SEBI has taken strong action against DroneAcharya Aerial Innovations and its founders after uncovering serious irregularities in the company’s financial reports and IPO declarations. The drone startup, once celebrated for its rapid growth, is now under scrutiny for inflating revenue, misusing investor money, and misleading the market. The findings have shocked investors who trusted the company’s promises and believed in its early success story.
Fake Revenue Claims Raise Major Red Flags
SEBI’s investigation found that DroneAcharya had reported inflated revenue by showing business deals that did not actually take place. A significant part of the company’s income for the year came from two firms that did not receive any drones or services from DroneAcharya. When SEBI checked the addresses of these firms, they did not match the scale of the business DroneAcharya claimed. Without these suspicious transactions, the company would have posted a loss instead of a profit. This false revenue picture created an illusion of strong performance and encouraged investors to trust the company more than they should have. SEBI concluded that these actions were intentional, planned, and designed to mislead the market.
IPO Money Diverted Away From Promised Use
DroneAcharya raised nearly ₹34 crore through its IPO with a clear promise that most of the funds would be used to purchase drones and accessories. However, SEBI found that only a very small amount was actually spent on these items. A large portion of the money was diverted elsewhere, including transfers to a related company. These transfers were not mentioned in the IPO documents, which is a serious breach of rules. When a company raises money from the public, every investor expects complete honesty about where their funds will go. By diverting funds and hiding the truth, DroneAcharya broke the trust that investors placed in it and violated the transparency requirements that every listed company must follow.
Market Manipulation Through Misleading Announcements
SEBI’s report also uncovered actions taken to artificially boost DroneAcharya’s share price after listing. Before the IPO, many investors were allotted special preference shares. After the company went public, DroneAcharya and its advisors made announcements that created excitement among retail investors. This buzz helped push the share price higher, creating an opportunity for early investors to exit with massive profits. Some investors made extraordinary returns in a very short period. While these profits looked impressive, they were made at the cost of unsuspecting retail investors who bought the stock at inflated prices. SEBI considered this behaviour as deliberate market manipulation aimed at creating a false sense of growth and demand.
SEBI’s Strict Action and What It Means
In response to these findings, SEBI has barred DroneAcharya and its promoters from accessing the securities market for up to two years. The company also faces monetary penalties and must provide detailed records of all the suspicious transactions. This action sends a strong message to all startups planning to go public. Investor trust cannot be taken lightly, and misleading information has serious consequences. For DroneAcharya, rebuilding its credibility will be extremely difficult. For investors, this case serves as a reminder to study a company’s finances carefully and stay alert to unusual promises or sudden hype.