Sebi bars Synoptics, promoters over IPO fund misuse, probes 20 SMEs

The market regulator also restricted merchant banker First Overseas Capital - the lead manager for Synoptics' IPO - from taking up any new assignments until further notice

The Securities and Exchange Board of India (Sebi) on Tuesday debarred Synoptics Technologies and three members from the promoter group from the securities market for alleged diversion or misutilisation of IPO (initial public offering) proceeds. The IT network solutions company was listed on NSE Emerge, the SME platform.

 

The market regulator has also restricted merchant banker First Overseas Capital, the lead manager for Synoptics’ IPO, from taking up any new assignment until further orders.

 

Sebi alleged that the company and the merchant banker siphoned away funds by transferring funds under the guise of meeting issue-related expenses.

 

Synoptics raised ₹35 crore from the public. Sebi’s probe showed that around 54 per cent of the issue proceeds, amounting to ₹19 crore, were siphoned off to a set of entities under the directions of the merchant banker.

 

The order also casts a shadow of investigation on 20 other SMEs listed on the stock exchanges which were undertaken by the First Overseas Capital as a merchant banker. Sebi stated that it will examine the utilisation of funds raised by these SMEs to identify if a similar modus operandi was adopted. These were the assignments undertaken by the merchant banker from May 2022 to April 2025.

 

Further, for any pending assignment undertaken by First Overseas Capital as a lead manager, the issuer has been directed to appoint a monitoring agency to monitor the use of IPO proceeds.