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29. In response to Mr. Seervai's argument that SEBI ought not to have permitted WeWork India to come out with an IPO under which, no part of its sale proceeds would accrue to the company, Mr. Rustomjee submits that the same is misconceived. He points out that Mr. Seervai's reliance on 'General Order No.1 of 2012' is incorrect, considering that SEBI has since, published the ICDR Regulations in 2018 expressly dealing with the issue of capital and disclosure requirements to be followed by an unlisted issuer (like WeWork India, in the present case) coming out with an IPO. Accordingly, he contends that post 2018, all unlisted issuers (including the Petitioner in the instant case) are required to comply with the provisions of the said ICDR Regulations which (impliedly) supersede those contained in General Order No. 1 of 2012. He has painstakingly taken us through the provisions of the ICDR Regulations including Regulation 6, which prescribes the eligible requirement for an IPO and our attention is drawn to Regulation 6(2)
39. In any event, it appears that the reliance of Mr. Seervai on this General Order issued by SEBI on 9th October 2012 is also erroneous on account of the fact that subsequently, on 11 th September 2018, SEBI has notified the ICDR Regulations, 2018. As a result, Mr. Rustomjee appears to be correct in his submission that the provisions of the said General Order are superseded, at least to the extent of the provisions contained in the ICDR Regulations. A perusal of the ICDR Regulations clearly reveal that they contain an exhaustive list of requirements that are required to be complied with by an Issuer coming out with an IPO. These are found in Regulation 6 of the said ICDR Regulations. For the sake of convenience and ready reference, it would be advantageous to reproduce the relevant regulation(s) hereunder :-
40. Thus, it is seen that even though an Issuer does not satisfy the conditions stipulated under Sub-Regulation (1) of Regulation 6, it would none-the-less be eligible to make an IPO if the issue is made through the book-building process and it undertakes to allot at least seventy-five percent of the net offer to Qualified Institutional Buyers (QIBs) and further undertakes to refund the full subscription money, in the event it fails to do so. In the present case, the Offer Documents clearly reveal that the WeWork India IPO is being made through the book-building process. This position is clearly disclosed in the RHP which states that: "The Offer is being made through the Book Building Process, in compliance with Regulation 6(2) and Regulation 31 of the SEBI ICDR Regulations". 9 The other requirement of the Issuer undertaking to allot at least seventy-five percent of the net offer to QIBs is also satisfied from the statements made in the RHP 10. Hence, it is evident that the WeWork India IPO is in compliance with Regulation 6(2) of ICDR Regulations and is therefore permissible. There is no infirmity on the part of SEBI in permitting WeWork India in making this IPO, contrary to what has contended by Mr. Seervai. Accordingly, we are not inclined to accept the arguments of Mr. Seervai that WeWork India, on account of making losses in F.Y. 2022, 2023 and 2024 and having a negative net worth as on 31 st March WeWork India, Red Herring Prospectus, Section VII ('Offer Related Information'), 'Offer Structure', p.
WeWork India, Red Herring Prospectus, p.95
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Order dated 1st December 2025 W.P. (L) NO. 31373 OF 2025 Hemant Vs. SEBI & Ors.
50. With this, we now consider the role of SEBI, as prescribed under the ICDR Regulations. Part V of the said ICDR Regulations deal with the issue of appointment of Lead Manager/s, other Intermediaries and Compliance Officer, whereas Part VI deals with regulations relating to 'Disclosures in and Filing of Offer Documents'. Regulation 24 prescribes that the DRHP and RHP are required to contain all material disclosures that are true and adequate to enable an applicant/investor to take an informed investment decision. The said Regulation further prescribes that the Lead Manager/s to the issue (appointed by the issuer) are required to exercise due diligence and satisfy themselves about all the aspects of the issue including the veracity and adequacy of the disclosures made in the Offer Documents. For the sake of convenience, the said Regulation 24 is reproduced hereunder :