Sebi Issues Warning To Nestle India Over Insider Trading Violation

Diversified fast moving consumer goods (FMCG) manufacturer Nestlé India has come under the market regulator’s radar for insider trading violation. The FMCG giant received a warning from the Securities and Exchange Board of India (Sebi) on March 7, 2025.

Nestle India informed the stock exchanges in a letter that it has received a warning from Sebi. It said that the company’s compliance officer has received an administrative letter from the regulator alleging the violation of Prohibition of Insider Trading regulations. The regulator had mentioned in the letter to Nestlé that the violation was made by a designated person of the company. A designated person is an employee of a company or any other person who has access to unpublished price sensitive information (UPSI).

“The Compliance Officer of the Company has received an administrative warning letter from the Deputy General Manager of SEBI for violation of SEBI (Prohibition of Insider Trading) Regulations, 2015 (‘PIT Regulations’) by a designated person of the Company,” Sebi said.

Nestle India did not share more details about the content of the letter or about the designated person who is said to have been involved in insider trading.

Insider trading is an illegal practice in which stocks or other securities are bought and sold based on non-public information price sensitive information about a company.

Nestlé India assured shareholders in the filing that the receipt of the letter will not impact its financial stability or day-to-day operations. “There is no material impact on financials, operations or other activities of the Company on account of above,” Nestle said.

While the diversified FMCG player has said that the letter will not impact its business, the impact of the development on the price of the company’s stock remains to be seen. Shares of Nestle India closed in the green on March 7, 2025 at Rs 2,221.70 apiece on the NSE, up by 0.93 per cent.

Shares of Nestle India have traded lower by over 11 per cent in a year on the NSE. Over a six-month period, the stock has declined more than 10 per cent on the NSE. On a year-to-date basis, the stock has gained more than 3 per cent on the NSE. In a month, the stock has slipped nearly 2 per cent, and in five days, the stock has surged over 2 per cent on the NSE.