Three months down the line you can queue up in the post-office to buy postcard, stamps and 11.50 per cent 2011 government paper across the counter. IDBI Capital Market Services Ltd (ICMS) has tied up with India Post to sell government papers to retail investors.
According to G V Nageswara Rao, managing director, ICMS, "Small savings certificates are sold through the post-office. But these instruments are not marketable and hence illiquid. In contrast to that, the government securities, are marketable and liquid and so are expected to be more attractive to the individuals."
He said: "Moreover in case of small savings, there is no flexibility as far as the maturity period is concerned. However, as there are government securities of different maturities, individuals can invest for a period they want to." He also said that representation has been made to the government to offer tax relief to small investors for investment in gilts so as to promote the retailing of government papers.
ICMS continued to be the number one primary dealer of the country as far as the turnover in the government securities is concerned. The company ended the year 2001-02 with the outright secondary market turnover of Rs 1,00,026 crore -- 71 per cent higher than the last year's transaction of Rs 58,493 crore. PNB Gilts stood second with an outright transaction of Rs 99,202 crore. According to Rao, in the first two months of the current financial year (2002-03), the secondary market turnover by ICMS was Rs 20,000 crore.
The turnover of the company in the repo market also increased by 109 per cent from Rs 68,234 crore in 2000-01 to Rs 1,42,327 crore in 2001-02. In the current financial year so far the repo turnover of the company was to the tune of Rs 42,300 crore. It claims to have a 17.6 per cent market share in the repo market.
