Rajesh Exports Hits Lower Circuit After SEBI Flags ₹15.15 Lakh Crore Revenue Mis-statement

Mumbai, June 4: Shares of jewellery exporter Rajesh Exports hit the 5% lower circuit on Thursday after the Securities and Exchange Board of India (SEBI) alleged that the company misrepresented revenues worth about ₹15.15 lakh crore between FY21 and FY25, triggering one of the most significant accounting-related regulatory actions in recent years.  

The stock fell to its lower circuit limit as investors reacted to SEBI’s interim order, which alleged that the company had overstated revenues generated through subsidiaries and overseas entities. According to the regulator, the misrepresented amount accounted for roughly 99.8% of the company’s consolidated revenue reported during the five-year period.  

SEBI alleges large-scale revenue inflation 

Shares have fallen 15% over a week versus the Nifty 50 declining 2% during the same period. Source: NSE 

In its interim order issued on June 3, SEBI said Rajesh Exports had prima facie misrepresented approximately ₹15,15,385 crore of revenue attributed to subsidiaries between FY21 and FY25. The regulator’s findings stemmed from a forensic review that questioned the genuineness of transactions reported by several overseas entities linked to the company. 

SEBI alleged that the company inflated its revenue scale over several years through dealings involving unverified overseas entities, with the discrepancies amounting to about ₹15.15 trillion ($158 billion).  

The regulator has barred Rajesh Exports chairman and managing director, Rajesh Mehta, from accessing the securities market until further orders and the completion of its investigation. SEBI has also directed the company to cooperate with investigators and forensic auditors examining its books.  

Revenue inflation estimated at 97-99% 

According to SEBI’s findings, the alleged inflation in reported revenues ranged between 97% and 99%, raising serious concerns about the accuracy of the company’s financial disclosures and corporate governance standards. The regulator also cited non-cooperation during parts of the investigation.  

Market participants viewed the order as a major blow to investor confidence, prompting a sharp sell-off in the stock. The lower-circuit hit reflects concerns over potential financial restatements, regulatory penalties and the broader implications of the ongoing investigation.  

What happens next? 

SEBI’s order is interim in nature, and the investigation remains ongoing. The regulator has sought a deeper forensic examination of the company’s accounts to determine the full extent of the alleged irregularities and identify any violations of securities laws.  

The outcome of SEBI’s investigation will be closely watched by the market given the scale of the alleged discrepancies and their potential impact on shareholders. 

Source: https://www.nseindia.com/get-quote/equity/RAJESHEXPO/Rajesh-Exports-Limited