NEW DELHI: State-owned Life Insurance Corporation of India (LIC) holds over 10.80% stake in Rajesh Exports, the jewellery exporting firm which has come under the capital market regulator Securities and Exchange Board of India (SEBI)’s lens for jacking up revenue numbers and concealing important information.
Data available at the exchanges shows that LIC, which is also the country's largest institutional investor, has maintained a stake of 10.80%-11.18% since at least March 2023 even as Rajesh Exports’ shares have fallen by 49% in the last one year and crashed about 90% from its peak level of February 2023.
At current share prices of around Rs 104 and a m-cap of Rs 3,068 crore, the value of LIC holdings in Rajesh Exports stands at about Rs 340 crore.
Shareholding pattern data also shows that LIC is the sole domestic institutional investor (DII) to have an exposure in Rajesh Exports with Banks and Mutual Funds having nil holding.
The high exposure of LIC in the Bengaluru-based firm has led to sharp political reaction from the main opposition party. The Congress on Thursday questioned LIC's investment in Rajesh Exports and asked whether the acquisition of such a large holding was influenced by directions from the ruling establishment.
On the contrary, foreign institutional investors (FIIs), have trimmed their holdings in Rajesh Exports over the past few years, with overall FII ownership falling from 17.60% in March 2023 to 14.26% by March 2026. At the end of the March quarter, Bridge India Fund (8.46%) was the largest FII in the company. Promoter group, led by Rajesh Jasvantrai Mehta, hold 54.6% stake in the company while public holding stands at about 20.4%.
The SEBI has barred Rajesh Exports chairman and managing director Rajesh Mehta from the capital market, alleging large-scale financial misrepresentation, disclosure lapses and non-cooperation with an investigation into the company's financial statements.
Based on its preliminary findings, SEBI alleged that Rajesh Exports had misrepresented Rs 15.15 lakh crore of revenues attributable to subsidiaries during FY21-FY25, representing about 99.8% of such revenues. The regulator said the disclosures appeared to have presented an inflated and misleading picture of the group's operational scale and financial health to investors.
Rajesh Exports on Thursday denied any financial irregularities, saying its reported revenues were correct and that there seemed to be a communication gap between the markets regulator and the firm. It added that the order passed by SEBI is an Interim Order in which no conclusive adverse findings of any kind have been reported by the market regulator.
The market regulator's probe, covering the period from April 2020 to March 2024, was initiated after a shareholder complaint raised concerns over potential financial misrepresentation relating to large outstanding trade receivables. A key finding of the order relates to the company's overseas subsidiaries, particularly Swiss-based entities that account for the overwhelming majority of its consolidated business.