SEBI has issued Adjudication Order No. Order/SM/KS/2025-26/32389 against Asirvad Micro Finance Limited (AMFL, PAN: AAGCA5257J) for alleged violations related to the issuance of Non-Convertible Debentures (NCDs, ISIN: INE516Q08281) to Karvy Capital Limited (KCL). The violations were identified during examination of AMFL’s Draft Red Herring Prospectus (DRHP) and pertain to private placement and debt securities listing regulations.

Key Points

• SEBI examined AMFL’s DRHP and identified violations related to NCD issuance (ISIN: INE516Q08281) to Karvy Capital Limited
• Alleged violations include Section 42, Section 26(4) read with 2(70), 26(6), 23(1), and 33(1) of the Companies Act, 2013
• Violations also alleged under Regulations 4(3), 6, 7, 8, 9 and 16 of SEBI (Issue and Listing of Debt Securities) Regulations, 2008
• Rule 14(2) of Companies (Prospectus and Allotment of Securities) Rules, 2014 also alleged to have been breached
• Adjudicating Officer has changed hands three times: Ms. Barnali Mukherjee (appointed August 02, 2024), Shri. Amar Navlani (appointed January 15, 2025), and the current undersigned officer (appointed September 11, 2025)
• Show Cause Notice (SCN No. SEBI/EAD/BM/GN/26176/1/2024) was issued on September 03, 2024, requiring response within 21 days

Regulatory Changes

No new regulatory changes are introduced. The order enforces existing provisions under:

• Section 42 of Companies Act, 2013 (private placement rules)
• SEBI (Issue and Listing of Debt Securities) Regulations, 2008 (Regulations 4(3), 6, 7, 8, 9, and 16)
• Companies (Prospectus and Allotment of Securities) Rules, 2014 (Rule 14(2))

Compliance Requirements

• Companies issuing NCDs on a private placement basis must strictly adhere to Section 42 of Companies Act, 2013 and Rule 14(2) of Companies (Prospectus and Allotment of Securities) Rules, 2014
• Issuers must comply with SEBI ILDS Regulations 4(3), 6, 7, 8, 9, and 16 when listing debt securities
• Proper disclosure and allotment procedures must be followed as required under Sections 26 and 33 of the Companies Act, 2013

Important Dates

• August 02, 2024: Initial appointment of Adjudicating Officer Ms. Barnali Mukherjee
• September 03, 2024: Show Cause Notice issued to AMFL (SCN No. SEBI/EAD/BM/GN/26176/1/2024)
• January 15, 2025: Shri. Amar Navlani appointed as replacement Adjudicating Officer
• September 11, 2025: Current Adjudicating Officer appointed
• September 19, 2025: Appointment communicated to current Adjudicating Officer

Impact Assessment

This adjudication order has a direct and significant impact on Asirvad Micro Finance Limited, potentially resulting in financial penalties under Section 15HB of the SEBI Act, 1992. The case highlights SEBI’s scrutiny of NCD private placement procedures during IPO/listing reviews. Other micro-finance companies and entities issuing NCDs should review their compliance with SEBI ILDS Regulations and Companies Act private placement provisions. The involvement of Karvy Capital Limited as the NCD subscriber adds regulatory complexity. Broader market impact is limited, but the order serves as a precedent reinforcing strict compliance requirements for debt securities issuances.