Gujarat investors flock to floats

Gujarat's retail investors have come out in hordes to subscribe to the shares of the seven PSUs that hit the market in the past month.

According to market analysts and fund managers, assuming that investors from Gujarat subscribe to about one fifth of any public issue, retail investors of the state have pumped in over Rs 4,300 crore in the public issues.

Atul Choksi, president of Ahmedabad Stock Brokers Association, said Gujarat accounts for between 35 and 40 per cent of the retail investors who invest less than Rs 50,000 in the IPOs. "The response from Gujarat has been extremely high for the PSU offers although the exact figures will not be available. But the number and amount pumped in by retail investors will definitely be very high," Choksi stated.

Offers have been made by Oil and Natural Gas Corporation (ONGC), Dredging Corporation of India (DCI), Gas Authority of India Ltd (GAIL), Indo Burma Company Ltd (IBP), Power Trading Corporation of India Ltd (PTC), Petronet LNG Ltd (PLL) and Computer Maintenance Corporation of India Ltd (CMC).

According to fund managers here, the total bid amount of these seven PSUs was around Rs 17,200 crore, of which 50 per cent was reserved for qualified institutional bidders (QIBs) while the remaining 50 per cent was equally distributed among non institutional bidders (NIBs) and retail institutional bidders (RIBs).

This means that retail investors could bid for shares worth around Rs 8,200 crore in the PSU offers.

"Although some of these issues have been oversubscribed ten times or more, even if an average of five times oversubscription is considered, retail investors in the country pumped in Rs 43,000 crore into the issues.

"If we safely assume that one fifth of these are from Gujarat, then retail investors from the state put in close to Rs 10,000 crore," said a fund manager here.

And even if all retail investors sought a funding of up to 50 per cent of the amount that they invest (which is not always the case), they pumped in close to Rs 5000 crore in the offers, fund managers said.

Ahmedabad accounts for around 80 per cent of all stock market transactions done in the state. "There does not appear to be any shortage of funds for investors here. Over Rs 4000 crore was pumped in by retail investors in Ahmedabad alone," said a fund manager.

Ramesh NGS, retail head, Gujarat, of IDBI Bank, said that, in the issues that IDBI has been merchant bankers, Rs 10 crore of funding has been done for retail investors.

"For hardcore retail investors below Rs 50,000, we have had about 4000 customers with a funding of Rs 25,000 each," he said, adding that IDBI has provided funding for other non PSU public issues as well.

Though funding statistics were not revealed by officials of Kotak Mahindra Bank, sources said this bank, which has only recently opened its branches in Gujarat (confined within Ahmedabad), had done good business in the recent IPOs.

The ONGC issue was for Rs 10,600 crore, the GAIL issue was for Rs 1,500 crore, the IBP issue was worth Rs 357 crore, the PTC issue was worth Rs 877 crore, the PLL issue was for Rs 390 crore, the CMC issue was for Rs 1825 crore and the DCI issue was for Rs 2240 crore, taking the total size to Rs 17,200 crore. All these issues were oversubscribed manifold.