Description

SEBI order against Pranav Adani, Kunal Shah, and Nrupal Shah for alleged insider trading violations in AGEL scrip related to SB Energy acquisition announcement in May 2021.

Summary

SEBI has issued an order under Sections 11(1), 11(4), 11B(1), 11B(2) read with Section 15G of the SEBI Act against three individuals for alleged insider trading in Adani Green Energy Limited (AGEL) scrip. The case relates to trading during January 28, 2021 to August 20, 2021, surrounding AGEL’s announcement on May 19, 2021 regarding share purchase agreements with Softbank Group Capital Limited and Bharti Global Limited to acquire stakes in SB Energy Holdings Limited. Noticee No. 1 (Pranav Vinod Adani) is a Director in various Adani Group companies, while Noticees No. 2 and 3 (Kunal Shah and Nrupal Shah, who are brothers) are related to him through marriage.

Key Points

  • Noticees: Pranav Vinod Adani (PAN: ABEPA1014B), Kunal Dhanpalbhai Shah (PAN: AFBPS1794P), and Nrupal Dhanpalbhai Shah (PAN: AKQPS8446L)
  • Material Event: AGEL announced acquisition of SB Energy stakes from SBGCL and BGL on May 19, 2021 at 08:20:21 hours
  • Price Impact: AGEL scrip increased 3.75% from ₹1,198.75 (May 18, 2021 close) to ₹1,243.65 (May 19, 2021 close)
  • Acquisition Significance: SB Energy portfolio totaled 5GW (1.7 GW operational); acquisition increased AGEL operational capacity by 46% and overall capacity by 33%
  • Investigation Period: January 28, 2021 to August 20, 2021
  • Investigating Officer Appointed: April 20, 2023
  • Investigation Report Date: November 10, 2023
  • Show Cause Notice Date: November 10, 2023

Regulatory Changes

No new regulatory changes introduced. This is an enforcement action under existing regulations.

Compliance Requirements

Alleged Violations:

  • Pranav Adani (Noticee No. 1): Alleged violation of Section 12A(e) of SEBI Act read with Regulation 3(1) of PIT Regulations (insider trading prohibition for insiders)
  • Kunal Shah and Nrupal Shah (Noticees No. 2 and 3): Alleged violation of Section 12A(d) and (e) of SEBI Act read with Regulation 4(1) of PIT Regulations (prohibition on communication of unpublished price sensitive information and trading based on such information)

Proceedings Initiated:

  • Against Noticee No. 1: Under Sections 11(1), 11(4) read with 11B(1) and Section 11B(2) read with Section 15G of SEBI Act
  • Against Noticees No. 2 and 3: Directions including disgorgement of unlawful profits under Sections 11(1), 11(4) read with 11B(1) and penalty under Section 11B(2) read with Section 15G of SEBI Act

Important Dates

  • Investigation Period: January 28, 2021 to August 20, 2021
  • Material Announcement: May 19, 2021 at 08:20:21 hours
  • Pre-announcement Close Price Date: May 18, 2021
  • Post-announcement Close Price Date: May 19, 2021
  • Investigating Officer Appointment: April 20, 2023
  • Investigation Report: November 10, 2023
  • Show Cause Notice: November 10, 2023
  • Order Date: December 12, 2025

Impact Assessment

Market Impact:

  • The SB Energy acquisition was material enough to cause a 3.75% price increase in AGEL scrip, reflecting significant market reaction to the announcement
  • The acquisition represented a substantial capacity addition (46% increase in operational capacity, 33% increase in overall capacity)

Enforcement Impact:

  • High-profile enforcement action involving a director of multiple Adani Group companies (Adani Enterprises Limited, Adani Wilmar Limited, Adani Total Gas Limited)
  • Demonstrates SEBI’s continued focus on insider trading violations, particularly involving related parties and family members
  • Proceedings seek disgorgement of unlawful profits and penalties under SEBI Act provisions

Compliance Impact:

  • Reinforces importance of insider trading compliance frameworks, especially for persons connected to insiders
  • Highlights scrutiny on trading activities of related parties during sensitive corporate events
  • Emphasizes need for robust information barriers and trading restrictions during material transactions

Impact Justification

High-profile insider trading enforcement action involving Adani Group director and family members, with alleged violations of PIT Regulations related to material unpublished price sensitive information concerning significant acquisition