Initial private offer

Sebi’s Wednesday crackdown on 7 companies, their directors and 3 merchant bankers for IPO violations is unprecedented, the biggest in 5 years after the NSDL IPO scam when a group of fictitious investors cornered shares reserved for retail investors. On the face of things, the money raised isn’t that high—just R453 crore out of the total of R15,296 crore raised so far in even this depressed year. The action, however, is very strict given that the firms and their promoters have been banned from entering the markets—even the merchant bankers have been banned from participating in the market for IPOs, rights issues, whatever, “till further instructions”.

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