Wealth Tax – Do you really need to pay?

Are you aware….??? Apart from your income tax, you may also be required to file some other taxes. Paying income tax has become very common to all of us and we do it regularly. But how many of you are aware of wealth Tax…??? In our last article we have explained the method of income tax calculation with facts and figures. Click here to read article on How to Calculate Income tax…???

Wealth Tax Act is an important type of direct tax; it is levied on the benefits derived from property ownership. It is introduced in 1st April 1957 for the first time in India. The tax is to be paid year after year on your wealth (property) on its market value, no matter whether the property yields any income or not. Wealth refers to the value of prescribed assets of an individual as reduced by debts owed in respect of assets.
 
Wealth = Prescribed assets - debts owed in respect of assets
 
Who Pays Wealth Tax


The person paying the Wealth Tax under the clauses of the Wealth - Tax Act, 1957 is called as Assessee. Following are the categories an assessee can belong to.

• A company
• A Hindu Undivided Family
• An Association of Persons or a Body of Individuals
• Non-corporative taxpayers
• Persons belonging in the 1-by-6 categories
• Legal representative, executor or administrator of a dead person
• An agent of a non-resident .

Wealth tax is levied on:-


While the definition of assets covered under wealth tax is extremely wide, fortunately a description has been provided for assets that fall within the purview of wealth-tax. Broadly, the following assets are considered as part of the taxable wealth of an individual:

• A house, with the first one being exempt
• Vacant plots of land (other than agricultural land)
• Silver, gold, precious stones, jewellery, etc
• Motor car (other than for business of hire) and
• Cash in excess of Rs 50,000.
• Yachts, boats and aircraft

An important point to note is that the value for the purpose of wealth-tax would be the value of the assets as on the last day of the respective previous year (i.e., March 31).

Wealth tax Exemptions

Wealth tax is not levied on all your productive assets, following assets are exempted from wealth Tax.

• Shares of companies
• Bank and company deposits
• Bonds
• Debentures
• Mutual fund units
• National savings certificates, etc.

Sources:http://www.indianmoney.com/article-display.php?cat_id=1&sub_id=110&aid=887&acat=&page_id=3&ahead=Wealth%20Tax%20%96%20Do%20you%20really%20need%20to%20pay?

Why does an Investor Put his Money in the Stock Market......???

Why does an investor put his money in the stock market? The answer would be to earn higher returns. Ask him if he is sure that he is going to earn money that he intends, we don’t think that there will be a confident answer from his side. This has been the story ever since the trading has started. There has been a continuous battle between the investors and the stock markets if you consider the history of stock market there have been some wins which have gone in favor of stock market and some in favor of investors. The investor, from the moment he invests tries to outperform the market, the billion dollar question is “Is it possible…..???”, but it cannot be said that it’s just impossible to outperform the market because there are some examples such as Warren Buffet.
The behavioral finance has proved that the tendency of investors is “to Buy the Stocks at Lower Price and Sell them at Higher Price”. How do they do that, it depends on the perception and analysis of various events that are happening around the world. It is mandatory to consider the events that are taking place around the world because Indian market is open to foreign investments and if anything (only concerned to financial system) happens in that country then it will have an effect on behavior of stock prices. One of the examples that can be given is the subprime crisis. The stock markets in America fell because there was a crisis and it had a huge impact on Indian stock market and we all know and experienced the worst period of our life.

Random walk

Have you ever heard someone saying that price of company ‘X’ will definitely be Rs. ‘A’ after a week or after a month or after a year…..? We don’t think you would have come across anyone. You might have heard that stocks may be of price M or N. why is this so? It’s mainly because of a theory called as random walk theory, which many believe does not exist but are continuously trying to get some findings to back up their belief.

The stock markets have been behaving in all ways. One person is right at least one time that’s the reason why there are so many people trying to figure out what’s the exact pattern that stock markets follow. It’s said that if a person understands two words SUPPLY and DEMAND then he can play with the market, but till today no one has been able to do that. That’s why you must have seen people who have earned thousands by losing lakhs together in the markets.
 
The random walk proposes that the prices of stock markets does not follow any trend, but move in random. It says that prices of stock moves like a drunkard walking. If you have seen a drunkard walking on road then
Here you can see that the prices have been increasing but the percentage increase is random. This is just an example; there are many instances which have shown very random results even though we have many of the analysis techniques such as fundamental analysis and technical analysis. This theory implies that all the techniques that we use to find the future prices of stocks are useless because the prices move randomly.


Types of Information:-

The information which plays a crucial role in the stock behavior is of three types;

• Historical data
• Public data
• Private information

Historical data: This refers to the past prices, volume of the stocks

Public data: The data which is accessible to the public

Private information: Information which is available or accessible to the key people in an organization.

you will definitely realize what this theory is proposing and sometimes it’s true too.

Depending on the above three types of information market has been divided into three based on their efficiency.

• Strong form
• Semi-strong form
• Weak form

Strong form:-

It says that all the information historical (prices, volume), public, private information has been absorbed by market and the present price is derived from that. Analysis (fundamental and technical) is not applicable.

Semi-strong form:-

According to this the stock market prices adjust quickly to the information available. It’s not possible to earn superior earnings using the publicly available information unless you have access to some inside or confidential information.

Weak form:-

According to this the market price has considered all the past price and volume data and it’s not possible to get superior returns just by keeping in mind the variations that had taken place in the past.

Indian stock market has been acting weak and semi-strong. So it is important for the investors to bear in mind the market characteristics when the efficiency of the market changes. Now the question arises when should you apply analysis techniques (technical and fundamental) or should you go ahead with the random walk theory and invest in stock market.
Tips for investors:-

• It is said that for a piece of news the market over reacts in the short term and under react in the long term. So an investor must capitalize on this and must make the right decision of buying or selling. Usually what happens is investors panic when market over reacts to some bad news and prices fall looking at this investors sell their shares only to realize losses. On the other hand an intelligent investor who knows about the efficiency of markets picks up stocks of good companies and makes profit once the market recovers.

• The stock markets in India are very much susceptible to changes on the news that’s occurring. For example the budget announcements, dividend announcements, mergers and acquisitions, fiscal policy, monetary policy etc.

• An investor can capitalize on the opportunities wherein if he can use his analytical skills about the economy. For example investors who knew that there would a direct impact on Indian stock markets due to slump in American markets would have sold their shares before there was a slump in market to be on safer side and many of them would have purchased number of shares when the market had hit the bottom because they know that market will recover and they can make some money by selling those shares then.
• An investor cannot keep quiet because he has a broker to look after his investments. An investor must keep his eyes and ears open to news updates and try to foresee its impact on the investors’ psychology.
• There have been many anomalies and the investor must try to capitalize on that.
• Do not try to make quick money by using the publicly available information. It’s because the information on which you are banking will be available to all and it’s a belief that the market will have adjusted itself to that information.
• Indian stock markets are reactive to the news. So if you are a speculator or an intraday trader then make sure that you capitalize on the information very quickly or even before the stock market absorb the news.
• There are some stocks whose prices move in trends. The changes in markets do not have a great impact on the prices. So if you are looking to make bucks taking advantage of changes in these stocks, then better think once again.
• Make sure to pick the stocks of the same company when the prices fall or of those companies which come in the same industry. It’s seen that the stock prices of the companies which are in same industry are also affected.
• If you are trying to make some money by doing arbitrage then be careful because recent studies have shown that many stock markets move in unison so just make sure that your decision is right.

 Sources:-http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=898&acat=&page_id=3&ahead=Why%20does%20an%20Investor%20Put%20his%20Money%20in%20the%20Stock%20Market......???

An Intrioduction to Shares & Debentures.....!!!

Companies (Private and Public) need capital either to increase their productivity or to increase their market reach or to diversify or to purchase latest modern equipments. Companies go in for IPO and if they have already gone for IPO then they go for FPO. The only thing they do in either IPO or FPO is to sell the shares or debentures to investors (the term investor here represents retail investors, financial institutions, government, high net worth individuals, banks etc). Whether they issue shares or debentures totally depends upon the concerned company.
Shares:-


Shares are the marketable instruments issued by the companies in order to raise the required capital. Shares are issued by each and every company which goes public. These are very popular investments which are traded every day in the stock market and the value of the share at the end of the day decides the value of the firm.
A company when it decides to raise capital from public prepares a memorandum, capital required which is written down in this is called as authorized capital and then prospectus is prepared which is verified by SEBI. SEBI permits the company to raise the capital and as a result company offers it to the public this is known as Issued Capital. Part of the capital issued which is subscribed by public is Subscribed Capital. If the number of subscriptions is more than the number of shares then it is called as over-subscription and if the number of subscriptions is less then it is called as under subscription. The amount paid by the investor is Paid up Capital.
Types Of Shares:-
The shares which are issued by companies are of two types

• Equity Shares
• Preference Shares

Equity Shares:-
Benjamin Graham one of the most influential and respected investor from America and author of two bestselling books “Security Analysis” and “Intelligent Investor” has said that the investor should not be too worried about the present performance of the stocks in the market and should be bothered about long term. The reason that he gives is that stocks behave like a voting machine in short term and like weighing machine in long term. These sentences are definitely applicable to shares and pretty much define their characteristics. Equity Shares are issued and are traded everyday in the stock market. The returns on the equity shares are not at all fixed. It depends on the amount of profits made by the company. The board of directors decides on how much of the dividends will be given to equity share holders. Share holders can accept to it or reject the offer during the annual general meeting.

Types of Equity shares:-
The Equity share is a common name, some of the types of equity shares are

• Blue Chip Shares
• Income Shares
• Growth shares
• Cyclical Shares
• Defensive shares
• Speculative shares

been doing extremely well in the past few years. These are usually well established companies. The word blue-chip shares came into existence when IBM Company was doing very well and shares of that company were trading at higher prices. The companies which come under this umbrella are never fixed as the performance of some of the companies may suddenly fall down and some of the companies which never did well start to do extremely well. Hence it can be said that list of blue-chip companies keeps on changing each year. The companies which come under this are market leaders and have the potential to dictate terms.


Income Shares:-

These are the shares of the companies which have stable operations. The companies have a high dividend payout ratio and when the dividends paid are high it implies that the profits saved for company is less and hence less opportunities of growth.

Growth shares:-

These are the shares of companies which have secured their positions in a particular industry. These shares have less dividend payout ratio and hence high growth potential.

Cyclical Shares:-

There is a definite business cycle that keeps on operating and these are the shares of that company whose performance varies with the stages of the cycle. It means to say that the prices of the shares are affected by the variations in the economy.

Defensive shares

These are the shares of the company whose performance does not change with the changes in the economy.

Speculative shares

These are the shares which are traded in the company which have a lot of speculations.
Shares cannot be put into one category strictly because the characteristics of the shares are overlapping in the sense that the blue-chip shares which are in great demand in the market fall under blue-chip shares and speculative shares.




Further Classification

One more classification of shares is given by one of the most successful and respected investor all around the world Peter Lynch. According to him the shares can be classified into 6 types

• Slow Growers
• Fast Growers
• Stalwarts
• Cyclicals
• Turn-around
• Asset plays
• Slow Growers

These are large companies which have the growth rate equal to the industry growth rate or their growth is equal or slightly faster than the GDP (Gross Domestic Product).

Fast Growers:-

These are shares of newly started successful companies which have a very good growth rate (the rate is usually 10 to 25 percent) per year.

Stalwarts :-

These are shares of very large companies which have stable growth. The dividend payout ratio is high. These companies are growing but not rapidly as in the case of fast growers.

Cyclicals :-

These are the shares of the company which is going through the business cycle or there is variation due to economic factors.
Turn-around


These are the shares of the companies which have started performing very well. These companies were fairing badly in the past and all of a sudden there is a turn-around in their performance.



Asset plays

These are the shares of the companies who are not given any recognition though they have a large asset base.



Advantages :-

• Equity shares give greater returns if the company makes profits. It is in comparison to debenture holders or preference share holders.

• There is a tremendous amount of capital appreciation if the shares are of a good performing company.

• The equity shares are easily transferable.

• The equity shares are traded at the stock exchanges so they can be bought and sold easily. These can be easily liquidated.

• The equity share holders have got the right to vote in the annual general meeting.

• Only the equity share holders have the right to choose the board of directors.

Equity share holders have the right to oppose any of the decisions taken by the board of directors. This is what happened when Mr. Ramalinga raju tried to buy Maytas company

Disadvantages:-

• No doubt equity shares have attractive and better returns but in case the firm has not performed well or is going for diversification or is investing in some venture then the profits carried forward will be more and the dividends paid will be less.

• In worst cases if the company goes bankrupt then it is dissolved. The assets are sold and the money obtained is distributed amongst the stake holders then only if something is left out after it is distributed to debenture holders and preference share holders it is given to equity share holders.

• No doubt equity shares have both advantages and disadvantages but the fact is that equity shares are the most sought financial instruments for both investment or for speculation.

Source:http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=863&acat=&ahead=An%20Intrioduction%20to%20Shares%20&%20Debentures.....!!!

Investment, Speculation & Gambling....!!!

Investment:-

The term investment has many facets and is used in many fields like management, finance, economics etc. but we will be strictly sticking ourselves to the meaning that is apt keeping in mind the financial market.

Warren Buffet one of the most respected investors all around the world and CEO & Chairman of one of the world famous Investment Company Berkshire Hathaway has opined that if a person invests money in the market with even a hint of thought of selling it once the price rises is not at all an investment. When you ask any person to define the term investment one of the most common answer would be that an investment is nothing but to put your money into something. One of the best definitions of investment is given by Frank K Reilly and Keith C Brown. According to them investment is defined as Current commitment of resources for a period of time in order to derive future payments that will compensate the investor for;
Source: http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=859&acat=&ahead=Investment,%20Speculation%20&%20Gambling....!!!

Investing in Stocks - Best Article of the Year....!!!

Which is the best time to buy stock…..??? Don’t you have this question in mind…??? The answer is very simple today or this moment is the right time to buy the stock. If you have a look at stock market graph of last 5 to 10 years, you can see that the trend is upward, there can be downfalls in between but over a period of time the share price will increase. This is the common logic of investing but there are some other factors to be considered such as why do we invest in stock? How to invest in stocks? Which stocks to buy? etc.

Most people do not do the required analysis before making their investment decision. They generally follow the traditional principle i.e. follow the crowd and buy what others are buying. This is the biggest mistake you can ever make while investing your hard earned money. Studies have proved that retail investors generally invest when market is already pretty high or over-valued. They feel that since the market is touching new heights this is the right time to buy, think for a moment while doing this. If something is valued the most, will it touch the new heights….? Answer is a BIG NO…!!!
 
Don’t be mistaken that only normal and non-finance guys make such mistakes. Even highly trained school business graduates end up doing the same thing! Successful investment is both an art and science. One needs to do the required technical (financial analysis) of the stock before buying or selling it. When to buy or sell probably is an art that comes with age and experience. In this article we have tried to help you understand the things you need to keep in mind while doing your research and number crunching. Remember there is no short cut to the investment.
 
Steps to Find the Best Stock:-
Step-1: Find out how the company makes money


Step-2: Do a Sector Analysis of the Company

Step-3: Examine the recent & historical performance of the Stock

Step-4: Perform competitive analysis of the firm with its Competitors

Step-5: Read and evaluate company’s Financial statements

Step-6: Buy or Sell
Step-1: Find out how the company makes money:-
Before you decide to invest in a company’s stock, find out how the company makes money. This is probably the easiest of all the steps. Read company’s annual and quarterly reports, newspapers and business magazines to understand the various revenue streams of the firm. Stock price reflects the firm’s ability to generate consistent or above expectation profits/earnings from its ongoing/core operations. Any income from unrelated activities should not affect the stock price. Investors will pay for its earnings from its core operations, which is its strength and stable operation, and not from unrelated activities. Thus, you need to find out which operations of the firm are generating revenues and profits. If you do not know that you are bound to get a hit in future.
Source:- http://www.indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=885&ahead=Invesing%20in%20Stocks%20-%20Article%20of%20the%20Year....!!!

Initial Public Offering (IPO)

The term IPO stands for Initial Public Offer and it is in practice in the primary market of shares and stocks. It is the first issue of shares of a company to the public. An Initial Public Offering (IPO) is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded. IPOs can be a risky investment. For the individual investor, it is tough to predict what the stock will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value. In short we can say that IPO is the medium through which a company raises equity capital from the public. By this process it also gets listed on the stock exchange.
In short we can say that IPO is the medium through which a company raises equity capital from the public. By this process it also gets listed on the stock exchange

Who decides the IPO Price?

Company with the help of lead managers decides the price or price band of an IPO. Merchant bankers or syndicate members are acting as the lead managers of companies.

Registrars to the Issue:-

Registrar plays an important role in an IPO process. Their main job involves processing of IPO applications, allocation of shares to the applicants on the guidelines provided by SEBI, processing refunds and also allocating shares in the account of the applicants.
Lead managers in an IPO:-
Lead managers are the independent financial institutions which are appointed by the companies generally involving big IPO’s. Their main responsibility is to initiate the IPO process, help the company in road shows, creating draft offer document and also getting the same approved by the SEBI and Stock exchanges and also helping the company in getting its shares listed on the stock exchanges.

Life cycle of IPO Prospectus:-
There are three stages in the life cycle of an IPO Prospectus such as;

• Draft offer document
• Offer document
• Red Herring prospectus .

Stage 1:- Draft offer document:-

Issuing company and the Book building lead managers prepare the draft offer document which is submitted to SEBI for the review. Now the SEBI may ask the lead managers to either make any changes if required or approve it.
Stage 2:- Offer document:-


Once the Draft offer document gets cleared by SEBI it becomes offer document, offer document is a modified version of Draft offer document after SEBI’s suggestion.

Stage 3:- Red Herring prospectus:-

Once the offer document gets clearance from SEBI the issuing company adds number of shares and the price on the document which is then offered to the public. The issue prospectus is now called the red herring prospectus.
Life cycle of an IPO:-
There are eight major steps in the life cycle of an IPO such as;

• Process initialization
• Pre Issue Role - Part 1
• Prospectus Review
• Pre Issue Role - Part 2
• Bidding for the public issue
• Price Fixing
• Processing IPO Applications
• Stock Listing.

IPO process initialization - Issuing Company:-
Reviewing draft offer prospectus by SEBI

If any changes are required in the document it is sent back
The draft offer prospectus becomes Offer Prospectus after the approval of SEBI.
Pre Issue Role - Part 2 - Lead Manager:-
Draft offer prospectus document for IPO is prepared

Filing of draft offer prospectus with SEBI.
Road shows are conducted.
Bidding for the public issue - Investor:-
Public Issue Open for investors bidding.

Filling of application form by the investor
Providing bidding information to BSE/NSE
Sending the cheques collected to the registrar by syndicate members
Revision of bid by investor if any
Updating stock exchanges with latest data
Closing of public issue
Price Fixing - Lead Manager:-
Lead managers evaluate the final issue price.

Red Herring Prospectus is updated with the final issue price and sent to SEBI and Stock Exchanges.
Processing IPO Applications - Registrar
All cheques and application forms are received by registrar

Applicant data is feeded into systems
Cheques are sent for clearance.
Looking out for all bogus application
Finalizing the pattern for share allotment
Preparing 'Basis of Allotment'
Transferring shares in the demat account of investors.
Refunding the remaining money though ECS or Cheques

Stock Listing - Lead manager:-
After the completion of all the above process lead managers decide the listing date with stock exchanges

Final listing of share on the exchange
Basic concepts attached with IPO:-

• Fixed issue price
• Book building issue
• Floor price
• Cut off price

Fixed issue price:-
Price at which the securities are offered/ allotted is known in advance to the investor
Book building issue:-
Price at which securities will be offered/ allotted is not known in advance to the investor. Only an indicative price range is known
Floor price:-
Floor Price is the minimum price (lower level) at which bids can be made for an IPO.
Cut off price:-
Cut off price refers to the price which is decided by the issuer i.e. the price at which the issuer decides to make the allotment and it indicates that the applicant is ready to accept the price decided by the issuer if he/she mentions cut off prices on the share application form.
Source:- http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=872&acat=&page_id=3&ahead=Initial%20Public%20Offering%20(IPO)

Extended Trading Hours....!!! Is a Blessing or Curse to Indian Stock Market...???

India is one of the favorite places for foreign investor to place their money. It is not only the money that trades in stock market but it is an indispensible amount which we can’t even think of neglecting. India has got a growing economy and is a safe heaven. The economy has successfully overcome the affects of the economic downturn. Recently Securities and Exchange Board of India (SEBI) has proposed new trading timings for Indian stock markets. In this article we will discuss the relevance of this proposal.

A Review on Increased trading hours

Trading in Indian stock markets starts at 9:55 am and goes on till 3:30 pm, it goes on for around five and half hours. SEBI the regulator of Indian securities market has come up with new timings for stock markets. According to the new time table the markets will start trading from 9 am and will go on till 5 pm. SEBI has said that the new timings will be implemented only after consulting the stock exchanges and stock brokers. SEBI has also placed two conditions before stock exchanges such as;

• Efficient risk management system
• Infrastructure commensurate

Stock markets should have efficient risk management system and infrastructure commensurate. Risk management system is an integral part for carrying out efficient clearing and settlement system. It contains some of the risk containment measures like capital adequacy requirements of members, monitoring of member performance and track record, stringent margin requirements, position limits based on capital, online monitoring of member positions and automatic disablement from trading when limits are breached etc. In India NSE was the first one to adapt this system). With the increase in trading hours trading activities will increase and it means the banks and financial institutions have to increase their working hours. The infrastructure that we have now has to be improved.

Reasons supporting increase in trading hours
Some of the reasons as stated by SEBI supporting the increase in trading hours are;


The events occurring have their effects on the stock market and events happening on foreign land can have a bearing on Indian stock market. It is done so as to align Indian markets with other Asian markets.

• With the increased trading hours investors can assimilate information and take the investing decision accordingly.
• The volatility, market efficiency stabilizes with the increase in trading hours.

Things to be considered before adapting the changes :-

Before any stock exchange decides to adapt the new timings some of the things it has to consider are;

• It has to update the volatility. Volatility is one of the measures taken for risk management. As of now it is calculated five times during trading for a day.
• Stock exchanges can decide upon having multiple trading sessions
• SEBI has said that the technology used by brokerages may need up gradation
• The timings are increased and hence there will be variation in volatility. If the affect is adverse then the traders may need to put up higher margins.

Benefits of Increased Trading Hours :-

• There will be increase in the intraday trading.
• Trading can happen in co-ordination with many of the stock markets of the world.
• Increase in the volumes of trading. Brokerage charges will also increase and hence the government revenues also increase.
• Retail investors will get sufficient time to think on their strategies. Not only retail investors even the FII’s can react to the current global events.
• Most of the Asian markets open before BSE & NSE and they are able to attract some of the foreign investment. Now with the Indian markets opening early it is expected that they will be able to attract the investors.
• SGX Nifty is NSE Nifty which is traded at stock market of Singapore ie SGX and it opens two hours earlier to Indian market as of now. As a result of this the volumes had reduced in NSE.
• Indian derivatives are listed and traded in many markets outside India, so with the increase of trading hours will help fair price discovery for them.
• Stock market reacts to the breaking or the current news and based upon the news it changes. With the increase of trading hours more time is provided to the market which may take either way go up or go down.
• One more advantage of increased trading is that there will be increased viewership and hence increase in advertisement.
• Previously trading began at 9:55 am and went on till 3:30 without any break in-between. With the increase of trading hours the traders can take a break in-between and reform the strategies.

Disadvantages of Increased Trading Hours :-

• The analysts will have to improve their efficiency and will have to frame out as to what will be the behavior of the market with the increase in the trading hours.
• There will be increased pressure on the traders including FII’s, banks, institutions etc.
• When there is increase in the working hours there will also be increase in the stress levels and hence brokerage charges or commission which will lead to increase in the overall operational cost.
• The stock markets don’t need any improvement in infrastructure if they adhere to new timings it is the brokerage houses, brokers, banks. Institutions who will have to improve the infrastructure, hire more men to handle the process.
• The markets of other countries are also trading for 5 to 6 hours but they have an hour lunch break in-between so that brokers can rethink on their strategies whereas no such thing has been proposed by SEBI.

Whatever may be the reason but this directive by SEBI has received a mixed response from the stock market neither everyone is happy nor everyone is sad. The brokers and the retail investors are worried about the price stability and many other factors. However if the brokers it’s up to the stock market to decide the new timings. If everything goes as planned then there will be increase in volumes, more intraday trading, and more inflow of capital from foreign investors, this will help to redirect more flow of money into the financial system.
Source: http://indianmoney.com/article-display.php?cat_id=1&sub_id=12&aid=870&acat=&page_id=3&ahead=Extended%20Trading%20Hours....!!!%20Is%20a%20Blessing%20or%20Curse%20to%20Indian%20Stock%20Market...???