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?
Financial markets are looking for direction amidst concern regarding economic growth, inflation and financial tightening. That’s visible not just in secondary market but also in primary capital market. Yes, we are talking about initial public offering.
Past few months have been dismal for the Indian IPO market. It was reported that in 2022-23, validity of 39 IPOs lapsed. Besides this, a few proposals were returned to bankers or withdrawn. The total amount that was supposed to be raised by such companies was more than Rs 85,000 crore.
The IPO papers for companies like CMR Green Technologies, Jesons Industries, API Holdings, Hexagon Nutrition, Maini Precision Products etc lapsed. Besides this, lot of companies also withdrew their offer documents like SBFC Finance, Joyalukkas India, FirstMeridien Business Services etc.
The reason for such dim performance include volatile financial markets and also uncertainty on both domestic as well global front. One of the biggest IPO succeses in recent times is Mankind Pharma’s Rs 4,326-crore issue. Now data suggest that things are improving. As per Prime Database, 59 companies have SEBI approval and they are looking to raise total Rs 86,329 crore. Besides this, there are 22 companies, whose approval is pending with SEBI and they are looking to raise Rs 8,100 crore.
We will get better picture if we look at Indian IPO market in global perspective. India has led globally the number of IPOs in Q1 of current calendar year. It was 33% higher than the same period last year. This was stated in the report by EY. So even though India is coming our of bleak times, it has done better as compared to rest of world and path ahead seems promising.
Various factors seems to be in favour of India. India is expected to be bright star among gloomy economic environment across the globe. It will be one of the fastest growing economy in the world as per IMF. Confidence in Indian story is also displayed by FPIs as they have become net buyers in recent times. So if you are looking to make some money through IPO then fasten your seat belt.
Published: May 3, 2023, 17:26 IST