The Telegraph
Since 1st March, 1999
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Magic effect on govt stake sale offer
- Sebi puts market on high alert; Shourie initiative works wonders as IBP bids gather momentum

Mumbai, Feb. 26: After the government cracked its whip yesterday and Sebi flashed a ‘high alert’ signal, the primary market rebounded today with a surge in bids for the IBP issue.

The offer finally attracted a surfeit of applications and covered more than two-thirds of its issue size.

“Our actions had a salutary effect,” disinvestment minister Arun Shourie said after a series of meetings with top officials, including intelligence bureau chief K. P. Singh, in Delhi today.

On Wednesday, rattled by the frigid response to the public issues by state-owned companies, the government had swung into action and claimed it had identified the bears who were mauling stock prices.

Securities and Exchange Board of India (Sebi) chairman G.. Bajpai said the markets had been put on on ‘high alert’ and strict action would be taken against those found guilty of manipulation.

“We are watching the price movement closely and are prepared to take prompt action against anything unusual. Any unusual movement will be looked into and dealt with seriously and expeditiously,” he added.

Results were immediate. The IBP issue, which attracted only 3 per cent subscription in the past few days, saw a dramatic 71.44 per cent subscription today, netting bids for 41.13 lakh shares against the 57.58 lakh shares on offer. The highest number of bids were received for 29.94 lakh shares at the floor price of Rs 620. The public offer will close on March 1.

The bids placed today were mostly from foreign institutional investors, sources claimed.

The CMC issue continued to fare well and was oversubscribed more than four times with bids for 1.6 crore shares against the 39.76 lakh shares on offer.

The IPCL offer was oversubscribed 2.7 times at 19.6 crore shares. There are 7.18 crore IPCL shares on offer. The IPCL offer will close tomorrow and some retail activity and local institutional support is expected in this counter, say merchant bankers.

Dredging Corporation, which opened today, saw a fair amount of activity and bids covered 32.26 per cent of the issue.

If Delhi was the hub of activity yesterday with merchant bankers and bureaucrats huddled in meetings, today was Mumbai’s turn. A meeting of the high-level committee on capital and financial markets was held at the central bank headquarters.RBI governor Y. V. Reddy chaired the meeting.

Finance secretary D. C. Gupta, Sebi chief Bajpai, IRDA chairman C. S. Rao, and other senior officials in the finance ministry, the RBI and Sebi attended the meeting.

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