Puravankara Reports SEBI Code of Conduct Violation by Designated Person's Relative; Penalty Transferred to SEBI IPEF
Puravankara Discloses Code of Conduct Violation; Corrective Measures and SEBI Compliance
Puravankara Limited reported a Code of Conduct violation by Mrs. Sonika Agarwal, immediate relative of designated person Mr. Raj Kumar Agarwal, involving the sale of 550 equity shares within six months of acquisition. The company imposed profit disgorgement of ₹2,837 and a penalty of ₹5,000, both transferred to SEBI's Investor Protection and Education Fund on January 6, 2026.
Nature of the Violation
The violation concerns a "contra trade" restriction—a foundational insider trading safeguard under SEBI regulations that prohibit directors, officers, and designated employees who buy or sell shares from entering into an opposite transaction during the next six months following the prior transaction. Agarwal and his wife confirmed in writing that the default was inadvertent and unintentional, and that they were not in possession of any unpublished price sensitive information when the trades occurred.
Compliance Framework and Remedial Action
Disgorgement is not a punitive action and is limited to the gains made, with penalties and other actions serving separately as deterrents. The principle underlying disgorgement is that a wrongdoer should not retain profits from wrongdoing. Under section 11(5) of SEBI law, disgorged amounts are credited to the Investor Protection and Education Fund (IPEF), which SEBI administers to protect investor interests.
Companies listed on Indian stock exchanges maintain compliance officers and audit committees to monitor insider trading risk. Designated persons can trade subject to SEBI regulations, which provide for monitoring through the concept of a "trading window"—periods during which insiders can reasonably be expected to have access to unpublished price-sensitive information, during which trading is closed. When the trading window is open, trading can proceed after obtaining pre-clearance from the Compliance Officer.
Puravankara's Regulatory Stance and Track Record
Founded in 1975, Puravankara Limited is one of India's most admired and trusted developers among top real estate companies in India, headquartered in Bengaluru. The company operates across a family of 55,000+ residents, with a track record of approximately 20 million square feet of projects: 12.8 million square feet completed and 7.2 million square feet of ongoing projects.
The company operates in the residential and commercial sectors, having developed projects in Bengaluru, Chennai, Kochi, Coimbatore, Pune, Mumbai, Dubai and Colombo. Puravankara announced plans to launch real estate projects with a Gross Development Value (GDV) of at least ₹9,000 crore in fiscal year 2026, signifying the company's confidence in the market and its growth strategy.
Context: Insider Trading Compliance in Listed Entities
Insider trading violations remain subject to strict scrutiny by SEBI. Insider trading laws under the SEBI (Prohibition of Insider Trading) Regulations, 2015 prohibit misuse of unpublished price-sensitive information, and violations attract severe consequences including fines, bans, disgorgement, and imprisonment. Public disclosure of such violations is required under SEBI circular dated September 23, 2024, which prescribes detailed disclosure requirements for such matters to the stock exchanges.
Puravankara's handling of this violation—immediate disclosure, corrective action, and transfer of both disgorgement and penalty to SEBI's IPEF—reflects standard compliance practice among listed entities subject to SEBI's Listing Obligations and Disclosure Requirements Regulations.