Another story of making money by flouting rules in the stock market has come to light. This time, the case is related to the merger of HDFC Limited and HDFC Bank. The country's market regulator, SEBI, has taken strict action in this case against a Hindu Undivided Family (HUF), imposing a penalty of ₹10 lakh. It is alleged that this HUF, identified as 'Rupesh Satish Dalal HUF', bought a large number of call options based on confidential information related to the HDFC merger and then made a profit.
Major Disclosure in SEBI Report
According to the information provided by SEBI, 'Rupesh Satish Dalal HUF' purchased several call option contracts related to the shares of HDFC Limited and HDFC Bank on April 1, 2022. This trading was not like a normal investment but was done based on a specific plan and information.
The investigation into the case revealed that at that time, the firm had inside information related to this merger, which was not made public in the market. Taking advantage of this information, it sold all the call options just a few days later, i.e., on April 4, 2022, and made a substantial profit.
Inside Information Obtained Through Son
Another important link emerged in SEBI's investigation. The information for this insider trading was received by 'Rupesh Satish Dalal' through his son. The son was in contact with a person associated with Deloitte. Deloitte was involved in this merger process as a professional consulting agency, and some of its officials were aware of the confidential information of the merger.
The investigation clearly showed that the information received by the son was not published and was not available to other investors in the market. This is a clear case of insider trading.
Strategy Devised to Make Profit
According to the SEBI report, as soon as the news of the HDFC merger became public, 'Rupesh Satish Dalal HUF' sold all its positions. This entire operation was carried out so cleanly that ordinary investors could not understand it, but this case could not escape SEBI's strict monitoring.
SEBI found in its investigation that there was no public announcement of the merger in the market at the time of trading. In such a situation, this entire process falls under the category of insider trading.
SEBI Imposes a Penalty of ₹10 Lakh
Taking the entire matter seriously, SEBI has imposed a penalty of ₹10 lakh on 'Rupesh Satish Dalal HUF'. In addition, they have been found guilty of violating the rules related to insider trading.
According to SEBI, such cases harm transparency and fairness in the market, and the confidence of small investors also wavers. Therefore, it becomes necessary to keep a close watch on such activities.
Deadline for Algo Trading Extended by Two Months
SEBI took another important decision on Tuesday. The deadline for the new framework created to make it easier for small investors to participate in algo trading has been extended by two months to October 2025.
Algo trading is an automatic system in which orders are executed through pre-determined programs. This enables fast and disciplined trading in real time. Adopting it was currently a bit complicated for small investors, which is being tried to simplify.
SIF Investments Will Also Be Monitored
SEBI has also implemented a new mechanism on Tuesday to monitor investments related to Specialized Investment Funds (SIF).
Under this, it will be seen whether the investors investing in SIF are fulfilling the prescribed minimum limit, i.e., the condition of ₹10 lakh, or not.
SEBI has clarified that if any investor is found to be violating this minimum investment limit, action will also be taken against them.
SEBI's Continuous Strictness
In the past few months, SEBI has been continuously taking a strict stance regarding insider trading, front running, and other market irregularities. Prior to this, penalties of lakhs and crores of rupees have been imposed on many individual investors, broking firms, and institutions.
SEBI's objective is to maintain transparency in the stock market and ensure that all investors have equal opportunities. Therefore, monitoring is being increased on those who misuse confidential information for profit.
