India’s Directorate of Enforcement (ED) has frozen trading accounts worth about ₹200 crore (2 billion rupees) as it investigates alleged WhatsApp stock promotions tied to subsequent share sales.
The investigation concerns R M Drip and Sprinklers Systems Ltd. and R&B Denims Ltd. The ED said the number of buyers rose for both stocks during the promotion campaign. It separately reported increases in R M Drip’s share price and trading volume while that stock was being promoted. People who had received shares through preferential allotments then sold some of their holdings to investors, the agency alleged.
The two companies issued more than 35 million shares and convertible warrants to selected people and entities between April 2023 and March 2024, according to the ED. The agency traced a substantial share of the allotment payments to connected individuals, firms and lenders.
From late December 2025 through February 2026, investors received daily recommendations to buy the shares in WhatsApp groups, including one named “Multibagger Stocks,” the ED said. The groups operated from Bhavnagar, Gujarat, and used SIM cards obtained in other people’s names in Haryana and Mumbai, according to the agency.
Investigators searched 29 premises in Mumbai, Nashik, Ahmedabad, Gandhinagar, Surat and Bhavnagar on Oct. 16 under the Prevention of Money Laundering Act. The ED said it seized digital devices, share-transaction records, property documents and other papers. It said the frozen accounts belonged to people and connected entities under investigation.
Zerodha co-founder and CEO Nithin Kamath warned in an Oct. 20 post on X that similar schemes may become more frequent as the market cycle advances. He pointed to promotions of stocks and initial public offerings through messaging groups and influencers. “This is probably the silliest way to lose money,” Kamath wrote.
The ED did not give a figure for investor losses. Its investigation is continuing.
