Pre-Marketing For Concor Gdr Issue Under Way

The pre-marketing exercise for the global depository receipts offering of Container Corporation of India (Concor) began this week, moving from Hong Kong to London and New York. Concor could become the first Indian company listed for disinvestment to hit international markets this year, with the schedules for the Gas Authority of India and Indian Oil Corporation GDRs still uncertain.

According to investment banking sources, the size of the issue will be scaled down from $200 million to between $175 million and $180 million, keeping in mind the Southeast Asian markets crisis and subdued trading interest on the GDR markets.

The core group on disinvestment has appointed J P Morgan as the lead manager to the issue, with the co-lead managers being SBC Warburg, HSBC and DSP-Merrill Lynch.

Sources said the launch date of the Concor GDR would be decided next week after the team returns with details of the initial response to the GDR. Concor is viewed as a fundamentally sound story by bankers, since it has a monopoly over rail-based container transportation.

The Concor scrip, which remains highly illiquid on the markets, yesterday witnessed trading in 50,000 shares at Rs 420 on the Bombay Stock Exchange (BSE). Trading in the scrip took place after several days, said market sources.

Sources said the $600-million IOC GDR has been pegged back while a fresh GAIL GDR would be considered only after the elections are over. The Indian GDR market has witnessed listless trading in recent weeks, with key GDRs ruling at a discount of 70-80 per cent to their issue price.

However, a source at a leading European investment bank said, The stock is illiquid and being in this particular sector, the Concor story may not be easy to sell.