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?
India is in the midst of an unprecedented healthcare crisis with more than 4 lakh fresh Covid-19 cases being recorded daily in the past few days. Social media is filled with posts and cries for assistance related to medicines, hospital beds and oxygen. Most rating agencies have revised India’s growth projection amid localised lockdowns announced by various state governments.
Amidst this chaos and volatility, shares of pathology labs, oxygen producers, pharmaceutical firms and medical equipment companies have been on a tear.
In absence of a particular index tracking stocks from this space, Money9 has conceived one to help the investor get a nuanced view of companies that are at the forefront of India’s fight against the virus.
As the name suggests, the index consists of 25 Covid-stocks broadly categorised into five verticals of the healthcare industry— vaccine manufacturers, pharma companies, hospital chains, pathology laboratories and medical equipment manufacturers.
Methodology
Money9 Covid25 Index is computed based on equal weightage for all constituents of the index. In this method, the level of the index demonstrates the aggregate market value of stocks present in the index in a specific base period. The base period for the Money9 Covid25 Index is March 24, 2020 when India went into lockdown, and the base value of the index has been kept at 100.
Performance
As seen in the above chart, the Money9 Covid25 Index has outperformed the benchmark Nifty 50 index by 108 percentage points and 90 percentage points for the Nifty Pharma index. To put it in simple words, Rs 1,00,000 invested on March 24, 2020, in Money9 Covid25 Index stocks would have fetched Rs 2,98,275 compared to returns of Rs 2,07,941 in Nifty Pharma and Rs 1,90,014 in Nifty50 stocks, respectively.
If we take a closer look at the chart from March 10, 2021, the day India recorded over 20,000 daily cases and marked the onset of the second wave, the outperformance has been even sharper. Money9 Covid25 Index rallied 31% compared to the Nifty Pharma index, which rose just 11.64% while the Nifty 50 index slumped by 2.32%.
Constituents
The index is constructed as a covid-specific alternative to the Nifty Pharma index by including a larger universe of stocks that include hospitals, pathology labs, medical equipment manufacturers and oxygen suppliers. Companies are selected based on their product offering and them being at the forefront of aiding the fight against the virus.
Gland Pharma got listed on the exchanges on 20 November 2020. Index weightage adjusted accordingly.
Max Healthcare Institute got listed on the exchanges on August 21, 2020. Index weightage adjusted accordingly.
Bhagawati Oxygen scrip on BSE. Previous day closing price was considered for days when share prices were not available.
Nureca got listed on February 25, 2021. Index weightage adjusted accordingly.
Limitations
Companies having different products, revenue streams and sizes are given equal weightage. The biggest vaccine players— Serum Institute of India and Bharat Biotech — are not part of the index since they are not listed on exchanges.
(Disclaimer: The list has been compiled for informational purpose only. Before investing, please consult your financial advisor)