Regulatory scrutiny exposes how a web of circular borrowings and share allotments inflated Dhenu Buildcon Infra’s market value despite minimal operations, raising questions on governance and valuation practices.
SEBI’s interim order against Dhenu Buildcon Infra Ltd has turned a little-known listed company into the latest example of how circular funding can warp a balance sheet, a shareholding pattern and, potentially, a stock’s market value. According to the regulator, the company appeared to show ₹1,000 crore of unsecured borrowings after repeatedly moving a base amount of ₹25 crore through a network of connected entities, even though the underlying money never changed hands in the way genuine loans would. The case has also put Surendra Kumar Jain and Virendra Jain back under scrutiny, with SEBI alleging they controlled the wider web of entities involved.
The regulator said the purported borrowings were followed by a ₹840 crore preferential allotment to six of the same entities, meaning the alleged loan structure was later converted into equity. SEBI has said the shares were issued without genuine financial consideration, and that the arrangement may have created the conditions for unearned gains if the stock were later sold into the market. As part of its interim measures, the regulator has barred the six allottees from dealing in Dhenu Buildcon shares and stopped the company from undertaking corporate actions.
Dhenu Buildcon’s own financial profile makes the allegations stand out even more. Filings cited by LiveMint show the company reported zero revenue from operations in financial year 2024-25 and a loss before tax and extraordinary items of ₹39.55 lakh. The same filings showed a balance sheet with total assets of ₹1,002.98 crore and liabilities of ₹1,000.38 crore, alongside equity of just ₹2.59 crore and long-term debt of ₹160 crore. That gulf between operating performance and the scale of the alleged borrowings is one reason the case has attracted attention.
The company’s recent corporate history adds another layer. Dhenu Buildcon traces its origins back to 1909, when it was incorporated as Hingir-Rampur Coal Company Ltd, before later changing its name to Dhenu Buildcon Infra Ltd in 2012. What is now a securities trading business bears little resemblance to its coal-mining past, and that shift matters because it leaves the company with little obvious operating base to support the size of the transactions now under review.
SEBI’s order also points to a dramatic change in the company’s equity structure. Scanx reported that Dhenu Buildcon allotted 591.55 crore shares to six non-promoter entities on December 27, converting ₹840 crore of unsecured loans into equity. The allotment followed earlier board and shareholder approvals, and was part of a wider plan to expand the company’s authorised share capital sharply. The transaction left the six allottees with overwhelming control of the diluted equity base.
That ownership shift was accompanied by a steep rise in the company’s market value. SEBI said Dhenu Buildcon’s market capitalisation climbed from about ₹3 crore to ₹4,925 crore during the period it examined, despite little change in revenues or profitability. The regulator’s concern is not simply that the valuation rose, but that it may have been inflated by a paper trail built on recycled funds rather than fresh capital.
According to SEBI, the evidence went beyond bank transfers. The order refers to common addresses, directors, authorised signatories and bank branches across the entities involved, as well as extensive cross-shareholdings. It also says physical inspections of registered offices suggested a lack of genuine commercial presence. The regulator further relied on chat messages and call records recovered in a separate search-and-seizure operation, which it said supported its view that the network was centrally controlled.
The wider context also matters. SEBI said it received a reference from the Serious Fraud Investigation Office on April 20, 2026, and then examined transactions from August 1, 2024 to July 31, 2026. Its findings centred on 46 transactions over eight days in December 2024, through which the company supposedly received ₹1,000 crore. Yet the regulator said Dhenu Buildcon’s bank balance never rose above roughly ₹26 crore, while about ₹996 crore was later transferred to five entities within the same network.
The company’s governance and audit trail have also drawn fresh scrutiny. LiveMint reported that Dhenu Buildcon’s FY2024-25 financial statements were signed off by Subramaniam Bengali & Associates, which said the accounts gave a true and fair view on the information made available to it. But the auditor later resigned, and the company disclosed a new statutory auditor in September 2025. That change came before the December allotment and has only sharpened questions about the timing of internal shifts at the company.
For now, SEBI’s action remains interim rather than final. The regulator has not yet reached a concluded finding on liability, but its order signals a serious view of the transactions and the people around them. The next stage will determine whether Dhenu Buildcon’s ₹1,000 crore loan story was a genuine financing event or, as SEBI suspects, a circular arrangement designed to manufacture scale where little real capital existed.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
