ONGC IPO: No shares, no refund

Pranshu Sikka and Amol Dethe, CNBC-TV18

It was the NDA government's big gift to Indian investors -- a big bang Rs 10,000 crore public issue from Navaratna ONGC (Oil and Natural Gas Corporation) in March 2004. But four years down the line, 200 investors still wait in vain for their refund or shares.

Vikas Vij was among millions of hopeful investors who put their money in the ONGC IPO in March 2004. He paid Rs 45,250, but was allotted just 60 shares at Rs 712.50 per unit. The 60 shares were credited to his account, but it's been four years, and he's still waiting for the refund of Rs 2,500.

"We have received a standard reply from them, which says they are checking and reconciling on their end," replies a miffed Vij. 

But at least Vikas got some shares. There are many others, who did not get any stocks in the initial allotment process.

As per information obtained by CNBC-TV18 from Sebi (Securities and Exchange Board of India) through the Right to Information Act, the regulator received 7,165 complaints regarding the ONGC IPO. Of these, 195 complaints pertaining to refund or allotment are still pending.

Although, Sebi did not provide a break up, many among these 195 pending cases are complaints of non-receipt of shares. Sources say SEBI has written to ONGC, demanding a clarification on the pending refunds.

Some time ago, Sebi had also pulled up registrar MCM, and prohibited it from taking any fresh business for two weeks, for mis-managing the ONGC IPO.

Prithvi Haldia, CEO of Prime Database, said, "Under no circumstance, no investor can be punished for their action. In this IPO, investors have a huge loss either not getting shares or not getting refund order and it is surprisingly taken four years and still these complaints remain."

We also learn that current Sebi Chairman CB Bhave has taken a stringent view of the entire situation. After all, investors who were dealt a bad hand in the IPO process have had to sustain staggering losses, even if notional ones.

Though the share is trading much below its all time high of Rs 1385.05, each share would today still be worth Rs 1202.50, including the dividends and bonus -- that's a gain of 70% from the allotment price of Rs 712.50 per share.

It's not known yet, whether ONGC has responded to Sebi's letter. But for Vikas and the others like him, the road to refunds is proving to be a long and testing one.