SEBI blamed for poor primary market

MUMBAI, July 24: The continuing buoyancy in the secondary market has not brought any cheer to the primary market. Even though the Sensex crossed above the 4,000 level recently, the month of July has been the worst month for the Indian primary market in seven years with only 3 public issues raising a meagre Rs 3 crore from the market.

The last time such dismal figures were reported from the primary market was in June 1991 when one public issue had raised Rs 59 lakh.

“What is surely required are measures to revive investors’ faith in new issues. One of these could be to allow profit-making companies to enter the market instead of only three-year dividend-paying companies as permitted under the extremely retrograde entry barrier guidelines introduced by SEBI in April 1996,” according to Prithvi Haldea of Prime Database. “As most closely held companies never paid dividends due to double taxation problem which existed in the past, the number of such companies is extremely low.