The world’s best-performing stock has turned into a warning sign for investors chasing quick gains from the artificial intelligence boom. A little-known Indian company has delivered a stunning 55,000% rise in just under two years, raising serious questions about hype, regulation and investor risk, reported Bloomberg.
RRP Semiconductor Ltd, which was largely unknown even within India until recently, has become a social media sensation after its shares surged more than 55,000% in the 20 months leading up to December 17. Bloomberg reports that this makes it the biggest stock gainer globally among companies with a market value above $1 billion.
The scale of the rally looks even more striking when placed against the company’s fundamentals. Bloomberg notes that RRP Semiconductor reported negative revenue in its latest financial results, has just two full-time employees according to its annual report, and only a loose connection to the global semiconductor spending boom.
FROM REAL ESTATE TO SEMICONDUCTORS
The company’s transformation began in early 2024. Bloomberg reports that RRP’s promoter, Rajendra Chodankar, shifted the company away from real estate and renamed it RRP Semiconductor.
Chodankar, whose earlier business interests included thermal imaging systems and drone camera equipment, took control of the listed company by repaying an Rs 80 million loan owed by G D Trading and Agencies Ltd in exchange for equity.
On April 23, the board approved issuing shares to Chodankar and others at Rs 12 each, around 40% below the market price at the time. This move gave Chodankar a 74.5% stake and reduced the original founders’ holding to less than 2%, according to Bloomberg.
Around the same time, Chodankar set up a private company, RRP Electronics Pvt Ltd, with plans to build an outsourced semiconductor assembly and testing unit in Maharashtra. While the listed firm does not own this private company, Bloomberg notes that both are controlled by Chodankar, which may have added to investor excitement.
THE ROLE OF HYPE AND LIMITED FLOAT
Bloomberg points out that the rally was driven by a mix of online hype, a very small free float, and a surge in retail investor participation in India. About 98% of RRP Semiconductor’s shares are held by Chodankar and a small group of associates, leaving very little stock available for public trading.
This lack of supply helped fuel extreme price moves. The shares reportedly hit 149 straight upper circuit sessions, even as both the company and the stock exchange issued warnings to investors.
“Semiconductors have been really hot and people are willing to buy any name given India has limited stocks to offer,” Sonam Srivastava, founder at Wryght Research & Capital, told Bloomberg. She added that cases like RRP show how investors can be drawn into risky trades during periods of market excitement.
REGULATORS STEP IN
The sharp rise has now attracted regulatory attention. Bloomberg reports that the Securities and Exchange Board of India has begun examining the stock’s surge for possible wrongdoing. The exchange has already restricted trading in the shares to once a week.
Since peaking on November 7, the stock has fallen about 6%, Bloomberg said, though it still remains far above earlier levels. RRP Semiconductor is currently valued at around $1.7 billion.
A spokesperson for BSE Ltd told Bloomberg that all surveillance actions related to the stock were communicated through official market circulars. RRP Electronics declined to comment on Bloomberg’s queries, citing an ongoing legal appeal.
REGULATORY ROADBLOCKS AND PAST LINKS
Bloomberg also highlighted regulatory complications around the company. In April this year, the exchange withdrew approval for a share sale by RRP Semiconductor, a decision that the company has challenged in court.
The exchange’s action followed a reminder from Sebi in September 2024 that the company belonged to the founder group of Shree Vindhya Paper Mills, which was delisted in 2017 for non-compliance and barred from accessing capital markets for 10 years.
A person familiar with the matter told Bloomberg that BSE may seek Sebi’s guidance on extending the lock-in period for the shares until the appeal is resolved.
WEAK FINANCIALS ADD TO CONCERNS
Despite the soaring share price, Bloomberg reports that RRP Semiconductor’s financials remain weak. The company posted negative revenue of Rs 68.2 million and a net loss of Rs 71.5 million in the quarter ended September.
The negative revenue came after the company reversed sales booked earlier from a Rs 4.4 billion order received from Telecrown Infratech Pvt Ltd, which was later cancelled due to contractual disagreements. The company also clawed back Rs 80 million of revenue in the March quarter, according to exchange filings cited by Bloomberg.
In a filing dated November 3, RRP Semiconductor said it has not started any semiconductor manufacturing activity, has not applied for government incentives, and denied any association with celebrities or state-allotted land.
Bloomberg notes that while RRP’s rise is unlikely to affect the wider artificial intelligence rally that has added trillions of dollars to global technology firms such as Nvidia, it highlights how extreme speculation can build in small pockets of the market.
With AI excitement fading and regulatory scrutiny increasing, Bloomberg warns that the biggest risk now lies with investors who entered the stock at high levels. The case also shows the growing challenge for regulators as India’s retail investor base expands rapidly and chases exposure to global themes with limited domestic options.
