Shourie effect: Bids gather pace

Tough talk with advisers on contractual obligations yield results.

Disinvestment Minister Arun Shourie said this at a press meet yesterday, and added that there was a sharp increase in the subscription to IBP, Dredging Corporation, CMC and IPCL public offers.

"Our actions had a salutary effect. The advisers were made aware of their contractual obligation to the government to market the shares," Shourie said.

Shourie said the advisers could not depend only on bookings made by the public. "They were told that the government was aware of what they were doing," he said, without disclosing names.

The minister, however, ruled out the possibility of making any change in the team of advisers at the moment. The government, however, would be more alert during future issues, he added.

Telecom Regulatory Authority of India Chairman and former Disinvestment Secretary Pradeep Baijal and Intelligence Bureau chief K P Singh were also present at the meetings.

When asked, Shourie said there was nothing unusual in Baijal's presence as he frequently consulted his former secretary on a host of issues.

"I have also consulted several journalists and chartered accountants on the market movement. I am a journalist and I make sure I get information from various quarters," Shourie added. He, however, refused to comment on the presence of the Intelligence Bureau chief in the meetings.

The minister thanked Sebi Chairman G N Bajpai for keeping a close watch on market movements. "A frown from the market regulator is enough to pep up the market," he said, referring to Bajpai's interactions with the merchant bankers who are working as book runners and lead managers for the issues.

When asked whether the Life Insurance Corporation and General Insurance Corporation had been told to pick up the shares, he said no such support was needed as private investors had responded with confidence.

IBP's offer for sale was subscribed 52 per cent today as against 15 per cent on Wednesday. The IBP offer, which was the slowest moving in the current bunch of four issues open currently, received bids for 2.98 million shares, according to data on the National Stock Exchange website at 8 pm.

"Big orders came from investors in the US and UK," though LIC and UTI Mutual Fund are also said to have invested heavily today," merchant banking sources said.

"A peculiar thing about IBP is that the issue is being hawked here when the roadshows are on in the US and UK. Till yesterday, the UK roadshow was on," said a merchant banker.

Meanwhile, the CMC offer was subscribed 3.11 times. Bids for a total of 12.4 million shares were received till today against the 3.976 million shares offered.

The Dredging Corporation's offer, which opened today, received bids for 228,000 shares against the 5.6 million offered.

The IPCL issue was subscribed 2.62 times and bids for 168.4 million shares were received till today against 139.3 million yesterday.

Franklin Templeton Investments is believed to have bid for 1.1 million IBP shares today. Sources close to the development said, "Franklin has bid for 1.1 million IBP shares at around Rs 636.36 per share amounting to Rs 70 crore."