The Securities and Exchange Board of India (SEBI) has initiated regulatory action against Elitecon International Ltd after finding prima facie evidence that the company's shares were manipulated through a classic pump-and-dump scheme.
The market regulator has observed that Elitecon's stock price surged more than 60 times within a short span before collapsing sharply, a pattern SEBI said was consistent with manipulative trading activity. The rally was allegedly accompanied by coordinated trades and fund transfers among promoters and connected entities.
SEBI noted that the company's reported financial performance also showed extreme and unexplained growth. Elitecon's revenue was found to have jumped nearly 686 times over a two-year period. The most significant absolute increase occurred during the September 2025 quarter, where revenue surged from Rs 525 crores in the preceding June 2025 quarter to Rs 2,195.8 crores in the September quarter.
Investigators have flagged what they described as fake or minimal business activity, combined with misleading corporate announcements that may have been used to lure retail investors into the stock during its upward surge.
The regulator further alleged that insiders offloaded shares at elevated levels. Promoter Vipin Sharma has been identified as a key seller during the peak trading period, when volumes and prices were at their highest. SEBI has also accused the company of serious disclosure lapses. Elitecon allegedly failed to inform shareholders in a timely manner about a Rs 408 crore Goods and Services Tax (GST) action, while other material developments were either delayed or not disclosed at all, potentially depriving investors of crucial information.
SEBI has said that the investigation is ongoing and that a detailed examination of trading patterns, financial statements and inter-entity linkages is underway. A final order, including potential penalties and market bans, is expected after the investigation is completed and due process is followed.
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