Axis Capital Mulls Legal Action Against Sebi

Axis Capital, a subsidiary of Axis Bank, clarified that it has not taken on any new assignments in the debt segment for over a year. Additionally, the revenue generated from its debt business in FY24 accounted for only 5% of the company’s total income

New Delhi: Axis Capital on Friday said it is exploring legal remedies against markets regulator Sebi’s order restraining the firm from taking up new assignments as a merchant banker for the debt segment.

In a statement, the company clarified that Sebi has not imposed any other restrictions on Axis Capital and it will continue to operate all other business activities in the ordinary course in equity capital markets, infrastructure investment trusts (InvITs), real estate investment trust (REITs), M&A, private equity and institutional equities domain.

On Thursday, the Securities and Exchange Board of India (Sebi), in an interim ruling, prohibited Axis Capital from taking up any new assignments in the capacity of a merchant banker, arranger or underwriter for any issue or offer for sale of securities in the debt segment. This restriction will remain in place until further orders.

“ACL (Axis Capital Ltd) provided guarantee/indemnity towards redemption of NCDs (non-convertible debentures) in the guise of underwriting, which it was not permitted to do under the existing regulatory framework. Such activity poses risk to the financial system as it can potentially disrupt the orderly functioning of the market,” Sebi stated.