Sebi probe reports cast shadow on Jhunjhunwala's holdings

Reports suggested that stock market regulator, the Securities and Exchange Board of India (Sebi), is looking into the allegations of insider trading in the shares of Aptech, a computer training company in which Jhunjhunwala is a promoter. 

An email sent to Jhunjhunwala on the allegations did not immediately receive a response. 

Investor Rakesh Jhunjhunwala, known as India’s Warren Buffet, on Tuesday witnessed his certain key investments underperform after news reports of a regulatory investigation into alleged insider trading in a firm in which he holds a stake. 

Four of his top five holdings underperformed the benchmark S&P BSE Sensex. They were down an average of 1.2 per cent, as against a 0.5 per cent fall in the Sensex. 

The reports suggested that stock market regulator, the Securities and Exchange Board of India (Sebi), is looking into the allegations of insider trading in the shares of Aptech, a computer training company in which Jhunjhunwala is a promoter. 

Insider trading refers to buying or selling of shares by those with privileged information about the company which is not available to the general public.

Jhunjhunwala holds a 45.4 per cent stake in Aptech in his name, and in the name of related entities, shows an analysis of shareholding data by Business Standard. 

The company was down 6.66 per cent at the close of trading hours. The fall adds to earlier underperformance by the company, which has given lower returns than the Sensex over the last decade. A look at the top five holdings’ performance over the December quarter shows signs of lagging performance. 

Watchmaker Titan is the ace investor's largest holding, according to the disclosures made at the end of December. It is worth Rs 7,053 crore. The stock was down 6.69 per cent in the December quarter; the S&P BSE Sensex gained 6.69 per cent in the same period.  

An email sent to Jhunjhunwala on the allegations did not immediately receive a response.

Photograph: Shailesh Andrade/Reuters.