Shares of Adani Green rise over 1% after SEBI drops insider trading case related to SB Energy deal

Shares of Adani Green Energy Ltd (AGEL) rose 1.5% to the day’s high of Rs 1,055.50 on Monday, December 15, following the conclusion of insider trading proceedings by the Securities and Exchange Board of India (SEBI) against persons associated with the Adani Group. The case was related to the 2021 acquisition of SoftBank-backed SB Energy.SEBI has withdrawn insider trading charges against Pranav Vinod Adani, Kunal Dhanpalbhai Shah and Nrupal Dhanpalbhai Shah. The regulator concluded that the transactions under investigation took place after the relevant information about the takeover had become public.

The Show Cause Notice (SCN) issued to the individuals was thrown out “without any instruction” and no payout or monetary penalty was imposed.The case arose out of Adani Green’s disclosure to the stock exchanges about its agreement to acquire shares in SB Energy from SoftBank Group Capital Ltd and Bharti Global. The announcement was considered price sensitive due to the size of SB Energy’s portfolio. SEBI noted that the company’s share price rose sharply on the day of the announcement.

The investigation focused on trading in Adani Green shares between January 28 and August 20, 2021. The SCN issued on November 10 alleged that Pranav Adani passed on unpublished price sensitive information (UPSI) related to the acquisition to Kunal Shah, who, along with Nrupal Shah, then traded shares while allegedly in possession of UPSI.

The notice cited fictitious illicit profits of Rs 50.92 lakh for Kunal Shah and Rs 40.45 lakh for Nrupal Shah, with the main allegation relating to a phone call from Kunal Shah to Pranav Adani on May 16, 2021.

Sensex, Nifty Today: Watch all the LIVE stock market action here. However, SEBI concluded through public news reports that the information had become “generally available” by 3:25 PM on May 16. The order noted that news of the takeover had been circulating in the public domain even before the phone call, making the allegation of UPSI communications untenable.

SEBI also highlighted that the trading activity of the individuals took place on May 17, 2021, after the information ceased to be UPSI. On that date, Kunal Shah bought 50,000 shares of AGEL on the NSE, while Nrupal Shah acquired 30,037 shares.

The regulator noted that the stock price hit the upper circuit on May 17 and rose 4.84% on May 18, indicating a stronger market reaction to the initial news flow than to the formal disclosure on May 19, 2021, which led to a 3.75% increase.

Also read: Axis Securities names Vedanta among top 3 tech picks, sees up to 11% increase in 3 to 4 weeks

(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)