Kajaria Ceramics Limited has filed its mandatory compliance report with the Bombay Stock Exchange and National Stock Exchange of India regarding the status of physical share transfer requests under SEBI's special window provision. The ceramic products manufacturer submitted the report on January 7, 2026, covering activities from December 7, 2025, to January 6, 2026.

SEBI Compliance Framework

The report submission follows SEBI Circular No. SEBI/HO/MIRSD/MIRSD-PoD/P/CIR/2025/97 dated July 2, 2025, which established a special window for re-lodgement of transfer requests for physical shares. This regulatory initiative allows shareholders to resubmit previously rejected or pending physical share transfer requests under revised guidelines and procedures.

Transfer Request Activity Summary

MCS Share Transfer Agent Limited, serving as Kajaria Ceramics' registrar and share transfer agent, provided detailed statistics for the reporting period. The data reveals minimal activity in physical share transfers during this timeframe.

Processing Efficiency

The single transfer request received during the period was processed within 10 days, demonstrating the company's adherence to timely processing standards. However, the request was ultimately rejected, indicating it did not meet the required criteria or documentation standards under the special window provisions.

Regulatory Compliance

Ram Chandra Rawat, COO (A&T) & Company Secretary, signed the compliance document digitally on January 7, 2026. The submission ensures Kajaria Ceramics maintains its regulatory obligations under SEBI guidelines for physical share transfer reporting. MCS Share Transfer Agent Limited, headquartered in New Delhi's Okhla Industrial Area, continues to handle the company's share transfer operations and regulatory compliance requirements.

Kajaria Ceramics Limited addressed a significant fraud incident at its subsidiary during a conference call. The company disclosed fraudulent activities worth approximately ₹20.00 crores at Kerovit Global Private Limited, a step-down subsidiary specializing in sanitary ware manufacturing.

Fraud Details and Discovery

The fraudulent scheme involved the creation of fake vendors and unauthorized payments orchestrated by Kerovit Global's Chief Financial Officer over a two-year period. The CFO created vendor accounts in his own name and forged management signatures to mislead other signatories in the maker-checker approval process.

The fraud was discovered during the company's vendor migration process as part of Operation Manthan, when discrepancies were found in Capital Work in Progress (CWIP) entries. The fraudulent payments were disguised as advances for machinery purchases related to a new sanitary ware plant expansion.

Operation Manthan and Cost Optimization

Kajaria Ceramics launched Operation Manthan as a comprehensive review of internal systems, processes, and business frameworks. This initiative has yielded significant cost savings across multiple operational areas.

The cost optimization efforts included better raw material negotiations, carton re-engineering, packaging material cost reduction, manpower reduction following sales team unification, and comprehensive travel expense cuts affecting employees, directors, and promoters.

Financial Impact and Recovery Prospects

The fraudulent amount was distributed across two financial years, with ₹6.00 crores in the previous year and ₹14.00 crores in the current financial year. Since the amounts were parked in CWIP, no depreciation was charged on these fraudulent entries.

The company expects to treat the loss as exceptional expenditure in its financial statements. While the accused employee has promised to return additional funds, management remains conservative about recovery prospects, stating they are "not hopeful even half will be recovered."

Strengthened Governance Measures

Kajaria Ceramics has implemented enhanced vendor onboarding systems across all subsidiaries through partnership with Sequelstring, a third-party vendor management platform. The new system includes:

• Automated online vendor verification processes
• Four-member approval authority for vendor onboarding
• Comprehensive validation of GST numbers, PAN details, and banking information
• Elimination of manual intervention in vendor creation
• Migration of existing vendors to the new platform within 2-3 months

The company has filed complaints with local police and the Economic Offences Wing. Management emphasized their commitment to creating "watertight systems" and transitioning from a person-based to system-based organization to prevent future incidents.

Company Response and Future Outlook

Managing Director Rishi Kajaria characterized the situation as part of "Kajaria 2.0," where the company's philosophy involves sharing bad news immediately while announcing good news only upon completion. The management stressed that this incident reflects their enhanced commitment to transparency and robust governance.

Despite the fraud incident, the company's fundamentals remain strong, with the new sanitary ware plant at Kerovit Global now operational and contributing to production. The comprehensive review of all other subsidiaries revealed no similar discrepancies, providing confidence in the isolated nature of this incident.

Kajaria Ceramics has implemented stricter controls under Operation Manthan, which has also resulted in significant cost savings. The company reports achieving ₹150.00 crore in annual cost savings through various optimization efforts across raw materials, plant operations, manpower, and travel expenses.