MUMBAI, Mar 18: The Bombay Stock Exchange (BSE) has decided to promote over 50 stocks from the non-specified B2 group to the B1 group. This is the second upgradation that will be carried out by the exchange in the current year.The second round is likely to witness the promotion of scrips like RPG Ricoh, ITI, Rain Calcining, Gail, Leading Edge, Akar Tools, India Polyfil, Sri Vishnu Cement, Gujarat Siddhee Cement, Eupharma Lab, Shahi Shipping, Andhra Cement, Dewan Housing Finance, Pennar Steel, Raashtriya Chemicals, Welspun Synthetics and ZF Steering to the B1 group.
The exchange is expected to transfer these scrips to the B1 group in the first week of April. The focus, according to sources, is likely to be scrips comprising the cement, steel and other core industries.
After the promotion of 51 stocks from the B1 category to the specified section (A group) on February 23, the strength of the B1 group is down to 544 stocks. Currently, out of the 6,975 stocks listed on the exchange, only 1,539 stocks aretraded on an average, of which the B2 group comprises 792 stocks.
The B2 group's contribution to the steadily rising turnover of BSE has been a negligible 0.28 per cent over the past one year. This figure is only expected to slide further following the transfer of another 50-odd scrips."Promotion to the B1 category will not only help change the perception of investors at large, but will also attract institutional participantsat these counters," explained a senior BSE official.
"The criteria for this development depends upon various factors, however, the intensity of the same differs in case of the B2 group stocks," he further stated. The exchange authorities, while considering such promotions, closely study factors like liquidity over the past 3-6 months, profitability of the specific company, dividend-paying record and shareholding pattern of the company.
It is learnt that companies which have a larger institutional participation are considered as the most deserving candidates for the promotion. Theexchange says that a strong domestic institutional holding means that particular scrip also has a huge retail base.
In this context it may be recalled that the exchange is also planning to set up an exclusive category for those companies which have either not abided by the exchange's listing agreement, or those which have maximum number of unresolved investor complaints pending against them.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
