FPOs lacking confidence despite going through: Antique

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FPOs lacking confidence despite going through: Antique

Anish Jhaveri, Group Chief Executive Officer of Antique Stock Broking, said that the offers were lacking confidence despite going through. “The fatigue from government paper is showing in subscription.”

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS REC FPO: Sources say LIC looking to increase bid NTPC allots FPO shares REC sets FPO floor price at Rs 203/sh NTPC FPO clearing price for QIBs fixed at Rs 202 NTPC FPO falters: Govt may scrutinize auction route ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 29/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news NTPC |

The market is abuzz with the latest follow-on public offers (FPOs) including National Thermal Power Corporation (NTPC) which got lukewarm response from the market and barely got subscribed one time, and Rural Electrification Corporation (REC), which also failed to gain investor interest and was not even subscribed fully.

As a result of this the retail category is giving thumbs down to FPOs which is a cause of concern.

Commenting on the same, Anish Jhaveri, Group Chief Executive Officer of Antique Stock Broking, said that the offers were lacking confidence despite going through. "The fatigue from government paper is showing in subscription."

The largest power utility in the country, NTPC, he said, was a great buy at Rs 2020 a share. "Life Insurance Corporation (LIC)'s investments in the primary market are impacting equity flows."

The Budget

Bullish to the Union Budget 2010, Jhaveri said the time was ripe for the government to move towards fiscal consolidation. "The market expects direction and velocity for reforms. It is not looking at minor issues like rollback."

Looking at Finance Minister Pranab Mukherjee's intent on fiscal deficit, he said, "We expect the government to implement the Kirit Parikh report on petroleum product pricing partially."

Here is a verbatim transcript of the exclusive interview with Anish Jhaveri on CNBC-TV18. Also watch the accompanying video.

Q: Your sense of how these follow-on public offers (FPO) have gone so far with all indications are that REC might be very lukewarmly subscribed today?

A: I think there is a little bit of resistance to these FPOs and very clearly they have been largely bailed out by government owned institutions or insurance companies. So they have gone through, but it lacks the confidence that one would have like to see in such a large interesting FPO, especially things like NTPC.