IT Raids Nuvama Wealth, Formerly Edelweiss Broking
• Nuvama Raided in ₹36,500 Cr Market Scam
•IT Dept Cracks Down on Jane Street Partner
•Jane Street’s ₹4,844 Cr Escrow Sparks New Probe
Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098
The Income Tax Department has raided Nuvama Wealth, formerly Edelweiss Broking, in connection with the Jane Street market manipulation case. Sebi had earlier banned Jane Street for expiry-day index rigging. The firm later deposited ₹4,844 crore in escrow, but investigations continue into its ₹36,500 crore profit from questionable trades.
I-T Department Raids in Nuvama Wealth Connection with Jane Street Trading Controversy
In a major enforcement action impacting India’s capital markets, the Income Tax Department launched search operations on Thursday at the offices of Nuvama Wealth and Investment Ltd, formerly known as Edelweiss Broking. This action is directly linked to the ongoing Jane Street market manipulation probe, in which Nuvama served as the firm’s on-ground trading partner in India.
The search was conducted under Section 133A of the Income Tax Act, 1961, with officials investigating the firm’s financial records, trade data, and communication logs. Nuvama confirmed the search and said it is extending full cooperation to the authorities and “sharing all requisite information.”
The development comes after Jane Street was barred from Indian markets earlier this month following allegations of manipulation in the derivatives segment by the Securities and Exchange Board of India (Sebi). The move has triggered ripple effects across the trading ecosystem.
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Sebi Crackdown Shakes Market; NSE Derivatives Turnover Dips 35%
Following the Sebi ban on Jane Street, India’s derivatives market experienced significant volatility and reduced liquidity. On July 17, the NSE’s index options premium turnover dropped to ₹39,625.77 crore, down nearly 35% from June’s average of ₹60,605 crore. This drop in turnover reflects a sharp decline in risk appetite among traders, with expiry-day volumes also falling steadily throughout July.
Though Jane Street has since been allowed back into the Indian markets, the episode has left a visible mark. According to a report by Sprouts News Investigation Team (SIT), Jane Street was permitted to resume operations after depositing alleged “unlawful gains” worth ₹4,844 crore in an escrow account before the July 14 deadline, as directed by Sebi.
On July 21, Sebi confirmed through formal communication that restrictions on Jane Street’s access to the securities market had been lifted. The regulator clarified that the interim order dated July 3 ceased to apply after the firm complied with its directives.
NSE, BSE Instructed to Monitor Jane Street; Options Trading Curtailed
Despite clearance, Jane Street remains under tight surveillance. Reuters reported that both NSE and BSE have been instructed to monitor the firm’s activities closely. Additionally, the firm has provided an undertaking to Sebi stating it will not participate in options trading and will stay away from the cash segment until it has fully explained its trading strategy to the regulator.
Sources cited by Reuters also indicate that Sebi is continuing to assess the systemic impact of Jane Street’s operations on expiry days, given the sheer volume and influence the firm wielded in the derivatives market.
₹36,500 Crore in Gains: Expiry-Day Manipulation Under Sebi Scanner
As per Sebi’s investigation, Jane Street amassed profits of ₹36,502.12 crore between January 2023 and March 2025. Of this, ₹43,289 crore came from index options trading, while the firm suffered losses of ₹7,687 crore in cash and futures segments. Sebi has frozen ₹4,840 crore, citing them as unlawfully gained profits through manipulative strategies.
The Sprouts News Investigation Team (SIT) has accessed details suggesting that Jane Street ran “the largest risks in F&O in cash-equivalent terms” and executed trades described as “prima facie manipulative.” In one instance, on January 17, 2024, the firm earned ₹734.93 crore in a single day by manipulating Bank Nifty futures and options, executing a “pump and dump” strategy—first driving the index up via large buy orders, then reversing to profit on bearish options.
Expiry-Day Trades Show Systematic Manipulation: Sebi Red Flags Intensify
Sebi reviewed 18 expiry-day trading instances, finding manipulative activity in 15 cases. The patterns included intense buying of index stocks and futures in the morning, followed by large-scale sell orders near market close to artificially move indices like Nifty and Bank Nifty. The regulator believes these were coordinated strategies to distort price discovery, primarily for derivative profit-making.
With Sebi tightening its grip and the Income Tax Department joining the probe, the Jane Street-Nuvama saga has raised serious questions about regulatory arbitrage and risk concentration in India’s capital markets. The Sprouts News Investigation Team (SIT) will continue to monitor the evolving investigation and its implications for market integrity.
A Test Case for Regulatory Oversight in Indian Markets
This high-profile case is fast becoming a test case for enforcement efficacy and regulatory coordination in India’s financial sector. As foreign institutional investors and high-frequency traders come under increasing scrutiny, authorities are looking to tighten compliance norms and prevent systemic risks posed by aggressive derivative strategies.
The investigation underscores the urgent need for real-time surveillance, transparency in high-value trades, and stronger deterrents against market manipulation on expiry days.
Some notable controversies involving Nuvama Wealth and Investment Ltd (formerly Edelweiss Broking)
SEBI Warning for Failing to Report Suspicious Activity
In June 2023, SEBI formally admonished Edelweiss Broking (now Nuvama) for failing to report suspicious transactions. These involved dematerialised shares linked to bogus entities with mismatched income and trading turnover between 2008–2013. SEBI advised stricter due diligence and timely reporting, though no suspension was imposed.
Client Securities Sold Illegally: ‘Anugrah Scam’
In a 2023 Securities Appellate Tribunal (SAT) ruling, Nuvama Clearing Services was ordered to reinstate ₹460 crore worth of client shares unlawfully sold to recover dues of Anugrah Stock & Broking. The tribunal found Nuvama had failed in due diligence as a custodian, violating NSE Clearing rules.
Stock Price Volatility Linked to Jane Street Incident
Following SEBI’s July 2025 crackdown on Jane Street, Nuvama shares plunged by up to 11% due to its role as Jane Street’s Indian trading partner. Investor sentiment turned negative amid uncertainty and regulatory scrutiny.
Unexplained Charges in Client Accounts
Reddit user reports and consumer complaints indicate unexplained periodic deductions from trading accounts, even without activity. Charges ranged from ₹20 to ₹650 and were often labeled “accrued” or DP-related, with poor explanations provided to clients.
Referral-Based Large Client Trading
Industry sources cited by Reddit allege that certain large-volume clients were routed through brokers like Nuvama via third-party referrals (e.g. Rohit Salgaocar), earning referral fees that raised questions about transparency and broker-client relationships.
Board of Directors at Nuvama Wealth and Investment Ltd: An Overview and Key Governance Watchpoints
Nuvama Wealth and Investment Ltd (formerly Edelweiss Broking) is governed by a diverse and seasoned board comprising executives and independent professionals from capital markets, audit, and private equity backgrounds. The company, currently under scrutiny due to its link with Jane Street’s market manipulation probe, is led by the following directors:
•Mr. Birendra Kumar, Chairperson & Independent Director, brings governance depth and regulatory experience to the boardroom.
•Mr. Ashish Kehair, Managing Director & CEO, is the face of Nuvama’s strategic leadership and capital market operations. His role is especially critical given the company’s regulatory engagements.
•Mr. Shiv Sehgal, Executive Director, heads capital markets and institutional equities—sectors closely tied to the recent derivative trading concerns.
•Mr. Nikhil Kumar Srivastava and Mr. Aswin Vikram, both Nominee Directors from promoter group PAG, provide investment oversight and strategic alignment from the private equity standpoint.
•Mr. Sameer Kaji and Mr. Kamlesh Shivji Vikamsey, Independent Directors, offer governance, compliance, and audit expertise critical to navigating the current regulatory spotlight.
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Regulatory Watch: Any Directorial Controversies?
As of now, no individual controversies have surfaced involving the directors themselves. However, the board’s role in oversight and risk governance has come into sharp focus amid the ongoing Income Tax Department search and SEBI’s market manipulation allegations linked to Nuvama’s former trading partner Jane Street.
The Sprouts News Investigation Team (SIT) notes that while directors may not be directly implicated, their fiduciary responsibility and corporate governance roles will be examined if the probe expands. The spotlight is particularly intense on operational leadership, especially in functions related to derivatives, risk controls, and regulatory reporting.
Further scrutiny from SEBI or tax authorities may raise questions about board-level due diligence and internal audit frameworks, especially given the scale of profits and alleged manipulations involved in the case.
