Thanks to the tough talking by the government and the turnaround in the stock markets, the public offer of shares by Gas Authority of India Ltd (Gail) on Friday managed to get full subscription on Day One. On top of this, the public offer for IBP shares — which got less than one per cent subscription in the first two days — also oversubscribed on Friday (one day before the closure of the issue) much to the relief of the Disinvestment Ministry.The IPCL issue which closed on Friday was oversubscribed by 331 per cent (3.3 times) and CMC issue by 735 per cent (7.3 times). The IBP issue has already attracted subscription of 110 per cent (1.1 times), Dredging Corporation of India by 138.9 per cent (1.3 times) and Gail by 108 per cent (one time). The recovery in the stock markets on Friday — the benchmark Sensex shot up by 100 points after the 516-point fall in the last 8 days — revived the confidence of investors in the public offers. The crash in the market had scared away investors from the public offers earlier this week, prompting an intervention by the Disinvestment Ministry.Merchant bankers say most of the bids have come in at the floor price in all the five PSU offers. There were unconfirmed reports that there could have been an element of directed buying by public sector institutions to ensure that the issues get oversubscribed. The bulk of the buyers in IPCL have been foreign institutional investors, who have picked up 75 per cent of the issue, worth about $500 million.The government is selling 8.45 crore shares in gas major Gail, which amounts to a 10 per cent stake, through a book-built issue. Also, to make the offer attractive, retail investors have been given a further 5 per cent discount on the discovered price.Merchant bankers feel the 100 per cent subscription of IBP is a good sign and augurs well for the forthcoming mega offer for ONGC shares. “With this oversubscription, we expect to see further investor participation in next two days. We also expect the same in Dredging Corporation of India, which closes on March 4,” Kotak Mahindra vice-chairman Uday Kotak said.The government is on the fast track to meet its disinvestment target of Rs 14,500 crore for 2003-04. It has also slated the ‘mother of all issues’ in the form of a 10 per cent stake sale in ONGC. This issue, which opens on March 5, is expected to draw in about Rs 10,000 crore.
