Here is some good news for investors in companies with large cash piles. To ensure that companies don’t renege on buyback announcements, SEBI has brought in new rules requiring companies to buy back shares amounting to at least 50 per cent of the amount earmarked, up from 25 per cent. To ensure that only the serious players make buyback offers, SEBI has mandated that a fourth of the buyback proceeds will have to be put in an escrow account. Of this, 2.5 per cent will be forfeited if the company fails to buy back at least half the offered quantity. The regulator has also barred companies from further capital-raising for 12 months from the closure of the offer. These rules could deter companies from resorting to share buyback as a means to return cash to their shareholders or to signal that their stock price is undervalued.

Listing without an IPO

With a view to encouraging start-ups and small and medium enterprises (SMEs), SEBI approved the listing of these companies on the Institutional Trading Platform without having to make a public offer. These companies will be accessible only to a set of investors such as angel investors, venture capitalists and private equity players. Hence the minimum investment amount will be Rs 10 lakh. This is expected to offer easy exit options for investors in unlisted companies. Smaller companies can also thus raise capital without incurring too much cost.

Yes to capital-raising

The Cabinet Committee on Economic Affairs (CCEA) approved the proposal of YES Bank to increase its foreign equity participation up to 60 per cent through a Qualified Institutional Placement (QIP) from overseas. The approval would result in foreign investment amounting to around Rs 2,650 crore flowing into the country. As of March 2013, foreign institutional investors held about 49 per cent stake in the company. While its capital adequacy ratio stands healthy at 18.3 per cent, the raising of additional capital will help it maintain a healthy growth of 24 per cent in loans over the next two years.

Swipe to claim

Hassle free and instant authorisation – these are the promises offered by the new products launched by L&T Insurance. Partnering with E-Meditek Global, the innovative MediCash card aims to reduce the cashless approval process in hospitals. With a swipe at the Point of Sale (POS) terminal and after filling in some information on the POS machine, the cashless authorisation slip is generated almost instantly. With this product, L&T Insurance will be the first insurance company in India to offer an instant cashless approval solution. The interface has been configured over Visa Prepaid Card.

Not adequately covered

Recent research revealed that one in every four employers believes that the healthcare cover for employees is inadequate. The research was undertaken by ICICI Lombard General Insurance through an online survey of 500 corporate clients. The research also suggests increasing vulnerability of young people to illnesses such as cancer. Claims data reveal that the incidence of critical illnesses increased by 65 per cent in the last three years, with maximum increase in the age group of 26-35.

Gainers on gas price hike

The CCEA approved the proposal to double natural gas price to $8.4 per mmbtu from April 2014. The new price will apply to all producers and thus will benefit companies such as ONGC, Oil India and Reliance Industries. The move to hike prices appears to be influenced by the sliding Rupee and lower production of domestic gas. Hence this price hike is seen as a positive to help revive investments in the sector. On the flip side, power and fertiliser companies are unhappy with the decision as this may impact their cost of inputs. However Finance Minister P. Chidambaram hinted at subsidised gas rates for the power and fertiliser sectors, to lower their cost burden.

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