Debock Industries could be falsifying financial results, says Motilal Oswal sub-broker

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A sub-broker at Motilal Oswal, Prashant Tiwari, has accused Debock Industries Limited of falsifying financial results. The Jaipur-based company, which was established in 2007, deals in sales and marketing and agriculture products, and has interests in the hospitality industry, according to its official website.

Debock Industries Limited has defaulted a loan repayment of over Rs 450 lakh to Punjab National Bank, according to a regulatory filing on June 17, 2023.

The company caught Tiwari's attention when its stocks started to spike on National Stock Exchange (NSE).

Debock Industries closed at Rs 15.00, in red, down by 0.99 percent on June 19, according to NSE.

The company hit its 52-week high at Rs 64.90, as per NSE.

It has shown a capital WIP of Rs 120.65 lakh till March 31, 2023, and claimed to make an advance payment to suppliers of around Rs 130 lakh, according to the regulatory filing.

"In Debock Industries's unaudited financial results released in December 2022, the company showed a profit of around Rs 10 crore, while it defaulted a loan repayment of Rs 450 lakh. That is when I started getting suspicious," Tiwari told Moneycontrol.

Tiwari had poured some of his client's funds into Debock Industries, which led him to personally investigate the company. "With a meagre market cap of Rs 180 crore, negligible debt, and reporting a robust quarterly profit ranging from Rs 5-10 crore, the stock seemed like a lucrative buy," added Tiwari.

"After a holding period of eight months and no significant movement in stock price, my anticipation of the windfall was pegged on the annual result for FY 2022-2023," he further added. However, "the result reported a sudden loss of Rs 10 crore and a loan default of Rs 4 crore and a significant cash crunch which the promoters tried to fund through the right issues of Rs 49 crore," according to Tiwari.

He decided to visit the company's corporate office in Jaipur and the registered manufacturing units based in Deoli. He visited the spot on June 11, 2023. "When I reached the corporate office and the manufacturing unit, I found it closed. The manufacturing units were also not operational," Tiwari claimed.

Moneycontrol tried reaching out to Mukesh Manveer Singh, Chairman and Managing Director of Debock Industries, regarding the same but could not get any response.

Tiwari also visited Debock Industries' hotel and inns address, where he found the business and infrastructure to be in "shoddy" condition and "incapable of generating a revenue of more than Rs 1 lakh". Tiwari had a help of a hotelier, Mradul Dixit, to investigate the hotel business of Debock Industries.