Rajesh Exports - Stock Hits Second Consecutive Lower Circuit After SEBI Flags ₹15.15 Lakh Crore Revenue Inflation

5 Jun 2026 , 01:34 PM

Shares of Rajesh Exports remained under heavy selling pressure on Friday, June 5, 2026, hitting the lower circuit for the second consecutive trading session and falling to ₹98.73. The sharp decline comes after the Securities and Exchange Board of India (SEBI) accused the company of allegedly inflating revenues by approximately ₹15.15 lakh crore during the period between FY21 and FY25.

SEBI Alleges Massive Revenue Inflation

SEBI has alleged that Rajesh Exports overstated its revenues by nearly ₹15.15 lakh crore over a five-year period. As part of its interim order, the market regulator has barred promoter Rajesh Mehta from buying, selling, or otherwise dealing in the company’s securities until further proceedings are completed.

In addition, SEBI has ordered a fresh forensic audit of the company’s books to examine the accuracy of its financial disclosures and accounting practices.

The allegations rank among the most serious corporate governance concerns faced by an Indian listed company in recent years and have triggered a sharp negative reaction from investors.

Rajesh Exports Rejects SEBI Findings

Rajesh Exports has strongly denied the allegations and disputed SEBI’s observations.

According to the company, the discrepancy arose because SEBI allegedly compared EBITDA figures of its Swiss subsidiary Valcambi with revenue figures, resulting in a reported mismatch of nearly 97%.

The company maintains that the regulator’s methodology led to an incorrect interpretation of financial data and has stated that it will provide supporting explanations regarding the accounting treatment of Valcambi’s operations.

The outcome of the forensic audit is expected to play a crucial role in determining the validity of both SEBI’s allegations and the company’s defense.

Institutional Investors Largely Stayed Away

A review of shareholding patterns over the past decade reveals limited participation from domestic institutional investors (DIIs), despite Rajesh Exports being listed since 1995.

Mutual Funds Exit Completely

Mutual fund ownership in Rajesh Exports has remained negligible throughout the last ten years.

• Peak mutual fund holding stood at only 0.5% in March 2016.
• Holdings steadily declined over the years.
• As of the latest available data, mutual funds hold zero stake in the company.

Private Insurers Show Minimal Interest

Private insurance companies have not maintained any meaningful ownership position in Rajesh Exports in recent years, indicating a long-standing lack of conviction among institutional investors.

LIC Remains the Only Major Domestic Institutional Shareholder

Among domestic institutions, Life Insurance Corporation of India (LIC) remains the sole significant shareholder.

LIC’s stake trajectory highlights its growing exposure to the stock over the years:

• March 2016: 1.99%
• March 2022: 11.22%
• March 31, 2026: 10.8%

However, LIC shares themselves were trading largely flat around ₹398 during Friday’s session, suggesting limited immediate market impact on the insurer.

Foreign Investor Ownership Remains Concentrated

Foreign Portfolio Investors (FPIs) maintained a relatively stable presence in Rajesh Exports for much of the past decade.

• FPI ownership ranged between 15.87% and 17.7%.
• FPI holding declined to 14.2% by March 2026.

Ownership among foreign investors remains highly concentrated.

Key FPI shareholders include:

• Bridge India Fund : 8.46%
• Schwab Fundamental Emerging Market Equity ETF : 2.7%

Such concentration raises additional concerns as a significant portion of foreign ownership is controlled by only a few investors.

Stock Performance Significantly Lags Nifty50

The recent regulatory developments have added to the stock’s already weak performance.

Rajesh Exports has substantially underperformed the benchmark Nifty50 index across multiple time frames:

Period	Rajesh Exports	Nifty50
1 Month	-17.15%	-2.85%
3 Months	-44.74%	-10.71%
1 Year	-50.41%	-5.67%

The stock’s prolonged underperformance indicates that investor concerns existed even before the latest SEBI action.

Key Red Flags Investors Cannot Ignore

Several factors highlighted by the shareholding data and regulatory developments warrant close attention:

1. Lack of Institutional Confidence

Despite being listed for more than three decades, Rajesh Exports has attracted virtually no meaningful mutual fund participation.

2. Reliance on a Single Domestic Institutional Investor

LIC remains the only major domestic institutional shareholder, increasing concentration risk.

3. Concentrated Foreign Ownership

A large portion of FPI ownership is held by only a handful of investors.

4. Serious Governance Allegations

SEBI’s accusations regarding revenue inflation and its decision to order a forensic audit raise substantial questions about financial reporting practices.

5. Continued Stock Weakness

The stock’s steep underperformance relative to the Nifty50 reflects deteriorating investor sentiment.

What Investors Should Watch Going Forward

The next few months could be crucial for Rajesh Exports and its shareholders.

Investors should closely monitor:

• Findings of the forensic audit ordered by SEBI.
• Any additional regulatory actions against the company or its promoters.
• Detailed disclosures regarding the Valcambi accounting issue.
• Changes in LIC’s shareholding position.
• Movements in foreign institutional ownership.
• Auditor observations and future financial statements.
• Management’s response to governance concerns.

Until greater clarity emerges, the stock is likely to remain under pressure from regulators, institutions, and market participants alike.

 

Disclaimer – The stock/s and indices mentioned in this article is discussed solely for informational and educational purposes. It should not be construed as investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research or consult a financial advisor before making any investment decisions. Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Data is as of June 6, 2026 (1:31 PM IST)