Rajesh Exports shares hit the 5% lower circuit at ₹103.92 on Thursday's trading session, continuing from the previous day's decline. The stock's movement to the daily lower circuit limit demonstrates the significant market impact of the fraud allegations. The sharp decline reflects investor concerns over the company's regulatory compliance issues and the potential impact on its business operations. According to latest market data, the stock has tanked 87% over three years through March 2026, falling from ₹610.10 by FY23-end to a five-year closing low of ₹80.38 by FY26-end. The regulatory action has also weighed on LIC shares, which declined around 1% during trade, as the insurer holds nearly a 10.80% stake in Rajesh Exports.
The Securities and Exchange Board of India (SEBI) issued an interim order against Rajesh Exports and its promoter Rajesh Mehta on June 3, 2026, alleging extensive financial irregularities. SEBI discovered that Rajesh Exports misrepresented revenues, with approximately 97-99% potentially inflated, representing a fraud amounting to ₹15.15 lakh crore - nearly 99.80% of its total consolidated revenue from FY 2020-21 to FY 2024-25. The investigation revealed significant fund-routing irregularities and a lack of cooperation from the company during audits. SEBI Whole-Time Member Kamlesh Chandra Varshney described the preliminary findings as 'egregious and unheard of' and emphasized urgent regulatory intervention was necessary to protect investors and preserve market integrity.
A comprehensive analysis of Rajesh Exports' shareholding patterns reveals a dramatic shift in investor composition over the past three years. Retail investors holding up to ₹2 lakh each held just 1.6% of the company's equity capital as of March 2023, while NRIs held a 13.77% stake and FPIs held a 17.60% stake during that quarter. By March 2024, retail shareholding jumped to 11.42%, while NRI holding plunged to 7.35% and FPI holding declined to 15.08%. The trend continued through FY26, with retail holding reaching 14.13% by March 2026, while NRI holding had plunged further to 5.27% and FPI holding declined to 14.25%. This pattern suggests that institutional and wealthy investors sharply pared their stakes while retail investors increased their exposure, even as the company's share price declined dramatically.
The interim order also examines questionable transactions with Affluence Shares and Stocks Pvt. Ltd., where Rajesh Exports recorded sales of around ₹11,487 crore and purchases of around ₹11,488 crore between FY22 and FY24. However, Affluence reportedly informed SEBI that Rajesh Exports was never its client and that no transactions had been executed with the company, stating that dealings were only with Rajesh Mehta in his personal capacity. SEBI noted that company funds were allegedly routed through Rajesh Mehta's account in connection with gold derivative transactions. The regulator also questioned certain accounting practices, including foreign exchange fluctuations being included within revenue and purchase figures instead of being accounted for separately, which resulted in approximately ₹866 crore being added to revenue and around ₹716 crore being added to purchases.
Market experts have characterized the Rajesh Exports situation as a classic case of institutional manipulation. Shriram Subramanian, founder and managing director of proxy advisory firm InGovern, stated that this is a classic case of pump and dump by influential shareholders on the unsuspecting public. Senior securities lawyer Chirag Shah noted that 'L'affaire Rajesh Exports has all the telltale signs of a pump and dump operation', highlighting that it took a shareholder complaint as late as 2024 for SEBI to start an investigation. Despite the stock's recovery of nearly 30% through Thursday's close of ₹103.92, the Securities and Exchange Board of India's interim order left the stock frozen at the 5% lower circuit throughout the entire trading session. The experts emphasize that retail shareholding has increased manifold while 'smart' money has offloaded, with concerns about potential excuses from statutory auditors seeking immunity.
