Welcome

Website counter
website hit counter
website hit counters

Saturday, October 16, 2010

Fwd: Govt.must ensure that Coal India IPO benefits retail investors first



---------- Forwarded message ----------
From: <info@karmayog.org>
Date: Sat, Oct 16, 2010 at 11:38 AM
Subject: Govt.must ensure that Coal India IPO benefits retail investors first
To: palashbiswaskl@gmail.com


Government - owned Coal India Ltd. is set to open its Initial Public Offering on Monday, 18th October 2010.

Coal India Limited is the world's largest producer of coal and is one of India's National Assets.
One of the Government's stated objectives in bringing out IPO's of national assets is for "spreading the equity cult in the country".
 
The issue size is of Rs.15,000 crores ( more than US$ 3 billion), i.e. shares worth Rs. 15,000 crores will be available for purchase. This is 10% of Coal India Ltd.'s equity, i.e. only a small amount of the company will be in the hands of shareholders, apart from the government. A part of this 10% is reserved for retail investors.
 
A retail investor is defined as a person who invests between Rs. 5000/- to Rs. 1,00,00/-. An individual cannot make multiple applications. The balance of the issue is for commercial investors like Foreign Institutional Investors (FIIs), Mutual Funds, High Networth Individuals (HNIs), etc.
 
Governments usually take out a public issue at a price which is considered cheaper than other similar shares which are already listed in the stock exchange. It therefore becomes relatively low risk for investors. Typically, such shares are offered at a 10-20% discount as compared to what a private organisation would have issued them at.
 
In addition to this pricing, since the government has a stated objective of "spreading the equity cult in the country", and therefore wants individuals to invest in the stock market and become shareholders and owners of Indian companies and thus benefit from the prosperity of the nation and growth and profit of individual companies, the government offers a further 5% additional discount to retail investors vis-a-vis other investors.
 
The Coal India issue is expected to be handsomely oversubscribed. So if you as a retail investor were to invest Rs.25,000/- in the public issue, you may actually receive shares of only Rs.5000/-.
 
A bold but fair thing to do would be for the government to first fill ALL the retail applications before issuing shares to the commercial or rich investors, i.e. the shares which are left to be alloted after the public has received the shares, can be distributed pro rata to other investors (i.e. in proportion to the amount that they have applied for)
 
This would have the added advantage that when the issue is listed and commercial investors are interested in buying large amounts of the stocks for their long term holdings (or short term trading), they would have to buy these from the retail investors, thus giving retail investors a benefit of price increase due to this demand.
 
Normally what happens is the opposite, i.e. the large investors get a larger share of the pie which they sell in the first few days of listing, leaving the retail investors high and dry when prices fall when such large volumes come into the market.
 
Therefore, the government should make a law for IPOs (at least PSU ones) that shares will be alloted first to retail investors and therafter, the balance shares to other types of investors.
 

Regards,

Vinay
 
PS: See 70 responses to "Ideas needed to control stone-throwing situations " at http://www.karmayog.org/messages/message.aspx?id=3395
 
PPS: If you do not wish to receive such emails, do inform us.



--
Palash Biswas
Pl Read:
http://nandigramunited-banga.blogspot.com/

No comments:

मैं नास्तिक क्यों हूं# Necessity of Atheism#!Genetics Bharat Teertha

হে মোর চিত্ত, Prey for Humanity!

मनुस्मृति नस्ली राजकाज राजनीति में OBC Trump Card और जयभीम कामरेड

Gorkhaland again?আত্মঘাতী বাঙালি আবার বিভাজন বিপর্যয়ের মুখোমুখি!

हिंदुत्व की राजनीति का मुकाबला हिंदुत्व की राजनीति से नहीं किया जा सकता।

In conversation with Palash Biswas

Palash Biswas On Unique Identity No1.mpg

Save the Universities!

RSS might replace Gandhi with Ambedkar on currency notes!

जैसे जर्मनी में सिर्फ हिटलर को बोलने की आजादी थी,आज सिर्फ मंकी बातों की आजादी है।

#BEEFGATEঅন্ধকার বৃত্তান্তঃ হত্যার রাজনীতি

अलविदा पत्रकारिता,अब कोई प्रतिक्रिया नहीं! पलाश विश्वास

ভালোবাসার মুখ,প্রতিবাদের মুখ মন্দাক্রান্তার পাশে আছি,যে মেয়েটি আজও লিখতে পারছেঃ আমাক ধর্ষণ করবে?

Palash Biswas on BAMCEF UNIFICATION!

THE HIMALAYAN TALK: PALASH BISWAS ON NEPALI SENTIMENT, GORKHALAND, KUMAON AND GARHWAL ETC.and BAMCEF UNIFICATION! Published on Mar 19, 2013 The Himalayan Voice Cambridge, Massachusetts United States of America

BAMCEF UNIFICATION CONFERENCE 7

Published on 10 Mar 2013 ALL INDIA BAMCEF UNIFICATION CONFERENCE HELD AT Dr.B. R. AMBEDKAR BHAVAN,DADAR,MUMBAI ON 2ND AND 3RD MARCH 2013. Mr.PALASH BISWAS (JOURNALIST -KOLKATA) DELIVERING HER SPEECH. http://www.youtube.com/watch?v=oLL-n6MrcoM http://youtu.be/oLL-n6MrcoM

Imminent Massive earthquake in the Himalayas

Palash Biswas on Citizenship Amendment Act

Mr. PALASH BISWAS DELIVERING SPEECH AT BAMCEF PROGRAM AT NAGPUR ON 17 & 18 SEPTEMBER 2003 Sub:- CITIZENSHIP AMENDMENT ACT 2003 http://youtu.be/zGDfsLzxTXo

Tweet Please

Related Posts Plugin for WordPress, Blogger...

THE HIMALAYAN TALK: PALASH BISWAS BLASTS INDIANS THAT CLAIM BUDDHA WAS BORN IN INDIA

THE HIMALAYAN TALK: INDIAN GOVERNMENT FOOD SECURITY PROGRAM RISKIER

http://youtu.be/NrcmNEjaN8c The government of India has announced food security program ahead of elections in 2014. We discussed the issue with Palash Biswas in Kolkata today. http://youtu.be/NrcmNEjaN8c Ahead of Elections, India's Cabinet Approves Food Security Program ______________________________________________________ By JIM YARDLEY http://india.blogs.nytimes.com/2013/07/04/indias-cabinet-passes-food-security-law/

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

THE HIMALAYAN VOICE: PALASH BISWAS DISCUSSES RAM MANDIR

Published on 10 Apr 2013 Palash Biswas spoke to us from Kolkota and shared his views on Visho Hindu Parashid's programme from tomorrow ( April 11, 2013) to build Ram Mandir in disputed Ayodhya. http://www.youtube.com/watch?v=77cZuBunAGk

THE HIMALAYAN TALK: PALASH BISWAS LASHES OUT KATHMANDU INT'L 'MULVASI' CONFERENCE

अहिले भर्खर कोलकता भारतमा हामीले पलाश विश्वाससंग काठमाडौँमा आज भै रहेको अन्तर्राष्ट्रिय मूलवासी सम्मेलनको बारेमा कुराकानी गर्यौ । उहाले भन्नु भयो सो सम्मेलन 'नेपालको आदिवासी जनजातिहरुको आन्दोलनलाई कम्जोर बनाउने षडयन्त्र हो।' http://youtu.be/j8GXlmSBbbk

THE HIMALAYAN DISASTER: TRANSNATIONAL DISASTER MANAGEMENT MECHANISM A MUST

We talked with Palash Biswas, an editor for Indian Express in Kolkata today also. He urged that there must a transnational disaster management mechanism to avert such scale disaster in the Himalayas. http://youtu.be/7IzWUpRECJM

THE HIMALAYAN TALK: PALASH BISWAS CRITICAL OF BAMCEF LEADERSHIP

[Palash Biswas, one of the BAMCEF leaders and editors for Indian Express spoke to us from Kolkata today and criticized BAMCEF leadership in New Delhi, which according to him, is messing up with Nepalese indigenous peoples also. He also flayed MP Jay Narayan Prasad Nishad, who recently offered a Puja in his New Delhi home for Narendra Modi's victory in 2014.]

THE HIMALAYAN TALK: PALASH BISWAS CRITICIZES GOVT FOR WORLD`S BIGGEST BLACK OUT

THE HIMALAYAN TALK: PALASH BISWAS CRITICIZES GOVT FOR WORLD`S BIGGEST BLACK OUT

THE HIMALAYAN TALK: PALSH BISWAS FLAYS SOUTH ASIAN GOVERNM

Palash Biswas, lashed out those 1% people in the government in New Delhi for failure of delivery and creating hosts of problems everywhere in South Asia. http://youtu.be/lD2_V7CB2Is

THE HIMALAYAN TALK: PALASH BISWAS LASHES OUT KATHMANDU INT'L 'MULVASI' CONFERENCE

अहिले भर्खर कोलकता भारतमा हामीले पलाश विश्वाससंग काठमाडौँमा आज भै रहेको अन्तर्राष्ट्रिय मूलवासी सम्मेलनको बारेमा कुराकानी गर्यौ । उहाले भन्नु भयो सो सम्मेलन 'नेपालको आदिवासी जनजातिहरुको आन्दोलनलाई कम्जोर बनाउने षडयन्त्र हो।' http://youtu.be/j8GXlmSBbbk