SEBI cites non-compliance in Swastika Investmart's SME IPO due diligence

This is an adjudication order by SEBI regarding Swastika Investmart Limited, a registered Merchant Banker, concerning alleged non-compliances with various SEBI regulations (including ICDR, MB, and SAST Regulations) observed during an inspection of its due diligence and disclosure practices for several SME IPOs.

Who it concerns: Swastika Investmart Limited (Merchant Banker/Noticee); Issuers mentioned in the context of the violations: Aditya Ultra Steel Limited, TBI Corn Limited, Service Care Limited, Sai Swami Metals and Alloys Limited, Resourceful Automobile Limited, United Heat Transfer Limited.

What SEBI found or ordered

• SEBI inspected Swastika Investmart Limited from July 08, 2025 to July 11, 2025, covering the period April 01, 2023 to March 31, 2025.
• SEBI observed prima facie non-compliances with ICDR, MB, Intermediaries, SAST, and PIT Regulations.
• A Show Cause Notice (SCN) was issued on March 18, 2026, and the Noticee submitted a reply on April 02, 2026.
• The Noticee claimed to have implemented enhanced due diligence procedures, including obtaining documentary evidence, maintaining site visit reports with geo-tagged photos, and subscribing to the Watchout Investor database.
• The order is an adjudication proceeding under Section 15-I of the SEBI Act, 1992, and the final penalty or direction is not stated in the provided text.

Also in the document

• The document provided is truncated and does not contain the final findings, penalties, or specific directions issued by the Adjudicating Officer.
• The violations relate to multiple SME IPOs, with specific issues cited including inadequate site visit documentation, reliance on resumes without supporting certificates for directors, and potential inaccuracies in disclosures regarding litigation and capital expenditure.