MC Insider: Stock market operators hurting, mis-selling lender under scrutiny, what the regulator told an MF CEO, and more

A bull market hides a lot of sins. But a bear market is usually unforgiving. That is as true about stocks as about the players – the stock operators. A number of market operators seem to have caught the fancy of enforcement directors and IT sleuths in recent months. The latest to make news in market circles is a large Gujarat-based operator who is known to “run” stocks including some high-profile speciality chemicals counters, a major player in the dyes segment, a leading logistics company, and several others. With a net worth estimated at Rs 3,000 crore, he is also known to own a hotel chain in his home state. Now you know why some mid-caps and small-caps are still sluggish – they just lost their mai baap to the Enforcement Directorate!

There is chatter on D-Street that some smart investors who lost money in tricky financial instruments issued by this lender with a tainted past have managed to get hold of crucial email exchanges from the past. These exchanges indicate instructions from top to middle level officers allegedly encouraging force-selling of these instruments to gullible retail investors. In other words, the said emails point towards potential intent of mis-selling. The question is -- will these exchanges be added to the existing evidence for ongoing probes and who will be held accountable?

The Lamborghini trail did bring to fore one alleged culprit in recent times but there’s never one cockroach in the kitchen, and the regulator seems to be hell-bent on a thorough clean-up job. When a leading mutual fund CEO put up a defence for the industry in a meeting with the regulator, he was met with a rather curt remark that almost rendered him speechless: “We know how the industry functions…” That meant time to back off, and let the regulator do its job, said the mutual fund honcho. Ouch!

Shifting focus now to Deal Street where the healthcare segment continues to witness high M&A and fundraising traction, especially when it comes to speciality chains. Kedaara Capital recently picked up a minority stake in IVF chain Oasis Fertility and now we hear that a south-based dermatology chain backed by a healthcare focused PE fund is in the middle of a transaction (which is planned to be a mix of primary and secondary fundraise) and term sheets have come in for the same. Any guesses?

Is it a case of peer pressure or is it just a desire to diversify? This west-based business house which has seen firms in its neighbourhood enter the pharma and healthcare sector and scale up over the years is now in action mode and wants to follow their footsteps, we are told. So much so that a few mid-sized targets in the API (active pharma ingredient) and formulations segments are already on its radar. Watch this space for more on this group’s next move.

Venture capital-backed startups have got a bad rep these days given the sheer beating their valuations have taken this year. At a closed door event held recently in the Maximum City by a wealth management firm, a senior of the private equity market, whose name rhymes with a famous real estate developer of the city, at the helm of the Indian arm of an overseas listed alternative asset manager, was apparently heard dissing venture capital startups saying that such startups "just make no sense". The veteran CEO, however, believes there is lot of "dry powder" with PEs to take advantage of any opportunities with some very keenly interested in buying warehouses in the country. Startup founders, perhaps it's time to dust up those decks and run to BKC?

The bureaucrats in the Union health ministry have received a dressing down from the minister recently for reports appearing in the media on two health initiatives that were slated to be announced by the prime minister in his Independence Day speech. A day before the I-day, during a presentation in the PMO, the top babu got a rap on his knuckles as the details shared were already in the public domain. “While it may not be the only reason why the initiatives ultimately may not have made it to the speech, everyone was upset about the leaks,” quipped a ministry insider. With a fresh warning not to speak to press representatives, officials in the ministry are being extra cautious now.

The delay in the appointment of a top executive in the country's apex research body has slowed down the pace of file approval. A little birdie told Moneycontrol that files have been moving at snail's pace as those which were earlier cleared within days are now taking weeks for official approval. There is chatter in officer circles that the sluggish approach towards nod for several projects may affect some ongoing health-related research.