The Securities and Exchange Board of India (Sebi) on Thursday said its preliminary analysis suggested large-scale withdrawal of applications in the high net worth individual (HNI) category after the closure of Vaswani Industries’ initial share sale offer.
The stock market regulator, which has withheld the listing of Vaswani Industries after receiving complaints from investors, has found that 3,813 applications have been withdrawn after the closure of the issue. “Of the withdrawn applications, 666 applications amounting to a total of Rs 31.32 crore belong to cases where bids have been punched in the system, but the cheques were not sent for payment,” Sebi said in its order. “Amongst the remaining 3,147 applications, 2,785 applications have been on account of “cheque return” amounting to a total of Rs 101 crore,” the regulator added.
“Applications in the HNI category amounting to Rs 44.6 crore (which works out to about 90 per cent of the issue size) have been made on the opening day of the issue at the cap of the price band. All these applications have been withdrawn subsequently,” Sebi said in its order.
| MASS EXIT | ||
| * A total of 3,813 applications have been withdrawn after the closure of the issue | ||
| * HNI applications amounting to Rs 44.6 crore have been made on the opening day of the issue at the cap of the price band. All these applications have been withdrawn subsequently | ||
| Large-scale withdrawals | ||
| Category | Times subscribed | |
| As on date of issue closure | After withdrawal/ rejection | |
| QIBs | 0.16 | 0.16 |
| NIIs | 11.29 | 0.84 |
| RIIs | 6.82 | 1.35 |
| Total | 4.16 | 1.28 |
| Source: Sebi order | ||
In its order, Sebi also said it would carry out a detailed investigation within the next 30 days, so that a decision on the listing application can be taken by stock exchanges within the statutory time limit provided under the Companies Act.
The regulator has also asked the banker to the issue, Ashika Capital, to place the amount in the public issue account in an interest earning account.
Vaswani Industries’ initial public offering (IPO) had opened on April 29 and closed on May 3. The company had made an offer of 10 million shares in a price band of Rs 45-49 a share. The issue was subscribed 4.16 times at the end of the bidding period. However, after the withdrawal of bids, the overall subscription came down to 1.28 times the shares offered.
