SEBI to issue confirmatory order by January 16, 2026 in Varyaa Creations IPO case

This order addresses SEBI's inquiry into the Initial Public Offer (IPO) of Varyaa Creations Limited, specifically examining irregularities in the use of issue proceeds and the conduct of the Lead Manager, Inventure Merchant Banking Services Private Limited.

Who it concerns: Varyaa Creations Limited, Inventure Merchant Banking Services Private Limited, Pooja Vineet Naheta, Sarika Amit Naheta, Kusum Naheta, Jaineshaa Naheta, Pari Naheta, Vineet Naheta HUF, and Amit Naheta HUF.

What SEBI found or ordered

• SEBI found that over 70% of the INR 20.10 Crore IPO proceeds (INR 14 Crore) were transferred to three entities (Maruti Corporation, Kaveri Corporation, and Overseas Metal and Alloys Pvt Ltd) on the day of listing.
• SEBI noted that Kaveri Corporation, a sole proprietorship in agriculture, withdrew INR 9 Crore in cash within 16 minutes of receiving funds.
• SEBI observed that the transfers were disproportionate to the issue expenses disclosed in the Prospectus and lacked a clear business connection to the stated use of funds (showroom in Agra).
• SEBI issued interim directions freezing the shareholding of the promoters (Noticees 3-9) and restraining Varyaa Creations Limited from accessing the securities market.
• SEBI directed Inventure Merchant Banking Services Private Limited not to take up new merchant banking assignments until further orders.
• SEBI noted a similar modus operandi in the IPO of Synoptics Technologies Limited involving the same recipient entities.

Also in the document

• The order is an interim/confirmatory stage document; SEBI directed the passing of a Confirmatory Order by January 16, 2026, following a directive from the Securities Appellate Tribunal (SAT).
• SEBI noted that the Lead Manager (Inventure) had initially been replaced by First Overseas Capital Limited (FOCL) for this IPO before Inventure took over, and FOCL was involved in a similar case with Synoptics Technologies.
• The company had proposed raising an additional INR 35 Crore through a rights issue in April 2025 while the inquiry was ongoing.