Govt's divestment policy dampens primary mkt

The UPA government's decision to suspend disinvestment in PSUs proved a dampener for activities in the primary market during the first half of this fiscal, prominent expert in the field Prithvi Haldea has said.

Activities in the primary market were below market expectations and in sharp contrast to the bullishness in the secondary market with the benchmark Sensex rising by 890 points during April-September 2006.

The biggest disappointment for the primary market has been lack of disinvestment by the government, Haldea said.

Not a single disinvestment took place in the current fiscal, he said adding the last disinvestment was in October 2004 of NTPC.

The realisation through the public issue in the first half of the current fiscal was a tad lower at Rs 7,581 crore as compared to Rs 7,622 crore raised during the same period last year, PRIME, a database on the primary market, said in a study.

However, the study said the number of public issue was 36 in the first half of the current fiscal as against 35 floated in the same period in the previous fiscal."

Despite huge success of the public issue in the past year, the amount raised did not come anywhere close to the market expectations at the beginning of the current year, it said.

On the disinvestment outlook, PRIME said, the pipeline of disinvestment or PSU offerings continues to become larger by the day yet nothing of it seems to be materialising.