BAJAJ BROKING

Notification
No new Notification messages
Vishal Mega Mart IPO is Open!
Apply for the Vishal Mega Mart IPO through UPI in just minutes.
Open a Free Demat Account
Pay ZERO maintenance charges for the first year, get free stock picks daily, and more.
Trade Now, Pay Later with up to 4x
Never miss a good trading opportunity due to low funds with our MTF feature.
Track Market Movers Instantly
Stay updated with real-time data. Get insights at your fingertips.

SEBI Bars Axis Capital From New Debt Segment Roles

Listen to our Podcast: Grow your wealth and keep it secure.

0:00 / 0:00

Synopsis:

SEBI has restrained Axis Capital from taking new merchant banker roles in the debt segment due to unauthorised guarantees for Non-Convertible Debentures (NCDs). The regulator highlighted potential risks to market stability from these actions.

SEBI  news today

The Securities and Exchange Board of India (SEBI) has taken strong action against Axis Capital, barring it from taking up any new assignments in the debt segment as a merchant banker, arranger, or underwriter. This decision comes after SEBI found irregularities related to the firm's involvement in providing guarantees for the redemption of Non-Convertible Debentures (NCDs) issued by Sojo Infotel Pvt. Ltd. Axis Capital's activities were seen as exceeding the permissible scope for merchant bankers under the current regulatory framework.

Axis Capital’s NCD involvement flagged by SEBI

SEBI’s interim order raised concerns over Axis Capital’s role in guaranteeing the redemption of NCDs. These guarantees went beyond the typical scope of underwriting, which is limited to market risks, not credit risks. The regulator stated that Axis Capital had acted more like a bank, exposing itself and its parent company, Axis Bank, to credit risk through the guarantees it provided.

The merchant banker continued supporting these NCDs over time, earning ongoing fees, which is a violation of the rules governing merchant bankers, who are typically paid a one-time fee for underwriting activities. SEBI found that Axis Capital’s involvement posed a risk to the financial system by undermining market integrity.

Market impact and SEBI’s response

As Axis Capital is a subsidiary of Axis Bank, the regulator pointed out that these actions exposed the bank to further risks. SEBI highlighted that such activities have the potential to disrupt the orderly functioning of the market, especially since Credit Rating Agencies (CRAs) had rated the NCDs based on Axis Capital’s guarantees. Investors relying on these ratings may have been misled by Axis Capital’s unauthorised guarantee structure.

In response to these findings, SEBI has barred Axis Capital from taking up new roles in the debt segment, including as a merchant banker, arranger, or underwriter, until further notice. Axis Capital has been directed to respond to SEBI’s observations within 21 days. This action underscores SEBI's focus on maintaining market stability and enforcing strict compliance in the financial sector.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

For All Disclaimers Click Here: https://bit.ly/3Tcsfuc

Read More Blogs

Our Secure Trading Platforms

Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading

Bajaj Broking App Download

8 Lacs+ Users

icon-with-text

4.4+ App Rating

icon-with-text

4 Languages

icon-with-text

₹4700+ Cr MTF Book

icon-with-text