India's securities regulator is set to investigate ICICI Prudential Asset Management Co. Ltd.'s investments into the IPO of affiliate ICICI Securities Ltd., The Hindu Business Line reported July 29, citing "a person familiar with the development."
ICICI Prudential Asset Management invested 6.4 billion rupees into ICICI Securities' IPO under five of its schemes. It invested 4 billion rupees on the first day of the IPO and the remaining 2.4 billion rupees on the last day of the offering. ICICI Securities raised about 35 billion rupees in its IPO in March, including about 17.17 billion rupees from anchor investors.
The Securities and Exchange Board of India is concerned that ICICI Prudential Asset Management's investments on the last day of the offering were of a "last-minute" nature to bail out the IPO, according to the report. The regulator is set to issue a show-cause notice to ICICI Prudential Asset Management over its investments.
The report came after the regulator asked ICICI Prudential Asset Management to refund its investments on the last day of the IPO, along with a 15% interest, to its five schemes.
A spokesperson for ICICI Prudential Asset Management said all investments in ICICI Securities' IPO were carried out in line with regulatory guidelines and process, noting that the company is working with the regulator to address the matter.
As of July 27, US$1 was equivalent to 68.64 Indian rupees.