Potential Exit from ACC Battery PLI Scheme and SEBI's Serious Allegations Trigger Investor Panic

Shares of Rajesh Exports continued their sharp decline on Monday, hitting the lower circuit for the third consecutive trading session as investors reacted to mounting regulatory concerns and uncertainty surrounding the company's future growth plans. The stock has now lost nearly 15 per cent in just three trading days, reflecting growing anxiety among market participants over recent developments involving both the Ministry of Heavy Industries and market regulator SEBI.

The latest sell-off highlights how rapidly investor sentiment can deteriorate when questions emerge regarding corporate governance, regulatory compliance, and strategic business initiatives. While Rajesh Exports has strongly denied the allegations against it and pledged full cooperation with authorities, the market appears to be pricing in significant uncertainty until greater clarity emerges.

Stock Locked in Consecutive Lower Circuits

Rajesh Exports shares touched the 5 per cent lower circuit limit at ₹94.50 during Monday's trading session, extending a steep correction that has erased a substantial portion of shareholder wealth in recent weeks.

The stock is now trading far below its 52-week high of ₹239, underscoring the severity of the recent market reaction. Trading volumes have remained elevated as investors reassess the company's risk profile in light of the ongoing regulatory scrutiny.

Analysts note that sentiment-driven selling has intensified as concerns surrounding the company's battery business ambitions and financial disclosures continue to dominate headlines.

PLI Scheme Review Raises Questions Over EV Battery Plans

One of the biggest concerns for investors is the possibility that Rajesh Exports could lose its status as a beneficiary under the government's Production-Linked Incentive (PLI) scheme for Advanced Chemistry Cell (ACC) battery storage.

The ACC PLI scheme is a flagship initiative aimed at creating a domestic battery manufacturing ecosystem and reducing India's dependence on imported energy storage technologies. Rajesh Exports had been viewed as one of the beneficiaries expected to participate in India's rapidly growing electric vehicle and battery manufacturing sector.

Reports suggesting that the Ministry of Heavy Industries is considering removing the company from the scheme have raised concerns about the future viability of its battery expansion plans.

If such a decision is eventually taken, it could significantly affect the company's strategic diversification efforts beyond its traditional gold refining and jewellery export business.

SEBI's Interim Order Intensifies Scrutiny

The market's concerns were further amplified after SEBI issued a detailed interim order that raised serious allegations regarding financial reporting practices and transactions involving certain subsidiaries.

According to the regulator's observations, questions have been raised regarding reported revenues, related-party transactions, fund movements, and disclosure standards associated with entities connected to the company's lithium-ion battery business.

The order also directed a fresh forensic audit and imposed restrictions on promoter and Chairman Rajesh Mehta from dealing in the company's securities pending further proceedings.

While these observations remain subject to further investigation and legal review, the severity of the allegations has created uncertainty among investors and institutional stakeholders.

Company Denies Allegations

Rajesh Exports has strongly rejected the findings outlined in the interim regulatory order and has maintained that its financial statements accurately reflect its business operations.

The company has argued that inflating revenues while maintaining similar earnings levels would provide little economic benefit because it would lead to significantly lower profit margins, making such an exercise irrational from a commercial standpoint.

Management has reiterated its commitment to cooperating with regulators and has expressed confidence that the facts will ultimately support its position.

Investors, however, appear to be adopting a cautious approach until the investigation process is completed and regulatory clarity emerges.

Battery Business Was Seen as a Key Growth Driver

The battery manufacturing business had been considered one of the most important future growth opportunities for Rajesh Exports.

As India accelerates its transition toward electric mobility, renewable energy integration, and energy storage solutions, companies involved in battery manufacturing have attracted significant investor attention.

The company's entry into advanced chemistry cell manufacturing was viewed as a strategic move to diversify beyond its traditional gold and jewellery operations and participate in one of the fastest-growing industrial sectors globally.

Any disruption to these plans could alter long-term growth expectations and impact valuation assumptions used by investors.

Corporate Governance Concerns Take Center Stage

The recent developments once again highlight the importance of corporate governance, transparency, and disclosure standards in determining investor confidence.

Institutional investors increasingly place significant emphasis on governance practices, especially when evaluating companies operating in emerging sectors that require substantial capital investments and government support.

Market experts believe that the outcome of the ongoing regulatory proceedings could become a crucial case study for governance standards within India's listed corporate sector.

What Investors Should Watch Next

Several key developments are likely to determine the stock's future direction in the coming weeks.

Investors will closely monitor the Ministry of Heavy Industries' decision regarding the company's participation in the ACC battery PLI scheme. At the same time, further updates from SEBI's investigation and the findings of any forensic audit could significantly influence market sentiment.

Any clarification from management regarding operational performance, project execution timelines, and regulatory engagement will also be important for restoring investor confidence.