MobiKwik has moved the Delhi High Court against its IPO book-running lead manager, DAM Capital Advisors, alleging that the firm has withheld Rs 42 crore meant for IPO-related expenses.

In an IPO, companies earmark a portion of the proceeds to cover expenses such as legal, audit, registrar fees among others -- details of which are outlined in the prospectus. Once regulatory approvals are secured for listing, the book-running lead managers (BRLMs) are required to instruct the designated Public Issue Bank to release these funds to the company.

MobiKwik alleges that DAM Capital failed to issue such instructions, leaving Rs 42 crore stuck in the public issue account.

According to the Gurugram-based fintech, DAM Capital is holding back the release of funds over a Rs 1.5 crore dispute. 

The company alleges it has already spent Rs 13 crore from its own pocket to cover IPO-related costs and is now seeking court intervention to ensure vendors are paid. DAM Capital, however, has argued that the disputed sum may be higher than what MobiKwik has disclosed.

Mobikwik submitted its draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) in January 2024 for an IPO; and RHP (Red Herring Prospectus) in December 2024 to raise Rs 572 crore through fresh issue of equity shares. Along with DAM Capital, SBI Capital Markets was also one of the primary BRLMs appointed.

The Delhi High Court has issued a notice on the petition; and the case is scheduled for hearing on August 21.

The development was first reported by Bar and Bench.