Shares of non-banking financial company (NBFC) Manappuram Finance slumped nearly 5% on Wednesday, following the decision of the Securities and Exchange Board of India (SEBI) to halt the initial public offering (IPO) of its subsidiary, Asirvad Microfinance.

What Happened: Asirvad Microfinance had filed preliminary papers with SEBI for a public offer to raise ₹1,500 crore. However, SEBI’s decision to suspend Asirvad Microfinance’s IPO is expected to cause a delay in its listing.

According to a source-based report from CNBC-TV18, SEBI has raised three queries on Asirvad MFI IPO, and two have already been resolved. The queries are common and not expected to affect the IPO process. The company has already responded to and resolved two queries.

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The third query requires legal opinion, which is currently being obtained.

Sources confirmed to the news publication that resolving the third query might take about 15 to 30 days.

Why It Matters: As per the initial plans, the IPO is a fresh issue of equity shares with no offer-for-sale (OFS) component. The company also aimed to raise up to ₹300 crore in a pre-IPO round, and if completed, the fresh issue size would be reduced.

Proceeds from the issue were intended to augment the capital base of the company to meet future business requirements.

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