Mumbai: Polycab India's shares witnessed a sharp decline of 22 percent in morning trade on January 11 following revelations by the income tax department about the discovery of around Rs 1,000 crore in "unaccounted cash sales" during raids on the company's offices the day before, media reports said.

At the same time, multiple block deals totalling Rs 1,293 crore took place on the exchanges, involving the exchange of nearly 33 lakh shares, equivalent to a 2.2 percent stake in Polycab, reported Moneycontrol.

The identities of the buyers and sellers involved in these transactions were not immediately could not be ascertained by Moneycontrol.

At 10:12 am, Polycab shares were trading at Rs 3,825 on the NSE.

There was a notable surge in trading volumes, with 20 lakh shares being exchanged, considerably crossing the one-month daily traded average of 7 lakh shares.

Over the past nine sessions, Polycab witnessed a substantial decrease in market capitalization, losing nearly Rs 23,091 crore. As a result, the current market capitalization stands at Rs 59,270.70 crore.

"Credible evidence recovered during the search has established that the flagship company has made unaccounted cash sales of around Rs 1,000 crore, which are not recorded in the books of accounts," the Central Board of Direct Taxes (CBDT) said on January 11, the report said.

CBDT is the administrative body for the income tax department.

The income tax department searched Polycab's premises on January 10.

Income tax officials covered 50 premises of the company in Mumbai, Pune, Aurangabad and Nashik in Maharashtra, Daman, Halol in Gujarat and Delhi.

On January 10, the income tax department conducted searches at 50 locations connected to Polycab in various cities, including Mumbai, Pune, Aurangabad, Nashik in Maharashtra, Daman, Halol in Gujarat, and Delhi.

The Central Board of Direct Taxes (CBDT) stated that during the searches initiated on December 22 of the previous year, unaccounted cash exceeding Rs 4 crore was seized, and over 25 bank lockers were put under restraint.

While the CBDT did not name Polycab in its statement, the group under investigation was indeed Polycab India, official sources later confirmed to a news agency.

Authorized distributors linked with the group were also included in the search operation.

According to the CBDT statement, a distributor acting on behalf of Polycab was found to have made unaccounted cash payments exceeding Rs 400 crore for raw material procurement.

The investigation also revealed alleged "non-genuine" expenses of around Rs 100 crore, including sub-contracting expenses, purchases, and transport expenses, based on evidence seized from Polycab's premises.

The search operation exposed instances of "unexplained" transactions by the distributor, involving the issuance of bills without actual goods supply.

These goods were purportedly sold in the open market for cash.

The CBDT claims that the authorized distributor facilitated certain parties in artificially inflating their purchase accounts, amounting to approximately Rs 500 crore.

It's noteworthy that this distributor exclusively deals in products from Polycab's flagship company.