SEBI Acted With 'Due Care And Caution' In Clearing WeWork India IPO: Bombay High Court

The Bombay High Court on Monday observed that SEBI had exercised “due care and caution” in clearing the WeWork India IPO, while dismissing two petitions that alleged the regulator failed to act on complaints of inadequate disclosures in the offer documents of the Indian arm of global co-working space brand. 

A division bench of Justice RI Chagla and Farhan P Dubash said it was “satisfied that SEBI has indeed exercised due care and caution and complied with the legal requirements, including those prescribed under the ICDR Regulations, in connection with the WeWork India IPO and the submissions to the contrary made by the Petitioners have no merit.”

The court added that “the role of SEBI in this regard would only be supervisory in nature” and that courts “should be slow from substituting its own wisdom in place of the actions of SEBI.”

The petitions, filed by Hemant Kulshrestha and Vinay Bansal, challenged the disclosures made in the Draft Red Herring Prospectus and Red Herring Prospectus issued for the IPO of WeWork India Management Private Limited. Both petitioners claimed that the offer documents omitted serious criminal charges pending against the promoters, understated Enforcement Directorate proceedings, and failed to warn investors of the risk that a conviction could trigger termination of the operations and management agreement governing use of the WeWork brand.

The petitions were moved on September 30, 2025, just before the commencement of the IPO Offer, and followed earlier complaints addressed to the Book Running Lending Managers (BRLM) and SEBI.

Senior counsels for the petitioners argued that the RHP selectively mentioned only some sections of the chargesheet filed by the CBI, omitting offences under Sections 409 and 477A of the IPC and the Prevention of Corruption Act. They submitted that SEBI should have applied the fit and proper criteria applicable to intermediaries and that the IPO was impermissible because the company had negative net worth (Rs. 437.50 Crores) and the issue consisted entirely of an offer for sale benefitting existing promoters.

SEBI, WeWork India and the BRLMs responded that the petitioners had approached the court belatedly, that the ICDR Regulations supersede the 2012 General Order relied upon by the petitioners, and that SEBI had directed extensive modifications on July 8, 2025, including elevating ED proceedings to the first risk factor. They also pointed out that the RHP contained the petitioners' complaints, the detailed responses, and full litigation disclosures.

In its findings, the court held that WeWork India was eligible to undertake the IPO through the book-building route and that the disclosures met ICDR requirements.

It said, “Hence, it is evident that the WeWork India IPO is in compliance with Regulation 6(2) of ICDR Regulations and is therefore permissible.” On the allegation of selective disclosure of criminal charges, the bench observed, “ We are not however impressed with the argument that this results in incorrect and/or inaccurate disclosures being made by WeWork India, inasmuch as, the disclosures made in RHP clearly reveal that the chargesheet was filed under several provisions, including Section 120B and 420 of the IPC thereby clearly indicating that charges under other provisions have also been framed against the said Promoter/s.”

The court added that a common investor would not be expected to interpret the seriousness of offences from the section numbers and that “the mere filing of chargesheet against the Promoter would be enough to deter him from investing in the IPO.”

The court found “no suppression, either gross or deliberate” and noted that the risk of termination of the WeWork brand licence upon conviction of promoters had been expressly disclosed.

While dismissing both petitions, the court held that Bansal had approached it with “unclean hands” by omitting replies he had received from WeWork India and the BRLMs. His petition was dismissed with costs of Rs 1 lakh payable to the Maharashtra State Legal Services Authority, while Kulshrestha's petition was dismissed without costs.

Case Name: Hemant Kulshrestha and Vinay Bansal vs Securities and Exchange Board of India and Ors

Case Number: WRIT PETITION (L) NO. 31373 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

Click Here To Read/Download Judgment