Rajesh Exports shares remained locked at the 5% lower circuit for the fifth consecutive trading session on Wednesday, June 10, hitting the lower circuit limit at ₹85.35 on the BSE. The stock has declined 22.6% in the last one week, 30% over the past month, 55% in six months and 58% over the last year, demonstrating sustained investor concerns following the comprehensive regulatory allegations. This marks the fifth occasion since details of SEBI's investigation emerged that the stock has hit its lower circuit limit, with the sustained pressure reflecting the severity of market reaction to the 109-page interim order issued by SEBI on June 3, which has fundamentally altered investor confidence in the company's financial reporting and governance practices.
SEBI's 109-page interim order dated June 3 alleges that Rajesh Exports orchestrated an elaborate financial fraud involving alleged revenue inflation of ₹15.15 lakh crore over the years, with the regulator's investigation and forensic examination revealing prima facie evidence suggesting that nearly 97-99% of the company's reported revenue may have been inflated. According to The Economic Times, the regulator found that around ₹15.15 trillion, or 99.8% of subsidiary revenue, was allegedly misrepresented during the period from FY21 to FY25. The latest allegations expand beyond previous findings, with SEBI now alleging accounting irregularities, diversion of company funds into personal accounts, and a pattern of conduct aimed at misleading investors. The regulator described the alleged discrepancies as "egregious and unheard of" and stated that "The acts of REL constitute a deliberate device, scheme and artifice to mislead and defraud investors dealing in the shares of REL by portraying an inflated and misleading picture of its operational scale, revenue and financial health."
The pressure on Rajesh Exports intensified further after reports suggested that the Ministry of Heavy Industries (MHI) could soon decide whether to remove the company from the list of beneficiaries under the government's production-linked incentive (PLI) scheme for advanced chemistry cell (ACC) battery storage. According to a PTI report, there is a "strong view" within the department in favour of immediately disqualifying the company from the scheme. The final proposal is expected to be placed before Heavy Industries Minister H.D. Kumaraswamy, who recently returned from an official visit to Kyrgyzstan. Adding to investor concerns, the Ministry of Heavy Industries is reportedly considering removing Rajesh Exports from the list of beneficiaries under the Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage, with sources citing a strong view within the ministry in favour of removing the company from the scheme following SEBI's findings. The matter is expected to be placed before Heavy Industries Minister H D Kumaraswamy for a final decision in the coming days.
As part of the interim order, SEBI has barred promoter Rajesh Mehta from buying, selling or otherwise dealing in securities of Rajesh Exports pending further directions. The regulator also directed the company to fully cooperate with investigators and ensure true and fair disclosure of its financial statements and related-party transactions. SEBI has ordered a fresh forensic audit of the company's books to verify the allegations and has directed Rajesh Exports to furnish all pending information sought by investigators within 30 days. The probe was initiated following a shareholder complaint received in March 2024, with Sebi's investigation and forensic review revealing the alleged financial irregularities. The three-year bar on CMD Rajesh Mehta creates management uncertainty for a company where the promoter holds 54.6% and has historically been the key strategic decision-maker.
Rajesh Exports has denied the allegations and said SEBI's order was interim in nature and did not contain any final conclusions. In a press release issued on Thursday, the company said SEBI's conclusions were based on a misunderstanding between revenue and EBITDA figures at Swiss refiner Valcambi SA, an indirect subsidiary of the company. According to The Economic Times, the company stated there seems to be "some type of communication gap and confusion between SEBI and the company," adding that it was in the process of submitting authenticated documents and remained confident that the regulator would arrive at the correct conclusion after reviewing the information. In a fresh defence of its position, Rajesh Exports said on Sunday that it had already provided between 300 GB and 400 GB of documentation to SEBI during the course of the investigation. The company maintained that the regulator may not have identified the correct files and said it would resubmit all relevant documents within 15 days to help clarify the matter. Chairman Rajesh Mehta claimed that SEBI's allegation that the company inflated revenues by ₹15.15 lakh crore between FY21 and FY25 was based on a fundamental accounting error, stating that the regulator mistakenly picked up EBITDA figures and treated them as top-line revenue. The company attributed the observations to an alleged misunderstanding involving its Swiss subsidiary Valcambi, stating that "The core observation in the order is concerning the mis-reporting of the revenues. This has emerged primarily due to confusion because SEBI has considered the EBITDA of Valcambi instead of Revenue; hence it has stated that there is a difference of about 97% in the revenue. The consolidated Revenue as stated by the Company is correct."
The latest selloff has drawn comparisons with the Gensol Engineering controversy that erupted in 2025, where SEBI alleged that promoter brothers diverted funds meant for electric vehicle procurement and treated the listed company as a "personal piggy bank."** According to regulatory findings, more than ₹260 crore intended for business purposes was allegedly used to fund personal expenses and lavish lifestyles, with Gensol shares losing between 80% and 90% of their value. However, analysts remain divided on whether the comparison is entirely appropriate for Rajesh Exports. Hariprasad K from Lifelong Wealth believes the issue goes beyond a failed business narrative and strikes at the heart of investor trust, stating that the key question is no longer whether the stock is cheap but whether investors can rely on reported financial statements. Meanwhile, Ponmudi R from Enrich Money notes that governance risk often commands a larger discount than business risk, with the market no longer valuing the company based on growth expectations but instead discounting it for regulatory, legal and governance risks. The Rajesh Exports share price at ₹85.35 represents a decline of approximately 58.5% from the 52-week high of ₹237.88, indicating significant market correction amid ongoing regulatory scrutiny and government scheme disqualification fears.
