India's markets regulator on Thursday barred investment bank Axis Capital from acting as a merchant banker for new debt issues for allegedly violating rules, according to an interim order on the regulator's website.

SEBI has barred Axis Capital from taking assignments as a merchant banker, arranger or underwriter in the debt segment.

As an interim measure pending investigation, market regulator Securities and Exchange Board of India (SEBI) has restrained Axis Capital Ltd (ACL) from taking up new assignments as a merchant banker, arranger or underwriter of any issue till further order.

In an interim order issued on September 19, the Securities and Exchange Board of India (Sebi) has also asked ACL to reply within 21 days to the observations made in the order.

Axis Capital is exploring legal options against Sebi's order restricting it from new assignments as a merchant banker for the debt segment. The company clarified that all other business activities will continue as usual,

India’s capital market regulator has barred Axis Capital Ltd. from acting as a manager for new offerings of debt by Indian companies, the latest crackdown in the country’s securities market.

“Sebi has not passed any adverse direction or order against Axis Bank Limited. Axis Bank is of the view that there is no material impact on the bank on account of the interim order against ACL, since ACL’s profit after tax (PAT) for FY24 was approximately 0.70 per cent of Axis Bank’s consolidated profit after tax,” the bank noted.

Sebi has prohibited Axis Capital from operating as a merchant banker for debt issuances and barred it from acting as an arranger or underwriter for any debt segment securities. The action follows Axis Capital’s involvement in Sojo Infotel’s non-convertible debentures offering,