Share India Capital Services settles case with SEBI for Rs 36.07 lakh over merchant banking regulation lapses

Share India Capital Services settles case with SEBI for Rs 36.07 lakh over merchant banking regulation lapses

• Share India Capital Services paid Rs 36.07 lakh to settle SEBI case.
• SEBI alleged Archit Nuwood Industries hid loan sanction details in its IPO.
• Adjudication closed after settlement application accepted and paid.

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Market regulator Securities and Exchange Board of India (SEBI) has accepted the settlement application against Share India Capital Services Private Limited after the merchant banker paid Rs 36.07 lakh towards settlement charges in a case related to alleged disclosure lapses in an SME IPO.

The proceedings stemmed from the SME initial public offer (IPO) of Archit Nuwood Industries Limited. SEBI had alleged that the merchant banker failed to disclose the true and adequate factual position regarding the sanction of a loan by AU Finance Bank under the “objects of the issue” section of the offer document. The regulator observed that such non-disclosure amounted to a misstatement, potentially impairing investors’ ability to make informed decisions.

SEBI show-cause notice alleged that, “The MB had failed to disclose the true and adequate factual position in respect of sanction of loan by AU Finance Bank under ‘objects of the issue’ section to enable the investors to take an informed investment decision and thus, made a mis-statement in the offer document”.

SEBI had initiated adjudication proceedings under SEBI Act and various regulations of SEBI. A show-cause notice was issued in April 2025. Pending adjudication, the entity filed a settlement application under the SEBI (Settlement Proceedings) without admission or denial of findings.

After deliberations by SEBI’s Internal Committee and the High-Powered Advisory Committee, the settlement amount was revised to Rs 36.07 lakh. The Panel of Whole Time Members approved the recommendation in January 2026, and the company remitted the amount on February 4, 2026.

With the payment confirmed, SEBI disposed of the adjudication proceedings.

Settlement is a mechanism through which a person or entity facing enforcement action can resolve the matter by paying a settlement amount and giving undertakings or complying with non-monetary conditions. Under this mechanism parties can settle the case with SEBI, without admitting or denying the findings. Once settlement application is accepted, SEBI disposes of the proceedings through a settlement order.