Bombay High Court Seeks SEBI's Response In Plea Challenging WeWork India's Ongoing IPO

A petition has been filed in the Bombay High Court challenging the ongoing Initial Public Offering (IPO) of WeWork India Management Private Limited, the Indian arm of the global co-working space brand.

The Petitioner, retail investor Vinay Bansal, has alleged serious lapses in the company's offer documents and accused the Securities and Exchange Board of India (SEBI) of regulatory inaction in the face of what he describes as serious “non-disclosure of material information and “material omission” that could endanger the interests of public investors.

The matter came up briefly for hearing on Friday before a Division Bench of Justice R I Chagla and Justice Farhan A Dubash. The Court has now posted the case for further hearing on October 8, 2025, and has sought a response from SEBI to the allegations raised.

Bansal claims that SEBI failed to act on his detailed complaint dated August 25, 2025, which flagged serious concerns around WeWork India's Draft Red Herring Prospectus (DRHP) and Red Herring Prospectus (RHP).

According to the petition, SEBI had initially kept the IPO in abeyance for over three months, but later approved the DRHP without any public explanation or addressing the issues raised.

The petition argues that WeWork India is a loss-making company with negative net worth and no clear pathway to profitability. As of March 2024, the company had a negative net worth of ₹437 crore and reported losses of ₹1,357 million in FY24, ₹21,468 million in FY23, and ₹6,429 million in FY22.

The IPO, structured entirely as an Offer for Sale (OFS) of over 4.3 crore shares, does not involve any fresh capital infusion. Citing the offer document's own admission that “our company will not receive any proceeds from the Offer,” the Petitioner argues that the sole purpose of the IPO appears to be to provide an exit to existing shareholders, particularly the Promoter Embassy Buildcon LLP. “The proceeds of the IPO will admittedly not create any tangible assets or business opportunities. Instead, the IPO proceeds are statedly only being used to offer an opportunity for the promoters to exit at the cost of innocent retail investors”, the petition asserts.

The petition also raises concern on the WeWork trademark itself. Admittedly, the company does not own the “WeWork” brand, but merely licenses it through a management agreement that remains valid only so long as the Promoters retain management and voting control.

According to the plea, this clause effectively entrenches the Promoters' position and creates a material risk that has not been adequately disclosed.

“Thus, in the absence of the brand name "WeWork", the mere provision of such facilities would not, by itself, inspire in the mind of the consumer and/or an investor, the same degree of trust, assurance, and expectation of quality, as such confidence is intrinsically linked to the established reputation and goodwill of the "WeWork" brand. Thus, the existence and business identity of WeWork India, is purely dependent on the brand name "WeWork", in the absence of which it cannot be expected to receive any investments from the public through the IPO route.”, the petition argues.

The petition details three pending legal matters involving the Promoters, a 2014 chargesheet filed by the CBI for alleged corruption and conspiracy; proceedings by the Enforcement Directorate under the Prevention of Money Laundering Act (PMLA); and a chargesheet filed by the Economic Offences Wing (EOW) on November 7, 2024. Notably, the petition alleges that the EOW chargesheet was not disclosed in the DRHP filed in January 2025, and was only added through an addendum in August 2025, after the Petitioner had flagged the omission.

Bansal also contends that SEBI has violated its own regulatory framework by allowing the IPO to go on. He argues that the IPO violates multiple provisions, including those relating to the misuse of issue proceeds, misleading business models, and issuer survival being contingent on litigation outcomes.

The Petitioner seeks a writ of mandamus directing SEBI to pass a reasoned and time-bound order on his complaint and to carry out an investigation into the allegations raised. He has also urged the Court to place the IPO and listing process in abeyance until such investigation is concluded.

In the alternative, he has prayed the Court to direct SEBI to ensure that WeWork India amends its RHP with adequate disclosures and files an affidavit disclosing the current status of the criminal cases involving its Promoters.Another petition seeking similar reliefs has also been filed by a second petitioner, Hemant Kulshreshtha.

Case Name: Vinay Bansal Vs Securities Exchange Board of India

Case No: WRIT PETITION LODGING NO. 31301 OF 2025

For Petitioner Vinay Bansal: Senior Advocate Navroz Seervai with advocates Prasad Shenoy and Chinmay Babhulkar instructed by Akash Menon.

For Petitioner Hemant Kulshrestha : Senior Advocates Amit Desai and Ashish Kamat along with advocates Gopal Krishna Shenoy, Aditya Mithe, Shashwat Rai and Mrinali Dave, instructed by Keystone Partners.

For SEBI: Senior Advocate Shiraz Rustomjee and advocates Prateek Pai, Ravishekhar Pandey and Ankit Ujjwal instructed by Agama Law Associates.

For WeWork India: Senior Advocates Darius Khambata and Gaurav Joshi and advocates Shruthi Sabharwal, Avinash Das, Anant Mishra, Ayan Tandon and Prachi Gupta instructed by Shardul Amarchand Mangaldas & Co.

Other Respondents: Senior Advocates Janak Dwarakadas and Ravi Kadam along with advocates Ravitej Chilumuri, Aishwarya Singh and Sanya Gandhi instructed by Khaitan & Co.

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