Operators and investors

Businessworld
Rajesh Gajra

This month opened with a bit of drama. On 1 February, when the Sensex shot up by 3.3 per cent, both foreign institutional investors (FIIs) and domestic institutions were net sellers on the combined cash market of NSE and BSE. Their net sales — Rs 127 crore and 115 crore, respectively — were small but without a net purchase of Rs 500 crore by FIIs, it is difficult to raise the market.

During the January crash, retail and domestic institutional investors were net buyers, while the FIIs and brokers were sellers. But the trend seems to have reversed in February. Retail investors did net sales of Rs 370 crore on BSE in the first three days while brokers’ proprietary accounts took in net purchases of Rs 107 crore.

Are operators driving the market?

Well at least the operators of Wockhardt Hospitals are not driving the market. Their IPO, on the strength of which the Wockhardt expansion was to take place, failed to attract investors and has now been withdrawn :
Reuters
Rina Chandran

India's Wockhardt Hospitals Ltd has shelved its initial public offering, becoming the first Indian listing hopeful to pull its deal as market turbulence saps appetite for risk.

India's stock market soared 47 percent in 2007, its fifth year of a bull-run, and had $15.8 billion initially in the IPO pipeline for 2008 -- more than double the size of last year.

Concerns that the credit crisis would trigger even deeper write downs for banks and financial institutions and a looming U.S. recession have caused many companies in Asia to shelve IPOs.

Healthcare services provider Wockhardt said late on Thursday it was pulling its offer to raise up to $165 million after it got subscriptions for only a fifth of the offering of 25.1 million shares. The company had extended the period and cut the price after initially hoping to raise up to $197 million.

Emaar MGF Land, the Indian joint venture of Dubai's Emaar Properties EMAR.DU, which aims to raise up to $1.64 billion, had to cut its price band twice and extended its IPO by three days to Feb. 11.

Major IPOs in waiting include a $1.5 billion offer from the tower unit of mobile firm Reliance Communications, a $500 million issue from mutual fund firm UTI Asset Management, and a $635 million offer from Bharat Oman Refineries, a venture of Bharat Petroleum Corp and Oman Oil Co.

Foreign funds, buyers of a record $17.4 billion in Indian equity in 2007, have sold about $2.5 billion net in shares so far this year.