The listing of the R49-crore Initial Public Offer (IPO) from Vaswani Industries , which was scheduled on May 17, 2011 has been delayed as the Securities and Exchange Board of India (Sebi) is probing in to the alleged manipulation during the issue book building process.
The Sebi investigation follows after receiving complaints from few investors association alleging that large number of high net worth investors (HNI) and retail investors had either withdrawn their application or their cheque got dishonoured after subscribing heavily during the book building process.
The HNI portion of the issue was subscribed 11.29 times, the retail category was subscribed 6.83 times, while the Qualified Institutional Buyers (QIB) category remained under subscribed to the extent of just 16% at the time of closure of the issue on May 3, 2011. According to sources familiar with the development, post withdrawal of their applications, the actual subscription of the HNI portion was slightly less than one time while the retail portion was subscribed by just 1.28 times.
According to the lead manager to the issue, the withdrawal of application from HNI?s and retail was seen across various bidding centres. ?We have finished the allotment of shares. However the listing has been delayed as SEBI had asked for more details from the lead manager and registrar to the issue,? said the person on condition of anonymity.
Ashika Capital was the book running lead manager to the issue while Link Intime India Private was the registrar to the issue. The company had fixed the issue price at the upper end of the price band of R49.
ICRA had assigned an IPO grade 2 indicating below average fundamentals to the public offer.