List of 87 Companies that have Vanished after raising funds through IPO in India

This is probably one of the hottest topics in the Indian Stock Market today. Every year hundreds of companies submit applications with SEBI (Securities & Exchanges Board of India) and a % of those companies manage to raise funds through Initial Public Offerings or IPO's. Indians are a notoriously smart bunch of guys who try to find out new and ingeneous ways of cheating others. Though the stock market regulator (SEBI) has strict norms and filtration criteria before they actually allow some company to issue an IPO, some crooks manage to find a way to go around the checks. They eventually offer IPO's and once investors buy their shares they just disappear. Recently the Ministor of Corporate Affairs Mr. Sachin Pilot, in a written reply to the Rajya Sabha has said that a total of 238 firms have been featured in the "List of Vanishing Companies" at the end of the financial year 2011-2012. The purpose of this article is to understand what is meant by vanishing. None of the news articles in the Internet actually listed down those 87 companies that cheated Indian Investors of their hard earned money. I did some digging and was finally able to find that information in the Ministry of Corporate Affairs website hidden away in some corner. So, for the benefit of all the Indian Investors who follow my blog - here is the list...

Before We Begin:

The following are some old articles in our blog that covered the topic of Initial Public Offering. You can revisit them to brush up your memory if you arent too sure about the IPO Process.

1. IPO Process Explained
2. Intermediaries involved in an IPO Process
3. IPO - Different Types of Issues

When is a company considered "Vanishing"?

A Company is considered "Vanishing" if it fails to file their financial statements, their operational details etc with SEBI on a quarterly basis. If a company fails to file its statements, SEBI tries to contact them at their registered office and if that too fails, SEBI tries to reach the directors of the company directly. If all of the 3 steps fail, a company is considered "Vanishing" which means SEBI does not know where the company is or what it is doing with the money that investors put into it during the IPO Process.

Did SEBI Miss all 238 Companies as mentioned in the first paragraph?

Actually, NO.

Of the 238, 151 companies have been traced. Of the 151, 31 are currently under liquidation. Which leaves us with "87" that still remain untraced.

What are the Government and Market Regulators Doing about this?

Mr. Pilot has said that government has been taking action against companies and their directors which disappear after raising money from public. He said that a central coordination and monitoring committee, co-chaired by ministry of corporate affairs chairman and market regulator SEBI monitors efforts to identify "vanishing companies" and take stock of action against them. The minister said that government is seeking assistance of police authorities and filing FIRs. He also said that, based on feedback from all stakeholders, procedural adjustments will be made in the IPO Process to minimize such situations in future.

Do we have a list of those 87 Companies that have Vanished this year?

The list contains the Name of the Company and the amount of money (In Rs. Crores) they raised via their IPO.

Name of the Company	Issue Size in Crores (Rs.)
Aditya Alkaloids Ltd	3.55
Aashi Industries Ltd. (Formerly Known as Aashi Pharmachem Limited	5.52
Ambuja Zinc Ltd.	2.14
Amigo Exports Ltd	3.3
Asian Vegpro Industries Ltd	7.09
AVR Securities Limited	2.47
Bhavna Steel Cast Limited	2.1
Bodh Gaya Ceramics Ltd	0.49
Caldyn Aircon Ltd.	4.45
Canara Credit Ltd	2.49
Carewell Hygiene Products Ltd.	2.49
Chhakri Tyres & Tubes Ltd Or Rhino Tyres Ltd) (Presently Known as Raam Tyres Ltd	9.59
Cilson Organics Ltd.	8
Citizen Yarns Limited	2.2
Crestworld Marines Ltd	4.38
Cromakem Limited	3
Daisy Systems Limited	1.31
Deccan Petroleum Ltd	4.57
Flora Wall Coverings Ltd	5.82
Frontline Financial Services Ltd.	4.43
Genuine Commodities Development Co. Ltd	2.68
Girish Hotels Resorts and Health Farms Ltd.	2.59
Global Blooms India Ltd	2.1
Global Exhibitions Limited. (Formerly Known as Global Network Limited )	4.45
Growth Agro Industries Ltd.	5.4
Hallmark Drugs & Chemicals Ltd. (Formerly Known as Lifeline Drugs Limited)	7
Hi-Tech Drugs Ltd	3.23
Hitesh Textile Mills Ltd.	7.48
Hoffland Investments Limited (Formerly known as Vadra Investments Limited)	2.9
Ichakalanji Soya Ltd	2
Imap Technologies Limited	1.8
Kamakshi Housing Finance Ltd (Presently Known as Kisha Impex Ltd	5.71
Kedia Infotech Ltd (Formerly known as Grives Hotels Ltd.)	4.98
Kesar Greenfield International Limited	5.69
Kiev Finance Ltd	12
Lyons Industrial Estate Enterprises Ltd. (Formerly Known as Lyons Range Finance Ltd.]	6.37
Ma Capital Market Services Ltd	1.44
Madhyavart Exxoil Limited	2.3
Manav Pharma Ltd	5.3
Marine Cargo Company Limited	3.41
Nagarjuna Jiyo Industries Ltd	2.73
Naisargik Agritech ( India) Ltd	4.66
Naturo Pest Ltd	4.84
Nishu Fincap Ltd (Formerly Known as Medha Finance and Securities Ltd)	4.25
Ocean Knits Ltd	2.61
Oriental Remedies and Herbals Limited	1.88
Orpine Systems Limited	2.71
P K Vaduvammal Finance & Investments Ltd (Presently Known as Novel Finance (I) Ltd)	1.5
Panggo Exports Ltd	2.47
Pashupati Cables Limited	11.95
Protech Circuit Breakers Ltd	2
Protech Switchgears Limited	2
Pur Opale Creations Ltd (Formerly Known as Nuline Glassware ( India) Limited	6.78
Rajadhiraj Industries Ltd	2.5
Realtime Finlease Ltd	3.75
Rizvi Exports Ltd.	3.65
Rusoday & Company Limited	0.94
Sai Graha Finance & Engineering Ltd	4.05
Saket Extrusions Ltd	2.13
Sequel Soft India Limited
Shefali Papers Ltd.	2.57
Shree Vaishnavi Printing & Dyeing Limited	3.24
Shree Yaax Pharma & Cosmetics Ltd	6.06
Shreeji Dyechem Ltd	1.94
Shri Mahalaxmi Agricultural Developments Co. Ltd	5.09
Shyam Printers & Publishers Ltd	2.25
Sibar Media & Entertainment Limited	3.5
Sibar Software Services ( India) Limited	3.5
Siddhartha Pharmachem Ltd.	12
Simplex Holdings Ltd.	2.27
South Asian Mushrooms Ltd	6.1
Sparkle Foods Ltd	5
Spil Finance Limited	5.7
SSK Fiscal Services Ltd.	2
Star Electronics Ltd.	2.47
Sterling Kalk Sand Bricks Ltd.	4.44
Sukhchain Cements Ltd. ( Formerly Known As Ganapati Cements Private Limited)	3.65
Super Domestic Machines Ltd	5.55
Sushil Packagings ( India) Ltd	4.52
Swal Computers Limited	2.6
Tirth Plastics Ltd	5.03
Topline Shoes Limited	7.8
Universal Vita Alimentare Ltd.	1.8
Vidiani Agrotech Industries Ltd.	2.80
Vipul Securites Ltd	3
Visie Cyber Tech Limited	1.4
Zed Investments Ltd.	2.8

Source: http://www.mca.gov.in/Ministry/vanishing.html

As you can see, all of these are ultra small sized IPO's where the largest IPO was only 12 crores and the smallest was 49 lakhs. Market Guru's always warn investors to stay away from Penny Stocks. They have the potential to give you triple or even four digit profit % returns but at the same time, your entire investment can go down the drain. The latter is what has happened to the investors who bought shares of these 87 cos.

Happy Investing & Stay away from Penny Stocks!!!