Bse Mulls Buyback Of Newly Listed Stocks

The bourse will rationalise the B1 and B2 group stocks wherein a category of stocks will be created on the basis of the frequency of the trades and performance of these companies. According to Damani, a separate indicative category of shares will be created which will be called `buyer beware stocks.

He said: The buy-back arrangement plan is still in a conceptual stage as there is a need to get adequate clearances from the government and the concerned regulatory authorities. It is only then such a safety net can be provided to the retail investor. BSE will also be selective in allowing companies listing on it.

We will qualitatively vet the offer documents of companies seeking listing on the bourse. If we are not satisfied with the companys replies and performance, as a stock exchange, we will reject listing. Sebi has decided to make companies disclose details on risks involved. However, BSE will go one step further by stopping such fly-by-night operators to raise capital from the market, he said.

Damani also stated that those stocks which are illiquid and listed on the exchange will be phased out as per the five shares per Rs one lakh category criteria laid down by Sebi.

In his talk Damani criticised Sebi for not conducting the board meeting when clearance of the BOLT expansion plan was on top of the agenda. He also stated that the intervention of the central government in the capital market is uncalled for when one is talking about liberalisation.

He said: If expansion of BOLT is allowed, at least 1000 stocks which are hardly traded on the bourse will be activated. The market has already witnessed an erosion of Rs 1,43,000 crore in which besides retail investors, mutual funds have lost a lot of money.

Damani feels that there is a long way to go for the countrys capital market to revive as the government needs to take up some confidence building measures.