SKINDIA INDIAN GDR MONITOR
Volume VI No 44	Oct 29-Nov 04, 1999	05-Nov-99

Markets Turnaround - Skindia GDR Index up 4.53% This week after a vertical fall of 2.86% in the Skindia GDR Index and 7.05% in BSE Sensex in the first two days, both the GDR as well as the domestic markets made a dramatic turnaround on the back of sustained buying by FIs and FIIs in the domestic bourse on Nov.02. The recovery in the domestic markets was followed by a spurt in the GDR/ADR markets and the Skindia GDR Index regained 4.97% while the BSE Sensex gained 5.17% on that day. For the rest of the week while the rally continued in the GDR/ADR markets the domestic markets seesawed. As per the figures released by SEBI for November, FIIs have been net buyers to the tune of US $98.6 mil upto Nov.04. In comparison FIIs made net sales of $175.9 mil in October. Interestingly even the Foreign Direct Investment inflows of $3.28 for Jan -Sep 99 period have already crossed the total inflow of $3.2 bn for 98. Over the week the Skindia GDR Index gained 38.33 points while the BSE sensex lost 108.65 points. During the week the average premiums of the 66 DRs rose up to 13.71% on Nov 04 from 7.99% on Oct 28 and the spreads between the 41 most actively traded DRs widened to 8.03% on Nov 04 from 7.51% on Oct 28. Over the week the 66 DRs on an average lost 0.72% and the underlying shares 5.81%. In DRs the the top gainer was the telecom sector appreciating 3.53% followed by finance and IT sectors gaining 1.91% and 1.24% respectively. The top three losers were steel sector depreciating 9.49%, power sector 5.02% and cable sector 4.35%. On the other hand in the underlying shares the only gainer was the telecom sector gaining 1.80%. The losers were steel, auto and textile sectors falling 12.35%,9.24% and 7.40% respectively. Gail GDR Issue - Oversubscribed 2.3 times : The Gas Authority of India closed its first 22.5mil GDR offer at a price of $9.67 each on the London Stock Exchange on Nov 04 at a discount of 11.3% over its underlying share. Each Gail GDR represents 6 underlying shares and the Government is expected to mop up around Rs.945 cr through dilution of 16% equity. After this issue Government's stake in the company will come down to 67.3% from 83.3% however on the assumption that the option given to underwriters to increase the size of the issue by 3.3m GDRs is not exercised. Enron is understood to have picked up a 5% stake through this GDR offer. ONGC & IOC are the other equity holders in the company with 5% equity each . FIs and FIIs hold the balance 7%. Earlier in February, 30 mil GAIL shares were offloaded in the domestic market. GAIL has the largest infrastructure for gas distribution in the country. For the year ended March 31 it reported an operative revenue of Rs.6760 cr and net profit of Rs.1006 cr.

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.