The underlying undertone of the market is very strong, says the CEO of IIFL Finance. I was just going through the clarification that you have handed out to the exchanges. The earlier release showed that promoter holding has crossed 25% and now you are saying it is not exceeded. The keyword being used here is voting rights. Help me understand what really is the rationale behind your promoter holding now?We have filed a revised filing today. There was a technical error in yesterday’s filing. Out of the promoter holding shares that I have purchased, two and a half lakh shares were supposed to be transferred in the promoter group entities. So that has been missed out and has been corrected today. So the correct holding and the voting rights are 24.99% and that is what we clarified. I think the revised filing has also been done on the exchanges on the NSE and BSE website.I understand that the latest clarification by you on the exchange says that you have not taken delivery but till yesterday it happened that four lakh extra shares got bought into the company from your side. Has it happened or not?Four lakh fifty four thousand shares are purchased by me and out of that two lakh fifty thousand shares are sold by our promoter group entity called Ardent. So the net effect is that the shareholding of the promoter group has gone up to 24.99%. I individually do not have 25% shareholding. So it is me, Venkat and promoter group entities put together. As I said, the two lakh fifty thousand transfer was missed out and therefore the calculations are not correct. But the fact that I have purchased the shares is correct. So I bought four lakh fifty four thousand shares yesterday, which is 0.12%. But for the promoter group, the total shareholding will not increase to 25.12%. It really will go up to 24.99%. So yesterday perhaps the selling of the promoter group of two lakh odd shares was perhaps not reported and the Street picked up the gross number of 4.54 lakh?Absolutely. So this I think is an error.This is a good clarification that open offer will not happen though I am still not sure whether legally netting off is allowed or not. I will get a legal opinion on that later on. But the market is also taking notice of big exits which have happened. Sumit Bali has resigned. The treasurer of the company Amarnath has also resigned. You are the chairman. You have taken over as the CEO. It has happened quite suddenly. Would you like to share some thoughts on that? What triggered that and what is happening?Sumit Bali has resigned and that happened last week. He is a professor and he got a better opportunity. So I think it is much in the public domain now that he is joining Axis Bank as head of retail assets. Amarnath has a personal emergency because his wife and children live in Australia and because of the Covid crisis, he has to rush to Australia and he is not in India. So it is a very exceptional family and personal circumstances. With Sumit Bali also I think that event has happened which has been reported and I have taken over as the CEO. I have been involved with the company right from the beginning. So there is nobody other than me who will have more experience to run the business. Also, we have very capable people as heads of all our businesses and all our support functions and I have an excellent rapport with them. Many of them have been recruited by me and all of them have been interacting with me. I have been executive chairman. So it is not that I am an owner who has been away from the company. It is very natural and logical for me to take over as I have been part of running the company.There is also a discussion in the market that Sebi is saying a promoter can participate in preferential shares up to 10% and increase the shareholding. Are you considering that? You have come quite close to 25%. At some point in time, would you like to infuse money into the company and also at the same time raise stake?I am a first generation professional entrepreneur. So the money that I have is maybe more or less what I get by way of dividend and unfortunately what has happened before the merger is that the promoter stake was more than 25%. We could have done the creeping acquisition of 5% but now the way rules are, unless we seek clarification from Sebi and get some clarity on this that if you are above 25%, then you can do a creeping acquisition of 5% but if you are at 24.99% and you are stuck there because you cannot cross the threshold of 25% without making an open offer. If there is a creeping acquisition allowed, we would have been happy but unfortunately it looks like there is no clarity in the current regulation if the stake is at 24.99%, whether you can do a creeping acquisition.How are you analysing the market? We are told that at IIFL, there has been a record addition of retail accounts. How are things looking?Yes, it is very interesting. For me, it is counterintuitive that we have seen in the last few months a number of new investors and traders coming. They are opening accounts or they are reactivating their old accounts, which they were not active in. So that is one side of the story. But as far as markets are concerned, they are looking beyond Covid-19. We have seen that in many other countries, recovery has been very quick. Even within India, other than Bombay and Delhi, most of the towns and cities are up and running. There are some sectors that will be impacted like aviation, hotels and malls. But other than that, the rest of the economy can chug along. The liquidity is very benign world over and interest rates are low. So money has to flow to equities, which is not only a domestic thing, it is global. Today if you go for a bank fixed deposit of less than two years, you cannot even get 5% returns which net of tax will become even lesser; 3% or so. So obviously people are pulled towards equity because there is no alternative. Having said this, although there are many analysts and many market observers, they are worried about near-term fundamentals. But I think the market is looking at FY22 and maybe FY23 and trying to discount those earnings and from that perspective, there may be minor corrections. But the underlying undertone of the market is very strong.
from Economic Times https://ift.tt/3hXiONA
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