The IPO, which opened on October 1 and closed on October 7, had already raised ₹1,348 crore from marquee investors including ICICI Prudential Mutual Fund, HDFC Mutual Fund, Goldman Sachs and Allianz Global Investors.
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BIJOY GHOSH
The Bombay High Court on Monday dismissed two writ petitions challenging the disclosures in WeWork India Management Pvt. Ltd.’s initial public offering (IPO), holding that the allegations of inadequate and misleading disclosures were “without merit” and that the Securities and Exchange Board of India (SEBI) had acted lawfully. The court also imposed a cost of ₹1 lakh on one petitioner for “deliberate suppression” of material facts.
Delivering judgment, a Division Bench of Justices R.I. Chagla and Farhan P. Dubash observed, “We are satisfied that SEBI has exercised due care and caution and complied with the legal requirements, including those prescribed under the ICDR Regulations, in connection with the WeWork India IPO.”
The Bench added, “Courts should be slow from substituting its own wisdom in place of the actions of SEBI.”
The petitions, filed by Hemant Kulshrestha and Vinay Bansal, sought directions to SEBI to halt or amend the IPO, alleging that the Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP) failed to disclose serious criminal proceedings against WeWork India’s promoters and risks to its brand license. Both claimed SEBI had failed to act on their complaints.
Senior Advocate Venkatesh Dhond, appearing for Mr. Kulshrestha, told the court, “There is gross and deliberate suppression of information, though the chargesheet filed by CBI mentions Sections 409 and 477A of IPC and provisions of the Prevention of Corruption Act, these have been conveniently omitted from the disclosures.”
He added, “The disclosures also fail to reveal that besides the CBI chargesheet, another chargesheet has been filed by the Enforcement Directorate under the PMLA.”
Supporting him, Senior Advocate Amit Desai argued, “The disclosures in the DRHP and RHP are materially incomplete and misleading, they ought to have set out the fact that grave offences under Section 409 and 477A of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act have been drawn.”
For Mr. Bansal, senior advocate Navroz Seervai submitted, “WeWork India could never have been permitted by SEBI to come out with an IPO, SEBI ought to have rejected the DRHP and RHP under its General Order No.01 of 2012.”
He argued that the company had “incurred net losses in FY 2022, 2023 and 2024 and had a negative net worth of ₹437.50 crore as on March 31, 2024.”
Senior Advocate Shiraz Rustomjee, for SEBI, countered, “The primary obligation for ensuring accuracy and correctness of disclosures lies on the Lead Managers… SEBI has discharged its obligations by ensuring compliance with ICDR Regulations.”
He pointed to SEBI’s July 8, 2025, letter, saying, “By this detailed letter running into 17 pages, SEBI applied its mind and suggested modifications which were incorporated in the RHP.”
Senior Advocate Darius Khambata, for WeWork India, argued, “The IPO is in conformity with ICDR Regulations. Promoters are not exiting but reducing shareholding to meet listing norms.”
He added, “All complaints and responses have been disclosed in Section IX of the RHP and made available for public inspection.”
Rejecting the petitioners’ claims, the Bench observed, “Upon a detailed perusal of all these disclosures, we find that the same clearly reveal the chargesheets filed against the Promoter/s of WeWork India, both by CBI as well as the ED.”
It held that the IPO complied with Regulation 6(2) of ICDR Regulations, which permits book-built issues with 75% allocation to Qualified Institutional Buyers even if profitability norms are not met.
“There is no infirmity on the part of SEBI in permitting WeWork India to make this IPO,” the order said.
On suppression by Mr. Bansal, the court noted, “It was incumbent upon Vinay Bansal to have disclosed these two responses and impleaded the 5 BRLMs, a party who approaches the court with unclean hands or by withholding material documents is disentitled to any relief.”
“Petition filed by Hemant Kulshrestha is hereby dismissed with no order as to costs. Petition filed by Vinay Bansal is hereby dismissed with costs of ₹1 lakh payable by him to the Maharashtra State Legal Services Authority within a period of two weeks,” the order read.
The IPO, which opened on October 1 and closed on October 7, had already raised ₹1,348 crore from marquee investors including ICICI Prudential Mutual Fund, HDFC Mutual Fund, Goldman Sachs and Allianz Global Investors.
Published – December 01, 2025 09:49 pm IST
