Description

SEBI issues confirmatory order against Synoptics Technologies Limited, its promoters, and Lead Manager First Overseas Capital Limited for irregularities in IPO bidding process on NSE SME Platform.

Summary

SEBI issued a confirmatory order under sections 11(1), 11(4) and 11B of SEBI Act, 1992 against Synoptics Technologies Limited (STL), its three promoters (Jatin Shah, Jagmohan Manilal Shah, Janvi Jatin Shah), and Lead Manager First Overseas Capital Limited (FOCL) for irregularities in the IPO bidding process. The order confirms interim directions issued on May 06, 2025 following complaints about irregularities in STL’s IPO on NSE SME Platform in June-July 2023 that raised INR 54.04 Crore.

Key Points

  • SEBI conducted preliminary examination following complaints alleging irregularities in Synoptics Technologies Limited’s IPO bidding process
  • Company raised INR 54.04 Crore through IPO on NSE SME Platform (INR 35.08 Crore fresh issue + INR 18.96 Crore offer for sale)
  • Listed on NSE SME Platform on July 13, 2023
  • First Overseas Capital Limited (Registration No. INM000003671) acted as Lead Manager
  • Interim order dated May 06, 2025 imposed immediate restrictions on all noticees
  • Issue-related expenses disclosed at INR 80 Lakh (INR 50 Lakh from fresh issue, INR 30 Lakh from selling shareholders)
  • Net proceeds to company projected at INR 34.58 Crore

Regulatory Actions

Against Company and Promoters (Noticees 1, 3, 4, 5):

  • Restrained from buying, selling or dealing in securities market directly or indirectly until further orders
  • Permitted to close open positions in exchange-traded derivative contracts within 7 days from order date
  • Allowed to settle pay-in/pay-out obligations for pre-order transactions

Against Lead Manager FOCL (Noticee 2):

  • Prohibited from taking up any new merchant banking assignments until further directions
  • For pending assignments where FOCL is already engaged as Lead Manager, issuer must appoint Monitoring Agency to monitor use of proceeds irrespective of issue size

Entities Covered

  1. Synoptics Technologies Limited (PAN: AAMCS4502L) - Company
  2. First Overseas Capital Limited (Registration: INM000003671) - Lead Manager
  3. Jatin Shah (PAN: AONPS5463E) - Promoter
  4. Jagmohan Manilal Shah (PAN: ABWPS9290B) - Promoter
  5. Janvi Jatin Shah (PAN: AYAPS9827K) - Promoter

Background

  • Company incorporated in 2008, engaged in trading IT products and providing IT networking solutions
  • Two promoters (Noticees 3 and 4) participated in offer for sale component worth INR 18.96 Crore
  • Red Herring Prospectus disclosed issue-related expenses and fund utilization plans

Impact Assessment

This enforcement action has severe implications for the SME IPO ecosystem and merchant banking activities. The market ban on the company and its promoters effectively restricts their participation in securities markets. The restrictions on FOCL as Lead Manager impact its ability to conduct merchant banking business and signals heightened regulatory scrutiny on IPO processes, particularly in the SME segment. The mandatory appointment of Monitoring Agency for FOCL’s existing assignments adds oversight layer for fund utilization.

Impact Justification

Confirmatory order imposing market ban on company and promoters, restrictions on Lead Manager for IPO irregularities involving INR 54.04 Crore public issue