Speaking to CNBC-TV18, Neeraj Gupta said that investors are willing to invest in success story of public sector undertaking (PSU) companies and the high demand in the PSU equity is a healthy trend.
In the 5 percent Bharat Electronics Ltd (BEL) offer for sale (OFS), strong foreign institutional investor (FII) activity was seen, said Neeraj Gupta, Secretary, DIPAM.
Speaking to CNBC-TV18 he said that investors are willing to invest in success story of public sector undertaking (PSU) companies and the high demand in the PSU equity is a healthy trend.
The government today raised over Rs 1,600 crore from its stake sale in BES, as per NSE data.
Retail investors bid for over 81.87 lakh shares, or 3.67 times, of the 22.33 lakh shares on offer and individual investors bid for over 2.09 crore shares as against 89.34 lakh shares, or 2.34 times, the number reserved for them.
The government now holds 74.41 percent in BEL.
With this stake sale the government has moved closer to its FY17 revised divestment target of Rs 45,500 crore. As per data available on the DIPAM website and capital raised via BEL's 5 percent stake sale, the centre has now raised around Rs 39,200 crore.
Below is the transcript of Neeraj Gupta's interview to CNBC-TV18's Sapna Das.
A: Last few issues have been pretty big ones. If you recall the ETF was Rs 6000 crore, MOIL was a small one but this is around Rs 1600 crore. This simply shows that the retail is really finding it attractive to invest in the market and they have money in their banks to invest.
Today’s retail portion has been oversubscribed by retail investors only by 3.5 times. This performance simply indicates that if there is good investment opportunities for the investors they are willing to invest in the success story of PSUs.
Q: You expect this trend to continue and also to further incentivise the retail investors would anything be on the anvil in terms of relaxation of the policy if at all?
A: This is a very healthy trend, if more and more investment comes to the equity market, it will directly lead to economic activities. I am sure this surplus which has come in the formal economy, it will go a long way in economic growth of the country.
Q: You have indicated that possibly FII interest has also seen a record subscription.
A: That is right. In this very issue there was lot of FII activity. All institutions had shown lot of activity in the BEL issue. Allotment will give you I am sure very different results. It is not only one sect of institutions like insurance or banks only picked up, every institutional investor has shown interest and it has been over subscribed by 2.33 times last evening. Today when they rolled it over for today also, this shows their continued interest.