What went wrong with Morgan Stanley?
Morgan Stanley raised large corpus (more than Rs.10bn) in around early 1994. The entire exercise in fund raising was centered on the hype of the fund being was the first fund promoted by an internationally acclaimed asset management company. It was marketed like any other public issue and fund investors rushed to invest in the scheme hoping to get superior returns. No one bothered to explain to them that Morgan Stanley AMC was a service provider – providing them the service of investment advice and management. No one explained to them that they were not investing in a share of a company in fact the artificial gray market premium served to perpetrate this feeling. The IPO was a great success. It ensured that the name “Morgan Stanley” was now a part of the dreams of more than 1 million Indians. The fund raising exercise, unfortunately, coincided with the peak of stock market boom. Indian stock markets lack depth and are quite illiquid. The fund managers were compelled to invest in equiti
