Green Shoe: ICICI Bank’s fraud

Most of the large and aggressively priced issues have a provision for a Green Shoe. It is an assurance by the company that it will protect the short term interests of the investors by buying back shares from the open market whenever the stock price goes below the issue price.

ICICI Bank had raised about 12940 Million INR for this purpose and though the stock is more than a 100/- below its issue price the company has till date bought back only a paltry sum of 185 Million INR from the open market. Their crime is aggregated from the fact that a lot of retail and institutional investors are still holding the partially paid share issued to them and they do not have any option/means to convert it to a full share.

The bank is not responsive to its customers, honest to its shareholders and its international investment arm is involved in sub prime lending… no wonder the stock is going down and is showing no signs of recovery.

12 thoughts on “Green Shoe: ICICI Bank’s fraud

  1. dont expect mfs to be safe either
    my mfs halved in the tech bust
    its all about gettin approx timing right and
    not being greedy and regular investg and bookg profits

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  2. yups I agree and that is why I am not going for SIPs.. but overall in a long term mutual funds usually go up and down with the index… and I am still bullish about indian stock market

    Like

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