TrafikSol had a terrific IPO. Then BSE decided to postpone its listing.
Subscribe to enjoy similar stories. Mumbai: Rising scrutiny on the flurry of small enterprises going public finally has Exhibit One: TrafikSol ITS Technologies Ltd. On Tuesday, BSE postponed the listing of TrafikSol shares after investor complaints reached the market regulator, a person aware of the matter said.
The complaints pertained to Trafiksol’s plans to use the ₹44.87 crore raised from the initial public offering (IPO). According to a second person, since the Securities and Exchange Board of India (Sebi) doesn’t play any role in the sanction or approval of IPOs of small and medium enterprises (SMEs), it had forwarded the complaints to BSE, which runs such IPOs. Concerns around SME IPOs have been rising.
Just last month, a modest motorcycle dealership in Delhi received IPO subscriptions of as much as 400 times for the ₹12 crore it wanted to raise. As recently as 29 August, Sebi had raised concerns about questionable practices in the SME market and warned investors about unrealistic projections by some SMEs. On 12 September, Bloomberg reported that Sebi is considering tighter oversight on SMEs selling shares to the public.
Both persons cited above said the grievances surfaced in a post on social media platform X regarding the company’s plan outlined in its red herring prospectus to use ₹17.7 crore—almost 40% of the gross issue proceeds—to buy a software for integrated command and control centre (ICCC) from one Oasis Corpcare. Oasis has a paid-up capital and authorized share capital of ₹1 lakh each. Another investor post on X highlighted that Oasis, which provides auditing, legal and book-keeping services, had purportedly not filed any reports or made any filings since 2021.
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