Bombay High Court upholds Kotak Bank’s decision to invest in Thyrocare

MUMBAI: The Bombay High court has upheld Kotak Mahindra Bank's decision to invest in the maiden stock offering by the healthcare and diagnostic company Thyrocare Technologies. The private bank moved the court after its share application was refused due to technical reasons.

In a relief to Kotak Mahindra, the Court on Wednesday ruled that the bank can participate in initial public offering (IPO) of Thyrocare if the promoters, merchant banks and the National Stock Exchange (NSE) have no objections. On the same day, the Mumbaibased lender approached the court, seeking intervention in the IPO process and arguing that its offer for qualified institutional buyer (QIB) was not accepted due to a technical glitch. The counsel representing the exchange said that if the merchant banks and promoters have no issues then it is willing to accept Kotak's bid, subject to completion of formalities.

According to people familiar with the development, Kotak had applied at the highest band price (of Rs 446) in the QIB segment. Edelweiss Financial Services, ICICI Securities and JM Financial Institutional Securities are the bankers to the issue.

“All valid bids were taken by the system. As a general practice, maximum bids are entered in the NSE system as per advice,“ an NSE spokesperson told ET. “There was no system related issues at NSE,“ he added.

After hearing the arguments, Justice SJ Kathawala ordered all related parties to file their submissions for an amicable consent.

When contacted, Nishith Dhruva, managing partner of MDP Partners, a firm representing Kotak Bank in the matter, confirmed the development but refused to divulge details citing client confidentiality. Law firm Khaitan & Co is representing merchant bankers in the case.

According to data available with NSE, the issue received cumulative bids for over 55 crore shares or about 73 times the total issue of 75.21 lakh shares. The company has offered shares worth Rs 451 ­ 480 crore (depending on the price band). The price band was set at Rs 420-446.

(BCCL and or its subsidiaries holds 0.56% of the Equity capital of Thyrocare Technologies Ltd as on the date of filing of the DRHP)