SEBI Finds Prima Facie Sensex Closing Price Manipulation By Copthall Mauritius And Mansi

The Securities and Exchange Board of India (SEBI) on 13 August, prima facie held that Copthall Mauritius Investment Limited and Mansi Share and Stock Broking Private Limited manipulated the Sensex closing price during the Closing Auction Session (CAS) to benefit from their expiry-day Sensex options positions.

Whole Time Member Kamlesh Chandra Varshney passed an ex-parte interim order against the entities, finding prima facie that they placed large and aggressive buy and sell orders in Sensex constituent stocks during the CAS to influence the Indicative Equilibrium Price (IEP) and secure wrongful gains from their Sensex options positions. He held:

“… I note from the facts and circumstances highlighted during the preliminary examination by SEBI that the modus operandi adopted by Noticees was to prima facie involve/employ the use of large and aggressive buy/sell orders in the underlying constituents of Sensex during the CAS to influence the IEP/closing price of the Sensex to enrich themselves with wrongful gains. To achieve an advantageous pay- off factor from the positions held by Noticees in the Sensex options expiring on the same day which is prima facie manipulative in nature.”

SEBI introduced the CAS through a circular dated 16 January 2026, with the framework taking effect from 3 August 2026. The CAS operates from 3:20 pm to 3:30 pm and permits orders within a ±3% price band. The closing prices of Sensex constituents determine the index's closing value.

SEBI's surveillance system detected abnormal movements in the Sensex IEP on 13 August 2026, which was also the weekly expiry day for Sensex derivatives. During the CAS, the Sensex recorded three sharp spikes of 362.02 points in two seconds, 132.67 points in 12 seconds and 405.08 points in 28 seconds.

The Regulator found that Copthall accounted for 86.6% of the gross buy value and later cancelled buy orders worth Rs. 98.11 crore, representing 32.79% of its total buy orders. It prima facie found that Copthall's aggressive buy orders pushed the Sensex IEP upwards, contributing to a closing level of 78080. Based on the movement in the Nifty, SEBI estimated that the Sensex would otherwise have closed at around 77840.

Mansi Share and Stock Broking, meanwhile, cancelled 12.65 lakh sell orders, representing 99.06% of its total sell orders. SEBI found that Mansi's low-priced sell orders suppressed the Sensex IEP and that its subsequent cancellation of those orders indicated an intention to suppress the IEP rather than genuinely sell the shares.

SEBI examined the entities' trading patterns by considering the size, price, timing and concentration of their orders, their impact on the IEP, subsequent cancellations and their concurrent Futures and Options positions. It found prima facie links between Copthall's buy orders and Mansi's sell orders and their respective Sensex option positions, indicating that the entities placed the orders to manipulate the Sensex IEP and benefit from their Futures and Options positions. It held:

“…the material available on record highlights that each of the Noticees tried to create a favourable move for themselves in the Sensex constituents to enrich themselves with wrongful gains in their expiry day Sensex Option positions.”

Further, the regulator observed that the entities' large buy and sell orders, followed by their cancellation, enabled them to avoid losses or secure wrongful gains on their expiry-day Sensex option positions that might otherwise have expired worthless.

Emphasising the significance of the newly introduced mechanism, SEBI noted that “with the introduction of CAS, volatility and manipulation is expected to reduce, as the system is more efficient and transparent. The design of CAS is such that it provides SEBI with greater ability to identify manipulation as compared to earlier VWAP system.” It also calculated the alleged wrongful gains at Rs. 2.96 crore for Copthall and Rs. 71.64 lakh for Mansi, totalling Rs. 3.67 crore.

Accordingly, SEBI ordered the impounding of the alleged wrongful gains and restrained the entities from accessing the securities market and participating in the CAS.