Satyameva jayate will triumph over gold coins.

Seems that Initial Public Offerings by companies in India this year have received lukewarm response from retail investors. Out of 16 IPOs that have hit the market the portions set aside for retail investors of 7 have been under-subscribed. Why? In April, a study showed that investors would have lost money on 60% of IPOs since 2003 and returns from 20% of those that were trading higher were less than term deposits in banks would have given. From January 2008 to June this year shares of 303 firms have lost 90% of their value. Alban Offshore dropped from Rs 5,151 to Rs 319, MMTC dropped from Rs 1,921 to Rs 45 and Koutons dropped from Rs 1,000 to just Rs 2.45, per share. Is it because the share market in India has crashed? No. Last December the Indian market was ranked sixth in the world in terms of price earnings and price-to-book ratios over 10 years. Why were 60% of investors losing money from IPOs when the market was doing so well? Because most business fellows in India are greedy, more interested in short term gains than in building long term reputations, and the market is highly manipulated by a few big players. Why then do so called experts keep on urging people to invest in shares? They work out the returns on term deposits in banks, real estate, gold and on shares and show how, over the longer term, shares always give returns many times higher than any other type of investment. Even with property prices reaching US levels investing in shares gives higher returns. If you do not have the knowledge to comprehend company balance sheets invest in equity mutual funds, they advise. Your money will be safe with experts, they say. Will it? Mutual funds are more interested in launching new schemes than generating higher income from older ones because the up-front commission is the highest. If the regulator modifies rules for one type of product, for consumer protection, the industry quickly comes out with different ones, to milk the customer. Banks have suffered when they loaned money against shares, based on reports of analysts. So, people do not trust companies, mutual funds or so called experts. Those who need regular income, such as pensioners, invest in term deposits, which are safe but lose value due to inflation, those with lots of money, especially black, buy real estate, and others, who want to guard against inflation but have small amounts of money, buy gold. India has overtaken China as the biggest importer of gold. The government is cracking down on black money and will launch a gold monetisation scheme in which people will get interest if they deposit their gold into banks. Will they? People will be afraid of questions about taxes so they may deposit only the new gold they buy from banks. Still, it may reduce the volume of import. Instead of selling Ashoka Chakra gold coins the government should sell trust. Satyameva jayate will be a game changer.