Major primary offerings that hit the market in the past few months and merchant bankers involved in these issues will be under scrutiny.

Last week, Sebi ordered an inspection of the records of the two lead managers for the Yes Bank [Get Quote] issue, Enam Financial and DSP Merrill Lynch.

Sebi feels the inspection needs to be broadbased to ascertain whether the multiple-application virus had spread to other issues as well.

Enam and DSP Merrill Lynch executives had no comments to offer, though it is understood that scrutiny of books in at least one of these two firms has already begun.

Among the other leading merchant banks, Kotak did not offer any comments. But Nimesh Kampani, chairman, JM Morgan Stanley, said, "We have not received any call from Sebi yet on this matter but we will be willing to cooperate in its investigation."

Sebi feels the onus of ensuring that investors with multiple applications do not get allotment lies with the lead managers and registrars of issues.

"The role of merchant bankers in ensuring multiple applications do not get allotments cannot be undermined. We will take action against them depending on the culpability found in our inspections," a Sebi official said.

The regulator has already instructed depositories to increase their surveillance and be proactive in alerting the regulator in case there are any suspicious developments.

Merchant bankers, however, feel that their responsibility is only to ensure that allotments on multiple applications are not made to any one beneficiary account or to different applicants with identical first names.

These two parameters, according to them, have been complied with. They say allotments for applications having the same addressees may not always be correct.

This is because several applications come with funding, in which case an address in an application may be that of a financier who may have funded more than one client and deserves allotments accordingly.