Accretion Pharmaceuticals SME IPO

Frequently Asked Questions (FAQs)

• 1. What is the SEBI interim order about?

  On May 6, 2025, SEBI issued an interim order restraining Synoptics Technologies Ltd (STL) and its promoters—Jatin Jagmohan Shah, Jagmohan Manilal Shah, and Janvi Jatin Shah—from accessing the securities market. The order alleges that STL diverted approximately ₹19 crore from its IPO proceeds under the guise of issue-related expenses, which was significantly higher than the ₹80 lakh disclosed in the Red Herring Prospectus (RHP).

• 2. Who is First Overseas Capital Ltd (FOCL), and what role did it play?

  FOCL was the lead manager for STL's IPO. SEBI found that FOCL, acting under the authority of the escrow agreement, instructed the bank to transfer funds purportedly for issue-related expenses. These transfers amounted to ₹19 crore, which SEBI deemed disproportionate and indicative of a scheme to siphon off funds.

• 3. How much did Synoptics Technologies raise in its IPO?

  STL raised a total of ₹54.04 crore through its IPO on July 13, 2023. This included ₹35.08 crore from the fresh issue of shares and ₹18.96 crore via an offer-for-sale by promoters.

• 4. What specific allegations has SEBI made against STL and FOCL?

  SEBI alleges that STL and FOCL orchestrated a scheme to divert IPO proceeds by transferring funds to entities under the pretense of covering issue-related expenses. Notably, ₹2 crore was routed to an individual who used the funds to purchase STL shares on the listing day, artificially inflating demand.

• 5. What immediate actions has SEBI taken against the involved parties?

  SEBI has barred STL and its three promoters from accessing the securities market until further notice. Additionally, FOCL is prohibited from taking on any new merchant banking assignments. For ongoing assignments, issuers are required to appoint independent monitoring agencies to oversee the use of IPO proceeds.

• 6. Is SEBI investigating other IPOs managed by FOCL?

  Yes, SEBI is examining 20 other SME IPOs managed by FOCL between May 2022 and April 2025 to determine if similar fund diversion schemes were employed.

• 7. What is the significance of the ₹19 crore figure mentioned in the order?

  The ₹19 crore represents approximately 54% of the fresh issue proceeds and 35% of the total IPO size. SEBI found this amount, transferred under the guise of issue-related expenses, to be grossly disproportionate to the ₹80 lakh disclosed in the RHP, indicating potential misuse of funds.

• 8. What are the potential consequences for STL and its promoters?

  If SEBI's allegations are substantiated, STL and its promoters could face further regulatory actions, including monetary penalties, disgorgement of ill-gotten gains, and extended bans from the securities market. Criminal proceedings could also be initiated depending on the severity of the violations.

• 9. How does this case impact investors and the broader market?

  Such cases erode investor confidence, particularly in the SME segment. They highlight the importance of stringent due diligence and the need for robust regulatory oversight to protect investors and maintain market integrity.

• 10. What measures can investors take to protect themselves in future IPOs?

  Investors should: • Thoroughly review the RHP and understand the company's business model and financials. • Be cautious of IPOs with high issue expenses relative to the total proceeds. • Monitor post-IPO fund utilization reports and disclosures. • Stay informed through official SEBI communications and reputable financial news sources.