Axis Bank Limited has issued a clarification regarding an interim order from the Securities and Exchange Board of India (SEBI) against its wholly owned subsidiary, Axis Capital Limited (ACL). The SEBI order, dated September 19, 2024, restrains ACL from taking on any new assignments in the capacity of a merchant banker, arranger, or underwriter for securities offers in the debt segment. This action is pending further inspection by SEBI.
ACL has maintained that all of its activities related to merchant banking, arranging, and underwriting in the debt segment were conducted in good faith and in compliance with regulatory provisions. Furthermore, the company states that no investor or market participant has suffered any losses from these activities.
While the interim order does restrict ACL’s involvement in debt segment activities, the company will continue operating its other business segments, including equity capital markets, mergers and acquisitions, private equity, and institutional equities. ACL clarified that it had already ceased taking new assignments in the debt segment for over a year.
Axis Bank emphasized that there will be no significant impact on its financials due to the SEBI order. For FY 2023-24, ACL’s profit after tax accounted for only 0.70% of Axis Bank’s consolidated PAT, and the income from ACL’s debt business was approximately 5% of ACL’s total income.
The bank reaffirmed its commitment to adhering to the highest standards of regulatory compliance and emphasized that no adverse directions have been passed against Axis Bank Limited itself.
