Selloff schedule lifts public sector shares

Public sector companies were in the limelight after the government announced the time-frame for their public issues.

Key divestment candidate ONGC was up 2.94 per cent at Rs 736.15, IPCL rose 4.56 per cent at Rs 181, GAIL went up by 1.35 per cent at Rs 217.40, IBP edged up 1.64 per cent at Rs 708.80, CMC rose 1.65 per cent at Rs 546.05 and Dredging Corporation climbed 0.89 per cent at Rs 476.70.

Ved Prakash Chaurvedi, chief executive officer (CEO), Tata Mutual Fund, said, "If the offerings are rightly priced, it could lead to a lot of new money entering the market, especially from the banking sector, rather than existing liquidity from the secondary market going into them."

He also added that the excellent returns from initial public offerings will be one of the key factors driving new investors to the stock markets.

A section of the market is worried that these clutch of public issues may lead to drainage of liquidity from the secondary markets.

Says a dealer from a local brokerage, "The market may continue to exhibit a downward bias as liquidity is sucked out with the public offerings."

Rajiv Sampat, director, Parag Parikh Securities Ltd, says," The feel-good factor is still strong and this will help attract fresh money and we may not see funds being taken out of the secondary markets."

He adds that the pricing of these IPOs will play an important role.

Sandip Sabharwal, fund manager, SBI mutual Fund, says, "domestic listings will not have much impact on the secondary markets as these companies are already listed and investors can hold on to these counters."