Rajesh Exports Faces Investigation by Sebi Over ₹770 Crore in Exposures to Retail, LIC Investors

Financial Irregularities Found in Rajesh Exports' Books

The Securities and Exchange Board of India (SEBI) has found financial irregularities in the books of jewelery maker Rajesh Exports, with the company's promoter inflating revenue scales over the years through unverified overseas entities. The regulator's 109-page order details how Rajesh Exports and its promoter have misrepresented numbers on their books, leading to a significant erosion of investor wealth.

Market Reaction

Following SEBI's order, Rajesh Exports' share price came under intense selling pressure on Thursday, June 4. The small-cap stock hit the day's low of ₹104.65, a 5% lower price band against its last closing price of ₹110.15 per share. As of 11:12 am, some 3.35 lakh shares were up for sale on the BSE, while another 20.61 lakh shares were up for sale on the National Stock Exchange.

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Investor Wealth Erosion

Data from the NSE shows that Rajesh Exports' share price has crashed 42% in 2026 so far, 49% in a year, 82% in three years, and 81% in five years. The company's market capitalization has eroded ₹27,999.21 crore since its peak in February 2023, resulting in a substantial dent to public investor wealth of approximately ₹12,725.53 crore.

SEBI's Order

SEBI's order stated that following the non-filing of cash flow statements for FY 2022-23, Rajesh Exports' share price has been in a continuous downtrend since June 2023 onwards. The share price eventually declined to ₹80.11 on April 2, 2026, corresponding to a market capitalization of approximately ₹2,365.33 crore.

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Stakeholders at Risk

Marquee names like Life Insurance Corporation of India (LIC) and 194,110 retail investors own a substantial stake in the firm, putting them at risk of further erosion in the value of their shareholding. As of March 2026, LIC held 3,18,75,887 shares or a 10.8% stake in the company worth ₹333.58 crore at today's price of ₹104.65. Retail investors own 4,17,32,856 shares, representing a 14.13% stake, amounting to ₹436.73 crore.

Expert Analysis

Mahesh Ojha, VP - Research and Business Development at Kantilal Chhaganlal Securities, advised investors to examine balance sheets, cash flows, and promoter track records closely before investing. He noted that weak operating cash flows despite strong reported earnings can be an important red flag.

Investor Exit

In the current backdrop, investors are looking to exit the small-cap stock but are not finding any buyers, as evident in the market depth on the BSE and NSE. G Chokkalingam, Founder, Equionomics Research, noted that if a regulator itself raises serious concerns about a company's financial reporting or governance practices, the implications can be significant.