“The listing of equity shares of Trafficol ITS Technologies Limited due on September 17, 2024 has been deferred till certain queries raised by the issuer are resolved. Market participants are requested to please note,” BSE said.
Noida-based Trafficsol, which provides comprehensive solutions for intelligent transportation systems and automation, has been advised to keep the entire amount in an escrow account until the company satisfactorily clarifies the issues raised in the complaint and the video on social media.
Fresh equity sale of 64.1 lakh shares was made in the IPO of Rs 44.87 crore, which received a strong response from investors with over 345.65 times subscription. For the year ended March 2024, the company posted total revenue of Rs 65 crore and a net profit of Rs 12.01 crore.
Unlike mainboard IPOs, SME IPOs are approved directly by the stock exchanges – BSE and NSE – without Sebi's involvement. However, in recent times, the regulator has flagged concerns of under-the-radar market manipulation where a large number of stocks double the money on the day of listing itself.
SEBI had recently issued an advisory stating that investors in the SME market should exercise caution. “Some SME companies and/or their promoters are resorting to certain practices that present an unrealistic picture of their operations. Such companies/promoters have been observed making public announcements that present a positive picture of their operations. These announcements are usually followed by various corporate actions such as bonus issues, stock splits, preferential allotments, etc,” SEBI said. Further, SEBI whole-time member Ashwani Bhatia had asked stock exchanges to learn not to turn down SME IPOs that come with inflated balance sheets. He had recently said, “Auditors should be good doctors – don't give them steroids when they can survive on paracetamol.”
The regulator is expected to revise the norms by tightening disclosure and eligibility criteria for listing SMEs. NSE has already tightened scrutiny of companies seeking to list on its SME platform and introduced positive free cash flow (FCFE) requirements for equity.
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