| Ready for the race
Mumbai, July 8: Maruti Udyog’s shares will be listed today on the derivatives and cash segments of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) in what will be a first for Indian bourses.
In the derivatives segment, the minimum size for a contract has been set at 1600 shares. The exchanges decided to allow the share to trade in both sections after approval from the Securities and Exchange Board of India. Analysts see this is as a shot in the arm for Maruti.
What facilitated the two-way debut was a Sebi circular of December 2002 allowing simultaneous listing for issues over Rs 500 crore,” a BSE official told The Telegraph.
Shares of Maruti, which resuscitated a dormant primary market with the largest initial public offer in four years, will trade under the scrip code 532500 in the BSE’s specified category — also referred to as the A Group.
Managing director Jagdish Khattar will kick off trading by ringing the opening bell in BSE’s Rotunda Hall at 9.55 am.
Operators are confident that the share will debut at an attractive premium, and move in a range of Rs 130 to Rs 175. Says Arun Kejriwal of Kejriwal Research and Investment Services: “I am talking like a soothsayer, but the markets expect a lot of activity in Maruti.”
Avinash Gorashakhar, an auto analyst at Emkay Share & Stock Brokers, was more circumspect, predicting the share will quote around Rs 145. He says many investors who ignored the maiden offer could try to hitch a ride now.
Gorashakhar expects investors to book profits once the share touches Rs 165 — a level where investors get an attractive return, after providing for interests costs. “Investors, especially retail ones, will wait and watch.”
Maruti’s market debut will embolden a government that is keen to ensure that other state-owned companies heading for selloff also get a good reception when their initial public offers hit the markets. Nalco, HOCL, National Fertilisers and RCF are among those on the list.
The next few days will be crucial for bourses. The Cabinet committee on Disinvestment (CCD) will meet on Thursday to discuss stake sales in HOCL and National Fertilisers. The same day, Infosys will unveil its first-quarter scorecard. The two events, along with Maruti, will influence the way stocks move in the short term.
Maruti will be India’s first stand-alone listed car company. Of the 11 firms that make cars in India, only two — Telco and Hindustan Motors — trade on exchanges. However, unlike Maruti, these companies also make commercial vehicles. Analysts expect the Maruti to make its way into leading stock indices like the BSE sensex and NSE’s Nifty not too far in the future.