By FMTeam In a decisive move to uphold market integrity, the Securities and Exchange Board of India (SEBI) has barred Pacheli Industrial Finance Limited (PIFL) and six associated entities from accessing the securities market. This action stems from allegations of a ‘pump-and-dump’ scheme and irregularities in a ₹850 crore preferential allotment.
Unusual Stock Price Surge
SEBI initiated an examination after observing an extraordinary surge in PIFL’s stock price. Between December 9, 2024, and January 16, 2025, the company’s share price escalated from ₹21 to ₹78 per share, marking a 372% increase. This rapid appreciation led to a price-to-earnings (P/E) ratio exceeding 4,05,000, a figure starkly disproportionate to the company’s financial performance.
Financial Discrepancies
A closer inspection of PIFL’s financials revealed inconsistencies. The company reported no operating income in the fiscal years 2021-22 and 2022-23. The marginal operating revenue of ₹1.07 crore in FY 2023-24 was primarily attributed to bad debt recovery and interest income from loans, rather than core business operations.
Preferential Allotment Concerns
Further scrutiny uncovered that PIFL had undertaken a preferential allotment amounting to ₹850 crore. SEBI’s investigation suggests that this allotment was part of a deliberate strategy to inflate the company’s share capital by allocating shares to connected entities without genuine consideration, thereby diluting the value for existing public investors.
Entities Barred
In addition to PIFL, SEBI has barred the following entities from the securities market:
- Pacheli Enterprises Limited
- Pacheli Global Finance Limited
- Pacheli Asset Management Limited
- Pacheli Leasing and Finance Limited
- Pacheli Technologies Limited
- Pacheli Infrastructure Limited
These entities are alleged to have acted in concert with PIFL in executing the dubious financial activities under investigation.
Regulatory Measures
SEBI’s interim order prohibits these entities from buying, selling, or otherwise dealing in securities, directly or indirectly, until further notice. This measure aims to prevent any further potential misuse of the securities market and to protect investor interests during the ongoing investigation.
Market Implications
The regulator’s swift action serves as a stern warning against market manipulation practices. By addressing such irregularities promptly, SEBI reinforces its commitment to maintaining transparency and fairness in the Indian securities market. Investors are advised to exercise due diligence and remain vigilant, especially when confronted with atypical stock movements that lack fundamental justification.
Company’s Response
As of this report, Pacheli Industrial Finance Limited and the associated entities have not issued any public statements regarding SEBI’s order. Stakeholders and market participants await further developments as the investigation progresses.
This incident underscores the critical role of regulatory bodies in monitoring and curbing financial misconduct, ensuring that the securities market operates on principles of equity and integrity.