Killing Fields

The CEA was referringto the feverish pace atwhich companies were debutingon the market; sixty-nine companies had raised nearly Rs.79,000 crore through IPOs during April-October 2025. Almost all companies had offered their shares to the public at hundreds oftimes oftheir facevalue, even inthe case of consistently loss-making companies, who showedsome profit inthe IPO year to satisfy regulatory requirements. Also, most ofthe shares on offer in IPOs belonged to promoters, who had acquired them attriflingprices. After offloadingtheir sharesto unsuspectinginvestors, many of the promoters coolly walked away~recoveringtheir investments many times over

- 

The recently concluded Confederation of Indian Industries (CII) Financing Summit 2025, attended inter-alia, by V Anantha Nageswaran, Chief Economic Advisor (CEA) and SEBI chief Tuhin Kanta Pandey, made headlines because of some plain-speaking by the CEA, who observed: "India's equity markets have grown impressively, but Initial Public Offerings (IPOs) have increasingly become exit vehicles for early investors, rather than mechanisms for raising long-term capital.

The CEA was referring to the feverish pace at which companies were debuting on the market; sixty-nine companies had raised nearly Rs.79,000 crore through IPOs, during April-October 2025. Almost all companies had offered their shares to the public at hundreds of times of their face value, even in the case of consistently loss-making companies, who showed some profit in the IPO year to satisfy regulatory requirements. Also, most of the shares on offer in IPOs belonged to promoters, who had acquired them at trifling prices. After offloading their shares to unsuspecting investors, many of the promoters coolly walked away ~ recovering their investments many times over.

This con is on par with the bank loan scam of the last decade, where promoters would shamelessly overvalue their assets, obtain loans from banks, against such overvalued assets, bolstered by fairy-tale business plans ~ and then hot foot with the moolah. Banks would perennially evergreen these loans, leaving behind duped shareholders ~ mostly, the Government, as almost all mulcted banks were Government-owned. Eventually, the bad loans were written off ~

costing the Indian taxpaying public a tidy sum, exceeding Rs 12 lakh crore.