Description

SEBI issues interim order against Nirman Agri Genetics Limited and Pranav Kailas Bagal examining alleged irregularities in IPO fund utilization following listing on NSE SME platform in March 2023.

Summary

SEBI has issued an interim order under sub-sections (1) and (4) of section 11 and section 11B of the SEBI Act, 1992 against Nirman Agri Genetics Limited (NAGL) and Pranav Kailas Bagal. The order stems from an examination initiated following SEBI’s order dated May 06, 2025 in the matter of Synoptics Technologies Limited, investigating whether similar modus operandi was adopted in SME IPOs managed by First Overseas Capital Ltd (FOCL) between May 01, 2022 to April 30, 2025. NAGL raised INR 20.30 Crore through an IPO in March 2023 and was listed on NSE’s SME platform “Emerge” on March 28, 2023.

Key Points

  • Nirman Agri Genetics Limited incorporated in August 2020, engaged in agriculture hybrid seeds, crop protection solutions, pesticides, and bio-organics products
  • Company raised INR 20.30 Crore through SME IPO in March 2023 with First Overseas Capital Ltd as Lead Manager
  • Listed on NSE Emerge platform on March 28, 2023
  • Registered office: 3rd Floor, Samarth House, Opposite Titan World, Mahatma Nagar, Nashik, Maharashtra-422005
  • Two noticees: Nirman Agri Genetics Limited (PAN: AAHCN1021C) and Pranav Kailas Bagal (PAN: EHJPB8209L)
  • Examination initiated as part of broader investigation into FOCL-managed IPOs following Synoptics Technologies Limited case
  • Company announced no deviation in IPO proceeds utilization on October 18, 2023
  • Detailed fund utilization submitted to SEBI on June 30, 2025 showing deployment across multiple entities

Objects of IPO Issue

As per DRHP/RHP filed by the Company:

  • 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

Fund Utilization Details

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

Other Utilization

  • Computers: INR 1.36 Crore to various parties
  • Issue Expenses: Not detailed in excerpt

Regulatory Action

SEBI has issued an interim order under:

  • Sub-sections (1) and (4) of Section 11 of SEBI Act, 1992
  • Section 11B of SEBI Act, 1992

The examination is investigating potential irregularities in fund utilization and whether similar modus operandi found in Synoptics Technologies Limited case was adopted.

Background Context

This order is part of SEBI’s systemic examination of SME IPOs managed by First Overseas Capital Ltd during May 01, 2022 to April 30, 2025, initiated following findings in the Synoptics Technologies Limited matter (SEBI Order dated May 06, 2025).

Compliance Requirements

  • Entities subject to interim order restrictions as specified by SEBI
  • Noticees required to respond to SEBI’s prima facie findings
  • Cooperation with ongoing investigation into IPO fund utilization

Important Dates

  • August 2020: NAGL incorporated
  • March 2023: IPO launched to raise INR 20.30 Crore
  • March 28, 2023: Listed on NSE Emerge platform
  • October 18, 2023: Company announcement stating no deviation in IPO proceeds utilization
  • May 06, 2025: SEBI order in Synoptics Technologies Limited matter triggering broader examination
  • June 30, 2025: Company submitted detailed IPO utilization information to SEBI
  • October 14, 2025: Interim order issued

Impact Assessment

Market Impact:

  • High impact on NAGL stock and investor confidence
  • Broader implications for SME segment credibility on NSE Emerge platform
  • Potential scrutiny on other FOCL-managed SME IPOs during the examination period

Regulatory Impact:

  • Part of systematic examination of merchant banker practices in SME segment
  • May lead to enhanced due diligence requirements for SME IPOs
  • Strengthens SEBI’s focus on post-IPO fund utilization monitoring

Operational Impact:

  • Trading and operational restrictions on noticees pending investigation outcome
  • Reputational risk for First Overseas Capital Ltd as merchant banker
  • Increased regulatory oversight on agricultural sector SME listings

Impact Justification

Interim order issued under Section 11 and 11B of SEBI Act involving examination of INR 20.30 Crore IPO fund utilization irregularities, part of broader investigation into SME IPOs managed by First Overseas Capital Ltd during May 2022 to April 2025 period.