SKINDIA INDIAN GDR MONITOR
Volume VI No 37	Sep 10-Sep 16, 1999	17-Sep-99

Exit Polls Disappoint Markets - Skindia GDR falls 63 points Concerns about the depleting numbers for BJP and allies in the exit polls coupled with a significant drop in fund buying, particularly from foreign funds in the domestic bourses kept the markets nervous most of this week. The volumes shrunk as the players were reluctant to expand their commitment in the absence of clear signals on the political front. As a result the Skindia GDR Index lost a huge 6.73% & the BSE sensex 4.06%.In the week the average premiums of the 63 DRs fell down to 8.15% on Sep 16 from 9.42% on Sep 10 whereas the average spreads of the 40 most actively traded DRs narrowed to 7.32% on Sep 16 from 7.77% on Sep 10. Over the week the 63 DRs on an average lost 3.75% and the underlying shares 3.62%. In DRs the top loser was the hotel sector depreciating 8.58% followed by auto and telecom sectors losing 5.58% and 4.70% respectively. The only gainer was the steel sector appreciating 7.27%.On the other hand in the underlying shares the top loser was hotel sector depreciating 9.28% followed by power and cable sectors losing 6.03% and 4.35% respectively. The two gainers were the telecom and steel sectors rising 7.86% and 6.24% respectively. ICICI LTD: In the Q1 of the financial year 1999 ICICI GDR recorded a gain of 66.80% and its share 62.61% both outperforming the Skindia GDR Index and the BSE sensex. Whereas in Q2 although the ICICI GDR lost 8.57% its underlying shares gained 5.33%. The GDR in Q1 traded on an average premium of 19.60% while for the period July to Sept the premium came marginally down to 19.30%. ICICI ltd has already completed the first two stages of its triangular $500m equity offering. In the first stage ICICI raised $115m through a preferential offer to the three Financial Institutions. As a result UTI's stake in ICICI increased from 12.7% to 14.7%, GIC's from 12.2% to 14.2% & LIC's from 7.4% to 8.7% . In the second stage ICICI ltd raised another $ 70m.through a public issue. Incidentally the issue was oversubscribed by 82% & ICICI might retain up to 10% of the oversubscribed amount. Now in the third stage ICICI plans to raise $315m , through an American Depository Receipt issue. Following the ADR issue, since a major chunk of its shareholding would be in the hands of global players ICICI will always be under pressure to perform as per the international standards. After the ADR issue, ICICI's adequacy ratio is slated to increase to 16.1%. ICICI is planning to shift its focus to new thrust areas by sanctioning up to 80% of its allocations to infrastructure and the other 20% to the service sector in the next three years

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.