SEBI said that the settlement for derivative transactions on September 4, September 5 and September 8 will be done on Tuesday (September 9, 2025). File 
| Photo Credit: Reuters

Capital markets regulator Securities and Exchange Board of India (SEBI) on Friday (February 14, 2025) rejected Digvijay Laxhamsinh Gaekwad’s plea seeking an exemption to make a competing open offer for a majority stake in Religare Enterprises.

With this ruling, the Burman Group’s open offer process remains on track, solidifying their acquisition bid for Religare Enterprises Ltd (REL).

The market regulator in an order stated that the price offered by Mr. Gaekwad was ₹275 per share in the proposed open offer which was ₹40 higher than the Burman Group’s offer of ₹235 per share.

“The applicant (Danny Gaekwad Developments & Investments, Florida) has failed to demonstrate his ability to meet the financial obligation for making the competing open offer,” it stated.

SEBI also observed that the “applicant has failed to deposit ₹600 crore, as directed by the Supreme Court of India vide its order dated February 7, 2025, read with order dated February 12, 2025, which would have shown the applicant’s commitment towards making the competing open offer”.

In the absence of adequate proof of financial resources required for making the competing open offer, the application does not appear to be bonafide. It seems frivolous and aimed solely at hindering the open offer process, the order passed by SEBI’s whole-time member Ashwani Bhatia said.

“I …. dispose of the application dated February 1, 2025, filed by the applicant,” Ms. Bhatia said in the order.

The regulator in its order, noted that Mr. Gaekwad’s request did not qualify as an exemption under the norms since he was not seeking relief from making an open offer but rather permission to make a competing one against the Burman Group.

SEBI maintained that the Burman Group’s public announcement date remained September 25, 2023, as per rules, and not January 18, 2025, as contended by Mr. Gaekwad.

The regulator also emphasised that Mr. Gaekwad had not applied for necessary regulatory approvals from SEBI, RBI, or other authorities. Even if he did, the approval process would be time-consuming, leading to uncertainty and further delaying the open offer.

SEBI also questioned the role of Mr. Gaekwad’s merchant banker, PL Capital Markets Pvt. Ltd., in doing the due diligence while taking on the assignment of the competing open offer.

“The merchant banker was clueless about the credentials of Mr. Gaekwad and was found to have failed to do proper due diligence and KYC of his client before accepting the mandate,” the regulator said.

The markets watchdog also highlighted that the open offer process by the Burman Group was already underway, with over 2.31 lakh shares tendered as of February 13.

“If Mr. Gaekwad’s competing offer were permitted, those shareholders who had already tendered their shares would be unable to participate, creating an unfair situation,” the regulator said in the order.

SEBI said if the competing open offer is allowed to be made by the applicant, it would entail keeping the open offer process by the Burman Group on hold for an uncertain period in a situation where the decision of regulators on the competing open offer cannot even be predicted.

“The same shall not only be prejudicial to the interest of the Burman Group, an existing shareholder of the target company (REL), which has devoted considerable effort, time and resources to be able to make the open offer, but also to the shareholders who have already tendered shares in the open offer by Burman’s,” SEBI said.

The regulator noted that Burman Group is a stakeholder in this process and as a shareholder of the REL, is entitled to protection of its rights, just like other shareholders.

The order came after Mr. Gaekwad submitted a letter dated January 24, January 26 and February 1, to SEBI requesting to grant requisite exemption from strict enforcement of Regulation 20 of the SAST (Substantial Acquisition of Shares and Takeover) rules to allow him to make a competing offer for 55% stake of REL, at a price of ₹275 per equity share.

He had also sought a directive to keep the Burman Group’s open offer in abeyance.

Later, Mr. Gaekwad filed a formal application, and the matter reached the Delhi High Court seeking a stay on the Burman Group’s open offer.

The court, however, directed SEBI to decide on Mr. Gaekwad’s plea while allowing the Burman Group’s offer to proceed.

Dabur India promoter Burman family through its four entities – M.B. Finmart Pvt Ltd, Puran Associates, VIC Enterprises, and Milky Investment & Trading Company – held a 21.54% stake in REL and proposed to acquire an additional 5.27% from the market in September 2023, triggering an open offer requirement under SEBI’s Takeover rules.

Thereafter, a public announcement for the open offer was made on September 25, 2023, followed by a detailed public statement (DPS) on October 4, 2023.

The Burman Group have attempted to obtain the requisite regulatory approvals in order to discharge the open offer obligations under SAST rules, however, the management of REL failed to extend the required cooperation in this regard.

Consequently, SEBI, through an order dated June 19, 2024, directed REL to make necessary applications for obtaining the required regulatory approvals.

Subsequently, after grant of approval by SEBI and RBI in December 2024, the Burman Group proceeded with the open offer process.

However, regulatory approvals took time, and the open offer process could only commence in January this year with the tendering period scheduled from January 27 to February 7.

The SEBI order came a day after Religare Enterprises announced that its executive chairperson Rashmi Saluja ceased to be a director on its board following shareholders’ rejection of a proposal seeking her re-appointment.

SEBI examined the matter to determine whether the company violated securities laws, including the SEBI Act, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, and Listing Obligations and Disclosure Requirements (LODR) Regulations. File
| Photo Credit: Reuters

Markets regulator Securities and Exchange Board of India (SEBI) on Monday (December 23, 2024) suspended trading in Bharat Global Developers Limited (BGDL) for financial misrepresentation, misleading disclosures, price manipulation, and offloading shares at inflated prices.

Additionally, the regulator has barred the company, its managing director Ashok Kumar Sewada, CEO Mohsin Shaikh and directors — Dinesh Kumar Sharma and Nirali Prabhatbhai Karetha — and several preferential allottees of shares among the 18 entities from the securities market.

SEBI, in its interim order, has also frozen illegal profits to the tune of ₹271.6 crore made by preferential allottees through the sale of shares.

This came after the SEBI initiated an investigation into Bharat Global Developers following social media posts and a complaint on December 16, 2024.

The inquiry was triggered by a dramatic 105-fold increase in BGDL’s share price, which surged from ₹16.14 in November 2023 to ₹1,702.95 in November 2024.

The regulator examined the matter to determine whether the company violated securities laws, including the SEBI Act, Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations, and Listing Obligations and Disclosure Requirements (LODR) Regulations.

In its probe, SEBI found that BGDL replaced its management, approved preferential allotments to select individuals, and issued false disclosures about business expansion and partnerships. These actions were part of a scheme to manipulate share prices and allow insiders to sell shares at artificially high prices.

The company portrayed itself as a successful company with large contracts and technological expertise, none of which were true. This misrepresentation attracted unsuspecting investors and inflated the share price.

Moreover, the financial statements of the company also appeared to misrepresent the true state of affairs of the company and its business.

The financial statements revealed that till FY23, the company had negligible revenue, expenses, fixed assets and cash flows. Suddenly, however, the financial results from the quarter ended March 2024 showed a steep spike in revenues and expenses. This was accompanied by negligible fixed assets, negative cash flows from operating activities and huge amounts of trade receivables and payables.

Further, the regulator noted that the number of shareholders surged from 10,129 in September 2024 to 44,976 in December 2024. However, over 99.9% of shareholders held less than 1 per cent equity, while a few preferential allottees controlled most shares and profited significantly.

Moreover, a bonus share issue (8:10) and a share split (10:1), scheduled for December 26, 2024, would have further diluted ownership and increased trading volumes.

“Misstatements regarding its business, financials and prospects as disseminated by BGDL show an effort to drum up the company’s share price. In light of the facts and findings… I find that in the garb of a compliant company, BGDL has created paper wealth now with a market cap of above ₹12,000 crore, which is not founded on any genuine economic activity or production of any goods or services. In fact, such wealth has arisen from misrepresentation of the company’s business and financials to general investors and shareholders,” SEBI Whole Time Member Ashwani Bhatia said in his 25-page order.

Accordingly, SEBI in its order said, “trading in the scrip of Bharat Global Developers Limited is suspended till further orders”.

Also, the regulator has barred the company, its top management and preferential allotees “from buying, selling or dealing in securities, or accessing capital market either directly or indirectly, in any manner whatsoever until further orders”.

Further, the compliance officer has been restrained from associating with any intermediaries registered with SEBI, any listed public company or any company that intends to raise money from the public, until further orders.

SEBI said the suspension of trading in futures contracts would be on soybean and its derivatives, crude palm oil, wheat, paddy rice, chickpeas, green gram and rapeseed. File
| Photo Credit: Reuters

The suspension of trading in derivative contracts for key farm commodities was extended till January, so as to curb food inflation. The Securities and Exchange Board of India (SEBI) initially ordered a year-long suspension of futures trading in key farm commodities in 2021 — a significant move since futures trading was allowed in 2003.

The suspension was first extended until December 20, 2023, and later to December 20, 2024. In a notification issued late on Wednesday (December 18, 2024), SEBI said the suspension of trading in futures contracts would now continue until January 31, 2025, on soybean and its derivatives, crude palm oil, wheat, paddy rice, chickpeas, green gram and rapeseed.

Also read | SEBI tightens rules for IPOs of small firms

“Instead of extending the ban for a year as it did in the past two instances, it has extended it for only one month. This is a good sign. Perhaps futures trading will be allowed early next year,” said a Mumbai-based dealer with a global trade house.

The vegetable oil industry has been seeking the resumption of futures trading to help importers hedge their risks and provide oilseed growers with an indication of future price movements.

“The resumption of futures trading in soybean, rapeseed, and their derivatives would help bring stability to oilseed prices,” said B.V. Mehta, executive director of The Solvent Extractors’ Association of India.

SEBI proposes retail investors participate in algo trading

Nearly two-thirds of the country’s edible oil requirements are met out through imports, primarily of palm oil from Indonesia and Malaysia, as well as soy oil and sunflower oil from Argentina, Brazil, Russia, and Ukraine.

The National Commodity and Derivatives Exchange (NCDEX), which derives most of its volume from trading in farm commodities, was the most affected by the government’s decision, followed by the Multi Commodity Exchange.

In 2008, the SEBI had introduced algorithmic trading which provided facilities like faster order execution, reduced transaction costs and greater transparency. File
| Photo Credit: Reuters

Securities and Exchange Board of India (SEBI) on Friday (December 13, 2024) proposed a framework to allow retail investors to participate in algorithmic trading through stock brokers.

In 2008, the SEBI had introduced algorithmic trading which provided facilities like faster order execution, reduced transaction costs and greater transparency. However, algo trading was permitted only for institutional investors.

A study published by the regulator in September showed that during fiscal year 2024, algorithmic trading accounted for 97% of foreign investors’ and 96% of proprietary traders’ profits in futures and options.

SEBI said that there has been an increasing demand for algo trading by retail investors, and thus the need to review the framework to safeguard investor interest and maintain integrity of the market.

The regulator, via a draft circular published on its website, has proposed that stock exchanges will need to grant approval for each algo that will be used by retail investors.

Moreover, all such orders will need to be tagged with a unique identifier for transparency in audit processes.

Algos developed by “tech-savvy” retail investors will need to be registered with exchanges, it added.

Exchanges will be responsible for supervising algorithmic trading for retail investors, including defining the roles and responsibilities of brokers.

The regulator has sought comments from the public before it finalises a date of implementation of its proposals.

The logo of Securities and Exchange Board of India (SEBI).
| Photo Credit: Reuters

The Securities Appellate Tribunal (SAT) has stayed a SEBI order that barred realty firm Omaxe, its Chairman Rohtas Goel, Managing Director Mohit Goel and others from the securities market for two years for misrepresentation in the company’s financial statements.

The latest order came after Omaxe and others challenged the order passed by the Securities and Exchange Board of India (SEBI) on July 30.

In its ruling on October 1, the appellate tribunal said, “direction at paragraphs No. 41(1) and (2) shall remain stayed, subject to deposit of penalty amount by the appellant within four weeks”.

Paragraphs No 41(1) and (2) pertain to securities market ban and prohibition from holding any position as key managerial personnel of any other listed company imposed on individuals by SEBI.

Commenting on the development, Omaxe Managing Director Mohit Goel said, “With this stay, the restrictions on our participation in the securities market have been lifted, enabling us to raise capital and continue business operations without disruption.”

“At Omaxe, we remain committed to upholding transparency and maintaining the trust of our investors and stakeholders. We will continue to fully cooperate with the authorities and focus on our ongoing projects, ensuring sustained value creation and growth,” Mr. Goel added.

SEBI, in its ruling, restrained Omaxe, Rohtas Goel, Mohit Goel and three others – Sudhangshu S Biswal, Arun Kumar Pandey, and Vimal Gupta – from the securities markets for two years.

Additionally, these five persons were “prohibited from holding any position as Director or Key Managerial Person of any other listed company for a period of two years”.

Further, a penalty of ₹47 lakh was imposed on 16 entities, including these six. The penalties ranged from ₹1-7 lakh.

In its order, SEBI said that these entities have “acted in concert in order to execute a fraudulent scheme which they tried to portray as normal transactions for the benefit of the company although it was experiencing loss, while also trying to portray these as merely lending activities, thereby trying to maintain the price of the scrip of Omaxe for a period of three years”.

The company misrepresented the financial statements during 2018-19, 2019-20 and 2020-21 through its various items — revenue, debtors, advances, and expenses.

“By the act of large-scale misrepresentation/misstatement/manipulation in financial statements by Omaxe, the scrip price was directly or indirectly manipulated to maintain the value of the collateral kept by the promoter against the loan,” SEBI had noted.

Furthermore, the fraud was never disclosed to the shareholders of Omaxe, which misled them to remain invested in its shares or deal in its securities. Also, misrepresentation of the books and accounts of Omaxe misled the investors in the securities market, it had added.

A bird flies past the logo of the Securities and Exchange Board of India (SEBI) at its headquarters in Mumbai on April 19, 2023.
| Photo Credit: REUTERS

The Securities and Exchange Board of India (SEBI) has blamed “external elements” for “misguiding” its staff, more specifically junior officers in House Rent Allowance (HRA) issues, to target its credibility and “its leadership”.

“It is our belief that SEBI’s junior officers, who were in large numbers, originally aggrieved in respect of HRA allowances, have been misguided, perhaps by external elements to believe that as “employees of a regulator”, they should not be held to high standards of performance and accountability even though they have in fact demonstrated that they are fully capable of delivering to high standards to the market ecosystem,” SEBI said on Wednesday (September 4, 2024).

They have been misguided also to believe that they were being underpaid even at a CTC of ₹34 lakh per annum and that it would be in their interest to “use issues of work culture to bargain for monetary benefits and to believe that they should get automatic promotions”, it said.

It opted not to name the “external forces” by saying “we would not like to speculate on who those external elements may be or what their motives might be”.

Responding to media report

On SEBI’s work culture, the market regulator released a five-page statement stating that the employees, in recent past, were demanding 55% increase in HRA over the allowances set in 2023 among numerous other benefits.

“Employees also raised an issue on updation of SEBI’s automated Management Information System for Key Result Areas (KRAs), which had been designed to bring more transparency, fairness and accountability within SEBI. A 15-minute silent protest was held in this context,” SEBI said.

It said a group of employees consciously designed a strategy to change the narrative to frame the issue as relating to the work environment “with an objective to have bargaining power to seek more benefits”.

“Accordingly, a letter focused on “work culture” was crafted and sent to HRD on August 06, 2024. Thereafter, after 7 days, apparently as part of the strategy, a second letter was submitted with a long list of 16 demands, for numerous monetary and non-monetary benefits including increase in HRA,” it added.

Further, automatic promotions at lower performance ratings without interviews was demanded, it further said.

Stating that SEBI officers were already well paid and for entry-level officers at Grade A, the cost-to-company (CTC) is ₹34 lakh a year that is comparable to private sector salaries, the regulator said the staff started demanding an additional CTC of almost ₹6 lakh per annum.

“The claims of unprofessional work culture in the letter dated August 06, 2024 are misplaced and seem to stem from instances such as under-pitching of processing capability of officers by as low as 1/4^th of actual capacity,” it said.

Also, misreporting of status of achievements of KRAs, shuttling of files between departments over a long period to avoid taking decisions and “adjusting” appraisal marks of poorly performing officers to “somehow” make them eligible for promotion, it said.

In such instances, the officers concerned have been held accountable, given firm feedback, and corrective actions taken.

“It is unfortunate that some elements have attempted to diminish the significant capabilities of SEBI employees by instigating employees to believe that, as “employees of a regulator” they should not be required to have such high standards of performance and accountability,” SEBI stressed.

“SEBI apprehends that the junior officers have been receiving messages from external elements outside their group, effectively instigating them to…go to media, go to the Ministry, go to Board…, perhaps to serve their own purpose,” it said.

“In fact, the letter of August 06, 2024 was not sent by the SEBI employee associations to the Government (and a section of the media). It was an anonymous email that was sent, and officers and associations have themselves condemned it and communicated the same to HRD through emails,” it claimed adding most unions have given in writing that they had not escalated the matter beyond the official channel.

Individually, SEBI imposed penalties in the range of ₹3 crore to 7 crore on Rana Sugars, its promoters, and other related entities.
| Photo Credit: Special arrangement

Markets regulator Securities and Exchange Board of India (SEBI) has debarred 14 entities including, Rana Sugars promoters’ and other related entities from the securities markets for two years and slapped a ₹63-crore fine on them on charges of diversion of funds.

The regulator also prohibited Inder Pratap Singh Rana (promoter), Ranjit Singh Rana (chairman), Veer Pratap Singh Rana (MD), Gurjeet Singh Rana, Karan Pratap Singh Rana, Rajbans Kaur, Preet Inder Singh Rana and Sukhjinder Kaur (promoter) from holding any position as director or key managerial person of any other listed company for two years.

On SEBI chairperson’s conflicts of interests

Ranjit Singh, Veer Pratap and Sukhjinder Kaur were also the promoters of Rana Sugars Limited, as per the exchange data.

Individually, SEBI imposed penalties in the range of ₹3 crore to 7 crore on Rana Sugars, its promoters, and other related entities.

“I find that noticee No 1 to 9, who are promoters of RSL and beneficiaries of such diversion of funds from RSL, have violated PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations.”

“…also find that Noticee No 10 (Manoj Gupta), who was CFO and signed and certified such manipulated financial statements of RSL, aided and abetted such diversion of funds from RSL to its promoters and their family members violated PFUTP regulations,” SEBI’s Chief General Manager G. Ramar said in the final order on Tuesday (August 27, 2024.)

The probe revealed that Rana Sugars Limited failed to disclose Laxmiji Sugars Mills Company as a related party in FY 2016-17. Further, the firm failed to disclose FTPL, CAPL, JABPL, RJPL and RGSPL as related parties.

Inder Pratap, Ranjit, Veer Pratap Singh Rana, were persons in charge of and responsible for the affairs of Rana Sugars. Therefore, Rana Sugars, Inder Pratap, Ranjit Singh and Veer Pratap Singh Rana have violated the disclosure rules.

SEBI also noted with respect to the movement of funds between RSL and its related entities was not towards business advance for the purchase of sugar cane seeds and repayment of unsecured loan.

Related parties are Flawless Traders Private Limited (FTPL), Century Agros Private Limited (CAPL), Jay Aar Builders Private Limited (JABPL), RJ Texfab Private Limited (RJPL) and RGS Traders (RGSPL).

“These funds were then transferred by RSL to related parties on the same day to promoters of Rana Sugars and their family members. The regulator found that related parties aided and abetted Rana Sugars, its promoters and directors to divert funds from RSL and violated PFUTP norms,” the order said.

SEBI also directed Rana Sugars to recover ₹607 crore from related entities which includes ₹339 crore in receivables and ₹268 crore in interest dues.

Thereafter, the regulator directed Rana Sugars to take all necessary steps for recovery of dues from these entities and advised them to appoint an independent law firm to take effective steps for recovery in consultation with the NSE.

The markets watchdog also observed that RSL, Inder Pratap Singh Rana, Ranjit Singh, Veer Pratap Singh, Gurjeet Singh, Karan Pratap Singh and Rajbans Kaur have failed to provide any explanation for not appearing before the investigation authority (IA).

Further, they also failed to furnish information/documents sought by the IA, which hampered the investigation process, thereby, violating SEBI norms.

The order came after SEBI investigated the affairs of RSL to examine the diversion of funds from the company by the promoters and promoter-related entities of Rana Sugars, and consequent misstatements in the financial statements of the company.

And whether the alleged diverted funds have been siphoned off by the promoters and promoter-related entities of the firm, resulting in violations of the provisions of PFUTP rules and LODR (Listing Obligations and Disclosure Requirements) norms. The investigation period was from financial year (FY) 2014-15 to FY 2020-21.

Bengaluru:

India’s No.2 IT services exporter Infosys’ CEO Salil Parekh has settled charges of violating provisions of insider trading, the country’s markets regulator said on Thursday.

Mr Parekh agreed to pay 2.5 million rupees (around $30,000) for failing to have adequate controls to prevent insider trading, the Securities and Exchange Board of India said. 

Congress Rahul Gandhi shows a stock market movement chart during a press conference in New Delhi on June 6, 2024.
| Photo Credit: AP

The story so far: The Indian stock market witnessed extreme volatility right after the release of the exit poll results earlier this month and on June 4 when the results of the latest Lok Sabha election were declared. The benchmark indices, the Nifty and the Sensex, have since managed to recover the losses. The Congress alleged that Prime Minister Narendra Modi and Home Minister Amit Shah had manipulated the stock market through their statements to favour certain investors.

What is the controversy about?

The Nifty and the Sensex gained 3.2% and 3.4%, respectively, to hit all-time highs on June 3, the first day of trading after the exit poll results, which were released over the preceding weekend, suggested that the BJP would win a resounding majority in the election. The biggest gainers were stocks of companies that were seen to be close to the government, such as the Adani Group stocks, and stocks of public sector companies which were expected to benefit during Mr. Modi’s third term in power. Both the benchmark indices, however, slumped by almost 6% the very next day after the actual results failed to match exit poll predictions. The decline on June 4, which was the worst single-day fall in the stock market since March 2020 in the wake of the COVID-19 pandemic’s outbreak in India, wiped out investor wealth worth about ₹30 lakh crore. Prior to the exit poll results, the Prime Minister and the Home Minister had made statements encouraging investors to buy stocks before June 4 in order to benefit after the election results.

What is the Opposition’s allegation?

The Congress has alleged that Mr. Modi and Mr. Shah deliberately made comments exhorting retail investors to purchase stocks before the day of the election results and that this was an attempt to manipulate the market to favour certain foreign investors. To back this claim, the party’s data wing head Praveen Chakravarthy has drawn attention to the doubling of the value of stocks traded for cash in the market on May 31, the last trading day before the release of the exit poll results. The total value of stocks traded on May 31 was ₹2.3 lakh crore against ₹1.1 lakh crore the previous day. Mr. Chakravarthy has noted that more than half the buying that happened on May 31 came from foreign investors and further added that foreign investors were largely net sellers prior to May 31, when they suddenly turned net buyers of stocks. According to him, the PM’s statements encouraging investors to buy stocks before June 4 would have benefited these foreign investors who managed to load up on stocks before the exit poll results gave a sharp 3% bump to the stock market on Monday. The Opposition parties claim that these foreign investors had insider information about the exit poll results. They also add that the foreign investors managed to offload their stocks on Monday to retail investors who were not just late to the party but also suffered huge losses on Tuesday. The Opposition parties have called for a joint parliamentary committee (JPC) to probe the matter.

What do the market regulator’s rules say?

The Securities and Exchange Board of India’s Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market (FUTP) Regulations state that “planting false or misleading news which may induce sale or purchase of securities” is illegal. But there are exceptions. Comments on the overall market trend when broadcast to the wider public through mass media such as TV and newspapers, are not considered to be the same as information secretly leaked to certain investors to benefit from a coming market move. If not for such exceptions, it would be impossible for anyone to voice their opinion on the market. So, experts contend that unless, say, an investigation can prove that Mr. Modi acted in collusion with certain investors to boost the market prior to the exit poll results, there is probably nothing illegal about his statement urging investors to buy before June 4.

How has the Centre responded?

Union Minister Piyush Goyal responded to the Opposition’s accusations by arguing that foreign investors actually bought stocks at a high price and sold at a low price while Indian investors deftly used the market’s volatility to sell high and buy low. NSE data appeared to back this contention as it shows the umbrella category of ‘retail investors’ were net sellers of stocks on May 31 and June 3, when the market rose, while they were net buyers of stocks worth ₹21,179 crore on June 4, when the markets crashed. Foreign portfolio investors (FPIs), meanwhile, were net buyers on May 31 and June 3 when the markets went up and were net sellers on the day the markets crashed. Some market experts, however, point to the fact that the NSE’s ‘retail investors’ category includes not just small ordinary retail investors but also non-resident Indians (NRIs), HUFs, individual/proprietorship firms and partnership firm /Limited Liability Partnership (LLP) that encompass the investment vehicles used by ultra high net worth and high net worth individuals. These experts observe that shares worth a net amount of more than ₹21,000 crore were bought by ‘retail investors’ from FPIs and domestic mutual funds and that such heavy buying was unlikely to have been done by small ‘retail investors’ alone.

Further, while FPIs bought stocks worth ₹96,155 crore on May 31, the highest-ever in history, they also sold stocks worth ₹93,977 crore on the same day. In other words, despite the sudden rise in trading activity, foreign investors were not huge net buyers of stocks on May 31. This is, however, not to categorically say that there was no mischievous activity during the day. Data on net purchases or sales may not reflect how individual foreign investors with insider information may have benefited. Further, whether an investor group profited or lost money can also depend on exactly when during a trading session they managed to buy or exit a stock regardless of whether the indices closed higher or lower that day. Only a thorough investigation based on granular data can offer an answer to whether there was manipulation.