Street signs: Hindustan Aeronautics IPO, defence stocks, and more

Big size, small demand
 
The recently-concluded initial public offering (IPO) of state-owned Hindustan Aeronautics (HAL) has created a unique record - its Rs 42-billion offering saw only 17 applications from institutional investors, which is the least number of applicants for an IPO of over Rs 10 billion. Not surprising then that the issue needed the support of state-owned Life Insurance Corporation. “This is a new low in terms of institutional demand. Such a large offering should have at least seen 50 applications from institutional investors. The disinvestment department could have handled the issue better,” said a banker.
 
Pavan Burugula
 
Investors log out of defence stocks

Shares of several defence sector-focused companies, including Astra Microwave, Reliance Naval and BEML are hovering around one-year lows. Market players say investor sentiment towards the sector has turned negative on fears of government lowering defence spends. “The capital spending in the sector has remained stagnant. Not many new projects are being announced. Also, large part of the defence spending is going to overseas suppliers. There are worries that increasing fiscal deficit could force the government to further slash spending. All these factors are weighing on stock erformance,” said an analyst.
 
Samie Modak
 
Fund managers need to be on guard
 
Mutual fund managers, who are actively buying stocks of various companies, have to be extra cautious while dealing with brokers. Recently, a fund manager received a marriage invitation from a broker, along with a box of sweets. The broker also gave a similar box to four other fund managers in the same fund house. The fund manager, along with his colleagues, kept the sweets in the middle of the room for everyone to share. One of the office assistants opened them and found a 10 gram gold coin in each box. “Luckily, all of us had kept our boxes in the middle of the office. Otherwise, there would have been an enquiry which would have been ugly,” says the fund manager.
 
Joydeep Ghosh