SEBI changed India’s closing price to save global passive funds a few rupees of tracking error. A ₹2 problem is now a ₹1.4-trillion one wild closing swings, two prices for the same stock, and a regulator insisting the casino is working.
At 3:15 every afternoon the Indian stock market stops being a market. Trading in some 200 of the country’s most important stocks halts, the screens go quiet, and whatever liquidity was there drains away. Fifteen minutes later a single number comes out the other end. That number is the official close — used to value index funds and mutual fund portfolios, to settle derivatives, to trigger margin calls, and to tell every investor in the country what he owns.
SEBI calls it the Closing Auction Session. The market has a better name: CASino.
“All working smoothly. So the government creates a problem. Then the government builds a team to solve the problem. And the solution creates a wealth transfer, a consolidation of power, and new problems requiring more government.”