If you’ve been around the markets long enough, you know IPOs usually fall into two neat categories. There are the comforting ones: young companies raising capital, scaling up, creating real value. And then there are the troublesome ones, where a shiny prospectus hides a labyrinth of strange transactions, inflated figures, and accounting tricks meant to dazzle unsuspecting investors.
DroneAcharya Aerial Innovations, unfortunately, fits squarely in that second camp. SEBI’s recent investigation revealed a long-running effort to mislead investors, divert IPO proceeds, and artificially beautify the company’s financial statements. By the time the regulator connected the dots, it barred the promoters and several associates from the markets until they settled the penalties.
But nothing in DroneAcharya’s 2022 listing hinted at the storm brewing beneath. The stock debuted on the BSE SME Exchange with a spectacular 90% jump, the kind of listing that normally signals the arrival of a rising star. Investors cheered. The presence of celebrity investors added glamour. Even SEBI didn’t raise an eyebrow initially. But over the next couple of years, as the company repeatedly missed filings and submitted incomplete disclosures, the warning signs piled up. And when SEBI finally dug deeper, it discovered that the rot had begun long before the IPO.
A Playbook Set in Motion
The story really begins with DroneAcharya raising money through OCPS (Optionally Convertible Preference Shares). These instruments are common in early-stage funding. Companies like them because they can raise money without immediately diluting voting control. Investors like them because converting right before an IPO can generate windfall gains.
The issue wasn’t the instrument, it was the context. When your revenue is barely ₹3.5 crore and your profits are negative, raising large sums through OCPS from nearly 200 investors, including celebrities like Aamir Khan and Ranbir Kapoor, is unusual. Yet DroneAcharya managed to pull it off.
And here’s where things get interesting. The company issued OCPS at a seemingly high price but followed it up with massive bonus issues. First came a 6:1 bonus, six free shares for every one held. Then a jaw-dropping 99:1 bonus. Someone holding just one share suddenly held over a hundred. And when the OCPS converted to equity right before the IPO, investors didn’t just get the shares they paid for, they received an avalanche of free shares.
These bonus issues crushed their effective cost per share. So when the stock listed at a premium, their gains skyrocketed. On paper, these early investors looked like geniuses who spotted the company early but the truth was far more calculated.
The Missing Money Trail
If the bonus trickery wasn’t unsettling enough, SEBI soon discovered a far more troubling pattern. DroneAcharya had quietly transferred over ₹10.6 crore to a private company named Awyam Synergies Private Limited (ASPL). The payment was recorded as “software development expenses.” But ASPL was owned entirely by DroneAcharya’s own promoters, Prateek and Nikita Srivastava. Even when they claimed to have resigned from ASPL, they still held 100% of its shares.
Under company law, this makes ASPL a related party, meaning every such transaction must be transparently disclosed. DroneAcharya didn’t report a single one. Not in the IPO documents. Not in annual reports. Not in post-listing filings. Some money eventually seeped back into DroneAcharya, but a significant chunk never returned. When promoter-owned companies quietly receive funds from the IPO-bound entity, that’s a glaring warning sign.
Where the IPO Money Really Went
The company raised ₹33.96 crore from the public, promising to use nearly ₹28 crore to purchase drones and accessories, with the rest allocated to corporate needs. But once SEBI traced the outflows, the narrative collapsed.
DroneAcharya paid almost ₹6 crore to a vendor called Micro Infratech for GIS and SQL software, tools that normally cost a few lakh rupees at best. Not only was the price inexplicable, but SEBI found that the moment the money entered Micro’s account, it exited the same day and flowed into various unrelated companies. It looked less like a software deal and more like a deliberate diversion of funds.
Another ₹8 crore went to Data Setu Technologies for “software development.” Again, invoices were inflated, deliverables were missing, and even basic quotations couldn’t be verified. The money moved, but the work didn’t exist.
SEBI then scrutinised DroneAcharya’s revenues. Two customers – Triconix and IRed, supposedly generated ₹12 crore or 35% of FY24’s operating revenue. But once SEBI removed this suspicious income, the company would have actually posted a loss of nearly ₹4 crore. Investors who believed they were backing a fast-growing business were unknowingly relying on fictional revenue.
The Mirage of Growth
The company didn’t stop at manipulating numbers. It began issuing corporate announcements about “potential orders” that were neither confirmed nor meaningful. Retail investors interpreted these vague statements as signs of booming demand and kept buying the stock.
You can see the effect clearly in shareholding data. At listing in December 2022, pre-IPO investors held 62% of the company. Within just three months, retail shareholding jumped to 72%. By September 2024, over 6,400 retail investors owned the stock. While the crowd rushed in, the early investors were quietly heading for the exit.
In just two years after listing, 168 early investors sold more than 74 lakh shares, collectively earning ₹114.25 crore. Their profit? Nearly ₹90 crore, a massive 225% return. One partner from Instafin Capital, which advised on DroneAcharya’s fundraising, made an eye-watering 5,800% return.
The people left holding the losses were retail investors who bought at inflated prices of ₹100–₹200, long after the insiders had booked their gains. When the truth finally spilled out, their holdings sank by 30–60%.
Why the Celebrity Money Came In
If the red flags were so obvious, why did big celebrities invest? The answer is simpler than we think. Most celebrities don’t analyse financial statements but their advisors do. When someone pitches an early-stage company with a guaranteed-sounding IPO and the lure of easy listing gains, it’s an easy sell.
That doesn’t make them complicit. But when everyday investors see famous names on the cap table, they assume the hard work of due diligence has been done and they follow blindly.
What almost no one realised, and what SEBI uncovered much later, was that out of the ₹66.31 crore the company raised through private placements and the IPO, only ₹1.64 crore actually went toward drones and the purposes outlined in the IPO. Just 2.5%. Everything else was inflated, misdirected, or misreported.
The Bottom Line
Despite the scale of the deception, the penalties were relatively small, fines ranging from ₹10–20 lakh per person, totalling ₹75 lakh, along with temporary bans until payment. Those responsible can eventually return to market activity.
Retail investors, however, don’t get that luxury. Their losses are permanent.
And that’s why the DroneAcharya saga stings. Markets run on trust. Once that trust is shattered, no glossy announcements, no high-profile investors, and no cutting-edge drones can pull a company back into credibility. It’s a brutal reminder that not everything that soars is meant to stay in the air.