Why Sebi banned IT firm Synoptics, promoters from the markets

Markets regulator Securities and Exchange Board of India (Sebi) on Friday banned IT firm Synoptics Technologies and its promoters from the bourses, in a major action in the SME segment that raises questions about smaller listings.

Here's the lowdown about it.

What happened?


Sebi whole-time member Kamlesh C Varshney upheld the interim order issued on May 6, maintaining the ban on Mumbai-based Synoptics and its promoters, Jatin Shah, Jagmohan Manilal Shah, and Janvi Jatin Shah, until the ongoing investigation is completed.

What is Synoptics Technologies?

Synoptics Technologies is a Mumbai-based IT services company founded in 2008. It specialises in IT infrastructure solutions, cloud services, software products, and enterprise software-as-a-service. It services enterprises, small businesses, and government clients. As per its website, the company focuses on digital transformation use cases to cut the cost of ownership and increase return on investment for customers. The company has grown from a small office to having over 450 employees.


Multiple complaints related to irregularities came up after the closure of the bidding process for the company’s IPO. Synoptics Technologies started trading on the NSE SME exchange on July 13, 2023. It was open for subscription between June 30 and July 5.

What has it done?

Sebi's investigation unearthed what it called "a well laid out plan" between Synoptics and its lead manager First Overseas Capital (FOCL) to siphon Rs 19 crore from the company's IPO proceeds.

The company allegedly transferred this amount under the guise of "management fees, underwriting and selling commissions, registrar fees, and other IPO related expenses". This exceeds the Rs 80 lakh disclosed as issue expenses in the company's prospectus.

The diverted funds are more than 54% of the Rs 35.08 crore raised through fresh share issuance and approximately 35% of the total Rs 54.04 crore issue size.

As per Sebi's interim order, the transfers occurred on July 12, 2023, a day before the company's shares began trading. This violates the escrow agreement that requires such transactions to be conducted only after receiving listing and trading approvals.

What else?

The regulator has also barred FOCL from accepting new merchant banking assignments due to the firm's role in the scam. This is significant because FOCL has been lead manager for the IPOs of 20 firms listed on the SME platforms of BSE and NSE between May 2022 and April 2025.

In a separate but related action in October 2024, SEBI had restricted FOCL from managing public debt issues due to violations, including failure to maintain minimum net worth requirements for six consecutive years.