It’s the timing of the government’s decision, to make it mandatory for all listed companies to have a minimum float of 25%, that’s surprising. It’s hard to understand why the government wants to flood the market with paper right now---$13 billion has to be raised in the next twelve months since companies have to increase their float by 5% every year while the total value of paper to be offloaded is about $32 billion. It’s as though there aren’t enough companies waiting to mop up money to fund their capacity expansion plans.
India needs about $50-60 billion of capital annually to fund its growth but instead of making sure that money is picked up by those who need it, the government’s forcing companies who may not want cash to raise it immediately.
India needs about $50-60 billion of capital annually to fund its growth but instead of making sure that money is picked up by those who need it, the government’s forcing companies who may not want cash to raise it immediately.
Post a Comment