Description

SEBI order under multiple sections against Droneacharya Aerial Innovations Limited and 9 other entities for fraudulent scheme, misrepresentation of financial statements, IPO proceeds misutilization, and non-disclosure violations.

Summary

SEBI has issued an order under Sections 11(1), 11(4), 11B(1), 11B(2) read with Sections 15A(b), 15HA and 15EB of the SEBI Act, 1992 against Droneacharya Aerial Innovations Limited (DAIL) and 9 other entities. The order addresses multiple serious violations including a fraudulent scheme, misrepresentation of financial statements, misutilization of IPO proceeds, non-disclosure of related party transactions, incorrect shareholding disclosures, and other regulatory breaches. DAIL’s equity shares have been listed on BSE SME platform since December 23, 2022.

Key Points

  • SEBI investigation revealed fraudulent scheme and misrepresentation by DAIL and associated parties
  • Misutilization of IPO proceeds detected during investigation
  • Financial statements found to contain misrepresentations
  • Non-disclosure of quotation of software in prospectus
  • Incorrect disclosure about deviation in utilization of IPO proceeds
  • Omission of mandatory half-yearly disclosures on IPO proceeds utilization
  • Non-disclosure of related party transactions
  • Incorrect shareholding disclosures filed with exchanges
  • 10 noticees involved: DAIL, two promoters (Mr. Prateek Srivastava - MD, Ms. Nikita Srivastava - CFO/Director), Instafin Financial Advisors LLP (corporate advisor), and 6 other entities/individuals
  • Main operations: drone operation training, drone supply and maintenance, management consultancy services

Regulatory Violations

  • Violation of SEBI Act provisions
  • Violation of Securities Contract (Regulation) Act, 1956 (SCRA)
  • Violation of SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations, 2003 (PFUTP Regulations)
  • Violation of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 (LODR Regulations)
  • Breach of corporate governance norms
  • Failure to maintain proper disclosure standards

Entities Involved

  1. Droneacharya Aerial Innovations Limited (CIN: L29308PN2017PLC224312)
  2. Mr. Prateek Srivastava (Promoter/Managing Director) - PAN: CJCPS9105B
  3. Ms. Nikita Srivastava (Promoter/Director/CFO) - PAN: BAZPM2614N
  4. Instafin Financial Advisors LLP (Corporate Advisor) - PAN: AAGFI3779L
  5. Mr. Sandeep Ghate (Partner of Instafin) - PAN: AACPG0447M
  6. Mr. Kishan R Verma - PAN: ACCPV3587H
  7. Mr. Harshal Kher - PAN: DPWPK6444A
  8. Corporate Capital Ventures Private Ltd. - PAN: AAECR4815P
  9. Micro Infratech Pvt. Ltd. - PAN: AAFCM3365A
  10. Ms. Mukula Joshi - PAN: AZHPJ1038K

Compliance Requirements

  • Listed companies must ensure accurate financial reporting and disclosures
  • IPO proceeds must be utilized strictly as per stated objectives in prospectus
  • Related party transactions must be properly disclosed as per regulatory requirements
  • Shareholding patterns must be accurately reported to stock exchanges
  • Half-yearly disclosures on IPO proceeds utilization are mandatory
  • All material information must be disclosed in offer documents
  • Corporate advisors must exercise due diligence in their advisory role
  • Promoters and key managerial personnel must ensure compliance with all applicable regulations

Important Dates

  • December 23, 2022: DAIL equity shares listed on BSE SME platform
  • April 25, 2017: Instafin Financial Advisors LLP incorporated
  • November 28, 2025: SEBI order circular date

Impact Assessment

Market Impact: High - enforcement action against BSE SME listed company raises investor concerns about governance standards in SME segment.

Investor Impact: High - investors in DAIL IPO and shareholders affected by misrepresentation of financials and misutilization of funds raised from public.

Regulatory Impact: High - demonstrates SEBI’s active enforcement against fraudulent schemes, financial misrepresentation, and IPO proceeds misutilization in SME segment.

Company Impact: Severe - regulatory action, potential penalties, reputational damage, and operational restrictions likely.

Sector Impact: Medium - serves as deterrent for other SME companies and highlights importance of proper governance and compliance standards.

Impact Justification

Major SEBI enforcement action involving fraudulent scheme, IPO proceeds misutilization, financial statement misrepresentation, and multiple regulatory violations by a BSE SME listed company and associated parties including promoters and advisors.