MUMBAI, November 5: The recent crash in the global stock markets killed the success of India's largest GDR offerring, at least for the time being. Analysts here say that it's a result of the uneasiness in the stock markets, led by Hong Kong's Heng Seng Index, which resulted in the postponement of Gail's GDR issue.

Leading merchant bankers have expressed surprise on how the other PSUs are confident of garnering interest for their respective GDR issues, considering the bleak market conditions. Nimesh Kampani, chairman of JM Financial, said the government had done the right thing by deferring the issue. He said that the poor response was not restricted to India. Of the 16 to 17 issues slated to hit the market, nearly 13-14 had to be withdrawn in the last couple of weeks.

"We have got the timing wrong again," said R Balakrishnan, President of Dil Vikas Finance. The bad market is not a sudden development, he feels, as the turmoil in the Asian markets began way back in July, with the slip in the Indonesian and Thai currencies. "We are at the end of the year and foreign investors will not be keen on taking an investment view till early next year, so any more issues will have to wait till January-February next year for success," he said.

"There is the expectation that the rupee may also depreciate by another 5-6 per cent. Investment at that point of time will make more sense," he added. Other investment bankers agree that Gail might try again just before the Union Budget when the market sentiment picks up in anticipation of better things to come.

A source at a leading investment bank said that the deferment of the Gail issue should not hamper the MTNL issue as the interested parties are different. "There is obviously a greater appetite for telecom sector stocks," he said.

UTI's success in getting its PSU fund oversubscribed has not enthused the investment bankers. Besides, investing in a fund is a different ball game altogether, they said.A few fund managers have also expressed surprise over the government's decision to go ahead with Gail's domestic issue, the light of the current market scenario.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.