SEBI Chairman Tuhin Kanta Pandey has issued a strong warning to market participants, affirming that the regulator will adopt a zero-tolerance approach towards any form of market manipulation. Speaking at an industry event in Mumbai, Pandey stressed that stringent action would be taken against those attempting to distort market dynamics.

“We will continue to watch. On market manipulation, we will come down very hard going forward. I mean, we have come hard earlier also, but I think going forward, market manipulation will be one that we will not tolerate,” he declared.

The SEBI chief's remarks come amid growing concerns over manipulation in Small and Medium Enterprises (SME) Initial Public Offerings. Over the past several months, SEBI has issued multiple orders against entities involved in irregular activities in SME IPOs, ranging from inflated subscriptions to inaccurate disclosures and alleged fund diversion. In several instances, SEBI and stock exchanges have intervened to pause IPO launches in order to safeguard investors.

Market manipulation isn’t restricted to SME listings. SEBI has also observed pump-and-dump schemes where retail investors are misled into buying certain stocks based on hype, only to suffer losses when prices crash. Manipulation in derivative markets, particularly index options, has also come under the regulator’s scanner. Investigations are ongoing, and SEBI has pledged to take corrective actions against offenders.

Regulation Alone Is Not Enough

Commenting on high-profile cases like that of Gensol Engineering, Pandey noted that while regulations are robust, they cannot alone prevent greed-driven misconduct. “Nobody can guarantee that egregious behaviour will not be there. Because greed is something which was written in the Mahabharata and the Ramayana also, and we still have to repeat the same thing,” he said.

He stressed that the solution lies not in adding more compliance layers, but in effective enforcement and timely intervention. “These are the things which cannot be stopped only by regulation,” Pandey added.

SEBI’s Action In The Gensol Case

In April, SEBI passed an order against Gensol Engineering, accusing its promoter, Anmol Singh Jaggi, of misusing loans sanctioned by public sector NBFCs—PFC and IREDA—for personal gains and share price manipulation. The regulator not only barred the promoters from accessing the markets but also removed them from the company's board.

Reassuring investors and the broader industry, Pandey concluded, “There may be cases which may be happening even now, but people will be caught and then they will have to suffer.”