SEBI Adjudication Order in the matter of Sigma Solve Limited

The Securities and Exchange Board of India (SEBI) recently issued an adjudication order (Order/JS/VC/2025-26/31689-31690) against Sigma Solve Limited and its merchant banker, Beeline Broking Limited, highlighting critical aspects of compliance with IPO proceeds utilization and disclosure obligations.

Key Findings:

• Sigma Solve Limited was examined for:

  Utilization of IPO proceeds exceeding the 25% cap for General Corporate Purpose (GCP). Delay in submitting the statement of deviation regarding IPO proceeds utilization.

  Failure to explain variations in IPO proceeds usage in its Director’s Report.

• Beeline Broking Limited faced scrutiny for:

  Inadequate due diligence concerning the IPO object of “Acquisition and other strategic initiatives.”Failure to update its website with the track record of IPO proceeds utilization as mandated for merchant bankers.

  
  

SEBI’s Observations & Conclusions:

• On excess utilization of GCP funds, SEBI relied on SAT’s interpretation in Mohandas Shenoy Adige v. SEBI (2021), holding that subsequent reallocation of funds (in this case, post-COVID surplus IPO expenses) does not make earlier disclosures “misleading.” Accordingly, no violation of Reg. 245(1) of ICDR Regulations was established.

• However, delays in disclosure (Reg. 32(1), LODR) and non-disclosure of variation in Director’s Report (Reg. 32(4), LODR) were confirmed as violations.

• For Beeline Broking, SEBI found lapses in due diligence obligations under Reg. 245(3), ICDR, and failure to maintain/update mandatory track records under Merchant Bankers Regulations & SEBI Circulars.