Abstract

This case discusses the various irregularities indulged in by the syndicate and sub syndicate members involved in the Vaswani IPO to inflate demand and mislead Retail Individual Investors (RIIs) and Non-Institutional Investors (NIIs) into participating in the issue. On May 13, 2011, market regulator, the Securities and Exchange Board of India (Sebi), took the necessary action against the Book Running Lead Manager (BRLM) and promoters of the company. This was the first time that SEBI had stopped the listing of an IPO after the allotment of shares to the investors.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand Sebi’s Rules and Regulations on IPOs.
• Understand the major flaws and loopholes in investing in IPOs in India
• Understand the role of SEBI in investor protection
• This case is meant for MBA/MS students as a part of the Financial Management and Investment Banking & Financial Services.

Keywords

Scam, IPO, Bonus, Sebi, SAT, Regulator, Book Running Lead Manager, BRLM, Investigation, syndicate, inflate, listing, withhold, procedure, Stock Market Scam, Demand Rigging, Business Ethics, Corporate Governance, Transparency, Cheating Investors, Primary Market