Rajesh Exports Faces Regulatory Scrutiny Over Revenue Discrepancies
The curious case of Rajesh Exports: Massive revenues, meagre profits
Image: The Economic Times
Rajesh Exports, India's fourth-largest company by revenue, is under investigation by the Securities and Exchange Board of India (SEBI) for alleged financial misconduct, including accounting irregularities and siphoning funds. The company reported revenues of ₹4.23 lakh crore but only ₹95 crore in profit, raising concerns about its financial practices.
- 01Rajesh Exports reported a revenue of ₹4.23 lakh crore for fiscal 2025 but only ₹95 crore in profit, resulting in a net margin of 0.02%.
- 02SEBI's investigation revealed that 97-99% of the company's revenues were attributed to overseas subsidiaries, particularly Valcambi, which did not recognize gold as revenue.
- 03The company is accused of misreporting revenues, with transactions recorded as corporate sales that were actually personal trades by promoter Rajesh Mehta.
- 04Regulatory filings indicated that REL transferred ₹338.90 crore directly to Mehta's personal accounts between April 2020 and September 2025.
- 05Despite its size, Rajesh Exports did not hold analyst calls, raising governance concerns among investors.
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Rajesh Exports Limited (REL), a significant player in the precious metals sector, is under investigation by the Securities and Exchange Board of India (SEBI) for alleged financial misconduct. The investigation uncovered serious issues, including accounting irregularities and the misappropriation of funds into personal accounts of the company's promoter, Rajesh Mehta. SEBI's report highlighted that REL's reported revenues of ₹4.23 lakh crore for fiscal 2025 were misleading, with a mere ₹95 crore in profit, indicating a net margin of only 0.02%. The majority of REL's revenue was attributed to its overseas subsidiaries, particularly Valcambi, which, according to its own audited accounts, only recorded processing fees and did not recognize gold as revenue. Furthermore, the investigation revealed that significant sales figures were actually personal gold trades by Mehta, disguised as corporate transactions. The company's governance practices have also been called into question, as it failed to hold analyst calls despite its market capitalization peaking at ₹25,000 crore. As of the latest trading session, REL's shares closed down 5% at ₹103.92.
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The investigation into Rajesh Exports could impact investor confidence and market perceptions of corporate governance in India, particularly in the precious metals sector.
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