Business Standard

Ministry Seeks Free-On-Board Crude Imports

Image

C Shivkumar BSCAL

The primary market advisory committee set up by the Securities and Exchange Board of India (Sebi) will meet on July 19 to discuss the modalities of refining the book-building process.

According to Sebi chairman D R Mehta, further relaxation in the entry norms by doing away with the mandatory 25-per cent offering clause will also be taken up at the meeting.

The Sebi chairman also said that he has written to the government requesting to opt for domestic divestment offerings. He believes that the only way the primary market will revive is when the Central government and leading corporates go for domestic issues rather than international offerings.

 

"There are very few reputed companies from big industry houses willing to opt for the Indian market to sell their shares. The government, too, needs to set an example by using the domestic divestment route to revive the primary market. We have written to the government recently and in the past regarding the disinvestment in the domestic market," he said.

Investment banking sources say that the key reason for the government and companies not to go for the domestic offering route is due to some flaws in the book-building process. According to them, the regulator insists that the book should be revealed every day by the book-runner to ensure transparency.

"In the international market, the book-runner discloses the pricing only after building the book completely. Sebi is insisting that the book should be disclosed everyday while it is being built. Many foreign institutional clients and domestic clients do not want the public to know their bids before the book is built and the price is fixed," a managing director at a leading investment bank commented.

Mehta believes that the regulator will take a view on these issues after the primary market advisory committee gives its recommendations. He also admitted that the minimum 25-per cent issue clause was causing problems for small companies planning to raise resources. description" content="Goodlass Nerolac Paints could not capitalise on its enhanced capacity in 1998-99 and will be keen to make amends in the current year. The commissioning of its plant in Lote Parashuram near Chiplun, Maharashtra, has been a drag on its bottomline, with a high interest and depreciation burden.">

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 18 1999 | 12:00 AM IST

Explore News