Shares of Rajesh Exports remained under heavy selling pressure on Friday, June 5, hitting a 5% lower circuit for the second straight trading session. The stock declined to ₹98.73 from its previous close of ₹103.92 as investors continued to react negatively to the recent interim order issued by the Securities and Exchange Board of India (SEBI).
The latest fall has taken the stock's cumulative decline to nearly 10% over the past two sessions, wiping out around ₹10 per share in market value since the regulator's action became public on June 3.
The lower circuit level of ₹98.73 is particularly significant as it marks the first time Rajesh Exports shares have slipped below the ₹100 mark. Market participants often view such round-number levels as important psychological support zones, and the breach highlights the severity of investor concerns surrounding the allegations.
The stock's sharp correction reflects worries about potential regulatory implications and the impact on the company's reputation, despite management's efforts to reassure shareholders.
In a statement issued on Thursday, Rajesh Exports strongly denied the allegations of revenue inflation mentioned in SEBI's interim order.
The company stated that the revenues reported in its financial statements are accurate and emphasized that the regulator's order is only interim in nature, with no final conclusions having been reached.
According to the company:
"There seems to be some type of communication gap and confusion between SEBI and the company. The company is in the process of clarifying all aspects to SEBI by submitting all the required and relevant documents."
Rajesh Exports further maintained that it is fully cooperating with the regulator and remains confident that the relevant documents will help clarify the issues raised.