Rajesh Exports drops 5% as SEBI flags FY21-25

Stock hits lower circuit after SEBI interim order

Rajesh Exports Ltd shares fell sharply after the Securities and Exchange Board of India (SEBI) issued an interim order alleging serious irregularities in the company’s financial reporting. The stock hit a 5% lower circuit on the BSE at ₹104.65 in early trade. On the NSE, the stock fell 4.99% to ₹103.92. The market reaction reflected heightened uncertainty after SEBI raised questions over the authenticity of the company’s reported numbers. Investors responded with heavy selling, pushing the stock to its circuit limit. The company is listed on both BSE and NSE and is described in the reports as a jewellery maker, gold refiner and exporter.

What SEBI alleged: possible revenue inflation at scale

SEBI’s interim order alleged “large-scale” financial irregularities and possible revenue inflation over multiple years. The regulator said a forensic review found prima facie evidence suggesting that nearly 97-99% of the company’s reported revenue may have been inflated, calling the findings “egregious and unheard of.” In another disclosure within the same coverage, SEBI alleged the company overstated its scale of operations through overseas subsidiaries. The alleged revenue misrepresentation was quantified at about ₹1,515,000 crore (₹15.15 lakh crore) during FY21 to FY25, described as nearly 99.8% of the company’s reported subsidiary revenue over that period. The order also highlighted concerns around transactions involving certain overseas entities and questioned whether the reported turnover reflected underlying economic activity.

Promoter market ban and restrictions on dealing in securities

A key part of SEBI’s interim action was a trading restraint on promoter Rajesh Mehta. The regulator barred Mehta from buying, selling or otherwise dealing in the securities of Rajesh Exports until further orders. Some reports also stated that SEBI temporarily restrained the company and its promoter from accessing the securities market pending completion of the investigation. The action, even though interim, is significant because it directly restricts the promoter’s ability to transact in the listed shares. SEBI also directed the company to ensure “true and fair” disclosure of its financial statements and related-party transactions. These directions indicate that the regulator is focusing not only on reported revenue numbers but also on the quality of disclosures and compliance processes.

Probe trigger: shareholder complaint and ongoing investigation

The interim proceedings stem from an investigation that began after a shareholder complaint about the company’s financial reporting practices, according to the provided material. SEBI’s order noted non-cooperation as an issue during the ongoing investigation. The regulator has sought more records and information to test the claims identified in the forensic review. Because the order is interim, SEBI has not reached a final conclusion at this stage. Rajesh Exports is expected to get an opportunity to present its response before the regulator passes a final order. Until then, the market is reacting to the seriousness of the allegations and the restrictions imposed.

Fresh forensic audit and a 30-day deadline for information

SEBI directed Rajesh Exports to provide all pending information sought by investigators within 30 days. The regulator also ordered the appointment of a fresh forensic auditor to conduct a more detailed review of the company’s books and transactions. The move suggests SEBI wants a broader and deeper examination beyond the earlier review that raised red flags. The order also directed the company to extend full cooperation to investigators. Such directions typically include timely submission of documents and data, and responding to regulatory queries. The stated aim, as reflected in the coverage, is to ensure accurate disclosures and clarity on related-party and overseas transactions.

Fund diversion allegations and shareholder wealth erosion estimate

Beyond revenue inflation, SEBI also alleged diversion of funds without required approvals and disclosures. The regulator alleged that Rajesh Exports routed ₹339 crore of company funds to accounts linked to promoter Rajesh Mehta, including for his personal derivative trades. SEBI said the alleged transfers were made without board or audit committee approvals and without proper related-party disclosures. Separately, SEBI estimated that the alleged misrepresentation and diversion resulted in shareholder wealth erosion of ₹12,726 crore, including for retail investors. These figures, as cited in the reports, became an important part of investor concern because they connect financial reporting issues to potential market losses. The company’s final response and SEBI’s eventual findings will determine what enforcement actions follow.

Market performance context: six-month, one-week and 52-week moves

Rajesh Exports’ decline on the day of the SEBI order came on top of a longer period of weak price performance cited in the coverage. At the lower circuit level of ₹104.65, the stock was reported to be down 44.63% over the past six months. Over the past one week, shares were reported to have declined nearly 10% on the BSE. The stock was also stated to be down about 54% from its 52-week high of ₹239 hit on December 22, 2025. Another reference in the provided text noted that the shares have lost more than 80% of their value over the past three years. These reported moves underline why the interim order intensified scrutiny from investors.

Key facts snapshot

Market impact and why the interim order matters

The immediate market impact was a sharp sell-off and the stock locking at its lower circuit limit, indicating a sudden imbalance between sellers and buyers. The allegations focus on the credibility of the company’s reported financials, which is a core input for valuations and investor confidence. SEBI’s emphasis on overseas entities and subsidiary turnover also signals that the regulator is scrutinising cross-border structures and the economic substance behind reported numbers. The direction to provide pending information within 30 days sets a near-term compliance clock that investors will track. The appointment of a new forensic auditor points to a longer investigative process, not a quick closure. Because the order is interim, the next meaningful milestones are the company’s submissions, audit findings, and SEBI’s final conclusions.

What comes next

SEBI’s interim order keeps the proceedings open and the investigation ongoing. Rajesh Exports is expected to be given an opportunity to respond before SEBI reaches a final conclusion. In the near term, investors are likely to monitor whether the company submits the requested information within the 30-day timeline and how the fresh forensic audit progresses. The trading restraint on promoter Rajesh Mehta will remain in place until further orders, as reported. Any subsequent SEBI communication, including additional directions or a final order, is likely to drive the next major re-rating in the stock. Until then, the stock’s movement may continue to reflect the uncertainty created by the interim regulatory action.