ED raids Mumbai, Ahmedabad and other cities in alleged ₹200 crore 'pump-and-dump' share manipulation case

The Enforcement Directorate searched 20 locations across Maharashtra and Gujarat in an alleged share-price manipulation case. It froze ₹200 crores held in trading accounts. The action was conducted under the Prevention of Money Laundering Act, 2002, in relation to alleged manipulation involving listed companies.

Investigators seized documents described as incriminating. They also took digital devices, share transaction records, and property documents. The searched premises included company offices, promoters’ homes, stock-broking and finance offices, and locations linked to online messaging groups.

The searches covered Nashik, Mumbai, Ahmedabad, Gandhinagar, Surat, and Bhavnagar. The seized material may help investigators trace share allotments, money flows, promotional activity, and property links. The article does not state what further legal action will follow, but the investigation concerns an alleged pump-and-dump scheme.

A pump-and-dump scheme is an alleged market-manipulation pattern. Participants create buying interest in a share, often through promotional messages or misleading claims. That extra demand can push the price and trading volume higher. The scheme matters because outsiders may mistake the activity for genuine market interest.

In this case, the ED said online groups sent daily “buy” tips on two shares. Buyers were drawn in, and the number of buyers rose many times over. The agency said preferential allottees then sold part of their holdings to many investors after prices and volumes increased.

When the coordinated promotion ends, demand may weaken. Sellers can then outnumber buyers, causing the price to fall. Investors who bought late may face losses. The article describes these events as alleged conduct under investigation, not a final court finding.

The reported operation had several measurable dimensions. The ED froze ₹200 crores in trading accounts. It conducted searches at 20 locations across Maharashtra and Gujarat. The searches took place in Nashik, Mumbai, Ahmedabad, Gandhinagar, Surat, and Bhavnagar.

The agency said two companies issued more than 3.5 crore shares and convertible warrants between April 2023 and March 2024. These securities were allegedly allotted to selected persons and entities. The ED said much of the allotment money came from a small circle of connected persons, firms, and lenders.

The article also describes promotional activity between December 2025 and February 2026. Groups named “Multibagger Stocks” reportedly sent daily buying tips. These figures show the alleged scheme’s financial, geographic, and securities scale. They do not establish guilt, because the investigation concerns allegations.

The alleged mechanism began with preferential allotments. The ED said two companies issued more than 3.5 crore shares and convertible warrants to selected persons and entities. Beneficiaries allegedly acquired shares at low prices, while much of the funding came from connected persons, firms, and lenders.

The agency said share prices were then steadily pushed higher while the shares largely remained with the same holders. Later, online groups named “Multibagger Stocks” reportedly sent daily “buy” tips. The groups allegedly operated from Bhavnagar using SIM cards registered in other people’s names in Haryana and Mumbai.

The tips attracted many retail buyers. The ED said buyer numbers, prices, and trading volumes increased. Preferential allottees allegedly sold part of their holdings into this demand. This connected low-cost acquisition, promotion, and selling. The claims remain under investigation and are not presented as a final finding of guilt.

The alleged participants had different roles. The two companies and their promoters were central because shares and convertible warrants were issued during the period investigated. The ED identified family-linked beneficiary clusters that allegedly received shares at low prices. Connected persons, firms, and lenders allegedly supplied much of the allotment money.

Stock-broking and finance firms were among the premises searched. The article does not assign them a confirmed role. People suspected of operating promotional messaging groups were also searched. Those groups reportedly used SIM cards registered in other names and sent daily buying tips.

Retail investors were the audience drawn in by the messages. The ED said their increased buying helped push prices and volumes higher. Preferential allottees allegedly used that demand to sell part of their holdings. These are investigative allegations. The article does not identify individual promoters, brokers, lenders, or investors by name.

Retail investors enter at a disadvantage when buying interest has been artificially created. They may believe repeated messages reflect genuine opportunity. If the price has already risen sharply, they can purchase shares at levels supported by promotion rather than normal market interest.

The alleged case illustrates this risk. The ED said online groups sent daily “buy” tips, attracting many buyers and increasing prices and volumes. It also said preferential allottees dumped part of their holdings to a large number of investors after buying interest increased.

If those sellers reduce their positions and promotion stops, demand can weaken. The share price may then fall, leaving later buyers with losses. Investors may also find that selling quickly is difficult if trading interest dries up. The article does not state whether a particular investor lost money, but it describes the alleged pathway from promotional buying to insider selling.

Listed-company shares are normally bought and sold through a stock exchange. Investors place orders, and prices change as buyers and sellers respond to available information, expectations, supply, and demand. Trading volume reflects the number of shares changing hands. This process helps form a market price for each listed security.

The alleged conduct described here interfered with those signals. The ED said shares were allotted cheaply to selected persons, prices were pushed higher, and online groups sent daily “buy” tips. Those messages allegedly attracted retail buyers and increased prices and volumes, allowing preferential allottees to sell.

Misleading promotion can distort supply, demand, and investor choices. It can create a false appearance of interest and undermine fair markets. Such manipulation can violate securities laws and trigger regulatory or criminal action. The article specifically reports searches under the PMLA, 2002, and describes the share activity as an allegation under investigation.