India growth story is being deflated, open looting in IPO market, SEBI and government silent

Indian Stock Market: There is a strange situation in the Indian stock market at present. Even though both the main benchmarks Sensex and Nifty are near their all-time highs, the market dynamics are very bad. This can be easily estimated from the fact that BSE Smallcap, which reflects the broad trend of the market, which includes shares of 1223 companies, has suffered a 13% loss so far this year and the shares of more than 80% of the companies listed in the market are in recession.

Rupee is falling every day. This is the situation when the Indian economy is running at a fast pace. For the first time in history, such a strange situation is being seen when all the factors of the Indian economy are positive. For example, high GDP growth of 8%, stable government, controlled inflation rate, cut in interest rates, bumper monsoon, huge cut in income tax and GST rates, crude oil prices falling to low levels and increasing earnings of corporate India.

Investing in mutual fund schemes

That means there is no such factor which is worrisome. Retail investors are also investing a lot through mutual fund schemes. Still, 2025 is going to be a complete recession. Common investors are surprised to see such strange circumstances. Actually, India Growth Story is being deflated and greedy merchant bankers, company promoters and big fund houses are responsible for this.

That is, these capitalists in collusion are defrauding crores of retail investors of the country through high priced IPOs and the officials of the regulator SEBI are silent. They are only expressing concern, but are not taking any action.

Such robbery took place 30 years ago also

Big operators and fund houses are keeping Sensex-Nifty at upper levels by increasing select big stocks, so as to keep the sentiment good and lure retail investors in expensive IPOs. Whereas the risk of recession is increasing in the entire market. The kind of loot that has taken place in the public offering (IPO). Such corporate loot also took place during 1992-1995.

Its adverse effect was that for several years there was a severe recession in the economy and the stock market. Even now the danger of a similar massive recession has arisen. But at that time there was some honesty among the promoters and merchant bankers, they used to launch IPOs of profitable companies even at a premium of Rs 25-50 or Rs 100 or sometimes even at par.

But now the greed has increased so much that small investors are being openly looted by launching IPOs of loss-making companies at a premium of thousands of rupees.

‘Open Rebate’ unfair advantage of

SEBI’s ‘open exemption’ The amount of capital that has been raised through expensive IPOs in the last 5 years by taking illegitimate advantage is more than was raised even in the last 20 years. A record capital of Rs 5.41 trillion has been raised from the market through 340 IPOs in the five years between 2020 and 2025, which is more than the capital of Rs 4.55 trillion raised through 658 IPOs in the 20 years between 2000 and 2020.

It is a matter of great concern that out of this, Rs 3.38 trillion i.e. 63% is the Offer for Sale (OFS) amount, which has gone directly into the pockets of capitalists and foreigners. OFS worth Rs 2 trillion have been brought in 2024 and 2025 alone. The second worrying thing is that crores of investors have suffered losses in about 44% of IPOs.

Paytm, Ola, Nykaa, Glotis, Jarrow, Excelsoft, DreamFolk, Credo, Utkrish, IdeaForge, Brainbees, Dame Capital, Ikeo, Acme, Honasa and many other expensive IPOs are examples of corporate loot. Today their share prices are biting the dust. But no action is being taken.

Kiss ‘greed’ Are fund managers putting retail investors’ money at stake?

The cartel of greedy merchant bankers, promoters, brokers and big fund houses is working very cleverly. They say, ‘The Indian stock market is not running because the valuation is high. Due to expensive valuations, foreign institutional investors (FIIs) are selling in India.” But in reality the PE ratio of Nifty-50 companies is only around 21. Midcap and smallcap are around 32.

Also read – Year Ender 2025: That ‘Bahubali’ of IPO…who created a ruckus on Dalal Street, gave 125% return

The fund managers who are calling the market expensive at this valuation, are the same fund managers who are investing heavily in very expensive IPOs or IPOs of loss making companies with PE ratios of 50, 100, 200. Why? Kiss ‘greed’ Are fund managers putting crores of investors’ money at stake by investing in these expensive IPOs? This is a big question. All political parties have also maintained silence on this serious issue.

Alarm bells for mutual fund investors

Another truth is that the thousands of crores of rupees that the country’s retail investors are investing every month in mutual funds through SIP, a large part of it is going in these expensive IPOs or OFS. For this reason, the returns in mutual funds are decreasing and the money of crores of investors of the country is going into the pockets of select capitalists and foreigners instead of being used for the growth of the country.

Also, liquidity is decreasing in the market, which will cause a major recession in the future. This huge loot of billions of rupees is ruining all the efforts of the government to boost the economy and India’s growth story is being deflated. This is a worrying situation.

Decrease in private investment is worrying: Finance Minister

The economy is booming only on the basis of government investment, despite record number of IPOs, private sector investment is very less, because the money being raised through IPO is going into the pockets of capitalists and foreigners through OFS.

Which goes out of the country only in the form of dollars and that is why the Indian currency is weakening. Union Finance Minister Nirmala Sitharaman has expressed concern several times over the decline in private investment in the economy, but is not putting any curb on expensive IPOs and OFS.

• Vishnu Bhardwaj’s report from Mumbai on Obnews Live.