State Bank of Mysore has gained 21% this year
Experts attribute the rally to a recent announcement by Sebi that eases the process for a listed company's promoters to sell their shares.
By Nihar Gokhale, ET Bureau | Updated:
MUMBAI: Shares of Government-owned bank State Bank of Mysore have gained nearly 21% since the New Year began. The stock, which had touched its 52-week low of Rs 408.10 on December 30, 2011, was at Rs 513 at the end of Thursday’s trading.
The market benchmark Sensex has gained 3% or 582 points since January 2. Experts attribute the rally to a recent announcement by Sebi that eases the process for a listed company’s promoters to sell their shares.
These new rules allow promoters to either auction shares in the market, or sell them to institutions through an institutional placement program (IPP).
These rules are reckoned to help the Government’s disinvestment plan, as it can now sell its promoter stake in listed public sector companies at attractive valuations. The Government owns 92.33% in SBM as on September 2011, as per exchange data.
The new rules will also help the Government comply with regulations that require government companies to pare down promoter stake to a maximum 90% by 2013. In the case of private listed companies, the maximum ownership is 75%.
“SBM shares are rising due to the buzz about a possible stake auction by the Government in scrips where it holds more than 90%,” said Dharmesh Pancholi, senior manager equity advisory at broker Sharekhan.
The Sebi announcement was made on January 3 and has fuelled a rally in PSU stocks such as MMTC, STCI and Hindustan Copper, where the Government’s holding far exceeds the 90% mark.
The market benchmark Sensex has gained 3% or 582 points since January 2. Experts attribute the rally to a recent announcement by Sebi that eases the process for a listed company’s promoters to sell their shares.
These new rules allow promoters to either auction shares in the market, or sell them to institutions through an institutional placement program (IPP).
These rules are reckoned to help the Government’s disinvestment plan, as it can now sell its promoter stake in listed public sector companies at attractive valuations. The Government owns 92.33% in SBM as on September 2011, as per exchange data.
The new rules will also help the Government comply with regulations that require government companies to pare down promoter stake to a maximum 90% by 2013. In the case of private listed companies, the maximum ownership is 75%.
“SBM shares are rising due to the buzz about a possible stake auction by the Government in scrips where it holds more than 90%,” said Dharmesh Pancholi, senior manager equity advisory at broker Sharekhan.
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The Sebi announcement was made on January 3 and has fuelled a rally in PSU stocks such as MMTC, STCI and Hindustan Copper, where the Government’s holding far exceeds the 90% mark.
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