Stock markets swing on both extreme sides.

Middle-class appeasement continues before the ensuing Parliament elections.

Income tax exemption limit enhanced.

Adani thankfully withdraws his greedy FPO. All his shares battered down.

Bond Markets are favorable.

Overseas remittance Tax of 20 %- a huge negative factor.                                                         

IT Index jumps in early trading as it gains more than 1.5% with all stocks in green

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Stock Market LIVE: Adani stocks keep Nifty in red; Sensex trading flat.

Adani stocks will be in focus once again .

Share Market LIVE Updates: Indian stock market had a subdued start with Adani stocks sinking at open. Sensex is trading flat, while Nifty is 30 pts in red. Adani Enterprises and Adani Ports are down 10% each. IT stocks gain. Metal, Energy and Bank drag; FMCG and IT indices shine.

The board of Adani Enterprises Ltd scrapped its ₹20,000 crore follow-on public offering (FPO) citing investor protection concerns. Adani stocks erased all the market’s budget day gains on Wednesday as the Hindenburg report continues to keep retail investors’ sentiments on the group subdued. 

Budget : At an overall level, the Budget is quite positive for the HNIs due to the reduction in the highest income tax rate from 42.74% to 39%. This would see increased adoption of the new tax regime for individuals. Particularly, the high-income bracket founders and professionals will save taxes on their ESOPs. On the other hand, there are a few negative announcements which will impact HNIs and family offices such as the taxability of market-linked debentures as short-term capital gains and taxation of proceeds of high-premium insurance policies. A very significant change is on limiting the exemption provided for capital gains upon the purchase of new residential property. If proceeds received from offers for sale by selling shareholders in an IPO are invested in purchasing a residential property beyond INR 10 cr, then the capital gains exemption will be available only in the proportion that INR 10 cr bears to the total proceeds of the share sale.

Post-budget views on REITs / InvITs and HNIs & family offices

 REITs / InvITs are mandatorily required to distribute their cash surplus up to certain limits as per SEBI regulations on a quarterly basis. The distributions generally consist of interest, dividends or repayment of debt. The law provides for a pass-through status or single-stage taxation of the receipts. The receipts are either taxed in the hands of the Trust or the unit holders. Not both. However, repayment of debt was not taxable in the hands of both. This double non-taxation has been addressed. From April 1, 2023, all distribution by a REIT/InvIT representing repayment of debt is taxable as “other income” in the hands of the unit holders.

Adani group company’s bonds fall to distressed levels after FPO withdrawal

Green Energy’s 4.375% bond due in September 2024 dipped over 12 cents on the dollar to 66.75 cents in global secondary market on Wednesday.

Adani Ports & Special Economic Zone or APSEZ’s 3.375% bond due in July 2024 fell the most in global secondary markets on Wednesday

After withdrawal of Adani Enterprises FPO (Follow-on Public Offer) on Wednesday, Adani group company’s bonds fell down to distressed levels. Bonds issued by Adani Green Energy and Adani Ports & Special Economic Zone (APSEZ) received maximum beating in the global markets.

As per the Trade data, Adani Ports & Special Economic Zone or APSEZ’s 3.375% bond due in July 2024 fell the most in global secondary markets as it logged decline to the tune of 20 cents on the dollar to 69.75 cents in investment grade — clocking biggest loss on Wednesday session. Likewise, four more bonds issues by Adani Ports & Special Economic Zone plunged to distressed levels on Wednesday as they fell to 69 cents or lower.

Adani Green Energy’s 4.375% bond due in September 2024 dipped over 12 cents on the dollar to 66.75 cents in global secondary market trading on Wednesday. Just one bond issued by Adani Green Energy didn’t fell to distressed levels but it also got hit by 9 cents on the dollar.

Some bonds of Adani Ports & Special Economic zone and Adani Green Energy currently yield more than 30 per cent in global secondary markets, which is much higher than the average investment grade yield of 4.96 per cent and junk bond yield of 8.14 per cent.

In a dramatic U-turn on Wednesday evening, Adani Enterprises Ltd announced to withdraw its FPO worth ₹20,000 crore. The company decided to call off Adani Enterprises FPO despite getting fully subscribed in three days of bidding from 27th January to 31st January 2023.

Announcing the withdrawal of Adani Enterprises FPO, Gautam Adani, Chairman at Adani Enterprises Ltd said, “The Board takes this opportunity to thank all the investors for your support and commitment to our FPO. The subscription for the FPO closed successfully yesterday. Despite the volatility in the stock over the last week, your faith and belief in the company, its business and its management has been extremely reassuring and humbling.”

On Wednesday session on Dalal Street, Adani Enterprises share price crashed 26 per cent and finished at ₹2,179.75 apiece on NSE, which is ₹932.25 per equity share lower from the lower price band of Adani Enterprises FPO price.

Strong investor demand boosts overseas bond markets

In the aftermath of Hindenburg Research report raising concern over Adani group companies debt positioning, Adani Enterprises shares nosedived from ₹3.442 to ₹2,179.75 apiece levels, logging more than 36 per cent loss in last five straight sessions.

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