The Securities and Exchange Board of India (Sebi), which regulates the country’s capital markets, has officially cleared Pranav Adani, a director in various Adani Group companies and the nephew of businessman Gautam Adani, of insider trading allegations. Sebi found no evidence that Pranav Adani shared any unpublished price-sensitive information (UPSI) or broke insider trading rules concerning Adani Green Energy Ltd (AGEL).
Sebi also dismissed similar charges against two of Pranav Adani’s relatives, concluding a case that had been under investigation for over two years. The decision was detailed in a 50- page order, stating that the allegations could not be supported by the facts and evidence reviewed.
The investigation focused on Adani Green Energy’s purchase of SB Energy and whether any confidential information about this deal was shared before it was publicly announced. Sebi looked into trading activities in AGEL shares from January 28 to August 20, 2021, to check for possible insider trading violations.
In November 2023, after reviewing an investigation report, Sebi began proceedings against three individuals: Pranav Adani, Kunal Dhanpalbhai Shah, and Nrupal Dhanpalbhai Shah. Kunal Shah is married to Pranav Adani’s cousin, and Nrupal Shah is married to his sister. The Shah brothers were accused of trading AGEL shares based on information allegedly given by Pranav Adani.
These allegations were formally presented in a notice from Sebi on November 10, 2023. Sebi’s Findings and Observations
After its investigation, Sebi found no substantial evidence that Pranav Adani had shared any UPSI with the Shah brothers. The regulator specifically looked at a phone call from Kunal Shah to Pranav Adani on May 16, 2021, which was initially thought to be a potential insider information exchange.
Sebi noted that this call was not made to share UPSI. It also stated that the trades by Kunal and Nrupal Shah were legitimate and not based on any non-public information about Adani Green Energy or its shares.
Thus, Sebi decided that no penalties or regulatory actions were necessary and closed the matter.
A key part of Sebi’s evaluation was the timing of public announcements regarding the AGEL–SB Energy acquisition. On May 19, 2021, Adani Green Energy announced to the BSE and NSE that it had signed agreements to acquire SB Energy.
However, Sebi pointed out that media reports about the acquisition had already appeared on May 16, 2021. Therefore, this information was already public and could not be considered UPSI after that date.
The regulator also noted that the market reacted more strongly to the media reports than to the official stock exchange announcement. AGEL shares reached their upper limit on May 17, rising 5 percent, followed by a 4.84 percent increase on May 18, compared to a 3.75 percent rise on May 19.
Based on this, Sebi concluded that the information was no longer UPSI after it was reported publicly on May 16 at 3:25 pm. Since the Shah brothers’ trades occurred on May 17, after the information was public, Sebi ruled out any insider trading violation.
In a separate but related decision, Sebi also cleared insider trading allegations against Vinod Bahety, Tarun Jain, Rajtaru Enterprises, and MC Jain Infoservices concerning trading in Adani Green Energy shares.
With these findings, Sebi has effectively concluded several proceedings related to alleged insider trading in AGEL, highlighting the importance of evidence-based regulatory actions and the clear distinction between public information and UPSI.