NHPC, RITES & Oil India Ltd -3PSU in process of IPO…
- Spiralling scrip prices in the secondary stock market over the last couple of days have brought back hopes of a revival of public issues.
- The primary market (where companies raise funds through the issue of fresh shares) is once again expected to gain currency after remaining subdued for over five quarters since February 2008. The usual lag for the primary market to pick up is three to six months from the time the stock market rises.
- “Clients are asking investment (merchant) bankers to take a relook at the issues and plans held up due to bad market conditions earlier. But one has to see how soon these issues will materialise,” .IT usually takes 30- 40 days to process the issue — either initial public offering (IPO), rights or follow- on offerings (by the companies already listed).
- “The market should remain stable for at least for 40 days for the issuer to take a firm decision to go ahead with the issue. It seems the journey has just begun, but the destination ( for revival of public issues) is still far away,” .
- The public sector units (PSUs) should hit the market to set the tone for other issues to follow.
- At least three PSUs — National Hydro Power Corporation (NHPC), RITES, a subsidiary of Indian Railways, and Oil India Ltd (OIL) — are armed with the mandatory approval of the market regulator Securities and Exchange Board of India (Sebi) that are valid till July or August.
- Thunuguntla cited a couple of reasons for the need for PSUs to revive the market, “PSUs are time-sensitive, and investors have a better perception of these companies for they are owned by the government, besides, reasonable pricing.”
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