Authority: Securities and Exchange Board of India (SEBI) - Nodal Co-ordination Cell
Order Date: April 09, 2026
Case Overview
SEBI issued an informal guidance letter (Issue No.: I/9043/2026) in response to a request from Jaro Institute of Technology Management and Research Limited. The company's equity shares were listed on the stock exchange on September 30, 2025, following an Initial Public Offer (IPO) that included both a fresh issue of equity shares and an offer for sale (OFS) by promoter Mr. Sanjay Namdeo Salunkhe. The guidance sought clarification on whether Mr. Salunkhe, as promoter and selling shareholder in the IPO, could acquire equity shares from the secondary market within six months of listing and whether contra trade restrictions under the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations) applied to him.
SEBI analyzed Regulation 9(1), Regulation 9(4), and Clause 10 of Schedule B of the PIT Regulations, along with Question no. 40 of SEBI FAQs dated December 31, 2024. The authority determined that Mr. Salunkhe, being the promoter of the company, must be classified as a designated person under Regulation 9(4) of PIT Regulations. As a designated person, he is required to comply with the company's code of conduct formulated under PIT Regulations, which must include the minimum standards set out in Schedule B.
Clause 10 of Schedule B specifies that the code of conduct must prohibit designated persons from executing contra trades within a period of not less than six months. Question no. 40 of SEBI FAQs explicitly states that if the initial transaction is disposal of securities through OFS, subsequent acquisition of securities within six months from the date of such initial transaction would be considered a contra trade.
Final Outcome
SEBI concluded that Mr. Sanjay Namdeo Salunkhe, as promoter and designated person of Jaro Institute, cannot execute contra trades within the period specified by the company's code of conduct (which cannot be less than six months). This means he is prohibited from acquiring shares of the company from the secondary market within six months of disposing of shares through the OFS in the IPO. However, SEBI noted that the compliance officer of the company may grant relaxation from strict application of contra trade restrictions for reasons to be recorded in writing, provided such relaxation does not violate the provisions of PIT Regulations.
The guidance letter will not be made public for 90 days from the date of issuance due to confidentiality requested by the applicant. SEBI clarified that this guidance expresses the department's position on enforcement action only and does not preclude seeking other opinions.
Topics: Insider Trading Regulations, IPO Compliance, Contra Trade Restrictions