Issue of shares: Spright Agro comes under SEBI scanner

The Securities and Exchange Board of India (SEBI) is currently conducting an investigation into Spright Agro Ltd., based in Ahmedabad, due to alleged violations related to share issues and suspicious trading activities. The violations under scrutiny include preferential allotments, share splits, bonus issues, and rights offerings, which reportedly occurred from August 2023 to April 2025., according to a report by NDTV Profit. Attempts to obtain comments from the company were unsuccessful as of the publication date, said the report. 

A significant factor in the probe is the company's 1:10 stock split and 1:1 bonus issue approved in February 2024, which increased the company's paid-up capital from 2.5 crore to over 50 crore shares by March 2024. An additional 1:1 bonus issue in November 2024 further expanded the capital to over 107 crore shares. Meanwhile, a rights issue in June 2024 raised approximately Rs 44.87 crore, although 16 of the 35 initial allottees sold their rights, gaining a combined Rs 29.56 crore. Questions have arisen concerning the intent behind these transactions.

Further complications involve the sale of around 5.59 crore shares between October 4, 2024, and April 30, 2025, by four preferential allottees, resulting in profits of approximately Rs 65.8 crore. As of the end of April 2025, these allottees held about 92 crore shares, valued at Rs 345 crore.

The dramatic rise in Spright Agro’s reported profits, from below Rs 0.51 crore per quarter before November 2023 to over Rs 5.50 crore, has also drawn SEBI’s attention. SEBI is examining these developments alongside leadership changes, including Akshaykumar Natubhai Patel as managing director since June 2022 and Apurvakumar Patel as an additional director from March 2023.

The investigation also considers the company's financial transformation and stock price surge, which have raised red flags. The allotment of 2.5 crore convertible warrants to 35 non-promoter entities in September 2023, converted into equity shares by December 2023, accounted for nearly 99.55% of the company's paid-up capital at the time.

This move has prompted questions about control and dilution. Additionally, between August 2023 and March 2024, the stock price surged significantly despite low trading activity, with only 10 unique entities trading the stock, averaging just 123 shares and around 13 trades per day. These factors collectively contribute to the ongoing scrutiny by SEBI.