SEBI Bans SME Nirman Agri Genetics For '93% IPO Fund Diversion'

The Securities and Exchange Board of India has banned SME-listed Nirman Agri Genetics Ltd. from accessing the securities market after alleged diversion of Initial Public Offering Funds. The regulator on Tuesday has also directed the company to pause all proposed corporate actions that include bonus issue, stock split and its name change to Agriicare Life Corp Ltd. until further orders.

The company in March 2023 raised Rs 20.30 crore through its IPO with First Overseas Capital Ltd. as the lead manager. The investigation was initiated by SEBI post a broader review of IPOs handled by First Overseas Capital between May 2022 and April 2025. This was after SEBI found irregularities in the IPO of Synoptics Technologies Ltd.

In its interim order passed on Tuesday, SEBI has restrained Nirman Agri's promoter from buying, selling or dealing in NAGL shares in either direct or indirect means until further notice.

According to SEBI's investigation the company had mis-utilised approximately Rs 18.89 crore or 93% of the total IPO proceeds by transferring the funds to entities that were either fictitious or controlled by the company’s promoter Pranav Kailas Bagal and his relatives.

In addition, the regulator also pointed that Nirman Agri submitted conflicting information regarding the fund utilisation without offering any credible explanation for the discrepancies.

The regulator also alleged that Nirmal Agri diverted Rs 6.75 crore of IPO proceeds through multiple layers to entities that are either linked to the promoter and his relatives or who directly gained from the diversion.

SEBI's report states that Nirman Agri claims to have paid Rs 12.14 crore to four vendors, but all of these firms had suspect credentials. The company failed to provide invoices to substantiate the payments. It also noted that in some cases the bank accounts receiving funds also belonged to entirely unrelated parties.

"The Company has failed to furnish any credible proof of any agreement or invoices backing the transactions between the Company and the said parties," SEBI noted in its interim order.

In contrast to the company's claims the site visits by NSE also revealed that the entities were non-existent at the given address and no agricultural activates were found.

In addition, the investigation has also showed that the promoter group's shareholding has fallen by 21.26% since listing in March 2023 from the earlier 65.59% at the time of listing to 44.33% as of September. The regulator adds that Bagal sold 8.6 lakh shares that represent 10.71% of his holding during September.