Pod Insights Finshots Daily DroneAcharya Aerial Innovations has landed itself in SEBI’s bad books About this episode In today’s episode on 2nd December 2025, we tell you how DroneAcharya Aerial Innovations, a company that made a splashy debut on the SME exchange a couple of years ago, ended up misusing IPO money and misleading investors.
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Transcript 0:00 Speaker 00 Hello folks, you're tuned into Fin Charts Daily. In today's episode, we tell you how Drone Acharya Aerial Innovations, a company that made a splashy debut on the SME exchange a couple of years ago, ended up misusing IPO money and misleading investors.
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0:58 Speaker 00 If you've followed the markets long enough, you know that IPO stories usually fall into two buckets. The first is the heartwarming kind, a young company raising money, scaling up, creating value. And then there's a second kind where the glossy prospectus is just a shiny cover for a means of odd transactions, inflated numbers and accounting acrobatics. Drone Acharya Aerial Innovations unfortunately seems to sit squarely in the second bucket. Sebi recently uncovered a long-running scheme to mislead investors, misuse IPO funds and dress up the company's financials. And once the dust settled, it barred the promoters and a few others from dealing in the markets till they pay their penalties.
1:40 Speaker 00 But you wouldn't have guessed any of this if you'd seen Drone Acharya's debut on the BSE SME exchange back in 2022. The stock listed with a dream 90% gain, the kind of performance that usually signals a promising young business. Investors cheered, celebrity involvement hyped it, even Sebi didn't sense anything off at first. But over the next couple of years, as the company filed patchy disclosures and repeatedly missed mandatory filings, the red flag began to pile up, the red flags began to pile up. And when Sebi finally started digging, it realized it had stumbled onto something far bigger than sloppy compliance. It turns out, the playbook had been in motion long before the IPO.
2:22 Speaker 00 The company first raised money through something called OCPS or optionally convertible preference shares. These are preference shares that investors can later convert into equity. Companies like issuing them because they can raise money without immediately giving up voting power and investors like them because converting at the right time can deliver hefty gains, especially right before an IPO. Now, the OCPS themselves are in a problem but issuing them when your revenues are barely 3.5 crore and your profits are negative does raise eyebrows, especially if the people buying them include celebrities like Amir Khan and Ranbir Kapoor. Yet, that's exactly what DroneAcharya managed to pull off. It did something really smart.
3:06 Speaker 00 First, it sold OCPS at a low price to nearly 200 pre-IPO investors. Then it began slowly issuing bonus shares. For instance, it once issued a 1:6 bonus, which means that for every one share you get six more and then a 1:99 bonus where for every one share you get 99 more. So, if someone had one share after the two bonuses, that one share magically became more than 100 shares. And when the OCPS finally converted into equity right before the IPO, investors didn't just get the number of shares they had paid for but also massive pile of extra shares for free. And because they got so much bonus shares, their effective cost per share dropped drastically, even though the OCPS price sounded high on paper.
3:51 Speaker 00 And when the IPO listed at a much higher price, their profits exploded. Their paper profits surged overnight and this made it seem like these pre-IPO investors were the visionaries who sparked the company early. And just when you think that's questionable enough, the trail gets stranger. After this, the company quietly transferred over 10.6 crore to a private company called Avyam Synergies Private Limited or ASPL as a payment for software development. The reality though, ASPL was fully owned by DroneAcharya's own promoters, Pratik and Nikita Shivashtava. Even when they claimed to have resigned from ASPL, they still held hundred percent of the shares, which made ASPL a related party under company law.
4:35 Speaker 00 And related party transactions must be disclosed to investors, auditors, stock exchanges, basically everyone. DroneAcharya didn't report any of this in its annual reports or to the stock exchanges after listing. Some of the money sent to promoter-owned company later came back, but a lot didn't. And when promoters quietly move company money into businesses they own without telling anyone, now that's a serious red flag. Then came the IPO proceeds itself. DroneAcharya raised 33.96 crore from the public, promising to spend nearly 28 crore on buying drones and accessories and the rest on general corporate needs. Simple on paper, but when Sebi followed the money, the story it uncovered was anything but simple. Let's start with the most obvious example.
5:19 Speaker 00 DroneAcharya paid almost 6 crores to a vendor named Micro Infratech for GIS and SQL software. But the thing is that this is the kind of software that usually costs a few lakhs, not a few crores. So firstly, nothing that could remotely justify the 6 crore rupees bill. And as if that wasn't enough, when Sebi checked Micro's bank accounts, the money left the account the same day and was sent to random companies that had nothing to do with software. It didn't look like a software purchase at all, but rather like a planned way to intentionally move money elsewhere. Another example was of 8 crore rupees, which was sent to Data Saitu Technologies for more software development. Except the invoices were inflated, the deliverables didn't exist, and even basic quotations were inverifiable.
6:02 Speaker 00 The money left the account, but left behind no trace of actual work done. The money left the account, but left behind no trace of actual work done. And then, there were revenues supposedly earned from companies like Triconics and Ired. These two alone accounted for 12 crore rupees or nearly 35% of DroneAcharya's operating revenues in FI24. But once Sebi removed that doubtful revenue from the statements, the company would have been staring at a loss of nearly 4 crore rupees. Investors who relied on those numbers would have believed the business was growing, when in reality, it wasn't. It didn't stop there. DroneAcharya kept putting out misleading corporate announcements about small potential orders that might never happen.
6:46 Speaker 00 But investors assumed the company was winning new business and bought the stock because of it. You can see this clearly by just looking at the rise in retail investor participation in DroneAcharya's stock. For context, at listing in December 2022, over 200 pre-IPO investors held 62% of the company. But just three months later, public shareholding had jumped to 72%. By September 2024, the number of public shareholders crossed 6,400. That means thousands of retail investors were now trading a stock whose financial foundation had been quietly hollowed out. Meanwhile, pre-IPO investors were cashing out.
7:24 Speaker 00 A total of 168 early investors sold over 74 lakh shares in the two years following the IPO, making a combined 114.25 crore rupees. That made their total profit 89.6 crore rupees, which translates into a stunning 225% return. For perspective, one partner from Instuff and Capital, DroneAcharya's own advisor involved in arranging investors for the OCPS round, made an eye-watering 5,800% return post-listing. But here's the flip side. Retail investors who were drawn in the company's fabricated figures and supposed order wins, ended up holding shares they bought at some times at peak price of 100 to 200 rupees.
8:06 Speaker 00 But once the truth emerged, their losses ranged anywhere between 30 to 60%, making them the last ones standing when the music stopped. That brings us back to the obvious question. If things were this messy from the start, how did big celebrities invest? Well, because celebrity investing rarely works the way people imagine. Celebrities rarely analyze investments themselves. They rely on advisors to spot money-making opportunities. So if someone like Instuff and which worked with DroneAcharya and probably had a good network, pitched the idea of a future IPO and easy listing gains, celebrities would buy the OCPS for that upside, not for the company's current financials. Now, that doesn't make them part of the fraud because they were just looking for a good return. But when regular investors like you and me say big names on the cap table,
8:52 Speaker 00 we assume the due diligence has been done and we end up chasing the same dream of quick gains too. What they missed in this excitement though, something that only SEBI could uncover after a thorough investigation was that barely 1.64 crore rupees out of the 66.31 crore rupees raised through private placements and the IPO was actually spent on drones and the objects the company had promised to use the IPO proceeds for. Now that's just 2.5% of what investors thought they were funding. The rest was either diverted, inflated or misreported. But despite everything, the penalties imposed range from 10 lakhs to 20 lakhs per party involved or 75 lakhs in total, along with temporary bans from participating in market until the fines are paid.
9:34 Speaker 00 Which also means that the people behind this can simply pay their fines and eventually return to business as usual. But retail investors like you and me don't get a second shot at recovering the money we have lost. So yes, DroneAcharya's story is a reminder that in the markets, trust is basically everything. And once it's broken, no amount of drones, software or glossy investments can help you lift off the ground again. Alright folks, I'll see you in the next one. Have a tremendous Tuesday.
10:03 Speaker 00 Thank you for listening to today's episode and if you want to share your feedback or suggestions, do drop us an email to [email protected] . Until next time.
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