The pricing debate

Did the govt price it too high? Merchant bankers say the open offers are priced at a discount between 30 to 40 per cent to 52-week high prices of these divestment stocks.

But a survey of the 52-week lows suggest that these issues are commanding a huge premium over the 52-week lows, which the investors haven't really forgotten.

IBP, for example, had declined to a 52-week low of Rs 188 on March 11, 2003. Thereafter, the stock surged to a 52-week high of Rs 909 on January 5, 2004.

Which means the offer price was at a 32 per cent discount to its 52-week high price, but at a premium of 230 per cent over its 52-week low.

The offer price of GAIL, similarly, commands a premium of 154 per cent over its 52-week low of Rs 72.60. Dredging Corporation offer price of Rs 380-400 is almost double its 52-week low of Rs 211.

IPCL was offered at a premium of 113 per cent over its 52-week price. ONGC, for which public offer price has yet to be announced, moved between 52-week low of Rs 350 and high of Rs 995 in the last 10 months.