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If you've watched Scam 1992 Web Series by Sony Liv, you already know who was Harshad Mehta and what he did and all that- not gonna bore you with that same story. The person that I'm addressing changed the stock market to a far greater extent than Harshad Mehta, when stats are something you care about a lot!

The person I’m addressing here is- Ketan Parekh(Note that you can click on the Wikipedia links for more info that I’ll provide throughout this blog).

Who Was Is Ketan Parekh?

Ketan Parekh is an Indian Stock Broker(now banned), joined Harshad Mehta’s Firm Grow More Research and Consultancy Services as a trainee of Harshad Mehta back in 1990, he was also involved in the 1992 Harshad Mehta scam but was not caught in involvement in the same, though he was caught in another scam named Canfina Mutual Fund. He was CA by profession and came from a stockbroking family background.

Harshad Mehta Scam Vs Ketan Parekh Scam In Terms Of Magnitude

What was the size of Harshad Mehta Scam- 3000Cr, 4000Cr, or 5000Cr? If inflation is taken into consideration at a 6% annual rate as declared by SEBI, the amount goes up as high as 24,000Cr(As Of 2020). But……

You probably don’t know the size of the Ketan Parekh Scam. How Big Was it- 10,000Cr? Maybe 15,000Cr? No, The gigantic scam when exposed(2001) was of the size 30-40,000(Yes, In Crores), and if again; inflation is taken into consideration at a 6% annual rate, guess what? It goes above the mark of Rs 1 Lakh Crore. Yes, that’s the actual size of the scam as of writing this blog(2020).

Do you call Harshad Mehta “The Big Bull”? Okay, what would you call Ketan Parekh then? Gigantic Bull or something? Okay… Uh…. No Lame Jokes…. Back to the point.

Comparison Of Harshad Mehta Scam and Ketan Parekh Scam In Terms Of Complexity

If you just take a look at the above image, you can tell how complex was Ketan Parekh’s method of executing the scam. After Harshad Mehta misused the Ready Forward Deal, SEBI was given more authority and power than before(It was just a non-statutory body without any statutory power). Ketan Parekh knew he can’t use the same Ready Forward Deal to execute the scam, also he couldn’t use Bank’s funds to inflate the stock prices as Harshad Mehta did.

So, he approached Institutional Investors with his institutional stockbroking firm (NH Securities) to fund his stocks(they were called K10 Stocks later on), he focused mainly on 10 stocks that were of sectors- Telecommunication, Technology, and media. But institutional investors require certain criteria to be met by the company they’re investing in, and one of those is that the company’s shares should be trading in high volumes(basically buying and selling of shares in a company creates volume: Higher the number of shares traded- Higher the volume).

Knowing this, Ketan Parekh came up with an outstandingly innovative idea- He traded shares between his own companies so that it looked like the company’s shares are being traded in high volumes through which he convinced the institutional investors to invest in those companies, and as usual, if the institutional investors invest in a company, retail investors(People like you and me) follow them, which caused the stock prices of those companies to inflate like crazy. He would then sell those stocks to make some crazy high profits.

He inflated the share price of the following companies to this extent:

HFCL(Himachal Futuristic Communications Limited)- Rs 42 to Rs 2300

ZEE- Rs 750 to 11000

GTL(Global Tele Systems)- Rs 85 to Rs 3100

Now, Ketan Parekh required another source to manipulate the stock prices consistently. He then approached the banks- MMCB and GTB and took 800Cr and 100Cr loans by both the banks respectively and used them to inflate the prices of the K10 Stocks. No one noticed why the stock prices were going up as the Dot Com Bubble was on the rise worldwide.

The End Of Ketan Parekh Story

Ketan Parekh was exposed by a (now famous)financial journalist- Sucheta Dalal (Yes, she was the one who exposed Harshad Mehta as well). It will be too complicated if I tell you how his scam was exposed. So, Screwww it!!!

Why Is Ketan Parekh Not Included in the Scam Web Series?

If you follow Hansal Mehta(Director of scam 1992), he announced that he was working on “Season 1” of a series based on the book- The Scam: who won, who lost, who got away by Sucheta Dalal and Debashis Basu.

So, there will be another season of “The Scam” web series which will completely revolve around Ketan Parekh.

If you like my blog, You can Drop a like and comment below what do you think about this whole scenario? Also, you can follow my blog so that you can see more of my yet-to-publish content.

Peace 🙂

As of 2020, the Stock Market is becoming more fascinating for teenagers than ever, and almost every one of them thinks they can get easy money from it.

But, the Stock Market is not some “Get Rich Quick” scheme, you may even have to sell your house if you’ve invested heavily without any knowledge and the market sinks to the bottom of the ocean(Search Google and you’ll find these stories of people).

Now, As I think and the study suggests, Here are the 3 main reasons you might have to turn your back on the stock market before incurring some serious losses.

So, Without getting into technicals, Let’s get started…

1. YOU’RE IMPATIENT AF!

Warren Buffet defines the stock market as a tool/medium to transfer the money from the “Impatient” to the “Patient”. The key skill required to get success in the stock market is your Emotional Discipline, you should have total control over your emotional behavior. High “EQ” is more beneficial than a higher “IQ” if you want to get into this; build an emotional discipline first.

2. YOU WANT TO GET RICH QUICK!

As I said earlier, the Stock market is not some get-rich-quick scheme that’ll make you a millionaire overnight(Yes it can but it’s highly unlikely). If you invest your hard-earned money in stocks, you HAVE to look for the long term benefits, and by long term I mean “decades”, There’s no such thing as getting rich quick “GROW UP!”.

3. YOU’RE TRYING TO PREDICT THE MARKET(LoL)!

Oh! I “think” that share will rise in the next 2 months, I “think” the market will fall in the next fiscal year, if these phrases come to your mind, “Move out or gain some knowledge first”. There has been no human alive to date nor will be; many tried and failed. It’s a game of emotions and you can’t read people’s emotions, as simple as that!

If you’re trying to predict the market, ‘You’re gambling with your money” and if you do, better gamble in a Casino, the rewards are better there.

Bonus- BUT I STILL WANT TO GET INTO SHARE MARKET

The stock market is not as risky as it seems to be. It’s just that you should have control over your emotions and have patience in the “Bear run” of the market.

HERE ARE 5 TIPS I CAN GIVE YOU IF YOU WANT TO BEGIN YOUR JOURNEY IN THE STOCK MARKET

– Learn to read the financial statements of a company.

– Know if the company you’re investing in; is worth the price its share is selling for or not i.e. Do a proper fundamental analysis of the company.

– Always buy “Bargain Issues”(more on that later).

-Don’t follow any expert’s, family member’s, friend’s advice EVER! Do your research.

– Find a mentor who can teach you Investing.

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Thanks!!!