UTI chief for more MNC issues

AUG 24: Unit Trust of India (UTI) chairman P S Subramanyum on Thursday urged the government to make it mandatory for big multinational com...

AUG 24: Unit Trust of India (UTI) chairman P S Subramanyum on Thursday urged the government to make it mandatory for big multinational companies (MNCs) making entry into the country to issue equity shares in the domestic market.

“This will not only boost the sagging primary market but also benefit the Indian investors in sharing their profits. SEBI should encourage them by relaxing the minimum permissible limit for the MNCs to make issues in India,” he said while addressing a conference organised by the Indian Merchants Chamber.

He also expressed concern over the market being driven by Nasdaq and said "the investors do still show interest in good issues but they keep away because some of the shares after doing well in the primary market get listed at discount or simply vanish. Sebi should take strict action against vanishing companies and arrange to pay back the investors. The spate of dotcom companies flooding the market is also a cause of concern. Investors are always interested in good quality issues at reasonable price. Companies too `should leave enough on the table’ for the investors."

Story continues below this ad

On the government’s PSUs divestment programme, he said it should consider the combination of domestic market, financial institutions and overseas market for divesting its shares. Aiming the overseas market alone will not yield the desired result, he said.

"The government should take immediate steps to bridge the widening oil pool account deficit before it slips out of hand. The ballooning oil prices have in turn pushed up the cost of various power projects. Most of the projects are already delayed behind the scheduled time, thus escalating the project cost further," he said.

The UTI chief said the recent rupee fall is just an aberration and there is no base level issue for the fall. Exporters are buying more dollars than what the actually require and keep them abroad. The RBI’s decision to cut the Export Earners’ Foreign Currency limit by 50 per cent is in the right direction and will yield the required result.

Subramanyum said the industrial production is picking up with the demand during the busy season improving. "This is a good news for the old economy stock investors particularly textile, steel and cement sectors. There is a huge buying capacity in textile sector. They have to just build up their brands. For example, cloths exported from India for $ 3 are imported back into the country for $ 35-40 with a big brand’s tag. Steel and cement sectors will also look up once the infrastructure projects announced by the government go on stream," he said.