SEBI Grade A Current Affairs — 22 October 2026

Persistent Systems opened a Qualified Institutional Placement to raise up to USD 450 million, approximately Rs 4,265 crore, with the floor price set at Rs 5,761 per equity share under SEBI's ICDR Regulations pricing formula. Shareholders had earlier approved a discount of up to 5% on this floor price. Proceeds will partly finance the acquisition of Nagarro. The QIP follows Persistent's 26th consecutive quarter of revenue growth, with Q2 FY26 revenue rising 30.3% year-on-year to Rs 4,663.9 crore.

A Qualified Institutional Placement (QIP) is a capital-raising mechanism introduced by SEBI in 2006 to allow listed companies to issue equity shares, convertible securities, or debentures to Qualified Institutional Buyers (QIBs) without a public prospectus. QIBs include mutual funds, foreign portfolio investors, insurance companies, and scheduled commercial banks, among others.

The floor price in a QIP is computed using a SEBI-prescribed formula under the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 — commonly called SEBI ICDR Regulations. The formula typically takes the average of the weekly high and low closing prices of the share on the stock exchange where the highest trading volume was recorded during the two weeks preceding the relevant date. Companies may offer a discount of up to 5% on this floor price, but only after securing shareholder approval through a special resolution.

QIPs were designed to reduce India's dependence on foreign capital markets (ADRs/GDRs) and streamline the domestic fundraising process. They are faster than Follow-on Public Offers (FPOs) because they bypass retail investors and avoid lengthy SEBI approval timelines.

The connection to the Nagarro acquisition is important: companies often use QIPs to fund large M&A deals, and SEBI's pricing rules ensure institutional investors receive shares at a market-linked, transparent price. The RBI/FBIL reference rate (Rs 94.7691 per USD here) is used to convert the USD-denominated issue size into rupee terms — a fact that links RBI's forex operations to capital market transactions.

Ahead of Budget 2027, debate has reopened on long-term capital gains tax across asset classes. Listed equity and equity mutual funds attract 12.5% LTCG above ₹1.25 lakh, with a one-year holding period. Debt mutual funds and gold are taxed at 12.5% after two years. Immovable property draws 12.5% LTCG without indexation after two years. Each asset class carries a distinct holding period threshold, tax rate, and exemption limit under the current Income Tax Act framework.

Long-term capital gains tax (LTCG) is levied on profits from selling capital assets held beyond a specified period. The key policy design choices are: the holding period that qualifies gains as 'long-term,' the applicable tax rate, and whether indexation (inflation adjustment on cost) is allowed.

Budget 2024 rationalised LTCG rates sharply. Before it, equity LTCG above ₹1 lakh was taxed at 10%; that exemption threshold was raised to ₹1.25 lakh and the rate to 12.5%, while the indexation benefit on property was withdrawn. This made the tax treatment of property more punishing in real terms — a politically sensitive change that feeds the Budget 2027 debate.

For exam purposes, the transmission mechanism matters: LTCG design affects asset allocation decisions of households, which in turn affects capital formation, equity market depth, and real estate demand. A higher LTCG on equities relative to property can shift savings away from productive financial assets. Conversely, removing indexation from property raises the effective tax burden on long-held assets even if the nominal rate looks low.

SEBI and RBI both track capital market flows and credit demand; changes in LTCG can shift household savings between bank deposits, mutual funds, and real estate — directly affecting credit offtake and monetary transmission. UPSC tests the fiscal policy dimension: how LTCG fits within capital gains tax architecture and its equity vs. efficiency trade-offs.