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SHCIL lent Rs 980-million stocks in 6 months

Rakesh P Sharma

The Stock Holding Corporation of India (SHCIL), one of the largest depository participants, has lent securities valued at Rs 980 million in 990 transactions between October 1, 2000 and March 1, 2001.

Of these, 974 transactions were valued at less than Rs 10 million each. The value of the remaining 16 deals was Rs 300 million. SHCIL has lend stocks for an average period of 12 days.

B V Goud, managing director and CEO, SHCIL, said, of the total value of securities lent during the six months, infotech stocks accounted for Rs 270 million (27 per cent) and old economy stocks accounted for the balance.

SHCIL has lent shares valued at Rs 119.1 million to some key operators who were allegedly involved in bear hammering in the recent market crisis. Lending of infotech stocks accounted for 7.86 per cent of this amount.

As on March 15, the day when the Securities and Exchange Board of India (Sebi) imposed a bar on securities lending schemes, SHCIL had securities valued at Rs 60 million outstanding.

SHCIL had started its securities lending scheme in the third quarter of calendar year 2000. But the volumes remained low till September 2000 and most domestic institutions like the Life Insurance Corporation and subsidiaries and the General Insurance Company and its subsidiaries could not provide the securities for lending.

Between May-September 2000, the securities lent by SHCIL stood at a mere Rs 82.5 million.

However, lending of shares improved after the Unit Trust of India started participation.

Currently, SHCIL 's clients include all domestic financial institutions and domestic mutual funds. It does not have any foreign institutional investors' account.

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