After Jane Street, Uday Kotak Reminds Market's Primary Role Is Promoting Capital Formation

Banking industry veteran Uday Kotak on Saturday rued that money power helps an investor, and reminded that the primary role of the market is to facilitate capital formation and fair price discovery.

Taking to the microblogging site X, the billionaire also seem to flag concerns on the business model of exchanges and brokerages, where there is a lot of reliance on volumes to generate the fees, and less focus on fundamentals.

"Recent stock market actions signify 3 aspects: money power, low liquidity in single stocks vs. index derivatives, exchange, broker business models linked to volume, less to fundamentals," the promoter and non-executive director of private sector lender Kotak Mahindra Bank said.

"Primary role of market is to promote capital formation, fair price discovery," he added in the post that comes a day after SEBI found Jane Street to have manipulated markets and made over Rs 4,800 crore in illegal gains.

In an order released in the early hours of Friday, the market regulator has found Jan Street, a New York-based hedge fund, guilty of manipulating the indices by taking bets in the cash, and, futures and options markets simultaneously for making handsome gains.

It has suspended the hedge fund from accessing the market and impounded over Rs 4,843 crore in gains. The probe has found that JS made a profit of Rs 36,671 crore on a net basis during the probe period from January 2023 to May 2025.