Kalyan Jewellers accuses stock price manipulation, requests trading halt from Sebi

Kalyan Jewellers recently brought to the attention of the securities market regulator, Sebi, concerning manipulative trading activities in its shares and requested regulatory intervention, including a temporary halt on futures and options (F&O) trading until an investigation is conducted. The company reported detecting abnormal trading behaviors and the spread of unverified rumors aimed at inducing panic among investors and depressing the stock price.

In a letter addressed to Sebi’s Integrated Surveillance Department, Kalyan Jewellers highlighted the anomalies observed in trading patterns and the dissemination of rumors that were apparently intended to instigate fear and decrease the stock’s value. The communication took place in 2025, and it has not been previously disclosed.

The jewelry retailer disclosed that its stock was included in the F&O segment on November 29, 2024. By the end of December 2024, futures contracts began to trade at a discount compared to spot prices, which the company described as atypical and suggestive of significant short positions being taken.

On a specific date, January 7, 2025, rumors started circulating in the market between 10:30 am and 11 am, which included false claims about the arrest of promoters and bribery of fund managers, allegations that were denied by Kalyan Jewellers.

The company put forth its belief that short positions had been accumulated since late December 2024, and the rumors were strategically released immediately after the release of its quarterly business update in early January, in accordance with its standard disclosure practices.

Kalyan Jewellers contended that a systematic approach was employed, involving the creation of short positions through F&O trading, the dissemination of misleading information on social media platforms, and coordinated selling to exacerbate the decline in the share price. An additional point raised was that certain individuals cited in their submissions were not registered as investment advisers with Sebi and, therefore, lacked the authority to issue investment recommendations.

The company presented documents to Sebi and the stock exchanges in 2025, revealing that its share price dipped from Rs 745 on January 6 to Rs 440.65 by January 30, 2025, marking a 41% decrease. Concurrently, Kalyan Jewellers’ market capitalization also fell from around Rs 76,795 crore to Rs 45,450 crore during the same period.

Expressing concerns for investor safeguarding and market integrity, Kalyan Jewellers urged Sebi to instruct stock exchanges to suspend trading in its F&O contracts as a precautionary measure while investigations were undertaken. Queries directed to Sebi and Kalyan Jewellers by Moneycontrol remained unanswered.

Moreover, the BSE released a statement on February 9 indicating that it sought clarification from Kalyan Jewellers regarding reports on alleged market manipulation to Sebi and the company’s request for a suspension from the F&O segment. Despite delivering consistent earnings, the stock has exhibited volatility over the past year, with a 45% correction following a peak in December 2024, currently trading at around Rs 416 per share.