The Bombay Stock Exchange has swung into action to defuse the rumpus over the over-counting of subscriptions to book-built public issues.
The BSE brass discussed the issue with the lead managers and the Securities and Exchange Board of India and put in place a proper system on a war-footing to be able to net off multiple bids while calculating the over-subscription to the on-going ONGC issue which will close on Saturday.
According to sources, some of the lead managers to the issues of six public sector undertakings which hit the market over the last three weeks drew the exchange's attention to the problem a couple of days back.
"We started the work on fine-tuning the software programming early this week and it will be completed on Friday," said a BSE executive.
A BSE executive pointed out that according to the offer for sale guidelines in respect of electronic registration of bids it is clearly stated that "the aggregate demand and price for bids registered on each of the electronic facilities of NSE and BSE will be downloaded on an hourly basis, consolidated and displayed at all bidding centres."
Keeping in view this norm, BSE displays the cumulative information pertaining to the BSE and the National Stock Exchange, where as it not clear whether NSE is also following the same guidelines, he said.
"In view of this, there might be differences in the information of the BSE and NSE in this regard and it is incorrect to conclude that just because the BSE figure is higher; it is inflated or over counted," the executive said.
The executive also pointed out that the possibility of over-counting is not due to errors but because of the multiple options that investors choose which, once again, is usually common to all exchanges.
In other words, the NSE numbers also could be inflated on account of the multiple options.
An NSE spokesman, however, reiterated that the NSE did not have the same system as the BSE and that there had been no overcounting. But asked for details on the system the NSE followed, the NSE spokesman declined to state anything further.
A section of the lead managers said there has been no concerted efforts by the exchanges to prop up the issue by inflating the over-subscription.
"Frankly, it is a procedural lapse and it's not fair to read too much into it. There is no doubt that ONGC issue has been over-subscribed. But it may not be as many times as it appears to be," said a merchant banker.
