Taking decisions based on transparent norms will be helpful for investors: Deven Choksey, KR Choksey Securities

In a chat with ET Now, Deven Choksey, MD, KR Choksey Securities, shares his views on the latest Sebi reforms. Excerpts:

ET Now: What better timing than right now when the markets are already flirting with historic highs?

Deven Choksey: Some of these clarities were required particularly to the offering of the new papers. The intent is very obvious and clear that they want to bring the investors back into the market and that is where these norms would help. Also, the guidelines are made very transparent. So obviously, taking decisions based on these guidelines could be even more helpful. At the same time, for the government sector PSUs, where the intents are also clear to bring down the fiscal defecit at country level, they have spelt out the roadmap to bring down the holding. Putting all these three areas together, I believe, is going to help the markets gain more confidence.

ET Now: You have neatly summarised the good part, which is retail participation will increase, government fiscal problem would be taken care of. But what is in store for the existing shareholders of Coal India, SAIL, MMTC, RCF, NMDC? They will get a sense that fresh paper will hit the market and maybe supply could have an impact on stock prices.

Deven Choksey: It is a good point and if they do not make the same mistake which they did the last time wherein the offer for sale would come in a kind of auction route in three or four days time. It was a mistake that they did in the last government. According to me, the offer for sale route should be probably following the similar kind of contours as you have it in buyback, which means that you run the offer for sale for a relatively longer period of time. Do not close this issue in three and four days time and do not bring down the price. On the contrary, the mechanism should be that if one is going for offer for sale, they will sell it to the highest bidder and that too for a longer period of time, say, for example three months or six months kind of a window should be kept open. If that is the case, then according to me even the existing shareholders will benefit out of it.