Sebi initiates insider trading probe on Pipavav Defence stock

Sebi initiates insider trading probe on Pipavav Defence stock

Mumbai: The stock of shipbuilder Pipavav Defence & Offshore Engineering Co Ltd slipped as much as 4.5% in early trades on Tuesday, following news that market regulator Sebi had asked stock exchanges for details of trades done in the Pipavav Defence stock prior to the company’s March 4 announcement of a stake sale to Anil Ambani’s Reliance Infrastructure (formerly Reliance Energy).

At 10 a.m. on Tuesday morning, the Pipavav Defence (formerly Pipavav Shipyard) share was trading at INR57.10, down from its Monday closing of INR59.75.

Sebi is probing allegations of insider trading, and has instructed stock exchanges to ascertain whether some market entities had built positions in the stock, aided by prior knowledge of the impending stock sale.

“Exchanges have informed the regulator that they have written to the company and are waiting for its response,” a Bombay Stock Exchange (BSE) official said.

Shares of Pipavav Defence, promoted by Nikhil Gandhi, had surged by 55% from INR48 levels at end-January to INR76.50 during the month before the announcement of the deal.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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