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Another Junk IPO Tarapur Transformers plunges on the day of the Listing

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The Indian market has seen a wave of low quality offerings in the recent days propelled by the bullish conditions prevailing in the market.Tarapur Transfromers is a prime example of such low quality which I have described before. The fundamentals of these companies is a total mess to say the least.They just get managed to listed at the low end of the range at just about 1 times subscription no doubt through help from “friendly investors” and promptly take a massive plunge either on the day of the listing itself or after a period of “pump and dump” . The market regulator makes no effort meanwhile to find how these issues are getting funded as a “few dirty fish can foul the whole pond”.With India requiring massive capital infusions and the stock markets being one of the most important conduits , a few rules on the quality of the offerings would be a great help in purging such junk. Maybe a new market for such listings for example a “junk” market should be opened to allow high risk investors to fund such  companies.

More on this topic (What's this?) Read more on Transformers, Investing in India at Wikinvest
PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in or call me on +913340606492.

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