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MDP wins in Bombay HC: IndusInd may rectify its IPO purchase error, in case with Khaitan, CAM, Law Point

MDP & Partners won for IndusInd Bank in the Bombay high court yesterday, which directed the stock exchanges and others to allow the bank to correct its filing mistake in its subscription of Mahanagar Gas Limited’s initial public offer (IPO).

MDP managing partner Nishit Dhruva explained that the mistake happened when Axis Bank, acting through IndusInd, made an application for buying Rs 1.71 crore worth of equity in Mahanagar’s IPO In the subscription application, IndusInd accidentally stated it was an individual investor instead of stating that it was a financial institution.

The application was made on 23 June and IndusInd only realised its mistake after the closure of the IPO and then tried to explain this to the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE) and the lead book managers to the IPO

The stock exchanges and book managers directed IndusInd to approach the Securities and Exchange Board of India (SEBI) but when SEBI did not respond to IndusInd’s representations until 27 June, the bank filed a suit in the high court.

In the meanwhile, SEBI on 28 June 2016 directed the book managers and exchanges to consider the application of Axis Bank made through IndusInd Bank, but the stock exchanges were reluctant.

Bombay high court justice SJ Kathawalla directed the exchanges and the book managers, on 28 June, to consider the bank’s application. All parties then finally consented to correct the error.

MDP managing partner Nishit Dhruva, partner Prakash Shinde, associates Chirag Bhavsar, Khushbu Chhajed and Rohan Agarwal, briefed advocate Birendra Saraf for IndusInd.

Khaitan & Co partner Raj Panchmatia acted for Mahanagar Gas.

Cyril Amarchand Mangaldas partner Indranil Deshmukh acted for book managers Kotak and Citigroup Global.

Law Point acted for the Bombay Stock Exchange.

Read Bombay HC order (PDF)

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