Varanium Cloud Ltd, one of the darlings of SME investors, has been on the downswing in recent times on reports of alleged default by its promoter.

According to a report by LiveLaw, an online news platform, the Bombay High Court has issued a non-bailable warrant against Varanium Cloud’s promoter Harshawardhan Sabale, with “Red Corner Notice proceedings” for defaulting on payment of more than ₹49.53 crore to his creditors.

The court further ordered the attachment of Sabale’s bank accounts with a total balance exceeding ₹3 crore and directed taking charge of all his demat accounts and all unencumbered shares of Varanium Cloud.

After hitting an all-time high of ₹239.95 on October 2023 against the IPO price of ₹122, the NSE-SME listed stock has been on a downward spiral. In the last few days, the stock has been hitting the lower circuit. On Thursday, the stock closed at ₹52.

In May, the company announced a stock-split from ₹10 (face value) to ₹5 and a bonus in the ratio of 1:1.

Varanium Cloud’s response

In response to the LiveLaw’s report, , the company issued a clarification to the NSE on Thursday.

According to the firm, the matter is currently sub judice and pertain solely to Sabale’s personal capacity.

“We emphasise that these legal proceedings have no bearing whatsoever on the operations, assets, or interests of Varanium Cloud Ltd. Our company remains steadfast and unaffected by these developments.”


The litigation involving Cherag Shah stems from his claim with regard to the valuation of a technology invented and developed by Sabale. The dispute around the technology, in which Shah was an early investor, led to the arbitration. Subsequently, Shah abandoned his ‘extravagant’ valuation claims after evidence was presented, ultimately seeking to enforce an agreement dated May 5, 2018, the clarification note said.

The Arbitral Award, issued on December 22, 2022, prompted Sabale to file an arbitration appeal/petition challenging the decision. The appeal remains pending.

“Concurrently, Shah initiated execution proceedings, culminating in the order referenced in the article. However, it’s important to note that this order is currently under appeal,” it said.

“We want to reassure our investors and the public at large that Varanium Cloud Ltd and its assets are secure and remain unaffected by the proceedings and outcomes of these legal matters. Our commitment to innovation, integrity, and excellence remains unwavering,” the company added.

The company had in September 2022 raised about ₹37 crore through the IPO. The public issue was subscribed more than 5 times.