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Govt to pay commission to brokers for selling PSU IPOs

Govt to pay commission to brokers for selling PSU IPOs
PTI
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First Published: Wed, Apr 28 2010. 04 46 PM IST
Updated: Wed, Apr 28 2010. 04 46 PM IST
New Delhi: The government on Wednesday said it will pay a commission to brokers selling public offers of state-run firms, in an attempt to woo retail investors for its ambitious disinvestment programme.
The government, which till now paid little of no commission to brokers, has fixed a commission of 0.35% for selling shares to retail investors and 0.15% for roping in HNI clients.
“After consulting with brokers we have done the changes and the commission for brokers have been fixed at 0.35% for retail investors and 0.15% for HNIs,” disinvestments secretary Sumit Bose told reporters.
The changes are done to attract more retail demand in the public offers, he said.
Earlier, the commission paid was included in the fees of the book running lead managers (BRLMs). “Now the government will reimburse this commission to the BRLMs for the brokers,” he added.
The new provisions will be applicable in all the forthcoming public issue starting with state-run power producer Satluj Jal Vidyut Nigam. SJVNL’s public issue opens on Thursday.
“The new norm will be applicable to all subsequent issue, starting with SJVNL,” Bose said.
The government is selling 10% of its equity shares in SJVNL through an initial public offering (IPO). The price band has been fixed at Rs23-26 per share.
The government has set a target of Rs40,000 crore through disinvestments in the current fiscal.
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First Published: Wed, Apr 28 2010. 04 46 PM IST
More Topics: Disinvestment | PSU | IPO | Shares | Brokers |