What explains the retail investor apathy to public issues?

Suraj Prakash Barjatia, Jodhpur

I think it is overpricing. NTPC committed the cardinal sin of offering its shares at a floor price of Rs 201 even as the market tanked to Rs 204. In such a scenario, investors would rather buy from the market, if at all.

The point is while a public issue need not be equated with or perceived of as a lottery, there must be something left in the plate for the investors.

If the equity cult is to revive, then we must not perceive the retail investors as milch cows. In short, there must be a substantial discount allowed to them vis-à-vis the amount collected from the Qualified Institutional Bidders (QIBs).

S. MURLIDHARAN

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(This article was published in the Business Line print edition dated February 15, 2010)
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