New Delhi: SEBI on Wednesday barred stock broker Prrsaar Sampada, its related entity Chaubara Eats and four others from the securities market and ordered the impounding of alleged wrongful gains totalling Rs 28.12 crore in a case involving alleged cross-segment price manipulation using stock futures and options.
In an ex-parte interim order, Sebi said the alleged wrongful gains comprised Rs 22.06 crore attributed to Prrsaar Sampada and its directors and Rs 6.06 crore to Chaubara Eats and its directors.
The regulator directed the six entities — Prrsaar Sampada, Ved Prakash Gupta, Priti Gupta, Chaubara Eats, Saroj Gupta and Gaurav Tomar — to credit the respective amounts to fixed deposit accounts with a lien marked in favour of SEBI.
The case, which bears similarities to the kind of cross-market trading strategies associated with global proprietary trading firms such as Jane Street, began with surveillance alerts raised by the National Stock Exchange and SEBI over unusually large profits made by Prrsaar in stock options alongside losses in stock futures on the same underlying stocks.
Prrsaar, a SEBI-registered stockbroker and depository participant, stopped the activity in its proprietary account after NSE communications in February and March 2026. Regulators subsequently found what they described as a similar pattern in the trades of Chaubara Eats, a related entity.
“The cross-segment price manipulation using stock options and stock futures, while also engaging in possible deceptive orders and coordinated/synchronised trading, is a novel manipulative, fraudulent and unfair trade practice employed by the suspects to deceive other market participants and profit from price fluctuation artificially induced by them in the market,” Varshney said in the order.
The regulator examined 23 scrip-days in detail — 13 involving Prrsaar and 10 involving Chaubara — covering stocks such as Bharat Dynamics, Godrej Consumer Products, Godrej Properties, 360 ONE, KFin Technologies, Prestige Estates, Mphasis, Waaree Energies, Torrent Power, Marico, Swiggy, Lodha, Jio Financial Services and Hindustan Zinc. The trades took place between December 2025 and June 2026.
According to the order, the entities targeted relatively smaller and less liquid stocks among the bottom 100 by market capitalisation of around 211 NSE-listed stocks eligible for derivatives trading.
The alleged strategy involved first placing large near-the-money options orders at prices below and above the prevailing market price, leaving them unexecuted in the order book. The entities then alternated between net-buying and net-selling stock futures in different time patches during the trading day.
SEBI alleged that these futures trades were designed to temporarily push prices up or down, triggering the pre-positioned options orders at favourable prices. Since futures and options prices move together, a rise in futures prices would increase call premiums and reduce put premiums, while a fall would have the opposite effect.
The order gave a hypothetical example of the strategy: if a stock trades at Rs 100 and its call option is priced at Rs 5, selling futures to push the stock down to Rs 98 could bring the call premium down to Rs 4, allowing the entity to buy it cheaply. A subsequent futures-led move to Rs 102 could lift the call premium to Rs 6, enabling an earlier sell order to execute at the inflated price.
SEBI said the futures leg consistently incurred losses, but these were outweighed by disproportionately larger gains in the options leg because the options positions were much larger than the futures trades used to influence prices.
The regulator also flagged possible deceptive orders, coordinated or synchronised trading and the use of multiple entities and contracts to evade surveillance systems.
“The manner in which the entities tried to evade the surveillance systems and their overall conduct, by carrying out trades across the stock futures and stock options segments, contracts and entities, necessitate emergent preventive actions to protect the integrity of the securities market,” Varshney said.
SEBI clarified that the Rs 28.12 crore amount represents only the suspected gains identified in the sample examined so far. A wider investigation is underway into the role of related entities, possible coordinated trading and potential manipulation involving the cash market.
The parties have 21 days to file their responses and seek a hearing. The interim order does not preclude further proceedings, including penalties, after completion of the investigation.
