Tata Steel Ltd FPO Message Board (Page 14)

ken

irrespective of the small arbitrage oppurtunities......in tisco....i would like to stay away for one day listing gain...although fruitful....but risky....in the current market environment...esp. For something like commodities...real estste like high beta stocks.....

I would like to avoid tata steel fpo....although boarders will like to disagree woth my stance.....but i would prefer to stay risk averse.......in commodities....there are better mid cap stocks buying oppurtunities....emerging....let us concentrate on that

setubhai what ur call on tata steel fpo

What is arbitrage opportunity for retail investor in Tata Steel FPO.

dear boarders

malegon report has clear the clouds over the fate of microfinance.....

Health is not permitting to post
...down with viral

i still stand on my sks micro view....

tata steel likely to go to 650 odd in cash...before fpo closing

so any oppurtunity is to stay away as the macro envirnonment is bad.....nifty is set to reduce further

regards

sj

Guys,

Lic and tvsmotor are going steady in upward direction. It seems peopole has happily accepted lic results. Lets wait and c.

Gane.

SJ

I MISS U ON THIS FORUM.........
I KNOW U R BUSY BOSS AND I COULD NOT MEET U......

FRIENDS

I WILL NOT BE AVAILABLE TILL 10 FEB DUE TO MARRIAGE IN MY FAMILY

I HAVE APPLIED FOR TATA STEEL FPO......

@ sreedhar
shud i apply in this fpo for listing gains?
if yes den den wat wud b d profit i ll get on d listing day?

vishal r

if the fut price goes to 655 , spot will also go to 650 around...

today if u short @ 635 and cover @ 655 at the listing, ur loss will be rs.20/sh

simultaneouly spot will also goaround 650 so profit here is 650 - 610 = 40

so overall gain = 40-20= 20/sh

Arbitrage opportunity in Tata Steel FPO:-

Let us assume an investor has applied for 3,000 shares in
the FPO and also shorted 5 lots (equivalent to 3000 shares)
of Tata Steel February Futures at 640 levels
If the FPO is subscribed 3 times and the allotment price is at
the higher end of the given price band at | 610:
Shares allotted =1000
Arbitrage benefit of futures over spot (in the allotted 1000
shares) = | (640-610) = | 30 per share = | 30000
Let us assume the futures price at the time of allotment
=| 635
Gain/loss while unwinding the remaining Futures positions
(2000 shares)
=| (640-635) = | 5 per share = | 10000
Gross gain =| (30000+10000)= |40000
Cash brokerage (@ 0.30%) = | 635*0.30/100 *1000
= | 1905
Cash STT (@ 0.125%) = | 635*0.125/100 *1000
= | 794
Futures brokerage (@ 0.03%) = | 640*0.03/100*3000
+ 635*0.03/100*2000
= | 957
Future STT (@ 0.017%) = | 640*0.017/100 *3000
= | 326
Total Transaction Cost = | 3982
Net Gain = | 36018
Total Cash Investment = | 610*3000
= | 1830000
Total Futures Investment = | 640*3000*0.25
= | 480000
Total Investment = | 2310000
Return on Investment = 36018/2310000*100
= 1.56%

CLD CLD CLD CLD

Q-1 :
I am not a daily trader but am doing trading about five days a month on an average. Will it be termed as business in my case.

ANS:

SEC 2(13) OF INCOME TAX ACT 1961 DEFINES BUSINESS AS FOLLOWS-

" includes any trade, commerce or manufacture or any "ADVENTURE" or concern in the nature of trade,commerce or manufacture."

I HAVE EMPHASISED ON THE WORD " ADVENTURE" THAT MEANS "FIRST TIME DOING", SO EVEN IF U DO FOR ONCE IT WILL BE TERMED AS BUSINESS IN INCOME TAX ACT, THERE IS NO NEED TO HAVE CONTINUETY OR DEVOTION OF PARTICULERS HOURS TO CALL A ACT BUSINESS.

------------------------------------------------------------------------------

Q-2:-

The trade value however is very high and will exceed the limits of 40 lakhs for audit purpose. This is the first year that I will generate so much trade value. Do I require the accounts to be audited. If so, what is the last date by which the audit certificate is to be obtained.

ANS:

40 lac limit is upto 31/03/2011, after that it will be 60 lacs, this 40/60lac is calculated as sum of all the trades in the nature of "sell" for "delivery based trades only". yes u r required to maintain records of all the transaction termed as "books of a/cs" and get audit certificate upto 30 sept of A.Y. for example for the F.Y ending 31/03/2011, last date is 30/09/2011.
-------------------------------------------------------------------------------------

Q-3.

Overall I am in loss in the trades. Can I carry forward the losses to next financial year.

ANS:

yes u can carry forward ur loss for the next 8 succeeding A.Y.

--------------------------------------------------------------------------------------
Q-4

I am basically a long term investor & am holding some shares for more than one year also. As such I have long term & short term losses & gains alongwith trade losses in my account. Pl. advise what is the stretegy I have to adopt for Income tax purpose.

ans:

ur income tax return will comprise of 2 heads for shares viz- capital gains (long term and short term) and business/profession

-----------------------------------------------------------------------------------
Q-5:

I may indicate that other than brokerage charges, STT, ST etc. (which are Govt. charges & cannot be relaxed) on delivery trades works out to about 0.17% & about 0.02% for intraday on trading volume where brokerage charges are 0.25%. Where brokerage charges are even higher say 0.5% as is the case witrh HDFC securities, STT, ST etc. chages work out even higher because ST is levied on brokerage amount. As such, the more the volume is generated, as is in your way of trading, STT ST etc. is a substantial amount is what you pay

ANS:

here is a demnstration of charges of cash market equity trades-

1. brokerage ----- charged by broker
2. service tax ----- charged only on brokerage
3. stt -------------- charged at 0.025% on sales only in case of intraday and 0.125% in case of delivery both buy and sell).
4.Transaction Charges --- charged @ 0.0035%
5.Stamp Duty --- charged at 0.01% on delivery trades and 0.002% on non delivery trades.

my broker charges brokerage and service tax in advance on monthly basis, so apart from brokerage i have the following cost --

---- for intraday total cost to buy and sell a rs. 100 stock is 0.037 paisa
----- for delivery trades to tal cost to buy a rs. 100 stock is 0.15 paisa similar cost to sell .

plz calculate if not believing me or i can showu my contract note

Mr Silent Investor @ 139: I appreciate your point

Tata Steel FPO Equation

Over subscription 16 times Allotment 20 shares Gain Rs.700
Over subscription 14 times Allotment 23 shares Gain Rs.805
Over subscription 12 times Allotment 27 shares Gain Rs.945
Over subscription 10 times Allotment 32 shares Gain Rs.1120
Over subscription 8 times Allotment 40 shares Gain Rs.1400

IPO for retail Investor is over.
ALL THE BEST



expected to be around 16 times. Allotment of 20 shares. The present premium of Rs.35 can give

Good News frds...
as per the eenadu business today.....
SEBI given permission to MCROMAX IPO is going to come in april with 2.17 crores equity shares...

one gud news is ...MICROMAX IPO is going to give 10% discount to retail investers

Dear Natrajan,
Shorted 1 lot at 638 today.Now will follow the same stategy u r following.

no discount for retailer............

Is thr any discount to retailers?

@ Gem ipo finder
Dear Jem,

It is good to see that you are a CA. Your guidance on many matters can be beneficial to many. My earlier post remains unanswered by you. I had asked the following:

"""I am not a daily trader but am doing trading about five days a month on an average. Will it be termed as business in my case. The trade value however is very high and will exceed the limits of 40 lakhs for audit purpose. This is the first year that I will generate so much trade value. Do I require the accounts to be audited. If so, what is the last date by which the audit certificate is to be obtained. Overall I am in loss in the trades. Can I carry forward the losses to next financial year. I am basically a long term investor & am holding some shares for more than one year also. As such I have long term & short term losses & gains alongwith trade losses in my account. Pl. advise what is the stretegy I have to adopt for Income tax purpose."""

Further, Mr. M.Gupta in its post on 17.01.11 has said that the limit for audit pupose is 60 lakhs. Is it correct?

Further, I may indicate that other than brokerage charges, STT, ST etc. (which are Govt. charges & cannot be relaxed) on delivery trades works out to about 0.17% & about 0.02% for intraday on trading volume where brokerage charges are 0.25%. Where brokerage charges are even higher say 0.5% as is the case witrh HDFC securities, STT, ST etc. chages work out even higher because ST is levied on brokerage amount. As such, the more the volume is generated, as is in your way of trading, STT ST etc. is a substantial amount is what you pay.

Pl. reply so that all get benefitted by your knowledge

Tata Steel is not offering any discount to retail Investors. Hence we are at PAR with all. This is unlikely to give a gain to Retailers in the short run. Also the money collected will be used to pay off debts which are matured( Debentures etc). Also such a small issue is hardly going to spurt production.My recommendation is that in case u r looking for a fast gain, then stay away. However it is ok from a long term perspective keeping the growth numbers of Automotive & infra sectors in mind. A SMALL INVESTMENT IS WORTH THE RISK.

how many percent discount get in FPO? is it 4.50% can any one tell....

GMP 24
KOSTAK 1800
sell as much as one can.