Posted April 04, 2018 06:01:58India’s real estate bubble has burst, and the new rules have opened the floodgates for more speculation.
But not everyone is happy with the new policies.
The Securities and Exchange Board of India (SEBI) is planning to crack down on speculation, and to ban any entity with a turnover of less than Rs 1 crore.SEBI has announced measures to ensure that “any company with a capital of less over Rs 1 lakh is banned from holding any share or shares on the market,” the government said.
The regulator will also introduce a new system to ensure “that no entity has any shares or shares issued on the Exchange that exceed Rs 1,000 crore,” it said.
In addition, SEBI has also announced a crackdown on those that use stock exchange shares for “improper purposes”.
“We have already issued a directive to all stock exchanges and have already started taking action against those who misuse stock exchange share,” SEBI Chairman and Managing Director Amitabh Kant said.
Sources close to the government say the regulator has also issued a ban on the use of stock exchange stocks for “unrelated purposes”.
However, many of the companies with stock exchange listings on the markets are not so lucky.
They are expected to take legal action against the SEBI, which will decide whether or not to take action against them.
“The regulator has announced some changes, but we are yet to make any changes to our system,” said a person familiar with the situation.
Some of these companies are looking to set up their own stock exchanges to boost their business and attract foreign investors.
For example, Pimco Group, which runs a Mumbai-based real estate brokerage, is planning an IPO that could be worth as much as Rs 40,000-50,000 crores.
But some of the largest companies in the sector have been hit hard by the new regulatory measures.
The likes of Reliance Industries, Jio Infocomm Ltd and Idea Cellular are all expected to suffer losses as they cannot survive on stock exchange stock.
A person familiar said Reliance, Jios, Idea and other major companies are likely to be the big losers from the SEB’s new rules.
The government, however, is optimistic that its measures will make life easier for some of these investors.
“We will not give up on our policies, we will keep going.
We are going to make the process more efficient and simpler, and make the market more fair and competitive,” Minister of State for Commerce V K Sinha said.”
We are also ready to provide financial support to any firm or person that has an interest in buying shares on these exchanges.
This will give the opportunity for them to become a player in the market.
We will not be able to provide subsidies to such firms, but will provide assistance in this regard,” he said.