SEBI issues warning to Nestle India for insider trading violations
Mumbai: The Securities and Exchange Board of India (SEBI) has issued an administrative warning to FMCG major Nestle India for violating insider trading rules. The company informed the exchanges about this on Friday.
The warning issued by the Deputy General Manager of SEBI was sent to the company’s compliance officer (CCO). Nestle India disclosed in a stock exchange filing that the company received the SEBI letter on March 6, 2025. The violation was committed by a nominee within the company. However, the coffee and tea maker clarified that the issue has no bearing on its financial, operational or other business activities.
According to SEBI, the violation involved “contra trading”. This occurs when an insider buys or sells shares within six months of a previous transaction in the same security for the purpose of short-term profit. SEBI rules strictly prohibit such trades for insiders and their relatives to prevent misuse of unpublished price sensitive information. The six-month restriction period is calculated from the date of the initial transaction.
Despite the warning, Nestle India stock performed well in the market. The company’s stock rose over 2 per cent to Rs 2,245.80 on the Bombay Stock Exchange (BSE) on Friday. Meanwhile, the FMCG company reported a 5 per cent rise in its consolidated net profit in the third quarter of the current financial year (FY25) to Rs 688 crore as compared to Rs 655 crore in the same period of the previous fiscal (Q3 FY24).
According to an exchange filing on January 31, the main reason behind the profit was higher sales of its powdered and liquid beverages, including the popular Nescafe coffee brand. The company’s total revenue from operations for the quarter reached Rs 4,779 crore, showing a growth of 4 per cent from Rs 4,600 crore in the corresponding quarter of the previous year (Q3 FY24).
Nestle India, a subsidiary of Swiss multinational company Nestle S.A., is known for its popular brands such as Nescafe, Maggi and KitKat. The company manufactures and markets a wide range of food and beverage products.
