WeWork India IPO Gets Green Signal as Bombay High Court Upholds SEBI Nod, Fines Petitioner INR 1 Lakh

According to a Bar & Bench story, office space company WeWork India received significant relief on December 1st when the Bombay High Court maintained the Securities and Exchange Board of India's (Sebi) licence for its 3,000 crore initial public offering (IPO). The report also stated that petitioner Vinay Bansal's plea, which had contested the IPO on the grounds of investor claims that SEBI failed to disclose disclosure lapses, including failure to disclose ongoing criminal proceedings under the Prevention of Money Laundering Act (PMLA), was dismissed by a division bench of justices R.I. Chagla and Farhan Parvez Dubash.

Court Imposed INR 1 Lakhi Fine on Bansal

According to Live Law, the court ordered Bansal to pay INR 100,000 to the Maharashtra Legal Services Authority (MLSA) and deposit the money within two weeks. We have yet to receive the entire order. In a separate case, Hemant Kulshrestha claimed that WeWork India had failed to disclose important criminal proceedings and contended that investors shouldn't be held accountable for pointing out omissions.

The Bombay High Court rejected his plea. According to the study, no expenses were incurred in this instance. As per the Bar & Bench article, petitioner Bansal had contested Sebi's clearance of WeWork India's initial public offering (IPO) as "illegal," alleging that the company's draft red herring prospectus (DRHP) contained errors and omitted information about disputes.

He said that these anomalies represented accrued losses and a declining net value and that the business had overstated growth without providing sufficient risk disclosures—information that is essential for investors to make informed decisions. Additionally, Bansal disputed WeWork India's representation of its connection to the international WeWork brand, claiming that it gave the impression of stability and financial support. He asserted that investors were not adequately informed of the fact that the Indian company actually merely licenses the brand name.

Details of WeWork IPO

The DRHP was submitted on January 31. The subscription period began on October 3 and ended on October 7. Qualified institutional buyers (QIBs) showed a great deal of interest in the IPO by the last day, oversubscribing 1.79 times. Retail investors made up 61% of the subscriptions, compared to 23% of non-institutional investors. According to BSE data, the IPO was 1.15 times subscribed on the last day. On October 10, WeWork India went public on Indian stock exchanges.