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Economic Times
06-07-2025
- Business
- Economic Times
Jane Street aftermath: 4 stocks suffer Rs 12,000 crore wipeout in collateral damage
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets Tired of too many ads? Remove Ads Markets regulator Sebi's investigation into Jane Street may have unintended consequences for Dalal Street, as was evident on Friday when four capital market-related stocks collectively lost Rs 12,000 crore in market regulatory action has exposed the market's dependence on proprietary trading firms and their domestic partners. What began as targeted enforcement against alleged market manipulation by the US-based trading giant quickly spilled over, impacting the broader capital markets infrastructure, even affecting firms with no regulatory issues. Nuvama Wealth Management , Jane Street's local trading partner in India, suffered the steepest decline on Friday, falling 11.26%, despite not being implicated in any wrongdoing in Sebi's investigation. Shares of stock exchange BSE and Angel One dropped around 6% each, while CDSL fell over 2%. The combined erosion in market capitalisation was nearly Rs 12,000 regulatory action targeted Jane Street and its affiliates for manipulating prices in Bank Nifty index options and underlying stocks, resulting in an order to disgorge unlawful gains of Rs 4,844 the market's reaction to Nuvama highlights how regulatory action against one entity can impact its business partners—even when they face no direct allegations. The sharp fall in Nuvama's stock reflects investor concerns about potential revenue loss from the possible exit of a significant client, regardless of the firm's conduct."Prop trading firms like Jane Street account for nearly 50% of options trading volumes," noted Zerodha founder Nithin Kamath, highlighting the market's concentration risk. "If they pull back—which seems likely—retail activity (around 35%) could take a hit too. So this could be bad news for both exchanges and brokers."Also Read | Explained: What is Jane Street and how it made Rs 36,500 crore profit by gaming Dalal Street The scale of the market's dependence on proprietary trading firms becomes evident through the numbers. When a single entity controls half of the options volume, its potential exit creates significant uncertainty about future market liquidity and trading activity."Jane Street is one of the largest traders contributing to Indian markets," said Siddarth Bhamre, Head of Institutional Research at Asit C. Mehta . "When big players are banned for wrongdoing, others become cautious and reduce activity, leading to lower volumes. Traders may also face fewer counterparties, potentially causing a further drop in F&O volumes ahead."The concerns extend beyond immediate volume impacts. Ashish Nanda, President & Chief Digital Business Officer at Kotak Securities, outlined the broader implications: "HFTs will surely be feeling the heat. Many will be re-assessing their strategies. Will they slow down? The fact is that HFT firms provide a lot of liquidity in the markets. If there's a reduction in activity by HFTs, it will also impact retail volumes."The immediate market reaction suggests traders are already pricing in a potential decline in volumes across Indian capital markets. Analysts warn that the regulatory action could put pressure on the revenue of intermediaries heavily dependent on derivatives trading, with volumes likely to shrink in response to Sebi's measures against one of the segment's largest prop trading One founder Dinesh Thakkar offered a more optimistic view, arguing that India's market opportunity remains "structural, not cyclical—and certainly not dependent on any one firm." He pointed to the surge in retail participation in equity derivatives—from just 2% in 2018 to over 40% in 2025—as evidence of strong underlying market fundamentals."When one player exits, others step in—and often, very fast," Thakkar noted, referencing global trading giants like Citadel Securities, IMC Trading, Optiver, Jump Trading, and Millennium, which are already expanding into India, setting up local entities, hiring talent, and investing in this optimism, the immediate challenge is gauging the actual impact on trading volumes. Zerodha's Nithin Kamath acknowledged the uncertainty: "The next few days will be telling. F&O volumes might reveal just how reliant we are on these prop giants."The Jane Street episode underscores how regulatory action—while targeting specific misconduct—can have broader ripple effects across the derivatives ecosystem. The Rs 12,000 crore selloff on Friday reflects investor concerns over volume contraction and revenue pressure, particularly for intermediaries with direct exposure to the banned the market adjusts to this new reality, attention will turn to whether other international trading firms can fill the liquidity vacuum left by Jane Street's exit—and how domestic players recalibrate their models to sustain revenue in a changing regulatory Read | Make $1 billion loss in stock futures to earn $5 billion profit in options: Sebi exposes Jane Street's Baazigar strategy
Time of India
06-07-2025
- Business
- Time of India
Jane Street aftermath: 4 stocks suffer Rs 12,000 crore wipeout in collateral damage
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets Tired of too many ads? Remove Ads Markets regulator Sebi's investigation into Jane Street may have unintended consequences for Dalal Street, as was evident on Friday when four capital market-related stocks collectively lost Rs 12,000 crore in market regulatory action has exposed the market's dependence on proprietary trading firms and their domestic partners. What began as targeted enforcement against alleged market manipulation by the US-based trading giant quickly spilled over, impacting the broader capital markets infrastructure, even affecting firms with no regulatory issues. Nuvama Wealth Management , Jane Street's local trading partner in India, suffered the steepest decline on Friday, falling 11.26%, despite not being implicated in any wrongdoing in Sebi's investigation. Shares of stock exchange BSE and Angel One dropped around 6% each, while CDSL fell over 2%. The combined erosion in market capitalisation was nearly Rs 12,000 regulatory action targeted Jane Street and its affiliates for manipulating prices in Bank Nifty index options and underlying stocks, resulting in an order to disgorge unlawful gains of Rs 4,844 the market's reaction to Nuvama highlights how regulatory action against one entity can impact its business partners—even when they face no direct allegations. The sharp fall in Nuvama's stock reflects investor concerns about potential revenue loss from the possible exit of a significant client, regardless of the firm's conduct."Prop trading firms like Jane Street account for nearly 50% of options trading volumes," noted Zerodha founder Nithin Kamath, highlighting the market's concentration risk. "If they pull back—which seems likely—retail activity (around 35%) could take a hit too. So this could be bad news for both exchanges and brokers."Also Read | Explained: What is Jane Street and how it made Rs 36,500 crore profit by gaming Dalal Street The scale of the market's dependence on proprietary trading firms becomes evident through the numbers. When a single entity controls half of the options volume, its potential exit creates significant uncertainty about future market liquidity and trading activity."Jane Street is one of the largest traders contributing to Indian markets," said Siddarth Bhamre, Head of Institutional Research at Asit C. Mehta . "When big players are banned for wrongdoing, others become cautious and reduce activity, leading to lower volumes. Traders may also face fewer counterparties, potentially causing a further drop in F&O volumes ahead."The concerns extend beyond immediate volume impacts. Ashish Nanda, President & Chief Digital Business Officer at Kotak Securities, outlined the broader implications: "HFTs will surely be feeling the heat. Many will be re-assessing their strategies. Will they slow down? The fact is that HFT firms provide a lot of liquidity in the markets. If there's a reduction in activity by HFTs, it will also impact retail volumes."The immediate market reaction suggests traders are already pricing in a potential decline in volumes across Indian capital markets. Analysts warn that the regulatory action could put pressure on the revenue of intermediaries heavily dependent on derivatives trading, with volumes likely to shrink in response to Sebi's measures against one of the segment's largest prop trading One founder Dinesh Thakkar offered a more optimistic view, arguing that India's market opportunity remains "structural, not cyclical—and certainly not dependent on any one firm." He pointed to the surge in retail participation in equity derivatives—from just 2% in 2018 to over 40% in 2025—as evidence of strong underlying market fundamentals."When one player exits, others step in—and often, very fast," Thakkar noted, referencing global trading giants like Citadel Securities, IMC Trading, Optiver, Jump Trading, and Millennium, which are already expanding into India, setting up local entities, hiring talent, and investing in this optimism, the immediate challenge is gauging the actual impact on trading volumes. Zerodha's Nithin Kamath acknowledged the uncertainty: "The next few days will be telling. F&O volumes might reveal just how reliant we are on these prop giants."The Jane Street episode underscores how regulatory action—while targeting specific misconduct—can have broader ripple effects across the derivatives ecosystem. The Rs 12,000 crore selloff on Friday reflects investor concerns over volume contraction and revenue pressure, particularly for intermediaries with direct exposure to the banned the market adjusts to this new reality, attention will turn to whether other international trading firms can fill the liquidity vacuum left by Jane Street's exit—and how domestic players recalibrate their models to sustain revenue in a changing regulatory Read | Make $1 billion loss in stock futures to earn $5 billion profit in options: Sebi exposes Jane Street's Baazigar strategy
Economic Times
05-07-2025
- Business
- Economic Times
Jane Street fallout: Derivatives trading volumes may be hit
The derivatives market could take a major hit in trading volumes after the Securities and Exchange Board of India (Sebi) cracked down on Jane Street Capital, halting its operations in Mumbai and impounding more than half a billion dollars of local assets. ADVERTISEMENT Analysts said the regulatory action would put pressure on revenue for intermediaries dependent on derivative market activity, with volumes shrinking in response to Sebi's stiff punitive measures against one of the biggest proprietary trading firms in the segment. "Jane Street is one of the largest traders contributing to Indian markets," said Siddarth Bhamre, head of institutional research, Asit C Mehta. "When big players are banned for wrongdoing, others become cautious and reduce activity, leading to lower volumes. Traders may also face fewer counterparties, potentially causing a further drop in F&O volumes ahead." The capital market regulator has taken its toughest action ever against a foreign trading firm by targeting Jane Street, one of the world's largest quant trading firms that's also among the highest paymasters at India's top technology campuses. Highlighting the broader market implications, Zerodha Founder and CEO Nithin Kamath cautioned that action against proprietary trading firms like Jane Street, which contribute nearly half of the options trading volumes, could also dampen retail participation. "There's a flip side. Prop trading firms like Jane Street account for almost 50% of options trading volumes. If they pull back which looks likely it could also impact retail activity, which makes up about 35%. This could spell bad news for both exchanges and brokers," Kamath wrote on X. ADVERTISEMENT He added that the coming days would be crucial in gauging the fallout. "The next few days will be telling. F&O volumes might show just how dependent we are on these prop giants. I'll share more data as and when anything interesting comes up," Kamath wrote on the social media platform. ADVERTISEMENT In the wake of the Sebi order, shares of Nuvama Wealth Management, capital market service provider Central Depository Services and stock exchange BSE slumped following the regulator's Wealth shares fell the most, dropping 10.6% as the firm is Jane Street's domestic trading partner, which got caught up in the regulatory crossfire, triggering investor anxiety despite no direct accusations against the firm. Along with Nuvama Wealth, shares of BSE fell 6.4%, while CDSL plunged 2%. ADVERTISEMENT In a strongly worded 105-page interim order, Sebi accused Jane Street and its associated entities of using complex high-frequency trading strategies to manipulate the Nifty 50 and Bank Nifty Indices. The regulator also said these tactics misled retail options traders and gave Jane Street an edge in India's booming derivatives interim order alleged that Jane Street earned unlawful profits of ₹4,843 crore ($570 million). Jane Street runs its operations in India through four group entities-two based locally and two located in Hong Kong and Singapore, respectively. The firm established its first Indian unit in December 2020, while the other two Asian entities participate in Indian markets as registered foreign investors. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
05-07-2025
- Business
- Time of India
Jane Street fallout: Derivatives trading volumes may be hit
Our Bureau Mumbai: The derivatives market could take a major hit in trading volumes after the Securities and Exchange Board of India (Sebi) cracked down on Jane Street Capital , halting its operations in Mumbai and impounding more than half a billion dollars of local assets. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Scientists: Tinnitus? When tinnitus won't go away, do this (Watch) Hearing Magazine Undo Analysts said the regulatory action would put pressure on revenue for intermediaries dependent on derivative market activity, with volumes shrinking in response to Sebi's stiff punitive measures against one of the biggest proprietary trading firms in the segment. "Jane Street is one of the largest traders contributing to Indian markets," said Siddarth Bhamre, head of institutional research, Asit C Mehta. "When big players are banned for wrongdoing, others become cautious and reduce activity, leading to lower volumes. Traders may also face fewer counterparties, potentially causing a further drop in F&O volumes ahead." The capital market regulator has taken its toughest action ever against a foreign trading firm by targeting Jane Street, one of the world's largest quant trading firms that's also among the highest paymasters at India's top technology campuses. Live Events Highlighting the broader market implications, Zerodha Founder and CEO Nithin Kamath cautioned that action against proprietary trading firms like Jane Street, which contribute nearly half of the options trading volumes , could also dampen retail participation. "There's a flip side. Prop trading firms like Jane Street account for almost 50% of options trading volumes. If they pull back which looks likely it could also impact retail activity, which makes up about 35%. This could spell bad news for both exchanges and brokers," Kamath wrote on X. He added that the coming days would be crucial in gauging the fallout. "The next few days will be telling. F&O volumes might show just how dependent we are on these prop giants. I'll share more data as and when anything interesting comes up," Kamath wrote on the social media platform. In the wake of the Sebi order, shares of Nuvama Wealth Management , capital market service provider Central Depository Services and stock exchange BSE slumped following the regulator's action. Nuvama Wealth shares fell the most, dropping 10.6% as the firm is Jane Street's domestic trading partner, which got caught up in the regulatory crossfire, triggering investor anxiety despite no direct accusations against the firm. Along with Nuvama Wealth, shares of BSE fell 6.4%, while CDSL plunged 2%. In a strongly worded 105-page interim order, Sebi accused Jane Street and its associated entities of using complex high-frequency trading strategies to manipulate the Nifty 50 and Bank Nifty Indices. The regulator also said these tactics misled retail options traders and gave Jane Street an edge in India's booming derivatives market. The interim order alleged that Jane Street earned unlawful profits of ₹4,843 crore ($570 million). Jane Street runs its operations in India through four group entities-two based locally and two located in Hong Kong and Singapore, respectively. The firm established its first Indian unit in December 2020, while the other two Asian entities participate in Indian markets as registered foreign investors.
Mint
01-07-2025
- Business
- Mint
Promoters stake sales surge almost 7-fold in Q1 as they cash in on high market valuations
Promoters of companies are cashing in their shares on high valuations. The value of promoter holdings in listed companies that were sold in the April-to-June period surged almost sevenfold from the previous quarter as higher market valuations offered them a better price. Shares sold by promoters on the country's top two exchanges increased 6.69 times on a quarterly basis and 1.54 times from a year earlier to ₹2.61 trillion, according to PRIME Database, which cited insider trading disclosures in the first quarter of FY26. The highest-selling promoter was the government, which sold shares worth ₹29,963 crore in ITI Ltd. Among the others, Pastel, a subsidiary of Singapore-based Singtel, sold shares worth ₹12,880 crore in Bharti Airtel, and the Chinkerpoo Family Trust set up by Rakesh Gangwal, co-founder of IndiGo, sold shares worth ₹10,408 crore in InterGlobe Aviation. Promoter stake sales in Vishal Mega Mart and Wipro were among the top five. In the first six months of 2025, promoters have already sold 65% of the stake worth ₹4.61 trillion that they offloaded in 2024. Promoters are seizing the current favourable market conditions to dilute their stakes in companies as valuations are currently significantly higher than their intrinsic worth, said Siddarth Bhamre, head of institutional research at Asit C Mehta Investment Intermediaries Ltd. Many promoters believe that their businesses are valued far above their actual worth and this valuation gap has prompted them to capitalise on the opportunity, resulting in a surge in stake sales, Bhamre added. The Nifty 50's current PE is 22.8x compared with 19.8x on 28 March, while its 12-month forward PE is 19.9x. The index has jumped 8.49% from April 1 to June 30. The PE of InterGlobe Aviation when the stake was sold on 25 May was 28.29x compared with an average of 18.35x in Q1 a year earlier. The PE of Vishal Mega Mart when Samayat Services LLP sold ₹10,221 crore of shares on 18 June was 90.42x compared with an average of 22.81x in the January-March quarter of 2024. Investment avenues Apart from rising valuations, promoters may sell shares to meet minimum public shareholding norms, repay debt or raise funds to invest elsewhere. 'Individual promoters are selling stakes either to deleverage the balance sheet at a personal level or to book profit and diversify into other investment avenues, while continuing to hold a majority stake in the company," said Sunny Agrawal, head of fundamental equity research at SBI Securities. The same promoters may later invest in the business and again increase their stakes through warrants, rights issues, or preferential allotments, he added. Of the ₹2.61 trillion worth of shares sold by promoters, offers-for-sale (OFS) made up ₹8,284 crore, while shares sold in block or bulk deals added up to ₹60,900 crore, as per PRIME Database. OFS, block and bulk deals are a part of the insider trading filings but do not make up all stake sales by promoters. Promoters selling stakes via bulk or block deals increased 64% YoY and 17 times sequentially in Q1. Promoters who sold shares via OFS increased 25 times YoY and 69% sequentially. The markets seem to remain elevated on the back of falling interest rates, which may keep promoter stake sale activity higher in the coming quarters, said Vinit Bolinjker, head of research at Ventura Securities. Agrawal of SBI Securities added that if market sentiment remains buoyant, promoter stake sales will continue. 'The market sentiment looks positive as global uncertainties have receded of late. And a rate cut and tax cut may boost consumption. Plus, private capex is picking up and earnings growth is likely to go back to two-digit numbers in Q2 of FY26," Agrawal added.
