Kalyan Jewellers flags alleged market manipulation to SEBI, seeks suspension from F&O segment

Kalyan Jewellers has approached the market regulator alleging unfair and manipulative trading practices in its stock and has sought regulatory intervention, including a temporary suspension of trading in the futures and options (F&O) segment until an enquiry is completed.

In a letter to the Securities and Exchange Board of India’s (Sebi’s) Integrated Surveillance Department, the jewellery retailer said it had observed unusual trading patterns and the circulation of unverified rumours that, in its view, were aimed at triggering panic among investors and exerting downward pressure on the share price. The letter was sent sometime in 2025.

Sebi’s response to the Kalyan Jewellers communication is not known. The 2025 communication to Sebi has not been reported previously.

According to the company, its stock was included in the F&O segment on November 29, 2024. Towards the end of December 2024, futures contracts began trading at a discount to spot prices, a pattern the company said was abnormal and indicative of aggressive short positioning.

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The company said that on January 7, 2025, between 10:30 am and 11 am, multiple rumours started circulating in the market, including claims relating to the arrest of promoters and bribery of fund managers. Kalyan Jewellers has denied these allegations.

In its submission, the company said it believes that short positions were built up from late December 2024, and that the rumours were released as part of a predetermined strategy immediately after its quarterly business update for the December quarter of FY25, which it released in early January, in line with its usual practice.

Kalyan Jewellers further alleged that the suspected modus operandi involved taking short positions through futures and options, spreading misleading information on social media, and coordinated selling to amplify price declines. It said some of the individuals referenced in its annexures were not registered with SEBI as investment advisers and were therefore not authorised to issue investment recommendations.

In documents submitted to the regulator and exchanges in 2025, Kalyan Jewellers said its share price fell from ₹745 on January 6 to ₹440.65 by January 30, 2025, a decline of about 41%. Over the same period, its market capitalisation declined from around ₹76,795 crore to ₹45,450 crore, according to figures cited by the company.

Citing concerns over investor protection and market integrity, the company has urged SEBI to direct exchanges to suspend trading in its F&O contracts as a precautionary measure.

Emails sent to Sebi and Kalyan remained unanswered.

Shares of Kalyan Jewellers have been witnessing heightened volatility in the last year despite steady earnings. After touching a lifetime high of ₹770 on December 2024, the stock has corrected 45% since then, currently trading around Rs 416 apiece, stock exchange data showed.

On February 6, the company announced its Q3 results, where its net profit rose 90% year-on-year to ₹416 crore while revenue rose 42% to ₹10,343 crore, data showed. Despite the decent numbers, the stock remained flat.