Shourie proposes EIU under CCS

EIU will process economic data and facilitate quick decisions, Shourie said.

Disinvestment Minister Arun Shourie has proposed an "Economic Intelligence Unit (EIU)" under the Cabinet Committee on Security (CCS) that will alert the government on sensitive economic trends.

The minister told reporters yesterday the proposal has been informally placed before Prime Minister Atal Bihari Vajpayee and Deputy Prime Minister L.K. Advani.

This assumes significance in the wake of the volatility in the stockmarket over the past week that led to an initial lukewarm response to the share offers of six public sector units.

On the allocation of shares, Shourie said while the details were yet to be worked out, retail investors would get a substantial chunk. Priority would also be given to "early investors", he said.

The government's divestment programme of the government today got a boost with the IBP, Dredging Corporation, CMC, IPCL and Gail issues getting an overwhelming response. In fact, these five public offerings had raised close to Rs 7,127 crore till today.

According to merchant banking sources, the IPCL offer for sale was subscribed 3.16 times. Against the 71.8 million IPCL shares on offer, bids for 226.6 million shares were received.

Foreign institutional investors have bid for 75 per cent of the issue, worth about $500 million. Till yesterday, the issue had managed to get a total of Rs 2,862 crore in subscription.

Foreign investors have subscribed to 8 per cent of the issue, and mutual funds another 12 per cent. Retail investors bid for close to 4 per cent of the issue.

Uday Kotak, chairman Kotak Mahindra Capital Company (KMCC), the lead book running lead manager to the issue told Business Standard : "The first round is over. The government's divestment programme is gathering momentum. We are confident. There is no concern. Liquidity is not an issue."

Offers of oil retailer IBP and Dredging Corporation of India were also fully subscribed late today. The IBP issue received bids for 6.34 million shares, about 110.15 per cent of the issue size of 5.75 million shares. The issue closes on March 1.

The Dredging Corporation issue received bids for 6.941 million shares, amounting to 123.95 per cent subscription for the 5.6 million shares on offer, merchant banking sources said.

CMC was subscribed 7.34 times till late today, with bids for 29.2 million shares against 3.97 million shares on offer, merchant bankers to the issue said.

Gail, which opened yesterday, was subscribed on the first day itself, its merchant bankers said. The Gail issue received bids for 96.9 million shares against the 84.5 million shares on offer.