ED raids 29 premises in 6 cities over share price manipulation fraud
Synopsis
More than 1 lakh retail investors were left stranded when WhatsApp groups pushing 'Multibagger Stocks' vanished overnight on 25 February 2026 and two listed shares crashed 70% within days. The ED's raids across six cities now expose the alleged architecture behind the scheme: insiders quietly accumulating shares between 2023 and 2024, SIM cards registered in fake names to run tip groups, and a coordinated exit that wiped out ordinary investors.
Key Takeaways
The ED searched 29 premises across Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar on 16 October 2026 under the PMLA, 2002 .
The probe targets alleged share price manipulation in R M Drip and Sprinklers Systems and R&B Denims Ltd .
Between April 2023 and March 2024 , the two firms issued over 3.5 crore shares and convertible warrants to a select group of connected persons.
WhatsApp communities named 'Multibagger Stocks' pushed daily buy tips from late December 2025 to February 2026 , swelling buyer numbers from 3,400 to over 1 lakh .
On 25 February 2026 , the groups were deleted; both stocks lost about 70% of their value within days, trapping over 1 lakh small investors .
Digital devices, share transaction records, and property documents were seized during the raids.
The Directorate of Enforcement (ED) on Friday, 16 October conducted searches at 29 offices and residential properties across six cities — including Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat, and Bhavnagar — in connection with an investment fraud linked to the manipulation of share prices of two listed companies. The operation, carried out by the ED Mumbai Zonal Office-I under the Prevention of Money Laundering Act (PMLA), 2002, resulted in the seizure of incriminating documents, digital devices, share transaction records, and property papers, according to an official statement.
Companies at the Centre of the Probe
The investigation centres on alleged share price manipulation involving two listed firms: R M Drip and Sprinklers Systems and R&B Denims Ltd. The premises searched included the offices of both companies, the residences of their promoters, offices of stock-broking and finance firms, and properties linked to individuals suspected of operating promotional WhatsApp groups used to push the stocks.
How the Alleged Fraud Was Structured
According to the ED, between April 2023 and March 2024, the two companies issued over 3.5 crore shares and convertible warrants to a select group of persons and entities. A large portion of the funds paid for these shares reportedly came from a tightly connected circle of individuals, firms, and lenders. Over subsequent months, the share prices were allegedly pushed steadily higher, even as the shares remained largely concentrated in the same hands — a classic 'pump' phase in a pump-and-dump scheme.
WhatsApp Groups and the Retail Investor Trap
The ED investigation further revealed that from late December 2025 to February 2026, WhatsApp communities operating under names such as 'Multibagger Stocks' sent daily 'buy' tips on the two scrips to retail investors. These groups were allegedly run on SIM cards registered in the names of third parties in Haryana and Mumbai, but operated from Bhavnagar, Gujarat. Lured by the recommendations, the number of buyers in the two stocks rose from approximately 3,400 to over 1 lakh.
The Crash and Its Fallout
On 25 February 2026, the WhatsApp groups were abruptly deleted. Both stocks almost immediately hit lower circuits and reportedly lost around 70% of their value within days — the 'dump' phase of the alleged scheme. More than 1 lakh small investors were left holding shares they could not sell, having suffered heavy financial losses, the ED said. This comes amid growing regulatory scrutiny of social-media-driven stock manipulation in India, with market watchdog SEBI having flagged similar 'finfluencer' and messaging-group-based pump-and-dump operations in recent years.
What Happens Next
The searches mark the formal entry of money-laundering proceedings under the PMLA, which carries the power to attach assets. Further arrests, asset attachments, and the recording of statements from promoters and brokers are expected as the probe deepens. Small investors affected by the crash are unlikely to see immediate relief, but the investigation could eventually support restitution proceedings if proceeds of crime are traced and frozen.
Point of View
A tightly held float, and a WhatsApp network that scaled manufactured enthusiasm to over a lakh buyers before vanishing in a single day. What makes it significant is not just the scale of retail losses but the brazenness: SIM cards in third-party names, groups with names specifically designed to attract aspirational investors, and an exit timed with apparent precision. SEBI and the ED have signalled awareness of this pattern for years, yet the scheme reportedly ran undisturbed for months. The real accountability question is not just about the promoters — it is about whether exchange surveillance systems and broker due-diligence obligations failed, and whether small investors will see any recovery of losses or only watch promoter assets get attached in prolonged legal proceedings.
NationPress
16 Oct 2026
Frequently Asked Questions
What is the ED share manipulation case involving R M Drip and R&B Denims?
The ED is investigating alleged manipulation of share prices of two listed companies — R M Drip and Sprinklers Systems and R&B Denims Ltd — under the PMLA, 2002. Investigators allege insiders accumulated over 3.5 crore shares at low prices between 2023 and 2024, then used WhatsApp groups to drive up prices before exiting, leaving more than 1 lakh retail investors with heavy losses.
How did the WhatsApp groups fit into the alleged fraud?
WhatsApp communities with names like 'Multibagger Stocks' sent daily buy recommendations on the two scrips from late December 2025 to February 2026, using SIM cards registered in third-party names but reportedly operated from Bhavnagar, Gujarat. When the promoters had allegedly exited, the groups were deleted on 25 February 2026, triggering a sharp fall in both stocks.
How much did investors lose and how many were affected?
Both stocks lost approximately 70% of their value within days of the WhatsApp groups being deleted on 25 February 2026. More than 1 lakh small investors were left holding shares they could not sell, according to the ED statement.
Which cities were covered in the ED search operations?
The ED Mumbai Zonal Office-I searched 29 premises across six cities: Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat, and Bhavnagar. Premises included company offices, promoter residences, stock-broking firms, and locations linked to those who allegedly ran the tip groups.
What could happen next in the investigation?
With formal PMLA proceedings now initiated, the ED can move to attach assets identified as proceeds of crime. Further arrests, recording of statements from promoters and brokers, and additional searches are likely as the probe progresses. Affected retail investors may eventually benefit from restitution proceedings if frozen assets are linked to their losses.
