Justice John Michael Cunha, noted that this exemption, as outlined in a circular issued by the Commissioner for Health on August 17, 2020, appears to contradict the fundamental purpose and objectives of the Karnataka Private Medical Establishments Act, 2007.
Legal Challenge via PIL
The court’s observations were made while hearing a Public Interest Litigation (PIL) challenging the legality of the circular in question. The PIL contends that the circular, which relaxes the requirements for trade licenses and OCs for PMEs during registration, goes against the spirit of the regulatory framework established by the Karnataka Private Medical Establishments Act, 2007.
Court Action and Government Notice
In response to the PIL, the Division Bench ordered notice to the State government, seeking a response on the legality and implications of the circular. The court’s scrutiny suggests a critical examination of the exemptions granted to PMEs and the potential impact on public health and safety.
The Food Safety and Standards Authority of India (FSSAI) CEO, G Kamala Vardhana Rao, has urged states to enhance their efforts in monitoring and ensuring compliance with food safety standards. Speaking at the 39th Meeting of the Central Advisory Committee (CAC), Rao encouraged states and union territories (UTs) to increase regular surveillance, inspections, and random sampling of food products to detect and prevent adulteration.
Meeting Highlights
During the meeting, attended by over 60 officials, including Commissioners of Food Safety (CFS), representatives from states/UTs, senior FSSAI officials, nodal ministries, and committee members, key discussions centered around doubling quarterly targets. States/UTs were directed to intensify efforts and ensure the testing of at least 10 milk samples daily to uphold food safety standards.
Focus on Compliance
The statement emphasized the need for rigorous monitoring to verify compliance with laid-down standards, reflecting a commitment to safeguarding public health. The FSSAI’s call for increased vigilance aims to strengthen the regulatory framework and ensure the safety and quality of food products available in the market. By encouraging proactive measures, the FSSAI aims to create a robust system that protects consumers from potential health risks associated with food adulteration.
Company registration is a pivotal step for any business, providing protection, limited liability, and fostering growth. In India, the concept of ‘One Person Company’ (OPC) emerged under the Companies Act 2013, allowing a single individual to form a company with reduced compliance compared to private companies. This article outlines the essential documents required for OPC registration.
Prerequisites for OPC Registration
Before initiating OPC registration, ensure a minimum of one person is involved, complying with the Companies Act, 2013. A single individual can serve as both director and member but limited to one OPC. One director must be an Indian resident, and the minimum authorized and subscribed share capital is Rs. 1 lakh. The chosen name must be unique and distinguishable.
Documentary Requirements
Digital Signature Certificate (DSC): Obtain a DSC, crucial for registration. Authorized agencies appointed by the Controller of Certification Agencies issue DSCs with a validity of one or two years. Ensure DSC validity or apply for a new one before registration.
Director Identification Number (DIN): Apply for DIN in the SPICe Form, including the proposed director’s name and address proof.
Company Name Approval: Submit Form SPICe+ 32 to get the company name approved. Only one preferred name can be provided, along with its significance. If rejected, reapply with another name.
Documents for ROC Submission: After MCA approval of the company name, the following documents need to be submitted to the Registrar of Companies (ROC):
Memorandum of Association (MOA)
Articles of Association (AOA)
Affidavit and consent of the proposed director
PAN card and address proof of the director
Address proof of the registered office
With these documents in order, the OPC registration process can proceed seamlessly, offering a legal framework for the business.
A Digital Signature Certificate (DSC) is a specialized form of digital certificate issued by licensed Certifying Authorities (CAs) in India, adhering to the Information Technology Act, 2000. Governed by the Controller of Certifying Authorities (CCA), DSCs serve as legally recognized digital signatures, ensuring the authenticity, integrity, and security of electronic transactions and documents within the country.
Types and Usage of DSCs
DSCs are categorized into different classes, with Class 2 and Class 3 being prominent. Class 2 DSCs verify individuals against a trusted database, while Class 3 DSCs require in-person verification by a Registration Authority (RA). Although Class 1 DSCs only validate the name and email address, they are no longer available as of 2021. DSCs find extensive application in electronic transactions, including filing tax returns, GST submissions, digital document signing during company incorporation, online tendering, and various financial activities.
Navigate to the Digital Certification Services section and choose the ‘organization’ option.
Download the registration form, providing details such as Class of DSC (Class 3), applicant information, address, GST details, identity proofs, and a signed declaration.
Prepare a demand draft (DD) or cheque payable to the local certifying authority.
Submit the application along with the payment to the authority; DSC is typically issued within around five days.
Cost and Validity
The cost of a DSC varies, ranging from approximately Rs 300 to Rs 2,000, depending on the certifying authority and the validity period, which can be one or two years.
In recent years, general insurance companies have faced profit challenges due to significant natural calamities impacting regions like Tamil Nadu, Jammu & Kashmir, and Cyclone Hud-Hud. To bolster awareness around householder and shopkeepers’ insurance, the general insurance industry is urging the government to consider tax exemptions for premiums associated with these policies.
Current Tax Exemptions and Industry Proposal
Presently, only premiums for life insurance and health insurance enjoy exemptions under Sections 80C and 80D of the Income Tax Act. The industry contends that extending tax exemptions to householder and shopkeepers’ insurance premiums would be advantageous for all stakeholders. Insurance companies typically allocate 12-15% of premiums to home and shopkeepers’ policies, but low premiums result in limited earnings for agents.
Industry Impact and Claims Scenario
Over the last three years, general insurers have faced claims surpassing Rs 10,000-12,000 crore due to various catastrophic events. Following recent floods in Tamil Nadu, claims have already reached Rs 3,000-3,500 crore. The industry is looking to increase awareness and renewals for home and shopkeeper insurance products.
Industry Voices and Recommendations
KG Krishnamoorthy Rao, MD and CEO of Future Generali India Insurance, emphasizes the importance of home insurance, particularly as a crucial financial asset. He recommends granting tax exemptions on home insurance premiums in the upcoming budget. Sasikumar Adidamu, Chief Technical Officer at Bajaj Allianz General Insurance, supports the idea of tax incentives to boost overall insurance penetration, considering the low coverage during major catastrophic events.
