New Rules, New Game: Understanding the SME IPO Transformation
With 745 companies and a combined market cap of ₹2 lakh crore, it has expanded rapidly. But with rapid growth come challenges. SEBI, the market regulator, is stepping in to fix these issues and protect investors.
The above chart shows the rising number of SME IPOs and the funds raised since 2020.
Let’s break it down:
What’s the Problem?
- Promoters Cashing Out: Some company owners use IPOs to exit instead of raising funds for growth.
- Misuse of Funds: Funds are often funneled into unclear expenses or related-party deals.
- Risk to Small Investors: Many retail investors chase high-risk IPOs, leading to potential losses.
- Poor Liquidity: After the initial excitement, trading in SME stocks dries up, leaving investors stuck.
What Will Change?
SEBI’s proposed rules are game-changers:
- Promoter Exit Limits: Only 20% of shares can be sold during an IPO.
- Fund Monitoring: No more vague allocations for “general purposes.”
- Higher Investment Minimums: Application sizes may rise to ₹2–4 lakh.
- Longer Lock-ins: Promoters must stay invested for up to five years.
- Boosting Liquidity: More investors will be required for better trading activity.
These changes aim to make SME IPOs safer and more transparent, encouraging long-term growth and protecting investors.
Important Reminder: SME IPOs come with market risks. Always consult your financial advisor before making investment decisions.
(Contributed by Abhinandan Singh, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
The Ultimate Guide to NRI Accounts: What Works Best for You?
Think of NRE and NRO accounts as tools to help you manage income in India and from abroad effortlessly.
The NRE Advantage: Earn income abroad? The NRE account is perfect! It keeps your money tax-free in India and allows easy fund transfers to your foreign account. But remember, it’s not for depositing Indian income like rent or dividends.
The NRO Helper: Got income from India—say rent, dividends, or a pension? The NRO account has you covered. While its interest is taxable, you can transfer up to $1 million annually to your foreign account.
PIS (Portfolio Investment Scheme) and Non-PIS Accounts
- PIS Account is your gateway to investing directly in Indian stocks and debentures of Indian companies. It’s RBI-compliant and links to your NRE or NRO account.
- Non-PIS Account on the other hand, is simpler and suited for mutual funds, bonds, or other instruments—but not direct stock investments.
Which One’s for You?
- NRE: For tax-free global income.
- NRO: For managing Indian earnings.
- PIS: For stock investments.
- Non-PIS: For diversified options.
Whether you’re managing global income, Indian earnings, or planning investments, choosing the right account is the first step toward hassle-free finances.
(Contributed by Mausam Gupta, Relationship Manager, Team Prithvi, Hum Fauji Initiatives)
Solo But Strong: Financial Freedom in Retirement for Single Women!
Planning for retirement is essential, especially for single women who shoulder financial responsibilities independently. With no partner to share the load, it becomes even more crucial to prepare for a secure and fulfilling future.
Think about your desired lifestyle in retirement—whether it’s traveling, pursuing hobbies, or enjoying time at home. Consider any potential financial obligations, like supporting your loved ones. Defining these goals gives you clarity on how much to save and which strategies to adopt.
Here are some key tips for single women planning for retirement:
- Start early: Save as soon as you start earning. Even small contributions grow significantly over time.
- Set clear goals: Decide what matters most in retirement. Clear goals keep you focused and motivated.
- Choose the right plans: Research pension plans or retirement funds tailored to your needs for a steady income. Since this is a crucial part for your life, having the right financial planner guide you could make all the difference.
- Secure with insurance: Life insurance is a must right from the start! It protects your loved ones and secures your future.
- Budget Wisely: Plan current expenses without neglecting savings. Stick to your retirement goals.
- Live within your means: Cut unnecessary expenses and prioritize long-term wealth creation.
By taking charge Single women can enjoy a comfortable, secure retirement free without financial worry.
(Contributed by Anjali Tomar, Financial Planner, Team Prithvi, Hum Fauji Initiatives)
What did our clients ask us in the last 7 days?
Question- With the next advance tax due date approaching, what happens if I miss the next payment or pay less than the required amount?
Our Reply – Think of advance tax as a way to keep your financial engine running smoothly, just like fueling your car during a long journey. It’s a “pay-as-you-earn” system where you pay taxes in small, manageable chunks instead of a year-end lump sum which could be bothersome due to a big amount suddenly required.
But what happens if you miss such a pit stop?
- Penalty Interest:
- Section 234B: Pay less than 90% by March, and you’ll be charged 1% interest monthly.
- Section 234C: Miss an instalment, and it’s 1% monthly on the delay.
- Bigger Tax Load: Missed payments pile up, making the final instalment hefty.
- Taxman’s Attention: Repeated misses may lead to unwanted scrutiny.
The table below shows what are the payment schedules for advance tax.
| Due Date | Percentage of Total Tax Payable | Applicability |
|---|---|---|
| 15th June | 15% | First instalment for individuals and businesses. |
| 15th September | 45% (cumulative) | Second instalment; total tax paid should be 45%. |
| 15th December | 75% (cumulative) | Third instalment; total tax paid should be 75%. |
| 15th March | 100% | Final instalment to complete 100% of tax liability. |
How to Avoid Penalties?
- Using online calculators or consulting a tax pro.
- Reviewing income quarterly and paying extra if unsure.
- Meeting deadlines—they’re your safety net
Missed a Deadline? Take Action!
Pay immediately to reduce penalties and adjust in the next round. Stay proactive, and your tax journey will be smooth sailing!
Take Action Now!
(Contributed by Team Dhruv, Hum Fauji Initiatives)
