Mumbai: The Rs 18,300 crore mega public issue (IPO) of ‘Paytm’, which was brought to the retail investors by showing a lot of confusion, has started to appear to be the biggest scam of the stock market. One 97 Communications Ltd., the operator of the digital payment platform ‘Paytm’, has not even been listed in the stock markets for just two months that its shares have started licking the dust. Against the IPO price of Rs 2150, now its share price has come down to just Rs 960. That means a huge loss of 55%. Investors who had invested in Paytm shares, their investment value has halved in just two months. Its condition also seems to be like the Rs 11,563 crore big issue of Reliance Power brought in January 2008 14 years ago.
When the Sensex hit the 21,000 mark for the first time in January 2008, the ‘Commission Agents’ of Reliance Power’s IPO at a very expensive price of Rs 450, despite making nominal profits, did similar luscious marketing. He had lured gullible retail investors into his trap. Over a period of time, its price was seen licking the dust and lakhs of investors lost Rs 11,000 crore! Reliance Power’s IPO turned out to be a big scam, but no investigation, no action. The regulator ‘SEBI’ remained silent, as a result of which the game of ‘loot’ continues unabated in the IPO market. In which Promoters, Merchant Bankers, Fund Managers and other middlemen are crossing all limits of greed and looting the retail investors of the country.
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‘enavabharat’ had alerted
When Paytm’s most expensive IPO came at an arbitrary price on November 8, 2021, then ‘enavabharat’ in its article “The race to rob the IPO market, these expensive stocks will be seen licking dust in the recession” by alerting investors to this. Though advised to stay away from overpriced IPOs, many investors got tempted by its greedy promoters and false promises of ‘commission agents’. As a result, investors in Paytm’s Rs 18,300 crore IPO have suffered huge losses of more than Rs 9,000 crore so far.
Chinese company took 5,000 crores
It is surprising that Paytm, which flourished due to the investment of Chinese companies, is continuously in huge losses and in the financial year 2021, it had a huge loss of Rs 1701 crore. Paytm has also incurred a loss of Rs 461 crore in the quarter of September 2021. Nevertheless, ‘SEBI’ allowed Paytm to sell the shares with a face value of Re 1 at a record high price of Rs 2,150. If calculated from the face value of Rs 10, then the IPO price of ‘Paytm’ becomes Rs 21,500 per share. Out of the Rs 18,300 crore IPO, Rs 5,000 crore was taken away from Indian investors by the Chinese company Ant Group alone.
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Why did the funds put 8,235 crores at stake?
Apart from LIC, many Indian and foreign funds (anchor investors) had invested a huge amount of Rs 8,235 crore in Paytm’s IPO. But the value of his investment has come down to only Rs 4,000 crore in two months. That is, Rs 4,000 crore has been sunk. The biggest question is why did these funds invest such a huge risk in the most expensive stock of Paytm with huge losses? Possibly in lieu of this, a huge amount has been given to the fund managers in the form of ‘commission’. Then he put the money of retail investors at stake. Seeing these big institutional investors, lakhs of small investors also invested in Paytm’s IPO.
In which ‘greed’ did these 4 mutual funds invest?
Anchor Investors also include 4 large mutual funds. Who bought 48.85 lakh shares by investing Rs 1050 crore in Paytm IPO. Among them, Aditya Birla Mutual Fund invested the maximum amount of Rs 515 crore through its 9 schemes. After this Mirae Asset Mutual Fund put at stake Rs 375 crore of its 4 schemes. HDFC Mutual Fund also invested 150 crores of 4 schemes in it. While BNP Paribas Mutual Fund invested Rs 10 crore. Now the value of their investment has halved. This loss is directly to the investors of these mutual funds. The big question is, in what ‘greed’ did these funds invest in Paytm’s IPO despite the huge risk? This is the subject of investigation.
Finance minister needs to intervene: Kejriwal
Arun Kejriwal, chairman of Kejriwal Research and Investment Services, says that in view of such indiscriminate ‘looting’, it has become imperative in the public interest that Union Finance Minister Nirmala Sitharaman should immediately intervene in this matter and 30 Years ago, the effective regulatory body called Controller of Capital Issues (CCI) will have to be formed back in the same way. Just as the central government brings IPOs of its companies at reasonable prices in the interest of common investors, similarly IPOs of private companies should also be allowed to be brought at fair prices.
Government should punish by fixing accountability: Sharma
Shyam Prakash Sharma, president of ‘RITES’ organization, says that it is a matter of great regret and misfortune that no definite rules and criteria have been made for pricing in IPO in India. When we asked SEBI in this regard, focusing its attention on the looting of investors, it gave a evasive answer and shied away from its responsibility by referring to Schedule XIII of Part VII of SEBI Regulations 2018. . It is clear from this that the officers of ‘SEBI’ who have been entrusted with the responsibility of protecting the interests of investors, do not have enough ability to understand this scam of ‘loot’ or maybe this ‘loot’ They have some vested interests attached to it. Both the situations are worrying.
Get IPO scams investigated
Sharma said that the Ministry of Finance, Government of India should investigate the IPO scams and take punitive action by fixing the accountability of ‘Sebi’ erring officials, merchant backers, fund managers and institutional investors and ensure that in future Investors will not be duped through IPO. Paytm IPO’s merchant bankers Morgan Stanley India, Goldman Sachs India, Axis Capital, ICICI Securities, Morgan India (JP Morgan India), Citigroup Global Markets The loss to the investors should be compensated by taking immediate action and recovery against Citigroup Global Capital and HDFC Bank.
Bad condition of other expensive IPOs too
Apart from Paytm, shares of other expensive IPOs such as Zomato, Cartrade, Nykaa, PB Fintech, Sapphire Foods also fell to their new lows. are engaged. The share of PB Fintech, operator of Policybazaar portal, is down to Rs 865, while its IPO price was Rs 980. Similarly, the share IPO price of Cartrade has declined by more than 50% from Rs 1618 to Rs 813 now.