Shares of Rajesh Exports Ltd. (REL) experienced a significant downturn, hitting a 5% lower circuit on Wednesday. The sharp decline followed an order from the Securities and Exchange Board of India (SEBI) for a forensic audit into the company's financial records.
SEBI's Directive and Market Impact
The market regulator's directive mandates an independent auditor to conduct a forensic examination of Rajesh Exports' financials. This scrutiny specifically targets the company's involvement in the Production Linked Incentive (PLI) scheme, particularly its award in 2022 for advanced chemistry cell (ACC) battery storage manufacturing.
Following the news, REL's stock price dropped to Rs 287.95 on the BSE and Rs 288 on the NSE, reflecting investor concerns over the regulatory action. The forensic audit aims to verify the company's compliance and accuracy in financial reporting related to the PLI scheme.
Understanding the PLI Scheme Connection
In 2022, Rajesh Exports was among several companies selected under the government's PLI scheme, designed to boost domestic manufacturing in strategic sectors. The company had announced plans to invest approximately Rs 50,000 crore to establish a 50 GWh ACC battery manufacturing unit. Under the scheme, REL secured a capacity of 10 GWh.
While SEBI has not yet disclosed any specific findings, the order for a forensic audit indicates a serious inquiry into the company's past dealings and financial disclosures concerning the substantial government incentive program. The outcome of this audit could have further implications for Rajesh Exports and its market standing.