Bengaluru: Shares of Rajesh Exports continued to remain under intense selling pressure, hitting the 5% lower circuit for the second consecutive trading session following an interim order issued by Securities and Exchange Board of India (Sebi). The persistent decline reflects heightened investor concerns over regulatory scrutiny into alleged financial irregularities involving the company and its promoter-chairman Rajesh Mehta.

The stock dropped another 5% on Friday, extending Thursday’s losses when it had also been locked at the lower circuit limit. This sharp fall has significantly eroded investor wealth and brought the company’s market capitalisation down to approximately Rs 1,334 crore.

The sell-off marks a notable shift in sentiment for a company that has long reported exceptionally large revenues, running into several lakh crore rupees annually, and has positioned itself as a major global player in the gold refining and jewellery business.

Sebi order triggers investor concern

The immediate trigger for the steep decline is Sebi’s detailed 109-page interim order issued earlier this week. The regulator has restrained Rajesh Mehta from accessing the securities market and directed the appointment of a fresh forensic auditor to examine the company’s financial records.

Sebi’s action follows a prior forensic review initiated after a shareholder complaint raised questions about the company’s disclosures, particularly concerning large outstanding receivables and the scale of reported revenues.

In its interim findings, Sebi alleged that revenues amounting to approximately Rs 15.15 lakh crore attributed to subsidiaries between FY21 and FY25 may have been overstated. The regulator also observed that between 97% and 99% of the company’s consolidated income during this period originated from subsidiaries and overseas branches.

Additionally, Sebi noted that key financial data and transaction-level details related to certain foreign entities were not furnished despite repeated requests. While the findings are preliminary, the seriousness of the observations has unsettled investors.

A company of extraordinary scale

Rajesh Exports, headquartered in Bengaluru, operates across multiple segments including gold refining, jewellery manufacturing, exports, and retail. One of its most significant assets is Valcambi, a Switzerland-based refinery widely regarded as one of the largest gold refining facilities in the world.

The company acquired Valcambi in 2015 in a deal valued at around $400 million, significantly enhancing its global footprint. It also runs retail jewellery operations under the Shubh Jewellers brand, claiming a presence across the entire gold value chain.

What has consistently set Rajesh Exports apart is the sheer scale of its reported revenues. According to figures cited in Sebi’s order, the company reported consolidated revenue of nearly Rs 7.78 lakh crore in FY26, compared to about Rs 4.23 lakh crore in FY25.

However, despite these enormous revenue figures, profitability has remained modest. In the March 2026 quarter alone, the company posted revenue of Rs 2.36 lakh crore but reported a net loss of Rs 53.5 crore. This mismatch between high revenues and thin margins has long been a point of concern among analysts.

Company denies allegations

Rajesh Exports has strongly refuted Sebi’s observations, maintaining that its financial reporting is accurate and transparent. In an official statement issued after the interim order, the company emphasised that no final adverse conclusion has been reached by the regulator.

“The revenues declared by the company are correct and there is no overstatement,” the company stated. It further suggested that the issue may stem from a “communication gap and confusion” between the company and the regulator.

The company also confirmed that it is in the process of submitting all required documents and clarifications sought by Sebi. It expressed confidence that the regulator would arrive at the correct conclusion once all authenticated information is reviewed.

Market outlook and investor sentiment

For investors, the key concern now revolves around the uncertainty created by the ongoing investigation. As the Sebi order is interim in nature, Rajesh Exports will have an opportunity to present its case before any final decision is made.

However, until there is greater clarity, the stock is likely to remain under pressure. The back-to-back lower circuit hits indicate that market participants are adopting a cautious approach, factoring in regulatory risks and potential reputational damage.

Analysts suggest that the outcome of the forensic audit and Sebi’s final findings will play a crucial role in determining the company’s future trajectory. In the meantime, volatility in the stock is expected to persist.

Conclusion

The sharp decline in Rajesh Exports’ share price underscores the impact regulatory actions can have on market sentiment. While the company continues to defend its financial disclosures, the seriousness of Sebi’s allegations has raised significant concerns. Until the investigation concludes and clarity emerges, uncertainty is likely to remain a key overhang on the stock.