On the July 11, 2011, SEBI has issued orders in the matter of the Vaswani Industry’s IPO. There were some of the directions which are included in the orders. These are:

Ø  The Vaswani industry must give a withdrawal option to their investors that have been allotted the shares in the category of ‘non-institutional investors’ and in the ‘retail individual investors’. The Vaswani Industries Limited has been told by the SEBI to open the withdrawal option for ten days period.

Ø  It is essential for the investors, who have applied for the withdrawal option, to include Delivery Instruction Slip. The reason behind this is to transfer the shares as decided in revised share allocation. This same thing should be credited in a separate escrow demat account

Ø  While in the process of withdrawal or refund, the company has a power to deduct the expenses that are incurred in connection with the IPO. However, one should note that the expenses which are deducted from the side of investor, while using the withdrawal option, should not exceed more than one percent of the amount invested by the investor.

Ø  On closing the withdrawal option, if somehow the subscription level of the withdrawal comes under the minimum level for subscription as stated by the law, then the BRLM can either purchase or arrange purchase for the shares so as to make sure that the subscription doesn’t come under the minimum level for subscription. Apart from this, if this condition is disobeyed, then it can result in refunding of total subscription to the investors as well as abandonment of all the shares which are allotted by the company.

Ø  If the company fails to offer the withdrawal option in the given frame of time, then BRLM can take some strict steps to ensure that the allocation of the shares is cancelled. In addition, money will also be refunded to the investors in 7 days of this failure.

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