Mutual Funds stayed away from Rajesh Exports, LIC didn’t

For at least a decade, India’s domestic institutional investors largely stayed away from Rajesh Exports. Mutual funds, which held a peak stake of just 0.5% in March 2016, have since exited completely. Private insurance companies hold no meaningful exposure either. LIC took a different view. The state-owned insurer increased its stake more than fivefold, from 1.99% in March 2016 to 11.22% by March 2022. As of March 2026, it still held 10.8% of the company. That ownership pattern is drawing fresh attention after SEBI’s interim order against Rajesh Exports. The regulator has alleged that the company prima facie overstated revenues by ₹15.15 lakh crore between FY21 and FY25. According to the order, between 97% and 99% of the company’s reported revenue came from overseas subsidiaries, particularly Swiss gold refiner Valcambi, where the regulator identified potential discrepancies. SEBI has barred promoter Rajesh Mehta from dealing in the company’s securities pending further proceedings and ordered a fresh forensic audit. Rajesh Exports has denied the allegations. The company argues that SEBI compared Valcambi’s EBITDA with its revenue figures, creating what it describes as a calculation error rather than evidence of misreporting. The case is far from settled. SEBI’s findings remain preliminary, and the company will have an opportunity to contest them. But the ownership data predates the order by years. For much of the last decade, private institutional capital appeared unconvinced by a company reporting enormous revenues while generating unusually thin margins. Yet during the same period, LIC steadily increased its exposure. That contrast now raises a broader question. When private institutions choose not to participate, what level of scrutiny should accompany the deployment of public money?