The share price of Rajesh Exports came under heavy selling pressure today (June 4) after market regulator SEBI issued an interim order alleging large-scale financial irregularities at the company. The company has now issued a clarification stating that the “order is interim and there has been no adverse conclusion on any aspect arrived by SEBI.”

Rajesh Exports share price slides 5% intra-day

In today’s trading session, the stock hit its 5% lower circuit as investors reacted to allegations involving revenue misstatements running into lakhs of crores and the alleged diversion of funds through overseas entities.

The regulatory action has also drawn attention to the company’s long-standing institutional investors, including Life Insurance Corporation of India (LIC), which continues to hold a significant stake in the jewellery exporter.

Let’s take a look at the key reasons why the share price of the company hit lower circuit today –

Why did Rajesh Exports shares fall?

Rajesh Exports shares came under heavy selling pressure after SEBI took action against the company and its chairman, Rajesh Mehta.

The market regulator SEBI has barred both Rajesh Exports and Rajesh Mehta from accessing the securities market until further notice.

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This latest development by the market regulator is part of an ongoing investigation into the company’s financial reporting and transactions involving its overseas subsidiaries.

According to SEBI’s interim order, the regulator’s preliminary findings suggest that the company may have overstated its revenues over several years.

The allegations relate mainly to the period between FY21 and FY25 and involve transactions carried out through foreign subsidiaries.

Rajesh Exports issues clarification – Responds to SEBI allegations

In its clarification, Rajesh Exports said, “The order is interim and there has been no any adverse conclusion on any aspect arrived by SEBI. The revenues declared by the company are correct and there is no over stating of revenues. There seems to be some type of communication gap and confusion between SEBI and the company.”

The company further added, “The company is in the process of clarifying all aspects to SEBI by submitting all the required and relevant documents. The company is confident that SEBI in its wisdom will clarify the situation and arrive at the correct conclusion based on the authenticated documents which are in the process of submission by the company.”

The Rs 15 lakh crore question

In the SEBI’s interim order, one of the key concerns raised is related to the company’s reported revenues.

According to the regulator, Rajesh Exports may have misrepresented subsidiary revenues worth nearly Rs 15.15 lakh crore over five years.

SEBI noted that a large share of the company’s consolidated revenue came from overseas subsidiaries, especially Switzerland-based Valcambi SA. “An entity in which REL Singapore Pte Ltd holds 95% and REL holds 5%. It is stated to be a holding company of Valcambi SA and not engaged in day to day business activities,” said SEBI order.

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However, the financial information available for these subsidiaries appeared inconsistent with the very large revenue figures reported in Rajesh Exports’ consolidated accounts.

Questions over revenue reporting

In addition to this, the capital market regulator SEBI has also raised concerns about the company’s standalone financial statements.

According to the interim order, some transactions may have been recorded in a way that inflated reported revenues.

The regulator has alleged that derivative transactions carried out by promoter Rajesh Mehta in his personal capacity were shown in the company’s books as business transactions. 

SEBI has also alleged that certain foreign exchange gains and interest income were classified as revenue.

“…REL had recorded foreign exchange fluctuations arising from revaluation of foreign currency creditors aggregating to Rs 716.18 crore as part of Purchases / Cost of Materials Consumed during FY 2020-21 to FY 2023-24,” added the SEBI’s order

According to the regulator, this may have further boosted the company’s reported sales figures.

Shareholding pattern of the Public shareholder

As per the latest shareholding pattern shared on the Rajesh Exports website, the total public shareholding is at 3,18,75,897.

Shareholding pattern data for the March 2026 quarter shows that Life Insurance Corporation of India (LIC) held 3,18,75,887 equity shares in Rajesh Exports. Apart from this, banks held only 10 equity shares.

Rajesh Exports Financial performance

For the March quarter (Q4FY26), Rajesh Exports reported a total income of Rs 2,37,104.8 crore, while its total expenses stood at Rs 2,37,144.7 crore.

Disclaimer: The regulatory actions and allegations mentioned in this report are based on an interim order issued by SEBI and are subject to final determination. This article constitutes straight corporate news and market analysis and does not provide personal financial or investment advice. Investors are advised to consult a SEBI-registered financial advisor before making any investment decisions regarding the stock mentioned. This disclaimer has been generated using AI to support user well-being and responsible content consumption.