Sebi dismisses insider trading charges against Pranav Adani, others in AGEL case
Mumbai: The Securities and Exchange Board of India (Sebi) has rejected insider trading allegations against Pranav Adani and six others, closing a long-running investigation into trades carried out before Adani Green Energy Ltd (AGEL) announced its acquisition of SB Energy for $3.5 billion in May 2021.
In two separate orders announced Friday, the regulator concluded that the charges could not be established after finding that the assumptions underlying the show-cause notices, including the length of the unpublished price-sensitive information (UPSI) period and the status of publicly available information, were inconsistent with the evidence on record.
The regulator has reconstructed in detail how negotiations between AGEL and SB Energy sellers progressed. According to the orders, internal negotiations, preliminary settlements and benchmark valuations circulating within AGEL until mid-May were not classified as UPSI.
Sebi said the information started taking a more precise shape only after a confidentiality agreement was signed between the parties on May 13, 2021, when the virtual data room was opened and negotiations moved from preliminary information exchange to concrete due diligence and transaction workflows. Even then, the same elements identified as UPSI in the investigation report were made public shortly thereafter.
The orders reintroduce detailed press reports published on May 16 and 17, 2021, describing AGEL’s potential acquisition of SB Energy, the size and nature of SB Energy’s renewable portfolio, the status of ongoing discussions, expected valuation frameworks, and AGEL’s internal progress on due diligence. Sebi observed that these reports revealed public information that the show notices treated as UPSI and that information became “publicly available” on the afternoon of May 16.
The regulator also noted that AGEL’s share price reacted sharply to these publications, with the stock peaking on 17 May and rising further on 18 May; These movements are larger than those seen on the actual announcement day of May 19, 2021, when the stock rose 3.75%.
In both cases, the regulator stated that the underlying assumptions of the investigation, particularly SCN’s framing of the UPSI period as extending from 29 April to 19 May, were inconsistent with the evidence, AGEL’s own statements and the chronology set out in the orders. Sebi found no basis to support the allegations as the information was yet to become UPSI or publicly available before the swaps.
Insider trading allegations
Sebi’s two insider trading cases, one involving Pranav Adani and the other involving Vinod Bahety and his affiliates, stem from AGEL’s acquisition of SB Energy from SoftBank Group Capital and Bharti Global, as announced on May 19, 2021.
The regulator assessed the transaction as price sensitive as it increased AGEL’s operational capacity by 46% and its overall portfolio by 33%. Sebi initially alleged that Pranav Adani, a director in multiple Adani Group companies, was UPSI’s hand in the acquisition and passed this on to his relatives Kunal and Nrupal Shah, who allegedly bought AGEL shares on this basis and made illicit gains.
Similarly, Sebi alleged that Bahety, who heads mergers and acquisitions in the group, also had similar access to UPSI and passed this access to associated entities, including AGEL-listed Rajtaru Enterprises and MC Jain Infoservices, during the period. Both the investigations covered transactions carried out between January 28 and August 20, 2021, after Sebi appointed an Investigating Officer on April 20, 2023, to look into possible insider trading in connection with the upcoming acquisition.
