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Markets regulator <keyword id="35210" type="General" weightage="80" keywordseo="sebi" source="Orion">SEBI</keyword> has simplified the procedural requirements for onboarding of <keyword id="6389755" type="General" weightage="50" keywordseo="foreign-portfolio-investors" source="Orion">Foreign Portfolio Investors</keyword> (<keyword id="2005494" type="General" weightage="100" keywordseo="fpis" source="Orion">FPIs</keyword>) in a bid to facilitate ease of doing business and to reduce the time taken for their registration. The regulator allowed designated depository participants (DDPs) to grant <keyword id="725142" type="General" weightage="80" keywordseo="fpi" source="Orion">FPI</keyword> registration on the basis of scanned copies of application forms and supporting documents, according to a circular issued on Monday. Granting of registration on the basis of scanned copies has been allowed but trading can only be activated following the verification of the physical documents, it said. At present, applicants are required to send both scanned copies as well as physical documents of application forms and supporting documents to the DDPs for obtaining the FPI registration. In addition, the <keyword id="63783" type="General" weightage="50" keywordseo="securities-and-exchange-board" source="Orion">Securities and Exchange Board</keyword> of India (SEBI) has allowed DDPs to accept the use of digital signatures by FPIs for the execution of registration-related documents. Besides, the regulator has permitted verification of <keyword id="61610" type="General" weightage="50" keywordseo="pan" source="Orion">PAN</keyword> by DDPs through the Common Application Form (CAF) module available on the websites of the depositories. Currently, DDPs can verify the PAN only after receiving a hard copy of the PAN from the applicant. In a bid to reduce the physical movement of documents and the time taken for registration, SEBI has allowed authorized bank officials to use the SWIFT mechanism for certification of copies of original documents submitted by FPIs, it said. These moves are aimed at easing the onboarding process of FPIs and reducing the time taken for granting registration as well as opening of demat, trading and bank accounts of FPIs, the SEBI said. For operational convenience, SEBI said in case an FPI applicant belongs to an existing FPI investor group, it may submit its unique FPI investor group ID in the CAF, in lieu of providing complete details of all group constituents. In case the applicant wants to club additional FPIs (apart from itself) in such a unique investor group ID, the FPI only needs to provide details of such additional FPIs, along with the investor group ID, it said. Currently, an FPI applicant, at the time of registration, is required to provide details of FPIs with whom it shares ownership of more than 50 percent or common control. Depositories in turn generate a unique FPI investor group ID for identifying each such FPI investor group. The circular, which will be applicable with immediate effect, came after SEBI's board in its meeting in December 2022 approved the simplification of certain procedural requirements for on boarding of FPIs. Earlier this month, SEBI made stringent norms for FPIs asking them to disclose any material change in their structure and common ownership within seven working days. With regard to new FPI registrations, the regulator can ask them for any additional documents which may be required. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/news/sc-dismisses-customs-plea-claiming-overvaluation-in-import-of-capital-goods-by-adani/articleshow/99057735.cms">SC dismisses custom's plea claiming overvaluation in import of capital goods by Adani</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/india/news/indias-covid-cases-show-a-slight-drop-with-only-1539-new-infections-and-four-deaths-in-the-last-24-hours/articleshow/99057573.cms">India's Covid cases show a slight drop, with only 1,539 new infections and four deaths in the last 24 hours</a>

Market regulator SEBI eases FPI onboarding process

The combined holdings of domestic mutual funds and direct households in stocks have risen over 720 bps since 2015 whereas those of foreign portfolio investors (<keyword id="725142" type="General" weightage="80" keywordseo="fpi" source="Orion">FPI</keyword>)have declined about 230 bps, <keyword id="48670" type="General" weightage="80" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword> said in a report. The last quarter alone saw a near 90 bps rise in domestic ownership while FPI ownership of sample of 75 companies fell 84 bps QoQ. At 25.6 per cent ownership of <keyword id="3658" type="General" weightage="20" keywordseo="india" source="Orion">India</keyword>'s largest 75 companies, domestic investors are now larger holders than FPIs for the first time since 2010, the report said. Average sector positions went higher in the latest quarter led by domestic institutions albeit FPIs continue to run more active portfolios. FPIs are overweight on financials and lifted the relative position by 40 bps during the quarter after taking it down for five consecutive quarters. The position is still 540 bps below the peak of September 19. The biggest FPI selling happened in technology where they have gone underweight during the quarter, Morgan Stanley said. "FPIs are also underweight on consumer discretionary and industrials - distinct from our recommendations. While domestic institutions added to technology during the quarter, they remain underweight. They also added financials and consumer discretionary but are overweight on neither. They are overweight on communication services, consumer staples and utilities in divergence from our view.The only sector where we are in sync is industrials where we recently raised our weight," Morgan Stanley said. From among the top 20 aggregate institutional holdings, active positions (relative to the MSCI Index) rose the most for <keyword id="6357073" type="General" weightage="50" keywordseo="itc" source="Orion">ITC</keyword> and declined the most for <keyword id="10926" type="General" weightage="50" keywordseo="reliance" source="Orion">Reliance</keyword> during the QE June 2022. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/tech/dyson-v15-detect-review/amp_articleshow/93143117.cms">Dyson V15 Detect review: The best just got better, but at a premium - Business Insider India</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/banks/news/rbi-governors-recipe-for-banks-of-the-future-oodles-of-social-media-new-tech-a-dash-of-human-touch/articleshow/93138812.cms">RBI governor’s recipe for banks of the future: Oodles of social media, new tech &amp; a dash of human touch</a>

Domestic mutual funds, retail investors now bigger equity holders than FPIs: MS

<ul><li><keyword id="46013" type="CITY" weightage="20" keywordseo="Kotak-Mahindra-Bank">Kotak Mahindra Bank</keyword>’s share price is up by more than 10% today morning after it posted its earnings yesterday. </li><li>Analysts are optimistic that the bank’s asset quality and decline in provisioning expenses will help it ride through the next year.</li><li>Kotak Mahindra Bank may also possibly be included in the <keyword id="48670" type="CITY" weightage="20" keywordseo="Morgan-Stanley">Morgan Stanley</keyword> Capital Investment (MSCI) Global Indices as the latter revises its foreign ownership limits (FOL). </li></ul>Kotak Mahindra Bank’s share price has skyrocketed by 10% on the back of bullish commentary and target upgrades from brokerages. The bank posted a profit of 27% in the second quarter and its net interest income grew by 17%. <div type="image" title="Copy of KMB1" msid="78887422" hostid="261" caption="&amp;lt;p&amp;gt;Kotak Mahindra Bank&amp;#39;s stock over the last one month&amp;lt;/p&amp;gt;"></div> “We increase our FY21 and FY22 earnings by 27% and 20% (respectively), aided by steady revenues and sharp decline in provisioning expenses,” said brokerage Motilal Oswal in its report. It upgraded its rating of Kotak Mahindra bank to ‘buy’, following a gap of 10 quarters. <div type="Article" hostid="261" msid="78869757" title="Kotak Mahindra Bank still on ‘alert’ as profit improves 27% over the last three months" mstype="2" mssubtype="0"></div> Potential MSCI inclusion boost Kotak Mahindra Bank may also possibly be included in the Morgan Stanley Capital Investment (MSCI) Global Indices as it revises its foreign ownership limits (FOL). This comes after Foreign Portfolio Investor (FPI) limits for Indian companies were relaxed to the sectoral limit. “Stocks that are being included tend to outperform in the run-up in their inclusion in key indices. Further, we observe that MSCI India index tends to outperform before and post the announcement,” the Morgan Stanley report said. It expects MSCI India to see passive inflows of $2.5 billion on the back of this move. Even though Kotak Mahindra Bank’s stock is up nearly 25% over the last one month, it still has to recuperate from the impact of COVID-19. As compared to January — before Prime Minister Narendra Modi announced a nation-wide lockdown to prevent the pandemic from spreading — the share price is down over 5%. <div type="image" title="KMB1" msid="78887454" hostid="261" caption="&amp;lt;p&amp;gt;Kotak Mahindra Bank&amp;#39;s share price since January&amp;lt;/p&amp;gt;"></div> Brokerages bullish post Q2 earnings “With a strong liability franchise in place, high capital and steady asset quality keeps our view constructive, although balance on loan growth has to improve from here on,” Prabhudas Lilladher analysts said in a note. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerages on Kotak Mahindra Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target Price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 1,650 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 1,634 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Prabhudas Lilladher </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 1,503 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">YES Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 1,6870 </td></tr></tbody></table> SEE ALSO: <a href="https://www.businessinsider.in/science/space/news/china-launches-three-new-spy-satellites-amid-border-dispute-with-india-and-tensions-in-the-south-china-sea/articleshow/78886330.cms">China launches three new spy satellites amid border dispute with India and tensions in the South China Sea</a> <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-is-looking-to-expand-operations-in-canada-if-h-1b-visa-issues-persist/articleshow/78884838.cms">EXCLUSIVE: HCL Tech is expanding operations in Canada as H-1B visa issues persist</a> <a href="https://www.businessinsider.in/finance/banks/news/kotak-mahindra-bank-q2-results-show-profit-up-by-27/articleshow/78869757.cms">Kotak Mahindra Bank still on ‘alert’ as profit improves 27% over the last three months</a>

Kotak Mahindra Bank surges 10% on earnings upgrades and potential MSCI inclusion

NEW DELHI: The <keyword id="6355512" type="ORGANIZATION" weightage="20" keywordseo="Union-Cabinet">Union Cabinet</keyword> on Wednesday allowed foreign investment in the Railways for the first time and raised limit for such investment in the defence sector, steps intended to raise funds for expansion of the Railways and encourage domestic manufacture of arms. 
 
100 per cent foreign investment in railway infrastructure projects will be allowed while in the case of defence the limit has been raised to 49 per cent from the current 26 per cent, subject to the Indian owners exercising management control. 
 The <keyword id="44528" type="ORGANIZATION" weightage="20" keywordseo="FDI">FDI</keyword> hike in defence is intended to cut imports by indigenising defence production as India is one of the world’s largest arms importers. 
 "It is a composite cap, incorporating all forms of foreign investment, FDI, FII, FPI, NRI, etc," said a <keyword id="6542458" type="POSITION" weightage="20" keywordseo="Government-official">government official</keyword> confirming that the proposals has been cleared. Experts did not seem impressed with the cautious stance of the <keyword id="6360789" type="ORGANIZATION" weightage="20" keywordseo="Modi-Government">Modi government</keyword> on defence. 
 
"Good development, but not great. Round one has gone to protectionist forces. 49 per cent is the same as 26 per cent technically and hence may not open the investment floodgates," said Amber Dubey, Partner and India Head of Aerospace and Defense at global consultancy KPMG. 
 
"We hope better judgment prevails and we have the FDI limit enhanced to 74 per cent later this year," he added. Official notifications giving effect to changes will be issued soon, after the minutes of the cabinet meeting are finalised. 
 Foreign investment in defence will be though the approval route, implying it will have to be cleared by the Foreign Investment Promotion Board (FIPB). Though the 49 per cent cap will be general rule for the defence sector, 100 per cent overseas ownership will be allowed in case the <keyword id="6362476" type="ORGANIZATION" weightage="20" keywordseo="investments">investments</keyword> comes bundled with state of the art technology. Such investment proposals will have to be cleared by the Cabinet Committee on Security (CCS). 
 
In companies with a 49 per cent foreign holding, more than one Indian company will be allowed to hold the 51 per cent share, unlike the present norm that mandates that a single Indian entity should own and control the entire 51 per cent, a move that will encourage more domestic players to enter the sector. 
 
In case of Railways, 100 per cent FDI will now be allowed in railway infrastructure segments such as electrification, signalling, high speed and suburban corridors. 100 per cent FDI will also be allowed through the Special Purpose Vehicle route to provide last mile connectivity to ports and mines. Further, some railway operations have also been partially opened up to foreign investment. 
 FDI is now allowed in PPP projects, suburban corridors, high speed train systems, and dedicated freight lines. Estimates suggest that the opening of railways to foreign <keyword id="47916" type="UNKNOWN" weightage="20" keywordseo="invest">invest</keyword>ors will add 1-1.5 percentage points to the overall GDP growth. China and Japan are keen to invest in the railways sector. 
 
As a result of these changes, railways transport will be removed from the list of prohibited sectors in the consolidated FDI policy.

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Market regulator SEBI eases FPI onboarding process

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Indian Cabinet Approves Raising FDI Cap In Defence To 49 Per Cent, Opens Up Railways

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