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As Anil Ambani& #39;s beleaguered story keeps unravelling, I go back to that late night in January 2008, when I left office after 11pm. The office cab driver dropping me home told me about having opened a demat account to buy this new dhansu IPO. Double hoga phataphat.
While I don& #39;t know if he got an allocation or not, but many small investors like him did get an allocation, such was the hype around a company which didn& #39;t even have a basic business model in place.
Of course, everyone was complicit in promoting what was basically rubbish being sold. From the ibankers to wealth managers to the media. Those were the good days.
The incentives were so aligned that the right story just didn& #39;t come out.
In fact, such was the hype that investors started buying Reliance Power Mutual Fund, in the hope that they can get a bigger indirect allocation to Reliance Power stock.
Then this became a sales theory.
In fact, such was the hype that investors started buying Reliance Power Mutual Fund, in the hope that they can get a bigger indirect allocation to Reliance Power stock.
Then this became a sales theory.
The idea being that Anil Ambani owned Reliance Power will give more shares to Anil Ambani run Reliance Power Mutual Fund.
This idea had its share of suckers as well.
This idea had its share of suckers as well.
While there are no guarantees when you buy a stock, but the misselling around Reliance Power was just unbelievably humongous.
In the end, Ambani may have defaulted on bank loans, but the people he basically destroyed were the small investors who came to the stock market thanks to the hype. And that was the bigger disaster.
Anil Ambani drove away another round of investors away from the stock market.
1992 saw Harshad Mehta.
2000 saw Ketan Parekh.
2008 saw Anil Ambani.
Three people who ensured that many Indians still don& #39;t get to enjoy the power of compounding.
1992 saw Harshad Mehta.
2000 saw Ketan Parekh.
2008 saw Anil Ambani.
Three people who ensured that many Indians still don& #39;t get to enjoy the power of compounding.
And people who have primarily benefitted from the Indian stock market are foreigners.
That& #39;s the irony of it all.
That& #39;s the irony of it all.
