Tryfacta filed the draft documents with the International Financial Services Centres Authority (IFSCA) in June this year for a $100-150 million public issue.
Sources added that the company’s IPO may not sail through regulatory checks owing to its past legal issues in the US.
According to the draft documents, the company’s President and Chief Executive Officer (CEO) Adesh Tyagi was previously charged with securities law violations and remains subject to a judgment by the United States Securities and Exchange Commission (SEC). He was also charged with criminal offences relating to manipulative trading practices and certain other criminal matters that were subsequently dismissed, the draft red herring prospectus (DRHP) said.
While the company has disclosed the issues in its draft documents, IFSCA is applying heightened scrutiny to governance and the promoter’s track record, as this could have been the first listing in the financial hub, according to sources.
“The company’s past records with the US regulators raise doubts — and do not give a good perception about the fundraise. The regulator is looking at all aspects. Disclosures are one aspect, but such history may also have some impact. The regulators have to look at the interests of the investors,” said a person familiar with the developments.
Among other risks, the company disclosed that it was involved in an ownership-related dispute and that the related settlement arrangement could result in another entity acquiring a significant shareholding in the company.
In 2017, the SEC alleged that Tyagi made materially false and misleading public statements and engaged in manipulative trading practices in his brokerage accounts to inflate the price and trading volume of Systems America, Inc during his tenure as CEO, sole director, and majority shareholder of the company.
In the same year, several restrictions were imposed on him by a US District Court in the SEC matter. In September 2025, a US court modified the judgment by removing certain restrictions. However, the remaining restrictions on participating in penny stock offerings and financial penalties, including disgorgement, continue.
“While we do not believe that our securities currently constitute a penny stock (as defined in Title 17 of the US Code of Federal Regulations Section 240.3a51-1), in the event that the equity shares are in the future classified as a penny stock, such development could prevent Adesh Tyagi from being involved in any offering of our company’s securities in the US,” the draft documents note.
Emailed queries to Tryfacta remained unanswered until the time of going to press.
Queries sent to IFSCA on the issue did not elicit any response until the time of going to press.
Earlier in March, XED Executive Development, the first company to file draft documents for a listing on the international exchanges in GIFT City, had withdrawn its $12 million issue amid dampened sentiment and weak investor demand following the West Asia war.
Industry players at the time cited bottlenecks around know-your-customer completion and restrictions on resident investors from investing in IPOs in GIFT-IFSC.
A source said some of the teething issues around the framework have been resolved in consultation with other authorities.
In a bid to make the listing ecosystem more attractive, IFSCA has facilitated direct listing, allowing companies to get listed without raising funds. Discussions with the Securities and Exchange Board of India are also ongoing to facilitate dual listings with safeguards.
