SME stock manipulation: Shyam Sekhar shares worst kept secret on 'magical wealth pie' 

Gensol Engineering: Market veteran Shyam Sekhar, who recently posted a series of tweets on Gensol Engineering Ltd on social media platform X, said not only small investors, but hugely successful ones, might have fallen prey to greed and put their money on frauds and hucksters. In a post on X, he unearthed what he called "worst kept secret playbook" in the SME stock manipulation.

Calling it a full blown mafia, the founder of ithought Financial Consulting in a post said the a few operators were getting the daily shareholders master list  -- checking who is buying and selling; and orchestrating people to buy. Such operators were stopping people whom they advise from selling, Sekhar suggested. 

"Tightly controlling float on a day to day basis. They even ran illegal portfolio management services by using this method. If an investor broke ranks and sold, he would be rusticated from their network. They were doing investment banking for potential SME companies," Sekhar cited. 

"A raging private placement trade was being run by them. Premiums were paid in cash by greedy investors wanting a piece of the magical wealth pie they were cooking up. The racketeers were simply on a rage for three years," he said. 

Sekhar comments came at a time when once SME Gensol Engineering, which got migrated to mainboard exchanges in 2023, lost 85 per cent of their value in past six months, amid concerns over alleged price manipulation and misappropriation of funds by the company promoter-directors Anmol Singh Jaggi and Puneet Singh Jaggi for personal gains.  

"The irony is that all this was mistaken for investment genius even by the broader investor community. Hugely successful investors fell prey to greed and put their money on these frauds and hucksters," Sekhar said. 

Many market gurus commented on the recent developments and concerns over SME valuations.  

Value investor Vijay Kedia has urged investors to remain vigilant against companies resembling Gensol, which may currently be flying under the radar but pose a significant risk to long-term investor wealth.

Kedia highlighted the presence of early warning signs—what he refers to as "red flags that scream before a scam"—that can help discerning investors avoid potentially hazardous stocks.

He cautioned against companies that engage in excessive self-promotion, including frequent media coverage, social media hype, and interviews that exaggerate minor developments to maintain a heightened public profile.

According to Kedia, investors should be wary of firms that regularly raise capital without offering transparent plans for deployment, as well as those that pivot into unrelated sectors simply to capitalize on current market trends.

He also advised skepticism toward businesses that heavily rely on trendy buzzwords such as “AI-powered,” “next-gen,” or “disruptive” without offering genuine substance or innovation to back their claims.

Sekhar said: “The exchanges could have easily identified these patterns, but chose to look the other way.”

In another post, Sekhar said he had golden Gensol moment for him at a TIA event. The Gensol fan army turned it into a big spectacle outside the hall, where people were standing around a passionate guru, who was giving feverish gyan on India, MSME, passion and more to the fanboys, he recalled.

"It was an army of Gensol fanatics full of goosebumps. Long after the event, the gyan session was still running. There was a particular guy I noticed who played trumpeteer in chief. Someone told me that he was a doctor. Being the hardened cynic I am, I told my friends there will be permanent loss of capital in GENSOL. I also told them another thing. "These Pied Pipers will be fully out of the stock before it goes to zero. Their followers will lose all their money. By their own public admission, I am proved dead right," Sekhar said.