RRP Semiconductor Ltd. has emerged as one of the most extreme examples of how India’s enthusiasm for artificial intelligence-linked stocks can detach from corporate fundamentals.
Once largely unknown, the company has drawn global attention after delivering the strongest share price gains worldwide, turning into a reference point for regulators and investors assessing speculative risk.
The stock surged more than 55,000% in the 20 months through December 17, the largest rise among companies with a market value above $1 billion, reports Bloomberg.
The rally unfolded despite weak financials, limited operations, and a business model still far from participating in large-scale semiconductor manufacturing.
As regulatory scrutiny builds, RRP’s trajectory is increasingly viewed as a stress test for India’s retail-driven equity boom.
A rally built on scarcity and hype
RRP’s ascent took place in a market with very few listed semiconductor companies.
That scarcity has left Indian retail investors eager for any proxy exposure to the global AI and chip spending cycle.
Online speculation, a very small free float, and rising participation from first-time investors helped propel RRP into 149 consecutive limit-up sessions.
This occurred even as the company posted negative revenue in its latest quarterly results and disclosed that it employed only two full-time staff in its most recent annual report.
RRP had also shifted away from real estate only in early 2024, leaving its direct connection to the semiconductor boom.
Regulators step in
The rally has now drawn the attention of the Securities and Exchange Board of India, which has begun examining the stock’s surge for potential wrongdoing, said the report.
RRP, valued at about $1.7 billion at its peak, has been restricted by its exchange to trading just once a week.
The shares have fallen around 6% from their November 7 high, suggesting that regulatory action and tighter surveillance are starting to weigh on momentum.
The case highlights the difficulty regulators face in balancing market access with investor protection, particularly in fast-moving, narrative-driven trades.
Ownership and corporate shifts
According to Bloomberg, RRP’s transformation began in early 2024 when entrepreneur Chodankar took control of G D Trading and Agencies Ltd. by repaying an 80 million-rupee loan owed to its founders in exchange for equity.
In April, the board approved issuing shares at Rs 12 each, 40% below the market price, giving Chodankar a 74.5% stake and reducing the founders’ holding to under 2%.
The company was later renamed RRP Semiconductor.
Chodankar also incorporated RRP Electronics Pvt. Ltd. earlier in 2024 to build an outsourced semiconductor assembly and testing facility in Maharashtra.
While RRP Semiconductor lists RRP Electronics as a related party because both are owned by Chodankar, it does not hold any direct ownership stake, according to exchange filings.
Financial strain beneath the surge
RRP’s financial disclosures have offered little reassurance.
The company reported negative revenue of Rs 68.2 million and a net loss of Rs 71.5 million for the quarter ended September.
The negative revenue stemmed from reversing sales linked to a Rs 4.4-billion order from Telecrown Infratech Pvt., which was cancelled due to contractual disagreements.
RRP also clawed back Rs 80 million of revenue in the March quarter, according to filings.
In a November 3 exchange statement, as per Bloomberg, the company said it has not started semiconductor manufacturing, has not applied under government incentive programs, and denied any celebrity associations, following reports linking it to high-profile figures.
Across Asia, exchanges and companies have warned investors about chasing AI-linked stocks.
Similar alerts in China and South Korea this month were followed by sharp price swings, reinforcing concerns about speculative excess.
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