Bombay High Court Dismisses Plea Challenging WeWork India IPO, Imposes ₹1 Lakh Cost On Petitioner

The Bombay High Court on Monday dismissed two petitions challenging the IPO of WeWork India, bringing an end to an attempt by two retail investors to stop or modify the company's public issue over allegations of inadequate disclosures.

A division bench of Justice R I Chagla and Justice Farhan A Dubash dismissed the petition filed by an invetsor Hemant Kulshreshtha with no order as to costs, while the petition filed by another investor Vinay Bansal was dismissed with a cost of Rs 1 lakh, to be deposited with the Maharashtra State Legal Services Authority within two weeks

WeWork India shares are listed in the Indian bourses since October 10. 

The petitions, filed by retail investors-Bansal and Kulshreshtha, alleged that WeWork India's IPO documents failed to disclose “material information” and that SEBI did not take action on his detailed complaint dated August 25, 2025.

Bansal's plea stated that SEBI had initially kept the IPO in abeyance for over three months, but later allowed it to proceed without addressing concerns he had raised about the company's financials, business model, and ongoing proceedings involving its promoters. According to the petition, WeWork India had a negative net worth of ₹437 crore as of March 2024 and posted losses of ₹1,357 million in FY24, ₹21,468 million in FY23 and ₹6,429 million in FY22.

The plea stated that the IPO, which is an Offer for Sale of over 4.3 crore shares, does not bring any fresh funds into the company. Relying on the offer document's own admission that “our company will not receive any proceeds from the Offer,” the petition claimed that the issue 'will admittedly not create any tangible assets or business opportunities' and simply allows promoter Embassy Buildcon LLP to exit.

The plea also noted that WeWork India does not own the 'WeWork' brand and only licenses it so long as its promoters retain voting and management control. The petition argues that the existence and business identity of WeWork India is purely dependent on the brand name 'WeWork',” and that investors should have been properly warned of the consequences if the licence were ever withdrawn.

The petition also pointed to three pending proceedings involving the promoters, a CBI chargesheet from 2014 for alleged corruption and conspiracy, a complaint by the Enforcement Directorate under the Prevention of Money Laundering Act, and a chargesheet filed by the Economic Offences Wing on November 7, 2024. It alleges that the EOW chargesheet was not disclosed in the DRHP filed in January 2025 and was added only in an August 2025 addendum.

During the hearing, SEBI's counsel Senior Advocate Shiraz Rustomjee objected to what he said were shifting arguments by the petitioners. He told the Court that the challenge originally related to non-disclosure of prosecutions, but was now being expanded to non-disclosure of the chargesheets themselves. He argued that SEBI had acted within the regulatory framework and said it was not practical for the regulator to issue detailed written orders for every complaint it receives in connection with IPOs.

“To suggest that we have not provided reasons is completely untenable,” he said, noting that SEBI had already asked that ED proceedings be disclosed prominently as a risk factor and that the RHP was subsequently amended.

Senior Advocate Amit Desai, appearing for another Kulshreshtha, said the obligation to disclose prosecutions was independent of any individual complaint. “The requirement is that the issuer has to disclose the prosecution launched against him,” he said, adding that the real question was whether an investor might suffer a loss if the information was withheld.

Senior advocate Venkatesh Dhond, also for Kulshreshtha, said the company had disclosed a “lesser offence but not a higher offence” and compared it to revealing only a minor charge when a serious charge was also pending. Responding to SEBI's objection that the petitioners were shifting their stand, he said that his client's locus did not depend on having subscribed to the issue. “I have a right under the regulations to expect the regulator to act in accordance with law,” he said.

The bench asked the parties how interim relief could be shaped after the issue had closed. Dhond said corrective disclosures could still be issued without rolling back the IPO. The court questioned whether such relief would amount to granting the final relief sought, but also asked whether the closure of the issue meant the information would now “receive a quiet burial.”

Senior advocate Navroz Seervai, for Bansal, said the matter concerned SEBI's conduct and that the regulator must show it had applied its mind to the complaint. “Nothing has been produced to show this,” he said, arguing that SEBI could not rely on the issue having closed. He said the petitioners had acted promptly and that the case involved “serious criminal charges against promoters offloading shares.”

Senior Advocate Gaurav Joshi, for WeWork India, opposed the plea and said that loss-making companies routinely undertake IPOs. “There is not a single law that prohibits it,” he said, pointing to examples such as Swiggy, Zomato and Paytm. He argued that SEBI's role in the process was supervisory and that it could not be expected to pass detailed quasi-judicial orders in every case.

Case Title: Vinay Bansal v SEBI and Anr

Case Number: WP(L) 31301 OF 2025

For Petitioners: Senior Advocate Navroz Seervai along with Advocates Prasad Shenoy and Chinmay Babhulkar instructed by Advocate Akash Menon for Vinay Bansal;

Senior Advocates Amit Desai, Venkatesh Dhond, Ashish Kamat, with Advocates Gopal Krishna Shenoy, Aditya Mithe, Shashwat Rai and Mrinali Dave instructed by  Keystone Partners for Hemant Kulshreshtha 

For Respondents: Senior Advocate Shiraz Rustomjee along with Advocates Prateek Pai, Ravishekhar Pandey and Ankit Ujjwal instructed by Agama Law for SEBI;

Senior Advocate Gaurav Joshi, Advocates Shruthi Sabharwal, Avinash Das, Anant Mishra, Ayan Tandon and Prachi Gupta instricted by Shardul Amarchand Mangaldas & Co for WeWork India

Senior Advocate Janak Dwarkadas along with Advocates Ravitej Chilumuri, Aishwarya Singh and Sanya Gandhi instructed by Khaitan & Co for Other respondents; Senior Advocate Ravi Kadam, Senior Advocate a/w Mr Ravitej Chilumuri, Aishwarya Singh and Ms Sanya Gandhi instructed by  Khaitan & Co for other respondents