Rajesh Exports, a Bangalore-based gold jewelry retailer, has seen its stock value dwindle by almost 70% since its peak last year. Despite this significant decline, the state-owned Life Insurance Corporation of India (LIC) maintains its approximately 10% stake in the company.
Over the past year, Rajesh Exports has faced numerous challenges, leading to a sharp decline in its shares by over 50%. These challenges stem from a range of controversies and financial setbacks. From its peak of Rs 946.85 in February 2023, the stock has plummeted by 67% and currently trades at Rs 306.60, with a market capitalization of Rs 9,077 crore.
The company has been embroiled in various compliance-related issues, including instances of missing documents during earnings filings and tax-related controversies, alongside a noticeable decline in revenues.
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In 2023, the National Stock Exchange (NSE) requested clarification from Rajesh Exports regarding its failure to disclose its cash-flow statement for FY23. Media reports suggested that the company had omitted half-year cash-flow statements and proper audit reports along with quarterly results for the period ending September 2023.
Furthermore, in a separate incident dating back to 2013, a non-bailable arrest warrant was issued against Prashant Mehta, the Managing Director of Rajesh Exports, in connection with a case alleging the sale of gold jewelry meant for export in the domestic market.
Despite ongoing governance challenges, Life Insurance Corporation of India (LIC) maintains a stake of approximately 10.8% in Rajesh Exports, marking a marginal decrease from 10.9% recorded in December 2023. Notably, no other domestic institution holds shares in the company, and it lacks coverage from prominent brokerage firms. Meanwhile, the majority of ownership, at around 54.55%, remains with the promoters, while foreign institutional investors (FIIs), such as Bridge India Fund, hold approximately 15.8%.
Rajesh Exports continues to face consecutive quarters of financial decline, with revenues dropping by 31% year-on-year in Q3FY24, highlighting persistent challenges in its operational performance.
Sources: moneycontrol.com
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