Shares of SME-listed Kore Digital plunged 10% on Friday after market regulator Sebi passed an interim order against the company and three of its key managerial personnel after its investigation found evidence of manipulated financial statements, non-genuine subsidiaries, suspicious accounting entries and diversion of preferential issue proceeds.

Sebi on Thursday barred Kore Digital MD Ravindra Doshi, CEO Chaitanya Doshi and CFO Kashmira Doshi from trading in Kore Digital shares until further orders. The regulator has also barred the company and the three individuals from accessing the securities market to raise money from the public. The company’s shares hit the lower circuit at Rs 78.75 apiece on Friday morning.

Sebi has also directed the National Stock Exchange (NSE) not to allow Kore Digital to migrate from its SME platform, NSE Energe, to the mainboard segment until regulatory clearance. A forensic auditor will be appointed to examine the company’s books from the date of its listing in June 2023 till March 31, 2026.

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What are Sebi’s allegations against Kore Digital?

At the centre of Sebi’s investigation are three companies that were allegedly acquired by Kore Digital and whose revenues were later added to Kore’s financial statements. These include Franken Telecom, Wolter Infratech and KDL Realinfra. The company’s revenue from operations rose from Rs 21.27 crore in FY23 to Rs 408 crore in FY26. On average, around 75% of consolidated revenue came from subsidiaries.

Sebi alleged that Kore’s consolidated financial statements were misstated by around Rs 541.3 crore during FY25 and FY26, representing roughly 73% of its total revenue over the period. The market regulator highlighted that the three subsidiaries were incorporated just months before Kore acquired them. They shared the same registered address and had either little or no filing history with the Ministry of Corporate Affairs.
GST registrations of Franken and Wolter were cancelled shortly after registration, while KDL Realinfra’s registration became inactive on the same day it was registered, according to the order.Further, surprise visits conducted by NSE in June this year failed to establish the presence of these companies at their stated addresses. Similar findings were recorded for several step-down subsidiaries and entities that had financial transactions with Kore.

Sebi’s examination also raised serious concerns about the audit records of the subsidiaries. Its investigation revealed that the audit reports carrying CA Riya Goyal’s signature and stamp were forged.

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Kore Digital share price

Kore Digital is a specialised telecommunication infrastructure provider. The company debuted on the NSE Emerge platform back in June 2023. The company’s stock has fallen around 7% in a week and 51% in 2026 so far.

In the longer term, Kore Digital shares have delivered negative returns of over 62% in one year and 16% in three years. The company has a market capitalisation of a little over Rs 105 crore.

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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.

Dario Amodei, Sam Altman and Elon Musk, the three musketeers at the centre of the AI race, are suddenly talking about hitting the brakes. Jefferies’ Head of Global Equity Strategy Chris Wood believes that if the AI trade loses momentum, global investors may once again turn to India, whose structural growth story has remained intact even as technology giants dominate emerging market allocations.

“It is reasonably clear that for India to become a prime point of focus again for emerging market equity investors, the AI story has to blow up,” Wood wrote in his latest GREED & fear newsletter. The three AI-linked stocks — TSMC, Samsung Electronics and SK Hynix — account for 29% of the MSCI Emerging Markets Index, compared with India’s 11%. But with Indian bank credit growing 19.1%, corporate lending accelerating and earnings growth expected to improve, Wood sees the country’s domestic resilience becoming harder for investors to ignore.

The report describes the development as “bizarre” and offers two possible explanations. The first is that a coordinated pause, presented as a safety measure, could help the biggest AI companies build a regulatory moat, particularly if open-source models from China are later restricted. The second is more concerning: the cost of computing may be becoming unsustainable, while AI models could be starting to plateau. Wood says he has no inside track but considers both explanations plausible.

Either way, a reversal in the AI trade could redirect global investor attention towards India, whose weighting in the MSCI Emerging Markets Index has been overshadowed by the combined 29% share of Taiwan Semiconductor Manufacturing Co., Samsung Electronics and SK Hynix. India accounts for 11% of the index, according to the report.

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India’s growth story has survived the shock

Wood’s argument for India is not based only on a possible unwind in the AI trade. He says the country’s domestic economic momentum has remained stronger than expected despite geopolitical stress and higher energy risks.
Bank credit was growing 19.1% year-on-year at the end of August. Corporate lending rose 21.6% in July, while loans to micro, small and medium industrial enterprises increased 24.9%.The report says the pickup in SME lending may indicate that recent GST and labour reforms, along with the government’s focus on improving the ease of doing business, are beginning to produce results.

The acceleration in corporate lending also points to the possibility that India’s long-awaited private sector capital expenditure cycle is finally beginning.

Wood says India is on track for real GDP growth of 6.5%-7% and nominal GDP growth of around 11%-12% in the current fiscal year. Jefferies’ head of India research, Mahesh Nandurkar, expects earnings growth to accelerate from 14% this fiscal year to 17% next year.

Other indicators are also strengthening. GST receipts rose 14.8% year-on-year in August, power demand growth climbed from 1.8% in January-March to 9.4% in April-August, and residential real estate sales in the top seven cities rose 7% in the first seven months of the year.

Why Wood prefers India’s midcaps

From an equity market perspective, Wood continues to find the mid- and small-cap segments more compelling than large caps because of India’s “huge reservoir of entrepreneurial talent.”

The Nifty MidCap 100 Index has risen 1.5% this year and 95% since the beginning of 2023. The Nifty, by comparison, is down 10.9% year-to-date and has gained 29% since the start of 2023.

That outperformance has come despite richer valuations. The Nifty MidCap 100 trades at 26.3 times 12-month forward earnings, compared with 17.3 times for the Nifty.

Wood argues that the strength of the mid- and small-cap market is not necessarily unhealthy. The growing contribution of these companies has also reduced the share of India’s top 20 stocks in total market capitalisation, a trend that contrasts with the global market, where passive investing has increased concentration in the largest companies.

Credit, gold loans and domestic flows

Another source of resilience is the continued flow of domestic money into equities. Net inflows into domestic equity mutual funds have averaged Rs 38,800 crore a month so far this year.

Those flows, however, are being absorbed by a renewed wave of equity issuance. Monthly equity supply rose to $9.5 billion in August from just $1 billion in April, limiting the upside for the benchmark Nifty.

Wood also highlights India’s organised gold-loan market as a potential source of additional consumer spending. Household gold holdings were estimated at $3.9 trillion at the end of March, while organised gold loans stood at $197 billion. Gold loans have grown at an annualised rate of 32% over the past three years.

Banks charge borrowers 9.25%, while the loan-to-value ratio remains below 60%. The report says the expansion of gold-backed credit could support consumer confidence while creating a profitable lending opportunity for banks.

The risk remains energy

The principal threat to India’s resilience is the energy shock. The capture of the port of Mokha and two islands in the Red Sea by the Houthis, along with damage to the East-West oil pipeline, has left Iran controlling the flow of oil through the Strait of Hormuz and the Houthis controlling the route through the Strait of Bab al-Mandeb.

Wood calls this a “nightmare scenario for markets” and says the need for energy exposure in portfolios is now more obvious than ever. Brent crude was trading at $106 a barrel at the time of the report.

India has so far managed the risk by continuing to buy discounted Russian oil while also purchasing more expensive energy from the US. Russia’s share of India’s crude imports rose from 20% in February to more than 50% in July.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)