Nirman Agri Shares Plunge 5% as SEBI Bars Firm Over IPO Fund Misuse

Shares of Nirman Agri Genetics Ltd (NAGL) fell sharply on October 15, hitting a 5% lower circuit at Rs 166.85 per share. The decline came a day after the Securities and Exchange Board of India (SEBI) barred the SME-listed firm from accessing the securities market due to alleged diversion of IPO funds.

Market Performance

Nirman Agri’s stock reacted immediately to the regulatory action:

• Share Price: Rs 166.85, down 5%
• 52-Week Low / High: Rs 130 / Rs 456
• Market Capitalisation: Rs 133 crore

The firm’s shares are now closer to their 52-week low, reflecting the impact of SEBI’s interim measures and the uncertainty around corporate actions.

SEBI Action Against Nirman Agri

SEBI’s interim order, issued by Whole-Time Member Kamlesh Chandra Varshney, has placed strict restrictions on the company and its promoter:

• Promoter Restrictions: Pranav Kailas Bagal is barred from buying, selling, or dealing in NAGL shares, directly or indirectly, until further notice.
• Corporate Actions Halted: All planned corporate activities—including bonus issue, stock split, and proposed name change to Agriicare Life Corp Ltd—have been suspended until further orders.

Alleged Misuse of IPO Funds

SEBI’s investigation found serious discrepancies in the utilisation of NAGL’s IPO proceeds. The company had raised Rs 20.30 crore in its IPO, but nearly Rs 18.89 crore (93%) was allegedly transferred to entities that were:

• Fictitious or non-existent
• Suspect in nature
• Controlled by Bagal and his relatives

The regulator noted that NAGL submitted conflicting information regarding fund utilisation, without any credible explanation or supporting documentation.

Specific observations from SEBI include:

• Payments of Rs 12.14 crore were claimed to four vendor entities, but these firms lacked valid agreements or invoices.
• Bank accounts receiving the funds were unrelated to the entities NAGL claimed to pay.
• NSE site visits revealed that the entities were non-existent, with no agricultural operations taking place at the listed addresses.

SEBI highlighted that NAGL failed to provide any credible proof of transactions, raising questions over the legitimacy of the fund utilisation.

Summary

The SEBI action against Nirman Agri has triggered immediate market repercussions, with the stock hitting the lower circuit and all corporate initiatives temporarily frozen.

Key Points:

• Shares down 5% at Rs 166.85
• SEBI bars firm from securities market over alleged IPO fund diversion
• Promoter Pranav Kailas Bagal restrained from trading NAGL shares
• Corporate actions, including bonus issue and name change, put on hold
• Rs 18.89 crore of IPO proceeds allegedly misused

Investors and market watchers are now closely tracking the developments, as SEBI’s scrutiny sheds light on serious governance concerns within the SME-listed firm.

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