Kalyan Jewellers seeks SEBI probe into alleged stock manipulation
What's the story
Kalyan Jewellers has accused certain entities of manipulating its stock price and has requested the Securities and Exchange Board of India (SEBI) to intervene. The company has also requested a temporary suspension of trading in the futures and options (F&O) segment until an investigation is completed. This follows a 41% drop in its shares in January 2025 amid rumors and unusual F&O trading patterns.
Trading irregularities
Unusual trading patterns, unverified rumors aimed at creating panic
In its letter to SEBI's Integrated Surveillance Department, Kalyan Jewellers flagged "unusual trading patterns" and unverified rumors. The company believes these were aimed at creating panic among investors and pushing the stock price down. It also noted that its stocks were added to the F&O segment on November 29, 2024. By late December, the futures contracts were trading at a discount to spot prices, something Kalyan Jewellers called abnormal and indicative of aggressive short positioning.
Market manipulation
Allegations of promoter arrests, bribery were circulated
Kalyan Jewellers also alleged that on January 7, 2025, several rumors were spread in the market. These included claims about the arrest of its promoters and bribery of fund managers, allegations Kalyan Jewellers has denied. The firm believes short positions were built up from late December the previous year, and that these rumors were part of a premeditated strategy that were released immediately after its quarterly business update for Q3 FY25.
Financial impact
Stock price and market cap fell
Kalyan Jewellers's stock price fell from ₹745 on January 6 to ₹440.65 by January 30, 2025 a decline of about 41%. During this time, its market capitalization also fell from roughly ₹76,795 crore to ₹45,450 crore.