The Securities and Exchange Board of India (SEBI) has revoked its interim order against Varyaa Creations Limited, marking a significant development in the regulatory scrutiny that began earlier this year. The revocation order, dated December 29, 2025, comes after the company successfully demonstrated the legitimate use and recovery of IPO proceeds that were initially flagged by the regulator.

SEBI Revocation Order Details

SEBI issued the revocation order (WTM/KV/CFD/CFD-SEC-4/31938/2025-26) on December 29, 2025, effectively lifting all interim directions that were imposed on May 14, 2025. The company informed BSE Limited about this development on December 30, 2025, pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015.

Background of Regulatory Scrutiny

The original interim order was issued following SEBI's examination of irregularities in Varyaa Creations' SME IPO process. The company had raised ₹20.10 crores through its IPO, which was listed on BSE's SME platform on April 30, 2024. SEBI's concerns arose when ₹14 crores (approximately 70% of IPO proceeds) were transferred directly from the escrow account to three entities: Maruti Corporation, Kaveri Corporation, and Overseas Metal and Alloys Private Limited.

Company's Defense and Evidence

Varyaa Creations successfully defended its position by providing comprehensive evidence that the fund transfers were legitimate advance payments for inventory purchases, aligned with the stated IPO objectives. The company demonstrated that all funds were eventually returned by the suppliers due to quality issues with the supplied gold and jewellery samples.

Key Findings Leading to Revocation

SEBI's revocation was based on several critical findings that validated the company's explanations. The regulator noted that the merchant banker Inventure's letter categorizing the transfers as "issue-related expenses" was a clerical error, with the correct format being for inventory purchases. Most significantly, the company's bank statements, verified directly with the banks, confirmed the complete recovery of all transferred funds.

Ongoing Investigation Aspects

While revoking the interim order, SEBI indicated that a detailed investigation will continue to examine specific aspects including the authenticity of correspondence between the company and suppliers, verification of business activities of the recipient entities, and the role of the merchant banker in the transaction process. The regulator emphasized that observations in the revocation order are tentative pending the completion of this comprehensive investigation.

Financial Performance Context

The regulatory resolution comes as Varyaa Creations had previously reported strong financial performance for H1 FY2025, posting a profit of ₹66.23 lakhs compared to a loss of ₹20.27 lakhs in the previous comparable period, with revenue from operations at ₹953.27 lakhs.

The revocation of SEBI's interim order represents a significant positive development for Varyaa Creations, removing regulatory restrictions while the company continues its business operations in the gems and jewellery sector.