The crackdown on alleged manipulation in recently listed initial public offers by the Securities and Exchange Board of India may unearth a full-blown scam.

Multiple government agencies, including the Enforcement Directorate, Central Board of Direct Taxes and the Ministry of Corporate Affairs will investigate the matter.

Regulatory sources say findings are due to be out on at least 15 more companies that raised money through IPOs in the past year.

What appears to have been a game of a few company promoters, brokers and operators may have wider ramifications, as it involves the exchange of huge cash and fund siphoning, say Sebi officials.

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"The case will be referred to other agencies, as material unearthed during the probe shows there are other grave violations and operators are running a money-laundering network.

"Promoters, too, have used various entities to siphon money; the trail needs to be followed," a Sebi source said.

Sebi chairman U K Sinha told Business Standard the market regulator was referring the cases involving possible money laundering to the ED and those involving unidentified income sources to the CBDT.

"It's an ongoing process and wherever any violation is found, action would be taken promptly," he said.

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The case is similar to the 2005 scam involving Rupalben Panchal, wherein operators using her as a front opened several demat accounts in a single name to corner IPO allotment.

When Sebi barred seven company promoters and 89 other entities from dealing in the stock market on Thursday, it observed a pattern in IPO applications, instances of share price manipulation, misuse of IPO money, fund siphoning and inadequate disclosure of information.

Sebi observed in its order several subscribers were dummy investors, so money-laundering instances were high.

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"It is expected Sebi will come out with at least two more sets of orders.

Many of the IPOs listed over the past year have been classic cases of distribution of poor company shares by operators in the market.

Proper investigations will show there are some large brokerage houses involved in funding such operator-driven companies.

Of course, these companies should be investigated by the MCA and income-tax authorities," said S P Tulsian, an independent equity advisor who tracks the IPO market.

"Increased coordination is required to probe such cases and it is a good thing that Sebi is referring these cases to other agencies.

"On the face of it, the ramifications seem to be much wider," said legal expert Siddharth Shah of Nishit Desai Associates.

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Calculations show small and little-known companies listed since March 2010 have lost about Rs 2,000 crore (Rs 20 billion) in market capitalisation, resulting in gains for operators and promoters as they exited the counter within days of listing.

More than 60 IPOs were listed since March 2010.

Most managed to get fully subscribed, riding on high retail participation despite poor fundamentals and abysmal market conditions.

A major portion of such subscriptions was dummy applications arranged by brokers in Gujarat, Rajasthan and Mumbai.

The share prices of such companies fell sharply, some as much as 90 per cent, from their issue prices.