SEBI issued a regulatory censure against Axis Capital Ltd for providing guarantee-like support to NCDs of Sojo Infotel, disguised as underwriting.
The order found Axis Capital's obligation to repay ₹174 crore of Sojo's debt upon default constituted an impermissible guarantee, violating merchant banker regulations.
Axis Capital earned approximately ₹299 crore in fees from 18 similar structured transactions between 2013-2023, with its liability exceeding net worth in several years.
The quasi-judicial authority concluded the activity was credit risk-based, not genuine underwriting, based on transaction structure, fee model, and rating agency assessments.