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PNB Gilts finds business from individuals growing

Our Bureau

CHENNAI, June 29

PNB Gilts Ltd is bracing itself for doing more business with individuals who want to invest in Government gilts. The company has entered into an arrangement with National Securities Depository Ltd (NSDL), under which an individual who has a demat account with the NSDL can buy and sell Government securities. The Managing Director, PNB Gilts, Mr. Arun Kaul, said on Thursday the company would enter into similar arrangements with other agencies to provide easy trading facilities to individuals.

Currently, any Indian national can buy a Government security, but the minimum investment should be Rs. 10,000. Physical delivery of debt instruments had been proving to be cumbersome, as the certificates had to be sent to the RBI for registration. Howeve r, demat accounts have made things easier and more individuals are coming forward to put their moneys in Government securities.

PNB Gilts Ltd is a subsidiary of Punjab National Bank. After receiving RBI approval, the company now plans to undertake transactions in derivatives, swaps and forward rate agreements also.

PNB Gilts' IPO is scheduled to open on July 11. The company proposes to sell 3.5 crore equity shares at a premium of Rs. 20, to raise Rs. 105 crores. The issue is to enhance its net owned funds, so that it can bid for more deals.

Mr. Kaul said the market for Government securities was growing by leaps and bounds. In 1996, PNB Gilts, along with five other companies, were the first organisations to get licences to function as primary dealers. Today, the number of players has grown t o nearly 25, but the market has also grown enough to accommodate all of them, he said, adding that PNB Gilts ranked number one among the primary dealers.

PNB Gilts is the only primary dealer in the country to have got a ISO 9002 certificate, Mr. Kaul said.