SEBI Scrutiny Demanded: Indiabulls Inks ₹1,050 Cr Share-Swap Deal with Sachin Mittal’s Fintech Cloud Amid Serious Questions
Special Investigative Report | New Delhi Is another high-stakes game being played on Dalal Street at the cost of retail investors and corporate governance?
The ₹1,050 crore acquisition of a 70% stake in Fintech Cloud Private Limited by Indiabulls Limited (formerly Yaari Digital Integrated Services) has come under intense scrutiny. The transaction values the young fintech firm at a staggering ₹1,500 crore, but a look into its past financial track record and the criminal allegations surrounding its key figures reveals startling details that have sent shockwaves across the market.
Two Years of ‘Zero’ Revenue, Then a Sudden ₹1,500 Crore Valuation!
Challenging standard corporate practices and transparent business models, the deal’s most mysterious aspect lies in its financial arithmetic:
* FY2023–24: Revenue: ₹0 (Nil)
* FY2024–25: Revenue: ₹0 (Nil)
* FY2025–26: Sudden Disclosed Turnover: ₹133.77 crore (Profit Before Tax: ₹30.31 crore)
The core question remains: On what basis was a company that did not record a single rupee in business for two consecutive years suddenly assigned a ₹1,500 crore valuation? Is this purely accounting acrobatics, or is there a deeper strategy behind it?
Accused of Forgery and ₹6.80 Crore Bank Loan Fraud!
The controversy extends far beyond an unviable valuation, with direct links to serious criminal proceedings:
* Fintech Cloud’s founder and Chairman, Sachin Mittal, was arrested by the Delhi Police Special Cell in June 2023 under FIR No. 84/2023.
* He faces severe charges under the Indian Penal Code for alleged forgery, extortion, and obtaining ₹6.80 crore in home loans from ICICI Bank and IDBI Bank using forged documents.
* Although the Delhi High Court granted him bail in March 2024, legal experts emphasize that bail does not equate to an acquittal or exoneration.
Furthermore, a former director of the company, Swadesh Ranjan Mishra, was previously arrested by the Delhi Crime Branch in connection with an alleged forged property and bank loan scam. Additionally, digital lending entities connected to Sachin Mittal, including the ‘Loanwalle’ application and Naman Finlease, have previously faced allegations of unlawful recovery tactics and harassment.
Dilution of Minority Shareholders’ Interest?
Rather than making a cash payout, Indiabulls proposes to execute the deal by issuing up to 21 crore new shares under a share-swap arrangement:
* This effectively transfers approximately 8.3% to 9% of the enlarged equity of a listed entity (Indiabulls Limited) to a non-listed company with a tainted background and an untested operational history.
* Unusually, while approval from the National Company Law Tribunal (NCLT), SEBI, and stock exchanges could take 9 to 12 months, Indiabulls has moved immediately to assume operational control over Fintech Cloud’s board of directors.
Regulatory History and Demands for Forensic Scrutiny
This is not the first time the broader Indiabulls corporate ecosystem has faced intense public questioning. Historically, entities within the group (including Indiabulls Housing Finance, now renamed Sammaan Capital) have faced scrutiny from the Supreme Court, CBI, and EOW regarding alleged loan irregularities totaling over ₹8,000 crore.
Given the scale of the current transaction, market observers are asking:
* Will SEBI and financial enforcement agencies order a thorough forensic audit into this ₹1,050 crore share-swap arrangement?
* Is it justifiable to dilute the equity of public shareholders to acquire a entity with such serious governance questions?
With investor capital on the line, demands for forensic scrutiny and regulatory intervention are rapidly growing.
