The Securities and Exchange Board of India (Sebi) has disposed of cases against Vishvaraj Environment after the Reserve Bank of India (RBI) confirmed that the company had regularised regulatory lapses that were not disclosed in its draft red herring prospectus (DRHP). With the markets regulator dropping the show-cause notice without any adverse direction, the company and its three merchant bankers can now go ahead with the initial public offering (IPO) process.
“The department is advised to process the offer documents in regular course and carry out their due diligence as done in any other case,” Sebi Whole-Time Member Kamlesh Chandra Varshney said in an order on Thursday.
The matter pertains to certain lapses which were not specified in the company’s DRHP filed in September 2025 for its ₹2,250-crore IPO. The offer comprises ₹1,250-crore fresh issue and ₹1,000-crore offer for sale by Premier Financial Services that holds 100% stake in the company.
Sebi had sought the RBI’s comments while processing the draft documents as Premier Financial, a non-banking financial company (NBFC), is supervised and regulated by the apex bank.
In its response, the RBI noted a number of lapses which were not specified in the draft documents. The company had shifted its registered office to Maharashtra from West Bengal and had also appointed Vandana Arun Lakhani as its director; both without getting approval from the RBI. Vishvaraj Environment had also failed to categorise itself as an NBFC-middle layer though its asset size was above ₹1,000 crore, failing to meet the RBI’s norms.
RBI’s Turnaround
“Pursuant to the violations observed, it would not be prudent to permit this non-compliant NBFC or its group entity to bring in an IPO. It would not be in public interest to permit them to bring out the IPO as the NBFC is a consistent violator of extant guidelines,” the RBI wrote in its response to Sebi in December 2025.
Following this, the markets regulator issued a show-cause notice (SCN) to the water utility and wastewater management company for willfully concealing material information from the DRHP, violating Sebi’s Issue of Capital and Disclosure Requirements (ICDR) Regulations, 2018. It also said the three merchant bankers of the public issue – JM Financial, Axis Capital, and DAM Capital Advisors – failed “to exercise due diligence and discharge their obligations.”
Relief for Merchant Bankers
In February, the RBI informed Sebi that the company took corrective steps and regularised all violations. “Since RBI has subsequently clarified that these violations have been regularized, the root of the SCN does not stand. Thus, the allegation levelled against the Issuer Company also does not stand,” as per the Sebi order.
The markets regulator also said that the merchant bankers cannot be faulted for failing to exercise independent professional judgement since the details of lapses were not provided to them by the company.