Rachana Infrastructure Limited has received an administrative warning letter from the Securities and Exchange Board of India (SEBI) concerning observations made on the disclosures in its prospectus for the SME IPO. The letter, dated May 19, 2026, was issued by the Deputy General Manager of the Corporation Finance Department, citing non-compliance with the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

The regulatory examination of the SME IPO revealed a specific discrepancy regarding the order book value disclosed in the prospectus dated May 09, 2022. The document stated the value of a construction project for a four-lane divided carriageway on NH-68 in Gujarat as Rs 140 crores, representing 19% of the total contract value. However, SEBI observed that as per the Joint Venture Agreement, only 5% of the contract value was actually allocated to the company.

Regulatory Observations

SEBI determined that the offer document did not contain true and adequate disclosures with respect to the order book value. This failure was deemed a violation of Regulation 245 (1) of the ICDR Regulations. The regulator has viewed this violation seriously and has issued a formal warning to the entity.

Compliance and Future Directions

The market regulator has advised rachana infrastructure to be careful in future operations and to improve its compliance standards. SEBI warned that recurrence of such instances could lead to appropriate enforcement action in accordance with the law. The company has been directed to disclose this letter to the recognized stock exchanges in terms of the LODR Regulations, 2015 and place it before its Board in the next meeting.

Rachana Infrastructure Limited has disclosed the receipt of an Order-in-Appeal from the Joint Commissioner (Appeals), CGST, Customs & Central Excise, Indore, confirming a demand of Input Tax Credit (ITC) amounting to Rs. 1,19,79,990/- along with applicable interest and equivalent penalty. The disclosure was made pursuant to Regulation 30 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and was communicated to the National Stock Exchange of India Limited on 13th May, 2026.

Order Details and Nature of Action

The Appellate Authority upheld the Order-in-Original passed by the Adjudicating Authority, confirming the demand related to alleged wrongful availment of Input Tax Credit under the provisions of the CGST Act, 2017. The order was received on 12th May, 2026, bearing Order-in-Appeal No. IND-CGST-JC-APP-1166-2025-26. The key details of the order, as disclosed by the company, are summarised below:

Financial and Operational Impact

The confirmed demand stands at Rs. 1,19,79,990/- along with applicable interest and equivalent penalty under the CGST Act, 2017. Rachana Infrastructure has stated that it is evaluating the order and considering appropriate legal remedies, including the filing of a further appeal before the appropriate authority or forum. The company has expressed its belief that it has adequate grounds to challenge the said order and does not expect any material adverse impact on its operations or other activities as a result of this order.