SEBI has ordered the winding up of the Growpital investment platform, declaring it an unregistered collective investment scheme. The regulator directed the firm and its promoters to refund Rs 192.88 crore to over 5,000 investors, along with 12% interest. The order follows findings that the platform violated securities laws by pooling funds from the public without the necessary regulatory approvals.
The Securities and Exchange Board of India (SEBI) has directed the winding up of Growpital, an agricultural investment platform that operated as an unauthorized collective investment scheme (CIS). The regulator concluded that the entity solicited funds from investors by promising tax-free returns from agricultural projects, essentially bypassing the strict compliance required for such financial products in India.
An investigation revealed that the platform pooled money from 5,208 investors using limited liability partnership structures. This arrangement effectively prevented investors from exercising genuine control over the underlying farmland assets. Under Indian law, any scheme that collects money from investors for a common purpose—where the investors do not have day-to-day control over the operations—is classified as a collective investment scheme and must be registered with the market regulator.
The SEBI order mandates a full refund of Rs 192.88 crore to the affected investors. This repayment must include an annual interest rate of 12%, calculated from the interim order date of January 29, 2024. To manage the process, the regulator has ordered the appointment of a nodal officer. Initially, approximately Rs 50 crore already held in escrow will be returned to investors on a pro-rata basis.
If the funds currently in escrow prove insufficient to cover the total refund, the regulator has authorized the recovery of money from trade receivables and the physical assets of the involved entities, including Yotta Agro Ventures and Farm Silo Tech. If a shortfall remains after these efforts, the personal assets and bank accounts of the primary promoters—including Rituraj Sharma, Krishnna Joshi, and Gayatri Rinwa—will be held liable to satisfy the remaining claims.
The regulator has also imposed significant penalties on the promoters, with each of the eight primary noticees facing a fine of Rs 2 crore. Secondary participants in the scheme face penalties ranging from Rs 20 lakh to Rs 50 lakh. Furthermore, the primary promoters are banned from participating in the securities market for five years or until the refund process is fully completed, whichever lasts longer.
This regulatory action serves as a reminder for investors to verify whether an investment scheme is registered with SEBI before committing capital. Platforms promising high, tax-free returns without clear regulatory oversight often carry significant risks. Investors can visit the official SEBI website to check the registration status of any collective investment scheme. The next important update for those involved will be the initiation of the distribution process by the court-appointed nodal officer.