Description

SEBI issues interim order against Nirman Agri Genetics Limited and Pranav Kailas Bagal regarding IPO proceeds utilization irregularities.

Summary

SEBI has issued an interim order under sections 11(1), 11(4) and 11B of the SEBI Act, 1992 against Nirman Agri Genetics Limited (NAGL) and Pranav Kailas Bagal. The order relates to examination of utilization of funds raised through IPO on NSE’s SME platform “Emerge” in March 2023. This examination was initiated following SEBI’s order dated May 06, 2025 in the matter of Synoptics Technologies Limited, to identify similar modus operandi in IPOs managed by First Overseas Capital Ltd (FOCL) during May 01, 2022 to April 30, 2025.

Key Points

  • Nirman Agri Genetics Limited raised INR 20.30 Crore through IPO in March 2023
  • Company listed on NSE’s SME platform “Emerge” on March 28, 2023
  • Lead Manager to the issue was M/s First Overseas Capital Ltd (FOCL)
  • Company incorporated in August 2020, engaged in agriculture hybrid seeds, crop protection solutions, pesticides, and bio-organics products
  • Registered office: 3rd Floor, Samarth House, Opposite Titan World, Mahatma Nagar, Nashik, Maharashtra- 422005
  • PAN of NAGL: AAHCN1021C
  • PAN of Pranav Kailas Bagal: EHJPB8209L
  • Company announced on October 18, 2023 that there was no deviation/variation in IPO proceeds utilization

Objects of the Issue (as per DRHP/RHP)

  • Funding additional working capital requirements: INR 11.82 Crore
  • Investments in strategic acquisition/joint venture: INR 2.00 Crore
  • Purchase of Computer and other hardware: INR 0.45 Crore
  • General Corporate Expenses: INR 3.73 Crore
  • Issue related expenses: INR 2.30 Crore
  • Total: INR 20.30 Crore

Utilization of IPO Proceeds (as per June 30, 2025 submission)

Working Capital Requirements (INR 11.82 Crore):

  • Janvi Trader: INR 2.5 Crore
  • Lalit Trader: INR 2.64 Crore
  • VN Enterprise: INR 3.5 Crore
  • Nilkanth Services and Trading: INR 2.5 Crore
  • SAE Impex: INR 0.20 Crore
  • Anand Salvi: INR 0.38 Crore
  • Shetkarikrushi: INR 0.10 Crore

General Corporate Purpose (INR 4.63 Crore):

  • Somnath Agriculture Trading: INR 3.5 Crore
  • M.K. Agro care: INR 0.30 Crore
  • Saptrashrungi KSK: INR 0.05 Crore
  • Agrocare crop: INR 0.30 Crore
  • Future Green Agri Crop: INR 0.25 Crore
  • Vishnu Krushi: INR 0.23 Crore

Co-Marketing Venture/JV (INR 2.5 Crore):

  • Giant Bio Care: INR 2.00 Crore
  • Vighnaharta Enterprises: INR 0.50 Crore

Computers (INR 1.36 Crore): Various parties

Issue Expenses: As planned

Regulatory Changes

This interim order is issued under sub-sections (1) and (4) of section 11 and section 11B of the Securities and Exchange Board of India Act, 1992. The order is part of SEBI’s broader examination of SME IPOs managed by FOCL following findings in the Synoptics Technologies Limited matter.

Compliance Requirements

The document indicates SEBI’s investigation into potential irregularities in IPO proceeds utilization. Specific compliance requirements and directions will be detailed in the complete interim order.

Important Dates

  • August 2020: Company incorporation
  • March 2023: IPO launched
  • March 28, 2023: Listing on NSE Emerge platform
  • October 18, 2023: Company announced no deviation in IPO proceeds utilization
  • May 06, 2025: SEBI order in Synoptics Technologies Limited matter
  • May 01, 2022 to April 30, 2025: Period under SEBI examination for FOCL-managed IPOs
  • June 30, 2025: Company submitted IPO utilization details to SEBI
  • October 14, 2025: Interim order issued

Impact Assessment

Market Impact: High - SEBI interim order against a listed SME company raises concerns about IPO proceeds utilization and due diligence in SME segment.

Investor Impact: Significant concern for NAGL shareholders and potential impact on investor confidence in SME IPOs managed by FOCL.

Regulatory Impact: Part of broader SEBI crackdown on IPO irregularities in SME segment, following similar patterns identified in Synoptics Technologies Limited case.

Company Operations: Potential restrictions on company operations, fund utilization, and trading depending on interim order directions.

Impact Justification

SEBI interim order against listed company for IPO proceeds misutilization has significant regulatory and market implications