Street signs: Sebi to trim Reit lot size, Voda Idea rights play, and more

Sebi to trim Reit lot size 

Market regulator Securities and Exchange Board of India (Sebi) plans to bring down the minimum lot for trading and IPO application for real estate investment trusts (Reits). Sources say the issue has already been taken up by Sebi’s primary market advisory committee and a discussion is likely soon. The minimum trading lot could be brought down to Rs 50,000, while minimum IPO application amount could be reduced to Rs 1 lakh. For the just-concluded IPO of Embassy Reit the minimum application size was Rs 2.4 lakh and trading lot is Rs 1.2 lakh. Investment bankers say the high investment threshold impacted retail participation in the country’s maiden Reit offering.

Samie Modak

Vodafone Idea rights play

Shareholders of Vodafone Idea should apply in the Rs 25,000-crore rights offering or exit the counter and re-enter later, say investment experts. The telecom major has priced the right issue, which will lead to 229 per cent equity dilution, at Rs  12.50 a share, a discount of 60 per cent to current market rate. “Given the high dilution, the adjusted price post rights issue for Vodafone Idea will be around Rs  18.40 per share, 32 per cent higher than the rights issue price. However, the adjusted price is much lower than the current market price. So it makes sense to apply in the rights issue. Investors who can’t apply should sell now and maybe buy again after the price gets adjusted,” said a fund manager. The ex-rights date is March 29.

Samie Modak

IIFL Wealth Finance cuts loan book

IIFL Wealth Finance, operating in the loan against securities business, is reducing its loan book. According to Fairfax India's annual report, the non-banking financial company (NBFC) has decreased its loan book by 19 per cent in 2018 to $680 million. IIFL Wealth Finance is an arm of IIFL Wealth, in which Fairfax has an investment. This business involves providing loan against securities, which include shares, mutual fund units, bonds or debentures. The loan book reduction is in response to the liquidity situation in the market, the report says. The move comes at a time when the loan against shares business has come under question, particularly in cases involving highly indebted groups.

Jash Kriplani