Mumbai: The Securities and Exchange Board of India (Sebi) Monday approved new conflict-of-interest norms that would apply to its chair, and sought to ease settlement rules to draw overseas funds – currently dumping local stock – to Mumbai-listed shares.

Tougher conflict-of- interest norms for Sebi board members and employees in insider trading rules would now be sent to the Centre for its consideration and publication so that the amended rules are legally binding on the current and future government appointees to the regulator. Separately, Sebi board approval for the net settlement of cash market trades for foreign portfolio investors (FPI) is expected to lower costs.

An expert panel was formed by Sebi chief Tuhin Kanta Pandey after his predecessor, Madhabi Puri Buch, faced significant allegations, including conflict of interest.

Classifying the Sebi chairperson and whole-time members as ‘insiders’ will subject them to the same legal trading restrictions as employees, ensuring they can’t trade while possessing price-sensitive information.

Sebi said it would revise its code on conflict of interest for members of the board for voluntary adoption. In the meantime, it would also refer the recommendations of the expert panel to the central government so that it gets legal sanctity.

Under the Sebi Act, the government is empowered to make such rules.
“As the central government is the appointing authority and prescribes the terms and conditions of service of board members, the central government will be the appropriate authority to take a decision in this matter,” Sebi said in a statement after the board meeting. The regulator said, top Sebi officials including the chairperson, would have to publicly disclose their assets and liabilities, in line with government norms that mandate officials to declare their immovable properties to their respective departments at the time of joining. A digital recusal process would also be put in place to record disclosure of conflicted relationships, Sebi said.

‘FOR THE FPIS’
Separately, Sebi also eased transaction settlement rules for foreign portfolio investors, allowing them to settle the net value of their cash market trades. Currently required to settle trades on a gross basis, FPIs often face higher funding and foreign exchange costs. The shift to net settlement — where buy and sell obligations can be offset — will reduce capital requirements, particularly during high-volume events such as index rebalancing.

“The proposal is expected to reduce the cost of funding for FPIs, particularly on index rebalancing days, when outright purchases and sales occur in incoming and outgoing index constituents, respectively,” Sebi said.

“Since non-outright transactions will continue to be confirmed and settled on a gross basis, concerns relating to potential market influence arising from large FPI positions or speculative trading activity are allayed,” it said.

An outright transaction is a one-way trade where an investor either buys or sells, but not both, in a particular security in a settlement cycle. Sebi also revised its “fit and proper” criteria for market intermediaries such as stock brokers, removing automatic disqualification for pending criminal cases while tightening norms for convictions involving economic offences.

The regulator also introduced relief measures for Alternative Investment Funds (AIFs) nearing closure. Funds will now be allowed to retain liquidation proceeds beyond their tenure under specific conditions such as pending litigation or tax liabilities.

A new category of ‘inoperative funds’ will allow such AIFs to operate with reduced compliance requirements until they formally surrender their licences. Further, Sebi sought to deepen retail participation in social impact funds by slashing the minimum investment threshold from Rs 2 lakh to Rs 1,000.

The Sebi board also approval a proposal to allow InvITs (Infrastructure investment trusts) to continue holding investments in SPVs (special purpose vehicles) after a project’s concession period ends, widen the pool of liquid mutual funds for parking surplus funds, and permitting privately listed InvITs to invest up to 10% of assets in under-construction or greenfield projects.

The shares of metals major Vedanta jumped nearly 3% on Tuesday after the company’s board considered and approved a third interim dividend of Rs 11 per equity share for the ongoing financial year 2026.

During its board meeting yesterday, the directors of the Anil Agarwal-led company approved the dividend payout cumulatively amounting to Rs 4,300 crore, the company announced in an exchange filing in the post market hours of Monday.

Vedanta had already fixed Saturday, March 28, as the record date to determine the eligibility of shareholders set to receive the dividend. This means that an investor must own the shares of the company as on the record date to be eligible for the dividend.

Vedanta is popular among investors for its dividend payouts, and has declared 49 dividends since July 23, 2001, according to Trendlyne data. At the current share price, Vedanta’s dividend yield stands at more than 3.5%.

Last year, the company had announced two interim dividends, Rs 16 in August and Rs 7 in June. 2024 was a bumper year in terms of dividend payouts, as the company announced four dividends cumulatively worth Rs 43.5 per share.

Vedanta share price

Vedanta shares jumped nearly 3% to Rs 664 apiece in the early trading hours of Tuesday. The stock later pared some gains and was trading at Rs 645.75 apiece. It has fallen nearly 6% in the past five days, and around 7% in the past one month. This comes after the stock surged 45% in the past six months.
Earlier yesterday, the stock plunged after the Supreme Court last week upheld the Bombay High Court’s ruling that the conglomerate founded by industrialist Anil Agarwal is not entitled to procure high-speed diesel (HSD) at concessional rates against Form C.The high court had found that Vedanta used HSD for purposes other than mining, including resale to transporters and private parties. It noted that the company’s tax registration certificate restricted the use of fuel to the running and maintenance of machinery for mining and processing iron ore for sale.

Additionally, Vedanta moved the National Company Law Appellate Tribunal (NCLAT), challenging the National Company Law Tribunal’s (NCLT) approval of the Adani Group’s bid to acquire Jaiprakash Associates Ltd for Rs 14,535 crore. In November last year, a Committee of Creditors (CoC) approved Gautam Adani’s resolution plan to acquire Jaiprakash Associates Ltd (JAL) through the insolvency process, after Adani Enterprises outbid Vedanta and Dalmia Bharat.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

At a time when market sentiment is clouded by uncertainty, volatility, and lingering concerns over growth, one of India’s most widely tracked banking stocks has found itself at the centre of a sharp debate. The question on many investors’ minds: is this the right moment to step in, or a signal to stay cautious?

Market expert Sameer Dalal from Natverlal & Sons Stockbrokers believes the answer is clear—this is not the time to retreat.

“So, no, I would never stay away from an HDFC Bank. I am actually one in favour of… For me, it is a screaming buy opportunity in the market. Look, you do not get these opportunities quite often. And as long as there is nothing wrong with the book in the sense that we are not going to see a sudden spike in the NPA numbers, I do not see why one should shy away,” Dalal said.

Governance Concerns Add to Market Jitters

The recent resignation of the bank’s former chairman has added a layer of discomfort among investors, especially as markets remain fragile. Dalal, however, questioned the manner in which the situation unfolded, suggesting that greater transparency could have helped avoid panic.

“If the older chairman, the chairman who retired, had his grievances, he should have pointed them out to the shareholders—that is you, me, and everybody else—saying that this is how the bank is being run, which I am not happy with, and if he thought he was in the right, he should have asked the shareholders to vote alongside him rather than taking a stance of a resignation,” he said.
He further added, “The shareholders at the end of the day are supreme… But the fact is that when the time is bad, the markets are falling, there is panic and fear, you add on to the fear by just leaving an open-ended statement and walk away. It is not a nice thing to have done, especially to the shareholders that you represent.”
Valuations: Discounted or Justified?
Despite the noise, Dalal pointed to valuations as a compelling factor supporting his bullish stance.
“But having said that, HDFC Bank is trading at 1.6 times price to book after adjusting for all its investments in its subsidiaries. The bank continues to grow. Yes, growth is slower, it is happening at 10% to 12% at the moment. We believe it will accelerate,” he noted.

He framed the broader issue beyond just one bank, tying it to the overall growth trajectory of the economy.

“Look, you also got to realise that growth in the entire lending space has slowed down because corporate growth is not really happening, but that eventually has to return… So, if the corporate side recovers, HDFC with its low-cost funding, with its reach… will come back, will grow at a quicker pace and then it will get rerated,” Dalal said.

The Growth Debate: A Sector-Wide Reality
One of the key concerns flagged by market participants remains the bank’s moderating growth and elevated loan-to-deposit ratio. However, Dalal believes this is not unique to HDFC Bank but reflective of a broader industry trend.

“So, you are right on that front that deposit growth has not been coming and because of which loan to deposit has moved up. But you also got to realise that post the merger with HDFC Limited… they had a lot of bonds in HDFC and all of those bonds need to be repaid to substitute it with low-cost borrowing,” he explained.

According to him, the bank has sufficient levers to manage funding without significantly impacting margins.

“Now, for the bank it becomes very easy to raise deposits at slightly higher rate… HDFC Bank will get the funds that they require from the growth perspective without really hurting their total borrowing cost,” he said.

Industry Context and India’s Growth Premium
Dalal also widened the lens to address a more fundamental question—whether India’s premium valuations are justified in the absence of strong growth.

“The entire space if you look at it, it is the smaller banks that have been able to grow at a faster clip… but all of your others… are in the low-teens,” he observed.

This leads to a bigger macro question.

“Is India’s high valuation multiple justified given the fact that we keep hoping that growth comes… or do we believe that the growth will come and that is why these higher valuation multiples can be sustained?” he asked.

Dalal remains optimistic, pointing to structural tailwinds.

“We believe that the growth engines of India will start firing and then these valuations start looking more justified,” he said.

A Long-Term Opportunity?
From a historical standpoint, Dalal argues that current valuations offer a meaningful margin of safety.

“In fact, if you look at on its own historical basis, HDFC used to trade at about three-and-a-half, four times, it is trading at two, so you are getting it at a mighty discount. I am not saying that on the consol basis two is cheap, but it is not expensive for the likes of an HDFC Bank who can still grow at 20%,” he said.

The Bottom Line
While near-term concerns around growth, deposits, and sentiment continue to weigh on the stock, the longer-term narrative remains intact for believers in India’s structural growth story. For investors willing to look beyond current uncertainties, Dalal’s message is unambiguous: this may well be a moment of opportunity rather than hesitation.

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