Trailing the Market

Trailing the Market Jairaj Kapadia THE hitherto wholly state-owned Indian Petrochemicals Corporation is appeasing investors after it opened its doors to the public with a share capital issue it made four months ago at a premium of Rs 150 per share for an aggregate amount of Rs 320crore. It has now decided to make the investors who had subscribed for that issue and become the shareholders a rights issue of 2.85 lakh shares of Rs 10 each at a premium of Rs 40 per share in the ratio of one-for-five and in a higher ratio of one for one to those of the subscriber- shareholders for the earlier issue who were allotted the shares from out of the employees' reserved quota. It is not clear who this category of shareholders whom the IPCL is placating are, but they are more likely to be institutional investors rather than the common public, as institutional investors are usually the beneficiaries picked out for allotment of unsubscribed surplus out of employees' quota of capital issues by the companies. As these are offered rights shares in 1:1 ratio, the average price of their shareholdings is to amount less at Rs 110 as against Rs 142 for the rest of the subscriber-shareholders for the earlier issue.