The capital market regulator, the Securities and Exchange Board of India (SEBI), has banned LS Industries Ltd (LSIL) from accessing the capital market over alleged stock price manipulation, despite the company reporting zero revenue and having a staggering market valuation of ₹5,500 crore.

SEBI's investigation uncovered a pump-and-dump scheme orchestrated by a network of traders, including Multiplier Share & Stock Advisors Pvt. Ltd. and Setu Securities Pvt. Ltd., who placed early buy orders at upper circuit limits, artificially inflating LSIL’s stock price before offloading shares. The market watchdog also cautioned retail investors against reckless investing, likening it to "children following the proverbial Pied Piper of Hamelin."

“The facts emerging from the case present an intriguing situation where shares of a listed company, with zero revenue and no business activity for many years, have traded at prices that gave the company a market capitalization worth thousands of crores,” SEBI stated in its interim order. The order prohibits LSIL from accessing capital markets and restricts key stakeholders from trading until further notice.

The Himachal Pradesh-based textile firm, which reported negligible revenue and zero sales in two quarters of FY25, saw its stock surge from ₹22.50 in July 2024 to ₹267.50 by September—an 11-fold increase—before crashing to ₹42.39 in November. SEBI has also frozen the bank accounts and demat holdings of Dubai-based NRI Jahangir Panikkaveettil Perumbarambathu (JPP), who purchased 10.28 crore LSIL shares for just ₹75 ($1) in an off-market transaction from a former director in October 2022. At its peak, his holding soared to ₹2,752 crore. The regulatory probe revealed that JPP offloaded a portion of his holdings at the peak, pocketing ₹1.14 crore in profits.

Further investigations exposed that insiders, including relatives of Robochef executives, traded LSIL shares amid the company’s sudden pivot to artificial intelligence and robotics in late 2024, when it acquired Robochef India Pvt. Ltd. and appointed foreign directors.