“Latest inventory market actions signify 3 features: cash energy, low liquidity in single shares vs. index derivatives, alternate, dealer enterprise fashions linked to quantity, much less to fundamentals. Main function of market is to advertise capital formation, truthful worth discovery,” Kotak posted on X (previously Twitter) on Saturday, July 5.
Latest inventory market actions signify 3 features: cash energy, low liquidity in single shares vs.index derivatives, alternate, dealer enterprise fashions linked to quantity, much less to fundamentals. Main function of market is to advertise capital formation, truthful worth discovery.
— Uday Kotak (@udaykotak) July 5, 2025
Hyperlink to the put up: https://x.com/udaykotak/standing/1941359058482774409?t=fmmOsN5mNzjw4Mbg1LtwxQ&s=08Kotak’s remarks come a day after the Securities and Alternate Board of India (Sebi) barred Jane Avenue Group and 4 affiliated entities from India’s securities market and ordered a freeze on Rs 4,840 crore in alleged illegal good points.
A crackdown on expiry-day manipulation
In a 105-page interim order issued Friday, Sebi accused Jane Avenue of deploying high-volume, cross-segment methods to control the Nifty and Financial institution Nifty indices, deceptive retail merchants and reserving huge income from index choices. The regulator mentioned the agency generated greater than Rs 36,500 crore in web income in India between January 2023 and March 2025, of which Rs 43,289 crore got here from index choices alone.The order mentioned Jane Avenue used a method known as “Intra-day Index Manipulation” on 15 of the 18 expiry days Sebi examined, which concerned shopping for giant portions of index constituent shares within the morning to artificially push up costs, whereas holding giant bearish bets within the derivatives market. These trades have been later reversed to drive down costs, cashing in on the autumn.On January 17, 2024, a day Sebi described intimately, the agency allegedly purchased Rs 4,370 crore value of Financial institution Nifty shares within the morning, making a deceptive sense of energy. On the identical time, it constructed Rs 32,114.96 crore value of bearish choices positions. By the afternoon, it reversed its money market trades, pushing the index decrease and reserving Rs 734.93 crore in revenue from derivatives, its largest single-day achieve in Indian markets.
“The gross sales are aggressive, in a fashion that pushes down costs within the element shares and therefore index. JS Group books losses in intraday money/futures market buying and selling,” the order mentioned. “Earnings in index choices greater than compensate for the JS Group’s losses.”
Additionally learn | Rs 735 crore in 1 day! Jane Avenue’s most worthwhile day on Dalal Avenue was constructed on Nifty Financial institution’s fall
Repeated warnings, mounting considerations
Sebi mentioned it first started reviewing Jane Avenue’s trades in April 2024, and issued a cautionary letter in February 2025 by means of the Nationwide Inventory Alternate (NSE), warning the agency to keep away from such patterns. Regardless of this, “JS Group continued with related trades, in disregard of the warning letter from the Alternate… and JS Group’s personal commitments,” the regulator famous.
On three different expiry days, the agency allegedly deployed an “Prolonged Marking the Shut” technique, putting giant promote orders within the remaining minutes of buying and selling to depress index ranges, thereby benefiting short-call or lengthy put positions.
Sebi wrote that the agency was “persistently operating what seemed to be by far the biggest dangers in ‘money equal’ phrases in F&O significantly on index possibility expiry days,” and that different merchants have been “unaware of all this, and have been therefore enticed to deal at a time that the Nifty Financial institution itself was being artificially and quickly propped up.”
Jane Avenue responds
Jane Avenue has denied any wrongdoing. “Jane Avenue disputes the findings of the SEBI interim order and can additional have interaction with the regulator,” the agency mentioned in an emailed response to Reuters. It added that it’s dedicated to working in compliance with laws globally.
The corporate, which started its India operations in December 2020, has 21 days to answer the Sebi order or problem it earlier than the Securities Appellate Tribunal.
As of Friday, 4 Jane Avenue-linked entities — JSI Investments Pvt Ltd, JSI2 Investments Pvt Ltd, Jane Avenue Singapore Pte Ltd, and Jane Avenue Asia Buying and selling Ltd — have been prohibited from shopping for, promoting, or dealing in Indian securities, and their accounts have been positioned below a debit freeze.
How Sebi’s crackdown on Jane Avenue unfolded: A 15-month path of scrutiny and ignored warnings
Kotak’s put up echoes broader considerations raised by Sebi in its investigation: that the market has tilted too far in favour of high-frequency, algorithmic methods, whereas retail buyers commerce on distorted indicators. The regulator pointed to a rising imbalance, the place overseas and proprietary merchants revamped Rs 610 billion in FY24 by means of such methods, almost matching the losses absorbed by retail members.
