Retail investors should get discount in IPOs of state-run cos

Government should give discounts to retail investors when it lists state-owned entities like the Airports Authority of India and helicopter operator Pawan Hans, BSE chief Ashish Chauhan said.
The move will help increase participation of retail investors, providing momentum to the primary market.
"The government should give discount to retail investors whenever it comes out with the IPOs of companies like AAI and Pawan Hans," Chauhan told PTI.
Apart from that, he said government should also give discount to retail investors in the OFS (Offer for Sale) and follow-on public offer (FPO) of state-owned companies.
Most of the companies give a discount of up to 5 per cent on the final offer price to this group of investors.

As IPOs come via the book building process, 35 per cent of the net offer is reserved for qualified institutional buyers (QIBs).

Further, up to 15 per cent is meant for High Net Worth Individuals (HNIs) or corporates who bid for more than Rs 2 lakh. The rest, 50 per cent, is reserved for retail or individual investors who invest up to Rs 2 lakh.
Proposals for listing of AAI and Pawan Hans have been made in the Draft Civil Aviation Policy. Besides, government is planning to divest 10 per cent of its stake in Rashtriya Ispat Nigam Ltd. It has already filed draft papers with the market regulator Sebi for the public offer.

AAI, a 'Miniratna' Public Sector Enterprise, manages 125 airports across the country, including 11 International, 81 domestic and eight Customs Airports. It also manages 25 Civil Enclaves at Defence Airfields.
Pawan Hans Ltd was incorporated in 1985. Government holds 51 per cent stake in it, while 49 per cent is with state-run ONGC.