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Tuesday, July 12, 2011

Vaswani Industries IPO - SEBI directs for withdrawal option

The Securities and Exchange Board of India (SEBI) has issued a Press Release in the matter of Vaswani Industries IPO. The following are significant directions given in the order:

  1. Vaswani Industries Limited shall give withdrawal option to all the investors who have been allotted shares in the non-institutional investors’ category and the retail individual investors’ category for such number of shares by which the allotment ratio was impacted due to withdrawals/rejections in the aforesaid categories.
  2. The withdrawal option shall be kept open for a period of ten days
  3. In the event of refund/withdrawal on the exercise of the withdrawal option by an investor, the Company may deduct the expenses incurred in connection with its IPO
  4. On closure of the withdrawal option, if the subscription level after such withdrawals falls below the minimum level of subscription as required by law, the BRLM, Ashika Capital Limited, may purchase or arrange purchase through any investor(s) identified by it of such number of shares so as to ensure that the subscription does not fall below the minimum level of subscription. Non-compliance of such condition shall result in refund of entire subscription money to the investors and cancellation of all the shares so allotted by the Company
Moreover, the order also stated that if the company fails to provide withdrawal option within given timeframe, the BRLM shall take necessary steps to ensure that allotment of shares is cancelled and money is refunded to investors within seven days of such failure

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