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SEBI Bans Synoptics Technologies After Rs. 19 Crore IPO Fund Misuse Revealed
SEBI has banned Mumbai-based IT company Synoptics Technologies and its promoters from the securities market. The ban applies to promoters Jatin Shah, Jagmohan Manilal Shah, and Janvi Jatin Shah. It will remain in place until SEBI finishes investigating claims of misusing IPO funds.
About Synoptics Technologies and Its IPO
Synoptics Technologies was founded in 2008. The company provides network and IT solutions and helps businesses save costs and work better with digital technology. The company has more than 450 employees. It got listed on the NSE SME exchange on July 13, 2023. Funds were collected from June 30 to July 5.
SEBI found that Synoptics Technologies and its lead manager, First Overseas Capital Ltd (FOCL), allegedly moved Rs. 19 crore from IPO funds before the company started trading. This amount is about 54% of the Rs. 35.08 crore raised through fresh shares.
The money was transferred as management fees, underwriting and registrar fees, and other IPO expenses. The company had only disclosed Rs. 80 lakh in the prospectus. The transfers happened on July 12, a day before shares began trading, which goes against the escrow rules.
FOCL is also banned from taking new merchant banking work. SEBI is investigating 20 more SME IPOs handled by FOCL from May 2022 to April 2025, possibly facing similar issues.
SEBI’s Stand and Market Impact
This action shows SEBI is serious about preventing companies from misusing IPO funds. The regulator wants to protect investors and ensure company compliance. Experts state that this could make other companies more cautious with their money and rules.
Synoptics Technologies falls into uncertainty, and its promoters cannot participate in the market until the investigation is over. This case is a lesson for companies, especially in the SME sector, to comply with SEBI regulations and maintain transparency in the matter of their funds.
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