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Movement of SENSEX - Feb. 2004 6100.00

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Notes and News Cover Feature : Global Comeback Of The Ipos Recent IPO Boom The Primary Market Increasing Operational Efficiency Of IPO Application Process -an Investor Perspective Market Focus : A Retrospective Of The Global Market BSE News

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BSE Indices Key Statistics of The Stock Exchange, Mumbai

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Review

The surge in emerging market equity prices since April has triggered a sharp pickup in primary market activity, with (In billions of U.S. dollars) 50 the fourth quarter of 2003 far surpassing levels recorded prior to the bursting of the high-tech bubble. The distribution of issuance across regions exhibited a noticeable 40 difference. After lying dormant for the better part of the year, Asia’s equity market erupted with new stock issues 2000 30 from a wide array of companies in the final months of the 2003 year. Firms in China and Hong Kong SAR were particularly active, issuing $8 billion in the fourth quarter. The China 20 Life IPO was noteworthy. At $3.46 billion, it was the largest 1999 IPO worldwide for 2003 and was 25 times oversubscribed. 2001 In Southeast Asia, Indonesian issuers were active, with stakes 10 2004 sold in Bank Mandiri, Bank Rakyat Indonesia, and PGN. 2002 Thailand’s government successfully divested stakes in Krung 1998 0 Thai Bank and Thai Airways. By contrast, issuance in Latin Jan May Jun Nov Dec Feb Mar Apr Jul Aug Sept Oct America remained low, notwithstanding $540 million in issuance by Mexico’s Cemex. New equity issuance was also limited in EMEA, where activity was dominated by the Central European telecom sector and a $300 million American Depository Receipt (ADR) issue by Russia’s Norilsk Nickel. Amid ongoing inflows by international equity investors, there is no sign of the deal flow drying up. In particular, issuance by Asian companies continued at a fast pace in the first few weeks of the year, and several large deals are in the pipeline for the remainder of the year. In India, the primary market is no different from the global trend. And the major chunk of the primary issuance had come from the PSUs. The current issue highlights the recent surge in the primary market on the global level as well as of India in particular. Different issues about the primary market got reflected through the articles. At the same time the article talking about the operational efficiency in the application process of the primary market, gives an added flavour to the issue.

Cumulative Gross Annual Issuance of Equity

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Domestic Economy Domestic Economy Gross Domestic Product (% change yoy) Value added in Agriculture (% change yoy) Industry Services Exports $ mn Imports $mn Money supply (M3) % change yoy WPI (% change yoy) Capital Issues (Rs. bn) Equity (Rs. bn) Debt (Rs. bn) GDRs/ADRs $mn FDI $mn Portfolio flows $mn NRI deposits $mn ECB $mn Total Foreign Capital Flows $mn (net) Aggregate deposits (SCBs) (% change yoy) Non-food credit (% change yoy) Gross Fiscal Deficit (% of GDP)

1998-99 6.5 6.2 3.7 8.3 33211 42379 19.4 5.9 437 117 320 a70 2480 -68 960 4367 8042 19.3 13.0 6.5

1999-00 6.1 0.3 4.8 10.1 36760 49799 14.6 3.3 663 249 410 822 2167 3024 1540 333 10184 19.3 21.9 5.4

2000-01 4.4 -0.4 6.6 5.6 44147 50056 16.8 7.1 492 142 348 480 4029 2760 2317 3737 9992 16.2 14.1 5.6

2001-02 5.6 5.7 3.3 6.8 43708 51261 14.2 3.7 458 62 395 495 6131 2020 2754 -1576 10573 11.5 13.3 6.1

2002-03 4.3 -5.2 6.4 7.1 52370 61445 15.0 3.4 408.1 73.9 334 131 4660 979 2808 -1698 12638 16.1 26.9 5.9

2003-04 (proj.) 8.2 10.7 6.1 8.3 58900 75000 14.0 5.0 4.8

Monthly Indicators Particulars IIP Exports (% change yoy) Imports (% change yoy) Forex reserves $bn Non-food credit WPI Trade Balance $mn

Jan03 Feb03 Mar03 Apr03 May03 Jun03 Jul03 Aug03 Sep03 Oct03 Nov 03 Dec 03 6.7 6.9 5.8 4.3 6.0 5.7 5.9 5.2 7.1 5.4 7.4 6.2 8.7 12.9 14.6 8.1 12.8 10.9 5.7 4.1 16.0 5.0 13.8 42.7 23.9 17.8 24.5 38.7 7.9 38.6 17.0 15.4 16.3 23.4 26.5 45.0 69.9 69.1 71.1 74.3 77.9 78.2 81.2 82.6 85.6 88.7 92.1 96.5 27.2 27.8 26.2 26.3 16.4 16.2 15.5 15.2 14.1 16.9 16.0 16.2 4.1 5.4 6.0 6.6 6.5 5.3 4.6 3.9 4.6 5.1 5.4 5.6 -638 -441 -776 -1527 -1106 -1613 -1016 -1055 -932 -2025 -1924 -1722

Jan 03 8.7 18.1 100.8 16.6 6.2 -1464

Markets Particulars Govt. borrowings (Rs. bn) Agg. deposits (% change yoy) Bank credit (% change yoy) Public Issues (Rs. cr) Rights Issues (Rs. cr) Private Placements (Rs. cr) Overseas Floatations (Rs. cr) Assets under management MFs. (Rs. cr) Corporate Debt Floatations (Rs.cr)

Feb-03 Mar-03 Apr-03 May-03 June 03 124.43 28.9 84.9 154.4 300.2 17.76 16.06 16.22 11.48 12.17 23.32 23.0 22.62 13.32 12.95 424.59 350.00 0.00 0.00 993.34 79.66 29.52 1.96 0.00 0.00 2161.63 3299.56 586.53 1232.29 2008.07 0.00 72.50 0.00 0.00 75.00 87190 79464 89238 98124 104762 2122 3630 565 1225 1933

July 03 Aug 03 Sep 03 Oct 03 Nov 03 Dec 03 Jan 04 Feb 03 154.4 261.4 -310 60 45.1 2.5 153.2 11.82 11.51 11.81 11.78 11.60 12.63 13.73 14.17 11.70 11.49 10.70 12.91 12.14 12.76 13.87 14.14 388.00 394.16 531.99 665.50 192.0 537.7 834.44 3782.01 0.00 0.00 164.86 80.89 7.71 98.02 110.86 34.43 3770.9 2845 2253.2 1037.79 421.3 1066.3 3593.10 4203.69 0.00 0.00 0.00 1426.6 362.3 27.31 61.33 0.0 112841 121040 121778 126726 132366 140093 145372 145657 3664 3063 2147 1415 415 1328 4063 4166

Rates, Ratios, Returns Jan 04 Feb 03 Jan 04 Bank Rate 6.0 6.0 CRR 4.50 Savings bank rate 3.5 3.5 SLR 25 Term deposit rate 5.00-6.00 5.00-6.00 Credit Deposit Ratio 55.23 PLR 10.50-11.00 10.50-11.00 Re/US$ 45.37 Call Money rate 4.50 4.40 Re/Euro 57.21 91 day T-Bills 4.33 Re/Yen 0.4260 CDs 3.75-6.00 3.92-5.06 Premium on Forward Markets(3mUS$) 1.28 CPs 4.70-5.75 4.60-7.50 Avg. Yield on Govt. securities (10 yrs) 6.14

Feb 03 4.50 25 55.39 45.17 57.08 0.4236 0.39 6.12

Jan 04 PE Ratio : SENSEX 19.39 Price to Book Value 3.65 Dividend Yield 1.73

Feb 03 18.71 3.52 1.79

PE Ratio : NIFTY 21.04 Price to Book Value 4.10 Dividend Yield 1.45

20.32 3.99 1.49

International Economy Austrl Particulars GDP 4.0 Interest Rates 5.48 Consumer Prices 2.4 PLR(%) Forex reserves ($bn) Currency Units/$ 1.29 Year ago 1.69 Stock Index current 3372.5 A month ago 3283.6 Year high 3398.2 Year Low 2673.3 Record high 3440.0 PE ratio 17.8

UK France Germany 2.8 0.6 0.2 4.22 1.3 1.8 0.9 3.75 2.5 0.55 0.79 0.79 0.61 0.92 0.92 4492.2 3725.4 4018.16 4390.7 3638.4 4058.6 4540.1 3785.4 4151.83 3287.0 2403.04 2202.96 6930.2 6922.3 8064.97 16.5 16.9 12.7

February Italy 0.1 2.3 0.79 0.92 20778.0 20561.0 20989.0 15125.0 16.5

Japan 3.4 0.03 -0.3 1.375 106 118 11041.9 10783.6 11361.5 7607.88 38915.9 40.5

US Euro 4.3 0.6 0.99 2.05 1.7 1.6 4.25 - 0.79 - 0.92 10583.9 10488.1 929.41 10737.7 930.79 7524.06 580.84 11722.9 22.4 -

China Malay 9.9 6.4 3.03 2.1 0.9 403 43.5 8.28 3.80 8.28 3.80 4116.7 879.2 3923.7 818.94 4225.2 894.45 3118.5 619.22 - 1314.16 17.8 16.9

Korea 2.3 3.94 3.3 162.1 1172 1166 883.42 848.50 899.21 515.24 1138.75 19.2

Taiwan 5.2 1.05 0.6 224.8 33.3 34.6 6750.5 6375.38 6975.3 4139.50 5451.80 22.5

Mexico 2.0 6.59 4.2 59.2 10.9 11.0 9991.8 9428.77 10157.1 5745.66 8319.67 15.9

Brazil -0.1 16.27 6.7 53.3 2.88 3.64 21755.0 21851.4 24349.8 9994.89 18951.5 9.1

S.Africa Russia 1.5 5.7 8.15 14.00 0.2 10.8 6.4 80.2 6.93 28.5 8.60 31.8 10895.8 670.1 10849.3 611.1 11155.9 688.7 7361.15 336.08 12.2 8.8

Sources: Center for Monitoring Indian Economy, The Stock Exchange, Mumbai, Reserve Bank of India, Financial Times, The Asian Wall Street Journal, The Economist, London. 1. Closing rates; 2. Last auction rates of 91 TBs.; 3. Forecasts of GDP Growth by The Economist; 4. Short term interest rates; 5. Stock market indices ; Australia: All Ordinaries; Brazil: Bovespa; China: Shanghai B: France: CAC40; Germany: XETRA Dax; Italy: Mibtel General; Japan: Nikkie 225; Britain: FTSE.100; United States: Dow Jones Industrials; Malaysia: KLSE Comp; Mexico: IPC; Russia: RTS; South Africa: JSE All Share; South Korea: KoreaCmpEx; Taiwan: WeightedPr. Latest data available for the month; 6. Year 2003.

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PORTFOLIO New Issuance Market as a percentage of GDP The New Issuance Market (NIM) expressed as a percentage of GDP shows a steep rise in the initial years of the post liberisation. The growth observed during the first half of the 90s mostly attributed to the financial liberisation of the economy. Capital market reforms like abolition of the office of Controller of Capital Issues (CCI), constitution of SEBI under the new Security and Regulation Act and relaxation in pricing of capital issues played an important role in such an upsurge. Higher investments in New Issuance Markets occurred during this phase due to inability of the commercial banks to meet private corporate needs. Capital formation by private corporate firms increased from Rs. 2800 cr. in 1989-90 to Rs. 22,750 cr. in 1993-94.

3 2.5 2 1.5 1 0.5 0 %

COMMENT

CURRENT NEWS China’s rules governing voluntary pension funds will allow some of the funds to be directly invested in the stock market. Under the rules, companies and employees can set aside upto one-sixth of an employee’s annual salary from the previous year in a voluntary pension fund. The World Trade Organisation has estimated a growth in the world trade of goods by 7.5 percent as compared to 4.5 percent last year. SEBI has decided to accept bank guarantees of banks having credit rating from a RBI recognised credit rating agency or a reputed foreign credit rating agency, towards the liquid assets of a member. The Reserve Bank of India said that foreign institutional investors were allowed to purchase equity shares and convertible debentures of SSI up to 49% of the company’s paid-up capital.

These alleged cures of the protectionists would make matters worse rather than better. They would do little to create jobs, and if foreigners were to retaliate we would surely lose jobs. Beside enhancing education, we need to further open markets here and abroad to allow our workers to compete effectively in the global market place. Remarks by Alan Greenspan, Chairman, Federal Reserve, on outsourcing at the Boston College Finance Conference, 2004

BSE NEWS

Mr Sulaiman Moh’d Al-Rashidi, Dy. Director General, Muscat Securities Market (left), in conversation with Shri Rajnikant Patel (centre), 5 Chief Operating Officer and Shri S. B. Patankar (right), Chief Technology Officer, The Stock Exchange, Mumbai, during his visit.

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way. (iv) The premium should be paid by the insured directly to the insurance company without routing through the NBFC. (v) The risks, if any, involved in insurance agency should not get transferred to the business of NBFC. Easier norms on banks ESOP, IPO funding In a significant move, the Reserve Bank of India (RBI) said banks are free to use their discretion while extending bank finance to employees for purchasing shares of their own company either under employee stock options (Esop) or initial public offerings (IPO). All such loans should be treated as banks’ exposure to capital market within the overall ceiling of five per cent of banks’ total outstanding advances as on March 31, of the previous year. As per the extant instructions, bank finance to assist employees to buy shares of their own company under the employees quota is restricted to Rs.50,000 or six months salary of the employee, whichever is less. The assistance is also limited to 90% of the purchase price of the shares. FIIs can issue PNs to entities supervised by regulatory bodies The Securities and Exchange Board of India clarified that foreign institutional investors (FIIs) can issue Participatory Notes (PNs) to entities that are regulated by either a central bank, securities commission or a stock exchange. According to the circular issued by SEBI, offshore derivatives instruments (or PNs) can be issued to an entity that is regulated, authorised or supervised by a central bank or any other similar body provided that the entity must not only be authorised but also be regulated by these regulatory bodies. PNs can also be issued to an entity regulated, authorised or supervised by a securities or futures commission, securities or futures authority. Any entity that is a member of securities or futures exchanges or other similar self-regulatory securities or futures authority or commission within any country, state or territory provided that these organisations are ultimately accountable to the respective securities or financial market regulators can also invest in the Indian equity market through PNs. PNs can also be issued to individuals or entities like fund, trust, collective investment schemes, investment company or limited partnership whose investment advisory function is managed by any of the regulated entities. SEBI revises norms for derivative contracts SEBI has said stock exchanges can reduce the lot size of derivative contracts exceeding Rs.0.2 million. The market regulator said for derivative contracts having a contract size or value of Rs.0.4 million and above, the lot size/multiplier should be reduced to half the existing lot size/multiplier. For derivative contracts that have a contract size/value of Rs.0.8 million and above, the lot size should be reduced to a fourth of the existing lot size. Similarly, where the contract size of the derivative contracts is less than Rs.0.2 million, for the sake of standardization, the existing lot size should be increased to bring the contract size to Rs.0.2 million, SEBI said in a release. The increase shall be carried out by increasing the lot size by multiples of 2. To facilitate these measures, the stipulation that the lot size should be in multiples of 100 stands revoked. SEBI has also decided that the lot size of contracts that have fallen below Rs.0.2 million should be brought back to the stipulated amount. It also specified that for stock-based derivative contracts, the lot size shall be in multiples of 100 and the fractions, if any, shall be rounded off to the next higher multiple of 100. SER

London Stock Exchange steps up activity in China with regional office The London Stock Exchange will open a regional office in China as part of its strategy for attracting listings from this country, which is one of the international exchange’s key target markets. The new office, the Exchange’s first in the Asia- Pacific region, will be based in Hong Kong. The Exchange is building its ties with the Shanghai and Shenzhen Stock Exchanges, two increasingly important bourses in the region. The London Stock Exchange will target large privatization deals and other medium to large companies in China. The Exchange will also continue to promote dual listings in London and Hong Kong through a single prospectus. Australian Stock Exchange implements new regulatory regime and introduces new group structure The Australian Stock Exchange completed its transition to the Financial Services Reform Act (FSRA) regime with the grant of various market operator licences for the Exchange, and other different clearing and settlement facility licences for the Australian Clearing House (ACH) and the ASX Settlement and Transfer Corporation (ASTC). As well as ensuring the compliance with the new regulatory regime, the Exchange has used the opportunity presented by the Financial Services Reform Act (FSRA) to streamline and improve its group structure from which trading, clearing and settlement services are offered. With this change, the Australian Stock Exchange is moving from a product-based structure to a functionally based structure. Colombo Stock Exchange signs MOU with 3 other regional bourses The Colombo Stock Exchange (CSE) entered into a Memorandum of Understanding (MOU) with the Karachi, Lahore and Islamabad Stock Exchanges. The Colombo Stock Exchange has already signed a MOU with the Mumbai Stock Exchange. The MOU is expected to promote mutual assistance between the parties involved to enhance cooperation for development of the securities market and to encourage cooperation between the Exchanges in areas of information sharing, training & education, technological development, new product development and cross border listings. SEBI asks depositories to halt transfer-cum-demat scheme SEBI has asked both the depositories NSDL & CDSL to discontinue the facility of transfer cum demat. In a communication to the depositories the capital market regulator said that this facility is no longer relevant and can be withdrawn without causing any undue inconvenience or delays to the investors. RBI terms for NBFCs insurance agency business The Reserve Bank of India announced that non-banking finance companies (NBFCs) registered with it might take up insurance agency business on a fee basis and without risk participation, without its approval. (i) The NBFCs should obtain requisite permission from the Insurance Regulatory Development Authority (IRDA) and comply with the IRDA regulations for acting as ‘composite corporate agent’ with insurance companies. (ii) They should not adopt any restrictive practice of forcing its customers to go in only for a particular insurance company in respect of assets financed by them. (iii) As the participation by a NBFC customer in insurance products is purely on a voluntary basis, it should be stated in all publicity material distributed by it in a prominent 7

Feature

Cover

GLOBAL COMEBACK OF THE IPOS

The IPO boom is part of a global phenomenon. Demand for on other shares. Recently stockmarkets have faded a little from equities, backed by a surge of new mutual-fund money in America their recent highs. in January alone, has been rising in part because investors can find The Indian Primary Market few other attractive bets. The demand for new shares is easily It was early-mid 1990s when sector-specific IPOs dominated. matched by supply from venture capitalists and private-equity Cement and steel in 1991-93, floriculture, aquaculture and financial firms, sitting on a hoard of investments made in the previous wave services between 1993 and 1995 and the ICE (IT, Communication of optimism that they have been waiting for years to unload. and Entertainment) boom of 1999-2000. But the present primary Governments are also keen to sell stakes and raise money. At the market has entirely changed. present pace, perhaps $75 On the regulatory context, the Offering shares in public sector companies at a discount to citizenry is billion worth of IPOs could market has become more be launched this year. In the not a unique idea. In the OECD countries, the first tranche of public efficient and safer. In the US, for instance, 21 IPOs sector shares were often sold at an attractive discount to the public to process side, book-building, have raised $ 5.1 billion facilitate price discovery and improve prospects for subsequent tranches. where investors bid for shares during the period 1 January- IPOs are considered the most transparent mode of government has replaced the fixed price divestment. Besides privatisation, public issues help in developing the 21 February 2004 as against regime. And as for the quality equities markets by creating broad share owning class. They also improve just three that raised $ 209 of the issues, PSUs and wellcorporate governance in companies that are listed for the first time. The million during the known companies across the problem in using this method in emerging markets is that retail investors comparable period last year. industries has replaced the flyLast year, only $45 billion was do not have the deep pockets to subscribe. In Eastern Europe and by-night operators. The first raised in IPOs worldwide, the Russia the government has used Vouchers. Under the communist system, ten months of the last fiscal least in over a decade. In the workers effectively owned the assets via the state and this imposed witnessed 15 public issues, notions of “fairness” in the privatisation process. Under a voucher scheme, America 29 companies have raising only Rs.2516 crores. individuals are given rights to acquire assets by using vouchers, which raised a total of over $6 billion Significantly, most of this are distributed freely. One example of privatisation gone badly was in this year, compared with three amount has been raised by the former Czechoslovakia, which decided to privatise all state-owned deals producing less than established PSUs, which companies at once. Citizens were issued vouchers, which could be $300m by the same point in brought in a sense of safety and 2003. Japan has already seen exchanged for shares of public sector companies. Baffled by the choices encouraged investor 40 new issues in 2004. The most residents ended up selling their entitlements to fund managers participation. But the present boom extends to emerging with private investors cornering most of the public sector companies. fiscal gave a healthy start with economies, especially in Asia. big PSU issues followed by sufficiently large issues of established In China, Semiconductor Manufacturing Internationa companies. At the same time, SEBI has made the entry norms more Corporation came to market and raised around $1.8 billion. stringent to maintain the quality of the issues. SER Investors in China seem remarkably unworried about questions of property rights and whether they will be able to get their money Year Number of Issues Amount (Rs. Cr.) out. It is yet to see, whether big deals by fairly established firms inspire 1989-90 186 2522 a string of new companies to offer shares to the public. Possibly, 1990-91 140 1450 but in the United States at least, it is harder than in 1999 for a firm to make its stockmarket debut. New auditing requirements 1991-92 195 1400 inspired by the Sarbanes-Oxley Act have doubled the cost of 1992-93 526 5651 preparing a firm’s books for the public, premiums for directors, and officers insurance, which companies buy to protect their top 1993-94 765 10824 staff from shareholder lawsuits, have soared. By one estimate, a 1994-95 1350 13312 new firm in America needs around $100m in sales to make an IPO worhtwhile, compared with $50 m a few years ago. Until 1995-96 1423 8882 European regulations are also tightened, Europe, alongside 1996-97 740 4671 emerging markets may be a more fertile place for offerings. In the wake of the dotcom bust, one might expect investors to scrutinise 1997-98 58 1132 IPOs much more closely than before. Yet many recent issues have been handsomely oversubscribed, and the first-day “pops” in share 1998-99 22 504 prices are high. This suggests that even today fund managers are 1999-00 56 2975 buying on the basis of faith as much as analysis. 2000-01 115 2479 As Jay Ritter, a professor at the University of Florida, points out, enthusiasm for IPOs has always been strongly correlated with 2001-02 6 1082 market peaks, measured by the ratio of capitalisation to the book 2002-03 6 1039 values of companies and by price-earnings ratios. More over, for the past two decades long-turm returns from IPOs bought on 2003-04 23 20000 their first day of trading have been persistently lower than those 8

RECENT IPO BOOM Jayesh Shroff Fund Manager, BoB AMC

It’s spring time and still it’s raining. Surprised by the paradox!! Well it’s spring time at the stock markets and it’s raining IPOs in capital market. In a span of just under two months we have more than ten high profile issues hitting the market. The collective amount to be raised by them is expected to be staggering Rs. 20,000 crores. Since it’s probably for the first time in the history of Indian capital markets that such huge sum of money is being raised in such a short span of time, the issue warrants detailed review. Before going to the core issue of IPO boom let’s analyse the reasons for sudden spurt in IPO activity in Indian capital markets.

receipts at Rs. 14,000 crores. And thus to achieve this targets it has lined up offer for sale of ONGC, Gail, IPCL, IBP, CMC and Dredging Corporation. Normally Rs. 20,000 odd crores to be raised under two months would have generated lot of skepticism about success of many of the issues. However, this time around the companies may find it easier to sail through. There are two main reasons for such a belief; first – all the offer for sale lined up are existing listed companies and second - the recent history of successful IPOs over past 12 months. Investors have made handsome gains in some of the recent IPOs.

The Indian stock market had never had it so good. The benchmark BSE Sensex has gained almost 100% from its lows in just under a year’s time. What are the factors that contributed to such a sharp rise in the stock prices in India? •

• • • • • • •

While the past experience of profiteering from an equity issue is impressive if one goes back little further in history, the record is not so impressive. Investors have got stuck with paper that is no longer saleable in the market.

The turnaround in sales and profitability reported by corporates across industry spectrum making the valuations very attractive Very well distributed monsoon across the country Accelerated reforms and infrastructure development in the country Sharp fall in interest rates leading people to shift some part of their assets from debt to equity Under ownership of stocks as an asset class in India; household savings in equities was only about 2% in 2002 Spurt in stock markets across the globe Huge inflow of FII money in Indian stocks Opening of global opportunities for Indian companies

With limited resources and so many companies up for grabs what should investor be looking for? The first thing that an investor wants is an offer that is priced cheap. But unlike a bear market most companies in a bull market will not offer their stocks cheap. They will try to price it as near to its fair value as possible. So amongst host of equity offerings how will you select the companies for investment? First

– Think Long term. Invest in companies where you think the business can profitably sustain over a long period of time. Second – Look for companies / sectors where business environment is undergoing a major transition and the company is set to ride the wave of transition Third – Invest in sound management

The economy itself has shown tremendous buoyancy in last one year. The so-called hindu rate of growth of 4-5% is behind us and we are witnessing GDP growing at more than 7%. The business confidence index is at its highest in last decade. All these factors indicate enormous growth potential that exists in India. Opportunities in large infrastructure projects and new businesses, hitherto unknown to Indians are now visible. For all this to materialize will require huge amount of money to be invested in these businesses. While part of it will come through debt funding a substantial part will also be raised through equity route. And that’s where the IPO boom is coming from.

This list can go much longer but what I’m trying to emphasis is that these are the basic rules; it’s like pain management for equity investment. India as an economy is at an inflexion point of growth. Over the next few years we are going to witness a massive change in demand and consumption pattern in India. This will lead to emergence of new industries, products and services and in turn open plethora of opportunities within the economy in general and stock market in particular. With such vibrancy in stock markets, the IPO market will also explode. There will be genuine companies offering equity and there will be fly by night companies. In such a situation, investors should look for sound investment principles, amongst quality and price always chase quality and buy businesses that look exciting and valuations will follow. SER

Now let’s look at the companies that have lined up equity issues. Of the total number of issues lined up few are offer for sale and not IPOs. An offer for sale is sale of equity stake by an existing stakeholder to the public. The Government of India in its interim budget has set a target of containing fiscal deficit below 4.8% of GDP. They have also reiterated their target of disinvestments

9

PRIMARY MARKET REVIEW Jignesh Shah Strategist, Ask Raymond James Securities

After having run up 73% in 2003, the year 2004 may create a record of sorts in the history of the Indian primary market. The Government’s decision to divest itself of its residual stake in six already privatized companies; the corporate sector’s need for funds to expand; and private investors looking for exit options have led to hectic activity in the primary market.

underlying fundamentals and valuations. In 1977 when the then Government compelled MNCs to divest their holdings and list on the bourses a few (IBM, Cocoa Cola) quit India; others (Levers, Colgate, P&G) listed. Investors made big money in subscribing to these fundamentally strong companies. The same will happen this time too – investors in India will make money, if the Indian economy continues at its scorching pace.

The market then turned nervous. Earlier too, the Government had divested its stake in PSUs, but such nervousness had not been seen. What could be the reason? Simple. The size of these issues is significant – the supply of paper is on the higher side, compared to appetite for it. With GDP as of March 2003 at Rs.24,696bn, at 8% growth the FY2004 addition is likely to be about Rs.2,000bn. Compared to that, IPOs and divestments are about Rs.300bn, nearly 15% of the addition to GDP. The Rs.300bn in funds will be mobilized to a large extent from the home market, not from overseas. Had the funds come through ADRs and GDRs, they’d have boosted the economy, bringing in fresh liquidity.

Generally, a good run in secondary markets leads to an IPO craze. For, when demand for new paper rises speedily, promoters (in order to expand capacity, build a market, put in new systems) rush to raise equity from the public (Raising equity is apparently less expensive; in reality it is not.) This eventually leads to many inefficient companies entering the primary market – and investors burning their fingers. As happened in the technology bull-run of 2000. This time, good money has been poured into emerging markets, specifically China. This led to the boom in China’s IPO market in the second half of last year. Giants like PICC Property & Casualty Co. (China’s largest non-life insurer, which raised $696mn, was oversubscribed 50 times and listed at a 50% premium to the IPO price), AviChina Industry & Technology Co. (a mini-car and helicopter maker, $248mn), China Resources Power Holdings Co. (an electric power company, $350mn), China Life Insurance Co. (the country’s largest life insurer, $3bn), Great Wall Automobile Holding Co. (Chinese truck and sport utility vehicle maker, $196mn). Since the 50% premium listing of PICC Property, sentiment towards IPOs changed. So much so that China Life, the next IPO, had to print 2.2 million application forms for retail buyers and another 400,000 for brokerages, or enough for one in three residents of the southern Chinese territory. In Asia in general, and in China particularly, the rapid turnaround in investor attitude toward IPOs stems from the surging liquidity brought about by record-low interest rates, rising optimism about the economic growth and a healthier appetite for emerging-market risk.

Because of the unexciting secondary market in the last three years, the Indian capital market has not seen so many IPOs. In the past six years, only Rs.102bn were mobilized through public issues of stock. Specifically, in 2001, fifteen issues raised Rs.3.92bn; in 2002, six drew in Rs.19.8bn and, in 2003, fifteen issues raked in Rs.21.7bn. As over-subscription in recent IPOs by a few times occurred and they were listed at a robust premium, institutions and retail investors jumped onto the bandwagon. The response of small investors to IPO has increased as a follow up to the gains they made as can be seen in following examples: Name of company Maruti Udyog Bharati Telecom Indraprastha Gas TV Today

IPO Listing % Gain CMP - (Rs.) % Gain Price (Rs.) Price (Rs.) (30 Jan 2004) 125 158.40 26.7 432.60 246 45 55 22.2 134.85 200 48 120 150 99.45 107 95 210 121 147.20 55

In all, IPO price is crucial. The 2003 bull-run in India was led by FIIs, which invested around Rs.304.6bn ($6.6bn) in equity. This run had then been utilised by retail investors to move out of those stocks in which they had been stuck for the past so many years. In the current IPO mania, if stocks are offered at a steep discount to core value, there are sufficient chances that investors will make money – and the equity cult among retail investors, which has withered, might once again surge. Since most IPOs floated in the recent past have returned phenomenal gains, investors are tempted to invest in IPOs with a view to selling off their stocks immediately on listing.But then, this comes with an inherent risk. Between an issue closing and its listing, market sentiment could change – and stock might not always list at a premium. In fact, if the market turns unfavorable, the listing price could even be lower than the issue price. Needless to say, IPO or no IPO, the quality of a company, its management prowess, business potential and valuation will remain driving factors for eventual shareholder reward. SER

In the year 2004, besides the divestment by the Government of India in already listed companies, a large number of companies will come to the capital market for the first time. A few such large corporations and sectors which aren’t yet listed are: NTPC - the largest government-owned power-generation corporation, TCS (Tata Consultancy Services)- the largest private-sector software development company, the aviation sector – the international AirIndia and the domestic Indian Airlines; Jet Airways - the largest private-sector airlines, Sony TV and NDTV - television broadcasters; Daksh e-services - BPO company; Reliance Infocomm - telecom company, etc. Positively, investor interest in different sectors will also be sparked. This will pull in institutional participation in Indian markets. With these IPOs, these and others like them will enormously raise market capitalization. In the short term, supply is probably higher compared to appetite for paper. In the long term, though, price will reflect the

10

INCREASING OPERATIONAL EFFICIENCY OF IPO APPLICATION PROCESS -AN INVESTOR PERSPECTIVE Nandamohan Shenoy Head - Investment Advisory Services Operations BNP Paribas

Last three months, the Indian Capital Market witnessed a slew of IPOs. As a retail investor one had to spend a lot of time and energy in filling up the mammoth forms every third day. This trend is bound to continue with more IPO’s planned in the Financial Year 2004-2005.At this juncture it is difficult to say whether Stock Market is shining or not but definitely the printing industry related to IPO’s are shining. In the present days when a depository account is mandatory for applying for an IPO account, one is at a loss to understand as to why there is huge data redundancy in the entire systems this one way of creating employment generation and more business to registrar? The printed matter for IPO comes in two parts. One is the disclosure data as is mandated by SEBI and the second one is the application form. The focus of this article is to how the drudgery of filling the application form be obviated. Some websites like ICICI direct gives the investor the facility to apply online. Even if one uses this route the BackOffice of the said brokerage firm has to fill up the application form on behalf of the customer, sign the form as a power of attorney holder attach a copy of the customer’s power of attorney and submit the same to the syndicate member. The famous law of Physics that energy can neither be created nor destroyed holds good for the Indian IPOs as well. The whole system can be made very efficient by reducing the entire paperwork, which can be brought down by ninety percent. The unique identification of the investor, in the age of depository, is the Depository Participant ID (DPID) and the Client ID of the investor. The IPO application form will contain the bare minimum data in addition to the two key fields mentioned above viz. Broker/ code /sub broker code, investor name, quantity, price and cheque details. This form need not be more than half the size of A4 paper and should look like a DP Account transfer instruction. This proposal was mooted to some NSDL /CDSL officials who had expressed the apprehension that if the client id is mentioned wrongly the registrars will find it difficult to mail back the original cheque or the refund order.at this juncture five different solutions come to one’s mind. The first solution is to write the address of the investor on the reverse of the form, which is optional, and not mandatory. This obviously not the best solution The second solution is the real time solution. The Collecting bank

will punch in the two key fields DP id and client id and the DP id & client ID will be validated with the NSDL/CDSL data base. However for this to happen one needs to be linked to NSDL/ CDSL on a real time basis. With the browser based technology and services similar to Sped E.NSDL/CDSL and think of giving login id & passwords to the collecting bankers The third solution is the batch mode with NSDL/CDSL before depositing the cheque for clearing. The data captured will be sent in a batch mode to NSDL/CDSL, which will validate the data and send a response file to the registrar. Currently such offline mode is happening in the MAPIN project as well as TIN (Tax information Network) for TDS (Tax deducted at source.).In case of TIN database NSDL gives a report for TDS wherein it clearly states the accounts where the PAN is missing. In addition the address of the proposed investor can be mentioned on the reverse of the cheque. The cheque should be deposited only on confirmation from the NSDL file. The fourth solution is similar to the existing account transfer instruction. The Depository participant should issue special booklets to investor pre stamped with the client id and DP id. This IPO instruction booklet will be used by the proposed investor and will be common across all the issues. This will be the simplest of solutions. However the broking fraternity will not agree, as there is every chance the customer will forget to mention the broker/sub broker code on the instruction. The prerequisite for the same is the allotment of ISIN as a part of the IPO process by the SEBI as well as NSDL/CDSL The fifth solution is too early a solution. With the MAPIN database being used for UIN. The bid capturing process in NSE/BSE system also should capture the UIN of the customer .At EOD of the exchange the IPO file can be downloaded and the cheque and the report along with simplified client instructions can flow to the registrar. The pre requisite for the same is the availability of the MAPIN data base by the exchange and its inter linkage to the NEAT/BOLT system. The second phase of refund order is also a paper intensive one. One is at a loss to understand as to why the ECS route cannot be adopted in lines with the dividend warrant route. This will also reduce the investor’s time of going to the bank and depositing the cheques. To conclude one needs to gear up all the machinery to improve the efficiency of IPO processing from the investor as well as the back office perspective. SER

Unified Market Clearing and Settlement System A giant settlement and clearing corporation, which will clear and settle transactions in all the markets - stock, commodity, bonds and foreign exchange - is in the works. The umbrella corporation will also have a huge settlement guarantee fund. All the settlement or trade guarantee funds of various exchanges may be merged for this purpose. At the moment, Clearing Corporation of India Ltd (CCIL) is the umbrella organisation for clearing trades in the government securities and foreign exchange markets. In the stockmarket, National Securities Depository Ltd (NSDL) and Central Depository of Securities Ltd (CDSL) clear the transactions. If the new corporation is set up, CCIL, NSDL and CDSL will have to be merged. The new project is the outcome of the World Bank’s efforts at putting in place a unified market clearing and settlement system. The Bank is exploring ways to merge all other settlement guarantee funds - National Securities Clearing Corporation Ltd (NSCCL), a wholly owned subsidiary of the National Stock Exchange (NSE), the Trade Guarantee Fund of the Bombay Stock Exchange (BSE) and funds belonging to regional exchanges. The new settlement guarantee fund will cover the cash and futures segments of the equities, commodities, bonds and foreign exchange markets if the World Bank project is implemented. 11

A RETROSPECTIVE OF THE GLOBAL MARKET

Focus

Market

S. Ramesh

Co-Head, Advisory Group Kotak Mahindra Capital Compnay

increased by 33% over the past 1 year from the lows in March 2003 • Since the beginning of 2003, there have been dramatic gains in the economy, corporate profits and the prices of corporate securities. For example, in the third quarter, real GDP grew 8.2%, S&P operating profits rose about 35% and share prices moved higher • The second phase of the equity bull market will likely be driven by the performance of the underlying corporations. Most US companies currently enjoy strong balance sheets and large cash positions as corporate borrowing costs have fallen.

GLOBAL • Global markets began 2003 on a bearish note, amidst the Iraqi War, SARS outbreak in Asia, terrorism threats, poor earnings visibility and discouraging economic data. March 11 2003 saw most global markets reach new lows before recovery set in. • Since May there was considerable rally in the global markets and many of the negatives that had held back equities in the past couple of years were beginning to fade, e.g. the economic downturn, the stock market crash, corporate balance sheet adjustments, oil price hikes, international tension, SARS. • Liquidity improved significantly in the equity markets, with clear signs of bond-to-equity shifts occurring for both foreign and local investors through the second half of 2003

EUROPE • The Euroland economy contracted in the second quarter of 2003. Inspite of this, between March and May 2003, broad based EU indices increased by 20% due to a significant reduction in risk aversion, rather than expectation of a strong economic rebound • The second phase of growth in equity indices was characterized by early signs of economic recovery - a steeper yield curve, improved confidence surveys, a pick-up in industrial production and corporate outlook • During February – March 2004, there has been notable softening of economic data – bond markets have rallied and equities have weakened • The recent setback in investors’ risk appetite and growth expectations has triggered a rotation from cyclicals and growth sectors towards defensives • The most obvious risk for the European market is a sharp rise in the Euro that caps economic growth. Another notable risk is a weaker than expected economic growth

170 160

US

Asia ex Japan

Japan

Europe

In d e x e d P r i c e

150 140 130 120 110 100 90

Daily From 11-Mar-2003 to 19-Mar 2004

• Global and regional equities had produced a strong start to 2004 with most indices showing positive returns till January. However equity markets have pulled back more recently primarily on concerns that global growth momentum is peaking. • The economic recovery is gathering pace and seems likely to be the first synchronized recovery since the early 1980s. The Asia Pacific region offers great upside potential on the back of sustainable earnings growth coupled with attractive valuations

190

US

180 170 160

DAX

150 140

CAC 40

130

• In early 2003, investors expressed intense worries on many issues ranging from the Iraq conflict to deflation. These concerns began to lift before June 2003, as did risk aversion in both equities and corporate bonds. • In combination with this and with clear evidence of economic and profit recovery, the Dow Jones Industrial Average has

FTSE 100

120 110 100 90

Daily From 11-Mar-2003 to 22-Mar 2004

SOUTH AFRICA 180 170

S&P 500 NASDAQ

• The FTSE / JSE All Share Index has increased by 10% yearto-date, with the 52-week high at 10,310 and the 52-week low at 7,361. • After three years of falling values and given the optimism surrounding the global economic recovery and improving corporate profitability, the FTSE-JSE all share index gained 49% in dollar terms driven by an appreciating rand as compared to MSCI world index which was up only 34%. • There were 426 companies listed on the JSE in 2003 compared with more than 668 at the end of 1999. However, the market capitalization of US$236 billion has not changed as the top

DOW Jones

160 150 140 130 120 110 100 90

Daily From 11-Mar-2003 to 22-Mar 2004

12

180

ALSI (DAILY)

11178.600 10061.160 10761.150 10561.150 10361.150 10161.150 9961.150 9761.150 9561.150 9361.150 9161.150 9961.150 8701.150 0561.150 8361.150 8161.150 7961.150 7761.150 7561.150 7361.150

160

TWSE Hang Seng

150 140 130 120 110 100 90 Mar

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003

2004

Daily From 11-Mar-2003 to 22-Mar-2004

160 stocks accounted for 99% of the exchange’s capitalization, and the JSE remains the 17th-largest bourse in the world • The exchange rate of the Rand appreciated by 19% in the last 12 months • In the recent budget announcement, the Government has allowed foreign companies to list on the JSE

• The principal risks to the anticipate upside, apart from event risks, are :(1) economic growth in the US and China; (2) US monetary policy; and (3) the US dollar

INDIA • Till end-April, Indian markets had under performed most global markets; however, the Sensex has risen by close to 90% since then, thus outperforming all the major global indices. The Sensex closed above 6,000 for the first time in history in Jan-04. • Turnover has picked up in the last 6 months, and the average daily turnover currently stands at US$ 1.5 bn in the cash market and US$ 2.0 bn in the derivatives market • Valuations are still compelling, with the Sensex forward P/E currently at 15x, having only recently recovered from a 10year low • Improved corporate profitability, a weakness in the dollar and good monsoons have driven the positive sentiment among both retail and institutional investors • The robust growth in the economy is expected to continue, with GDP growth of over 8% expected in FY04 and close to 6% in FY05 • This strong up trend is being led by significant FII inflows and increased appetite for equities in retail investors — The net FII inflow in 2003, at US$ 6.6 bn, is the highest in the last 10 years and second only to Korea and Taiwan in exJapan Asia • Institutional participation as a proportion of total market turnover has increased to 15% for 2003 compared to less than 9% in 2000. SER

ARGENTINA • After four years of recession, Argentina’s economy grew 8.4 percent in 2003, according to preliminary government statistics. Forecasts call for growth of 6.9 percent in 2004 • The stock market index moved within the range of 561 and 1275 during the year to date • Argentina is facing its second economic progress report as part of a review of a three-year $13.3 billion loan package arranged with the IMF in the wake of its 2001-2002 economic collapse 1300 1200 1100 1000 900 800 700 600 500 A

KOSPI STI

170

M

J

J

A

S

O

N

D

2004

F

M

ASIA

200

• Since April 2003, there has been an upturn in the global markets fuelled by diminishing concerns over SARS, a weakening dollar, improving economic data and liquidity • After a strong start in 2004, Asian equity markets have pulled back primarily on concerns that global growth momentum is peaking. The five key reasons for recent weak performance in calendar 2004 are global risk reversion, concerns over global growth prospects, political shocks, seasonality and new equity supply. • Key investment themes arising from current performance as well as structural, demand and cyclical factors are in banking, steel, autos and the travel sectors. FIIs

1500

180

BSE Sensex

MSCI EMF

Nikkei 225

Hang Seng

S&P 500

N o rm a liz e d

160 140 120 100 80

Mutual Funds

1,482 1,355

(U S $ m n )

1200 836

900

724 548

600 300 185 0 (300)

502

698 527

451

257 79

7

(84) Jan-03 Feb-03

86

13

Mar-03

90

15

16

(37) Apr-03 May-03

(42) Jun-03

Jul-03

13

88

Aug-03

187 42 (63) (43) Sep-03 Oct-03 Nov-03

409

206 13

Dec-03

Jan-04

(118) Feb-04 Mar-04

Index Based market wide circuit breaker for the Quarter 1st April 2004 to 30th June 2004 The BSE implements on a quarterly basis the index based market wide circuit breaker system. The system is applicable at three stages of the index movement either way at 10%, 15% and 20%. These circuit breakers will bring about a coordinated trading halt in all equity and equity derivatives markets nationwide. The market wide circuit breakers would be triggered by movement of either SENSEX or the NSE S&P, Nifty whichever is breached earlier. BSE to Shift BSE 100 index to Free Float methodology BSE in continuation of its policy to gradually shift to the free float methodology , has shifted the BSE 100 index to the free float methodology. The free float factor for ONGC has been revised from 0.05 to 0.15 (W.E.F. 5th April) after the successful completion of the ONGC IPO. In order to make indices more qualitative and inline with world standards, the BSE has pioneered the concept of globally accepted “Free Float Methodology” in index construction in India by launching the TMT benchmark “BSE Tech Index” in July 2001 and Bankex in June 2003. BSE and FISE ( Federation of Indian Stock Exchanges ) jointly submit a proposal for formation of BSE IndoNext for shares of small and medium capital companies Shares of small and medium capital companies which are listed only on various Regional Stock Exchanges ( RSE ) do not have a liquidity as many RSE’s have either nil or negligible turnover , hence investors are unable to find exit route and companies are unable to raise fresh capital from the capital markets for expansion , working capital requirements etc . BSE has taken steps to solve these problems jointly with FISE by submitting a proposal to SEBI for formation of IndoNext for shares of small and medium capital companies .This major capital market initative would enable members of RSE and participating RSE’s to trade the shares of companies with paid up capital upto 20 crores listed and traded on BSE and participating RSE’s to be traded in a national market through a single book order system on the BSE BOLT system in BSE. SER

NEW RELEASE

DIRECTORY OF MEMBERS 2004 14

BSE

I

Beta, R2,Volatility and Returns of SENSEX scrips for one year period (March 2003 - February 2004 ) Code

Name

Beta Values

Co-efficient of Daily determination Volatility (R2) (%) 500410 A.C.C. 1.29 0.94 2.51 500490 BAJAJ AUTO 0.66 0.95 2.06 532454 BHARTI TELE 0.71 0.91 3.39 500103 BHEL 1.07 0.96 2.44 500087 CIPLA LTD. 0.52 0.95 2.15 500124 DR.REDDY’S 0.63 0.85 2.34 500300 GRASIM IND. 0.97 0.98 2.40 500425 GUJ.AMB.CEM 0.98 0.95 2.19 500010 HDFC 0.41 0.98 2.32 500180 HDFC BANK 0.47 0.94 1.87 500182 HERO HONDA 1.03 0.95 2.75 500696 HIND.LEVER 0.91 0.76 1.94 500104 HIND.PETRO 0.75 0.75 2.40 500440 HINDALCO 0.80 0.96 2.13 532174 ICICI BANK 0.89 0.97 2.54 500209 INFOSYS TECH 1.39 0.81 3.23 500875 ITC LTD. 0.61 0.94 1.69 500510 LARSEN & TOU 0.99 0.97 2.25 500108 MAHA.TELE 0.81 0.76 2.41 500312 ONGC CORPN 1.14 0.91 2.69 500359 RANBAXY LAB. 0.68 0.83 1.74 500325 RELIANCE 1.14 0.99 1.94 500390 RELIANCE ENERGY 1.17 0.93 2.72 500376 SATYAM COM 1.83 0.91 3.49 500112 STATE BANK 1.11 0.92 2.13 500570 TATA MOTORS 1.37 0.97 2.58 500400 TATA POWER 1.21 0.93 2.50 500470 TATA STEEL 1.39 0.99 2.57 507685 WIPRO LTD. 1.59 0.69 3.05 505537 ZEE TELE. 1.38 0.90 3.56 Beta = Co-variance(SENSEX, Stock)/ Variance(SENSEX) R2 = (Correlation)2 Avg. Daily Volatility = One standard deviation of daily returns of individual Returns = % variation in the stock price over last one year

0.987

0.979

0.993

0.998

BSE-TECk

0.941

0.851

0.977

0.976

MSCIINDIAINDEX 0.994

0.992

0.999

0.999

NIFTY

0.996

0.991

0.999

0.999

NASDAQ

0.683

0.789

0.900

0.935

DOW JONES

0.660

0.852

0.955

0.942

S&P500

0.570

0.797

0.940

0.919

FTSE 100

-0.380

0.605

0.877

0.865

-0.394

0.674

Free Float Adj. Factor 30/01/2004 0.90 0.70 0.20 0.35 0.60 0.75 0.80 0.70 0.80 0.80 0.50 0.50 0.50 0.80 1.00 0.75 0.70 0.90 0.45 0.05 0.70 0.55 0.50 0.90 0.45 0.65 0.70 0.75 0.20 0.55

stock price for last one year

Telecom 3%

1 Month 3 Months 6 Months 1 Year (Feb 04) (Dec 03-Feb 04) (Sep 03-Feb 04) (Mar 03-Feb 04)

BSE-100

NIKKEI

Weights as on 31/01/ 2004 (%) 1.30 2.09 1.72 1.62 1.40 2.31 2.55 1.09 3.89 2.77 1.60 6.23 2.51 3.00 5.44 8.21 6.19 4.10 1.26 1.66 3.97 13.84 1.66 2.86 4.50 3.56 1.61 3.86 2.20 0.98

Sectoral Weights in SENSEX as on Feb. 27, 2004

Correlation of SENSEX with INDEX

Returns (1 year) (%) 68.65 75.58 429.07 176.55 55.43 41.41 206.38 91.50 62.64 49.91 120.95 2.90 45.06 112.80 81.93 18.39 69.30 181.32 35.57 91.01 53.23 88.69 224.10 37.29 104.83 212.98 185.39 186.28 -0.73 58.45

0.137

0.858 15

Transport Equipments 7%

Capital Goods 2%

Diversified 7%

Power 3%

Finance 17%

Oil & Gas 18%

FMCG 12%

Metal Products & Mining 7%

Media & Publishing 1%

I.T 13%

Housing Related 2%

Healthcare 8%

Key

Statistics

1 i) ii) iii) iv) v) vi) vii) 2

Particular Turnover Specified Shares (A Group) B1 Group Securities B2 Group Securities F - Group Securities (Debt) G - Group Securities T Group Securities Z- Group Securities Total Turnover (i - vi)

Cumulative from Jan

3 i) ii) iii) iv) v) vi) vii) 4

5

6 i) ii) iii) iv) v) vi) vii) 7 8 9 a) i) ii) iii) iv) v) vi)

b) i) ii) iii) iv) v) vi)

10

11 i) ii) iii) iv) v)

Average Daily Turnover Specified Shares (A Group) B1 Group Securities B2 Group Securities F - Group Securities G - Group Securities T- Group Securities Z- Group Securities Total Average Daily Turnover (i to vi)

Cumulative from Jan Turnover for the month High Low No. of Shares Traded A Group (Total) B1 Group (Total) B2 Group (Total) T- Group Securities Z- Group Securities Total Shares Traded (i to v) No. of Debentures traded G Group V-SAT Turnover (incl. in item no 2) No. of Trades Cumulative from Jan Deliveries (Monthly) No. of Shares Specified Shares (A Group) B1 Group Securities B2 Group Securities G Group Securities T Group Securities Z Group Securities Total No. of Shares Cumulative from Jan Value Specified Shares (A Group) B1 Group Securities B2 Group Securities G Group Securities T Group Securities Z Group Securities b) Value Cumulative from Jan Debenture Deliveries (Monthly) a) No. of Debentures Cumulative from Jan b) Value Cumulative from Jan Market Capitalisation (Estimated) A Group B1 Group B2 Group T Group Z Group BSE (i-v)

of The Stock Exchange, Mumbai

(Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Cr. Rs.) (Bn. Rs.) (USD Bn.) (Cr. Rs.) (Bn. Rs.) (USD Bn.) (Cr. Rs.)

(Cr. Rs.) (Bn. Rs.) (USD Bn.) (Cr. Rs.) (Cr. Rs.)

Nov-03

Dec-03

Jan-04

Feb-04

Feb-03

Feb-02

39889.90 4614.14 426.01 28.87 0.00 0.00 70.27 45029.19 450.29 9.89 45029.19 450.29 9.89

44343.39 9093.37 722.06 13.49 0.00 570.80 72.43 54815.54 548.16 12.02 99844.73 998.45 21.90

57937.14 6810.49 576.41 26.91 0.02 238.77 30.63 65620.37 656.20 14.44 65620.37 656.20 14.44

47752.22 3317.68 271.00 9.57 0.01 99.14 13.90 51463.52 514.64 11.37 117083.89 1170.84 25.80

21399.34 1921.87 133.02 4.73 0.31 1.67 23460.94 234.61 4.92 54359.06 543.59 11.39

24632.52 3585.98 346.38 3.76

1994.50 230.71 21.30 1.44 0.00 3.51 2251.46 22.51 0.49 2251.46

2015.61 413.34 32.82 0.61 0.00 25.95 3.29 2491.62 24.92 0.55 4538.40

2758.91 324.31 27.45 1.28 0.00 11.37 1.46 3124.78 31.25 0.69 3124.78

2513.27 174.61 14.26 0.50 0.00 5.22 0.73 2708.61 27.09 0.60 5833.39

1126.28 101.15 7.00 0.25 0.02 0.09 1234.79 12.35 0.26 1294.26

0.15 1428.58 14.29 0.29 1575.36

3206.84 **722.09

3219.55 2078.22

4134.61 2124.46

3176.52 2265.70

2018.51 968.72

2126.83 1056.00

182.25 116.36 19.68 10.40 328.69 3.22 0.00 19790.12 17564.00 17564.00

196.16 187.02 38.04 37.38 14.78 473.38 0.17 0.00 22984.58 23286.00 40850.00

221.26 149.09 36.05 17.51 6.80 430.71 2.73 0.00 25610.12 22346.00 22346.00

160.94 59.72 14.57 5.10 3.06 243.39 0.08 0.00 22907.56 15793.00 38139.00

101.77 31.20 10.22 0.14 143.33 0.0200 0.0000 9214.73 9533.26 22552.65

124.90 35.27 22.62

41.90 48.28 9.86 0.00 0.00 0.00 100.04 100.04

56.37 86.51 22.81 0.00 48.87 11.74 226.30 326.34

54.18 62.74 24.59 0.00 19.24 7.47 168.22 168.22

33.44 27.40 10.44 0.00 5.39 3.17 79.84 248.06

25.46 12.18 6.84 0.00

32.06 14.26 13.16

44.48 105.26

59.48 111.81

8812.43 2032.80 207.20 0.00 0.00 0.00 11052.43 11052.43

11293.11 4169.39 418.85 0.00 771.67 44.33 16697.35 27749.78

13934.84 2730.86 364.68 0.02 258.33 36.45 17325.18 17325.18

9493.35 1325.65 176.40 0.01 110.00 15.09 11120.50 28445.68

4364.10 443.37 63.55 0.29

5608.10 921.66 119.34

4871.31 10707.60

6649.10 13341.54

0.00 0.00 0.00 0.00

0.00 0.00 0.01 0.01

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.00 0.00 0.00

0.00 0.01 0.00 3.36

911386.00 1076265.70 1029361.88 1024620.93 114346.00 141101.19 125974.27 123086.92 15618.17 20890.86 18741.50 17648.10 0.00 12652.28 10796.38 10625.35 24503.00 22450.99 21980.39 20240.15 1065853.17 1273361.02 1206854.42 1196221.45

520966 69872 12639

448638 117293 24212

16396 619873

6574 596716

2.92 28571.56 285.72 5.87 67740.56 677.41 13.91 1231.63 179.30 17.32 0.19

(in Crs)

(in Crs) (Cr. Rs.) (in ‘000s)

(in Crs)

(Cr. Rs.)

(in Crs) (Cr. Rs.)

(Cr. (Cr. (Cr. (Cr. (Cr. (Cr.

Rs.) Rs.) Rs.) Rs.) Rs.) Rs.)

16

0.37 183.16 0.0024 16524.00 12146.85 26528.57

Particular (Bn. Rs.) (USD Bn.) 12 13

14 15

16 a) b) c) d) e) 17 f) g) 18

19 a) b) c) d) e) 20 f) g) 21

22

23

24

25

26

27

28

No. of Trading Days Cumulative from Jan No. of Companies Listed Newly Listed Delisted Total Newly listed securities of existing companies Cumulative from Jan Capital Listed During the Month - Existing Companies (Cr. Rs.) - Newly Listed Companies (Cr. Rs.) Total (Cr. Rs.) (Bn. Rs.) (USD Bn.) Amount offered thro’ equity (prospectus) Total No. of Issues Par Amount (Cr. Rs.) No. of Issues (premium) Premium Amount (Cr. Rs.) Total amount (b+d) Amount offered thro’ other instruments (Prospectus) Total No. of Issues Amount (Cr. Rs.) Total amount offered thro’ prospectus Total No. of Issues (a+f) Amount (e+g) (Cr. Rs.) Amount offered thro’ equity by existing listed companies Total No. of Issues Par amount (Cr. Rs.) No. of Issues (premium) Premium Amount (Cr. Rs.) Total amount (b+d) Amount offered thro’ other instruments by existing listed companies Total No. of Issues Amount (Cr.Rs.) (Cr. Rs.) Total amt offered by existing listed companies Total No. of Issues (a+f) Amount (e+g) (Cr. Rs.) Total amount offered thro’ all offer documents (XVIII+XXI) Total No. of Issues Cumulative from Jan Amount (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (USD Bn.) BSE Sensitive Index (30 Scrips) (1978-79=100) High Low Average Closing (Month End) BSE TECK Index (2nd April 2001=1000) High Low Average Closing (Month End) BSE 100 Index (1983-84=100) High Low Average Closing (Month End) BSE 200 Index (1989-90 = 100) High Low Average Closing (Month End) The Dollex-200 (1989-90 = 100) High Low Average Closing (Month End) BSE 500 Index (1989-90=100) High Low Average

Nov-03

Dec-03

Jan-04

Feb-04

Feb-03

Feb-02

10658.53 234.15 20 20

12733.61 279.32 22 42

12068.54 265.50 21 21

11962.21 264.24 19 40

6198.73 129.87 19 42

5967.16 122.55 20 43

2 0 2 41 41

4 1 5 40 81

2 93 -86 65 65

11 43 -118 73 138

0 4 5647 36 85

2 0 5798 41 103

578.47 18.98 597.45 5.97 0.13

988.64 197.17 1185.81 11.86 0.26

1770.53 39.47 1810.00 18.10 0.40

51166.36 689.39 134.97 0 51301.33 689.39 513.01 6.8939 11.33 0.14443537

784.96 2043.37 2828.33 28.2833 0.580885

1 40.00 1 152.00 192.00

2 10.00 2 141.00 151.00

2 4.85 1 426.91 431.76

2 103.98 2 145.90 249.88

1 3.2 1 38.46 41.66

0 0 0 0 0

0 0.00

0 0.00

0 0.00

0 0.00

1 400

2 850

1 192.00

2 151.00

2 431.76

2 249.88

2 441.66

2 850

2 11.97 1 73.58 85.55

0 0.00 0 0.00 0.00

0 0.00 0 0.00 0.00

3 69.02 3 1512.50 1581.51

1 15.60 0 0 15.6

1 3.12 0 0 3.12

0 0.00

2 400.00

1 400.00

0 0.00

0 0

1 46.8

2 85.55

2 400.00

1 400.00

3 1581.51

1 15.6

2 49.92

3 3 277.55 277.55 2.78 0.06

4 7 551.00 828.55 8.29 0.18

3 3 831.76 831.76 8.32 0.18

5 3 8 4 1831.39 457.26 2663.15 857.26 26.63 8.5726 0.59 0.17960612

4 7 899.92 2366.26 23.6626 0.485985

5097.84 4771.23 4951.10 5044.82

5838.96 5131.54 5424.67 5838.96

6194.11 5593.74 5954.15 5695.67

6035.80 5567.12 5826.74 5667.51

3322.17 3223.41 3278.85 3283.66

3712.74 3311.73 3528.58 3562.31

1145.16 1063.03 1100.68 1145.16

1302.89 1146.04 1218.77 1302.89

1416.11 1193.32 1301.23 1219.06

1301.17 1150.29 1234.03 1198.72

861.64 805.51 831.649 833.03

1008.57 926.37 974.7515 926.43

2603.65 2454.93 2543.09 2594.34

3074.87 2643.01 2813.58 3074.87

3297.19 2878.90 3142.23 2946.14

3128.32 2855.71 3003.89 2923.99

1641.99 1590.58 1622.58 1628.72

1788.54 1602.61 1711.43 1707.72

645.01 610.01 630.82 644.99

766.31 658.54 702.79 766.31

818.17 714.62 780.30 731.05

775.10 707.23 744.32 725.66

391.44 379.38 387.01 389.27

404.34 353.84 383.67 384.64

237.11 222.18 230.78 233.75

279.73 239.49 256.65 279.73

299.11 262.06 285.78 268.62

284.93 259.93 273.72 266.94

136.6 131.97 134.98 135.95

138.03 121.39 131.18 131.2

1991.74 1880.02 1939.57

2366.36 2033.24 2175.98

2517.28 2191.35 2400.75

2379.96 2167.36 2283.64

1168.97 1131.18 1155.57

1191.81 1043.2 1130.96

17

Particular 29

30

31

32 33

34

35

36

37

38

39

40

41

42

43

Closing (Month End) P/E Ratio (Month Averages) BSE SENSEX based scrips (30) BSE 100 Index based scrips (100) Price to Book Value (Month Averages) BSE SENSEX based scrips (30) BSE 100 Index based scrips (100) Dividend Yield % (Month Averages) BSE SENSEX based scrips (30) BSE 100 Index based scrips (100) No. of Registered FIIs + FIIs Purchases in Secondary market in BSE (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (USD Bn.) FIIs Sales in Secondary market in BSE (Cr. Rs.) Cumulative from Jan (Cr. Rs) (Bn. Rs.) (USD Bn.) Net FIIs Investments in Secondary market in BSE (Cr. Rs.) Cumulative from Jan (Cr.Rs) (Bn. Rs.) (USD Bn.) FIIs Purchases in Secondary market (Equity) (All-India) + (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs. ) (USD Bn.) FIIs Sales in Secondary market (Equity) (All-India)+ (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (USD Bn.) Net FIIs Investments in Secondary Market (Equity) (All-India)+ (Cr. Rs.) Cumulative from Jan (Cr.Rs.) (Bn. Rs.) (USD Bn.) FIIs Purchases in Secondary market (Debt) (All-India)+ (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs. ) (USD Bn.) FIIs Sales in Secondary market (Debt) (All-India)+ (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (USD Bn.) Net FIIs Investments in Secondary market (Debt) (All-India)+ (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (USD Bn.) Capital raised through Euro Issues No. of Issues * Cumulative from Jan Amount Raised (Cr. Rs.) Cumulative from Jan (Cr. Rs.) (Bn. Rs.) (Source - CMIE) (USD Bn.) Members Individuals Corporate (Unlimited Liability)Clause (4) A of Securities Contracts (Regulation) Rules, 1957 Indian Companies Foreign Institutional Investors Financial Corporations

44

Dollar Re. Exchange Rate (I USD - Rs.)

45

Scrips Listed

Nov-03

Dec-03

Jan-04

Feb-04

Feb-03

Feb-02

1991.74

2366.36

2246.83

2228.41

1161.63

1132.98

16.28 14.27

17.30 15.12

19.39 16.90

18.71 16.19

14.22 12.06

17.28 14.67

2.99 2.69

3.26 2.93

3.65 3.27

3.52 3.13

2.22 1.81

2.53 1.78

2.05 2.52 515

1.94 2.40 517

1.73 2.14 527

1.79 2.25 534

2.2 2.98 500

1.88 2.33 488

2447 2447 24.47 0.54 1695 1695 16.95 0.37

4357 6804 68.04 1.49 2774 4469 44.69 0.98

4216 4216 42.16 0.93 3784 3784 37.84 0.83

3640 1323 7856 2908 78.56 29.08 1.74 0.60926042 2926 1122 6710 2419 67.10 24.19 1.48 0.50680913

2486.76 4369.76 43.6976 0.897466 1729.28 3477.28 34.7728 0.714167

752 752 7.52 0.17

1583 2335 23.35 0.51

432 432 4.32 0.10

714 201 1146 489 11.46 4.89 0.25 0.10245129

757.48 892.48 8.9248 0.183298

9947 9947 99.47 2.19

14027 23974 239.74 5.26

16830 16830 168.30 3.70

14952 3235 31782 8308.4 317.82 83.084 7.02 1.74070815

5291 10214 102.14 2.097761

6647 6647 66.47 1.46

7866 14513 145.13 3.18

13654 13654 136.54 3.00

12555 26209 262.09 5.79

2855 7041.3 70.413 1.4752357

3324 7824.4 78.244 1.606983

3300 3300 33.00 0.73

6161 9461 94.61 2.08

3177 3177 31.77 0.70

2397 379.1 5574 1267.1 55.74 12.671 1.23 0.26547245

1966.3 2389.6 23.896 0.490778

1177 1177 11.77 0.26

890 2066 20.66 0.45

822 822 8.22 0.18

1010 236 1832 476.8 18.32 4.768 0.40 0.09989524

526 1048.3 10.483 0.215301

738 738 7.38 0.16

669 1407 14.07 0.31

129 129 1.29 0.03

734 187 863 330 8.63 3.3 0.19 0.06913891

155 401.7 4.017 0.082502

438 438 4.38 0.10

221 659 6.59 0.14

693 693 6.93 0.15

276 49.5 969 146.8 9.69 1.468 0.21 0.03075634

370.5 646.6 6.466 0.132799

1 1 362.31 362.31 3.62 0.08 712 208 0

1 2 27.31 389.62 3.90 0.09 712 207 0

1 1 61.33 61.33 0.61 0.01 715 207 0

0 0 1 1 0.00 0 61.33 71.65 0.61 0.7165 0.01 0.01501152 720 712 206 212 0

0 0 0 0 0 0 711 215 2

484 20 0

485 20 0

488 20 0

494 20 0

480 20 0

472 22 0

45.5200

45.5880

45.4557

45.2700

47.73

48.69

7353

7368

7305

7185

7355

7296

Conversion Table : 1Billion = 100 Crore l 1 Crore = 10 Million l 1 Million = 10 Lakh l + FII data except those pertaining to BSE sourced from SEBI ***MAHURAT TRADING **SATURDAY TRADING

18

1 Lakh = 100 Thousand

@

&

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