In a first-ever closure, BSE on Tuesday deferred the listing of Trafiksol ITS Technologies Ltd, a small and medium enterprise (SME) whose initial public offering (IPO) was closed recently, as the company Some 'questions' remain to be resolved by .
The company's IPO opened on September 10 and closed on September 12. The company's shares were to be listed on the BSE SME platform on September 17.
BSE said in a notice to market participants on Tuesday, “…in view of certain queries that have been raised, the listing for trading of the scrip (of Trafaxol ITS Technologies) has been postponed until further notice.” issued until the issues are resolved by the issuer,” BSE said in a notice to market participants on Tuesday. However, the stock exchange did not give further details.
The Noida, Uttar Pradesh-based company's IPO size was around Rs 45 crore. The issue price band was Rs 66-70 per share. According to information on the BSE SME platform, the issue was oversubscribed by 321.51 times, the retail portion by 317.74 times and the non-institutional investors' quota by 517.50 times.
Incorporated in 2018, Trafiksol ITS Technologies provides solutions for intelligent transportation systems and automation, including software development, consultancy, and supply services. In the year ended March 31, 2024, the company's profit rose to Rs 12.09 crore from Rs 4.77 crore in FY 2023 and Rs 2.05 crore in FY 2022. Its income from operations stood at Rs 65.81 crore in FY 2024, compared to Rs 36.29 crore in FY 2023 and Rs 27.91 crore in FY 2022.
BSE's action against Trafficsol ITS Technologies comes amid concerns raised by the Securities and Exchange Board of India (SEBI) about some SME companies and their promoters implying that their An unrealistic picture of operations is presented.
Such companies or promoters have been seen making public announcements that project a positive image of their operations. SEBI said last month that these announcements usually accompany various corporate actions such as bonus issues, stock splits and preferential allotments.
“These actions create a positive sentiment among investors, which prompts them to buy such securities. Also, it provides an easy opportunity for promoters to offload their holdings in such companies at higher prices. It does,” Sebi had said.
Market regulator SEBI is not directly regulating SME IPOs. Monitoring of such small IPOs is done by NSE and BSE.
The listing of SMEs on the NSE and BSE is witnessing irrational fervor with several of these IPOs being oversubscribed 500 and 700 times.
Annual listings on SME platforms through IPOs have quadrupled in the last five years from 46 in 2019-20 to 196 in FY2024. The amount of funds raised through IPOs has also increased 12-fold from Rs 495 crore to Rs 6,096 crore in five years. The market capitalization of SME companies has now increased to Rs 2 lakh crore.
According to Prime Database, in the first five months of the current financial year, around 108 SME companies have raised Rs 3,548.17 crore through share listings.