Paperless trading deadline nears
Vivek Law
MUMBAI, January 3: The boom in demat trading expected to be triggered off from January 15 might well be a dream. Institutions (read FIIs) have more or less shown the thumb to the Securities & Exchange Board of India (SEBI) diktat and appear to be prepared to go into the January 15 deadline with only a small part of their portfolio dematerialised.The shares which have been received for dematerialisation by January 1 are the ones which would be dematerialised by January 15 as it takes 15 days for a share to be dematerialised under normal circumstances. Registrars have given an undertaking that they will dematerialise within 15 days all the shares received by them till January 1. But they are not too worried about meeting this commitment. Reason: there aren't many shares to be dematerialised. The figures available as on date are indicative of the sense of disappointment that has enveloped the market, especially registrars who were hoping to make a killing by dematerialising chunks of shares. In the case
of State Bank of India, the number of shares that will be added to the demat number post-January 1, would be 70 lakh shares. Add to this, 1.57 crore shares that have been dematerialised as of now, and you have a total of 2.27 crore shares as against the total share base of 52.60 crore shares. FIIs themselves have close to 20 per cent holding in SBI but the number of shares dematerialised show that the response has been far from encouraging. The result, a godown leased out by the registrar to house the expected flood of shares, is lying vacant for want of huge number of shares. "We had already paid an advance for leasing the premises. The response is far below expectations," said a registrar source. The case is not too different with the other market favourite, Tisco. The company which has an equity base of 36.70 crore shares has so far seen 5.42 crore of its shares dematerialised. More importantly, only an additional 7 lakh shares still remain pending with the registrar for demat. "The FII response has
been extremely cold. The response has been reasonably okay from the domestic institutions more so the Unit Trust of India, but apart from that it is no where near expectations," said a source. The situation is quite the same for IPCL, where 1.33 crore shares have been dematerialised out of a total of 24.90 crore shares. However, only 3.50 lakh shares are expected to be added to this number by January 15 deadline. "The response is the same for L&T as well. The percentage of demat in Reliance too has remained stagnant for the past month or so. The same is true for Bank of India and ICICI where the growth in demat has remained slow," said a source. "The concern of the market so far has been that registrars would not be able to handle the bulk of demat requests that would pour in. However, while registrars have been able to meet the deadline it is the institutions which have not brought in the shares," said a depository source.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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