Sebi fines United Polyfab Gujarat and promoters Rs 48 lakh, for fraudulently trying to migrate to mainboard

Sebi's showcause notice stated that the benefits to a company on migration from SME platform to the mainboard, including increased liquidity and investor interest.

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26 Aug, 2025 12:21

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United Polyfab Gujarat and its promoters have been fined Rs 48 lakh for violating Sebi (Prohibition of Unfair Trading Practices) Regulations and the SEBI Act.

The market regulator's investigation revealed that the company had tried to manipulate the price of the stock and came up with a bonus issue to fraudulently migrate to the exchange's mainboard.

In an order dated February 29, the Securities and Exchange Board of India (Sebi) stated, that the company, in collusion with the promoters and associates, "was engaged in the fraudulent scheme to enable satisfaction of the migration criteria to migrate the company from NSE’s SME Platform ‘Emerge’ to the Main Board of NSE in violation of the aforesaid provisions of PFUTP Regulations and SEBI Act, 1992".

Also read: V-Marc India: Sebi finds evidence of price manipulation while investigating another case

It added, "In order to fulfil the market capitalisation criteria the connected entities artificially increased the price of the scrip of UPGL during Patch 1 and Patch 2 of IP (investigation period). Also, the company came out with bonus issue on February 19, 2021 to fulfil the paid up capital criteria. The conduct of the Noticees in manipulating the price of scrip of UPGL and not complying with the provisions of the SEBI Act, 1992 and PFUTP Regulations cannot be taken lightly. The violations done by the Noticees are serious, therefore, should be dealt with sternly by imposing monetary penalty as effective deterrence."

The regulator's showcause notice recorded the benefits of being listed on the mainboard.

It stated that the benefits to a company on migration from SME platform to the mainboard include increased liquidity due to reduction in lot size to single share; higher visibility to the companies listed on main board platform; addition of new investors which are interested in investing mainboard companies only; and exemption from requirement of mandatory market making.

The regulator's order noted that the connected entities artificially increased the price of the scrip of UPGL during Patch 1 of the IP (i.e. June 09, 2020 to February 16, 2021), thereafter, the company came out with bonus issue to fulfil the paid up capital criteria and later on the connected entities again artificially increased the price of the scrip during Patch 2 of the IP (i.e. August 01, 2021 to November 24, 2021) in order to fulfil the market capitalisation criteria before applying for the migration from SME Platform ‘Emerge’ to the Main Board of NSE.