Description

SEBI adjudication order against Niraj Dhanraj Chhajer and Deepti Chhajer for alleged insider trading violations in Torrent Power Limited scrip.

Summary

SEBI has issued an adjudication order (Order No. Order/JS/VC/2025-26/31971-31972) against Mr. Niraj Dhanraj Chhajer (PAN: ADIPC7826M) and Ms. Deepti Chhajer (PAN: ADEPB3292N) for alleged insider trading violations in the scrip of Torrent Power Limited (TPL). The investigation was conducted to ascertain possible violations of the SEBI Act, 1992 and SEBI (Prohibition of Insider Trading) Regulations, 2015.

Key Points

  • Adjudication proceedings initiated against three individuals: Mr. Niraj Dhanraj Chhajer (Noticee-1), Ms. Deepti Chhajer (Noticee-2), and Mr. Rishi Sudhirbahi Shah (Noticee-3)
  • Alleged violations of Regulation 4(1) of PIT Regulations and Section 12A(d) and (e) of SEBI Act by Noticee-1 and Noticee-2
  • Alleged violations of Regulation 3(1) of PIT Regulations and Section 12A(e) of SEBI Act by Noticee-3
  • TPL announced financial results on February 14, 2023 at 16:42:03 IST for quarter ended December 31, 2022
  • Standalone profit increased to ₹694.94 crore (Q3 FY23) from ₹492.94 crore (Q2 FY23) and ₹380.18 crore (Q3 FY22)
  • Year-on-Year profit increase of 83% and Quarter-on-Quarter increase of 41% on standalone basis
  • Consolidated profit increased 88% YoY and 43% QoQ
  • Stock price increased from ₹457.00 (February 14, 2023) to ₹504.40 (February 15, 2023) post-announcement

Regulatory Changes

No regulatory changes introduced. This is an enforcement action under existing SEBI (Prohibition of Insider Trading) Regulations, 2015 and SEBI Act, 1992.

Compliance Requirements

  • Show Cause Notice (SCN) bearing Ref. No. SEBI/HO/EAD-8/AS/VC/7824/1-3/2025 dated March 11, 2025 was issued to the Noticees
  • Noticees required to show cause why inquiry should not be held and why penalty should not be imposed under Section 15G of SEBI Act
  • Proceedings conducted under Section 15-I of SEBI Act and Rule 5 of SEBI (Procedure for Holding Inquiry and Imposing Penalties) Rules, 1995

Important Dates

  • February 14, 2023, 16:42:03 IST: TPL submitted financial results for Q3 FY23 to exchange
  • February 14, 2023: Closing price ₹457.00 (pre-announcement)
  • February 15, 2023: Closing price ₹504.40 (post-announcement)
  • February 11, 2025: Initial Adjudicating Officer appointed
  • March 11, 2025: Show Cause Notice issued to Noticees
  • April 02, 2025: Current Adjudicating Officer appointed (due to transfer of erstwhile AO)

Impact Assessment

Market Impact: The financial results announcement led to significant positive price movement in Torrent Power Limited scrip, with stock price jumping 10.4% from ₹457.00 to ₹504.40 in a single day.

Enforcement Impact: This adjudication order demonstrates SEBI’s continued vigilance in detecting and prosecuting insider trading violations. The case involves alleged trading activities around price-sensitive information (strong quarterly financial results).

Regulatory Precedent: The order reinforces the application of PIT Regulations, particularly Regulation 3(1) (prohibition on communication of unpublished price sensitive information) and Regulation 4(1) (prohibition on trading while in possession of unpublished price sensitive information).

Investor Protection: The enforcement action aims to maintain market integrity and protect investors from unfair trading practices by insiders or connected persons who may have access to material non-public information.

Impact Justification

Enforcement action for insider trading violations in Torrent Power Limited scrip. Impact limited to specific individuals but demonstrates regulatory enforcement of PIT regulations.