Latest news with #SynopticsTechnologies
Economic Times
07-05-2025
- Business
- Economic Times
An SME busted for fund misuse puts 20 more IPOs managed by the same lead manager under scanner
Capital markets regulator Sebi has widened its investigation into the misuse of IPO funds in the SME segment, following its action against Synoptics Technologies and its lead manager First Overseas Capital (FOCL). In its order, the regulator has barred Synoptics Tech and its promoters from the securities market for siphoning off IPO funds. ADVERTISEMENT In the same order, Sebi mentioned that it will review 20 other SME IPOs managed by FOCL, checking for similar irregularities. Sebi's investigation into Synoptics revealed that funds raised through the IPO were not used for the stated business purposes. Instead, the money was diverted through multiple accounts to entities with no clear business activities. The lead manager, FOCL, was found responsible for failing to ensure that the funds were properly used, raising questions about its role in the regulator's move to expand the probe to 20 other IPOs where FOCL acted as lead manager suggests larger governance issues plaguing the SME is now examining whether a similar pattern of fund diversion, inflated expenses, or questionable end-use of IPO proceeds was repeated across these listings. ADVERTISEMENT SME IPO market has seen a wave of crackdown from the regulators as the promise of high returns and rapid listing gains has often attracted strong retail participation. One of the key changes in the recent past was the introduction of a profitability requirement, where SMEs must have a minimum operating profit of Rs 1 crore in at least two of the last three financial years to qualify for an move is aimed at ensuring that only companies with a proven track record of profitability can access public funds. ADVERTISEMENT To curb excessive selling pressure from promoters, Sebi also capped the Offer for Sale (OFS) component in SME IPOs at 20% of the total issue size. Additionally, selling shareholders are restricted from offloading more than 50% of their holdings during the Sebi continues its investigation into the 20 FOCL-managed IPOs, the outcome could further shape the regulatory landscape for SME public issues in India. ADVERTISEMENT (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
Business Mayor
06-05-2025
- Business
- Business Mayor
Sebi bans Synoptics Tech, promoters from securities market for IPO fund diversion
In an interim order, the regulator, said 'the examination reveal a well laid out plan of the company (Synoptics Technologies) and the lead manager, FOCL (First Overseas Capital Ltd), to siphon away funds raised in the IPO'. 'Acting under the authority granted by an escrow agreement, FOCL prima facie appears to have issued instructions to the banker to the issue for transfer of funds under the guise of meeting issue-related expenses. 'The amount transferred ostensibly for meeting 'Issue management fees, underwriting and selling commissions, registrar fees, and other IPO related expenses' was Rs 19 crore and grossly disproportionate to the Rs 80 lakh disclosed as issue expenses in the RHP (Red Herring Prospectus),' Sebi's whole time member Ashwani Bhatia said in the order. As per the order, the amount accounted for more than 54 per cent of the total proceeds raised by Synoptics through the fresh issue of shares worth Rs 35.08 crore and 35 per cent of the total issue size (Rs 54.04 crore). The markets watchdog concluded that FOCL, acting in concert with the Synoptics Technologies, siphoned off a substantial portion of the issue proceeds. Accordingly, Sebi directed FOCL not to take up any new assignments relating to merchant banking activities in the securities market till further directions from the regulator. Additionally, in respect of any pending assignments where FOCL is already engaged as a lead manager as on date, the issuer will appoint a monitoring agency to monitor the use of proceeds irrespective of the issue size, the order said. Sebi observed that FOCL, during the period May 1, 2022 to April 30, 2025, undertaken Initial Public Offering (IPO) assignments for 20 companies which listed on SME segment of BSE and NSE. The regulator said it will 'examine the utilisation of funds raised in all these issues to identify whether a similar modus operandi was adopted in any of the other issues managed by FOCL during this period'. Mumbai-based Synoptics Technologies raised Rs 54.04 crore through an Initial Public Offer (IPO) on the SME Platform of NSE in July 2023, and FOCL acted as the lead manager to the issue. The order came after the Securities and Exchange Board of India (Sebi) examined the matter on receiving complaints alleging irregularities in the bidding process following the closure of the IPO.
Economic Times
06-05-2025
- Business
- Economic Times
Sebi bans Synoptics Tech, promoters from securities market for IPO fund diversion
New Delhi, Markets regulator Sebi on Tuesday restrained Synoptics Technologies Ltd (STL) and its promoters from securities market following allegations of siphoning off IPO proceeds. Apart from Synoptics, the company's promoters Jatin Shah, Jagmohan Manilal Shah and Janvi Jatin Shah were also barred by the regulator. ADVERTISEMENT In an interim order, the regulator, said "the examination reveal a well laid out plan of the company (Synoptics Technologies) and the lead manager, FOCL (First Overseas Capital Ltd), to siphon away funds raised in the IPO". "Acting under the authority granted by an escrow agreement, FOCL prima facie appears to have issued instructions to the banker to the issue for transfer of funds under the guise of meeting issue-related expenses. "The amount transferred ostensibly for meeting 'Issue management fees, underwriting and selling commissions, registrar fees, and other IPO related expenses' was Rs 19 crore and grossly disproportionate to the Rs 80 lakh disclosed as issue expenses in the RHP (Red Herring Prospectus)," Sebi's whole time member Ashwani Bhatia said in the order. As per the order, the amount accounted for more than 54 per cent of the total proceeds raised by Synoptics through the fresh issue of shares worth Rs 35.08 crore and 35 per cent of the total issue size (Rs 54.04 crore). The markets watchdog concluded that FOCL, acting in concert with the Synoptics Technologies, siphoned off a substantial portion of the issue proceeds. ADVERTISEMENT Accordingly, Sebi directed FOCL not to take up any new assignments relating to merchant banking activities in the securities market till further directions from the regulator. Additionally, in respect of any pending assignments where FOCL is already engaged as a lead manager as on date, the issuer will appoint a monitoring agency to monitor the use of proceeds irrespective of the issue size, the order said. ADVERTISEMENT Sebi observed that FOCL, during the period May 1, 2022 to April 30, 2025, undertaken Initial Public Offering (IPO) assignments for 20 companies which listed on SME segment of BSE and NSE. The regulator said it will "examine the utilisation of funds raised in all these issues to identify whether a similar modus operandi was adopted in any of the other issues managed by FOCL during this period". ADVERTISEMENT Mumbai-based Synoptics Technologies raised Rs 54.04 crore through an Initial Public Offer (IPO) on the SME Platform of NSE in July 2023, and FOCL acted as the lead manager to the issue. The order came after the Securities and Exchange Board of India (Sebi) examined the matter on receiving complaints alleging irregularities in the bidding process following the closure of the IPO. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
06-05-2025
- Business
- Time of India
Sebi bans Synoptics Tech, promoters from securities market for IPO fund diversion
Live Events New Delhi, Markets regulator Sebi on Tuesday restrained Synoptics Technologies Ltd (STL) and its promoters from securities market following allegations of siphoning off IPO proceeds. Apart from Synoptics, the company's promoters Jatin Shah, Jagmohan Manilal Shah and Janvi Jatin Shah were also barred by the an interim order, the regulator, said "the examination reveal a well laid out plan of the company (Synoptics Technologies) and the lead manager, FOCL (First Overseas Capital Ltd), to siphon away funds raised in the IPO"."Acting under the authority granted by an escrow agreement, FOCL prima facie appears to have issued instructions to the banker to the issue for transfer of funds under the guise of meeting issue-related expenses."The amount transferred ostensibly for meeting 'Issue management fees, underwriting and selling commissions, registrar fees, and other IPO related expenses' was Rs 19 crore and grossly disproportionate to the Rs 80 lakh disclosed as issue expenses in the RHP (Red Herring Prospectus)," Sebi's whole time member Ashwani Bhatia said in the per the order, the amount accounted for more than 54 per cent of the total proceeds raised by Synoptics through the fresh issue of shares worth Rs 35.08 crore and 35 per cent of the total issue size (Rs 54.04 crore).The markets watchdog concluded that FOCL, acting in concert with the Synoptics Technologies, siphoned off a substantial portion of the issue Sebi directed FOCL not to take up any new assignments relating to merchant banking activities in the securities market till further directions from the in respect of any pending assignments where FOCL is already engaged as a lead manager as on date, the issuer will appoint a monitoring agency to monitor the use of proceeds irrespective of the issue size, the order observed that FOCL, during the period May 1, 2022 to April 30, 2025, undertaken Initial Public Offering (IPO) assignments for 20 companies which listed on SME segment of BSE and regulator said it will "examine the utilisation of funds raised in all these issues to identify whether a similar modus operandi was adopted in any of the other issues managed by FOCL during this period".Mumbai-based Synoptics Technologies raised Rs 54.04 crore through an Initial Public Offer (IPO) on the SME Platform of NSE in July 2023, and FOCL acted as the lead manager to the order came after the Securities and Exchange Board of India (Sebi) examined the matter on receiving complaints alleging irregularities in the bidding process following the closure of the IPO.
