Pantomath’s IPO Deals Put Group Fund Holdings and Investor Protection Under the Spotlight
India’s stock market has seen a large number of companies come forward to raise money through initial public offerings (IPOs). As more companies enter the market, attention is also turning to the role of investment banks and their links with the funds that invest in these businesses before they are listed.
Mumbai-based Pantomath is one group facing questions about these relationships. Its businesses include an investment bank, funds that invest in companies before their IPOs, a stake in a listed broking group and a mutual fund launched in 2025. The main concern is how these businesses operate when a fund linked to the group invests in a company and the group’s bank later helps take that company public.
The issue has come into focus with Hi-Tech Flow Solutions, a Delhi-based pipe manufacturer. The company filed draft IPO papers in September, with Pantomath Capital among its two bankers. A fund linked to Pantomath owns 14.67% of the company. It bought the shares at ₹19.74 each and plans to sell its entire holding of around 20.3 million shares through the IPO.
Under Indian rules, a holding of more than 10% makes Pantomath an “associate” of the company. In such a case, the bank cannot lead the IPO and can only market the issue. However, it must still sign the due-diligence certificate, which is the bank’s formal confirmation that the information in the prospectus has been checked. This means the bank is required to sign off on the offer even though a fund from the same group plans to sell its full holding. The rules do not stop the fund from doing so.
Who Is Behind Pantomath?
Pantomath was founded by Mahavir Lunawat and Madhu Lunawat. The group has managed 123 IPOs, most of them involving small companies. It was also among the bankers involved in the National Stock Exchange’s public offering last month.
Its businesses include Pantomath Capital, which works as a merchant bank; a group of pre-IPO investment funds; a 37% stake in a listed broking group; and a mutual fund that received its licence in July 2025. The mutual fund manages around ₹2,000 crore of retail investors’ money.
Other financial groups, including Kotak and Motilal Oswal, also operate through different businesses under the same group. The questions around Pantomath relate to how often its businesses appear in different roles in the same transaction. The concern is greater in smaller companies, where share trading can be limited and retail investors make up an important part of the market.
How the Investment Model Works
Sales material for one of Pantomath’s funds, shared by a distributor, describes a plan to exit investments through an IPO or a sale within around three and a half years. It refers to an average return of 2.5 times the amount invested. The material also says the fund aims to buy shares at prices 30% to 40% below those of listed companies in the same sector, using the group’s investment banking network.
In simple terms, the fund invests in a company before it enters the stock market, the group’s investment bank helps bring the company to the market, and the fund can then sell its shares to public investors. This has led to questions about how the shares are valued, how long the fund holds them and what information is available to people buying shares in the IPO.
Three Deals Under Scrutiny
Hi-Tech Pipes
In October 2024, Pantomath was the sole banker for a ₹500 crore share placement by Hi-Tech Pipes, a listed company controlled by the Bansal family. The same family controls Hi-Tech Flow Solutions.
The placement price was ₹185.50 per share. Pantomath confirmed that a fund linked to the group bought 2.7 million shares, worth around ₹50 crore. On September 21, Hi-Tech Pipes shares closed at ₹75, about 60% below the placement price.
The transaction raises a question about the purpose of the fund’s investment. Was it made for the benefit of the fund’s investors, or did it also help the bank complete the share placement? The available details do not, by themselves, establish that anything improper took place.
Vikran Engineering
In January 2024, a Pantomath-linked fund invested in power contractor Vikran Engineering at a valuation of around ₹740 crore. Pantomath Capital was the exclusive banker for that funding round.
Nineteen months later, Pantomath co-led the company’s IPO. Vikran was valued at ₹1,781 crore before the new money was raised, and retail investors paid ₹97 per share.
Two months after the listing, the company announced a solar power order worth ₹1,642 crore, after which its share price rose. By February, the order had been cancelled and the company’s internal auditors had resigned.
Between September 2025 and June 2026, domestic institutional investors reduced their holding in Vikran from 12.6% to 5.7%. The public shareholding rose from 28.8% to 36.7%, and the number of shareholders increased by around 17,000.
Shareholding data suggest that the Pantomath-linked fund reduced its stake by around 6%. Pantomath says it sold less than 5% of its original investment.
These changes have raised questions about how shares moved between early investors and the public after the listing. However, the figures alone do not prove that the transactions were improper.
SAR Televenture
Pantomath took telecom tower company SAR Televenture public in 2023 through an IPO that raised less than ₹25 crore.
Eight months later, the company raised another ₹450 crore. This included ₹150 crore through a follow-on offer at ₹210 per share and ₹300 crore through a rights issue at ₹200 per share.
The market maker for the shares was the broking arm of Asit C Mehta, which is partly owned by a Pantomath company. SAR Televenture shares reached ₹414 around six weeks later but have since fallen to about ₹73. Pantomath says its fund continues to hold its full stake in the company.
Across these three cases, investors who bought shares at the offer price have seen their holdings fall by between 42% and 65%.
What the IPO Performance Data Shows
Data firm IPO Platform found that around 90% of Pantomath’s 123 IPOs listed above their offer prices. However, more than half of these stocks now trade below their offer prices. Five of the group’s last eight main-board IPOs are also trading below their offer prices.
IPOs of small companies carry risks, and the figures do not prove that Pantomath has performed worse than other investment banks. No full comparison with rival banks has been published. Even so, the data show that investors in many of the group’s IPOs have seen their shares fall below the price they paid.
Past Regulatory Findings Involving a Related Broker
Pantomath Stock Brokers, a brokerage firm whose board included the Lunawats, acted as market maker in 63 small-company IPOs between 2016 and 2020. All 63 IPOs were managed by Pantomath Capital.
In 2022, the Securities and Exchange Board of India (SEBI) found that the broker had misused up to ₹24 crore of client money on 35 of the 37 days examined by its inspectors. The findings included pledging client shares beyond the amounts clients owed and using client money to cover the broker’s own trading losses. SEBI called the violations “very serious” and imposed a fine of ₹20 lakh.
The broker blamed the Toshniwal family, which handled its daily operations. The Lunawats said they had separated themselves from the broker by 2019. However, Pantomath continued to use the firm as a market maker for two IPOs in 2021 and 2022.
In 2022, a new company linked to the Lunawats bought a stake in Asit C Mehta, whose broking arm later acted as market maker for SAR Televenture. Pantomath Stock Brokers surrendered its exchange licence in July 2025, one week after SEBI licensed the group’s mutual fund. Pantomath said the timing was a coincidence.
A separate SEBI inspection of Pantomath Capital in 2023 found that the signatures on two due-diligence certificates did not match each other or the signatory’s identity card. The charge was dropped in 2024, without a ruling on whether the signatures were genuine.
What Pantomath Has Said
In written responses, Pantomath said all its businesses are separate companies registered with SEBI and have their own boards. It also pointed out that financial groups with several connected businesses are common in markets such as New York and London.
The group said that a fund holding shares in a company taken public by its investment bank does not, by itself, amount to a regulatory conflict of interest. It said all holdings were within the permitted limits and had been disclosed. It also noted that SEBI requires bankers to sign due-diligence certificates, regardless of their role in an IPO.
Some questions remained unanswered. Pantomath described its Bharat Value Fund as a “long-only” fund that holds investments for the longer term. When asked about the sales material that refers to an exit within around three and a half years, the group said “long-only” means buying and holding shares without trading or short selling.
Pantomath did not identify other IPOs in which its group-linked funds had invested. When asked about its earnings from the Hi-Tech Flow offer, it referred to the offer documents. Asked whether its mutual fund had invested in any IPO managed by Pantomath, it said only that the fund was permitted to do so.
On the earlier broker case, Pantomath said the Lunawats had taken the matter to the authorities. SEBI’s findings, however, came from its own inspection, and the regulator rejected the claim that earlier management was responsible as “baseless”.
How the Rules Compare With the US
In the United States, when a bank’s related businesses own 10% or more of a company issuing shares, the conflict must be clearly disclosed. An independent underwriter is often required to check and support the price.
India has also tightened rules in one area. Last December, SEBI barred bankers from leading IPOs in which their own directors or employees held even 0.1% of the company. However, the current framework allows a fund linked to the same group to own 14.67% of a company and sell its entire holding through an IPO, as planned in the Hi-Tech Flow offer.
Why the Issue Matters
India is seeing its largest-ever wave of share sales, and IPOs by small companies are attracting many first-time retail investors. Pantomath may not have broken any rules. The question is whether the rules provide enough protection when different businesses within the same group take different roles in a share sale.
The Hi-Tech Flow offer gives SEBI a current case to examine how its rules apply when a group-linked fund is selling its entire stake while the group’s bank is involved in the IPO.
Clear information about who is selling shares, how the parties are connected and how the offer price is checked can help investors make better decisions. The broader question is whether the rules should look not only at each company separately, but also at how businesses within the same group work together.