ED Searches 29 Premises Across Gujarat, Maharashtra in Stock Manipulation Probe

Bhavnagar: The Enforcement Directorate (ED) on Friday conducted searches at 29 locations across six cities as part of a money laundering investigation into alleged stock price manipulation that reportedly caused heavy losses to more than one lakh retail investors.

The searches were carried out in Mumbai and Nashik in Maharashtra, and Ahmedabad, Gandhinagar, Surat and Bhavnagar in Gujarat, in connection with the trading of shares of listed companies, including RM Drip and Sprinklers Systems Limited and R&B Denims Limited.

The premises searched included the companies’ offices, the residences of their promoters and locations linked to individuals who had acquired shares at low prices. The agency also searched stockbroking and finance firms, as well as premises associated with people suspected of operating WhatsApp groups used to promote the stocks.

During the searches conducted under the Prevention of Money Laundering Act (PMLA), the ED seized documents, digital devices, share transaction records and property-related papers. Further investigation into the case is underway.

According to the agency, the two companies allotted more than 3.5 crore shares and convertible warrants to select individuals and entities between April 2023 and March 2024. A significant portion of the funds used for these acquisitions allegedly came from a closely connected network of individuals, firms and lenders.

The ED alleged that the share prices were subsequently driven up over the following months, while ownership of the stocks remained largely concentrated within the same group.

Between late December 2025 and February 2026, WhatsApp groups with names such as “Multibagger Stocks” began circulating daily stock recommendations, urging retail investors to buy shares of the two companies, the agency said.

According to the ED, the groups were operated from Bhavnagar using SIM cards registered in other people’s names in Haryana and Mumbai. As retail investors acted on the recommendations, the number of buyers in the two stocks reportedly surged from around 3,400 to more than one lakh.

The WhatsApp groups were abruptly deleted in February 2026, following which both stocks hit their lower circuit limits and lost approximately 70% of their value within days, the agency said.

The sharp decline left more than one lakh retail investors facing substantial losses, with many left holding shares they were unable to sell. DeshGujarat