Delhi High Court refers Mobikwik – DAM Capital IPO dispute to mediation

The Delhi High Court on Tuesday referred the dispute between One Mobikwik Systems Limited and DAM Capital Advisors Limited to mediation [One Mobikwik Vs Dam Capital].

The dispute concerns the alleged failure by DAM, Mobikwik's lead banker, to release ₹42 crore meant for expenses related to Initial Public Offering (IPO).

The order referring the matter to mediation was passed by Justice Amit Bansal after being told by the counsel for Mobikwik and DAM Capital that they were willing to explore mediation as the undisputed amount has already been released by the banker. The mediation will now try to resolve the differences between the parties over the disputed amount.

Mobikwik moved the Court under Section 9 of the Arbitration and Conciliation Act, 1996, alleging that DAM Capital failed to issue instructions for the release of around ₹42 crore lying in the public issue account.

The company said the sum represented IPO expenses that, under the standard execution framework, are specified in the prospectus and must be released to the issuer once listing approvals are in place. These funds are then used to settle payments to service providers such as legal advisors, auditors, printers, advertising agencies and registrars engaged for the IPO.

Mobikwik argued that DAM Capital was withholding instructions on account of a dispute of only ₹1.5 crore, while the company had already spent ₹13 crore from its own funds to discharge IPO obligations.

Therefore, it sought urgent court intervention to secure release of the balance amount so that pending vendor payments could be cleared.

DAM Capital maintained that the disputed amount could be significantly higher than Mobikwik’s estimate.

On August 14, Justice Amit Bansal issued notice on the petition and recorded submissions by the parties. The counsel for Mobikwik pressed for urgent release of the sums while DAM Capital sought time to obtain instructions.

On August 21, the lawyers for both parties informed the Court that an arrangement had been worked out - DAM Capital would permit release of the escrowed funds within 24 hours subject to Mobikwik providing requisite information.

It was agreed that undisputed dues of respondents would be paid from this amount while ₹1.49 crore would remain in the escrow account.

Mobikwik had filed its Draft Red Herring Prospectus (DRHP) in January 2024 with the Securities and Exchange Board of India (SEBI) for an IPO comprising a fresh issue of shares worth ₹700 crore and an offer for sale (OFS) of up to 5.2 million shares by existing shareholders, including founders and early investors.

The company debuted in the Indian stock market in December 2024.

Mobikwik was represented by advocates Sumit Roy, Sidharth Mahajan, Utkarsh Mishra, Zahid, Neelam Phukan and Ankur Anthwal (Claritas Legal).

Dam Capital was represented by advocates Anuj Berry and Parimal Kashyap (Trilegal)

SBI caps was represented by advocates Subir Kumar, Varun Agarwal and Vaishnavi Pawar.