Competition brings brokerage downwards
Mumbai: Like most other industries in this country, the stock broking industry is going through a churn. Sustained reforms in the financial markets and increasing competition has ensured that the brokerage rates have fallen down drastically.

Further, the scope for increasing the market is also diminishing, with most brokerage houses already making their presence felt in the smaller towns. Besides, the introduction of screen-based trading, electronic transfer of shares and internet trading have all reduced the scope for brokers to fleece their clients.

According to market sources, brokerages on delivery-based transactions have fallen to as low as 0.20 to 0.35 per cent of trade value (as compared to 0.50 per cent prevailing a year ago), depending on the kind of volumes. Even institutional investors — such as the Unit Trust of India, SBI Mutual Fund and others — pay as little as 0.25 per cent brokerages on trade value.
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New takeover code being considered
New Delhi: The finance minister has stated that the new reforms package that will be announced shortly, will see changes in the takeover code.

Apart from a slew of sops for foreign investors on the foreign direct investment front, a new auto, drug, LNG, steel and food processing policy for the domestic sector, several legal provisions like a new competition and insolvency law and some new provisions in the companies act, the minister has promised promoters of Indian companies, a new takeover code.

In the meanwhile, the Sebi committee on takeovers, headed by former chief justice, Justice PN Bhagwati, is to meet soon to look some of the tricky issues relating to the competitive bidding process under the takeover code. The committee will seek to plug some of the loopholes relating to competitive bidding process under the takeover code.

Under the regulation, any person who acquires a 15 per cent limit in company will have to make public announcement for a public offer, after which any person has 21 days within which to make a counter-offer. There is a cooling-off period in which the counter offer cannot be made until after 21 days of the first public offer.

During this time, if some other person corners shares from the market and cross the 15 per cent trigger off limit he will not required to make a open offer, which poses a tricky question in the case of takeovers.

For instance in a hostile takeover case like Gesco Corporation, where a competitive bidding process is on, a third party could mop up shares from the market and even cross 15 per cent without having to make an make a open offer. He could later could offload the stake in favour of one of the warring parties.
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Bajoria to smoke peace pipe with Wadia
New Delhi: After having given him many sleepless nights, Calcutta-based corporate raider, Mr. Arun Bajoria, has shown signs of making peace with Mr. Nusli Wadia of Bombay Dyeing.

In a brokered peace that is being brought about, it is understood that the jute baron will sell the Bombay Dyeing shares acquired by him, back to Wadia for a price that is rumoured to be at Rs. 200 per share. Although, informed sources say that he may well sell for Rs. 150 per share. It is also understood that the Tata group will step in to help their friend, Wadia, and purchase the block of shares from the jute baron.
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