Regulations
Inventure makes an audacious debut. SEBI and exchanges are sleeping

To the utter amazement of the entire market, the stock of the broking firm was rigged up non-stop to Rs225 from Rs91, once again making a mockery of regulators, raters, and the entire market system

Stockbrokers may be cutting branches and staff but the stock of broking company Inventure made a debut today that had all the hallmarks of a red-hot chip. Last month, amid deep general gloom and a virtually dead IPO (initial public offering) market, Inventure defied sceptics to make an issue at a princely price of Rs117. Market watchers wondered whether the stock would find takers. Not only was the stock subscribed, but today it opened at the issue price. In line with a weak market, the stock fell to Rs91 and it is then that speculators stepped in. The stock jumped from Rs91 and rose non-stop all the way to Rs225, up by a huge 92%, even as the Sensex was down by 250 points. The stock closed slightly below the high of the day. Stunningly, on its debut, Inventure was the highest-traded share in the market today. Trading volume was a hige 5.87 crore shares, 60% more than the second-highest traded stock Lanco Infratech Limited.

 All this would leave a casual market watchers stupefied. Of course, a Moneylife reader would know that the IPO market can be easily manipulated. We had written earlier on how a cabal of Mumbai and Gujarat operators can ensure the full subscription and subsequent price-rigging of any scrip-irrespective of the fundamentals- right the under the nose of the Securities and Exchange Board of India (SEBI) and the two "national" exchanges, the Bombay Stock Exchange and the National Stock Exchange.

Fitch /ICRA had assigned an IPO 'Grade 2' to Inventure's IPO. According to these rating agencies, the company has 'Below Average Fundamentals'. Both rating agencies assign IPO grading on a scale of 5 to 1, with 'Grade 5' indicating 'Strong Fundamentals' and Grade 1 indicating 'Poor Fundamentals.'

The issue has received bids for more than 3.2 crore equity shares against issue size of 70 lakh shares. Non-institutional and retail investors subscribed over 9.49 times and 8.66 times, respectively.

The company intends to spend the issue money for investment in its subsidiary, Inventure Finance Private Limited and long term working capital.

A broking firm coming up with an IPO during a time when other broking firms are cutting jobs due to stiff competition was indeed surprising, to say the least. We now know why.

You may also want to read:

1)    IPOs: Manipulation rules
2)    What ails the Indian IPO market-I?
3)    What ails the Indian IPO Market?-II

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COMMENTS

varun

6 years ago

I think are regulators are colluding with punters

Deepak

6 years ago

If you carefully see the listing notice issued by both the exchanges.The company has not correctly disclosed the name of FII who has subscribed to 3.33% of post issue capital under the public holding >1% category. This was pointed out to both the exchanges but no corrective actions were taken

Vaibhav Dhoka

6 years ago

This sleeping regulator is not new to punters.They know well when to en cash this sleep and they rig the Market.Recently I have been to a bro king house in Pune and senior executive there bet me on action on BROKERS from SEBI on INVESTORS complaint.So cycle of scams are bound to be repeated with our sleeping REGULATOR SEBI and seems to be sleeping Exchanges.

Muthu

6 years ago

What you says make lot of sense. What if someone was naïve enough to buy at Rs.225/-? We will know their fate in the days or weeks to come.

Sanjay

6 years ago

I recall that as per Listing rules, on day of listing, teh stock is given a free reign so the price discovery can take place.

K A PRASANNA

6 years ago

WE HAVE 3 SLEEPING REGULATORS - SLEEPING EXCHANGE BOARD OF INDIA (SEBI), NATIONAL SLEEPING EXCHANGE(NSE) AND BOMBAY SLEEPING EXCHANGE (BSE).

sachin

6 years ago

Maybe there was no manipulation.

Maybe the shorts got squeezed badly.

Trading interest in newly listed stocks is very high. Day traders short such stocks in large quantities and often get trapped because of the small free float.

Rajesh

6 years ago

Exchanges are not sleeping. They are well awake and may be participating in the gains.

IndiaFirst Life enters health insurance segment

The insurer is planning to offer a comprehensive health cover for the entire family

IndiaFirst Life Insurance, a joint venture between two of India’s largest public sector banks—Bank of Baroda and Andhra Bank—along with UK’s leading risk, wealth and investment company Legal & General, today announced its foray into the health insurance market with the launch of its IndiaFirst Money Back Health Insurance Plan.

The announcement was made by Dr P Nandagopal, managing director & CEO, IndiaFirst Life Insurance at a conference here today.

"The unique proposition of this plan is that it offers a comprehensive health cover for the entire family along with the investment flexibility to grow wealth by investing in different funds under a single plan," said Dr Nandagopal.

A substantial part of the premium you pay is actually credited into your policy account and this money is invested in various funds as per your choice to get you optimum returns. This money accumulates in your account and comes back to you at the end of the policy. You can also use this amount any time if you need to cover hospital expenses that are beyond the insurance limits or not payable under this policy.

Modern day stress, eating habits, sedentary lifestyle and family conditions all cause serious damage to our health. Most of us ignore health insurance because we just don’t want to incur premium costs when we get nothing in return except when there is a serious health problem.

User

HDFC Bank opens branch in Leh

The second largest Indian lender plans 50 branches in J&K by the end of 2011

HDFC Bank, the second largest private bank in the country, opened its first branch in Leh (Ladakh) today. The branch was inaugurated by Abdul Rahim Rather, finance minister, Jammu & Kashmir.

At 10,500 feet above sea level, this is one of the highest branches in the world. With its footprint in Leh, HDFC Bank hopes to play a key role in financial inclusion by providing credit and other financial instruments customised for the requirements of the local populace.

Through its initiatives, HDFC Bank has been reaching out to around 600 million unbanked Indians, most of them in rural India.

Navin Puri, country head, branch banking, HDFC Bank, told the media in Mumbai: “As a leading bank of the country, we are committed to take modern banking to remote places where it is required the most and make a difference to the lives of people there. Opening a branch in Leh is the first step towards what we believe will be a long and mutually beneficial partnership.”

Senior executive VP, Ravi Narayanan, branch banking head, HDFC Bank, said: “With this branch in Leh, we have taken modern banking to new heights. Using state-of-the-art technology, products to suit local needs and personalised attention, we are confident of serving the people of this region well. We plan to have more than 50 branches in Jammu & Kashmir by the end of year.”

User

COMMENTS

Thunder

6 years ago

It would be a good idea to try HDFC bank's products and services as the bank is rapidly expanding and it must be offering quality product and quality services.

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