The Securities and Exchange Board of India (Sebi) has barred Elitecon International, its promoter-cum-Managing Director Vipin Sharma, and four others for alleged irregularities in financial statements, manipulation of stock price and volume, and misleading campaigns. In an ex-parte interim order, the markets regulator impounded a total of ₹51 crore, froze their bank accounts, and directed them to disclose details of all their assets within 15 days.
“I hold that this is a fit case to exercise powers of passing an interim order, pending conclusion of investigation, so as to insulate the securities market and to protect the unlawful profits made from being siphoned off, which may go beyond the regulatory reach.” Sebi Whole-Time Member (WTM) Kamlesh Chandra Varshey said in the order. The regulator said it will continue to investigate the matter.
Elitecon, formerly known as Kashiram Jain and Company, was incorporated in December 1987. It is engaged in the business of trading tobacco-based products and is known for its flagship brand ‘Kingsman’.
What did SEBI say in its statement?
Sebi noted that the company violated a series of clauses under Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations 2003, Sebi Act 1992, and Listing Obligations and Disclosure Requirements (LODR) Regulations 2015. Other four noticees are non-promoter Pawan Kumar Ray and three off-market transferees Gaurav Tyagi, Prabhakar Kumar, and Sujit Chaturvedi.
The regulator noted that the company provided misleading information to present inflated financials. It also suppressed details about major events such as show-cause notices from goods and services tax (GST) authorities, Food and Drug Administration’s seizure of inventories, and closure of registered offices by GST officials.
There was a substantial on-year growth in key financials in FY25 as well as the September quarter. On a standalone basis, Elitecon’s FY25 net profit increased almost seven times on year to ₹32.21 crore and revenue grew over five times to ₹297.51 crore. Similar ballooned figures were noted for the quarterly results too.
However, inspections by Sebi and BSE showed minimal manufacturing and operational activities. The regulator raised doubts about the authenticity of this growth, especially as there was a negative correlation between the rise in revenue and the fall in electricity consumption of the company.
While examining the shareholding pattern, the regulator also noted a significant decline in locked-in shares to 17.19% in October-December 2025 from 99% a quarter ago. Sebi alleged that Sharma offloaded shares worth ₹50 crores into an artificially inflated market via promotional activities and campaigns.
As soon as the lock-in period for preferential allottees expired, he and the company intensified the promotional activity to maintain enough liquidity in the market, enabling other allottees to exit at inflamed prices, as per the interim order. The number of public shareholders increased 1.4 times during the December quarter and 131 times in a single year till December 2025.
It also found heavy stake acquisition by promoter and promoter group between March 2019 and December 2021 to over 90% from around 14% and then a massive drop to 59% by the end of 2023. On Monday, shares of Elitecon closed almost 5% lower at ₹48.38 on the BSE at a market capitalisation of ₹7,730 crore. The stock has lost almost 90% of its value compared to its record high.