BharatPe founder sent legal notice to Kotak Mahindra Bank for missing out on Nykaa IPO

ET has seen the copy of the notice sent by Grover’s lawyers.

In it, they wrote, “To the shock and surprise of our clients, on October 28, 2021, after having repeatedly assured our clients that the shares of FSN (Nykaa’s parent firm) would be allotted to them, Kotak informed our clients that it would not be able to provide financing for the Nykaa IPO.”

“Kotak’s refusal to comply with its assurances was on the pretext that it had decided not to finance the Nykaa IPO due to ‘erratic FII movements’ and ‘very high lending rates’,” the notice added. As per Grover’s lawyer, Kotak’s “eleventh-hour” denial of IPO financing to Grover cost him a “business/investment opportunity about which they had informed Kotak more than a month in advance of the launch of the IPO”.

The notice said that Kotak Mahindra Bank must arrange for IPO allotment before the Nykaa issue closes or it will be liable to compensate the BharatPe founder and his wife for losing out on gains he would have made on the Rs 500 crore investment—equally split between the two.

“This notice was received by us and was replied to appropriately at the time, including placing on record our objections to inappopriate language used by Mr. Grover,” Kotak Mahindra Bank said in a statement dated January 9, 2022. “Appropriate legal action is being pursued.”

“We would like to confirm that there is no breach or violation by the Kotak Group in any manner whatsoever,” the statement read.

Grover told ET he had no comment on the matter.