SEBI barred Almondz Global Securities for failing to exercise due diligence and for violating norms in the IPO of Bharatiya Global Infomedia
Market regulator Securities and Exchange Board of India (SEBI) suspended merchant banker registration certificate of Almond Global Securities (Almondz) for six months for violating norms in the initial public offering (IPO) of Bhartiya Global Infomedia Ltd (BGIL).
SEBI in its investigation found that, BGIL had used the IPO proceeds in a substantially different manner and purpose from what it disclosed in the draft prospectus. BGIL also made incorrect and misleading disclosures in the prospectus. SEBI said, “As a lead manager of this IPO Almondz has failed to exercise the required due diligence.” SEBI held Almondz equally responsible in the fraud committed by BGIL and its officials.
SEBI found Almondz guilty for failure to exercise due-diligence in respect of wrong, false and misleading disclosures and also in respect of non-disclosure of ICD raised by BGIL.
However, with regard to the third allegation of failure to carry out independent valuation, Almondz had been given ‘benefit of doubt’ by SEBI.
SEBI said BGIL and Almondz as its book runner lead manager (BRLM) of the issue has issued share at Rs82 per share, on the day of listing BGIL share prices opens at Rs81.9 and closed to Rs29.90 at BSE. Hence SEBI has decided to investigate its IPO proceedings.
SEBI in its order, barred Almondz from taking up any new assignment or involvement in any new issue of capital including IPO, follow-on issue in the securities market for a further period of six months from the date of the order. Almondz has been further directed that during this period of six months, it shall not take up any assignment or involvement in buy-back of securities, open offers under the SEBI and delisting of securities.
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While FIIs are increasing their shareholding in Infosys, domestic institutional investors including LIC, are reducing their stake in the country's second largest IT company
State-run Life Insurance Corporation of India (LIC) sold 0.46% of its stake in Infosys Ltd for about Rs850 crore to cut its shareholding to 3.25% in the IT company during the March quarter. Taking into account the current market value of Infosys shares, the 0.4% decline in LIC's holding in the company would be worth overt Rs850 crore.
LIC, the country's largest insurer is also the biggest institutional investor in Indian markets. During the December 2013 quarter, it held 3.71% stake in Infosys.
As per data from BSE, the insurer has been reducing its stake from the IT company. As on June 2012, LIC had 6.72% stake in Infosys which was reduced by 3.47% to 3.25% as on March 2014.
LIC appears to have sold shares at a time when foreign institutional investors (FII) were increasing their stake in Infosys. FIIs hiked their stake in Infosys to 42.10% in the January-March quarter from 40.65% in the preceding three months.
However, domestic institutional investors (DII) reduced their exposure in Infosys to 13.66% in January-March quarter of 2014 from 15.35% in the preceding quarter.
Infosys, which is scheduled to report its fourth quarter earnings tomorrow, is expecting a sluggish growth in revenue during the quarter.
Infosys co-founder NR Narayana Murthy was brought back to head the IT major in June last year, following quarters of laggard performance.
Meanwhile, the company shares have underperformed the broader market by declining nearly 6% compared to 5.7% surge in the BSE's benchmark Sensex during the March quarter.
Infosys closed Friday marginally higher at Rs3,235.85 on the BSE, while the 30-share Sensex ended the day marginally down at 22,628.