Upholding a Sebi order in connection with alleged irregularities in Vaswani Industries IPO, the Securities Appellate Tribunal (SAT) has directed the company to give withdrawal option to retail investors.
"The appellant [Vaswani Industries] shall give a withdrawal option in the RII category to the extent of 15,00,348 shares...," SAT said in an order dated August 25.
It also directed Vaswani Industries to issue a public advertisement giving details of the withdrawal option and the bonus shares to be received by investors in case of their not opting for withdrawal.
"The public advertisement shall be made in consultation with Sebi and Bombay Stock Exchange... Within seven working days of this order," SAT said.
Vaswani Industries had moved SAT stating that Sebi's order of July 11, directing the company to give withdrawal option to NIIs and retail subscribers to its IPO, be vacated immediately as it violates the provisions of the Companies Act.
Sebi had directed stock exchanges on May 19 to withhold the company's listing, following complaints of irregularities in subscription, especially huge withdrawals and rejections after IPO closure.
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The company had offered one crore shares in the price band of Rs 45-49 and the issue was subscribed 4.16 times. Qualified Institutional Buyers (QIBs) subscribed to just 0.16 per cent of their allotted 50 per cent portion, whereas non- institutional investors (NIIs) portion was oversubscribed 11.29 times and retail investors oversubscribed 6.83 times.
In its order, SAT said that for the purpose of the withdrawal of offers and other related issues, Vaswani Industries will have to follow procedures laid down in the Sebi order of July 11.
"After completion of the withdrawal of offers by RIIs and placement of those shares with either the Sole Syndicate Member cum Book Running Lead Managers i.e. Ashika Capital Ltd or investors identified by Ashika Capital Ltd, and subject to the receipt of minimum subscription and any other compliance, the stock exchanges shall grant listing permission for the shares," SAT said.