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Million-plus retail investors back PSU issues

business Updated: Dec 20, 2010 01:39 IST
Debobrat Ghose
Debobrat Ghose
Hindustan Times
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The capital market experienced its biggest churn ever at the hands of retail subscribers in 2010-11. More than a million retail investors applied in each of the three initial public offerings (IPOs) back-to-back in the current fiscal year.

Three public sector companies — Coal India Ltd (CIL), Power Grid Corporation of India Ltd (PGCIL) and Manganese Ore India Ltd (MOIL) — each received a record 1 million-plus applications from retail investors in October, November and December respectively.

While CIL’s mega issue received 1.6 million applications, the other two issues of PGCIL and MOIL received 1.4 million and 1.3 million applications respectively.

“It’s a unique case, which shows the confidence retailers have in PSUs,” said Sumit Bose, secretary, department of disinvestments. “Our emphasis was on retailers, due to people’s ownership in PSUs and a lot of exercise was done to create mass awareness.”

Another first-of-its-kind that created a record this year was PGCIL’s follow-on public offer. It received more than a million applications from retailers.

The three issues were also over subscribed — CIL (15.2 times), PGCIL (14.8) and MOIL (56.3). “CIL proved a game changer by creating a major excitement among individuals and handsome profits earned by them. The effect of these got translated into other PSU issues,” said T Jagannadham, strategist & head of research, SMC Global Securities.