The market loves power plays, but not quite the kind SEBI just unearthed at the Indian Energy Exchange. In what looks like a charged case of insider trading, the regulator found that a few individuals had been running a parallel current of information, using privileged regulatory insights to light up their portfolios before the official switch was flipped.
To give a brief background, IEX is an exchange where one can trade electricity units. As IEX is a listed company, its shares are traded on stock exchanges and are part of the futures and options segment. This allows a person to bet on the movement in the shares of IEX without actually owning the stock.
According to a SEBI order, a handful of traders gained early access to the Central Electricity Regulatory Commission’s (CERC) market coupling decision in July, a policy move that was expected to shake up how power is traded on exchanges. Armed with this information, they built large positions in IEX derivatives, knowing well that the stock would drop once the decision went public. IEX’s share price plunged nearly 30% in two days, and their put options, or bets placed when someone expects a share or index to fall, made a neat profit.
The total gain? A sizzling Rs 173 crore, booked through a flurry of trades in IEX put options. As per the SEBI order, the group didn’t just rely on whispers; they allegedly tapped into internal meeting notes, monitored confidential communications, and even kept a live video feed of discussions, effectively turning policy deliberations into a real-time trading signal.
Once the trades paid off, the current flowed into a web of connected firms, routed neatly across accounts and corporate entities. The regulator’s fund-trail analysis reads like a circuit diagram, with money looping between companies with overlapping ownership, partners, and signatories.
For SEBI, the red flag was the trading pattern: zero activity in IEX derivatives for months, followed by a sudden surge of heavy put bets days before the policy announcement. The trades were placed, squared off, and profits transferred within days. The order makes clear that insider trading is no longer confined to the stockbroking floor.
SEBI’s move to freeze the proceeds and bar the accused from the market sends a strong signal: this grid won’t tolerate short circuits. The regulator’s tone suggests it sees the episode as more than just another compliance lapse; it’s a warning that the walls between regulators, market intermediaries, and traders need better insulation.
The order on IEX comes a few months after Jane Street was prima facie found liable for influencing movement in options trading through big volumes in the spot market, especially in Nifty Bank. The alleged illegal gain in the case of Jane Street, though, was much higher at Rs 4,843 crore. No surprise then that SEBI has been warning retail investors to be careful about F&O.
RBI Moral Suasion
In its last monetary policy meeting, the Reserve Bank of India kept the repo rate unchanged, said in as many words that there is space to cut rates, yet left the stance unchanged at neutral. The RBI’s communication left many questions unanswered, perhaps for a reason. Central banks like to work more through moral suasion than direct action.
Action: No change in rate or stance.
Moral suasion: There is space to cut rates.
Now that the RBI has released minutes of the last policy meeting, some more light has been shed on its decision. The minutes reveal that beneath the calm exterior, there’s quiet debate over how long India’s growth can rely on fiscal thrust and favourable inflation before the rate cycle must turn again.
Governor Sanjay Malhotra’s statement stands out for its mix of caution and conviction. He acknowledged that growth has been resilient, buoyed by a robust first quarter and a promising monsoon, but warned of a softer outlook ahead amid US tariff shocks.
Inflation, meanwhile, has retreated to its lowest in eight years, giving the RBI what he called “policy space to further support growth.” Yet, in his words, this is “not the opportune time.” The combined impact of fiscal measures, GST rationalisation, and prior rate cuts is still working through the economy. With global policy fog thickening, Malhotra argued for patience: any further cut now, he cautioned, could “fail to deliver the desirable impact.” His message was clear — prudence can be as powerful as policy action.
Two external members, Nagesh Kumar and Ram Singh, however, leaned toward an accommodative stance, citing the need to counter the fallout from US tariffs and support MSMEs. Not surprisingly, as external members are government nominees on the Monetary Policy Committee.
Poonam Gupta and Saugata Bhattacharya preferred to wait for the recent rate cuts of total 100 basis points to transmit, noting that domestic demand remains strong and inflation expectations are anchored.
Google’s Vizag Bet
Moving on to the corporate world, tech giant Google is making its biggest bet on India. The search engine monolith and the owner of Gmail and YouTube said this week it will invest $15 billion in India over five years to build an artificial intelligence data centre in Visakhapatnam, Andhra Pradesh.
The data centre will have an initial capacity of 1 gigawatt and will be the company’s “largest AI hub” outside the US, Google Cloud CEO Thomas Kurian said at an event in New Delhi announcing the investment.
The project also includes construction of a new international subsea gateway. Adani Group and Bharti Airtel have partnered with Google to build the infrastructure for the data centre.
The announcement is significant for several reasons other than the massive investment amount itself. For one, the project will help Google to better compete with its US compatriots such as Microsoft and Amazon that have already invested billions of dollars into building data centres in India.
India’s importance in Google’s scheme of things is so important that even the standoff between India and the US over tariffs and a trade deal hasn’t deterred the company from announcing the mega project.
While US President Donald Trump and his supporters want US companies to invest more at home rather than other countries like India, anti-American sentiment in India has been growing in India ever since Trump imposed a 50% tariff on Indian shipments to the US.
But the political rhetoric aside, India is an important growth market for Google parent Alphabet Inc. Apart from the dominance of Gmail and Google search in India, YouTube has the highest number of its users and Android dominates smartphone usage in the country. A massive data centre will be key to maintaining this dominance.
IT Earnings
Staying with tech news, over the past few months, India’s top IT companies have been in the news mostly for negative developments—layoffs at TCS, the impact of AI on jobs, the crackdown by the US on H1-B visas, clients turning cautious, and so on. But latest quarterly results show some of these concerns might be easing.
Last week, Tata Consultancy Services had topped revenue estimates, as we noted in our newsletter. This week, Infosys, Wipro, HCL Tech, Tech Mahindra and LTIMindtree put up a strong show that indicate an improvement in demand.
Infosys topped analysts’ estimates for profit and revenue in the second quarter. Its net profit rose 13% to Rs 7,364 crore while revenue grew 9% to Rs 44,490 crore. The company now expects full-year revenue growth of 2-3%, versus 1-3% previously.
“We are benefiting from consolidation plays on automation and on using AI for efficiency. That’s the big focus that we see from our clients across industries,” Infosys CEO Salil Parekh said.
HCL Tech’s consolidated revenue rose 10.7% to Rs 31,942 crore, beating the analysts’ estimates, while profit was flat but matched forecasts at Rs 4,235 crore. It kept its annual revenue growth forecast unchanged at 3-5% despite macroeconomic uncertainty.
Wipro posted a 1.8% rise in consolidated revenue to Rs 22,697 crore, topping estimates. It expects a 0.5% decline to 1.5% revenue growth for Q3. Net profit, however, rose 1.2% to Rs 3,246 crore, slightly missing analysts’ estimates. LTIMindtree’s net profit rose 12% and consolidated sales climbed 10.2%, beating forecasts.
Tech Mahindra’s Q2 revenue increased 5.1% to Rs 13,995 crore, beating estimates, as a rise in Europe revenue offset a drop in sales from the Americas. Its net profit, however, fell 4.4% to Rs 1,195 crore, missing forecasts.
So, what do these numbers and companies’ commentary mean for coming quarters?
Well, the results indicate an improvement in demand in the second half of the year as clients loosen their purse strings, especially for AI contracts, and Indian companies win more deals. Infosys, for instance, announced that it had won a $1.6 billion contract from the UK’s National Health Service.
The IT sector may well have put the worst behind it, at least for now. The big question is: Will the momentum sustain? Let’s hope so. And let’s also hope President Trump doesn’t spoil the party again!
Market Wrap
The stock market regained its momentum this week, crossing key resistance levels amid speculation that India and the US may be getting back to the drawing board to close a trade deal. Although New Delhi refuted US President Donald Trump’s remarks about India being willing to cut Russian oil imports, markets latched on to renewed hopes of a reduction in the 50% tariff imposed earlier.
The Nifty and Sensex ended the week up 2.5% each, led by financials, energy, and consumer-facing companies. Financials had already gained traction following the RBI’s push to ease lending rules, while consumer durables are benefiting from GST rate cuts. The benchmark indices are now just 2.5% below their record highs.
The Nifty 50 heatmap for the week showed a sea of green, with Nestle, Asian Paints, M&M, Bajaj Finance, Titan, and Bharti Airtel among the top gainers, rising 4–8%. Few of the Nifty 50 stocks closed the week in the red, including IT heavyweights Infosys, Wipro, Tech Mahindra, and TCS.
Earnings snapshot
- Zomato parent Eternal’s Q2 profit at Rs 65 crore vs Rs 25 crore in Q1, Rs 176 crore year ago
- Nestle India revenue climbs 11%, profit falls 17% to Rs 743 crore on one-off gain year ago
- Axis Bank Q2 standalone net profit falls 26% to Rs 5,090 crore, net interest margin shrinks
- HDB Financial Services posts about 2% drop in Q2 profit to Rs 581 crore as provisions jump
- HDFC Life Insurance Q2 profit rises 3.3% year-on-year to Rs 447 crore
- ICICI Lombard General Insurance Q2 profit jumps 18% to Rs 820 crore
- Tata Communications consolidated net profit falls 19.4% to Rs 183 crore
Other Headlines
- Hyundai announces $5 billion investment in India to expand manufacturing, research operations
- Adani Group seeks to buy 87 real estate properties from Sahara Group
- IMF lifts India’s growth forecast for 2025-26 to 6.6% from 6.4% despite US tariffs
- China files WTO complaint against India for EV, battery subsidies
- Gold prices continue to rise, hit $4,300 per ounce in global markets
- Indian crypto exchange CoinDCX gets funding from Coinbase at $2.45 billion valuation
- Quick commerce startup Zepto raises $450 million at $7 billion valuation
- Infosys wins $1.6 billion contract from UK’s National Health Service
- LG Electronics India’s shares soar 53% in trading debut, market cap hits $13 billion
- Canara Robeco AMC’s shares rise 13% on listing, market cap hits Rs 6,000 crore
- Dubai’s Emirates NBD looking to buy a stake in RBL Bank
That’s all for this week. Until next week, happy investing!
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