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SEBI begins probe for fake bids in IPO

Sebi has begun a probe into possible use of fake bids for artificially pushing up the subscription levels in numerous IPOs over past few years, with a modus-operandi similar to that in Vaswani Industries case.

After halting Vaswani Industries’ listing earlier this month on suspicion of irregularities in its IPO bidding, the market watchdog last week ordered a detailed probe into the matter, which would be completed by the next month.

However, Sebi has now received complaints of many IPOs in past 2-3 years, alleging that promoters roped in some ‘operators’ to inflate the IPO subscription level with fake bids, which they withdrew at a later stage or cashed in on the first day of listing.

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