Kalyan Jewellers India Ltd has approached the Securities and Exchange Board of India (SEBI), alleging unfair and manipulative trading practices in its stock, requesting regulatory intervention, including a temporary suspension of trading in the futures and options (F&O) segment until a comprehensive inquiry is completed.
In a letter addressed to SEBI's integrated surveillance department, the jewellery retailer detailed what it described as unusual trading patterns and the circulation of unverified rumours designed to trigger panic among investors and exert downward pressure on its share price. The communication, sent sometime in 2025, had not been previously reported until 9 February 2026.
The Timeline of Alleged Manipulation
According to Kalyan Jewellers, the chain of events began shortly after its stock was included in the F&O segment on 29 November 2024. By late-December 2024, the company observed that futures contracts were trading at a discount to spot prices—a pattern it characterised as abnormal and indicative of aggressive short positioning.
The situation escalated on 7 January 2025, when, between 10:30am and 11am, multiple rumours began circulating in the market. These included claims relating to the arrest of promoters and alleged bribery of fund managers—allegations that Kalyan Jewellers has categorically denied.
In its submission to the regulator, the company stated it believes short positions were deliberately built up from late-December 2024, and that the rumours were released as part of a predetermined strategy. The timing was particularly notable, as it came immediately after the company released its quarterly business update for the December quarter of FY24-25 in early January, consistent with its usual disclosure practices.
Alleged Modus Operandi
Kalyan Jewellers outlined what it believes was a coordinated manipulation scheme involving multiple elements:
● Building short positions through futures and options contracts
● Spreading misleading information across social media platforms
● Executing coordinated selling to amplify price declines
The company also highlighted that some individuals referenced in its annexures to the regulator were not registered with SEBI as investment advisers and were therefore not authorised to issue investment recommendations.
The Financial Impact
The alleged manipulation had severe consequences for the company's market valuation. According to documents submitted to SEBI and stock exchanges in 2025, Kalyan Jewellers' share price plummeted from ₹745 on 6 January 2025, to ₹440.65 by 30 January 2025—a decline of approximately 41% in less than a month.
Over the same period, the company's market-capitalisation dropped dramatically from around ₹76,795 crore to ₹45,450 crore, representing a loss of over ₹31,000 crore in shareholder value.
The volatility has continued, despite steady operational performance. After touching a lifetime high of ₹770 in December 2024, the stock has corrected by about 45% and is currently trading around ₹416 per share.
The stock price decline stands in stark contrast to the company's actual business performance. On 6 February 2026, Kalyan Jewellers announced its third quarter (Q3) results which showed robust growth:
- Net profit rose 90% year-on-year to ₹416 crore.
- Revenue increased 42% y-o-y to ₹10,343 crore.
Regulatory Response and Market Action
SEBI's response to Kalyan Jewellers' communication remains unknown at this time. The regulator has not publicly commented on the allegations or indicated whether an investigation has been initiated.
However, the National Stock Exchange (NSE) has taken note of the development. On 9 February 2026, the NSE asked Kalyan Jewellers to clarify media reports regarding the alleged market manipulation complaint to SEBI and the request for temporary F&O suspension. The company's response to this Exchange query is pending.
Similarly, the Bombay Stock Exchange (BSE) issued a statement on 9 February 2026, seeking clarification from Kalyan Jewellers with reference to news reports about the alleged manipulation and the request for F&O segment suspension.
Citing Investor Protection Concerns
In its submission to SEBI, Kalyan Jewellers emphasised investor protection and market integrity concerns as the basis for its request. The company urged the regulator to direct stock exchanges to suspend trading in its F&O contracts as a precautionary measure while investigations are underway.
This appeal underscores the company's belief that continued F&O trading could expose investors to further manipulation and price volatility until the matter is thoroughly investigated and resolved.
The Kalyan Jewellers case highlights growing concerns about potential manipulation in India's derivatives markets, particularly in newly admitted stocks. The allegations raise questions about surveillance mechanisms, the role of social media in spreading market-moving rumours, and the effectiveness of existing regulatory frameworks in protecting investors from coordinated manipulation schemes.
If substantiated, the allegations could prompt SEBI to review its monitoring protocols for stocks in the F&O segment and potentially strengthen regulations on short-selling and the dissemination of market-sensitive information through social media channels.
Market participants and investors will be watching closely for the regulator's actions and the company's formal response to the exchange queries in the coming days.
The case serves as a reminder of the vulnerability of even fundamentally strong companies to market manipulation and the importance of robust regulatory oversight in maintaining fair and transparent capital markets.
