Synopsis : Rajesh Exports shares hit the 5% lower circuit after SEBI alleged financial irregularities involving revenue reporting and barred the company and its promoter from the securities market. The company has strongly denied the allegations and said it is cooperating with the regulator.
- Rajesh Exports Under Pressure After SEBI Interim Order
Shares of Rajesh Exports came under intense selling pressure on June 4, hitting the 5% lower circuit after market regulator SEBI issued an interim order alleging large-scale financial irregularities involving the company’s revenue reporting and overseas transactions.
The development has raised fresh concerns among investors, leading to a sharp decline in the stock and renewed scrutiny of the company's financial disclosures.
- Stock Hits 5% Lower Circuit
Rajesh Exports shares fell sharply during the trading session as investors reacted to SEBI's interim findings.
The regulator has temporarily barred both the company and its Chairman, Rajesh Mehta, from accessing the securities market until further notice as part of an ongoing investigation.
The action triggered heavy selling in the counter, pushing the stock to its lower circuit limit.
- Why Did SEBI Take Action?
According to SEBI's interim order, the regulator has raised concerns regarding the company's financial reporting practices between FY21 and FY25.
The investigation primarily focuses on transactions involving overseas subsidiaries and whether the company overstated its revenues over multiple years.
SEBI's preliminary findings suggest that certain financial transactions may have been accounted for in a manner that inflated reported revenues and sales figures.
- The Rs.15.15 Lakh Crore Revenue Allegation
One of the most significant concerns highlighted in the interim order relates to revenue disclosures.
SEBI has alleged that Rajesh Exports may have misrepresented subsidiary revenues amounting to nearly Rs.15.15 lakh crore over a five-year period.
The regulator specifically highlighted transactions involving overseas subsidiaries, including Switzerland-based Valcambi SA, a key entity within the group's international operations.
According to SEBI, the available financial information of these subsidiaries appeared inconsistent with the extremely large revenue figures disclosed in the company's consolidated financial statements.
- Questions Over Revenue Recognition
SEBI has also questioned certain accounting treatments reflected in the company's standalone financial statements.
According to the regulator:
- Certain derivative transactions undertaken by promoter Rajesh Mehta in his personal capacity were allegedly recorded as business transactions.
- Some foreign exchange gains and interest income were reportedly classified as revenue.
- Foreign exchange fluctuations amounting to approximately ?716 crore were allegedly included within purchases and cost of materials consumed during FY21 to FY24.
The regulator believes these practices may have contributed to an overstatement of revenue figures.
- Rajesh Exports Responds to Allegations
Following the sharp market reaction, Rajesh Exports issued a clarification emphasizing that the SEBI order remains an interim order and does not represent a final conclusion.
The company stated:
"The order is interim and there has been no adverse conclusion on any aspect arrived by SEBI."
Rajesh Exports further maintained that its reported revenues are accurate and suggested that the matter may stem from a communication gap between the company and the regulator.
The company added that it is currently submitting additional documents and explanations to SEBI and remains confident that the regulator will arrive at the correct conclusion after reviewing all relevant information.
- LIC's Exposure Remains in Focus
The development has also drawn attention to institutional investors holding stakes in the company.
Among them, the Life Insurance Corporation of India (LIC) continues to be a significant shareholder in Rajesh Exports, making the regulatory developments particularly important for market participants tracking institutional ownership trends.
- Financial Performance Snapshot
For the fourth quarter of FY26, Rajesh Exports reported:
- Total Income: Rs.2,37,104.8 crore
- Total Expenses: Rs.2,37,144.7 crore
The company's financials are now expected to remain under close scrutiny as SEBI continues its investigation.
- What Investors Should Watch Next
The key factor going forward will be SEBI's final findings after reviewing the company's submissions and supporting documents.
While the current order is interim in nature, any adverse final ruling could have implications for investor confidence, corporate governance perception, and the company's future market performance.
Until greater clarity emerges, volatility in the stock is likely to remain elevated.
Disclaimer: This article is for informational and educational purposes only. The allegations mentioned are based on an interim SEBI order and remain subject to further investigation and final regulatory findings. Investors should conduct their own research and consult a SEBI-registered financial advisor before making investment decisions.
