Based on the Securities and Exchange Board of India’s Final Order dated August 28, 2026 in the matter of the IPO of Trafiksol ITS Technologies Ltd.

SEBI’s final order in the Trafiksol ITS Technologies IPO turned significantly on a single vendor quotation. Here is what the order found about that vendor, and the practice questions it leaves for any merchant banker and other ECM practitioner signing off on a similar object of issue.

BACKGROUND

The issue, in brief:

Trafiksol ITS Technologies Ltd. — an intelligent-transportation-systems and EPC contractor run by promoters Jitendra Narayan Das (Chairman and  Managing Director) and Poonam Das (Whole-Time Director) — took a fresh issue of 64.10 lakh shares to BSE’s SME platform through sole merchant banker Ekadrisht Capital Pvt. Ltd. The issue was priced at the top of its ₹66–₹70 band, was oversubscribed 345.65 times, and raised ₹44.87 crore.

Of that amount, ₹17.70 crore — close to 40% of the entire raise — was earmarked to buy an “Integrated Command Control Centre” software platform that Trafiksol described as central to its smart-city business, priced off a quotation from a vendor called Oasis Corpcare Pvt. Ltd. Shares were allotted and credited to investors’ demat accounts; a day before the scheduled listing, a complaint about that vendor’s credibility led BSE and SEBI to defer the listing, open an investigation, and ultimately unwind the entire IPO — refunding every subscriber and cancelling the allotment before a single share traded.

SEBI’s final order, issued nearly two years later, fixes individual responsibility for that vendor quotation on the company’s two promoters.

THE QUOTATION

What the objects of the issue actually funded

The software purchase was by far the largest of five disclosed uses of the IPO proceeds — and the only one built entirely on a single, unverified quotation.

Object of the issue	₹ Crore
Purchase of software	17.70
Repayment / prepayment of borrowings	5.50
Working capital requirements	10.40
General corporate purposes	8.28
Issue-related expenses	2.99
Total	44.87

THE VENDOR, EXAMINED

What SEBI and SAT found when they looked at Oasis Corpcare

Once the listing was deferred, an investigation into Oasis Corpcare — the vendor behind the ₹17.70 crore quotation — surfaced a pattern that both SEBI and, on appeal, the Securities Appellate Tribunal, treated as decisive.

1. Bought for ₹20,000

Oasis’s entire shareholding changed hands in 2019 for a nominal consideration of ₹20,000. The person who acquired it was offered a commission, through a middleman, to submit a quotation to Trafiksol.

2. No financials, nil revenue

Oasis had filed no financial statements with the Ministry of Corporate Affairs  for more than three years, and reported nil revenue in the last year for which it had filed.

3. Filed to BSE the night after listing was halted

The financial statements eventually submitted to BSE were signed and generated between 7:38 pm and 7:43 pm on September 18, 2024 — the day after listing had already been deferred — and emailed at 11:59 pm the same night.

4. Fabricated client list

Oasis’s profile claimed a ₹12.82 crore project pipeline. Two of the companies it named as clients told SEBI, on record, that they had no dealings with Oasis at all.

5. Office found locked

A site visit by BSE found Oasis’s registered office locked. One of its directors, when SEBI called to ask questions, answered initially  and then switched off his phone.

6. Approved in two days, on two months of GST returns

Trafiksol’s own board “noted and approved” the vendor within two days of receiving the quotation, relying only on GST returns for two recent months — disregarding that Oasis Corpcare had no business during FY 2020 and FY 2021, turning blind eye on the absence of financials for the two preceding years and the company’s own purchase policy, which called for at least three competing quotes.

“…if an established software player follows such a methodology to reach out to an entity with doubtful credentials, with an offer of commission of Rs. 50 lakhs for procuring quote from a third party, in our considered view, it cannot be treated as ‘genuine’ quotation, and therefore we are not persuaded to accept the argument that the Company had made the disclaimer that such a quote was for budgetary estimate only.” – Securities Appellate Tribunal, Order dated January 24, 2025

Because this finding had already been adjudicated against the company and upheld on appeal, the job of the final order was to fix individual responsibility on the two promoters. It held Jitendra Das — who held calls concerning the vendor and personally met the middleman who delivered its quotation — directly involved in placing a fabricated quotation behind 40% of the issue. It also held Poonam Das, the Whole-Time Director with no hands-on role in vendor selection, independently liable: she had certified a true copy of the board resolution approving Oasis and signed the Prospectus’s declaration as to its correctness, and SEBI held that such certification “cannot be treated as a mere formality.” Together with the company, both promoters were restrained from the securities market for one year and fined a combined ₹1.05 crore.

PRACTICE NOTE

Vetting a vendor before its quotation becomes an object of the issue

Nothing in Trafiksol’s disclosure was technically prohibited — ICDR Regulations do permit issuers to rely on quotations for contracts not yet awarded. What failed was the diligence behind the quotation. That failure points to specific, practicable checks for the next mandate.

PHASE 1 · BEFORE ACCEPTING THE QUOTATION

1. Verify the vendor’s independent existence and capacity

Check MCA filing history, on-time financial statements for at least the preceding three years, and employee/asset footprint before relying on its quotation for a material object. A “budgetary estimate” disclaimer does not excuse this — both SEBI and SAT rejected that argument once the vendor’s own credentials proved fabricated.

2. Flag any quotation sourced through a middleman on commission

Treat introduction by an unrelated broker or middleman working on commission as an automatic trigger for enhanced diligence, not a routine sourcing channel. Specifically confirm that no commission has been paid for obtaining quotations.

3. Call the vendor’s stated clients directly

Don’t accept a vendor-supplied profile at face value — two of Oasis’s three claimed client relationships were denied outright the moment SEBI asked.

4. Confirm the issuer’s own procurement policy was actually followed

Check for a minimum number of competing quotes and a genuine techno-commercial evaluation and push back if it wasn’t — rather than treating a board’s rapid “noted and approved” as sufficient.

PHASE 2 · THROUGH THE FILING PROCESS

5. Size the diligence to the object’s weight in the issue

A vendor behind roughly 40% of proceeds warrants materially more scrutiny than one behind an incidental purchase.

6. Re-verify vendor credentials at each stage of refiling

DRHP, RHP and Prospectus each repeated the same unverified quotation over nearly four months without a fresh check being recorded.

7. Read the board’s own approval process as a diligence signal

A vendor cleared in two days, on documents the purchase committee wasn’t equipped to evaluate, is worth querying before the disclosure is finalised — not after a regulator asks.

8. Keep the diligence trail on record

A clean set of board minutes will not, after the fact, substitute for a genuine verification file — the regulator’s inquiry in this case reached well past what the company had told its own board.

Authors: Abhinav Kumar – Partner; Shubham Sancheti – Managing Associate, Ayana Banerjee & Indira Satish – Senior Associates

Disclaimer: This note only highlights key issues and is not intended to be comprehensive. The contents of this note do not constitute any opinion or determination on, or certification in respect of, the application of Indian law by Talwar Thakore & Associates (“TT&A”). No part of this note should be considered an advertisement or solicitation of TT&A’s professional services..