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.

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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 tax-paying public a tidy sum, exceeding Rs 12 lakh crore.

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All the while, in parliamentary debates, the Finance Minister insisted that writing off a bad loan was not equal to waiving it off, but there is no record of any recovery, in any of the written-off loans. Here and there, some bank managers were jailed for their malfeasance, but few of the borrowers, or top brass of the duped banks, got their just desserts. The share market regulator, SEBI, is mandated to ‘protect the interests of investors in securities and to promote the development of, and to regulate the........

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