The recent ban on Jane Street by the Securities and Exchange Board of India (SEBI) for allegedly manipulating Indian stock indices has sparked debate about its potential impact on the Indian market. While some analysts foresee a decline in trading volumes and revenue pressure on intermediaries, Angel One founder Dinesh Thakkar maintains an optimistic outlook, asserting that India's market momentum remains strong and resilient.
SEBI penalized Jane Street for allegedly manipulating Indian stock indices, particularly Bank Nifty, through extensive derivative positions, leading to significant losses for retail investors. The regulator has ordered the seizure of ₹4,844 crore and has barred Jane Street from the Indian securities market pending further investigation.
Thakkar believes that SEBI's action against Jane Street will not derail India's market momentum, which he says is driven by strong structural factors. He welcomed the crackdown for strengthening governance and transparency. He emphasized that India's capital markets remain resilient, liquid, and poised for long-term growth.
Thakkar argues that India's market opportunity is "structural, not cyclical—and certainly not dependent on any one firm". He pointed to the surge in retail participation in equity derivatives—from just 2% in 2018 to over 40% in 2025—as evidence of strong underlying market fundamentals.
He also noted that when one player exits, others step in quickly. Global trading giants like Citadel Securities, IMC Trading, Optiver, Jump Trading, and Millennium are already expanding into India, setting up local entities, hiring talent, and investing in infrastructure.
The immediate market reaction to the SEBI ban saw a sharp selloff in capital market-linked stocks, wiping out ₹12,000 crore in market value on Friday. Nuvama Wealth Management, Jane Street's local trading partner in India, suffered the steepest decline, falling over 11%, despite not being implicated in any wrongdoing in Sebi's investigation. Shares of stock exchange BSE and Angel One dropped around 6% each, while CDSL fell over 2%.
Analysts warn that the regulatory action could put pressure on the revenue of intermediaries heavily dependent on derivatives trading, with volumes likely to shrink in response to Sebi's measures against one of the segment's largest prop trading firms.
SEBI's probe into Jane Street triggered a sharp selloff in capital market-linked stocks, wiping out Rs 12,000 crore in market value. The crackdown exposed Dalal Street's dependence on prop trading firms and impacted even those not under scrutiny.
Despite the immediate challenges and market volatility, Thakkar's perspective suggests a long-term confidence in the Indian market's ability to adapt and thrive. The entry of new global players and the increasing participation of retail investors could offset the impact of Jane Street's ban and contribute to the continued growth of the Indian capital markets.
