There are about sixty PSU companies which are likely to tap the capital markets in the near future. Of these at least three of them namely NTPC, Satluj Jal Vidyut Nigam and REC are likely to happen in the current year. It may be mentioned here that two of the above three are listed entities.

Readers will recall the over whelming response received by NHPC when they went public and the disappointment of investors post listing. The HNI category was oversubscribed 57 times and those applying with leveraged funds had an interest cost of about Rs 7. The net effect of this was the lukewarm response that the next PSU offering namely Oil India received from the retail investor.

With a pipeline of roughly 60 issues and over 60000 crs to be raised the retail participation is a must for the success of the issues. Retail investors were offered a discount when the follow on issues of ONGC, IPCL, Dredging Corporation and other issues were made in 2003. The recent changes announced by Sebi earlier this week where the concept of “French Auction” have been introduced would allow the issuer or seller of shares make up the loss or part of the loss suffered on the retail discount.