Rajesh Exports faces PLI exit after SEBI order (2026)

What has triggered the government review

The Ministry of Heavy Industries (MHI) is likely to decide in the coming days whether to remove Rajesh Exports from the beneficiary list of the production-linked incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage. The review follows an ex parte interim order by market regulator SEBI that alleges large-scale financial irregularities at the Bengaluru-based company. Sources cited by PTI said there is a “strong view” within the ministry that Rajesh Exports should be excluded from the scheme.

The matter is expected to be placed before Heavy Industries Minister H D Kumaraswamy, who has recently returned from an official visit to Kyrgyzstan. MHI administers the ACC battery storage PLI scheme and is currently examining the SEBI order before taking its next step.

SEBI’s interim order and the core allegations

SEBI issued a 109-page ex parte interim order on June 3. In the order, the regulator alleged that Rajesh Exports overstated revenues by ₹15.15 lakh crore between FY21 and FY25. In normalized terms, this is ₹1,515,000 crore.

SEBI also said that nearly 99.8% of the revenues reported by the company’s subsidiaries during the period were materially misrepresented. Separate reporting also described SEBI’s conclusion as a 97% to 99% overstatement of revenues, in the context of the regulator’s interim findings.

The order flagged concerns including alleged fund diversion, opaque related-party transactions, and disclosure lapses. SEBI’s interim findings referenced entities linked to Rajesh Exports’ lithium-ion cell business, including Elest Pvt Ltd and ACC Energy Storage Pvt Ltd.

Restrictions on promoter and next investigative steps

Pending further proceedings, SEBI has restrained promoter and Chairman Rajesh Mehta from buying, selling, or dealing in the company’s securities until further orders. The regulator has also ordered a fresh forensic audit of the company’s books.

Separately, a report said SEBI has barred Rajesh Exports and its founder and Executive Chairman Rajesh Mehta from accessing the securities market until the completion of the investigation. The immediate effect is that the promoter’s market activity is curtailed while the investigation and audit proceed.

Rajesh Exports’ response and the accounting dispute

Rajesh Exports and Rajesh Mehta have denied SEBI’s allegations and said they are cooperating with the investigation. In another response cited in the provided material, the company said the revenues stated in its financials are correct.

The company also claimed the interim order stems from a misunderstanding, alleging SEBI treated EBITDA (or gross profit) as revenue, particularly in relation to Switzerland-based subsidiary Valcambi SA. Rajesh Exports said it is addressing what it described as a confusion or communication gap and is confident it can clarify the matter by presenting relevant documents.

Another report stated the company would resubmit documents to SEBI within 15 days. Rajesh Mehta also said the company had not received any communication from the ministries at that point and maintained that the SEBI matter is separate from the PLI scheme, adding that the company is progressing under the scheme.

Why the ACC battery PLI link matters

Rajesh Exports has been under the watch of MHI, which administers the ₹18,100 crore National Programme on Advanced Chemistry Cell Battery Storage. Being a beneficiary under this scheme can be important for companies planning battery manufacturing investments, where incentives are tied to approved plans and performance conditions.

The potential removal of Rajesh Exports from the PLI beneficiary list would represent an administrative and reputational setback at a time when SEBI’s interim order has raised governance questions. One report also noted that the potential loss of the PLI beneficiary tag could leave the company’s battery division entities without the promised subsidies intended to offset capital expenditure, referencing Elest Pvt Ltd and ACC Energy Storage Pvt Ltd.

Wider government scrutiny beyond MHI

In addition to MHI’s review, another report said the Ministry of Corporate Affairs (MCA) is in touch with SEBI and may take an appropriate decision soon. The report added that MCA may ask the relevant Registrar of Companies to undertake an inspection of the company, if required.

Officials quoted in the same reporting said that, for the moment, SEBI is taking the lead in the case. Any further action by MCA would be separate from SEBI’s market-regulatory process but linked to the same set of concerns around corporate governance and disclosures.

Market impact and investor context

One report described a market sell-off and said the stock is down over 50% year-on-year. The same coverage linked this to the governance issues flagged by SEBI and the restriction placed on the chairman’s trading in the company’s securities.

At this stage, the key market variables are procedural rather than financial guidance: the status of the forensic audit ordered by SEBI, the company’s submissions and responses to the regulator, and the MHI decision on PLI beneficiary status. The regulatory steps are central because they affect both investor confidence and the company’s standing in a flagship incentive framework.

Key facts at a glance

What to watch next

The next near-term trigger is MHI’s decision on whether Rajesh Exports remains on the ACC battery PLI beneficiary list, with the matter expected to be placed before the Heavy Industries Minister. In parallel, the process initiated by SEBI will continue, including the ordered forensic audit and the company’s submissions to the regulator.

Rajesh Exports has denied wrongdoing and said it is cooperating. The outcome will depend on the findings of SEBI’s ongoing proceedings and how the government evaluates eligibility and reputational considerations under the ACC PLI framework.