FOR IPO FUND DIVERSION, SEBI RESTRICTS NIRMAN AGRI GENETICS’ FURTHER CORPORATE ACTIONS IPO FUND DIVERSION BY A SME FACTS OF THE CASE

 FOR IPO FUND DIVERSION,

SEBI RESTRICTS NIRMAN AGRI GENETICS’

FURTHER CORPORATE ACTIONS  

IPO FUND DIVERSION BY A SME FACTS OF THE CASE  

FACTS

SEBI has banned the SME-listed company Nirman Agri Genetics Ltd. (NAGL) from accessing the securities market over the alleged misuse and diversion of funds raised through its Initial Public Offering (IPO). 

SEBI's investigation found that the company allegedly diverted about ₹18.89 crore, which is approximately 93% of the total ₹20.30 crore raised through its March 2023 IPO. 

MODUS OPERANDI:  

The funds were reportedly transferred to entities that were either: 

• Fictitious or non-existent. 

• Suspect in nature. 

• Controlled by the company's promoter, Pranav Kailas Bagal, and his relatives 

SEBI'S ACTIONS: 

• Banned NAGL from accessing the securities market until further notice. 

• Restrained the promoter, Pranav Kailas Bagal, from buying, selling, or dealing in NAGL shares. 

• Halted all proposed corporate actions by the company, including a proposed bonus issue, stock split, and a change of name. 

OUTCOME  

The SEBI action is an interim order, and the investigation is ongoing.  

The company and its promoter have been given time to file their objections. 

SEBI findings led to the company's shares hitting the lower circuit. 

LEARNING  

This is a warning signal for all companies including SMEs who indulges in IPO as the SEBI is now acting as a watch dog to prevent funds diversion and frauds. 

R V SECKAR FCS, LLB 79047 19295