Street Signs: Transparency boost for RPTs, Dr Agarwal GMP at 15%, and more

RPT smoking gun: Proxy advisory firms unite for full transparency

 

Proxy advisory firms are set to launch a platform to monitor related-party transactions (RPTs) and shareholder dissent in listed companies. The portal, expected to launch within 10 days, will provide recommendations on RPTs and offer detailed information for a fee. Three proxy advisory firms have agreed to jointly roll out the platform, with a fourth potentially joining. This initiative responds to the Securities and Exchange Board of India’s (Sebi’s) push for investor education and increased scrutiny of RPTs, which have been prone to “egregious” misuse, according to the Sebi chairperson. Market players believe the move will enhance transparency within India Inc and help curb the misuse of RPTs — essentially transactions between a listed company and entities related to it in some way.

 

Brokers’ escape hatch: NSE releases referral rule pressure valve

 

The National Stock Exchange (NSE) has suspended its earlier directive restricting referrals from unregistered individuals. The directive, issued on August 14, 2024, required prior approval from the stock exchange for registrations. Industry associations had called for the relaxation of this rule, advocating for referrals to be permitted without registration. In response, the NSE confirmed that the matter was discussed at the Brokers’ Industry Standards Forum, and the proposal is under review. The original directive sought to address concerns about the exploitation of referral schemes to attract clients for trading, rather than simply account openings, as well as the influence of finfluencers. Referral programmes are considered a crucial tool in client acquisition within the broking industry. In 2024, the domestic broking sector added a record 46 million new dematerialised accounts, compared to 31 million in 2023. The recent spike in volatility and regulatory changes could slow the rate of account additions moving forward.

 

A 20/20 vision for investors: Dr. Agarwal’s GMP comes into focus

 

Shares of Dr. Agarwal’s Health Care are trading at a grey market premium (GMP) of nearly 15 per cent. With a price band of Rs 382-402 per share, grey market operators are buying shares at Rs 450 to Rs 460 ahead of the eyecare chain’s Rs 3,027 crore initial public offering (IPO), which includes a fresh fundraise of Rs 300 crore. For 2023-24, the company posted a net profit of Rs 95 crore on revenues of Rs 1,376 crore. At the top end of the price band, Dr. Agarwal’s is valued at almost Rs 12,700 crore. Meanwhile, the GMP for Denta Water and Infra Solutions stands at just over 40 per cent. The water management infrastructure firm’s IPO had attracted over 220x subscription. Market observers said that Denta’s GMP, in relation to its subscription levels, is relatively modest, which they attribute to ongoing turmoil in the smallcap sector. Last week, the Nifty Smallcap 250 index dropped by 4.2 per cent.