After keeping everyone guessing for more than two weeks since its listing on the Bombay Stock Exchange on February 23, State Bank of Travancore (SBT) has finally been traded for the first time on the BSE on March 11.SBT's maiden performance on BSE is indeed a lackadaisical one. On the first day, as against SBT's public offer of 11.54 lakh shares, BSE has witnessed a volume of just five shares, which is incidentally the `market lot' for the scrip! In other words, the Rs 69-crore `successful' public issue could not attract more than a solitary trade worth a paltry amount of Rs 3,000 on the country's premier stock exchange.
In fact, on NSE, SBT had recorded 32 trades with a volume of 260 shares on the first day which shot up to 102 trades with a volume of 1,015 shares on the third day. But, what's really interesting is the price difference between NSE and BSE. SBT indeed registered a maiden quote of not less than its issue price of Rs 600 on both NSE and BSE. Since its listing on NSE, the price hasdropped down from Rs 619 on March 3 to Rs 557.50 on March 11. When the scrip is placed at a discount of 10 per cent over its issue price on the NSE, it has been quoted at Rs 600 on BSE on the same day thereby facilitating an arbitrage of 7.6 per cent over the NSE rate. The public issue might have helped SBT to augment its capital base for meeting future capital adequacy requirements.
But, the initial trading figures of the scrip certainly conclude that the public issue, which sought to enhance the share price prospects through an increase in the public holding from less than 1 per cent to a respectable 24 per cent, has in no way contributed for a better discounting of the scrip on the trading floor. Of course, when individual shareholders have been statutorily barred from holding more than 200 shares in the bank, until the restrictive piece of legislation is done away with, how can one expect the share prospects to improve? GSFC surfaces on NSE after 381 days!
The Rs 47-crore public issue of GujaratState Financial Corporation (GSFC) was closed on February 21, 1997 as scheduled with a subscription of 1.06 times. But, the listing application was reportedly made to the company's regional stock exchange of Ahmedabad only on April 30, that is after 67 days. In other words, to process 10,000 applications, they took more than two months! That this took place despite a `stalwart' like ICICI Securities acting as lead managers to the issue.
The listing application was indeed made within 70 days. But the regional stock exchange authorities took more than 40 days of incubation to process the application. Even after the delayed listing, the Rs 47-crore `successful' public issue failed to attract any quote on its regional stock exchange at Ahmedabad. The scrip which was atleast traded on BSE after 111 days failed to find a place on NSE, as promised in the offer document, even after one year! Who is actually responsible for the hold-up? Who should be penalised for the delay? The progressive laxity in listing isno laughing matter. This firmly establishes that the so-called tightening of market regulation in the interest of the investor is more an eye-wash.
The company, the issue managers, the stock exchanges and the regulators -- they all owe an honest explanation to the investing public. That is, if they do care. Meanwhile, on BSE, since its listing for 9 month, GSFC has been traded only for eight times. The scrip, which was offered at Rs 20 a piece, opened on June 12 at Rs 22 with a volume of just 600 shares against the public float of 2.35 crore shares. On the second day, the scrip shed a rupee in price and 100 in volume, even as the market in general has turned bullish. For almost a week there was no trading in the scrip. On June 19, it registered a volume of 2000 shares yet, the price dropped further down to Rs 19. Since then, it has crashed to Rs 11 in four trading sessions between October 16, 1997 and January 6,1998. When the scrip is almost forgotten on the BSE, it surfaced on NSE with a maiden quoteof Rs 18 on March 6. The vast difference between the rates of BSE and NSE and the sudden appearance on NSE after 381 days of incubation smells fishy.
(Arranged by Investar -- the Aarthik & Research Syndicate)
