In a bid to protect investors amid a rush for public offers by corporate India, the government has decided to scrutinise all the IPOs that garnered more than Rs 50 crore in the past three years to ascertain that funds were utilised for declared purposes.
As part of this drive, the Ministry of Company Affairs has directed the Registrar of Companies (RoC) to “keep under watch” the IPOs that hit the market since ’04, garnering an estimated Rs 25,000 crore.
During this period, Indian market was inundated by a number of mega and medium-sized public offers including Reliance Petroleum, TCS, Patni Computers, Biocon, NDTV, IndiaBulls, Jet Airways and Suzlon.
The move coincides with market regulator Sebi’s stern action against two depositories NSDL and CDSL and eight depository participants such as Karvy Stock Broking among other market players in the IPO scam.
Earlier, the ministry, headed by Prem Chand Gupta, had cracked a whip against vanishing companies as part of their drive to safeguard interest of investors and had booked many of the fly-by-night operators.
The government would keep a watch on the utilisation of funds raised from IPOs of Rs 50 crore and above, a ministry source said here.
“The IPOs that hit the markets in the past three years would be under watch to ensure that the funds raised have been utilised as per the initially announced plans,” the source said.