NDTV Profit Impact: SEBI Exposes 'Zero-Revenue' LS Industries’ Rs 5,500-Crore Valuation As Stock Scam

The Securities and Exchange Board of India on Tuesday barred LS Industries Ltd., its promoter Profound Finance, and four other entities from the securities market, for stock price manipulation.

The regulator first observed an article written on the website of NDTV Profit on Feb. 3 this year, flagging how a company with almost negligible revenue had a valuation of Rs 5,500 crore. The subsequent investigation by the regulator in the company's affairs uncovered suspicious trading patterns, misleading disclosures and transfers to an NRI.

Looking at the unusually high fluctuations of the company's share price, the regulator found that from July 23, 2024, it rose from Rs 22.50 per share to Rs 267.50 in just two months, an increase of 1,089%, before crashing to Rs 42.39 by November 2024.

It then rose again to Rs 136.87 in December 2024, before settling at Rs 67.95 in February 2025. SEBI found that a group of traders—Multiplier Share & Stock Advisors, Setu Securities, Paresh Dhirajlal Shah, and Ruchira Goyal—were behind this.

They placed large buy orders to create a price surge, then later dumped shares, triggering lower circuits and price crashes.

NDTV Profit also reached out to LS Industries, its promotor and auditor for a comment on the issue. However there was no response from them at the time of publishing this report.

The regulator also found that the company made a series of big announcements, such as entering artificial intelligence and robotics, hiring foreign directors, coming out with a Dubai subsidiary and even acquiring Robochef India Pvt. The directors of Robochef were found to have traded in the company's shares when the price was high.

In the detailed order by SEBI Whole Time Member Ashwani Bhatia, it is further mentioned that an investigation in the matter will have to be conducted expeditiously and concluded by May 15, 2025. The regulator also impounded an amount of Rs 1.14 crore as unlawful gains.

"At the same time, I deem it fit to sound a note of caution for the investors. It is noted that the investors at times act in a manner bereft of any caution or rationale," Bhatia said in the order.

"Investors in blind pursuit of profit through investment in a company without any fundamentals are like children following the proverbial pied-piper of Hamelin. Markets can be generous at times, but cannot be so generous to give outlandish gains," he said.