The relief was granted even as the core allegations of financial misrepresentation and diversion of funds remain under challenge and unresolved. SEBI’s objections, meanwhile, were limited—and unusually restrained.
In its order dated 3 February 2026, SAT allowed DroneAcharya to proceed with a preferential issue of shares and to mobilise funds through other channels, subject to disclosures, while its appeal against SEBI’s November 2025 enforcement action is still pending.
"...if any investor desires to invest in the preferential issue of shares of the Company after acquainting himself with entire affairs of the Company, keeping in view the peculiar nature of this case where appellant has procured order from Indian Defence, the same may be permitted by putting the appellants on strict terms," says the SAT bench of justice PS Dinesh Kumar (presiding officer) and technical member Meera Swarup and Dr Dheeraj Bhatnagar.
In November 2025, citing serious lapses including mis-utilisation of IPO (initial public offer) funds and misleading financial disclosures, SEBI levied penalties totalling ₹75 lakh on DroneAcharya Aerial Innovations and the company promoters Prateek Srivastava, Nikita Srivastava, Instafin Financial Advisors LLP, Sandeep Ghate and Micro Infratech Pvt Ltd for a series of fraudulent activities, including issuing misleading announcements, falsifying financial statements and misusing IPO proceeds.
DroneAcharya, which debuted on the BSE SME platform in December 2022 after raising nearly ₹34 crore, had earmarked ₹27.98 crore of its IPO funds for the purchase of drones and related accessories. However, SEBI found that the company spent only ₹70 lakh on drones, while over ₹27 crore was diverted through dubious purchases of software and computer equipment.
The findings were not minor procedural breaches but went to the heart of market integrity.
Yet, during the hearing of DroneAcharya’s interim application, SEBI did not press for a blanket prohibition on fund-raising.
Instead, its counsel told the tribunal that SEBI would not oppose certain forms of fund-raising—specifically pledging of shares and liquidation of mutual fund investments—while opposing issuance of new securities due to the gravity of the allegations. Even this opposition was framed cautiously, with the regulator stressing that any concession should not be treated as a precedent.
This stance left room for the tribunal to step in. “…what remains for consideration is permitting the appellants to raise funds by issuing preferential shares and debentures,” it says.
SAT noted that subsequent to SEBI’s order, the company had received clearance from the Indian Army in January 2026 to proceed with bulk production of FPV (first person view) drones following the successful evaluation of samples. This development, the tribunal said, altered the factual position and justified reconsideration of interim relief.
The tribunal acknowledged that allegations of misuse of IPO funds are still under examination. Ordinarily, that would weigh heavily against allowing access to the market. But in a crucial passage, SAT held that if investors are willing to participate in a preferential issue “with full knowledge of the pendency of the appeal” and the SEBI order, such fund-raising could be permitted—provided disclosures are made prominently and acknowledged by investors.
Accordingly, SAT allowed the company to raise funds through a preferential issue of shares, subject to explicit, bold disclosure of SEBI’s findings and the pending appeal in the offer documents. It also permitted promoters to pledge shares and liquidate mutual fund holdings to raise working capital, particularly for executing defence-related orders.
What makes the order striking is not merely the relief granted, but the regulatory optics it creates. In its November 2025 order, SEBI also uncovered inflated revenues in FY23-24, noting that DroneAcharya recorded ₹12.35 crore in revenue from Triconix and IRed, despite providing no goods or services to them. Without this fictitious income representing 35% of its annual revenue, the company would have reported a pre-tax loss instead of the ₹8.44 crore profit it claimed.
The market regulator, in its order, has already recorded a clear finding of wrongdoing serious enough to warrant a market ban. The appeal against that order has not yet been decided. And yet, the company has now been allowed to tap investor money, albeit with disclosures, before the allegations are finally adjudicated.
For market-watchers, the episode underscores a recurring tension in securities enforcement: the balance between preventing investor harm and allowing business continuity, especially when public-sector or strategic contracts are involved. It also raises a quieter but sharper question, whether SEBI, faced with defence-linked operational arguments, chose not to push back as hard as it might have in a purely commercial case.
The appeal against SEBI’s order remains pending. Until it is decided, the findings of fraud stand—not stayed, not diluted—only temporarily worked around.
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