SKINDIA INDIAN GDR MONITOR
Volume VI No 06	Feb 05-Feb 11, 1999	12-Feb-99

The pre-budget rally begins Both the indices the Skindia GDR Index and the BSE Sensex, which continued their fall from the previous week took a U-turn in the later half of the week on expectations of the beginning of a pre-budget rally. The budget for the Financial Year 1999 - 2000 will be presented by the finance minister Mr. Yashwant Sinha on Feb 27, 1999. During the week the Skindia GDR Index fell below 600 mark for the first time in the year 1999. The Skindia GDR Index closed the week with a loss of 7.35 points and the BSE Sensex with a gain of 76.98 points. As the GDRs closed on the negative territory while the share on the positive the average premiums of the 60 GDRs inched downwards to 9.15% on Feb 11 from 9.52% on Feb 04 and the average spreads of the 37 most actively traded GDRs widened to 9.39% on Feb 11 from 8.65% on Feb 04. During the week, the 60 GDRs on an average lost 1.21%, whereas the shares gained 2.38%. In the industry wise break up the GDRs from auto sector were the highest gainers appreciating 6.06% followed by pharma and fertiliser with 5.18% and 4.32% respectively. The top losers were telecom shedding 4.29% followed by textiles and aluminium sector losing 2.87% and 1.98% respectively. In shares too the top gainers were the auto industry gaining 9.20% followed by cables and pharma with 7.33% and 6.66%. The top losers were telecom, hotels and aluminium depreciating 4.09%, 3.63%, 2.65% respectively. A GDR issue by an Indian Company after more than a year After more than a year and two months an Indian company came out with a GDR issue. The issue was made by the telecom giant VSNL at $9.25 on Feb 11, 1999 which is 12.24% above the closing price of its share of Rs 700 on BSE. The issue was for 17.4 million GDRs with a green shoe option of 2.6 million GDRs. The government of India has been able to raise $161 million from this issue and if the option is exercised the total amount raised will touch $185 million. The issue was oversubscribed by 2.18 times attracting a sum of $341 million. As the issue date came closer the VSNL stock in the domestic markets started to attract attention from the market players. The average turnover of VSNL shares for the third quarter was Rs 1.62 cr, the average turnover in this year has shot up to Rs 5.09 cr. On the day of issue the VSNL GDR moved up by 7.79% to $10.38. As the initial response to the GDR issue was not very good the scrip fell by 15.31% to $10.38 during the year 1999 and its share has come down by 4.76% to Rs 700.

DISCLAIMER : Factual material is obtained from sources believed to be reliable and SkindiaFinance is not responsible for any errors and omissions contained herein. Any recommendation contained in this report may not be suitable for all issuers.