Rakesh Jhunjhunwala under Sebi probe for insider trading in 2016: Reports

Rakesh Jhunjhunwala, the billionaire stock market investor, is under Securities and Exchange Board of India (Sebi) scanner for insider trading in education firm Aptech. Jhunjunwala and his family own majority stake in Aptech, reports The Economic Times.

According to Livemint, the market regulator is examining the time period of February 2016 to September 2016. "The regulator is examining a time frame of February 2016 to September 2016 for irregular trades, which it suspects were done on the basis of insider information", Livemint reported.

Sebi is also investigating the role of other family members, as well as some board members, including investor Ramesh S Damani and director Madhu Jayakumar. Jhunjhunwala's brother and wife, Rajeshkumar Jhunjhunwala and Rekha Jhunjhunwala, are also being probed by market watchdog.

According to Livemint, Jhunjhunwala's brother and wife bought 763,057 shares in the IT firm through block deals on September 7, 2016. With 24.224 per cent stake in it, Aptech is the only company in Rakesh Jhunjhunwala's portfolio where he has management control. The stake is valued at around Rs 160 crore.

In 2005 Jhunjhunwala picked up stake in Aptech for the first time — 10 per cent at Rs 56 per share. He has gradually increased his holding since then. Sebi sent the summons under Section 11 C(5) of the Sebi Act that gives the regulator power to summon individuals and appear before it for any probe.

Rakesh Jhunjhunwala still sees an NDA government, but advises caution

Rakesh Jhunjhunwala, one of India’s biggest stock market investors, advised caution ahead of Lok Sabha elections even as he said that the ruling government is likely to come back to power.

He was speaking on a day when the market hit new highs with a little over a month to go before election results. He was part of a panel discussion marking the launch of the latest entrant in the mutual fund industry -- the Sun Pharmaceutical Industries copromoter Sudhir Valia-backed ITI Mutual Fund. Others on the panel were Ramesh Damani, member, Bombay Stock Exchange (BSE); Nimesh Shah, Managing Director and chief executive officer at ICICI Prudential Asset Management Company; and George Heber Joseph, chief executive officer and chief investment officer at ITI Mutual Fund.

Both the benchmark indices closed at all-time highs on Tuesday -- the S&P BSE Sensex closed at 39,275.64 while the National Stock Exchange's Nifty 50 ended at 11,787.15.

“Today is a new high in the market but all the bars are empty!” said Jhunjhunwala, suggesting that the market has been driven higher by a few stocks, rather than seeing a broad-based rally. However, he remained bullish on expectations of a pickup in the capex cycle and said that the phase of the bad loan crisis has passed.

Jhunjunwala said he expects the ruling National Democratic Alliance (NDA) to come back to power at the Centre. He added that the Bharatiya Janata Party (BJP) may not win a single-party majority in the Lok Sabha. However, he expects the ruling party to be a dominant partner in the new government.

Ramesh Damani advised investors against positioning themselves on the certainty of a particular party coming to power. He said markets have had a bad track-record in predicting election outcomes, and investors should be careful of being overly assured about a given outcome.

“I think the market is pricing another comfortable majority for the NDA, which may not happen,” he said.

Nimesh Shah said certain government-owned companies with good returns on equity and banks with a good liability franchise look good. He was also bullish on pharmaceutical and healthcare segments.

George Heber Joseph, chief executive officer and chief investment officer at ITI Mutual Fund, too was bullish on the pharma and healthcare segment, pointing out that the share of the wallet for these segments is likely to increase.

Jhunjhunwala also sounded another note of caution on the nature of the latest bull-run. He said it has failed to benefit the majority of people, which could result in the imposition of taxes for redistribution.