We decode the massive 512.5 cr. fine on Franklin Templeton, by SEBI in an order, on the debt funds that were shuttered unilaterally by the AMC in April 2020.

A few follow ups: We had posted in December on a thread about what action we hoped SEBI would take, and I'm glad to say that SEBI has been incredibly open and listened.
Our original post when the funds where shut: capitalmind.in/2020/04/the-fr…
And of course, our post on things debt MFs did, and things that SEBI should have done - which they have nearly completely done so far. Kudos to the regulator on this. capitalmind.in/2020/04/how-de…

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More from @deepakshenoy

7 Jun
Be careful if you hear tips asking you to buy DHFL. The nclt has approved the resolution plan, where I believe the plan is for the shares to be written off to zero. Piramal will then get new shares. Today's shares will have zero value, beware.
Meanwhile, today, 21 lakh shares traded at upper circuit. This will do good as a coin - DHFLCOIN - and go to the moon. Image
Read 6 tweets
30 May
There's some brouhaha about salaries of founders in a private company, so let me do a little thread about why it's still probably tax efficient to pay yourself through salaries versus other mechanisms.
The dividend is the least tax efficient mechanism now. The company earns Rs. 100, pays Rs.25 tax, and if it distributes the remaining 75, that can get taxed at 42.74% (highest tax bracket) so the founder gets Rs. 43 (Effectively 57% taxes)
Salary is better. The company earns Rs. 100, pays Rs. 100 as salary, founder pays 42.74% tax, company has no profit so it pays no tax (salary is deductible). Effective tax rate: 42.74%.

But the companies act restricts payouts to 10% of profit (you need govt permission for more)
Read 8 tweets
27 May
RBI balance sheet: 4 lakh crores added this year to 57 lakh crores (this is around 25% of money supply - quite large) They pay 99,000 cr. mostly because they didn't need to make provisions.

Quick thread on the RBI accounts.
Income from interest came down to 69,000 cr. from 109000 cr. Due to two things: lower rates (on indian and foreign bonds) and banks having to get paid for reverse repo.
RBI didn't generate as much profit selling dollars as I had thought. Only 50,000 cr. versus 30,000 cr. last year. Overall, income fell from 1.49 lakh cr. to 1.33 lakh cr.
Read 11 tweets
25 May
The RBI dividend is smaller than I thought, but it's good. The RBI is overcapitalized, it knows it, and I've pleaded for making accounting profits off the massive FX hoard for ages, and I'm super glad the RBI did some.

Forex markets are okay. 72.77 USDINR, near 2021 lows.
Also, there has been no REAL RBI selling. RBI bought, and then did a sell-buy swap. So the $580 billion is actually around $660 bn if you consider that they own $80bn forwards.
See how much the RBI bought this year - it's 50% more than any other year, if you include that whopping huge Forex forward exposure they own.
Read 8 tweets
23 May
Wonderful thread, and I'll add a little of what I know. Uber and Ola allowed anyone to become a taxi driver. The medallions in New York were given to a few people only, so the price of it was absolutely huge. Uber ensured anyone could drive. But there's a catch.
You couldn't "flag down" an Uber. A car couldn't put a sign saying "we're available" - and you just get in. Because that activity was licensed. And licenses were limited.

The answer was the app; book on the app, and Uber finds a cab hanging around close to you.
This was skirting of a regulation and suddenly allowed anyone to offer taxi services. In anticipation, people would drive to high-demand locations in order to service the location. Traffic would actually INCREASE, because supply had to be greater than demand.
Read 9 tweets
15 May
Do you have credit card debt that you don't pay back in full every month?
If you voted Yes for the above: Do you know right now, that every single purchase from day 1 of purchase, attracts interest at 3%+ per month?
Snapshot at 2:30pm: Appears that many people who "revolve" are not aware of this massive dirty behaviour by card companies. I will elaborate on this thread:
Read 10 tweets

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