Why is DroneAcharya Aerial Innovations share price hitting lower circuit for last two straight sessions?

Stock market today: DroneAcharya Aerial shares continue to remain under the bears' grip for the second straight session on Tuesday. Droneacharya Aerial's share price today opened down and touched a 20% lower circuit within a few minutes of the Opening Bell. While touching the lower circuit, the SME stock went on to hit the lower circuit on the second successive session. The BSE-listed stock came under sell-off pressure on Monday after the capital market regulator, SEBI, on Friday barred DroneAcharya Aerial Innovations Ltd, its promoters, and others from the securities market for up to two years. The market regulator body also levied fines totalling ₹75 lakh for misutilisation of IPO proceeds and fraudulent corporate disclosures. DroneAcharya Aerial Innovations news SEBI slapped a penalty of ₹20 lakh each on Prateek Srivastava, promoter and managing director of DroneAcharya Aerial Innovations (DAIL), and promoter and CFO Nikita Srivastava. Further, SEBI imposed a penalty of ₹10 lakh each on DAIL, Instafin Financial Advisors LLP and Sandeep Ghate, while Micro Infratech Pvt Ltd was fined ₹5 lakh. DAIL came out with its initial public offer (IPO) and raised ₹33.96 crore from the public. The equity shares were listed on the BSE SME platform on December 23, 2022. In a 105-page order, Sebi said that after listing on BSE SME, the company and its promoters have fraudulently made misleading and false corporate announcements to induce interest to buy shares of DAIL to create demand for shares of the firm and also to maintain the otherwise falling price so that the pre-IPO investors could exit at a better price. The regulator observed that they inflated revenues and profits, and artificially maintained the price of DAIL's shares, which enabled pre-IPO investors to exit at a commensurate price; the chances of this, in the normal course, were bleak. The market watchdog found that the IPO proceeds were misutilized and had deviated from the objects clause of the IPO stated in the prospectus, without obtaining shareholders' approval for the deviation. It also noted that they have misrepresented the financial statements by including income from Triconix and IRed, thereby inflating the profit figures for FY 2023-24. "They have also failed to make disclosures with respect to the quotation of software/ accessories in the prospectus, and made incorrect disclosures with respect to the deviation of the IPO proceeds". Sebi further stated that Instafin Financial Advisors LLP and Sandeep Ghate have actively aided and abetted the activity of DAIL, Prateek and Nikita. Micro Infratech Pvt Ltd was found to have provided inflated invoices to DroneAcharya and has also aided them in misutilizing the IPO proceeds, which contributed to misrepresenting their financials and facilitating this fraud. Accordingly, Sebi restrained DroneAcharya Aerial Innovations, Prateek Srivastava, Nikita Srivastava, Instafin Financial Advisors LLP and Sandeep Ghate from accessing the securities market for two years, while Micro Infratech was barred for one year. The order followed the Securities and Exchange Board of India (SEBI), which conducted an investigation into the matter after finding reasonable grounds to believe that there was possible misutilization of IPO proceeds, misrepresentation in financial statements, and diversion of funds by the management of DAIL.