Tips to save IPO listing gains tax!
In the years 2023 and 2024, many IPOs brought huge earnings for the investors. But tax also has to be paid on this! What is the tax rule on booking listing gains from IPO? How can tax liability on listing gains be reduced? How will the tax be calculated on selling IPO shares?
COVID-19 has taught us how to turn a crisis into an opportunity. A simple example of this is investing into equities. Investors who betted big when the crisis hit us last year have a reason to smile and pose as the Sensex and Nifty more than doubled from their lows of March 2020. The second wave of coronavirus has brought some jitters in the domestic stock markets and it again can be a good opportunity for smart investors to go bargain hunting.
One stock that can give good returns in the near term is Indian Hotels. According to Anand Rathi, Indian Hotels is the best play in the hotel sector and has set a target price of Rs 130 which gives a 30% upside.
“After Covid subsides, Indian Hotels to outclass others, driven by its dominance in the Indian hotel sector, strong brand equity, well-diversified portfolio across business segments and price points. We reckon that complete revival in demand will be from Q1 FY23 subject to the speed of vaccination. In our view, the company has enough liquidity to tide as earnings will take time to recover; particularly cross-border travel is discounted in the price,” said the brokerage firm in a report.
Likewise, even ICICI Securities is upbeat on the counter and has set a price target of Rs 150. Under the R.E.S.E.T 2020 strategy, Indian Hotels is focusing more on bringing cost efficiency through various measures. “Fixed cost per month reduced from Rs 164 crore to Rs 120 crore, leading to average savings of Rs 132 crore per quarter. The key levers are 1) decline in staff to room ratio from 1.53 FY20 to 1.14 during Q3FY21 through redeployments in new properties and multiskilling, 2) lease rental waivers of Rs 49 crore, 3) savings of Rs 67 crore through prudence in all other corporate expenditure. These initiatives will bode well in the long term as business returns to normal,” said Rashesh Shah, Research Analyst at ICICI Securities.
While the company captures premium category customers through its Taj, Seleqtions and Vivanta brands, it attracts lean luxury/economy category customers through its Ginger brand (recovering faster, ~60% occupancy in Dec’20). Such operations across price points help it capture down-trading volumes in a downturn and provide revenue stability, said Shobit Singhal, Research Analyst at Anand Rathi.
(Disclaimer: The recommendations in this story are by the respective research and brokerage firm. Money9 & its management do not bear any responsibility for their investment advice. Please consult your investment advisor before investing.)