The institutional fund managers, who are custodians of investor money have demonstrated their irresponsibility by subscription to the issue of the Tower company that closed today. The whole world is touting that it is expensive, but these guys think it is cheap. By keeping away, they could have got the stock far cheaper in the secondary market later, if they love the stock so much.
These kind of investments give rise to suspicion about the integrity of the fund managers. Unless they have a personal interest, I cannot imagine anyone investing in this issue. Surely there are far better investment opportunities available in the secondary market. Perhaps it is time for SEBI to step in and have a separate disclosure about investment in IPO by the fund managers. As it is, the fund managers are the only creatures in the industry who do not have any qualifications or hurdles to be cleared to manage money. An investor needs to be KYC compliant, a distributor has to pass exams, etc. If SEBI thinks it should be bothered with investor protection, a good place to start with would be to look in to which fund managers invested in this issue and keep an eye on them.