LIC Shares Under Pressure As SEBI Order Exposes Alleged Fraud At Rajesh Exports

Shares of Life Insurance Corporation of India (LIC) traded lower on Thursday morning as investors reacted to a major regulatory crackdown on gold jewelry manufacturer Rajesh Exports, where the state-run insurer holds a significant legacy stake.

On the NSE, LIC shares opened weak at ₹400.50 apiece, down from the previous close of ₹402.90. Heavy volumes dragged the stock to an intraday low of ₹397.60 during morning trade.

By 11:33 AM IST, the stock was trading at ₹399.40, marking a decline of 0.87%. Rajesh Exports locked into its 5% lower circuit limit with no buyers on the board.

SEBI Crackdown 

The selling pressure intensified after the Securities and Exchange Board of India (SEBI) released a 109-page ex-parte interim order on Wednesday evening. Passed by Whole-Time Member Kamlesh Chandra Varshney, the order alleged an "egregious" revenue misstatement of approximately ₹15.15 lakh crore at Rajesh Exports between FY21 and FY25.

The findings have cast a shadow on institutional backers. Latest exchange shareholding data reveals that LIC holds a substantial 10.80% equity stake in Rajesh Exports, leaving its public equity portfolio exposed to the fallout of the multi-year accounting probe.

Avoid Bottom-Fishing

Prominent domestic brokerages have rushed to caution retail clients. Institutional research desks at Angel One and financial advisory firm Univest issued morning notes advising investors to avoid bottom-fishing or average-buying into Rajesh Exports strictly.

The research teams noted that while LIC’s core insurance business and independent balance sheet fundamentals remain robust, its equity investment valuations will face short-term headwinds as SEBI expands its forensic audit into the jewelry exporter’s operations.

Also read: Why Market Regulator SEBI Cracked The Whip On Rajesh Exports