SEBI Bans Trafiksol, Promoters for 1 Year, Imposes ₹1.05 Crore Penalty

The Securities and Exchange Board of India ( SEBI) has barred Trafiksol ITS Technologies Ltd and its promoter-directors Jitendra Das and Poonam Das from accessing the securities market for one year over serious irregularities linked to the company’s 2024 SME initial public offering (IPO). The regulator has also imposed penalties totalling ₹1.05 crore on the three entities.

Under its final order, SEBI fined Trafiksol ₹30 lakh, Jitendra Das ₹50 lakh and Poonam Das ₹25 lakh. The penalties are required to be paid within 45 days. The regulatory action followed complaints received by SEBI and BSE after Trafiksol’s SME IPO was subscribed 345.65 times in September 2024. The issue involved a fresh offering of 64.10 lakh shares in the price band of ₹66-70 and raised ₹44.87 crore at the upper end of the price band. Around ₹17.70 crore of the proceeds was proposed to be used for purchasing software.

The company’s shares were scheduled to list on September 17, 2024. However, concerns emerged over Oasis Corpcare, the proposed software vendor from which Trafiksol had obtained a quotation. Questions were raised about the vendor’s ability to execute the proposed contract, prompting BSE, in consultation with SEBI, to defer the listing.

In an interim order issued in October 2024, SEBI directed BSE to keep the IPO proceeds in an interest-bearing escrow account pending further directions and ordered a detailed investigation. In its 85-page final order, SEBI identified several violations involving financial disclosures, issue-related expenses and deployment of IPO proceeds. The regulator said Trafiksol’s disclosures overstated its operations through unsupported recognition of unbilled revenue and transactions involving Limco and Ishira.

SEBI also found that material issue-related expenditure was not properly disclosed and that a financial relationship creating a potential conflict involving the merchant banker was omitted from the draft offer document. The regulator termed the Oasis quotation a particularly serious violation, alleging that a substantial portion of the IPO proceeds was to be deployed based on a fabricated quotation from an entity lacking credible technical and operational capabilities.

SEBI said Jitendra Das was directly involved in procuring the quotation, while Poonam Das failed to exercise adequate due diligence while signing relevant documents. Both remain promoters, with Jitendra Das serving as chairman and managing director and Poonam Das as whole-time director. The three have consequently been restrained from accessing the securities market or dealing in securities for one year.