Insider Trading before the HDFC Life and Exide Deal?
Moneylife Digital Team 03 September 2021
Exide Industries (Exide) shares rallied as much as 14% in early trade as HDFC Life Insurance Company (HDFC Life) announced that it will acquire Exide life insurance  business for Rs6,687 crore. But what is intriguing is that the shares of both the companies—Exide and HDFC Life rose even before the announcement and that too with massive volumes. Did the market participants involved in the trading of shares have a crystal ball or can it be another case of possible insider trading?
 
Exide’s shares jumped by 11% in just two days before the announcement without any major development. It is interesting to note that Exide’s share price has been on a declining trend for the past few months. What can be the possible reason other than insider trading for the share price to reverse? Even after announcement of its quarterly results, the share price has declined by 7% till 30 August 2021.
 
Coming to HDFC Life, even though the share price declined by 3% on Friday after the announcement, it rose by 6% on the previous day with huge volumes. As per The Economic Times report, “The near-6 per cent jump in the stock came after a media report said that the company is likely to raise as much as $1 billion from investors.”
 
It can be a possible reason; but the timing of the rise in stock price coincided with the day before the announcement of acquisition, alluding to insider trading.
 
 
 
The volume chart throws some interesting data points. The volume of traded Exide’s shares had barely crossed the 50-lakh mark in the month of August. The average traded volume in August was around 35 lakh. However, volumes shot up to 204 lakh on 2nd September, around six times more than the average volume in August. Similar is the case with HDFC Life where the average traded volume was 29 lakh in August and, on 2nd September, it jumped to around 163 lakh. Such a sudden surge in volumes a day before a major announcement alludes to a clear-cut case of insider trading.
 
Moneylife has reported several possible cases of insider trading in the past. Below are the links to our reports on insider trading.
 
 
Comments
rdalal1980
1 month ago
It is also unusual that Exide dropped from its June high by 20% only for this deal to be announced later when the price it significantly dropped. Coincident much?
L Romi
1 month ago
It seems the only legitimate trading taking place on the bourses is insider trading .

Freak trades on Friday’s and many such nefarious activities.

Honesty and transparency are not the traits in this market.
ganesanjaicare
1 month ago
No point in writing about insider trading.india nobody punished for insider trading .meagre penalty they are escaping.in the name of analyst meet management of several companies disclose price sensitive information only to privileged few. Retailers known only after the event.
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