The Securities and Exchange Board of India (SEBI) has issued 47 notices and an interim order against Bharat Global Developers Ltd., thus stopping trading in the company’s shares pending further instructions. Additionally, the capital markets watchdog has prohibited the company’s promoters from using the financial markets until further directives.
Sebi issued its ruling after reviewing complaints and social media posts from December 16, 2024. The allegations concerned Bharat Global Developers’ dubious financials and disclosures. The company was accused of misrepresenting the actual financial situation of the business and its operations.
Bharat Global Developers’ stock was in the news as it produced an incredible 3,350 per cent return in just 11 months, going from its 52-week low of Rs 49.45 in December 2023 to Rs 1,702.95 in November 2024. On Friday, the stock touched a lower circuit of 5% and ended at Rs 1,236.45. The stock has plummeted more than 27% since its peak.
As of its last closure, Bharat Global Developers had a market capitalization of over 12,500 crores, but its free-float was only Rs 125.20 crore or 1% of the entire mcap. The stock, which was formerly worth Rs 14 in January 2022, has increased by 8,730 per cent since then. In less than two years, it was pumped 121 times, or 12,065 per cent, at its highest point.
Bank accounts will be frozen and the involved entities’ assets will be seized. By March 2025, Sebi had ordered a thorough inquiry into the illegal scheme. A ‘pump and dump’ following fraudulent business disclosures and high-value orders, as well as an inflated share price, are the major accusations.
It’s interesting to note that until the fiscal year 2023–2024, the company had no revenue, spending, fixed costs, or cash flows. However, the March 2024 quarter financial reports reveal a sharp increase in both. Following a management change in December 2023, the company allegedly “reported” corporate expansion, a significant amount of preferential allocation, high-value acquisitions, and more.
Just one day before the lock-in period for the business’s preferred allocation ended, on October 30, the corporation “suspiciously” declared that it was setting up six new arms. Recently, the company revealed that it was competing for a Rs 120 crore contract from Reliance Industries Ltd (RIL), which was previously “mistakenly” stated to be a Rs 300 crore deal.
Bonus shares and a stock split were announced by Bharat Global Developers. Bonus shares were scheduled to be issued by the corporation in 8:10 and 1:10 ratios, respectively. The record date for this corporate action was set by the corporation for Thursday, December 26. But in response to Sebi’s directive, this action has also been stopped.
