Sebi issues final order against Axis Capital, imposes regulatory censure; Axis Bank shares fall over 1%

It also stated that no loss had been caused to any investor or market participant from these activities as of that date.The company further said that Sebi had not imposed any other restrictions on its operations and that its other businesses, including equity capital markets, mergers and acquisitions, private equity and institutional equities, would continue to operate.Axis Capital also disclosed that it had already discontinued and had not undertaken any new assignments as a merchant banker, arranger or underwriter for debt-segment issues or offers for sale for over a year.The subsidiary said it was evaluating all available legal remedies based on the merits of the matter and prevailing law.Sebi Modified Restrictions In November 2024On November 27, 2024, Axis Bank informed the exchanges that Sebi had passed a confirmatory order on November 26, following a personal hearing for Axis Capital and submissions and undertakings provided by the subsidiary.Under the confirmatory order, the earlier restriction preventing Axis Capital from undertaking new merchant banking-related assignments across the entire debt segment was modified.The restriction was limited to activities alleged to be in violation of the provisions referred to in the interim order.At the time, Axis Bank had said that the matter remained pending adjudication with Sebi.What Was The Potential Financial Impact On Axis Bank?In its September 19, 2024, filing, Axis Bank had clarified that Sebi had not passed any adverse direction or order against the bank.The lender also stated that it did not expect any material impact on its business from the interim order against Axis Capital.According to the disclosure, Axis Capital's profit after tax (PAT) for FY2023-24 was approximately 0.70% of Axis Bank's consolidated PAT.

Further, income from Axis Capital's debt business accounted for approximately 5% of the subsidiary's total income in FY2023-24.Axis Bank had also reiterated its commitment to the highest standards of legal and regulatory compliance and said that the bank and its subsidiaries held regulatory authorities in the highest regard.Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser.

Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution.

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