Description

SEBI settles case against Tata Capital Limited for violations related to unlisted CRPS issuances deemed as public issues due to down-selling to over 200 investors within six months.

Summary

SEBI issued a settlement order against Tata Capital Limited for violations related to two issuances of unlisted Cumulative Redeemable Preference Shares (CRPSs) on private placement basis in April 2015 and March 2017. The CRPSs were down-sold to more than 200 investors within six months from allotment date, making them deemed public issues. Tata Capital filed a suo-motu settlement application and agreed to pay ₹14,40,000 as settlement amount without admitting or denying findings. The case was settled on September 26, 2025, and payment was confirmed on October 24, 2025.

Key Points

  • Tata Capital Limited issued two series of unlisted CRPSs on private placement basis in April 2015 and March 2017
  • First issuance (ISIN: INE976I04143) allotted to 90 original allottees on April 22, 2015, but had 931 holders within 6 months
  • Second issuance (ISIN: INE976I04200) allotted to 30 original allottees on March 10, 2017, but had 210 holders within 6 months
  • Down-selling to more than 200 investors within six months deemed the issuances as public issues
  • Violations of Companies Act, 2013 Sections 23(1), 26(4), 26(6), 33(1), and 40
  • Violations of SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013
  • Settlement amount: ₹14,40,000 (Rupees Fourteen Lakhs Forty Thousand)
  • Settlement approved by Panel of Whole Time Members on September 26, 2025
  • Payment confirmed on October 24, 2025

Regulatory Violations

Companies Act, 2013:

  • Section 23(1) - Public offer requirements
  • Section 26(4) read with 2(70) - Private placement definitions
  • Section 26(6) read with Sections 26(1), 33(1) and 40 - Private placement procedures

SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013:

  • Regulations 4(2)(a), 4(5), 5(2)(b), 6, 7, 8, 9, 13, 16 and 22

Settlement Details

Timeline:

  • June 11, 2025 - Internal Committee meeting with Tata Capital representatives
  • June 23, 2025 - Revised settlement terms filed proposing ₹14,40,000
  • July 24, 2025 - HPAC recommended settlement approval
  • September 26, 2025 - Panel of Whole Time Members approved settlement
  • October 03, 2025 - Notice of Demand issued
  • October 24, 2025 - Settlement amount remitted and confirmed

Settlement Terms:

  • SEBI will not initiate any enforcement action against Tata Capital for the said violations
  • Settlement without prejudice to SEBI’s rights under Regulation 28 and 31 of Settlement Regulations
  • Settlement based on neither admitting nor denying findings of facts and conclusions of law

Issuance Details

First CRPS Issuance (ISIN: INE976I04143):

  • Allotment Date: April 22, 2015
  • Original Allottees: 90
  • Redemption Date: August 08, 2019
  • BENPOS Date: October 19, 2015 (6 months from allotment)
  • Holders at BENPOS: 931
  • Status: Unlisted

Second CRPS Issuance (ISIN: INE976I04200):

  • Allotment Date: March 10, 2017
  • Original Allottees: 30
  • Redemption Date: March 09, 2024
  • BENPOS Date: September 08, 2017 (6 months from allotment)
  • Holders at BENPOS: 210
  • Status: Unlisted

Impact Assessment

This settlement order resolves historical violations from 2015 and 2017 CRPS issuances. The matter has no ongoing market impact as both issuances have already been redeemed (2019 and 2024). The settlement demonstrates SEBI’s enforcement of private placement rules and the deemed public issue provisions when securities are widely distributed post-allotment. The relatively modest penalty reflects the historical nature of the violations and voluntary settlement approach by Tata Capital Limited.

Impact Justification

Settlement of historical violations from 2015 and 2017 CRPS issuances. Matter resolved with monetary penalty. No ongoing market impact.