There’s a clamour for shares of IPO-bound cos

HNIs Accumulate Maximum Shares

EVEN as trading volumes in the secondary market are shrinking, the market for shares of privatelyheld companies appears to be buzzing with activity. Some of these are IPO-bound companies whose plans were stalled by comatose market conditions, some of them delisted themselves voluntarily while others were suspended by stock exchanges.
    Brokers say some high networth individuals are taking advantage of comatose market conditions to accumulate shares of these companies, some of which are now available at a steep discount to the prices they were quoting at around a year ago.
    Take the case of BSE. The company was supposed to go public by March-end last year. But the prolonged downturn in the stock market has thrown cold water on those plans. Brokers and shareholders, tired of the long wait and lack of clarity on the bourse's future plans, are willing to sell out at a discount. And there are bargain hunters looking to lap up the shares ahead of the extraordinary general meeting on February 20. On that day, BSE will take the approval of its shareholders to allot fresh equity to foreign strategic partners Deutsche Boerse (DB) and Singapore Exchange (SGX) through a preferential allotment at Rs 400 per share. The same shares are available at Rs 250 in the market for unlisted shares, after adjusting for the bonus issue of 12:1.
    Brokers familiar with the
development say many longterm shareholders still holding shares of delisted or suspended companies want to exit either out of disillusionment or the need for funds. For example, Bharat Hotels was delisted from bourses several years ago, but many shareholders were holding on to the shares on talks that the company may go public again shortly. "But given the market scenario, it seems unlikely in the near future," says a broker. He says this 'private' market is mostly for HNIs, as the shares on offer are usually large blocks.
    apurv.gupta@timesgroup.com