SEBI fines merchant banker Swastika Investmart Rs 10 lakh after inspection

SEBI has imposed a penalty of Rs 10 lakh on Swastika Investmart Limited, a SEBI-registered merchant banker, for violations of SEBI rules that its adjudicating officer found after an inspection. The order is dated 4 November 2026. The company must pay within 45 days of receiving it.

What Happened

A merchant banker manages share issues such as IPOs and is responsible for checking what the issuing company tells investors. SEBI inspected Swastika Investmart from 8 July 2025 to 11 July 2025, covering 1 April 2023 to 31 March 2025, and issued a show cause notice on 18 March 2026.

The notice covered the company's work on SME IPOs of Aditya Ultra Steel, TBI Corn, Service Care, Sai Swami Metals and Alloys, Resourceful Automobile and United Heat Transfer, and on a takeover offer for Shalimar Paints. The points raised included directors' qualifications disclosed on the basis of CVs, site visits without formal reports, and the objects of the issue. In its reply, the company said disclosures rested on information and confirmations from the issuers and their legal advisers, and that it has since strengthened its due diligence.

The adjudicating officer found, among other things, that the company had no compliance officer for 20 days in May 2023, had not uploaded the required track record of its public issues, did not use its designated email ID only for regulatory communication, and had no firewall on emails between its merchant banking division and other divisions. The officer also found that during the inspection period it had no insider-trading code of conduct, no compliance officer under those rules, and no proper structured digital database of people handling price-sensitive information. The order notes that SEBI has penalised the company in the past.

What It Means

The penalty was imposed under Section 15HB of the SEBI Act, which allows a penalty of Rs 1 lakh to Rs 1 crore. If it is not paid within 45 days, SEBI may start recovery proceedings, including attachment of property. The order is a regulator's finding and can be appealed before the Securities Appellate Tribunal.

Investors in SME IPOs rely on the merchant banker's checks of the offer document. A complaint against a SEBI-registered intermediary can be filed at https://scores.sebi.gov.in.

Source: SEBI order