Teji Mandi: Unseated by Damani, uprooted by Ambani

The market is throwing all indications of a choppy series ahead. With fresh stamp duty imposed, MF investors will have to make minor tweaks to their playbook. In today's edition, we have also given a glimpse of the downfall of the poster boy of India's retail space.

The market consolidation around the current levels is on expected lines. After two prolific months of re-bounce, a negative bias has surely set in. The market is likely to wait for further cues before making any decisive movement on either side.

Mutual Funds - A little tweak in the playbook:

Severely crunched for fresh revenue sources, the government has now levied upon a new stamp duty on the mutual fund investors from 1st July onwards.

The fine print reads that stamp duty of 0.005% will be levied on the issuance of units, and 0.015% on transfer of MF units between Demat accounts. For dividend reinvestment, it will be imposed on the dividend amount minus TDS. For fresh purchases, it will be imposed on the purchase amount less any other charges.

It will apply to all mutual funds—debt as well as equity. However, the impact will be typically severe for debt funds held for less than 90 days, as it is a one-time charge regardless of holding period.

Redemption of funds will be exempted from the duty.

Indian Retail - New victors to take the march along

The journey of Kishore Biyani, who was once hailed as a poster boy of India's retail space, has been a traumatic one. Unseated by Damani's D Mart, he is now set to be uprooted by Ambani's digital plus retail play.

India's retail space is expected to spice up in the coming months with RIL making quick inroads into major categories. Going by the buzz, Kishore Biyani is likely to give up the control of Future Retail to Reliance Retail.

The deal, currently under negotiation, comprises RIL buying out FBB, Big Bazaar, Food Hall and Central, Future Lifestyle Ltd and Future Supply Chain Solutions.

Key takeaways:

The deal between the RIL and Future group is moving at a rapid pace. It is not just threatening to end Biyani's journey, the hallow around Damani's Avenue supermart is also expected to lose its shine.

Here, one needs to spare a thought for the investors of Avenue Supermarts. Those convinced with the prospects of DMart- have continued to avoid exorbitant valuations all along.

Talking about the stamp duty impact, it would be foolish for MF investors to even consider stopping their SIPs. The best way to avoid the impact of the new cost would be to focus on long term investing and avoid frequent churning. Remember, each fresh purchase is going to attract the stamp duty of 0.005%.

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