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Sebi bars Allegro Capital, individual for insider trading activities in Biocon shares

Sebi has barred Allegro Capital and one of its senior executives from the securities market for one year in a case related to alleged insider trading activities in the shares of Biocon. Besides, the market watchdog has directed them to disgorge wrongful gains along with interest. The amount would be more than Rs 24 lakh.

Allegro Capital and its director as well as major shareholder Kunal Ashok Kashyap have been fined Rs 10 lakh each, according to an order by Sebi dated July 8. They also have to jointly and severally disgorge Rs 24,68,751 along with an interest of 12 per cent per annum from January 19, 2018, till the date of actual payment.

The regulator noted that Allegro Capital was in a temporary business relationship with Biocon and that Kashyap also held directorship in Mazumdar Shaw Medical Foundation. On January 18, 2018, Biocon had announced an exclusive global collaboration with Sandoz on next generation biosimilars.

Sebi had observed that shares of the company rose 5.6 per cent at close on the day after the announcement. Later, the regulator initiated a probe to ascertain whether certain persons/entities have traded in the scrip of Biocon while they were in possession of Unpublished Price Sensitive Information (UPSI) and were in violation of Sebi norms.

Based on the chronology of events leading up to the corporate announcement, it was alleged that the UPSI period was from December 4, 2017, to January 18, 2018, the order said quoting the showcause notice sent to Allegro Capital and Kashyap.

Kashyap had submitted that by resorting to his independent directorship in Mazumdar Shaw Medical Foundation and by making reference to Allegro Capital where Arun Chandavarkar (then CEO and Joint MD) and Kiran Mazumdar Shaw, have their trading accounts, Sebi was clearly grasping at straws trying to conclude that he was a connected person.

“In this regard, it is observed that reliance on the aforesaid have been placed to show that the association of Noticee No. 1 (Kashyap) with senior management of the company is not merely in the capacity of an advisor on specific set of projects, but it goes beyond that where he not only serves on the board of the charitable foundation of the promoter of Biocon but also provides broking services to the promoter and the then CEO and Joint MD,” Sebi said in the order.

This shows that Kashyap is in frequent communication with the key managerial personnel of Biocon outside his contractual relationship with Biocon and also shows his proximity to the management of Biocon.

“The same makes Noticee No. 1 stand on a different footing as compared to other advisors, if any, contracted by Biocon. Therefore, Noticee no. 1 association with M/s Mazumdar Shaw Medical Foundation and Allegro Capital Advisors Ltd., where he is the majority shareholder are relevant factors as it establishes his relationship / connection with Biocon and/ or its management. “Hence, the submission of the Noticee No. 1 is untenable,” the order said.

Passing the order, Sebi Whole Time Member Madhabi Puri Buch said that even if, the noticees (Kashyap and Allegro Capital) were bullish with respect to Biocon’s scrip in the long term, the sudden spurt/ jump in volume shown by them during UPSI period has not been justified by them.

“To put it differently, noticees may have been bullish about Biocon but because of the UPSI, their purchases in the scrip of Biocon were advanced as they wanted to buy it before the price starts to increase after the publication of the announcement.

“Thus, the trigger for buying irrespective of the long term bullish view was on the basis of UPSI. Therefore, it is held that the noticees have dealt in the scrip of Biocon on the basis of UPSI and hence have violated Section 15G(i) of Sebi Act,” the order noted.

Section 15G pertains to insider trading.

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Sebi levies nearly Rs 23 lakh fine on 16 entities

Markets regulator Sebi has imposed a total fine of nearly Rs 23 lakh on 16 entities for violation of market norms while dealing in the scrip of Timbor Home Ltd.

The entities entered into off-market transactions without making the payment of considerations within the timeline as stipulated under the Securities Contracts Regulation Act (SCRA).

In another investigation conducted by Sebi in the scrip of Timbor Home between April 2014 – May 2015, 21 entities who were allegedly connected and had allegedly acted in concert as part of a scheme to plant unsolicited and misleading advice, recommending purchasing the company’s shares to induce unsuspecting investors to buy the scrip and thereafter offloading a large number of shares in the secondary market pursuant to such misleading recommendation.

The modus operandi included the off-market transfer of shares of Timbor Home by certain promoters of the company to other connected entities and in turn, the connected entities sold the shares in the market.

Analysing the data regarding off-market transactions, Sebi noted that the off-market dealings of the entities in the scrip of Timbor Home were not in conformity with the SCRA norms.

Besides, certain entities also failed to furnish the information sought by the regulator.

For violation of market norms, the 16 entities are facing a fine in the range of Rs 1 lakh to Rs 2.2 lakh.

In a separate order, Sebi has warned Shri Parasram Holdings Pvt Ltd “to exercise caution, care and due diligence in its future conduct as a stockbroker in all its dealings with its clients and to ensure compliance with the applicable laws at all times in future”.

The order came after Sebi inspected the books of accounts and other records of the broker for the period April 1, 2012, to January 20, 2014, to verify whether it had complied with the regulator’s circular.

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SEBI to allow accredited investors, make capital markets investing easier, tighten independent director norms

Seeking to strengthen the corporate governance practices as well as attract more investors, markets watchdog Sebi on Tuesday approved stricter norms related to independent directors, reduced the minimum subscription amount for REITs and InvITs and decided to introduce a framework for accredited investors along with other measures.

To provide easy access to investors to participate in public/rights issues by using various payment avenues, Sebi has also decided to permit banks, other than scheduled banks, to act as a banker to such issues.

The board of Sebi, at its meeting in Mumbai on Tuesday, gave its nod to allow resident Indian fund managers to be constituents of foreign portfolio investors and decided to amend mutual fund rules to provide for the investment of a minimum amount as “skin in the game” in the schemes floated by Asset Management Companies (AMCs) based on the risk associated with such schemes.

Continuing efforts to bolster the regulatory framework for independent directors, Sebi has cleared various amendments to rules governing the appointment, re-appointment and removal of independent directors — a move that will also provide more say for public shareholders in the appointment and re-appointment of such people.

The new norms will be effective from January 1, 2022. Under the proposed changes, a listed company will be required to disclose the resignation letter of an independent director and there will be a one-year cooling period for an independent director transitioning to a whole-time director in the same company/ holding/ subsidiary/ associate company or any company belonging to the promoter group.

Further, the process to be followed by the Nomination and Remuneration Committee (NRC) while selecting candidates for appointment as independent directors would become more transparent. These include enhanced disclosures regarding the skills required for appointment as an independent director and how the proposed candidate fits into that skillset, Sebi said in a release.

Continuing efforts to deepen the market for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), the watchdog has decided to reduce the minimum subscription amount and trading lot size for them. The minimum application value will be in the range of Rs 10,000-15,000 and the trading lot will be of one unit for REITs and InvITs .Under the current norms, while making an initial public offer and follow-on offer, the minimum subscription should not be less than Rs 1 lakh for InvITs and Rs 50,000 for REITs under the current rules.

Allotment to any investor is required to be made in the multiples of a lot. At present, for initial listing, a trading lot should be of 100 units and during follow-on offer, each lot should consist of the such number of units in its trading lot as it had at the time of the initial offer.

Suraj Malik, Partner — M&A Tax and Regulatory Services — at BDO India said that reduction in application value and trading lot for REITs and InvITs will enable greater retail participation in such instruments. “The government itself is targeting several REITs/InvITs to monetise state and PSU assets and this change will enable them to attract an asset allocation from a wider market of retail investors,” he said.

The regulator will introduce a framework for accredited investors, a class of investors who may be considered as well-informed about investment products. Individuals, HUFs, family trusts, sole proprietorships, partnership firms, trusts and body corporates based on financial parameters would be eligible to be accredited investors.

In addition, the regulator has decided to introduce a minimum unit holders requirement for unlisted InvITs. “The minimum number of unitholders, other than sponsor, its related parties and its associates shall be five together holding not less than 25 per cent of the total unit capital of the InvIT,” Sebi said.

To ease the compliance burden on listed entities, a proposal has also been cleared to merge listing rules pertaining to debt securities and non-convertible redeemable preference shares into a single regulation.
Under the new framework, issuers other than unlisted REITs and InvITs that are in existence for less than 3 years, can tap the bond market on certain conditions.

The Sebi board also cleared a proposal to allow resident Indian fund managers to be constituents of foreign portfolio investors. Besides, changes would be made to the prohibition of insider trading regulations whereby the reward for informants would be hiked to up to Rs 10 crore from the current Rs 1 crore.

Among other measures, the regulator would amend Sebi (Credit Rating Agencies) Regulations, 1999. These regulations were amended “to define a Credit Rating Agency (CRA) in terms of rating of securities that are listed or proposed to be listed on a recognised stock exchange, and to provide for an explanation in clause (f) of Regulation 9 specifying that ratings undertaken by a CRA under the respective guidelines of a financial sector regulator or authority shall be under the purview of the concerned financial sector regulator or authority”.The board also approved Sebi’s annual report for 2020-21.

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Tata Motors share price continues rallying, gains 84% so far this year; outperforms benchmarks

Tata Motors share price has soared 7.5% in the last one month, extending its monstrous rally following the March 2020 sell-off. The stock had tanked 66% in March 2020, only to rally 425% since then as the bulls started asserting control on Dalal Street. On Tuesday Tata Motors shares were trading flat with a positive bias at Rs 343.85 apiece, up 84% so far this year, outperforming benchmark indices. Earlier this month on June 15, Tata Motors hit a fresh 52-week high of Rs 360.55 per share. Tata Motors has a market capitalization of Rs 1.13 lakh crore.

Tata Motors Historical Price: Tata Motors Share price in the last 10 trading session
The share price of Tata Motors has slipped marginally over the last 10 trading sessions. On June 15, Tata Motors share price hit a fresh 52-week high resulting in some profit booking. However, the stock been gaining for consecutive trading sessions since last Thursday. On Tuesday, Tata Motors share price was up 0.22% at Rs 343.85 per share.

The fall in stock price only paves the way for an attractive entry opportunity into the stock. Domestic brokerage firm ICICI Direct advises investors to buy the stock in the range of Rs 348-358 per share, for a target price of Rs 405 per share. A stop loss of Rs 324 apiece has been recommended. “The stock recently registered a breakout above the last four month’s consolidation range (Rs 342- 279), thus opening upside towards Rs 405 levels as it is the measuring implication of the recent range breakout (342-279=63 points) added to the breakout area of Rs 342 signalling upside towards Rs 405,” ICICI Direct said. ICICI has given a three-month duration for this trade to play out.

Tata Motors History and Company profile
Tata Motors is the automobile unit of the Tata Group. The company manufactures passenger cars, trucks, coaches, buses, sports cars, construction equipment and military vehicles. Formerly known as Tata Engineering and Locomotive Company (TELCO), the company was founded in 1945. Tata Motors manufactured its first passenger vehicle in 1991. Tata Motors also owns South Korean truck manufacturer Daewoo and the British luxury vehicle manufacturer Jaguar Land Rover.

Recently, Tata Motors have renewed their offerings in the passenger car segment with the launch of cars such as Tata Tiago, Tata Tigor, Tata Nixon, Tata Harrier, and Tata Altroz. Earlier this month, Tata Motors announced that Both the Jaguar and Land Rover brands would undergo transformation by electrification – six new all-electric Land Rover models would be introduced in the next five years and Jaguar would be completely reimagined as a purely electric brand from 2025.

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