New KYC Norms for your Mutual Fund Investments

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New KYC Norms Mean for Your Mutual Fund Investments

All mutual fund investors, whether new or existing, will have to provide additional Know Your Customer (KYC) details to their fund houses.


mutualfunds-kyc


Key Points:


  • In September this year, the Association of Mutual Funds of India (AMFI) came out with a circular directing mutual fund companies to collect additional information from new investors from November 1, 2015 to comply with norms of the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS). The mutual fund body advised fund houses to make the additional KYC information mandatory for investors from January 1, 2016.
  • The additional KYC details a mutual fund investor has to provide under FATCA and CRS include gross annual income, net worth, occupation, source of wealth and country of birth.
  • If the investor is tax resident in any country other than India, the additional information required will include tax identification number and country of tax residency.


How to update?

  • An investor can update the information both online and offline. For investments in more than one mutual fund, investors have the option to update the information online by visiting the respective website of the fund house.
  • The investor can also download the form and submit it on the point-of-services (POS) or the nearest office of the mutual fund house.
  • To avoid updating the KYC information with multiple fund houses, the investor can simply update it with the registrars.
  • If mutual fund investor is serviced by a single registrar, they don't have to have to update the information with both the registrars. But in case they want to start a new investment in a mutual fund which is using services of the other registrar, they have to update the information with both registrars.

Coffee Day Enterprises IPO Review

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Coffee Day Enterprises (CDEL) is entering the market with an initial public offer (IPO) to raise Rs 1,150 crore at a price band of Rs 316-328 per equity share. The company owns the popular coffee chain – CafĂ© Coffee Day – and is the largest coffee retail company in India. The company also has diversified business interests through its subsidiaries across segments like logistics, financial services, hospitality, and technology parks.

The entire issue is for fresh equity which would be used by the company to finance the expansion of its coffee business, repayment and pre-payment of loans to the parent company as well as subsidiary and utilise the rest for general corporate purposes. At present, its promoters hold 63.3 per cent stake in the company; post-issue the shareholding will come down to 52.6 per cent.


cafe-day-ipo



Issue Details:

 Issue Open: Oct 14, 2015 - Oct 16, 2015
 Issue Size: Equity Shares of Rs. 10
 Issue Size: Rs. 1,150.00 Crore
 Face Value: Rs. 10 Per Equity Share
 Issue Price: Rs. 316 - Rs. 328 Per Equity Share
 Market Lot: 45 Shares
 Minimum Order Quantity: 45 Shares
 Listing At: BSE, NSE

At the higher end of the issue price, adjusting for the valuation of the listed plays (SLL and Mindtree) along with IT play, the coffee business is available at 25-26x its FY2015 EV/EBITDA which is in line with some of the listed comparable companies and thus is not cheap. However, given the strong brand image, extensive distribution reach and growing disposable income in India, the company is an attractive play on urban discretionary consumption and investors could look at it with mid-to-long term investment horizon. There may be listing gains, which risky traders would want to take to.