Close Menu
    What's Hot

    Golden Visa Now in Reach: Settle in UAE for Just Rs.23 Lakh

    July 7, 2025

    Bank of Baroda Starts LBO Recruitment for 2500 Posts, Apply by July 24

    July 4, 2025

    Big Sell-Off by Promoters and Insiders Raises Investor Concerns

    July 4, 2025
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    Invest PolicyInvest Policy
    Subscribe
    • Insurance
    • Investment
    • Tax
    • Stocks
    • MF
    • Money
    • Property
    • Schemes
    • More
      • Documents
      • Cards
      • Loan
      • Hindi
    Invest PolicyInvest Policy
    Home » SEBI Takes Action Against Axis Capital: A Closer Look at the NCD Issue and What Led to the Ban
    News

    SEBI Takes Action Against Axis Capital: A Closer Look at the NCD Issue and What Led to the Ban

    Shehnaz BeigBy Shehnaz BeigSeptember 20, 2024Updated:September 22, 2024No Comments3 Mins Read
    Facebook Twitter LinkedIn Telegram Pinterest Tumblr Reddit WhatsApp Email
    SEBI Takes Action Against Axis Capital: A Closer Look at the NCD Issue and What Led to the Ba
    Share
    Facebook Twitter LinkedIn Pinterest Email

    On September 19, the Securities and Exchange Board of India (SEBI) issued an interim order against Axis Capital (ACL), one of India’s prominent investment banks. The order has placed strict restrictions on the firm, barring it from accepting new assignments as a merchant banker. In addition, Axis Capital will not be able to engage in offering debt securities for sale or act as an underwriter or arranger until further notice.

    The regulatory action came in response to allegations of irregularities related to Axis Capital’s involvement in a Non-Convertible Debenture (NCD) issue by Sojo Infotel Pvt. Ltd. SEBI’s investigation into this matter was triggered by an article written by Hemindra Kishan Hazari, a well-known research analyst.

    The Article That Brought Attention to the Case

    On January 16, 2024, Hemindra Kishan Hazari published a detailed article titled “Is Axis Capital an Investment Bank or a Hedge Fund?” In this article, Hazari pointed out irregularities in how Axis Capital handled the NCD issue for Sojo Infotel Pvt. Ltd. The article gained significant attention and ultimately caught SEBI’s eye, prompting a regulatory investigation into the matter.

    Hazari’s article raised concerns over whether Axis Capital was adhering to proper guidelines as a merchant banker or acting more like a hedge fund by taking risks that could jeopardize the market’s stability. With more than 25 years of experience in the Indian capital markets, Hazari specializes in banking and macroeconomic research, making his findings particularly significant.

    SEBI’s Investigation and Findings on Axis Capital’s Role

    Following the publication of the article, SEBI launched an investigation into Axis Capital’s involvement with the NCD issue of Sojo Infotel Pvt. Ltd. The key finding from SEBI’s inquiry was that Axis Capital had guaranteed the NCDs under the guise of underwriting. However, according to SEBI regulations, such arrangements are not allowed.

    See also  Buzzing Stocks: Vedanta, KPI Green, and Other Top Stocks to Watch Today for Market Action

    In the debenture issuance, a Debenture Trustee Deed (DTD) was created between Sojo Infotel, Axis Debenture Trustee (ADT), and Axis Capital. Shares of LIL were pledged as collateral for the NCDs, and in case of default, the Debenture Trustee had the right to take possession of these shares. The agreement included a clause stating that if Axis Capital couldn’t find a buyer for the shares, it would be required to fulfill its underwriting obligation by purchasing the shares or providing funds for their purchase.

    However, SEBI’s investigation revealed that this arrangement didn’t qualify as an underwriting activity, as it wasn’t a simple agreement to subscribe to unsubscribed securities. Instead, Axis Capital guaranteed the redemption of NCDs in case of default upon maturity. This, according to SEBI, violated the core definition of underwriting, which typically doesn’t involve offering guarantees to redeem securities.

    Why SEBI’s Order Is Important for the Market

    SEBI’s order emphasized that Axis Capital’s actions in this case posed potential risks to the financial system and could disrupt the normal functioning of the market. By offering guarantees instead of underwriting in the traditional sense, Axis Capital was found to have violated fundamental regulatory principles.

    The interim order bars Axis Capital from undertaking any new assignments or participating in various segments of the market, such as debt securities, until further notice. While SEBI continues its investigation, Axis Capital is expected to face significant scrutiny from both regulatory bodies and the market.

    This case serves as a reminder that even well-established financial institutions must strictly adhere to market regulations, ensuring transparency and stability within the financial system.

    See also  How to Check KRN Heat Exchanger IPO Allotment: A Step-by-Step Guide
    Share. Facebook Twitter Pinterest LinkedIn Tumblr Telegram Email
    Previous ArticleCasagrand Premier Builder Plans ₹1,100 Crore IPO – Details You Need to Know
    Next Article KRN Heat Exchanger IPO Set to Open on September 25: Key Details Investors Should Know
    Shehnaz Beig
    • LinkedIn

    Shehnaz Ali Siddiqui is a Corporate Communications Expert by profession and writer by Passion. She has experience of many years in the same. Her educational background in Mass communication has given her a broad base from which to approach many topics. She enjoys writing around Public relations, Corporate communications, travel, entrepreneurship, insurance, and finance among others.

    Related Posts

    Big Sell-Off by Promoters and Insiders Raises Investor Concerns

    July 4, 2025

    Gold Mutual Funds Are Making Gold Investment Easier for Everyone in India

    July 4, 2025

    SEBI Takes Strong Action Against Jane Street for Misusing Nifty Index in Indian Stock Market

    July 4, 2025

    Government Eyes IPO Listing of SBI Subsidiaries, Investors Watch Closely

    July 3, 2025

    Indian Techie Soham Parekh in Trouble for Handling 5 Jobs Together, Earns Over 2.5 Lakh a Day

    July 3, 2025

    Crizac IPO Opens for Subscription: Check All Details, Expert Reviews, Risk Factors, and Future Outlook

    July 2, 2025
    Add A Comment

    Comments are closed.

    Top Posts

    Golden Visa Now in Reach: Settle in UAE for Just Rs.23 Lakh

    July 7, 2025

    Bank of Baroda Starts LBO Recruitment for 2500 Posts, Apply by July 24

    July 4, 2025

    Big Sell-Off by Promoters and Insiders Raises Investor Concerns

    July 4, 2025

    Subscribe to Updates

    Get the latest sports news from SportsSite about soccer, football and tennis.

    Advertisement

    Our main motto is to help our customers in making personal finance decisions easy and convenient as per their comfort. We are committed to provide accurate and unbiased information at your doorstep and keep it transparent among our customers.

    We're social. Connect with us:

    Facebook X (Twitter) Instagram Pinterest YouTube
    Top Insights

    Golden Visa Now in Reach: Settle in UAE for Just Rs.23 Lakh

    July 7, 2025

    Bank of Baroda Starts LBO Recruitment for 2500 Posts, Apply by July 24

    July 4, 2025

    Big Sell-Off by Promoters and Insiders Raises Investor Concerns

    July 4, 2025
    Get Informed

    Subscribe to Updates

    Get the latest creative news from FooBar about art, design and business.

    © 2025 Invest Policy. Designed by DigiSpiders.
    • Home
    • About Us
    • Contact Us
    • Privacy Policy
    • Terms and Conditions
    • Disclaimer

    Type above and press Enter to search. Press Esc to cancel.