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Prime time equity show takes a break

Mumbai, Feb. 24: After the initial brouhaha, the public offer for the sale of government equity in IPCL, CMC and IBP slowed to a crawl today as fund managers paused for breath and small investors remained shy.

Although the IPCL and CMC issues have already been oversubscribed, IBP is struggling to attract bids. On the second day, the IBP counter attracted bids for 62,000 shares, mostly at the floor price of Rs 620. There are 57.58 lakh shares on offer.

CMC has, however, met with a better fate. The issue was oversubscribed 2.85 times — bids were submitted for 1.13 crore shares against an offer for 39 lakh shares.

However, IPCL, which witnessed hectic activity on the opening day, has lost some steam after Reliance Industries, its current owner, declined the government offer to pick up another 5 per cent in the petrochemicals company.

The decision will hang like Damocles’ sword on small investors who are now uncertain about the IPCL pricing.

However, merchant bankers have their fingers crossed. “Wait, don’t rush to any conclusion,” a senior merchant banker said. “By the first half of tomorrow, we’ll see some big-ticket bids from leading institutions,” he said.

“We have approached several institutions and they have assured us that bids have been lined up for tomorrow,” he said. Insurance majors LIC and GIC, along with several PSU banks, will lead the bidding. Overseas investors will also troop in at a later stage, he added.

There are issues of logistics also, as fund managers take one issue at a time. It takes a lot of time to fill in every application, he reasoned.

But for now, the primary market looks tense. It is witnessing an unprecedented gush of IPOs after a long while and a minimum sum of Rs 15,000 crore will be sucked into the IPOs.

IBP is a niche company and once the IPCL issue closes on Friday, the interest will shift to IBP, said a fund manager affiliated to a leading mutual fund. The IBP issue closes on Monday.

Merchant bankers also said the refunds from the Patni Computers offer have just started coming in. The refunds will be reinvested back into primary markets. Patni Computers will be listed tomorrow and it remains to be seen whether it will ramp up gains as TV Today and Indraprastha Gas did or whether it will list with modest gains.

Patni's listing price will also influence small investors’ bids in the current IPOs. An attractive opening will encourage investors to make a foray back into the IPO market and will also make dithering investors take the plunge.

If the current bidding process for the three companies have put merchant bankers on full alert, the mega offers of ONGC and Gail will test their mettle, opine industry circles.

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