SEBI Imposes ₹10 Lakh Fine for Insider Trading in HDFC Merger Case

The capital market regulator, the Securities and Exchange Board of India (SEBI) has penalised Rupesh Satish Dalal HUF with a monetary fine of ₹10 lakh for executing trades in HDFC Ltd and HDFC Bank while in possession of unpublished price-sensitive information (UPSI) related to their impending merger.

The case originated from a review conducted by the National Stock Exchange (NSE), which flagged unusual trading patterns in HDFC Ltd and HDFC Bank during the merger period (November 1, 2021, to April 30, 2022). Based on this review, NSE referred the matter to SEBI for a detailed probe.

Suspicious Trades Ahead of Merger Announcement

According to SEBI, Rupesh Satish Dalal HUF purchased derivative contracts of HDFC Ltd and HDFC Bank on April 1, 2022, just 3 days before the official announcement of the merger on April 4, 2022. The timing of these trades raised red flags, triggering regulatory scrutiny.

Rupesh Satish Dalal, the karta of the HUF (Hindu Undivided Family), was found to have acted on non-public information when placing these trades.

How the UPSI Was Accessed?

The investigation revealed that Dalal received the sensitive information through his son. Dalal's son maintained close and frequent contact with an insider associated with Deloitte Touche Tohmatsu India LLP, which had been appointed as the official valuer for the HDFC merger.

This Deloitte employee, part of the valuation team since March 29, 2022, was also a long-time friend of Dalal’s son. Records show they had multiple phone interactions and even met in person on March 31, 2022, just a day before the trades were placed.

Quick Exit After Public Disclosure

SEBI's order notes that the HUF entered call option positions in both HDFC entities on April 1, 2022. As soon as the merger was officially announced on April 4, 2022, the HUF immediately exited those positions—an action that aligned with profiting from the UPSI.

This sequence of events led SEBI to conclude that the entity had violated the Prohibition of Insider Trading (PIT) Regulations.

Also Read: India Sees $1.4 Billion FPI Inflows in June 2025, Driven by ETFs Amid Active Fund Outflows

Earlier Settlements in the Case

Notably, in December 2024, SEBI had already settled similar charges with two individuals—one of whom was a former Deloitte employee—who were also allegedly involved in UPSI-related trades. They paid a combined settlement fee of ₹74 lakh to resolve the case without admitting or denying guilt.

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