The Securities and Exchange Board of India (SEBI) has impounded ₹173.14 crore in alleged insider-trading profits and barred eight individuals from accessing the securities market, after finding that they traded in shares and derivatives of Indian Energy Exchange Ltd (IEX) on the basis of confidential information leaked from the Central Electricity Regulatory Commission (CERC) ahead of its market coupling order.
The ex-parte interim order passed by Whole-Time Member Kamlesh Varshney under Sections 11(1), 11(4), and 11B of the SEBI Act said there was “enough concrete prima facie evidence on record in the form of documentary evidence found on the device of Bhoovan pertaining to the CERC order, minutes of meetings held earlier in this regard shared with him, statements of Noticees admitting that the UPSI was conveyed to them by Bhoovan, meeting of Sanjeev Kumar with O2 on July 15, 2025 and the fact that they were in constant touch with O1 and O2 who had access to the UPSI from the very nascent stage, to draw a reasonable conclusion that UPSI was shared with Bhoovan by O1.”
The CERC’s July 23 order introduced market coupling - a system for centralised matching of bids from various power exchanges to determine a uniform market clearing price. The move aimed to streamline price discovery across India’s three operational exchanges: IEX, Power Exchange India Ltd (PXIL) and Hindustan Power Exchange Ltd (HPX).
Before the announcement, IEX dominated the power exchange market, particularly in the day-ahead market (DAM) segment, which accounted for the majority of its trading volumes. With market coupling, IEX was expected to lose its dominant position in price discovery as PXIL and HPX would gain access to larger trade volumes. The new mechanism was, therefore, expected to reduce IEX’s trading volume and market share in the DAM segment.
Between July 21 and July 28, the noticees took large positions in put options of IEX, anticipating a sharp price fall after the CERC order. The trades were exited immediately after the announcement, yielding cumulative profits of ₹173.14 crore.
The profits included ₹72.04 crore for Bhoovan Singh, ₹31.59 crore for Amita Soran, ₹22.65 crore for Amar Jit Soran and ₹34.53 crore for Narender Kumar. SEBI’s fund-flow analysis found that parts of these gains were transferred to related entities such as Jai Singh & Co, GNA Energy Pvt Ltd and JSC Infratech Pvt Ltd, reinforcing the close financial links among the traders.
SEBI initiated a suo motu preliminary examination after observing a sharp fall in the share price of IEX on July 24 this year, following the CERC’s after-market announcement introducing market coupling a day earlier. The order led to a nearly 30% drop in IEX’s share price.
During this period, SEBI also received a complaint alleging insider trading in the scrip. Based on this, the regulator appointed an investigating authority on September 12 to examine trading in IEX between July 1 and August 14. Search and seizure operations were subsequently carried out between September 18 and 20 at multiple locations linked to the noticees. Digital evidence was collected and statements recorded.
SEBI held that the CERC order constituted unpublished price sensitive information (UPSI) under the Prohibition of Insider Trading Regulations, 2015 and that the noticees were insiders who had traded while in possession of that information.
“There is huge correlation between the UPSI and trades undertaken by the Noticees when they were in possession of UPSI,” the order stated, adding that the transactions “would not qualify as regular or routine.”
Invoking his powers under the SEBI Act, Varshney directed that “the bank accounts of Noticees are impounded to the extent of amount as mentioned in Table below, and all Noticees are directed to open fixed deposit account(s)… with a lien marked in favour of SEBI and the amount kept therein shall not be released without permission from SEBI.”
He also restrained the noticees from trading in securities “either directly or indirectly” until further orders, and instructed banks and depositories to freeze withdrawals from their accounts.
While the order does not yet impose a final penalty, SEBI said that adjudication proceedings would follow, which may result in disgorgement or monetary fines.
The regulator also confirmed that its investigation into the role of CERC officials - identified as Official 1, Official 2 and Official 3 - was continuing. Varshney noted that the leak “originated within CERC’s Economics Division” and described the matter as “a serious breach of confidentiality by a statutory authority.”
[Read Order]