On December 2, the Securities and Exchange Board of India (Sebi) cancelled the initial public offer of Trafiksol ITS Technologies, a company that falls in the category of an SME-a small and medium enterprise. The stock market regulator asked it to refund money to investors.
This is one of several SME IPOs to run into trouble with the regulator in the recent past. Trafiksol ITS is a Noida-based company which provides intelligent transportation systems and automation solutions for traffic and toll management. It filed its Draft Red Herring Prospectus on May 31, 2024 for an IPO to be listed on the Bombay Stock Exchange's SME Platform.
The IPO offered 6.41 million new equity shares at a price of between 66 and ₹70 a share. The IPO was open between September 10 to 12 and was oversubscribed 345.65 times with listing scheduled for September 17.
Sebi acted on a complaint alleging that the objects of the issue included the purchase of software of 17.70 crore from a vendor with questionable financials, concluded after an investigation that the vendor was a 'shell entity'.
In another case, C2C Advanced Systems, an IPO on the National Stock Exchange's Emerge platform, opened November 22-26 at a price band of ₹214226, and saw 125-time subscription for the 2.91 million-share issue. The listing on November 29 was deferred due to complaints of discrepancies in financial statements. The NSE consulted with Sebi and told the company to provide subscribers a withdrawal option and appointed an independent auditor for inspection of the accounts.
About 370,000 applications were withdrawn. But after the audit, Sebi allowed the listing on December 2.
Additionally, the regulator asked the NSE to set up monitoring to oversee the utilisation of funds raised through the IPO.
This story is from the December 10, 2024 edition of Business Standard.
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This story is from the December 10, 2024 edition of Business Standard.
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