The year 2010 will go down in the history of Indian markets as the one that witnessed the revival of the government divestment process with the Coal India IPO emerging to be the jewel in the crown.
It was also the year when the India stood out as one of the favourite emerging markets among foreign investors, despite the series of scams, rising inflation and interest rate, and a burgeoning fiscal deficit, the last one coming despite inflows from auctioning of 3G spectrum that surpassed all expectations.
After 2009, when the BSE sensex and investors' wealth nearly doubled, expectations were raised as Dalal Street entered 2010. So if one compares the 81% return in sensex in 2009, the 17.4% rise in the benchmark index during the year looks like just a trickle. But even this modest rise was enough to beat the 14.3% rise in the Shanghai index, 5.3% in Hang Seng and the 3% fall in Nikkei. However, among its other Asian peers Indonesia and South Korea fared much better.
One of the high points of the year was the IPO for Coal India and the subsequent listing. The IPO, that closed on October 22, was subscribed about 15 times and generated a demand worth Rs 2.36 lakh crore, making it the largest and the most successful offer ever. And on listing on the eve of Diwali, the stock gave a 47% return to retail investors and 40% to others, as it closed at Rs 342.
The year also witnessed sensex rising to beyond the 21,000 mark on Diwali Day, at 21,109 and closed at a 33-month high at 21,005.
On the FII front, the $29.4 billion of net inflow also made it the best year ever in terms of foreign fund flows but the Rs 27,500 crore net mutual fund outflow also gave it the tag of the worst year in terms of MF outflows.