RRP Semiconductor Ltd., a little-known Indian company, has delivered the world's largest stock gain among firms valued over $1 billion, with shares skyrocketing
more than 55,000% in the 20 months ending December 17. This extraordinary rally—fueled by social media hype and retail investor enthusiasm amid the global AI boom—has raised alarms about speculative excess, even as the stock shows signs of cooling, said a Bloomberg report. Despite the surge, the company's fundamentals remain weak: it reported negative revenue of Rs 68.2 million and a net loss of Rs 71.5 million in the September quarter, with only two full-time employees listed in its latest annual report. The firm has only a loose connection to semiconductors, having pivoted from real estate trading in early 2024. The rally drove 149 consecutive upper-circuit hits, propelled by a tiny public float—about 98% of shares are held by founder Rajendra Chodankar and associates. India's lack of major listed chipmakers turned RRP into a proxy play for the AI frenzy that boosted giants like Nvidia. Regulators are now scrutinizing the rise. The Securities and Exchange Board of India (SEBI) has launched an examination into potential wrongdoing, according to sources. The Bombay Stock Exchange (BSE) has restricted trading to once a week and placed the stock under enhanced surveillance, noting the price movement “is not commensurate with the company's financials.” The stock, valued at around $1.7 billion ( Rs 15,116 crore market cap), has dipped 6% from its November 7 peak but remains enormously elevated from levels below Rs 20 in early 2024. How the Rally Began RRP Semiconductor, formerly G D Trading & Agencies Ltd., underwent a transformation in 2024 when Chodankar—whose background includes niche defense products like thermal imaging and drone cameras—acquired control by repaying an Rs 80 million loan for equity. The board then issued shares to him at a discount, granting 74.5% ownership, and renamed the company. Separately, Chodankar incorporated private firm RRP Electronics Pvt. Ltd. to build a semiconductor assembly and testing (OSAT) facility in Maharashtra. An inauguration event attended by Maharashtra Chief Minister Devendra Fadnavis and cricketer Sachin Tendulkar fueled speculation, though the listed company has no direct stake and has denied celebrity ties or government incentives. The company has clarified it has “yet to start any sort of semiconductor manufacturing activities” and reversed prior sales bookings due to canceled orders. Broader Market Warnings Similar speculative spikes have prompted cautions across Asia. In China and South Korea, exchanges issued risk alerts for AI-related stocks after rapid gains followed by declines. Experts highlight risks for retail investors chasing AI proxies in India. “Semiconductors are hot, and with limited options, people buy any related name,” said Sonam Srivastava of Wryght Research & Capital. This case underscores challenges in curbing hype-driven bubbles, especially with low-float stocks and social media amplification. As AI enthusiasm moderates and scrutiny intensifies, the downside risk falls heavily on late entrants—and on Chodankar, who controls most of the float. Investors are advised to prioritize fundamentals over momentum in volatile themes like AI and semiconductors.
