CHENNAI, Dec 25: To the Himalayan Panda and the Olive Ridley Turtle, add a new species to the endangered list - merchant bankers. They are being slowly but steadily squeezed in by lack of their main diet source - public offers of capital. And if the trend does not change, they may well be killed off by starvation.

Look at the numbers. According to the Reserve Bank of India's December bulletin, the number of issues from non-government public limited companies has crashed to 67 in the first half of fiscal 1997-98 - a mere tenth of the 638 issues which hit the market during the same period the previous year - and that was supposed to be terrible!

It's the money which counts, of course, and not merely the number of issues. But no joy on that front too. The total amount raised through all types of offers - equity, rights, preference, debentures, convertible debentures and so on and so forth - was Rs 1,694.5 crore against the Rs 7,204.1 crore raised in the previous year. Displaying an unexpectedly wry sense of humour, the RBI has pointed out that at Rs 892.3 crore, the premium collections alone on equity and rights issues between April and September 1996 outstripped the total of Rs 706 crore garnered through such issues during the same period this year!

There has been a steep fall in the debenture issues while there had been no preference issues in the current year's first half, RBI said. Against this, the six month period- April to September 1997- had seen 26 debenture issues aggregating Rs 3,358 crore and 5 preference share issues aggregating Rs 71.9 crore. All the debentures issued were of the convertible type with rights accounting for Rs 852.7 crore through four issues. The balance Rs 135.2 crore had come through two offers, RBI said. The previous year's corresponding period had seen a lower number of non convetible issues, at 11, which had, however, raised Rs 2,905.8 crore. This is more than six times the Rs 452.2 crore that had been raised through 15 convertible debenture offers.

Among the 61 equity offers, 16 were accompanied with requests for premium. The Rs 706.6 crore raised in this segment included Rs 383.6 crore as premium. This category saw 41 prospectus offers for Rs 189.5 crore, and 20 rights offers aggregating Rs 517.1 crore. The respective premium collections came to Rs 11.3 crore and Rs 372.3 crore. Of the Rs 3,774.2 crore that came through 607 issues in the first half of 1996-97, 104 collected premium aggregating Rs 892.3 crore. There had been 56 rights issues garnering Rs 700.3 crore. Premium collections alone came to Rs 502.8 crore through 34 offers. The study also revealed that the repo has been steadily thinning over the past two years.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.