Last Updated on February 11, 2025 by IPO Manthan Team
C2C Advanced Systems shares hit 5% lower circuit on February 11, 2025, following serious concerns raised by an independent auditor. The audit revealed discrepancies in the company’s financial disclosures, causing panic among investors. As a result, the company’s market capitalization dropped to Rs 1,160.22 crore.
C2C Advanced Systems Shares Hit 5% Lower Circuit
The major issue highlighted was the mismatch in financial data presented in the Red Herring Prospectus (RHP). The company claimed its loans payable stood at Rs 13.29 lakh, but the actual amount recorded in its financial books was nearly Rs 13 crore as of September 30, 2024. This significant difference raised red flags about the accuracy of its financial reporting.
Another alarming finding was related to the company’s sales and receivables. The total sales during the review period stood at Rs 94 crore, with Rs 74 crore still unpaid. A deeper look into the transactions revealed that Rs 70 crore worth of sales came from just four customers. Two of these customers, Synergy Log-in System SDN BHD and Synergy Information Technology Inc, were linked to C2C Advanced Systems but were not disclosed as related parties in official documents.
Additionally, the company failed to comply with FEMA regulations regarding software exports. It did not submit Softex forms, which are required under the Foreign Exchange Management Act. This raised concerns over the legitimacy of its overseas business dealings and led to further scrutiny.
The latest developments follow a history of regulatory issues for the company. In December 2024, SEBI had delayed the company’s listing and ordered an independent audit after an investor complaint. Despite these concerns, C2C Advanced Systems shares debuted at Rs 429.40 per share on NSE Emerge, a massive 90% gain over the issue price of Rs 226.
With the recent findings, investor confidence in the stock has taken a hit. The revelations of financial misrepresentation and regulatory non-compliance have triggered selling pressure, leading to the lower circuit. Market experts believe that further regulatory actions or penalties could follow, making the situation more challenging for the company.
C2C Advanced Systems shares hit 5% lower circuit, and investors are now closely watching how the company responds. With regulatory scrutiny intensifying, the company must address these concerns transparently to regain trust. Until then, uncertainty around the stock is likely to persist.