With a market cap of Rs. 12,520.2 crores, the shares of a company primarily involved in the business of infrastructure activities hit a 5 percent lower circuit on BSE, settling at Rs. 1,236.45 on Friday.
The stock was subsequently suspended by SEBI until further notice due to suspicious price movements and allegations of financial misrepresentation.
What’s the news:
The Securities and Exchange Board of India (SEBI) has suspended trading in shares of Bharat Global Developers Limited until further notice. SEBI issued an interim order against the company as well as 47 notices.
Additionally, SEBI has barred the company’s promoters from accessing the capital markets until further orders are issued.
This action follows complaints and social media posts from 16th December 2024, highlighting concerns about suspicious financial activities and inadequate disclosures by Bharat Global Developers. The complaints alleged that the company misrepresented its financial condition and business operations.
The stock gained attention after delivering remarkable returns of more than 2,100 percent in just 11 months, rising to Rs. 1,702.95 in November 2024 from a 52-week low of Rs. 50.43 in December 2023.
The market regulator has taken strict action by impounding the assets of involved entities and freezing their bank accounts. A detailed investigation into the alleged fraudulent scheme has been ordered, with a deadline of March 2025.
SEBI’s order highlights serious allegations, including artificially inflating the stock price through a “pump and dump” scheme, misleading disclosures about the company’s business operations, and fabricating high-value orders.
The rise in Bharat Global’s share price was allegedly planned to benefit select preferential allottees by using false financial information and misleading disclosures.
Suspiciously, on 30th October, just one day before the lock-in period for the preferential allotment ended, the company announced plans to establish six new subsidiaries.
Recent Work Orders:
On 11th December, BGDL’s agro division secured an annual supply contract worth Rs. 650 crores with TATA Agro & Consumer Products for the continuous supply of premium agricultural commodities, including tea leaves, coffee beans, organic pulses, and dry fruits.
On 21st November, the company’s Dubai-based wholly-owned subsidiary secured multiple orders, valued at ~Rs. 251 crores, to process and supply high-value precious stones, including diamonds, rubies, emeralds, and sapphires, to leading wholesalers and custom designer jewellery boutiques.
Recently, it also claimed to have completed a Rs. 120 crore order for Reliance Industries Limited (RIL), although it was earlier incorrectly reported as a Rs. 300 crore order.
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Financials:
The company reported no revenue, expenses, or cash flow until December 2023. However, its financial results for the March 2024 quarter showed a sudden spike in both revenue and expenses. Following a management overhaul in December 2023, the company claimed to have expanded its business, issued sizable preferential allotments, and secured high-value deals.
On a quarter-on-quarter basis, the company reported a growth in revenue from operations by nearly 300 percent, rising from Rs. 54 crores in Q1 FY25 to Rs. 216 crores in Q2 FY25, while its net profit increased from Rs. 3 crores to Rs. 10 crores, representing a rise of around 233.3 percent QoQ.
Previous News:
On 18th November, the Board of Bharat Global Developers Limited approved the issue of bonus shares and stock split in an 8:10 and 1:10 ratio respectively, fixing Thursday, 26th December, as the record date. However, following SEBI’s order, these corporate actions have also been put on hold.
About the company:
Incorporated in 1992, Bharat Global Developers Limited, formerly known as Kkrrafton Developers Limited, is engaged in the business activities of construction of buildings carried out on an own-account basis or on a fee or contract basis.
The company specialises in sourcing, importing, and exporting a wide range of products spanning industries such as textile, agriculture, consumer goods, and more.
Written by Shivani Singh
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