Share listing delay hurts investors

ONGC, Gail India, Power Trading Corporation public issues

Investors in Ahmedabad suffered huge losses due to the irregularities in the listing of the Oil and Natural Gas Corporation (ONGC), Gas Authority of India Ltd (GAIL) and Power Trading Corporation (PTC) stocks.

"It is a mistake of the company to credit the depository participant accounts of high net worth individuals with excess ONGC scrips and then freeze the ISIN code after the investors had sold the shares they were originally allotted. The investors were forced to square off their transactions at higher prices under the T plus Two settlement scheme, mounting to huge losses," said Sarit Choksi, an investor who invested in all three stocks.

ONGC stocks were over credited in the high networth individuals following which the company froze the ISIN code of the scrips, causing troubles to investors.

"The refund order of GAIL directly came to the addresses of the retail investors, while over 50 per cent of the investors had subscribed to the issue by taking funding from various banks. If this continues, banks will stop funding causing difficulties to the retail investors like us," added Choksi.

The listings of the Power Trade Corporation scrip was delayed by a week, adding to the pains of the investors.

"While the listings of PTC was delayed by 15 days and was not as per the SEBI guidelines to be listed within 21 days from the date of close of the issue. The issue was oversubscribed by over 12 times. A lot of investors money was involved and as per the SEBI's guidelines, the company should compensate the investors," said an investor of PTC in Ahmedabad.

"If irregularities in scrips like ONGC, GAIL and PTCL happens, its a great set back to the investors, causing huge losses and even the market regulator like SEBI is not taking hard stand since all the issues are government issues," stated another investor.

"It is very difficult to allocate the amount the losses made by the investors but it is for sure the investors made huge losses in the ONGC scrips as they have to square off their transaction at higher prices due to the freezing of the ISIN code," said Nitin Parikh a stock broker.

"Moreover, the banks will not be interested in funding issues if the refunds will be addressed directly to the investors," he said.