SEBI lifts ban on Axis Capital and relaxes restrictions on operations

On By Pranco

The Securities and Exchange Board of India relaxed the directions earlier given to Axis Capital through an interim order. The capital markets regulator issued an affirmative order on Tuesday saying Axis Capital should not undertake any specific type of transaction in the debt segment until further notice.

In the previous interim order issued in September 2024, authorities banned the entity from acting as an investment banker in the debt market until further notice, Moneycontrol reported.

The SEBI’s recent order dated November 26 said: “ACL shall not undertake any transaction which would imply that ACL would provide any credit risk cover (as referred to in paragraph 10 of the interim order). Order), guarantee or indemnity in relation to the purchase of pledged shares (as referred to in paragraphs 11 and 12 of the Interim Order), or such that it results in a structured secured credit transaction (as referred to in paragraph 18 of the Interim Order) , in the debt segment, until further notice.”

Earlier, authorities barred Axis Capital from operating in the debt segment after it evaluated whether the entity was expanding beyond the activities permitted for a merchant banker in relation to the issuance of listed non-convertible debentures (NCDs) of Sojo Infotel.

The order was passed by the regulator’s full-time member (WTM) Ashwani Bhatia and noted: “ACL provided guarantee/indemnity for repayment of NCDs under the guise of acceptance, which it was not allowed to do under the existing regulatory framework. Such activities pose a risk to the financial system as it could potentially disrupt the orderly functioning of the market.”

In an in-person hearing later, Axis Capital’s legal representative urged that the ban, which covers the entire debt market, be lifted and limited to activities included in the preliminary injunction. The entity also said it was prepared to impose voluntary restrictions on undertaking activities that the authority said were prima facie contrary to the provisions of the Merchant Bankers Regulations, 1992.

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