SEBI (Securities and Exchange Board of India), the regulatory authority for the stock market, has taken significant action against a company from Himachal Pradesh, LS Industries Ltd. SEBI has banned LS Industries and five other units from trading in the stock market until further notice. The action follows allegations of price manipulation and fraud in the company’s stock. SEBI has stopped LS Industries Ltd and its promoters from trading in its shares and imposed a ban on them from participating in the securities market until further notice. As a result, the company’s share price hit a 5% lower circuit on Tuesday, dropping to an intraday low of ₹64.56.

The company’s revenue is zero, but its stock saw a massive surge. LS Industries’ stock soared from ₹22.50 in July 2024 to ₹267.50 by September 2024, a staggering 1,089% return in just two months. From December 2024 to January 2025, the stock surged by more than 370%, pushing its price-to-earnings (P/E) ratio above 400,000.

According to SEBI’s order, there were no business activities for several years, and despite suffering losses of ₹8.83 crores in the last three financial years and having zero revenue, the stock surged rapidly, reaching a market capitalization of ₹5,500 crores. SEBI’s investigation also brought attention to Dubai-based investor Jahangir Panikkavil Perumbambathu (JPP), whose bank accounts and demat holdings have been frozen by SEBI.

In the investigation, SEBI found that former director “Suet Meng Chai,” who held 12.12% of the company’s shares, transferred his entire stake to NRI investor Jahangir Panikkavil Perumbambathu on October 12, 2022. In an off-market transaction, Jahangir bought at least 10.28 crore shares for just one dollar (approximately ₹75 at the exchange rate at the time), worth around ₹154.32 crores. Later, Jahangir sold the shares and made a profit of ₹1.14 crore. Jahangir still holds shares worth ₹698 crore, which have appreciated to around ₹2,752 crores.