Sebi bans SME firm Varyaa Creations from securities market over IPO proceeds diversion
ADVERTISEMENT Also, the shareholdings of seven promoter group entities have been frozen until further directions, according to an interim order passed by Sebi on Wednesday.
Varyaa Creations, which is primarily engaged in wholesale trading of precious metals, and manufacture and sale of jewellery, came out with its Rs 20.10-crore IPO and got listed on the SME platform of the BSE on April 30, 2024.
The Securities and Exchange Board of India (Sebi) carried out a routine inspection of the activities of the Inventure and noticed certain irregularities in the IPO process of VCL and initiated an inquiry into the matter. During the inquiry, Sebi noted that more than 70 per cent of the issue proceeds (Rs 14 crore) were transferred to three entities -- Kaveri Corporation, Maruti Corporation, and Overseas Metal and Alloys Pvt Ltd -- on April 30, 2024, the day of the listing on the instructions of the lead manager Inventure. The stated purpose of the transfers was to cover issue management fees, underwriting and selling commissions, registrar fees, and other IPO-related expenses.
ADVERTISEMENT
Sebi said these transfers, purportedly made to cover issue-related expenses, were disproportionate to the issue-related expenses disclosed in the IPO's prospectus.
The regulator sought explanation from VCL and Inventure regarding transfers, however, VCL failed to give a satisfactory response, citing the unavailability of its accounts team and statutory auditor.
ADVERTISEMENT
The lead manager stated that transactions were in line with objects of the issue stated in the prospectus -- purchase of inventory and general corporate purposes. After further investigation, Sebi, prima facie, found certain discrepancies in the use of the funds.
ADVERTISEMENT
"...it, prima facie, appears that Rs 9 crore from the IPO proceeds was credited to the bank account of Kaveri Corporation and withdrawn in cash on April 30, 2024 -- the very day the company was listed," Sebi said. Accordingly, Sebi has restrained Varyaa Creations "from accessing the securities market, either directly or indirectly, in any manner whatsoever until further orders. Besides, Noticee 2 (Inventure Merchant Banking Services) shall not take up any new assignment relating to merchant banking activities in the securities market till further directions from Sebi".
ADVERTISEMENT Besides, the regulator directed the appointment of a monitoring agency for any pending assignments of Inventure.
On freezing the holding of seven entities, Sebi noted that a lock-in period applicable to a portion of the promoters' shareholding expired on May 14, and there is a risk of the promoters offloading the shares held by them in VCL, while the inquiry into the end-use of IPO proceeds is ongoing.
Over the past year, Sebi intervened in many cases, especially in the SME segment, where IPO proceeds were misutilised or siphoned off.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Indian Express
an hour ago
- New Indian Express
KMRL begins process to set up ballastless track
KOCHI: Speeding up the second phase of the 'Pink Line' project, Kochi Metro Rail Ltd (KMRL) has initiated the process to set up ballastless track of standard gauge in the elevated section from JLN Stadium station to Infopark Phase 2 station. It has invited open e-tenders online for Rs 127.91 crore for 'Design, Supply, Installation, Testing and Commissioning of Ballastless Track', a work that is aimed to be financed by availing a loan from the Beijing-headquartered Asian Infrastructure Investment Bank (AIIB). The successful bidder should complete the work in 16 months from the date of the Letter of Award. The last date of tender submission is September 1, while the bids will be opened on September 9. The contract awardee can subcontract the work, limited to 50% of the contract price. The tender shall be valid for 180 days (both inclusive) from the last date of submission of tenders. Last week, KMRL floated open tenders for supply of a third rail traction system as well. The Phase 2 project involves the construction of an elevated, electrified metro rail system spanning 11.2km and comprising 11 stations along the JLN Stadium-Infopark section. While the original deadline was the end of 2025, it was revised to December 31, 2026, after the work suffered a delay due to a fund shortage and issues related to utility shifting. 'While the complete section is targeted to be completed by next year's end, we plan to open the first reach up to Padamughal by June 30, 2026. Hence, the successful bidder should complete the work in that session quickly by March 2026. It requires another three months for testing and other purposes,' a senior KMRL official said.
India Today
an hour ago
- India Today
UPI to remove money request feature from October 1: What it means for you
Starting October 1, 2025, the way Indians use the Unified Payments Interface (UPI) will change. The National Payments Corporation of India (NPCI) has announced that it is retiring the money request option for person-to-person (P2P) transfers, a move intended to clamp down on scams that have increasingly targeted unsuspecting money request button was, at least on paper, a neat tool. Rather than awkwardly asking someone to send money, you could simply raise a request, whether for splitting the bill after dinner or reminding a forgetful friend about that Rs 500 they still owed. The recipient had the choice to approve or why this change? While the tool was neat, fraudsters quickly discovered a loophole. Fake requests became a common trick, and many people, thinking they were confirming a genuine payment, accidentally authorised transfers straight out of their accounts. NPCI's new directive leaves little room for ambiguity. From October 2, 'no P2P collect transaction should be initiated, routed or processed,' it said in a note to banks, payment service providers and UPI apps. Systems must be updated to block such requests doesn't mean UPI itself is getting harder to use. In fact, most features remain untouched. You can still:-- Send money instantly using a UPI ID, mobile number, or bank details.-- Scan a QR code to pay friends, family, or shopkeepers.-- Approve requests from verified merchants, such as delivery apps or online change applies solely to peer-to-peer collection requests. Merchant collection requests will continue, with their existing higher transaction caps. (Previously, P2P collection was limited to Rs 2,000 per request.)Safety over simplicityBy cutting off P2P collection, NPCI is removing what it sees as one of UPI's weakest security links. Approving a fraudulent request required little more than a careless tap, making it a favoured trick in online fraud kits.'The objective is to protect consumers and strengthen trust in UPI,' the organisation has said, framing the decision as a pre-emptive strike against rising fraud course, for genuine users, it does mean losing a shortcut. Instead of raising a request, you'll now have to ask for your share directly, either by sharing your UPI ID, generating a QR code, or simply dropping a payment reminder on has been India's digital payments crown jewel, handling billions of transactions every month. Its popularity rests on three things: speed, simplicity, and zero transaction costs. But that very simplicity has left it vulnerable to have tried everything from phishing texts and fake OTP requests to imitating bank officials. The collect request feature was just another arrow in their quiver. Removing it, NPCI argues, is about building resilience before the problem grows this means for usersadvertisementFor most people, little will change. Sending money will remain instant, free, and widely accepted. The only thing missing will be that polite nudge via UPI. It might be mildly inconvenient to craft your own reminder messages or share a QR code instead, but the trade-off is clear: fewer ways for fraudsters to trick people into parting with their future, then, is one of tightened safeguards, less about offering every possible shortcut, and more about ensuring every tap and swipe is secure.- Ends
Business Standard
an hour ago
- Business Standard
Jyoti Structures Q1 PAT jumps 119% YoY to Rs 11 cr
Jyoti Structures reported a 119.25% surge in consolidated net profit to Rs 11.16 crore, driven by a 76.87% rise in revenue from operations to Rs 156.16 crore in Q1 FY26 over Q1 FY25. Profit before tax stood at Rs 10.24 crore in the June 2025 quarter, registering a growth of 97.3% on a YoY basis. Total expenses fell 46.91% to Rs 9.54 crore during the quarter from Rs 17.97 crore in Q1 FY25. The cost of materials consumed stood at Rs 91.28 crore (up 112.33% YoY), while employee benefits expenses were Rs 17.97 crore (up 273.6% YoY) during the period under review. Jyoti Structures is engaged in Electricity, transmission, distribution and substations. The registered office of the company is in Mumbai. Shares of Jyoti Structures ended flat at Rs 16.13 on Thursday, 14 August 2025.
