Why SEBI Raised Red Flags On Rajesh Exports

The Rs 15 Lakh Crore Mystery Inside Rajesh Exports' Global Revenue Machine

By Sudarshan Bhandari and Nimish Maheshwari

What? 

For years, Rajesh Exports looked like one of India's greatest corporate success stories.

The Bengaluru-based company built its reputation as a global gold powerhouse, processing and exporting precious metals at a scale few Indian firms could match.

After it acquired Swiss refiner Valcambi in 2015, Rajesh Exports became an international player with ambitions stretching across the global bullion trade.

The numbers appeared to keep up with this narrative.

Between FY21 and FY26, Rajesh Exports reported annual consolidated revenue ranging from Rs 2.4 lakh crore to nearly Rs 7.8 lakh crore. At its peak, the company was reporting sales larger than many of India's most recognised industrial groups.

However, repeated non-compliance, as The Core had reported in January 2024, and a complaint filed months later, made regulators look at the company more critically.

Who were the customers behind all that revenue?

A 109-page interim order issued by SEBI said that roughly Rs 15.15 lakh crore of revenue reported through overseas subsidiaries over five financial years could not be reconciled with the audited financial statements of the Swiss business that sat at the heart of Rajesh Exports' global operations.

The company has denied all wrongdoing and said it will cooperate with a fresh forensic audit.

How Did We Get Here?

The acquisition of Swiss refiner Valcambi in 2015, one of the world's largest precious-metals refiners, gave Rajesh Exports a global footprint and an explanation for the extraordinary scale of revenue it would subsequently report.

By FY25, more than 98% of Rajesh Exports' consolidated revenue was being attributed to overseas subsidiaries. The Indian parent company itself remained relatively small, generating only a fraction of the group's reported turnover.

That structure was unusual but not necessarily problematic. The problem emerged when regulators attempted to verify the underlying business activity.

Valcambi's Swiss financial statements reportedly showed only processing income — the fees earned from refining precious metals for customers. The revenue reflected in those audited accounts was tiny compared with the enormous trading revenue appearing in Rajesh Exports' consolidated statements.

SEBI alleged that Rajesh Exports had access to Valcambi's audited financial statements but, for consolidation, relied on unaudited figures recorded by Global Gold Refineries instead.

The company has disputed the regulator's conclusions, but the discrepancy is so large that it transformed what might have been an accounting dispute into a governance crisis.

Why Does It Matter?

Once the discrepancy appeared, investigators moved to the obvious next step.

They sought customer-wise and vendor-wise information that could establish where the reported revenue originated.

According to the order, those details were not provided despite repeated requests.

Rajesh Exports argued that Swiss confidentiality obligations and data-protection laws restricted the sharing of certain information. SEBI examined those arguments and concluded they did not prevent the disclosure of corporate financial records required for regulatory verification.

As investigators dug deeper, other issues surfaced.

The entire episode raises larger questions on governance. How did this happen without being detected earlier?

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0.5%

That’s how much India's eight core infrastructure sectors grew in May, a seven-month low, down sharply from 1.2% growth a year earlier, according to government data released Monday, Business Standard reported.

The Lead: The May reading marked a slowdown from April's 1.8% growth. The eight core industries account for 40.27% of the weight of items in the Index of Industrial Production.

The decline was driven mainly by the energy sector: coal production fell 9.3%, crude oil output declined 4.6%, natural gas output fell 4.9%, and refinery products output dropped 8.7%. Fertiliser output also slipped 0.9% in May due to a raw-material crunch tied to the conflict in West Asia.

Forecast: Cement and steel bucked the trend, growing 8.4% and 5% respectively, aided by government infrastructure spending on highways, ports and railways, while electricity generation rose 8.7% on summer demand. Cumulative core sector growth for April-May stood at 1.1% year-on-year, suggesting a soft start to the fiscal year even as construction-linked industries held firm and energy output remained the weak link.

US-India Trade Talks Resume

India is pushing for a tariff advantage over regional rivals, Commerce Minister Piyush Goyal said Monday, as Washington's top trade negotiator prepares to land in New Delhi this week.

Setup: Goyal said negotiations are taking longer than expected because of the tariff currently imposed on Indian goods, even as New Delhi continues to seek preferential market access and a "comparative advantage" over competitors like Vietnam. He said he'd be "happy" to finalise a deal before July 24, when Washington's temporary 10% tariff on trading partners expires.

What’s Next: US Trade Representative Jamieson Greer will visit India on Tuesday for two days of talks, with New Delhi pushing for tariff terms better than regional peers as both sides try to seal a deal and mend strained ties, Reuters reported.

India is also seeking guarantees against fresh tariffs once a deal is signed, wary of further threats if talks stall, a government official said. Greer's office said the talks aim at "fair, balanced, and reciprocal trade," as both sides race to close a pact before the temporary tariff window closes.

India’s Sugar Export Era Pauses

India is unlikely to have a meaningful sugar export surplus for at least the next three seasons as weather risks and rising ethanol production squeeze domestic supplies, Reuters reported.

Trigger: Trade executives and industry officials told Reuters that as an emerging El Niño pattern threatens sugarcane yields, the government’s ethanol blending programme is diverting more cane away from sugar production. The combination is expected to leave little surplus for overseas markets.

Context: Once the world’s second-largest sugar exporter, India accounted for roughly 10% of global shipments, exporting an average 6.8 million tonnes annually through 2022-23. After allowing exports of only about 800,000 tonnes this season, New Delhi has barred further shipments until September-end.

The prolonged absence of Indian sugar could tighten global supplies and support prices, particularly as major producers such as Brazil and Thailand also face weather-related production risks.

Monsoon Revival Lifts Hopes

India's monsoon has regained momentum after stalling over western India for nearly two weeks, with rains set to push into central regions this week, aiding crop sowing and easing heat, weather officials said, according to a Reuters report.

Catch Up Quick: Maharashtra, Telangana, Chhattisgarh and Karnataka are now covered, and Mumbai is expected to receive rains within two days; the city had earlier rationed water to construction sites and cut industrial use by a fifth as reservoirs declined.

Forecast: Conditions are turning favourable for the monsoon to advance into central Maharashtra, Chhattisgarh, Telangana and Odisha, with rains strengthening over the west coast from next week. Still, June rainfall remains 42% below normal, among the weakest starts in years, comparable to 2019 and 2023, QuantEco Research noted.

With El Niño expected to strengthen through the season, reservoirs at 27.7% capacity and kharif sowing down 3.9% YoY, QuantEco projects near-flat FY27 agriculture GVA growth (0-1%) and FY27 CPI inflation at 5.1%, citing the asymmetric inflationary impact of rainfall deficits, partly offset by lower crude oil prices.

Recovery Still Out Of Reach

India's IT industry won't find relief soon. Accenture’s latest results suggest the demand recovery that many in IT services were waiting for remains elusive, said a note from Kotak Institutional Equities. Revenue growth landed at the midpoint of guidance, FY2026 guidance was trimmed to 3-4% from 4-5%, and bookings weakened, signalling that spending caution remains entrenched. Commentary on AI adoption was positive, but the optimism hasn't been reflected meaningfully in numbers.

Context: Fresh headwinds compounded the pressure. The West Asia conflict disrupted demand and delayed client decisions, while discretionary spending remained weak across sectors. Managed services bookings also deteriorated sharply, with book-to-bill slipping below 1x in the third quarter of FY26 — often seen as an indicator of softer demand ahead.

What Next? For Indian IT firms, the read-through remains difficult. Kotak Institutional Equities said Accenture’s results offer few positive cues as companies continue to grapple with slowing discretionary spending and AI-led disruption. Its aggressive acquisition push and expansion into the mid-market could also suggest confidence that a quick recovery remains limited.

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Lessons From The World’s Biggest IPO

On Episode 908 of The Core Report, financial journalist Govindraj Ethiraj talks to Garima Kapoor, Economist & Deputy Head of Research at Elara Securities (India) as well as Piyush Pandey, Senior Vice President, Lead Analyst-Institutional Equities for IT, Telecom, Internet and Power at Centrum India.

• Lessons From The World’s Biggest IPO

• Monsoons Have Now Recovered And Is Advancing, Says The IMD

• Near Term Risks For The Rupee Are Fading But There Are Longer Term Issues

• Where Do Analysts See Value In The Telecom Business Stack?

• Alan Greenspan, The Man Behind The Famous Irrational Exuberance Term Has Died