The Hindu Business Line : IPO feast

This is with reference to "Do the markets have the stomach for IPO feast?" (Business Line, February 23). The article has rightly pointed out that the retail investors will have to be highly choosy due to the disadvantage in the rollover of funds. The retail participation may not be that encouraging as in the case of Maruti IPO.

The MOD should have weighed this factor at the right perspective before considering such a rapid succession of offers. Else, a rider could have been considered to ensure a minimum allotment to all the retail investors so as to encourage small investors among the retail options.

The possibility of price movement towards south may help the retail investors to buy the scrips from the secondary market subsequently. Anyway, it is certain that all the offers may be oversubscribed many times. In spite of the heavy odds, retail investors also will participate by diverting their bank deposits in the "falling interest regime".

Though Reliance has turned down the 5 per cent IPCL offer, the investors under QIB and NIB segments may pounce upon the `feast' to take good positions. In the meantime, the secondary market may have a temporary set back on account of withdrawal of investors for raising funds for the initial public offers.

C. P. Velayudhan Nair

Kochi

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