The Securities and Exchange Board of India (SEBI) has issued an administrative warning to FMCG major Nestle India for violating insider trading regulations, the company informed exchanges on Friday.
The warning, issued by SEBI’s Deputy General Manager, was addressed to the company’s Compliance Officer (CCO).
Nestle India disclosed in a stock exchange filing that it received SEBI’s letter on March 6, 2025.
The violation was committed by a designated person within the company. However, Nestle India clarified that this issue does not have any material impact on its financial, operational, or other business activities.
According to SEBI, the violation involved a “contra trade.” This happens when an insider buys or sells shares within six months of a previous transaction in the same security, aiming for short-term profits.
SEBI regulations strictly prohibit such trades for insiders and their immediate relatives to prevent the misuse of unpublished price-sensitive information. The six-month restriction period is counted from the date of the initial transaction.
Despite the warning, Nestle India’s stock showed resilience in the market. On Friday, the stock rose over 2 per cent to Rs 2,245.80 on the Bombay Stock Exchange (BSE) before giving up some gains.
Meanwhile, the FMCG company posted a 5 per cent increase in its consolidated net profit to Rs 688 crore in Q3 of the current financial year (FY25), compared to Rs 655 crore in the same period of the previous fiscal (Q3 FY24).
According to its exchange filing on January 31, the key reason behind the profit was higher sales of its powdered and liquid beverages, including the popular Nescafe coffee brand.
Its total revenue from operations for the quarter reached Rs 4,779 crore, marking a 4 per cent increase from Rs 4,600 crore in the corresponding quarter of last year (Q3 FY24).
Nestle India, a subsidiary of Swiss multinational 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.
(Inputs from IANS)
