Sebi cracks down on insider trading in IEX: 8 banned from markets after Rs 173 crore windfall

Markets regulator Securities and Exchange Board of India (Sebi) on Wednesday barred eight people from accessing the capital markets after allegedly finding them indulging in insider trading related to the shares of Indian Energy Exchange (IEX), leading to illegal gains of over Rs 173 crore.

Those named in the order are Bhoovan Singh, Amar Jit Singh Soran, Amita Soran, Anita, Narender Kumar, Virender Singh, Bindu Sharma and Sanjeev Kumar. Although the decision is an interim order, it applies immediately until further notice.

The regulator conducted a suo-motu preliminary investigation into the alleged insider trading after taking note of the significant fall in the price of shares in the IEX following the Central Electricity Regulatory Commission’s (CERC) instruction on market coupling on July 23, 2025 after trading hours.

Market coupling involves the centralized matching of bids from different energy exchanges to arrive at a uniform market clearing price. This step was aimed at achieving price convergence for different electricity sectors.

The order showed that IEX shares fell more than 29% on July 24, the day after the CERC order.

India currently has three operational electricity exchanges – IEX, PXIL and HPX – that enable transparent and efficient electricity trading between generators, distribution companies and major consumers. Although all three offer similar products such as Day-Ahead Market (DAM), Term-Ahead Market (TAM), Real-Time Market (RTM) and Renewable Energy Certificates (RECs), IEX dominates the market, especially in the DAM segment, where it comes to buying and selling power for next day delivery. IEX’s higher liquidity makes it the leading price-setting platform in short-term electricity trading. Sebi’s findings showed that European (PE) PUT options expiring on July 31, 2025 rose to 65,212 on July 22, 2025 and after the CERC order was made public on July 23, IEX’s share price fell 29.6% to close at Rs 132.32 on July 24. 2025.

In a 45-page order, Sebi said: “I note that prima facie fraudulent market activities from Noticees in the present case are being carried out in a well-coordinated manner in collaboration with other entities involved in sharing the UPSI [unpublished price sensitive information] with them disrupt the orderly functioning of the securities market, adversely affect the integrity of the securities markets and also be detrimental to the efficient functioning of the overall securities markets ecosystem.”

“Noticees’ thoughtful modus operandi herein included sharing crucial information regarding regulatory actions emanating from a regulator that would undoubtedly have a serious impact on IEX’s listed securities. Such actions create an information imbalance among investors, leaving them at a disadvantage due to their lack of access to the confidential information held by individuals who may have access to such information from their influential contacts. This results in an imperfect market in which information is stored.” not easily and equally accessible to all participants in the securities market in an equitable manner, thereby exposing innocent investors to possible financial risks that become unavoidable,” the order said.

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