“The quotation of shares of the share capital of Trafiksol ITS Technologies “The limited offer to be held on September 17, 2024 has been postponed until the issuer resolves certain concerns raised. Market participants are requested to take note,” the BSE said.
Noida-based Trafiksol, which offers end-to-end solutions for intelligent transport systems and automation, has been advised to hold the entire proceeds of the issue in the escrow account until the company satisfactorily explains the issues raised in a complaint and a video on social media.
The Rs 44.87 crore IPO, which was entirely a fresh share sale of 64.1 lakh shares, received a strong response from investors with an overall subscription of over 345.65 times. For the year ended March 2024, the company posted total revenue of Rs 65 crore and net profit of Rs 12.01 crore.
Unlike IPOs of major companies, SME IPOs are cleared directly by the stock exchanges (BSE and NSE) without Sebi’s intervention. However, in recent days, the regulator has been raising red flags about the possibility of undetected market manipulation, where a large number of shares double their value on the same day of listing.
Sebi has recently issued an advisory saying that investors in the SME market should exercise caution. “Some of the SMEs and/or their promoters have resorted to certain media which project an unrealistic picture of their operations. Such companies/promoters have been seen making public announcements which create a positive image of their operations. These announcements are often followed by various corporate actions such as bond issues, share splits, preferential allotments etc,” Sebi said. Further, Sebi member Ashwani Bhatia has told stock exchanges to learn not to say no to SME IPOs which come with inflated balance sheets. “Auditors should be good doctors – do not give them steroids when they can survive on paracetamol,” he had said recently.
The regulator is expected to review SME listing rules, tightening rules related to disclosure and eligibility. The NSE has already stepped up scrutiny of companies seeking to list on its SME platform and introduced positive free cash flow to equity (FCFE) requirements.
Read also | SME IPOs look like a boom-day-then-doom story
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