Summary of this article
Sebi fined a trader Rs 10 lakh for insider trading in HDFC and HDFC Bank shares ahead of their merger announcement.
The trader named Rupesh Satish Dalal HUF bought call options three days before merger news went public
The trades earned hm Rs 5.67 lakh in HDFC and Rs 2.52 lakh in HDFC Bank.
The Securities and Exchange Board of India (Sebi) has imposed a monetary penalty of Rs 10 lakh on Rupesh Satish Dalal HUF after finding it guilty of insider trading in the shares of HDFC Ltd. and HDFC Bank Ltd. prior to the official announcement of their merger in April 2022.
In its adjudication order dated July 29, 2025, Sebi concluded that the noticee traded in multiple call option contracts of both companies on April 1, 2022, just three days before the public disclosure of the merger on April 4, 2022. The trades resulted in a sharp profit after the stocks surged nearly 9-10 per cent following the announcement.
According to Sebi’s findings, the trades were executed while in possession of unpublished price sensitive information (UPSI) regarding the proposed amalgamation. The regulator noted that the information was allegedly passed from an insider at Deloitte, which was part of the merger valuation team, to the noticee through his son’s acquaintance.
“When the facts are considered holistically, a picture emerges, on the preponderance of probabilities, that the Noticee had procured the UPSI regarding the impending merger and traded on the basis of it,” Sebi said in its 25-page order.
The order further highlighted that the entity had little prior exposure to derivatives trading, yet suddenly took large bullish positions in call options of both HDFC and HDFC Bank. “Such unique timing and strategy strongly suggest that the Noticee acted with prior knowledge of the UPSI,” Sebi said.
The trades earned Rupesh Satish Dalal HUF profits of about Rs 5.67 lakh in HDFC and Rs 2.52 lakh in HDFC Bank options. Sebi concluded that these transactions violated Regulations 3(2) and 4(1) of the Prohibition of Insider Trading (PIT) Regulations and Sections 12A(d) and (e) of the Sebi Act.
The Adjudicating Officer, Jai Sebastian, in his order stated that the penalty of Rs 10 lakh was appropriate and proportionate to the violations committed in the insider trading case.
“I am of the view that the said penalty is commensurate with the lapses/omissions on the part of the Noticee,” Sebastian wrote in the order, adding that the case was established on the “preponderance of probabilities” based on call records, meeting details, and the unusual trading pattern.
The officer directed Rupesh Satish Dalal HUF to pay the penalty within 45 days of receiving the order.
