On the afternoon of March 8, 2014, the Malaysia Airlines Flight MH370 flying from Kuala Lumpur to Beijing vanished from radar. The Boeing 777 was carrying 227 passengers and a dozen crew members. Over the years, three attempts have been made to find out what really happened on that fateful day but with little success.
The disappearance of MH370 remains one of the aviation industry’s greatest mysteries. Now, almost 12 years later, the Malaysian government has ordered to resume search for the missing jet.
But not all mysteries in the aviation sector are that difficult to solve. Take the case of DroneAcharya Aerial Innovations Ltd. The drone maker was once hailed as a high-flyer and created much hype through pre-IPO fundraising and a successful December 2022 IPO. As it turns out, it was being propped up by hot air.
Capital markets regulator SEBI recently found multiple holes in the drone maker’s books: fictitious sales, misused funds, misleading statements, and a PR machine working in overdrive to mask the truth. Here’s what happened.
In early 2022, DroneAcharya raised Rs 32.35 crore through pre-IPO private placements of shares, roping in 199 investors, including Bollywood stars like Aamir Khan and Ranbir Kapoor. This star power lent the young company credibility and fanfare. It then raised another Rs 33.96 crore in its IPO. The stock debuted on the SME platform and almost doubled on listing as investor enthusiasm surged. By January 2023, the stock had doubled again!
On paper, the company’s financials also seemed to skyrocket. Revenue jumped from a modest Rs 3.6 crore in FY22 to Rs 18.5 crore in FY23, and then to Rs 35.2 crore in FY24.
SEBI’s investigation, however, found that a significant chunk of the post-IPO revenue was pure fiction. In FY24, the company recognized Rs 12.35 crore of revenue from two large “orders” – from clients named Triconix and IRed – without delivering any goods or services. By counting these phantom sales, it inflated its profit by Rs 12.35 crore.
DroneAcharya also played fast and loose with the money raised from the public. In its IPO prospectus, the company had earmarked about Rs 27.98 crore to buy drones and related accessories. Yet, as SEBI discovered, it spent only Rs 0.70 crore on actually buying drones and funnelled large sums into dubious transactions such as paying Rs 5.9 crore to a vendor for “software development.” Those software invoices were allegedly fake and grossly inflated.
Meanwhile, the company’s promoters orchestrated a publicity blitz to keep the stock flying high. They made a flurry of upbeat corporate announcements to whip up investor interest and sustain a lofty valuation. SEBI noted that many of these proclamations were about trivial matters with no concrete outcomes.
Through all this, its promoters and pre-IPO investors were quietly cashing out as retail investors took a fancy to the stock. According to the SEBI order, by late 2024, 168 out of 210 pre-IPO shareholders had dumped roughly 74.4 lakh shares of DroneAcharya stock, garnering about Rs 114.25 crore in the process and pocketing Rs 89.6 crore in profits.
Today, retail investors own more than 56% of the company while promoters own barely 28%. And what about its stock? DroneAcharya’s shares are languishing more than 30% below the IPO price and have crashed 85% from the record high touched in January 2023, the month after the IPO.
Finfluencer in Net
DroneAcharya isn’t the only fish SEBI has caught milking investors. The bigger fish that landed in its net is actually a finfluencer. On Thursday, SEBI dropped a bombshell on trader-turned-educator Avadhut Sathe and his Avadhut Sathe Trading Academy Pvt Ltd. In an interim order, it demanded they disgorge a staggering Rs 601.37 crore in “unlawful gains”.
The charge sheet says Sathe’s business raked in the massive amount from roughly 3.37 lakh students between 2015 and 2025 by peddling stock tips. In short, what looked like an over-priced trading course was allegedly a thinly veiled investment-advisory racket.
According to SEBI, Sathe’s academy ran live trading “tips” where he doled out real-time buy/sell calls, even as students followed along on the market. Crucially, promoters only flashed the winning trades in advertisements and testimonials, creating the illusion that every pick was a sure shot. The order notes the firm “selectively showcased only profitable trades” to mislead people about actual results. In these sessions Sathe himself would share his own live market positions and directly recommend stocks to course-takers. In reality, regulators say, Sathe was functioning as an unregistered investment adviser, charging hefty fees for targeted stock advice instead of just teaching basics.
SEBI also learned that some sales staff even urged prospective students to take out loans just to pay the course fees. Trainers promised lofty returns in social media teasers and “success story” reels, then channelled most of the money into Sathe’s accounts. Crucially, none of Sathe’s entities were registered with SEBI as required for giving stock tips or research
The interim order explicitly bars Sathe and his team from doing any live-market trading or advertising performance numbers in the future. It’s reportedly the largest penalty ever slapped on an individual market trainer in India
Sathe insists his academy is only a “training” outfit, but regulators have made clear they saw the evidence differently.
Small versus Big
Coming back to the ground, the Indian auto industry is witnessing a feud fit for a soap opera, except the drama revolves around fuel efficiency rules and a seemingly tiny 3-gram carbon dioxide concession. At first glance, it sounds trivial: under draft CAFE 2027 norms, the government may allow certain pint-sized petrol cars a slightly higher CO₂ limit to keep them on the road. Specifically, vehicles under 909 kg with sub-1200cc engines and under 4 metres length get to emit about 3 grams per km more than otherwise allowed when averaging out a manufacturer’s fleet emissions.
This small mercy for lightweight hatchbacks is meant to acknowledge their “limited scope” for further efficiency gains. But those 3 grams have ignited an outsized corporate brawl, pitting market leader Maruti Suzuki against a coalition of its rivals in an increasingly public spat.
The controversy centers on who benefits from this small-car CO₂ diet plan. According to multiple industry letters sent to the government, a group of major automakers, including Tata Motors, Hyundai, Mahindra & Mahindra, and MG Motor, want the concession scrapped entirely. They argue it creates an uneven playing field by primarily benefiting a single player’s portfolio. The letters politely avoid naming names, but it’s an open secret that the “single player” in question is Maruti Suzuki, the country’s champion of sub-909 kg hatchbacks. In fact, one rival pointed out that over 95% of all cars qualifying for this weight-based leniency come from just one manufacturer. Little surprise, then, that Maruti’s competitors smell a regulatory tweak custom-tailored for the reigning small-car king.
From the perspective of these opposing firms, the 3g/km CO₂ leeway isn’t a harmless favor, it’s a spoiler that could undermine broader clean-tech progress. If Maruti (or any company) can more easily meet fleet targets thanks to a stable of ultra-light models, rivals worry there’s less pressure to invest in expensive emissions-cutting tech across the board.
The feud isn’t just philosophical; it’s getting personal. Maruti Suzuki has come out swinging in defense of the small-car allowance, effectively accusing its detractors of disingenuous whining. The company argues that without a bit of regulatory breathing room, entry-level cars could become casualties of overly rigid standards, pricing out first-time buyers.
This clash has effectively split the auto industry into camps. Normally, carmakers present a united front on regulations through their lobby group, but not this time. At a recent meeting of the Society of Indian Automobile Manufacturers, a staggering 15 out of 19 automakers voted against the weight-based concession, leaving Maruti (and one ally, Renault) in a lonely minority.
Hitting Turbulence
While the tiny drone maker is struggling to stay in the air, India’s biggest airline flew straight into turbulence this week after failing to adjust its rosters to meet new government rules.
IndiGo cancelled 150 flights on Wednesday and more than 500 on Thursday alone. That’s almost a fourth of the more than 2,000 flights it operates every day. Operations were hit across major airports including Delhi, Mumbai, Bengaluru and Hyderabad, leaving thousands of passengers stranded and exhausted.
With many of IndiGo’s 400 aircraft occupying multiple parking slots at several airports, flights of other airlines such as Air India, SpiceJet and Akasa also faced disruptions and delays. And the chaos will persist for some more weeks.
This is perhaps the biggest crisis that IndiGo has faced since it began flying about two decades ago and now commands a 60% share of the Indian market. In fact, for an airline that took pride in its punctuality, the delays and cancellations are a body-blow to its reputation.
But what exactly caused this chaos?
The disruptions arose mainly from “misjudgement and planning gaps” in implementing Phase 2 of the Flight Duty Time Limitations, the Directorate General of Civil Aviation said on Thursday. The DGCA, India’s aviation regulator, said that IndiGo accepted that the crew requirement to meet the new rules exceeded its anticipation.
What are these new rules? The new rules say pilots must get mandatory rest of 48 hours per week, up from 36 hours previously. Moreover, pilots can now make two night-time landings per week, down from six under the old rules.
This essentially means airlines need more pilots or at least adjust their rosters. IndiGo has now asked for more time to adhere to rules that limit pilot duty hours at night and has told the DGCA that it intends to fully restore its operations by February 10 next year.
While the government is considering its request, the debacle would surely affect IndiGo’s revenue, profit and stock performance in the coming months. Its shares are already down over 12% from a one-year high in August even though the benchmark indices have touched new record highs. So, brace for a rough ride!
Market Wrap
Stock market benchmarks ended flat this week, as losses in the first three sessions were offset by gains on Thursday and Friday thanks to optimism over interest rate cuts by the Reserve Bank of India. Indeed, the RBI trimmed the repo rate by 25 basis points on Friday and retained its stance as ‘neutral’, indicating there is still room for further cuts.
Overall, the RBI has now reduced rates by a total of 125 basis points since February as inflation remains below its target levels. Lower rates will benefit not just banks and non-bank finance companies such as Bajaj Finance but also sectors such as autos by aiding demand for cars and bikes.
While the Nifty and Sensex closed flat, weakness persisted in broader markets. The small-caps slumped 1.8% and the mid-caps lost 0.7%. Of the 16 major sector indexes, 11 fell for the week. The gainers included financials and autos.
IndiGo operator InterGlobe Aviation crashed 9% this week as it struggled with mass flight cancellations. It was followed by Max Healthcare, Hindustan Unilever, Zomato parent Eternal, Titan and Apollo Hospitals.
Heavyweight Reliance Industries, Zudio owner Trent, Sun Pharma, and Nestle were among the other laggards.
IT stocks were the top gainers this week, buoyed by optimism that an expected by the US Federal Reserve later this month would boost their business. Wipro jumped 4% while HCL Tech, Tech Mahindra, Infosys and TCS all rose more than 3% each. Asian Paints, SBI Life, Maruti Suzuki, Eicher, and Hindalco were the other major gainers.
Other Headlines
- Russian president Vladimir Putin visits India with aim to increase bilateral trade
- British American Tobacco plans to sell between 7% and its entire 15.3% stake in ITC Hotels
- Denmark’s Novo Nordisk gears up to launch blockbuster diabetes drug Ozempic in India this month
- Fitch Ratings upgrades India’s GDP forecast for 2025-26 to 7.4% from 6.9% earlier
- India Services Purchasing Managers’ Index rises to 59.8 in November from October’s 58.9
- Reliance Industries begins work on draft prospectus for Jio’s IPO, reports Bloomberg News
- Parliament approves law that could raise taxes on cigarettes
- JSW Steel to move Bhushan Power’s steel business to JV with Japan’s JFE Steel
- Aircraft parts supplier Aequs’ Rs 922-crore IPO gets full subscription on first day
- Ecommerce firm Meesho’s Rs 5,421-crore IPO fully covered on first day
- Furniture and mattress maker Wakefit sets price band of Rs 1,288-crore at Rs 185-195 per share
- Mahindra & Mahindra unit sells 3.58% stake in Spain’s CIE Automotive for 119 million euros
- RBI approves Vikram Sahu as Bank of America’s India CEO
That’s all for this week. Until next week, happy investing!
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