India Inc's shift to online forms hits printers specialising in stock market-related printing

MUMBAI: Ever wondered why you don’t see neat stacks of IPO forms with newspaper sellers these days? Or do you miss the comfort of reading annual reports in a paper format? By and large, it’s the care for trees, but more importantly, corporate parsimony, that has reduced the use of paper in stock markets. From public offerings to shareholder notices and annual reports, the action has moved from ‘recycled 54-GSM prints’ to online forms and e-extensions.

Apart from elbowing aged investors and people without internet access out, this transition to paperless investing has dealt a body blow to printers specialising in stock market-related printing. Low business volumes have forced 16 of the 24 exclusive “stock market printers” to down their shutters.

“Our business has gone down by a good measure... but then, we saw it coming a long time ago. Our financial services printing revenues are down by a good measure,” said Pratul Dalal, executive director at Western Press, one of India’s oldest stock market printers. “It’s difficult for investors as well… You can’t do much online if you don’t have net access at home. Investors residing in smaller towns lose out big time on this count,” Dalal said.

Overall revenues of most printers are down 40-50% over the past few years. The period between 1993 and 2007 saw printers billing generous work orders from companies.

During this period, the IPO application print-run alone ranged between 2 and 4 crore forms per issue, irrespective of the issue size. “Mid-90s were big business days for most printers. You had 3-4 IPOs opening for subscription almost every day. Print orders, running into several crores, were completed overnight then,” said Melwyn Fernandes, founder of SAP Prints.

Apart from IPOs, printers also got work orders for follow-on issue forms, bond subscription forms, shareholder notices, annual account booklets, mutual fund documents and insurance prospectuses. “Financial services printing is specialised in nature. You’ve to adhere to a prescribed format. Not every printer in town can do it,” said Fernandes.

The trend of paperless markets started in 2007, but the real push came after Sebi introduced ASBA (applications supported by blocked amount) for IPOs in 2010. Offer-forsale, e-filing, emailing of annual statements to shareholders further reduced the scope of printers. By 2011, top mutual funds and insurance companies also moved online.

“Paperless investment option is good, but, I think, we transitioned to online a bit too soon. Small retail investors are not able to keep pace with technology,” said Prakash Maheshwari, director, Orient Press. “Companies are required to print fewer number of disclosures as well. For instance, the number of pages in abridged prospectus has come down from 48 to around 16. This may impact the quality of disclosures by companies,” said Maheshwari.

According to printers, the limited reach of forms and red-herring prospectuses (RHPs) could be one of the reasons why public issues are not getting proper response from retail investors. Often, brokers in smaller cities do not even share RHPs with prospective investors.