SEBI Settles Unregistered CIS Case Involving Growpital Platform as Two Entities Pay Over ₹81 Lakh

The Securities and Exchange Board of India (SEBI) has disposed of enforcement proceedings against two entities involved in the high-profile Growpital platform case after receiving aggregate settlement charges of ₹81.12 lakh. Nutrikosh India Private Limited and individual Alok Chaudhary paid ₹40.56 lakh each to settle allegations arising from an unregistered Collective Investment Scheme (CIS) run under the guise of an agri-investment initiative.

The settlement was executed under SEBI’s Settlement Regulations without the applicants “admitting or denying the facts and conclusions of law,” according to an order passed by SEBI Whole Time Member Kamlesh Chandra Varshney.

Allegations and Regulatory Findings

SEBI had issued a show cause notice (SCN) dated March 3, 2025, to 30 entities following a comprehensive regulatory probe into the Growpital investment platform. The investigation revealed that the platform mobilised capital by promising retail investors lucrative, tax-free returns from agricultural operations.

In the case of Nutrikosh India and Chaudhary, the regulator alleged:

• The entities aided and abetted key operators of Growpital in running the fraudulent and unregistered investment operations.
• Nutrikosh served as an intermediary conduit for layered fund transfers amounting to approximately ₹7.03 crore without genuine economic substance.
• The entity played an active role in schemes deployed to collect retail deposits and present inflated revenue figures, creating an illusion of commercial viability to draw in fresh investor capital.
• The conduct violated provisions of the SEBI Act, CIS Regulations, and the Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations.

Settlement Terms and Process

Following the issuance of the notice, both applicants approached SEBI seeking a consensual resolution under the SEBI (Settlement Proceedings) Regulations.

SEBI’s Internal Committee considered the settlement terms and recommended that the charges be settled upon payment of ₹40.56 lakh per applicant. The recommendations were reviewed and endorsed by SEBI’s High Powered Advisory Committee (HPAC) and subsequently ratified by a panel of Whole Time Members. Upon full receipt of the ₹81.12 lakh settlement remittance, the regulator formally closed proceedings initiated against the two noticees.

However, SEBI explicitly reserved the right to revive enforcement measures if any declaration or submission made by the applicants is found to be false or if the undertakings are breached.

Wider Crackdown on Growpital Platform

The settlement with the two entities comes alongside sweeping enforcement action against the primary promoters and associated conduits of the platform. SEBI's investigation into Growpital—which originated with an ex-parte interim cease-and-desist order in January 2024—determined that the platform pooled ₹192.88 crore from 5,208 retail investors through three limited liability partnerships: ZF Project 1 LLP, ZF Project 2 LLP, and ZF Project 3 LLP.

In a parallel final order, SEBI:

• Ordered the winding up of the unauthorised collective investment schemes.
• Directed the refund of ₹192.88 crore to affected investors alongside 12% annual interest calculated from January 29, 2024.
• Imposed penalties exceeding ₹25 crore on 28 remaining entities, including founder Rituraj Sharma.
• Banned key operators and associated LLPs from the Indian securities markets for up to five years.

The resolution of the Growpital proceedings highlights SEBI's strict posture towards unregulated fintech platforms utilising LLP arrangements and unconventional assets to bypass India’s CIS frameworks.

Tags: SEBI Growpital Collective Investment Schemes Nutrikosh India Investor Protection PFUTP Regulations