Rajesh Exports Shares Rebound After Massive Crash Amid SEBI Fraud Probe

After a brutal seven-day losing streak that wiped out 30% of its value, Rajesh Exports shares staged a recovery, hitting the upper circuit with a 5% jump on Monday. This sudden volatility follows a bombshell interim order from the Securities and Exchange Board of India (SEBI) regarding an alleged ₹15.15 lakh crore revenue inflation scandal.

The SEBI Investigation: A "97% Revenue Inflation" Allegation

The turmoil began when SEBI released an interim order following a shareholder complaint received in March 2024. According to the regulator’s forensic review, there is prima facie evidence suggesting that approximately 97% to 99% of the company's revenue may have been inflated. SEBI described these findings as "egregious and unheard of."

As part of the interim measures, the market regulator has restrained promoter Rajesh Mehta from buying, selling, or dealing in any securities of Rajesh Exports until further orders. The investigation aims to determine if the company's reported earnings matched its actual operational scale.

Rajesh Exports Responds: A "Communication Gap" Over EBITDA

The company has vehemently denied any wrongdoing, attributing the massive discrepancy to a fundamental misunderstanding of financial metrics. In an exchange filing, Rajesh Exports clarified that its declared revenues are accurate and that the perceived inflation is a result of a technical error in SEBI's assessment.

The company explained that the 97% difference arose because SEBI reportedly considered the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of Valcambi instead of the actual Revenue figures. "The core observation in the order is concerning the misreporting of the revenues... SEBI has considered the EBITDA of Valcambi instead of Revenue," the company stated, maintaining that the consolidated revenue remains correct.

Promoter Stance: No Intent to Legally Contest

Founder and Chairman Rajesh Mehta has maintained a cooperative stance with the regulator. In recent interviews, Mehta denied allegations that the company had impeded the audit process, asserting that all requested documents have been submitted.

Addressing the possibility of a legal battle against SEBI's directions, Mehta noted that since the interim order does not currently impose fines, penalties, or coercive actions, there is no immediate reason to challenge it. He expressed confidence that the submission of authenticated documents would reconcile the differences and lead to a correct conclusion.

A Devastating Impact on Market Valuation

Despite the recent 5% uptick to ₹80.23 on the NSE, the long-term outlook for the stock remains grim. The company's market capitalization has plummeted to ₹2,369 crore. The stock has faced a staggering 55% decline in 2026 so far and has lost 87% of its value over the last three years, reflecting deep investor anxiety regarding the ongoing regulatory scrutiny.

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