The Enforcement Directorate (ED) has conducted searches at 29 premises across six cities in connection with an alleged stock market manipulation case involving listed companies R M Drip and Sprinklers Systems Limited and R and B Denims Limited. The searches were carried out in Mumbai and Nashik in Maharashtra, and Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat.
According to the ED, the investigation revealed that the two companies issued more than 3.5 crore shares and convertible warrants to selected individuals and entities between April 2023 and March 2024. The agency is investigating allegations that coordinated promotional activities were used to influence investor behaviour and manipulate the prices of the companies’ shares.
The ED alleged that WhatsApp groups operating under names such as “Multibagger Stocks” circulated promotional messages encouraging retail investors to purchase shares of the companies. These campaigns reportedly resulted in a sharp increase in the number of buyers, from approximately 3,400 to more than one lakh.
The agency further stated that the WhatsApp groups were abruptly deleted on February 25, 2026. Following their deletion, the shares of both companies reportedly hit the lower circuit, with their market value declining by around 70 per cent within a few days. The sharp fall allegedly caused substantial financial losses to more than one lakh small investors.
During the searches, the ED seized documents suspected to be incriminating, digital devices, share transaction records and property-related documents. These materials are expected to assist investigators in examining the alleged transactions, identifying the individuals and entities involved, and tracing the financial trail associated with the suspected manipulation.
The investigation highlights concerns over the use of social media platforms to promote stocks and potentially influence retail investment decisions. The findings of the investigation and the material seized during the searches will be examined as the proceedings continue. The allegations remain subject to investigation and must be established through the applicable legal process.
