This document summarizes an IPO scam involving Yes Bank shares in 2005. Certain entities obtained shares meant for retail investors by making thousands of fake applications using fake or borrowed identities. They then sold the shares on the listing day for a profit, as the share price rose. An investigation found one entity, Roopalben Panchal, had used over 6,000 fake applications to obtain over 9 lakh shares, which she sold for a profit of over 13 crore rupees. The scam took advantage of the bull market and lack of proper verification to illegally obtain shares and booking early profits.

1. IPO SCAM 2005-Yes Bank
Presented By-
Yasha Singh
(4113007007)

2. IPO- Highlights
• Issue opened on June 15, 2005.
• Total issue amount 31500 Lakh.
• Issue size was 700 lakh share.
• Share Reserved for small investor were 1.75 crore.
• Share price when it was listed was Rs 45.
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3. About the Scam
• The IPO scam of 2005 involving irregularities in the shares of
Yes Bank Ltd. and occurred during a bull phase in the stock
market.
• Certain entities namely Roopalben Panchal, Sugandha
Estates and Investments Pvt. Ltd., Purshottam Budhwani
and Manojdev Seksaria had obtained IPO shares reserved for
retail applicants by making applications in the retail categories
through the medium of thousands of fictitious/benami IPO
applicants with each of the application being for small value so
as to be eligible for allotment.
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4. • Several fake demat account were open giving a common
address in a single day, with the help of certain individuals,
brokers, bankers and the Depository Participants (DPs).
• Financers sold these share on the opening day of the listing of
shares in the stock market and made gains(as list price was
higher then allotment price).
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5. • Roopalben Panchal transferred 9,31,600 shares to seven
entities on July 11, i.e. prior to the listing.
• For an allotment of 9,31,600 shares Roopalben had to apply
for crores of shares.
• Observed that Roopalben Panchal’s name in the list of
applicants/ allotees appeared only once.
• Rupalben cornered & sold 8,39,500 shares @ Rs 61.40
and earned profit of Rs 13,76,78,000
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6. Gimmick of Roopalben in Yes Bank
IPO
• 6,315 Bogus-fictitious applications, Demat A/cs, Bank A/cs
Demat A/c had similar addresses of Ahmedabad
• Similar address on all applications similar address of Bharat
Overseas Bank,Worli, Mumbai
• 9,47,250 shares allotment to these fictitious accounts
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7. • Roopalben received funds from 8 entities prior to the IPO of
Yes Bank Ltd.
Devangi Dipak Panchal, Rajan Dapki, Zenet Software Ltd., Excell Multitech
Ltd., Taurus Infosys Ltd., Seer Finlease P Ltd., Barghav Panchal (HUF) and
Jayantilal Jitmal
• She in turn transferred these funds to 6315 entities who had
utilized these funds for making applications in the IPO of
YBL.
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8. Sugandh Investment – Yes Bank
• 1315 Bogus applications
• Allotment of 1,97,250 shares
• Profit of Rs 32,26,492
• Modus-operandi similar to Rupalben
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9. Financial position of Yes Bank in 2005

10. Financial position of Yes Bank in 2005

11. Stock trend from 2005-2014 (NSE)

12. Stock trend from 2005-2013 (BSE)
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13. Stock trend from 2005-2014 (BSE)

14. Analysis
• The IPO of yes Bank came on 15 June 2005 the stock was
listed at Rs 61.75 which move till 2006 to Rs 105.
• The consistent upward movement of the stock shows the
stock was a consistent performer and within 1st year of its
listing it gave a return of 100%.
• Then the stock had a small downfall till 21 July 2006 to 75.10
an picked from there again to touch the mark of Rs 250 till
2008.
• In 2009 fell to 43.8 then started rising and touched Rs 507 on
16 may 2013
• On 10 OCT 2013– Rs 341.85
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15. Why IPO Scam
• During the bull-run there is an incentive in applying for IPOs,
as generally IPOs open on a price higher than the offer price and
the aim of the ‘scamsters’ was to illegally procure maximum
profits which would have otherwise gone to genuine retail
investors.
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16. Order of SEBI
• Panchals & Others directed not to buy, sell or deal in Yes Bank
and other Companies Shares.
• NSDL is directed to ensure that the 6315 demate a/c of
Roopalben and 1315 demate a/c of Sugandh are not to be
utilized for manipulation of IPO in future.
• NSDL is directed to undertake a comprehensive inspection of
Karvy-DP
• NSDL and CDSL are advised to enhance their surveillance
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