Sebi initiates 3rd tranche of distribution of disgorged amount in IPO cases

Capital markets regulator Sebi on Thursday said it has initiated the third tranche of distribution of nearly Rs 15 crore to 2.58 lakh investors from the disgorged amount in the matter of IPO irregularities observed during 2003-2005.

The regulator has already distributed Rs 23.28 crore in April 2010 and Rs 18.06 crore in December 2015, according to a release.

The capital markets watchdog has been distributing funds among eligible investors from the money collected by it through disgorgement orders in cases of irregularities in the Initial Public Offerings (IPO).

The regulator had investigated certain irregularities in the shares issued through 21 IPOs during the period 2003-2005 before their listing on the stock exchanges. Following the completion of the investigations, the Securities and Exchange Board of India (Sebi) directed certain persons to disgorge the illegal gains.

Under the chairmanship of former Judge of the Supreme Court of India D P Wadhwa, a committee was set up which recommended the procedure of identification of persons who have been deprived in the said IPOs and the manner in which reallocation of shares to such persons should take place.

As per the recommendations of the Wadhwa committee, 13.57 lakh persons had been identified as eligible investors for distribution.

Of 13.57 lakh investors, 10.02 lakh investors were paid the full eligible amount and 97,657 investors were excluded due to the costs involved.

"Sebi has initiated the third tranche for distribution of Rs 14.87 crore to 2.58 lakh investors from the disgorged/recovered amount in the matter of IPO irregularities on August 17, 2023," the regulator said.

In the current exercise, Sebi is distributing amounts to those investors to whom partial amounts were paid earlier and are entitled to receive additional amounts.

Of 2.58 lakh investors, 1.15 lakh investors would be paid the eligible amount in full and the remaining 1.43 lakh investors would be paid in part.

Sebi said that wherever the bank details of the eligible investors are available, the amount is being credited to their bank accounts with an intimation to the investors. In cases where bank details are not available, payment warrants are being sent to the last known address of the investors.