Did retail give exits to NRIs, some FPIs in Rajesh Exports
Small investors piled up shares of the gold company over three years, even as its price sank.
A clutch of non-resident Indians (NRIs) and foreign portfolio investors (FPIs) divested a large chunk of their shareholding over the past three years at the expense of small retail shareholders in Rajesh Exports, the company in regulatory crosshairs for alleged misrepresentation of financial statements.
Interestingly, as these institutional and wealthy investors sharply pared their stakes, the company's share price plunged by a staggering 87% over three years through 30 March this year, for which the latest shareholding pattern is available.
Retail investors holding up to ₹2 lakh each held just 1.6% of the company's equity capital as of 31 March 2023. That quarter, NRIs held a 13.77% stake, and FPIs held a 17.60% stake.
A year later, retail shareholding jumped to 11.42%, while NRI holding plunged to 7.35%, and that of FPIs declined to 15.08%, according to exchange data.
By the quarter ending 30 March 2026 (FY26 end), retail holding stood at 14.13%, while NRI holding had plunged further to 5.27%, and FPI holding had declined to 14.25%.
Between March 2023 and March 2026, when retail raised their stakes in the gold jewellery manufacturer, and NRI and FPI sharply cut theirs, the REL scrip plummeted 87% to a five-year closing low of ₹80.38 by FY26-end from ₹610.10 by FY23-end, per Bloomberg data.
While the price has since recovered by nearly 30% through Thursday's close of ₹103.92, the Securities and Exchange Board of India's (Sebi’s) interim order alleging the company misrepresented its financial statements left the stock frozen at the 5% lower circuit throughout the entire trading session.
"This is a classic case of pump and dump by influential shareholders on the unsuspecting public," said Shriram Subramanian, founder and managing director of proxy advisory firm InGovern.
"L'affaire Rajesh Exports has all the telltale signs of a pump and dump operation," said senior securities lawyer Chirag Shah. "Surprising that it took a shareholder complaint as late as 2024 for Sebi to start an investigation. Retail shareholding has increased manifold, and 'smart' money has offloaded. Let's wait for the statutory auditors to come up with some novel excuses this time too and then seek immunity with impunity."
About the Author
Ram Sahgal is a deputy editor at Mint. He has over 20 years of experience in journalism, with previous roles at The Intelligent Investor, Bombay Times, The Economic Times, and The New Indian Express. Between his media roles, he briefly worked at a commodities exchange before returning to his true passion, business journalism. Ram graduated in liberal arts from St Xavier’s College, Mumbai, where he studied films, which explains his move to Bombay Times, where he covered the film industry during the rise of Sunny Deol and Sanjay Dutt. He took a leap of faith to transfer to The Economic Times, and thanks to his restless mind, later moved to cover the commodities beat. Over the past three years, Ram has been tracking the stock markets at Mint. His focus areas include writing about market infrastructure institutions, brokerages, derivatives, and related regulations. His hobbies include spotting trains and understanding the locomotives that power them. In his free time, he takes his octogenarian mother out for drives and goes to the cinema with her on weekends. If he has a dream, it is to write a screenplay for a movie. For now, he enjoys viewing market data on NSE and BSE, observing the shifting mood of Mr Market, and conversing with market experts.
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