SEBI Fines Aqua Proof ₹45 Lakh for Front-Running KPIT Tech Trades
Sebi justified the penalty, saying it must be imposed for non-compliances in order to ensure that the violations can be prevented in the future
The Impressive TimesMumbai, July 10, 2025 — The Securities and Exchange Board of India (SEBI) has imposed a total penalty of ₹45 lakh on Aqua Proof Wall Plast Private Limited (APWPPL) and its director Naresh Chandra Bohra in a case involving front-running trades in KPIT Technologies Ltd.
As per SEBI’s order, the regulator concluded that APWPPL had engaged in prohibited trading activity in 2017 by acting on confidential client information to execute trades ahead of a major institutional order. This manipulative tactic, known as front-running, is strictly banned under Indian securities law due to its unfair impact on market integrity and investor trust.
The order noted that the trades were initially executed by Mehrangarh Financial Advisors Pvt Ltd (MFAPL), which was later merged with APWPPL. On July 26, 2017, MFAPL sold a large chunk of KPIT shares at an average price of ₹123.73 just before a major client sell order. When the client’s order hit the market and drove prices down, MFAPL allegedly bought back shares at a lower rate of ₹120.20, pocketing a profit of ₹3.53 per share on 5.52 lakh shares—amounting to illegal gains of approximately ₹19.52 lakh in one day.
SEBI stated that the trades were enabled by access to non-public information, reportedly acquired through links to Anand Rathi Shares and Stock Brokers. The use of insider knowledge to benefit at the expense of other investors was described as a “serious breach” of fair market conduct.
In its ruling, SEBI levied a ₹40 lakh fine on the company and an additional ₹5 lakh on Director Bohra, highlighting that penalties are necessary not just for punishment but to deter similar violations in the future.
The market watchdog emphasized that front-running undermines investor confidence, distorts fair price discovery, and erodes the credibility of capital markets. While no specific loss to retail investors was calculated, the broader market disruption and unfair advantage were cited as reasons for the financial penalties.
This case adds to a series of recent enforcement actions by SEBI aimed at curbing insider trading, front-running, and unethical conduct in India’s equity markets.
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