{"id":687,"date":"2024-07-06T12:05:09","date_gmt":"2024-07-06T12:05:09","guid":{"rendered":"https:\/\/www.naikwealth.in\/blog\/?p=687"},"modified":"2024-07-09T06:01:14","modified_gmt":"2024-07-09T06:01:14","slug":"how-did-varanium-cloud-a-listed-company-cheat-its-investors","status":"publish","type":"post","link":"https:\/\/www.naikwealth.in\/blog\/how-did-varanium-cloud-a-listed-company-cheat-its-investors\/","title":{"rendered":"How did Varanium Cloud, a listed company, cheat its investors?"},"content":{"rendered":"\n<p>Varanium Cloud (IT services company) was listed on NSE\u2019s SME platform in September 2022. Its shares quickly rose from \u20b9 122 to \u20b9 1,602 in just four months, making it the talk of the town.<\/p>\n\n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<div class=\"wp-block-group is-vertical is-layout-flex wp-container-core-group-is-layout-8cf370e7 wp-block-group-is-layout-flex\">\n<h2 class=\"wp-block-heading\">Why does it matter?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Misutilisation of IPO proceeds:<\/strong> The company\u2019s promise to use the IPO proceeds worth \u20b9 40-odd Crores was questioned by NSE. Even its dealings with Avance (a BSE-listed company) are under the radar of SEBI for gross misreporting of financial data.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Fund Diversion:<\/strong> The company made large remittances (46% of IPO proceeds) to BM Traders. SEBI found that BM Traders is involved in the wholesale fruit and vegetables business. Moreover, the visit to its office revealed that it was a residential address and had no business activity.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Misreporting of financial statements:<\/strong> Varanium\u2019s standalone revenue from operations in 2022-23 was \u20b9 383.36 Crore, 985% higher than its previous year! Its primary revenue came from a company named Amtelfone. A public domain search showed a website that had basic information but no details of Amtelfone\u2019s management or individuals associated with it.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Stake divestment by promoter:<\/strong> SEBI\u2019s investigation revealed that Harshavardhan Sabale (promoter) was prima facie engaged in fraudulent practices by presenting misleading information about the company\u2019s growth and prospects.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Zoom In<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>SEBI\u2019s investigation revealed that Varanium had misutilised the IPO proceeds and had manipulated its financial statements by recording fictitious sales and purchases.<\/li>\n\n\n\n<li>Considering its findings, SEBI banned Varanium &amp; Harshavardhan Sabale (promoter) from the capital markets in May 2024.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What next?<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Many retail investors get swayed away by social media and their brokers, investing money in shares to make a quick buck.<\/li>\n\n\n\n<li>Such behaviour may derail one\u2019s long-term journey.<\/li>\n\n\n\n<li>It\u2019s advisable to seek professional guidance before making any investment decisions.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><em>Disclaimer.\u00a0Mutual Fund\u00a0investments are subject to market risks, read all scheme related documents carefully<\/em><\/p>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Varanium Cloud (IT services company) was listed on NSE\u2019s SME platform in September 2022. Its shares quickly rose from \u20b9 122 to \u20b9 1,602 in just four months, making it the talk of the town. Why does it matter? Zoom In What next? Disclaimer.\u00a0Mutual Fund\u00a0investments are subject to market risks, read all scheme related documents&#8230;<\/p>\n","protected":false},"author":4,"featured_media":689,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-687","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-market"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How did Varanium Cloud, a listed company, cheat its investors? - AD Naik Wealth<\/title>\n<meta name=\"description\" content=\"Discover how Varanium Cloud&#039;s rapid stock rise led to scrutiny by SEBI for misutilisation of IPO proceeds, fund diversion, and financial misreporting.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.naikwealth.in\/blog\/how-did-varanium-cloud-a-listed-company-cheat-its-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How did Varanium Cloud, a listed company, cheat its investors? 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