Market Alert June 5, 20265 min read Business / Markets
Rajesh Exports Shares Hit 5% Lower Circuit for Second Day After SEBI Order
SEBI has accused India’s largest gold jewellery exporter of inflating nearly its entire revenue for five years. The promoter has been barred from markets and Rajesh Exports SEBI order. Here is a plain-language breakdown of what happened, what it means, and what comes next.
₹15.15L Cr
Alleged misrepresented revenue (FY21–FY25)
99.8%
Share of consolidated revenue allegedly overstated
−80%
Stock decline over last 3 years
−15%
Weekly fall vs Nifty 50’s −2%
Table of Contents
What is happening with Rajesh Exports?
Rajesh Exports, a Bengaluru-based company and one of the world’s largest manufacturers and exporters of gold jewellery, has been hit with a landmark regulatory action. On June 3, 2026, the Securities and Exchange Board of India (SEBI) issued an interim order alleging that the company massively overstated its revenues over a five-year period from FY2021 to FY2025.
Following the order, the company’s stock fell 5% on two consecutive trading days, locking into the lower circuit at ₹103.92 on the NSE. To put that in perspective, the stock has now lost over 80% of its value compared to three years ago — a staggering collapse for a company that was once seen as a blue-chip in the jewellery sector.
How big is the alleged fraud? Breaking down the numbers
This is where the scale of the allegation becomes hard to digest. SEBI claims Rajesh Exports misrepresented revenues worth approximately ₹15,15,385 crore — that is over 15 lakh crore rupees — between FY21 and FY25. To put that number in context, India’s entire GDP is around ₹300 lakh crore. The alleged misrepresented amount makes up roughly 99.8% of the company’s total consolidated revenue reported during that period.
In simple terms: SEBI is saying that almost every rupee of revenue the company claimed over five years may not be real. The alleged revenue inflation ranged between 97% and 99% each year.
Between FY21 and FY25, SEBI says 97% to 99% of Rajesh Exports’ consolidated revenues were attributed to its overseas subsidiaries — with Switzerland-based gold refinery Valcambi SA (a key part of the group’s international operations) being the most significant source. The regulator’s concern is about whether these overseas revenues were genuine or merely circular/fictitious transactions.
What else did SEBI flag?
The interim order raised two additional red flags beyond the revenue misrepresentation:
1. Unverifiable gold mining investments in Africa
The company claimed investments of ₹1,035 crore in gold mining assets located in Africa. However, when SEBI asked for supporting documents — such as valuation reports, entity-wise breakdowns, and reconciliation statements — the company could not produce them. This has raised serious questions about whether these assets actually exist at the stated value.
2. Suspicious transactions with Affluence Shares and Stocks
SEBI also examined a series of transactions between Rajesh Exports and an entity called Affluence Shares and Stocks, where the company had recorded sales of ₹11,487 crore. The nature and legitimacy of these transactions are under investigation, and SEBI has flagged potential diversion of funds to the promoter’s personal accounts.
What action has SEBI taken?
In its interim order, SEBI has taken the following steps: The company’s chairman and managing director, Rajesh Mehta, has been barred from buying or selling Rajesh Exports’ securities and from accessing the securities market until the investigation is complete. The company has been directed to fully cooperate with investigative authorities and forensic auditors. Forensic auditor BDO, which was appointed to examine the company’s books, continues its work. SEBI has also asked the company to make fresh disclosures wherever required.
It is important to note that this is an interim order — meaning it is a preliminary step, not a final judgment. No adverse conclusion has been formally arrived at yet.
How did this case begin?
The story begins not with a journalist or a whistleblower, but with an ordinary shareholder. A complaint was filed with SEBI in March 2024, flagging that a large amount of trade receivables — money owed to the company by buyers — had been outstanding for over two years. This is a classic warning sign in accounting: if customers aren’t paying their bills for that long, it can suggest the sales weren’t real in the first place.
SEBI took the complaint seriously and launched a formal investigation in October 2024. It then brought in BDO, a globally recognised forensic audit firm, to dig into the company’s books. The results of that forensic audit form the backbone of SEBI’s current allegations.
What does the company say?
Rajesh Exports has pushed back firmly. In an official exchange filing, the company stated that the SEBI order is interim in nature and that no final adverse conclusion has been reached. The company has denied any overstatement of revenues and attributed the situation to what it called a “communication gap and confusion” between itself and SEBI. It says it is in the process of submitting all required documents to clarify its position.
The MD, Rajesh Mehta, has also gone on record saying “nothing in it is true,” referring to SEBI’s findings. The company also pointed out that on a standalone basis, its sales for the March 2026 quarter rose 27.48% year-on-year to ₹2,441 crore.
What does this mean for investors?
If you hold shares of Rajesh Exports, here is what you should understand. This is an interim SEBI order, not a final conviction. The company has the right to respond and present its case. That said, when 99.8% of revenues are alleged to be fictitious, the risk to the stock is extremely high regardless of the final outcome — markets price in uncertainty quickly, as the back-to-back lower circuits show. Shareholders should wait for the next formal update from SEBI or the company before making any decisions, and consider consulting a SEBI-registered financial advisor.
What happens next?
SEBI’s investigation is ongoing. The company will be given an opportunity to present its evidence and counter SEBI’s findings. If the allegations are upheld, the penalties could include permanent market bans, financial penalties, and potential criminal referrals. If the company successfully rebuts the charges, the interim restrictions could be lifted. Either way, this case is likely to take months to resolve, and the stock will likely remain under severe pressure until there is clarity.
This article is for informational purposes only and does not constitute investment advice. Please consult a qualified financial advisor before making any investment decisions.