BSE Defers Trafiksol ITS Technologies’ Listing: What It Means for SME IPOs
In an unexpected move, the Bombay Stock Exchange (BSE) delayed the listing of Trafiksol ITS Technologies on its SME platform at the last minute, raising concerns about the company’s operations. This decision came after the Securities and Exchange Board of India (SEBI) raised questions about Trafiksol's use of IPO proceeds and the company’s fundamentals.
Trafiksol ITS IPO: High Demand, Sudden Setback
Trafiksol ITS Technologies, specializing in traffic, toll, and tunnel management solutions, aimed to raise Rs 44.87 crore through its IPO. The offering garnered massive demand, attracting bids worth Rs 19,380 crore. However, the excitement was short-lived. BSE’s deferral of the listing, following SEBI’s concerns, triggered a sharp reaction in the market. Trafiksol’s grey market premium (GMP) dropped from Rs 63 to Rs 0, and the BSE SME IPO index dipped by over 2%.
SEBI’s Concerns: Use of Funds and Transparency
One of the main issues flagged by SEBI involves the allocation of Rs 17.70 crore for purchasing software from Oasis Corpcare. Trafiksol has yet to sign a definitive agreement with the vendor, raising transparency concerns. Additionally, the company was not required to appoint an independent monitoring agency for fund oversight since the IPO proceeds were under Rs 100 crore, further fueling skepticism about the company’s governance practices.
Regulatory Scrutiny on SME IPOs
SEBI has been increasingly vigilant about protecting investors in the growing SME IPO market, which is witnessing high valuations and demand. SEBI recently issued a warning to investors, urging caution amid rising fraudulent activities in the sector. The regulator has also announced plans to tighten norms for SME IPOs to enhance transparency and protect investor interests.
While the listing deferral may only be temporary, the event highlights the critical role that regulatory oversight plays in ensuring transparency and fairness in the SME IPO space. Investors should stay alert as SEBI continues to strengthen its regulations in this rapidly expanding sector.