India’s market regulator, the Securities and Exchange Board of India (Sebi), has levied a ₹10 lakh (approximately $12,000 USD) fine against Anand Rathi Share and Stock Brokers Limited for multiple violations of regulatory norms, the regulator announced Friday.
The penalty follows an investigation initiated on June 17, 2025, covering the period between April 1, 2023, and August 31, 2024. Sebi’s 42-page order detailed several breaches, including failures in reporting technical glitches and exceeding pre-defined capacity utilization thresholds.
Specifically, Sebi found Anand Rathi failed to report a technical glitch that occurred on May 21, 2024, within the stipulated timeframe. Whereas the brokerage informed the exchanges about the incident within an hour and submitted a preliminary report the following day, the submission of a Root Cause Analysis (RCA) was delayed, according to the order.
The regulator similarly determined that Anand Rathi exceeded capacity utilization limits, setting thresholds at 85% and 95%, which surpassed the permissible 70% of installed capacity. Further violations included deficiencies in patch management protocols and adherence to password policies.
A significant finding in Sebi’s investigation concerned data security. The regulator found Anand Rathi lacked adequate Data Leakage Prevention (DLP) systems during the inspection period, a requirement under Sebi regulations and National Stock Exchange of India guidelines.
Anand Rathi claimed to have previously deployed a McAfee solution in 2020 and later implemented Zscaler. However, Sebi’s investigation revealed the McAfee subscription had expired in December 2021, with no evidence of renewal or continued active use during the inspection. Evidence for the Zscaler system demonstrated implementation only *after* the inspection concluded.
Sebi concluded that the broker had violated data security provisions mandating the deployment of tools to detect and prevent data leakage.
Anand Rathi’s initial public offering (IPO) opened on September 23, 2025, seeking to raise ₹745 crore (approximately $89.4 million USD), with listing scheduled for September 30, 2025, according to HDFC Sky. In July 2025, Mehul Kothari of Anand Rathi recommended three shares to buy or sell, focusing on stocks under ₹200, as reported by Mint.
Sebi has not commented on whether the penalty will impact the ongoing IPO process. The brokerage has yet to publicly respond to Sebi’s order.
