Vanishing Firms Hinder Primary Market

A large number of companies have vanished after raising money from the public causing concern among the regulating authorities of the capital market at a time the primary market is in the doldrums.

As many as 118 companies that had proposed listing at one or more of the four major bourses do not appear in the quotation lists of the relevant stock exchange, according toa study conducted by Prime Data Base.

The study reveals that there are 76 companies in which the last trading took place prior to December 1995 while for another 166 companies there has been no trading after July 1,1996.

Of the 3,667 companies for whom any quote was available, there was no current trading in the first two weeks of 1997 for as many as 1,011 companies, i.e. 28 per cent.

The study further reveals that of 3,872 equity issues, as many as 205 companies (5 per cent) were not traded at all, 2,987 (77 per cent) were quoted below offer price and 69 (2 per cent) were quoted at offer price.

Only 611 companies (16 per cent) were quoted above par.

On the other hand, of the 1,049 equity at premium issues,28 companies (three per cent) were not traded at all, 862 (82 per cent) were quoted below offer price.

Only 151 companies(14 per cent) were traded above the offer price.