SEBI Prohibits Osiajee Texfab From Securities Market Over Alleged Manipulation

The Securities and Exchange Board of India (SEBI) has barred Osiajee Texfab Ltd, its managing director, stockbroker Shreni Shares Ltd and 19 connected individuals and entities from the securities market over suspected stock price manipulation.

In an interim order issued on Thursday, the regulator said the stock had surged nearly 842% in less than a year despite little evidence of meaningful business activity.

Osiajee Texfab's shares climbed from ₹50.40 on 30 January 2025, to ₹474.80 on 27 January 2026, before rising again in May 2026. SEBI said the sharp rally was not supported by any material corporate developments and appeared to have been driven by coordinated trading and misleading disclosures.

On 10 July, Osiajee Texfab shares were down 8.18% at 11:27 AM.

Why Did SEBI Take Action?

According to the market regulator, Osiajee Texfab presented itself as a growing textile company even though its standalone textile operations had almost no revenue. The company's textile income reportedly declined from ₹2.06 crore in FY22 to virtually nil by FY25, while nearly all of its consolidated revenue came from its wholly owned subsidiary engaged in eucalyptus and poplar plantation activities.

During surprise inspections, SEBI said it found no evidence of textile manufacturing at the company's premises. Investigators reportedly did not find inventory, invoices, stock records or signs of active textile operations. The regulator also said the managing director admitted that the company's income was generated through its plantation subsidiary rather than its textile business.

SEBI further questioned corporate announcements that claimed the textile business was "growing steadily", saying they gave investors a misleading picture of the company's financial position.

Trading Pattern Raised Red Flags

The regulator's preliminary findings pointed to a small group of traders playing a significant role in pushing up the stock price. SEBI said the top 10 contributors accounted for 67.38% of the positive last traded price contribution between 30 April and 14 May 2026. All of them traded through the Hoshiarpur branch of Shreni Shares Ltd, managed by the husband of Osiajee Texfab's managing director.

SEBI also identified 516 synchronised trades worth ₹3.92 crore, including 183 executed within one minute with matching buy and sell prices. The regulator said this pattern suggested coordinated trading designed to create artificial demand.

Pending a detailed investigation, SEBI has restrained all 19 noticees from dealing in the company's shares. It has also directed Shreni Shares to place ₹82.56 lakh, the alleged gains from selling its holdings after SEBI's inspection, in a fixed deposit with a lien in the regulator's favour. The noticees have been given 21 days to respond to the allegations.

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