“Based on an article titled ‘Mystery of a Zero Revenue Company With Rs. 5500 Crore Market Valuation,’ ... SEBI decided to examine the matter.”

Sebi announces market ban on LS Industries, latest news: Watchdog for the stock market, the Securities and Exchange Board of India (SEBI), on Friday said that LS Industries, its promoter, and four others will remain barred from the securities markets until the results of a probe into allegations of malpractices and stock price manipulation come out.

"...hereby confirm the directions issued vide the interim order dated February 11, 2025," SEBI's whole-time member Ashwani Bhatia said in the confirmatory order.

SEBI also said the timeline to complete the investigation in this matter is extended to November 15.

LS Industries Limited, previously known as Lifestyle Fabrics Ltd. until 2009, is listed on BSE Ltd. (BSE). LS Industries Limited (LSIL or the Company) is a public limited company engaged in the textiles business. It was listed on BSE on November 17, 1994.

SEBI, in its February 11, 2025, interim order, said, “Based on an article titled ‘Mystery of a Zero Revenue Company With Rs. 5500 Crore Market Valuation,’ published in NDTV Profit on February 3, 2025, SEBI decided to examine the matter.”
 

It added, “A quick check on screener.in suggested that something was amiss. Since the price movement in the scrip of LS Industries Limited (LSIL) did not appear consistent with the reported financials of the company, the matter was taken up for examination.”

SEBI further wrote, “After the revocation of the suspension of trading in the scrip of LS Industries Limited, it was observed that the share price surged from Rs. 22.50 to a high of Rs. 267.50 between July 23, 2024, and September 27, 2024, marking an increase of 1089% in just over two months. Following this peak, the share price fell sharply to a low of Rs. 42.39 on November 21, 2024, representing a decline of 84.15% from its high. The price then began to rise again and, within one month, increased to Rs. 136.87 on December 23, 2024, which is a 223% increase from the recent low of Rs. 42.39.”

“As per the financial statements of LSIL published on the BSE website, it was observed that the company reported negligible revenue in the last three financial years as well as in the last three quarters ending on June 30, 2024 (Q1 FY25), September 30, 2024 (Q2 FY25), and December 31, 2024 (Q3 FY25).”

“LSIL reported negligible revenue and zero cost of material consumed and purchase of inventory during the period from FY22 to FY24, as well as for Q1, Q2, and Q3 of FY25. This indicates that the company was not conducting any business during this period. LSIL consistently reported losses, except for the quarter ending December 2024, when it reported a profit due to ‘Other Income.’”
 

“Furthermore, despite the negligible revenues reported by LSIL, its balance sheet showed huge amounts of trade receivables.”
“Corporate announcements by LSIL were also analyzed for the period from July 23, 2024, to February 4, 2025, as the financials did not seem to explain the dramatic rise in the stock price.”

In its interim order, Profound Finance (promoter of LSIL), Jahangir Panikkaveettil Perumbarambathu, Suresh Goyal, Alka Sahni, and Shashi Kant Sahni HUF (a Dubai-based NRI public shareholder) are barred from buying, selling, or dealing in LS Industries shares.
 

SEBI alleged unlawful gains of Rs. 1,14,01,135 by Jahangir Panikkaveettil Perumbarambathu from share sales have been frozen.