Securities and Exchange Board of India (Sebi) has suspended trading in shares of Bharat Global Developers Ltd until further orders as it issues an interim order against the company and 47 notices. The capital markets watchdog has also banned the promoters of the company from accessing capital markets till further orders.
Sebi's order came after it took note of social media posts and complaints dated December 16, 2024. The complaints were made with respect to suspicious financials and disclosure by Bharat Global Developers. The complaints were held against the company for misinterpreting the true state of financials of the company and its business.
Shares of Bharat Global Developers came under the spotlight after the stock delivered an astronomical return of 3,350 per cent in just 11 months, rising to Rs 1,702.95 in November 2024 from its 52-week low at Rs 49.45 hit in December 2023. The stock settled at Rs 1,236.45 on Friday, hitting a lower circuit of 5 per cent. The stock has crashed over 27 per cent from its peak.
Bharat Global Developers commanded a total market capitalization of more than 12,500 crore as of its previous close, while its free-float stood at Rs 125.20 crore, just one per cent of the total mcap. Once a penny stock valued at Rs 14 in January 2022, the stock is up 8,730 per cent from those levels. At its peak, it was pumped 121 times or 12,065 per cent in less than two years.
Assets of involved entities are impounded and bank accounts shall be frozen. Sebi has directed detailed investigation into the fraudulent scheme by March 2025. There are serious allegations of inflated share price and 'pump and dump' after false disclosures about business and high value orders.
Interestingly, the company held no revenue, expenses, fixed and cash flows until financial year 2023-24, the financial results for from March 2024 quarter shows a sudden spike in revenues and expenses. The company allegedly 'reported' business expansion, sizable preferential allotment, high value deals and more post management overhaul in December 2023.
The company 'suspiciously' announced to set up 6 new arms on October 30, just one day before the expiry of lock-in for the preferential allotment of the company. The company has recently announced the competition of Rs 120 crore order from Reliance Industries Ltd (RIL), which was also 'mistakenly' mentioned as Rs 300 crore order earlier.
Bharat Global Developers had announced the issue of bonus shares and stock split. The company was set to issue bonus shares in 8:10 and 1:10 ratio respectively. The company had fixed the record date for this corporate action at Thursday, December 26. However, this action has also been halted, following Sebi's order.