The Securities and Exchange Board of India (SEBI) has barred Axis Capital Limited from providing merchant banking services in the debt segment. This interim action follows an investigation into Axis Capital’s involvement in a transaction related to Non-Convertible Debentures (NCDs) issued by Sojo Infotel Pvt. Ltd.
SEBI’s inspection found that Axis Capital had provided credit risk guarantees for the NCDs, which exceeded the scope of its merchant banking license. The transaction included a commitment from Axis Capital to cover NCD redemption, which aligned more with banking operations.
SEBI has prohibited Axis Capital from taking on new merchant banking assignments in the debt segment until further notice. Axis Capital has 21 days to respond to the interim order.
