Insider Trading: Smallcap stock crashes 17% after SEBI penalises promoter for insider trading 

Synopsis: The shares of this industry stock crashed about 17% following the company announcement in which the promoter, Mr Anil Jain, was fined Rs 10 lakh for insider trading. The company also faced IT raids at its office and several other locations. 

The shares of this company, which specialises in trading eco-friendly refrigerant gases and providing comprehensive solutions for responsible coal procurement and ash disposal, had its shares tumble about 17% after the company got involved in IT raids along with the insider trading penalty imposed on the promoter. 

With a market cap of Rs 3,727 crore, the shares of Refex Industries Ltd crashed about 17% and reached their low at Rs 212 compared to their previous day closing price at Rs 254.35 and have given a return of 1200% in the last 5 years and are trading at a PE of 19, whereas their industry PE is 48. 

About the insider trading and IT raid case. 

SEBI has passed an adjudication order dated December 12, 2025, in connection with alleged insider-trading activities in the shares of Refex Industries Limited. The order was issued under Section 15-I of the SEBI Act, 1992, following an investigation into trading by certain entities in the company’s stock. As part of this action, SEBI imposed a penalty of Rs 10 lakh under Section 15G of the SEBI Act on Anil Jain, who is the promoter, chairman, and managing director of Refex Industries.

According to SEBI, Anil Jain, in his capacity as chairman and managing director, allegedly communicated unpublished price-sensitive information (UPSI) to certain individuals or entities. SEBI stated that these recipients subsequently traded in Refex Industries’ shares while in possession of this information, resulting in alleged unlawful gains of Rs 12.33 lakh. The regulator alleged violations of Section 12A(e) of the SEBI Act read with Regulation 3(1) of the SEBI (Prohibition of Insider Trading) Regulations, while the entities involved were alleged to have violated Section 12A(d) and (e) read with Regulation 4(1).

SEBI’s adjudicating officer concluded that the alleged communication of UPSI and the subsequent trading activity warranted regulatory action under insider-trading provisions. The order reflects SEBI’s position on enforcing market discipline and preventing the misuse of sensitive corporate information, particularly when it involves senior management of a listed company.

Refex Industries clarified to the stock exchanges that the penalty has been imposed on Anil Jain in his individual capacity and therefore has no financial, operational, or monetary impact on the company. The company also stated that Jain intends to strongly contest the order and believes he can defend his position through the legal process by availing remedies available under law.

Separately, Refex Industries informed the exchanges that the Income Tax Department carried out search operations at the company’s registered office and other locations linked to the Refex Group between December 9 and December 13, 2025, with the exercise concluding late on December 13. The company said it and its officers fully cooperated throughout the search and provided all information and documents requested by the authorities.

As of now, no communication, notice, or order indicating any adverse findings has been received from the tax department, and Refex emphasised that its business operations continue as usual and remain unaffected. However, the stock has recovered and has achieved a gain of 11%, which is a recovery of almost 28% from its low. 

Financials and more. 

The revenue from operations is at Rs 427 crore in Q2 FY26 versus Rs 428 crore in Q2 FY25, which is more or less the same. However, the net profit has increased from Rs 31 crore in Q2 FY25 to Rs 36 crore in Q2 FY26, which is a jump of about 16 per cent.  

Refex Industries Limited is a diversified company with operations spread across several key areas of the economy. It is active in refrigerant gases, coal and ash management, power trading, clean mobility, and renewable energy, giving it exposure to both traditional industries and emerging sustainability-driven segments. The company places strong emphasis on innovation and sustainability, aiming to support long-term value creation while aligning its businesses with India’s evolving energy and infrastructure needs. By operating in sectors critical to the country’s growth, Refex seeks to build a balanced and future-ready business model.

Written by Leon Mendonca. 

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