Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

FII traffic to face diversion
Fri, 26 Mar Pre-Open

Most of us know of Mauritius as a great holiday destination. It also has a sizeable population with roots tracing back to India. In financial circles though, it is famous as a tax haven for foreign funds investing in India. It has a double taxation treaty with India. Capital gains on Indian equity investments in the hand of a Mauritian company do not attract any tax here. Due to this agreement, almost 90% of the foreign investment into India comes from the African island. In fact, according to Wall Street Journal, total foreign institutional investment into Indian equities of almost US$ 46 bn came through Mauritius during 9mFY10. Compare that with investment routed through Singapore of around US$ 10 bn during the period.

But all that could change with the new Direct Tax Code set to be introduced next year. The main thrust of the new proposals is to simply the maze of tax exemptions. And one of the exemptions to be removed could be the double taxation treaty with Mauritius. That would affect several foreign private-equity players, hedge funds and mutual funds.

There is still some time before the tax proposals become law. In our view, a lot of pressure will be applied on India to keep the double taxation treaty in some form. But there is also the chance that the government sticks to its guns. After all, it is losing out on a chance to tax money flows amounting to several billion dollars. There is also a global trend wherein governments are getting increasing fidgety about tax avoidance. Especially when most of them have to support expensive stimulus packages. In India’s case, regulators also want to exercise greater control on offshore money flowing into the country. The entire episode over foreign institutional investors (FIIs) and P-notes.

If the double taxation treaty is tweaked, foreign institutional investors will have to re-route their investments. Truth be told, we are not big fans of FIIs in their present form. Most of it is short term money chasing incremental returns. They come in hordes crowding good investments out of the reach of individual investors and often leave in hordes trampling everything and everyone that comes in their way. In our view, changes in the double taxation treaty could trigger a correction for reasons other than fundamental merits of companies. That could create a buying opportunity for individual investors to really dig in.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary

What else is happening in the markets today? Dig in...

Equitymaster requests your view! Post a comment on "FII traffic to face diversion". Click here!


Stock Market Updates

Sensex Trades Marginally Lower, Dow Futures Up by 174 Points (Today's Market)

May 14, 2021 12:30 pm

BSE Sensex is trading down by 29 points, while the NSE Nifty is trading down by 39 points.

Sensex Opens Flat; Asian Paints Rallies 7% Post Q4 Results (Today's Market)

May 14, 2021 09:30 am

Indian share markets open flat. The BSE Sensex opened down by 33 points, while the Nifty is trading lower by 14 points.

ADANI TOTAL GAS Share Price Down by 5%; BSE 500 Index Down 0.1% (Today's Market)

May 14, 2021 09:34 AM

ADANI TOTAL GAS share price is trading down by 5% and its current market price is Rs 1,330. The BSE 500 is down by 0.1%. The top gainers in the BSE 500 Index are ASIAN PAINTS (up 6.7%) and BANK OF INDIA (up 5.7%). The top losers are ADANI TOTAL GAS (down 5.2%) and VINATI ORGANICS (down 7.1%).

JINDAL STEEL & POWER Share Price Down by 5%; BSE METAL Index Down 2.4% (Today's Market)

May 14, 2021 09:32 AM

JINDAL STEEL & POWER share price is trading down by 5% and its current market price is Rs 466. The BSE METAL is down by 2.4%. The top losers are JINDAL STEEL & POWER (down 5.3%) and NMDC (down 5.3%).

BANK OF INDIA Share Price Up by 5%; BSE BANKEX Index Up 0.3% (Today's Market)

May 14, 2021 09:28 AM

BANK OF INDIA share price is trading up by 5% and its current market price is Rs 77. The BSE BANKEX is up by 0.3%. The top gainers in the BSE BANKEX Index is BANK OF INDIA (up 5.2%). The top losers is HDFC BANK (down 0.2%).

GRINDWELL NORTON Share Price Up by 8%; BSE CAPITAL GOODS Index Up 0.4% (Today's Market)

May 14, 2021 09:26 AM

GRINDWELL NORTON share price is trading up by 8% and its current market price is Rs 1,259. The BSE CAPITAL GOODS is up by 0.4%. The top gainers in the BSE CAPITAL GOODS Index is GRINDWELL NORTON (up 7.7%). The top losers are L&T (down 0.3%) and V GUARD INDUSTRIES (down 0.4%).

View More Indian Share Market News

Most Popular

Is Intraday Trading For You?(Fast Profits Daily)

May 13, 2021

Do you think you have what it takes to be an intraday trader? Find out in this video.

My Secret to Find Breakthrough Stocks(Fast Profits Daily)

May 7, 2021

I've used this trading technique for many years with great success. I'm sharing it with you today.

Are the Stock Markets Deaf to Covid Agony?(Profit Hunter)

May 6, 2021

Why are markets discounting the economic impact of Covid?

The Key to Profit from India's EV Revolution(Profit Hunter)

May 7, 2021

Stocks you must consider investing in before buying your first electric vehicle.


India's #1 Trader
Reveals His Secrets

Secret To Increasing Your Trading Profits Today
Get this Special Report,
The Secret to Increasing Your Trading Profits Today, Now!
We will never sell or rent your email id.
Please read our Terms


May 14, 2021 (Close)