Bankers advise clients to open demat account early

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New Delhi, Jan 9 (UNI) With a string of IPOs about to hit the market in the next three months, bankers across the country have resorted to informal scheduling and advisories with investors queing up to open demat accounts.

Most initial public offers are in the demat mode, which means that prospective investors who do not have a demat account will not be able to participate in the opportunity.

While bankers were tightlipped about the unofficial advisories, they have a word of genuine advice to prospective customers: ''To start early, and have all the required documentation in place to avoid disappointment.'' A senior Mumbai-based banker explained, ''it takes about five working days to obtain the demat account number, so it is always advisable to start as early as possible.'' Reacting to the upcoming IPOs, market sources said, undue delays have been reported in Lucknow, Kanpur, Bhopal, Ludhiana and Chandigarh, among other places.

Irate customers have been reported to be threatening to move their savings accounts elsewhere if their banks did not provide them immediate access to a demat account.

Some banks in northern India were reported to be advising their customers to come back 'later', citing lack of manpower as the sole reason.

The reported 'advisory' ranged from two days to a week.

Bankers have reported long queues of people intending to open demat accounts ahead of a season of very attractive IPOs. ''The demand is simply phenomenal, every one seems to want a piece of the action,'' a banker in Bhopal said.

With the equity markets in top gear, and the benchmark BSE Sensex close to 21,000, the equity culture is reaching out to smaller towns.

Initial public offers of close to Rs 15,000 crore are expected in January, and a similar amount is expected to hit the market in February.

In a recent report, Delhi-based Prime Database estimated the amount of mobilisation at Rs 75,000 crore in 2008.

Prime Database said it expects 150-175 IPOs in the current year.

The total market mobilisation will include Rs 60,000 crore from IPOs and the balance from follow-on issues.

Leading the list of attractive market offers this year is Reliance Power, which has proposed an issue of 260 million shares in a price band of Rs 405-450 per share. The issue opens on January 15 and closes on January 18.

Other top names in the pipeline include Futures Group (with an IPO opening on January 11) and the State Bank of India which is expected to come out with a rights issue later in the year.

There are several power IPOs in the pipeline, reflecting the aggressive growth in the power sector.

UNI MP/RT SR RN1937

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