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?
When it comes to stock market investing, it is not just the layman investors who end up losing money. Even ace stock pickers can make wrong bets. Sample this: Radhakishan Damani, Basant Maheshwari and Rakesh Jhunjhunwala are in the list of top 500 shareholders of state-owned Steel Authority of India (SAIL).
Data available on the website of the steel major showed that Radhakishan Damani together with his family members held more than 2 crore shares of Steel Authority of India as of June 30. On the other hand, Basant Maheshwari HUF and Basant Maheshwari together held 79.40 lakh shares.
Earlier on July 15, the latest shareholding pattern showed that Rakesh Jhunjhunwala had 5.75 crore shares, or 1.39% stake in the steel major. He was not among the key shareholders of the company in the preceding quarters.
However, the ace investors’ bet has gone wrong as the stock is down 27% at Rs 110 apiece from its 52-week high of Rs 151.10. The primary reason for this sell-off is peaking out of iron ore prices weakening Chinese demand and the Evergrande group crisis dented the investor sentiment.
BOBCAPS is of the opinion that the margins of steel companies will be softening over the next 6-12 months with steel prices easing to US$ 650/t by FY23.
“Risk-reward in steel equities is further worsened by the precipitous fall in iron ore prices. The last cost support for steel is in elevated coking coal prices and it appears that it is only a matter of time, given the current pace of Chinese steel production decline, that coking coal starts to correct. Higher coking coal prices are currently compressing Chinese steel margins and supporting steel prices. Global steel equities continue to derate in expectations of a price decline. Leading to sharp decline in MTM earnings for SAIL,” said Abhijit Mitra of ICICI Securities.
The brokerage firm has a ‘Sell’ rating on SAIL with a price target of Rs 99 as it is of the opinion that the largest MTM earnings drop for SAIL could be in the range of 14-17%.