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100 Days of GST, IPO's to Hit the Market This Week and Top Stocks in Action Today
Tue, 10 Oct Pre-Open | Karan Janani, TM Team

100 Days to Good and Service tax

One of the main reasons for implementation of the goods and service tax (GST) was to widen the taxpayers base by bringing the unorganized players in the tax net.

Let's see how well the government has fared on this front?

Till date, nine million enterprises registered under the GST network. Of which, 2.6 million are new GST assesses and 6.4 million taxpayers are from the past regime. The new additions signify an increase of 40% to the previous tax base.

The tax collections too have largely been met. Against the target set by government for Rs 910 billion, the tax revenue collected for August was Rs 906 billion.

While, the tax seems to benefit the organized players in a big way, it is the unorganized segment who have taken a big hit. First, it was demonetization and now it is the implementation of GST. This hit is well reflected in the gross domestic product numbers. GDP growth has slumped to 5.7% in the June quarter from a high of 7.9% clocked in the June quarter of 2016.

To boost the economic scenario, the government recently came out with certain relaxations under the goods and service tax (GST).

Apart from tax rates being reduced on twenty-seven items, the government relaxed the compliance burden on the small and medium sized enterprise (SME). SMEs with an annual turnover of less than 15 million can now fill quarterly returns, as compared to monthly returns before. Also, the annual turnover limit under the composition scheme which enables firms to pay tax at concessional rates have been raised from Rs 7.5 million to Rs 10 million.

Not only this, concerns of exporters too have largely been addressed by removal of interstate GST till March 2018 and an assurance to clear the refunds at a faster pace.

The transition to goods and service tax (GST) is a tough one and we believe if implemented properly, the tax will reap huge benefits to the listed organized companies in the long run.

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Gold Surges on Geo-Political Tensions

North Koreas plan to test a new long-range missile that could reach the west coast of the US raised geo-political tensions. This led to a surge in the prices of gold.

Geo-political tensions are on the rise and it may weigh on our benchmark index. During this uncertain time, buying gold may provide an excellent hedge towards any political or economic uncertainty. Ray Dalio, the billionaire hedge fund manager, echoed similar thoughts few weeks back. He's advising investors to allocate 5-10% of their portfolios to gold. That's the same allocation we recommend to our readers.

IPOs Worth a Massive Rs 123 Billion to Hit the Market this Week

General Insurance Cooperation of India (GIC) and Indian Energy Exchange (IEX) and are set to launch their IPOs this week.

GIC, the biggest IPO to hit the market since 2010 is set to raise Rs 113 billion from its offering. It's a mix of fresh issue and an offer for sale.

General Insurance Corporation is the largest reinsurance company in India in terms of gross premiums. The gross premiums have grown at a CAGR of 24.84% from FY 2015 to FY 2017. The issue will remain open from 11 October to 13 October and the price band is in the range from Rs 855-912 per equity share.

IEX is another IPO, whose issue opened on yesterday. It is the largest exchange for trading electricity and enjoys 99% market share. The company's management claims that the industry has a strong potential given the power exchange trading penetration in India is only 3% as compared to 23-53% in European countries. Improving transmission lines across the country will further boost trading volumes. The price band is in the range from Rs 1645-1650 per equity share and the issue closes tomorrow. Here is our detailed view on the IPO, stating as to whether you should apply or avoid the same!

Our View on MAS Financial Services

MAS Financial is a Gujarat-based non-banking finance company (NBFC), primarily focused on middle and low-income customer segments. The company offers business and financing products such as micro-enterprise loans, small and medium enterprise loans, two-wheeler loans, commercial vehicle loans and housing loans.

To know our view on the IPO, click here.

Top Cues in Action Today

ONGC is likely to sell some of its stake in Indian Oil Corp. Ltd to institutional investors like Life Insurance Corporation of India (LIC) to part fund its Rs 340 billion acquisition of refiner Hindustan Petroleum Corporation Ltd (HPCL). ONGC holds 13.77% stake in India's biggest refiner Indian Oil.

In another development pertaining to ONGC, it has received clearance from the Coastal Regulatory Zone for setting up a seawater desalination plant at its Uran unit in Raigad, Maharashtra at a cost of Rs 2.66 billion.

The proposal is to set up a seawater desalination plant with a capacity to process 20 million litres per day. The proposed site is about 380 meters away from the high tide line of Arabian Sea, along the western coast of India.

Tata Teleservices is expected to remain under pressure. The stock crashed by 15% in yesterday's trade. The stock crashed post the development that the company's management and representatives from the promoter group met Department of Telecommunications (DoT) officials and discussed ways of surrendering or selling their existing spectrum holdings.

As per reports, the company was preparing an exit plan for most of its 5,000-odd employees, while transferring only a small part of its employees to other group companies.

Following the above development, Tata Teleservices will be one of the first big Tata units to be shut in the group's 149-year-old history

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