Capital markets regulator Sebi has withheld the listing of sponge iron maker Vaswani Industries’ Rs 490 million initial public offer (IPO) offer after it received complaints regarding irregularities in subscriptions, it said late on Wednesday.

Based on the data from the exchanges and registrars on the subscriptions or withdrawals in the issue, which closed on May 3, and preliminary inquiries,

SEBI has advised the stock exchanges to withhold the listing of securities until further instructions.

Inquiries are in progress. Based on the findings, appropriate action would be taken, it added.

The company had sold 10 million shares at a price band of 45-49 rupees each and the issue was subscribed more than four times.

The Securities and Exchange Board of India (Sebi) has halted the listing of Vaswani Industries and launched investigations into the issue. Around 3,000 retail applicants withdrew their applications and several others were disqualified due to stop-payment of cheques. Sources say Sebi’s concerns emerge from fears that a majority of the applicants could be dummy investors, acting on behalf of a few big operators.

Vaswani Industries, which planned to raise Rs 50 crore through its IPO, offered 10 million shares at a price band of Rs 45-49, and the issue was subscribed over four times. The merchant banker, Ashika Capital, fixed the price at Rs 49. After many investors withdrew their applications, Vaswani Industries allotted 75 per cent of the number of shares that retail investors had bid for against an expectation of 25 per cent when the bidding had closed.

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