Why Did Nuvama Shares Plummet Over 10% After SEBI's Action Against Jane Street?
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Synopsis
Nuvama Wealth Management's shares fell over 10% after SEBI's ban on Jane Street from Indian markets. The regulatory authority ordered Jane Street to deposit Rs 4,843.5 crore in alleged illegal gains. Discover the implications of this action on Nuvama and the wider market.
Key Takeaways
- Nuvama Wealth Management shares fell over 10%.
- SEBI took action against Jane Street.
- Jane Street must deposit Rs 4,843.5 crore.
- Trading practices under scrutiny due to illicit options trading.
- Market integrity is crucial for investor confidence.
Mumbai, July 4 (NationPress) Shares of Nuvama Wealth Management experienced a steep decline of over 10% on Friday, following the Securities and Exchange Board of India (SEBI) barring Jane Street, a US-based trading firm, from participating in the domestic equity market. The regulatory body mandated Jane Street to deposit alleged illegal earnings amounting to Rs 4,843.5 crore into an account designated for the market regulator.
Nuvama serves as Jane Street's trading partner within the Indian stock markets.
By 12:45 p.m., Nuvama Wealth shares were valued at Rs 7,408.50, reflecting a 9.45% drop on the National Stock Exchange (NSE) compared to the prior day's closing.
The stock began trading negatively at Rs 7,940.0, a decrease of Rs 235 from the previous session's closing price of Rs 8,175.50.
In the wake of heightened selling pressure due to SEBI's intervention, the share price further plunged, hitting an intra-day low of Rs 7,280.50, marking a drop exceeding 10%.
Interestingly, the company's 52-week high and low stand at Rs 8,508.50 and Rs 4,600.0, respectively.
Additionally, the market regulator has prohibited three other entities linked to the US trading firms from accessing the market.
SEBI has directed these entities to deposit their gains of Rs 4,843.5 crore, accrued from illicit options trading practices, into the regulator's account.
The order also calls for the freezing of bank accounts belonging to these entities, which include JSI2 Investments Private Limited, Jane Street Singapore Private Limited, and Jane Street Asia Trading Limited.
According to the interim order issued by SEBI, Jane Street reaped Rs 43,289.33 crore by trading index options on Indian exchanges from January 1, 2023, to March 31, 2025.
As per the findings, Jane Street engaged in purchasing substantial quantities of cash sector and Bank Nifty futures in the morning, then sold considerable amounts of Bank Nifty options in the afternoon on 14 expiry days.
Point of View
Nuvama's decline is a critical reminder of the interconnected nature of global trading practices. SEBI's decisive actions reflect a commitment to maintaining market integrity. As the situation unfolds, it highlights the importance of regulatory frameworks in safeguarding investor interests while navigating the complexities of international trading partnerships.
NationPress
16/07/2025
Frequently Asked Questions
What caused Nuvama's shares to drop?
Nuvama's shares fell over 10% due to SEBI's action against its trading partner, Jane Street, which was barred from the Indian market and ordered to deposit illegal gains.
How much illegal gain is Jane Street required to deposit?
Jane Street has been ordered to deposit Rs 4,843.5 crore in alleged illegal gains as part of SEBI's regulatory actions.
What are the trading impacts of SEBI's decision?
SEBI's decision has led to increased selling pressure on Nuvama's shares, causing a notable drop in its market value.
What is the significance of this regulatory action?
This action underscores SEBI's commitment to maintaining market integrity and addressing illicit trading practices in the Indian equity market.
What is the current trading status of Nuvama shares?
As of now, Nuvama shares are trading significantly lower, reflecting the market's reaction to the news about Jane Street.
