Shares of Rajesh Exports continued their recovery for the fifth straight trading session, gaining sharply after suffering a steep decline earlier this month following regulatory action by the Securities and Exchange Board of India (SEBI). The stock has risen nearly 28 percent from its recent low, reducing its decline from pre-order levels to around 11 percent.

The company's shares had plunged to a 52-week low after a seven-session losing streak triggered by SEBI's interim order issued on June 3. The regulator barred Rajesh Exports and its Chairman and Managing Director Rajesh Mehta from accessing the securities market pending an ongoing investigation.

SEBI has alleged that Rajesh Exports significantly overstated its consolidated revenue between FY21 and FY25, with the alleged misrepresentation amounting to approximately ₹15.15 lakh crore. The regulator's findings relate to revenue reported through overseas entities and have led to a forensic examination of the company's financial records.

The allegations triggered heavy selling pressure in the stock, resulting in multiple lower-circuit sessions and a decline of nearly 30 percent over seven trading days. Investor sentiment was impacted by concerns surrounding corporate governance, financial reporting practices, and the potential implications of the ongoing regulatory probe.

Rajesh Exports has denied any wrongdoing and stated that its financial disclosures are accurate. The company has indicated that it will cooperate with SEBI's investigation and provide the necessary documentation to address the regulator's concerns. Chairman Rajesh Mehta has also stated that he does not intend to challenge the interim order and will cooperate with the ongoing proceedings.

Despite the recent recovery, market participants are expected to closely monitor further developments in the regulatory investigation, which remains a key factor influencing the stock's performance.