SEBI has nixed the Rs 3,000-crore initial public offering of Sahara Prime City.
The Securities and Exchange Board of India said it had closed the file on the IPO when giving out the Monday status report on public issues.
Sahara Prime City had filed the draft red herring prospectus (DRHP) with SEBI on September 30, 2009. The company had planned to raise up to Rs 3,000 crore with a green-shoe option (that is, retaining excess subscription) of Rs 450 crore.
According to agency reports, SEBI closed the IPO file after various clarifications sought from merchant bankers for the share sale remained pending for months together.
The company had indicated in the DRHP that it would use the IPO proceeds to fund the construction and development of residential projects over three years. The total cost of these projects was estimated at Rs 3,505 crore.
Enam Securities and JM Financial were the book-running lead managers and global coordinators of the issue while Edelweiss Capital, IDBI Capital and Daiwa Securities SMBC were the book-running lead managers.
PTI reports:
After Sahara Prime City filed the DRHP, SEBI started receiving complaints against Sahara group and subsequent investigations led to the high-profile order from the regulator against two Sahara firms.
The 34-page interim order against Sahara group, passed on November 24, 2010 by SEBI’s then wholetime member K.M. Abraham, began with a reference to Sahara Prime City’s DRHP for the proposed IPO and later listed out complaints on disclosures made in the IPO document.
SEBI had sought clarifications from Enam Securities in April 2010 regarding the OFCDs (optionally fully convertible debentures) issued by Sahara India Real Estate Corp Ltd and Sahara Housing Investment Corp Ltd .
Later, in May, SEBI sought these clarifications directly from the two Sahara firms, but was not satisfied with the replies. SEBI then began its formal probe into the OFCD issue in August 2010 and passed its interim order in November that year.
These OFCDs are at the centre of the high-profile case between SEBI and Sahara group, reaching the Supreme Court.
On August 31, 2012, the apex court asked the two companies to refund over Rs 24,000 crore raised via the OFCDs issued to more than three crore investors.
Accusing Sahara of not complying with the court orders, SEBI has ordered attachment of properties of the two companies and their top officials including group chief Subrata Roy. It has also sought directions for his arrest.
The Sahara group, however, claims that it has already repaid most of the investors and that its total outstanding liability is much less than the Rs 5,120 crore already deposited with SEBI towards the refund.