Description

SEBI order under Sections 11(1), 11(4), 11B(1) and 11B(2) against Droneacharya Aerial Innovations Limited and 9 other noticees for fraudulent scheme, misrepresentation of financial statements, misutilization of IPO proceeds, and non-disclosure violations.

Summary

SEBI issued an order under Sections 11(1), 11(4), 11B(1) and 11B(2) read with Sections 15A(b), 15HA and 15EB of the SEBI Act, 1992 against Droneacharya Aerial Innovations Limited (DAIL) and nine other noticees including promoters, directors, and related entities. The investigation found violations related to fraudulent schemes, misrepresentation of financial statements, misutilization of IPO proceeds, non-disclosure of related party transactions, incorrect shareholding disclosures, and violations of PFUTP Regulations and LODR Regulations. DAIL’s equity shares have been listed on BSE SME platform since December 23, 2022.

Key Points

  • DAIL (CIN: L29308PN2017PLC224312) listed on BSE SME platform on December 23, 2022
  • Order covers 10 noticees: Droneacharya Aerial Innovations Limited, Mr. Prateek Srivastava (Promoter/MD), Ms. Nikita Srivastava (Promoter/Director/CFO), Instafin Financial Advisors LLP, Mr. Sandeep Ghate, Mr. Kishan R Verma, Mr. Harshal Kher, Corporate Capital Ventures Private Ltd., Micro Infratech Pvt. Ltd., and Ms. Mukula Joshi
  • Main operations: drone operation training, drone supply and maintenance services, and management consultancy
  • Violations include fraudulent scheme, misrepresentation of financial statements, misutilization of IPO proceeds, non-disclosure of software quotation in prospectus, incorrect disclosure about deviation in IPO proceeds utilization, non-disclosure of related party transactions, and incorrect shareholding disclosures
  • Instafin Financial Advisors LLP incorporated on April 25, 2017, engaged in corporate advisory services to start-ups
  • Mr. Sandeep Ghate and Ms. Damini Ghate are partners of Instafin
  • Investigation conducted based on reasonable grounds of IPO proceeds misutilization and fund diversion

Regulatory Changes

No new regulatory changes introduced. This is an enforcement order applying existing provisions under SEBI Act, 1992, PFUTP Regulations, LODR Regulations, and SCRA.

Compliance Requirements

The order examines compliance failures across multiple regulatory areas:

  • Proper utilization and disclosure of IPO proceeds as per stated objectives
  • Accurate financial statement reporting and disclosures
  • Disclosure of related party transactions as per regulatory requirements
  • Accurate shareholding pattern disclosures
  • Compliance with listing obligations under LODR Regulations
  • Prohibition against fraudulent and unfair trade practices
  • Half-yearly disclosures on IPO proceeds utilization

Important Dates

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

Impact Assessment

Market Impact: High - This enforcement action against a BSE SME listed company involving serious violations including fraudulent schemes and IPO proceeds misutilization sends a strong regulatory message about compliance standards expected from SME platform listed entities.

Investor Impact: High - Investors in DAIL potentially affected by misrepresentation of financial statements, fund diversion, and non-disclosure of material information. The order addresses protection of investor interests.

Operational Impact: High - Multiple noticees including company, promoters, directors, CFO, and related entities face regulatory action. The comprehensive nature of violations spanning corporate governance, financial reporting, and disclosure obligations indicates systemic compliance failures.

Regulatory Significance: The order demonstrates SEBI’s focus on SME platform compliance and willingness to take comprehensive enforcement action against fraudulent schemes and disclosure violations to protect investor interests and market integrity.

Impact Justification

Major enforcement action involving multiple serious violations including fraudulent schemes, IPO proceeds misutilization, financial statement misrepresentation, and disclosure failures by a BSE SME listed company and its promoters.