Within an hour, the public offering of the Oil and Natural Gas Corporation was over-subscribed 2.8 times. Since the issue will not close till March 13, and road-shows in Europe and the United States of America are yet to start, the eventual over-subscription will be much more. Mr Warren Buffet or Mr George Sorros may or may not have had a hand to play. But clearly, domestic and foreign institutional investors have the appetite for India’s largest ever public offering, which also happens to be one of the biggest global issues slated for 2004. With ONGC’s stock price rising, there has been a favourable impact on the secondary market also, and post-issue, ONGC’s free float will certainly rise. With strategic sales temporarily stuck, courtesy the Supreme Court, Mr Arun Shourie built his disinvestment hopes around six public issues of Indian Petrochemicals Corporation Limited, IBP, Dredging Corporation of India, CMC, Gas Authority of India Limited and ONGC, and the expectation was that at least Rs 14,000 crore would flow in. The other five have already been over-subscribed. IPCL has been over-subscribed by 4.9 times, IBP 2.8 times, DCI 18 times, CMC 10.43 times and GAIL 7 times. So more than Rs 14,000 crore is likely. Disinvestment receipts through these issues will be more than three-and-a-half times what flowed in in three years, 2000-2001 to 2002-03.

Mr Shourie is in a celebratory mood. He has drawn six lessons from this experience. First, we must realize India’s strengths and recognize that perceptions about India have changed. Second, we must stop discouraging ourselves, a reference to criticisms about size, timing and bunching of the public issues. Third, if there are discouraging noises, we must ignore them. Fourth, we must attempt to “exhume” the real character of our stock market. Fifth, the counter-factual of these six issues, not having materialized, would not have been desirable. Sixth, placing public issues in overseas markets improves the country’s profile à la China. Those who invest in a country’s stock begin to trumpet the country’s success. No one can grudge Mr Shourie his celebration, and these lessons are valid. However, the minister has missed the most important lesson of all, one on which he needs to plead mea culpa. Markets are best left to themselves. The psychology that markets are working when prices increase and are tampered with when prices drop is odd. This is not to deny that markets are manipulated. If anything, in both major stock-market scams of the Nineties, bull cartels were at work, underlying the lack of regulatory oversight. However, in the present case, there was no need for the minister to press the panic buttons.