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Informist, Wednesday, Aug. 19, 2026

 

MUMBAI – Securities and Exchange Board of India late Wednesday restrained two individuals associated with Dhenu Buildcon Infra Ltd. from buying, selling or dealing in securities or associating themselves with the securities market on an interim basis. The order follows a SEBI probe that showed that Dhenu Buildcon used a network of connected entities to create the appearance of receiving INR 10 billion. However, only INR 250 million was actually involved, which was repeatedly circulated through multiple entities and routed back to Dhenu Buildcon through different routes.

 

"The requirement for immediate intervention arises from the combination of the nature of the prima facie findings. The material presently available reveals a transaction of an extraordinary magnitude relative to the financial and operational profile of DBIL (Dhenu Buildcon Infra)," SEBI said in an interim order. The market regulator probed the company's activities between Aug. 1, 2024 and Jul. 31, 2026.

 

SEBI's probe has revealed a pattern of layering and round-tripping of funds amongst a network of entities, followed by conversion of a substantial portion of the purported unsecured loans into equity shares of Dhenu Buildcon through a preferential allotment. SEBI still hasn't ascertained the origin of the INR 250 million. 

 

Dhenu Buildcon's market capitalisation rose to INR 49.25 billion from INR 30 million during the probe period. Before SEBI's probe began, its shares traded on only 100 of 495 trading days. This increased to 350 out of 501 trading days during the probe period. Between Aug. 1, 2024 and Jul. 31, 2026, the total number of shares traded increased by roughly 171% and the average number of trades per day swelled by 133%, SEBI said.

 

Of the INR 10 billion purportedly received by Dhenu Buildcon, around INR 8.40 billion was subsequently converted into equity loans through preferential allotment to six of the seven lenders. "Evidences on record lead to a strong prima facie inference that Noticees intended to earn unlawful gains at the cost of public investors," SEBI alleged.  

 

Given the current circumstances, SEBI refused to consider the preferential allotment of INR 8.40 billion worth of loans as independent of the money lent. Of the purported loan liabilities, SEBI said it allotted 5.92 billion equity shares to six of the seven lenders, who now collectively hold around 99.70% of Dhenu Buildcon's diluted equity share capital. 

 

SEBI expressed concerns that if these entities sell their holdings at the prevailing market price of around INR 8 per share, "gullible" investors may buy the shares at an inflated price. The allottees stand to make wrongful gains of around INR 56.67 billion if they choose to empty their holdings. The lock-in period for these shares expired on Saturday. Some have already started selling their shares, offloading 17,444 shares worth INR 134,292.80 over two days.

 

MODUS OPERANDI

At the centre of the alleged malpractice are two individuals, Surendra Jain and Virendra Jain, whom SEBI identifies as the key conspirators. The Serious Fraud Investigation Office and the Enforcement Directorate are also investigating the two in other matters. 

 

SEBI's probe found that Dhenu Buildcon received INR 10 billion from seven entities as unsecured loans through 46 transactions between Dec. 24 and Dec. 31, 2024. During this period, Dhenu Buildcon's bank balance did not exceed around INR 260 million, despite the purported receipt of INR 10 billion. 

 

Dhenu Buildcon transferred roughly INR 9.96 billion to five entities within this network in eight days. All the entities are connected and controlled by Surendra Jain and Virendra Jain. An investigation into WhatsApp communications before the transactions on Dec. 24 found discussions about Dhenu Buildcon, bank accounts, loan agreements, and other details. 

 

Crucially, the financial and operational profiles of several entities were disproportionate to the scale of transactions attributed to them. These entities had no operations or physical presence during the regulator's on-site visits during the probe.

 

"The transactions had the effect of creating an apparent financial position which was disproportionate to the company's actual business and financial profile as the company had negligible revenues and profits, while its balance-sheet size increased approximately hundred-fold following the purported borrowing," SEBI said in its probe findings.

 

SEBI's VIEW

Dhenu Buildcon did not disclose details of the loans, such as the purpose and terms, until July 2025, when it proposed converting them into equity. "The examination found serious disclosure lapses regarding non-disclosure of loan agreements, wrong disclosure of loan for working capital, non-disclosure of cancellation of NBFC license and non-operational website," SEBI said.

 

"The preferential allotment was the second stage of the same arrangement, and the purported loans created the basis for the debt conversion, while the debt conversion resulted in the acquisition of virtually the entire equity capital of DBIL without consideration," SEBI said in its interim order.

 

The entities that bought shares in Dhenu Buildcon have been restrained from disposing of shares until further order. Dhenu Buildcon has been directed to refrain from undertaking any corporate actions, such as changing its name, altering its capital structure, issuing bonus or rights shares, stock splits, dividends, and other such actions, for now.

 

The two key alleged conspirators are restrained from dealing in the securities market directly or indirectly. Yet, if they have any open position in any exchange-traded derivative contracts, they can close or square them off within three months from the date of the order or at the expiry of such contracts, whichever is earlier, SEBI said.   End

 

Reported by Anand JC 

Edited by Saji George Titus

 

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