In today’s Finshots, we tell you how an IEX insider trading scandal managed to slip out from inside the walls of CERC, India’s power regulator and why SEBI is now circling in.

The Story

It feels like just yesterday we wrote about market coupling, something that shook up IEX, India’s largest power exchange, and the country’s energy trading landscape.

The directive came from the Central Electricity Regulatory Commission (CERC), the government body that decides how electricity is priced, who can trade it, how it flows across regions and of course, keeps the power markets fair and transparent.

This order changed the single factor that made IEX one of the most profitable power exchanges in the country and sent its stock price into a freefall. And that’s also where this story begins.

On July 23, 2025, CERC ordered the implementation of market coupling by January 2026, starting with the Day-Ahead Market (DAM). If that sounds too technical, just understand that the power that discoms supply to your home is usually bought from generators like NTPC, through something called long-term Power Purchase Agreements (PPAs). These contracts lock in a fixed price for the electricity they buy. But if prices fall later, discoms still have to purchase at old, higher rates. That’s inefficient and expensive.

Which is why power exchanges exist. Think of them as stock exchanges, but for electricity. Power generators and users trade here, and prices are discovered openly through bids based on demand and supply. Some trades happen for the same day, but some, just a day in advance. This is called the DAM.

And India has three power exchanges: IEX, PXIL, and HPX. All offer similar trading products, but IEX had the largest market share thanks to its first-mover advantage. It launched India’s first electricity trading platform after the government opened up the sector, and higher trading activity on the platform made IEX the most influential exchange for price discovery, especially in the DAM.

But CERC’s order threatened that dominance. It introduced “market coupling”, meaning bids from all power exchanges would now be centrally matched to arrive at one single market price instead of each exchange setting its own. That meant IEX would lose its leadership in price discovery, while rivals, PXIL and HPX could gain. And since DAM contributes a large chunk of IEX’s revenue, the impact was massive. Within days of the order, its stock plunged nearly 30%.

But what no one knew back then was that a few insiders had already placed their bets. And the surprise wasn’t just who they were, it was where they came from — the CERC itself.

Three months went by quietly and then, a few days ago, market regulator SEBI dropped a 45-page interim order that landed like a bombshell. It revealed that a trail of unusual trades and traced phone numbers led straight to one place: CERC’s own Economics Division, the very unit that drafted the market coupling order.

But before telling you more about what SEBI uncovered, there’s one term you need to know: Unpublished Price Sensitive Information, or UPSI. This is insider information that, if leaked, can move a company’s stock price. In this case, the UPSI was the market coupling order itself. SEBI noted that between July 1, a day after the last CERC meeting before the market coupling order, and July 22, just a day before the announcement, this confidential information was already circulating in private circles.

And the people involved weren’t random traders. They were three CERC officials and two closely connected family groups working together.

The first was the Soran family cluster: Bhoovan Singh, his parents Amar Jit Singh and Amita Soran, and Amita’s sister Anita. Bhoovan was at the centre of the information chain, receiving confidential details and passing them on. Even an astrologer known as “Guruji”, a close contact of Bhoovan, was looped into the scheme and received leaked insider information, so that he could make money too.

The second was the Kumar family cluster: three brothers — Narender, Virender and Sanjeev Kumar, along with Sanjeev’s wife, Bindu Sharma. Bhoovan and Narender were old family friends, and that connection tied both clusters together. They even had a joint WhatsApp group called ‘OTC’ where insider information was exchanged.

And the source of this information?

Yogeita Mehra, Chief of the CERC Economics Division. She knew Bhoovan from her college teaching days and, according to SEBI, began leaking confidential CERC documents from April 2024 — including internal meeting minutes, draft proposals and details about market coupling.

Bhoovan then passed on this to the Kumar brothers via the WhatsApp group. Sanjeev even visited the CERC office nearly a week before the market coupling order was issued, sat next door to a confidential board meeting and watched it live on a computer — then casually shared a photo of it in the group. Not just that, he even met high-ranking CERC officials, including Yogeita Mehra and Gagan Diwan, the Deputy Chief.

Then came the trades. Between July 21 and 23, all eight entities suddenly turned active in the market and began buying IEX put options. Volumes shot up to 65,000 contracts. A put option simply means you’re betting the stock will fall. And fall it did. Between July 23 and 24, IEX’s share price crashed from ₹169 to ₹132. While regular investors were left stunned, the insiders quietly walked away with ₹173 crore in profits. And between July 24 and 28, they squared off their positions and disappeared with the gains.

Soon after, large sums were routed to connected entities — Jai Singh & Co. (linked to Narender Kumar), GNA Energy Pvt. Ltd. (run by Sanjeev Kumar) and JSC Infratech Pvt. Ltd. (with bank accounts operated by both Narender and Sanjeev).

By July 31, NSE flagged the trades and emailed all entities asking for an explanation. And that trail eventually led SEBI to uncover what really happened.

Now, someone could argue that talks of market coupling had been around for a while and that the UPSI period should have been longer. But one look at these trades tells another story. Some of those involved opened demat accounts just days before the announcement. They had never traded derivatives before. They had never even touched IEX stock in the months before. And yet, on their very first trades, they made crores. That’s not smart trading. That’s a pattern SEBI calls insider trading, especially when 91% of derivatives traders lose money.

For now, SEBI’s interim order means the case is still ongoing. The entities’ bank accounts have been frozen up to the extent of the illegal profits they made, they cannot trade in the markets until further orders from SEBI, and they have about three weeks to respond and argue their case in a personal hearing.

Whatever happens next, this entire episode is a reminder that when information isn’t equal, neither is the market.

Entire industries can be shaken by a single regulation change. And when the rule maker turns rule breaker, no trading strategy can compete with insider access. That’s why the clean-up must start at the source. Internal compliance cannot just be a paper rule, it has to be a culture.

This kind of compliance already exists in sectors like investment banking and mergers and acquisitions, where one leak can swing stock prices in seconds. Now, that doesn’t mean insider trading never happens there. No system is foolproof. But those guardrails exist for a reason — to make wrongdoing harder, riskier and easier to trace. They keep markets fair and trust intact.

Public institutions need that same proactive oversight. Because this story isn’t just about ₹173 crore being made overnight. It’s also about innocent investors never being able to regain what they’ve lost, despite the accused and insiders being penalised, and about how quickly trust in a fair market can disappear.

Until then…

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