Sebi Directs Trafiksol to Refund IPO Proceeds

The Securities and Exchange Board of India (Sebi) has ordered Trafiksol ITS Technologies to refund the Rs 44.9 crore received from investors in its initial public offering (IPO). The Bombay Stock Exchange (BSE), in coordination with the bankers, will oversee the refund process, which is expected to be completed within a week from the date of the order, along with the interest earned on the issue's proceeds.

Sebi received a complaint prior to the listing of the shares, alleging that the objects of the issue included the purchase of software from a third-party vendor with questionable credentials. An investigation revealed that the vendor was a shell entity, and that the company had engaged in a cover-up when the vendor's credentials were questioned.

The order aims to protect investors' interests by ensuring they get their money back. "The finding that the company was involved in cover-up is based on fact that it can be reasonably presumed that MD of the company, given his long association with this sector, at the very least, was aware that the profile of the TPV directors, which was submitted to BSE, was fabricated," the order stated.

Trafiksol, which provides solutions for traffic and toll management projects through technology, had filed a draft red herring prospectus with BSE for an IPO on the SME Platform, issuing 64.1 lakh equity shares at Rs 66-70 per share. The offering was oversubscribed nearly 345.7 times, raising Rs 44.9 crore. The listing, scheduled for Sept 17, 2024, was deferred due to a complaint.