Many funds are sitting on illiquid stocks

Careful stock selection, rather than right entry into a stock and exit is the most important aspect of investing. But fund managers have to keep in mind another aspect: liquidity. That is why they try to avoid small companies. In fact, large foreign funds may avoid even a country because they cannot buy and sell a stock in large enough volumes for...

Reverse book building needs a quick fix

A few years ago, the Securities and Exchange Board of India (SEBI) set up a committee which recommended the ‘reverse book building’ (RBB) procedure to give minority shareholders a voice in deciding the price at which a company could delist its shares from the stock exchange. RBB ensured a transparent process of ‘price discovery’ – one at which the...