Time was when wannabes had to grovel before the Controller of Capital Issues (CCI) for a modicum of premium while going public. In 1978, Colgate-Palmolive (India) (CPIL) was listed in India via an "Offer for Sale" to reduce foreign holding, with shares priced at their face value of Rs 10 plus a Rs 15 premium, making the listing price Rs 25 per share. Colgate had been the darling of the share market with its generous dividend and bonus issues. Despite shedding the toothpaste-means-Colgate status, it is still quoted at around Rs 2900. In hindsight, the CCI was unduly niggardly and conservative in 1978, especially in the current milieu of free pricing even by loss-making companies. Colgate had envious reserves and surplus as well as market share in 1978.

Fast forward to 2025. Despite retail investors biting the dust with listing gains proving elusive and a mirage, the market regulator hasn’t tightened the regulations to prevent loss-making companies, who have piled up huge losses, from tapping the market to the detriment of the retail investors. They get away with hefty premiums, often in the range of 20,000% of the face value, by flaunting the merchant banker’s assessment that the future for the company is very bright. Touche! The truth is the entire system is gamed to facilitate promoter exit at mind-boggling valuation because the Offer for Sale (OFS) rides piggyback on the IPO. This is a flagrant conflict of interest situation—get an exaggerated and undeserved valuation so that the promoters and venture capitalists can dump their........

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