PSUs on the IPO bandwagon

In January, three major PSUs, UTI Asset Management Company, Bharat Sanchar Nigam (BSNL) and State Bank of India (SBI) announced their intent of mobilising funds from the country’s white hot primary market.

Print Edition: Feb 10, 2008

PSUs are catching the IPO bug. In January, three major PSUs, UTI Asset Management Company, Bharat Sanchar Nigam (BSNL) and State Bank of India (SBI) announced their intent of mobilising funds from the country’s white hot primary market, even as the top brass of Coal India is considering a proposal to seek the government’s permission for listing on the bourses.

Decoding the rush

PSUs need large sums of money to fund their expansion plans. As the government doesn't have any money to fund them, the only alternative is a public issue.
Major PSUs lining up IPOs include UTI MF, Canara Bank, Syndicate Bank, UCO Bank and Coal India.
Only hurdle is the Left, which sees IPOs as anti employee. It has hijacked BSNL plans.

The Left parties, as expected, have put a spanner in the works of BSNL’s proposal, but UTI, India’s oldest mutual fund house, has already filed the Draft Red Herring Prospectus with SEBI to enter the capital market soon with an offer for sale of 48.5 million equity shares of Rs 10 each; the shares will be offloaded by its four sponsors—SBI, LIC, Punjab National Bank and Bank of Baroda.

Then, a number of public sector banks have lined up follow-on public offers. Among them are Canara Bank, Syndicate Bank, UCO Bank and United Bank of India. It’s time more PSUs hit the stock markets.

— Amit Mukherjee

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PSUs on the IPO bandwagon