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Journalism of Courage
The fact that Maruti Udyog Ltd8217;s initial public offer IPO has been oversubscribed by ten times couldn8217;t be better news for the moribund primary market. The size of the IPO is itself ranked among the top issues in India8217;s capital market history, which makes the oversubscription level all the more mind-boggling. For starters, the IPO underlines the fact that when good companies with strong balance sheets and credibility come to the market to raise money, the investing public will bite. Also, the fact that an IPO of the size of Rs 830 crore has already been oversubscribed ten times is convincing evidence that investors have money.
The process is also bound to boost prospects for the strategic sale of public sector undertakings. After all, if offloading the government8217;s stake in Maruti to a reputable strategic investor like the Japanese firm, Suzuki, could evoke such a thundering response, it means that the strategic sales of other PSUs would also invoke interest. Maruti, apart, the recent entry of some good public sector banks and a clutch of credible companies has also whetted the market8217;s appetite. Add to this the excellent performance of many of these stocks post-listing, and you have a sure sign that the primary market is gradually coming back to life after being in coma for years. It has long been argued that good issues will always find takers. Maruti has proved just that, and has set a trend for others to follow.
