SEBI warns Nestle India for insider trading violation
Nestle India, a leading player in the fast-moving consumer goods (FMCG) sector, recently found itself in hot water with the Securities and Exchange Board of India (SEBI) over insider trading violations. The regulatory body issued an administrative warning to the company for breaching regulations in this regard. The warning, sent by SEBI’s Deputy General Manager to the company’s Compliance Officer, was received by Nestle India on March 6, 2025.
The violation in question involved a designated person within the company engaging in a “contra trade” – a transaction where an insider buys or sells shares within six months of a previous transaction in the same security with the intention of making short-term profits. SEBI regulations expressly forbid such trades by insiders and their immediate family members to prevent the misuse of sensitive, non-public information. The six-month restriction period is calculated from the date of the initial transaction.
Despite this setback, Nestle India’s stock remained resilient in the market, exhibiting a positive performance. On Friday, the stock experienced a rise of more than 2 per cent, reaching Rs 2,245.80 on the Bombay Stock Exchange (BSE) before retracting some gains.
In terms of financial performance, Nestle India recorded a 5 per cent increase in its consolidated net profit in the third quarter of the current fiscal year (FY25). The company’s net profit stood at Rs 688 crore, up from Rs 655 crore in the corresponding period of the previous fiscal year (Q3 FY24). The growth was primarily attributed to robust sales of its powdered and liquid beverages, including the iconic Nescafe coffee brand.
Furthermore, the company reported a total revenue from operations of Rs 4,779 crore for the quarter, reflecting a 4 per cent rise from Rs 4,600 crore in the same quarter of the previous year (Q3 FY24). Nestle India’s strong financial performance underscores its position as a market leader in the FMCG sector.
Nestle India, a subsidiary of the global giant Nestle S.A., boasts a diverse portfolio of popular brands that are household names in the country. The company’s commitment to delivering quality products and meeting consumer demands has allowed it to maintain a strong presence in the Indian market. While the SEBI warning may have raised eyebrows, Nestle India continues to forge ahead, focused on driving growth and sustaining its market leadership in the FMCG industry.
