&w=3840&q=100)
How Sebi fixed ₹20 cr disgorgement in IndusInd Bank insider trading case
IndusInd Bank on March 10 disclosed losses in its derivative portfolio, estimating an adverse impact of 2.35 per cent of its net worth of around ₹1,530 crore (as of December 2024). The bank's stock fell 27.2 per cent the next day: from ₹901 to ₹656.
Sebi investigation
Following the disclosure and stock crash, Sebi initiated a suo motu investigation to identify trades made with unpublished price-sensitive information (UPSI) related to the derivative losses. The regulator examined records from NSE, BSE, depositories, KPMG, and IndusInd Bank, focusing on the period from September 12, 2023 to March 10, 2025.
Why September 2023? Sebi's probe revealed that following the Reserve Bank of India's Master Direction (Classification, Valuation and Operation of Investment Portfolio of Commercial Banks) on September 12, 2023, IndusInd formed an inter-departmental team by September 26 to address derivative accounting issues. At the team's first meeting on September 26, discrepancies in the accounting of derivative contracts were identified, prompting the bank to calculate unreported losses.
Who traded before the crash?
Also Read
Sebi identified individuals who were aware of the derivative loss discussions and traded IndusInd shares during the UPSI period. On December 4, 2023, Khurana sold 348,500 shares to net ₹53 crore. Kathpalia sold 125,000 shares, earning ₹19.2 crore. The three other individuals sold smaller quantities around the same time. Sebi noted that none of these individuals had submitted a trading plan for FY24 or FY25, which would have indicated pre-planned sales unrelated to UPSI.
Sebi, in a 32-page interim order, concluded that these individuals traded while aware of the UPSI, thereby avoiding significant losses. 'It would be naive to assume the noticees traded routinely while discussions on discrepancies with a substantial financial impact were ongoing,' said the order.
Calculating disgorgement amount
Sebi calculated the disgorgement based on losses avoided due to the 27.2 per cent stock price drop post-disclosure. Had the individuals sold their shares after the UPSI became public, their proceeds would have been 27.165 per cent lower, the regulator has held. Thus, Sebi multiplied the number of shares sold by each individual by this percentage to determine the loss avoided, which formed the disgorgement amount.
Kathpalia's 125,000 shares sold for ₹19.2 crore and 27.165 per cent of it comes to ₹5.21 crore.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
2 hours ago
- Business Standard
Sebi moots lighter regulatory framework for AIFs with accredited investors
Capital markets regulator Sebi has proposed a separate category of Alternative Investment Fund (AIF) schemes, consisting of accredited investors, which will enjoy a lighter-touch regulatory framework compared to regular AIFs. In a consultation paper issued on Friday, Sebi suggested that such accredited investors (AI-only schemes) could be allowed certain flexibilities, given that accredited investors are deemed to have the knowledge, financial capacity and risk appetite to make informed investment decisions without the same level of regulatory safeguards required for retail participants. The proposal includes exemptions from requirements such as maintaining pari-passu rights among investors, NISM certification for key investment team members, and the current limit of 1,000 investors per scheme, the regulator said. These schemes could also extend their tenure by up to five years, subject to investor approval, and in the case of trust-structured AIFs, managers could take over certain responsibilities currently mandated for trustees, it added. The regulator also said the move is in line with its long-term vision of gradually shifting from the present 'minimum commitment threshold' metric to 'accreditation status' as the primary criterion for determining investor sophistication in AIFs. However, both metrics would co-exist for now to avoid disruption in the industry, it added. Sebi noted that while the number of accredited investors remains modest, recent relaxations and proposed process improvements, including leveraging KYC registration agencies and streamlining accreditation norms are expected to boost participation. The Securities and Exchange Board of India (Sebi) has invited public comments on the proposals till August 29. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
News18
2 hours ago
- News18
Sebi moots lighter regulatory framework for AIFs with accredited investors
New Delhi, Aug 10 (PTI) Capital markets regulator Sebi has proposed a separate category of Alternative Investment Fund (AIF) schemes, consisting of accredited investors, which will enjoy a lighter-touch regulatory framework compared to regular AIFs. In a consultation paper issued on Friday, Sebi suggested that such accredited investors (AI-only schemes) could be allowed certain flexibilities, given that accredited investors are deemed to have the knowledge, financial capacity and risk appetite to make informed investment decisions without the same level of regulatory safeguards required for retail participants. The proposal includes exemptions from requirements such as maintaining pari-passu rights among investors, NISM certification for key investment team members, and the current limit of 1,000 investors per scheme, the regulator said. These schemes could also extend their tenure by up to five years, subject to investor approval, and in the case of trust-structured AIFs, managers could take over certain responsibilities currently mandated for trustees, it added. The regulator also said the move is in line with its long-term vision of gradually shifting from the present 'minimum commitment threshold' metric to 'accreditation status' as the primary criterion for determining investor sophistication in AIFs. However, both metrics would co-exist for now to avoid disruption in the industry, it added. Sebi noted that while the number of accredited investors remains modest, recent relaxations and proposed process improvements, including leveraging KYC registration agencies and streamlining accreditation norms are expected to boost participation. The Securities and Exchange Board of India (Sebi) has invited public comments on the proposals till August 29. PTI HG MR MR view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
Economic Times
3 hours ago
- Economic Times
Siddharth Vora, Head - Investment Strategy & Fund Manager, PL Capital
With a strong background in finance and advanced credentials, the fund manager leads PL Capital's quant-driven investment strategies, including the flagship AQUA and MADP funds. Combining human insight with data-driven models, their adaptive 'Quantamental' approach dynamically adjusts across market cycles, delivering consistent outperformance. Passionate about blending art and science, they continually innovate to enhance systematic, rule-based investing for long-term success. Let's start with your personal story Tired of too many ads? Remove Ads How did you land up in this job? Which funds are you currently managing? Tired of too many ads? Remove Ads What is your investment philosophy and how would you describe your investment strategy? What gives you the kick while managing other people's money? I was born and raised in Mumbai, the financial capital of India. Growing up in a family deeply rooted in financial services, my interest in the markets developed almost instinctively, shaped over years of dinner table conversations. I pursued CA, CFA, and an MSc in Management for Business Excellence, along with a double diploma in World Politics from the University of Warwick. I've also completed CMT Level 2 and am a SEBI-registered Research Analyst, Investment Advisor, and Portfolio Manager. To further hone my skills, I have completed programmes at Harvard, the London School of Economics, and completing my articleship at EY, I joined PL's Institutional Equities research team in 2016, later moving into Investment Strategy and Advisory. While gaining deep exposure on the research side, I saw a clear opportunity to innovate and differentiate, which led me to the world of quantitative investing.I spearheaded PL's foray into the Quantitative Asset Management space. This decision not only fortified PL's position with a distinct moat but also introduced more sophisticated and systematic strategies to India's investment the past five-plus years, I have built and led a multi-disciplinary team of experts to introduce groundbreaking strategies and have completely transitioned to quant-based asset management. I am currently the Head – Quant Investment Strategies and Fund Manager at PL Asset Management.I manage PL's flagship equity strategy AQUA, Adaptive; Quantitative; Unbiased; Alpha, India's pioneering style-agnostic and style-adaptive flexicap PMS. I also manage MADP – Multi Asset Dynamic Portfolio – a first-of-its-kind multi-asset PMS that employs quant models for tactical asset allocation using only passive instruments. Together, AQUA and MADP have surpassed INR 500 crore in AUM and exemplify our differentiated 'Man with Machine' approach — a synergy between PL's traditional investment wisdom and cutting-edge quantitative PL Capital's flagship equity PMS, has completed two successful years. As of 30th June, AQUA delivered a TWRR of 28.14%, outperforming the benchmark BSE 500 by 7.61%. This milestone strongly validates AQUA's systematic, data-driven investment framework, powered by robust quantitative models, adaptive strategy, and disciplined have designed adaptive investment strategies that rely on data-driven models and systematic processes to switch between investment styles, sectors, and risk levels based on market and macro cycles. Technically, it's a quantitative, rules-based, dynamic multifactor strategy. The core philosophy is built on the pillars of adaptability, flexibility, agility, and totality – providing a sustainable, repeatable, and holistic method for investing across changing market follow a "Quantamental" investment approach, integrating Fundamental, Alternative, Technical, and Quantitative analytics. Our team has built 25+ proprietary factors, using over 1,000 indicators, and tested more than 7,500 strategies to power our models. Every decision is guided by structured rules and systematic machines that can make money — that's what truly excites me. We build models using sophisticated technology and statistics. At the same time, we create synergies by translating human investing understanding into rules, which we rigorously test across multiple market cycles. Simply put, it's about blending art and science, where human intelligence is amplified by machine rigor and accuracy. This approach makes investing scientific, sophisticated, and systematic.I believe there's always scope to improve and explore the boundless possibilities of the man-with-machine approach. This includes finding smarter solutions, building new features, and making systems more robust in investment decision-making.
