Pump-and-Dump Risks in Indian Stocks: Signals, Exit Tricks, and SEBI Safeguards

Pump-and-dump alarms are back in Indian stocks. A family tale around Aayush Wellness shows a beginner with FOMO pouring a big chunk of savings into a rising tiny-cap, then watching the profits vanish as trading dried up. The surge drew others in, but there were suddenly no buyers and the stock tumbled. SEBI later blocked buying in the stock, a tangible reminder that regulators can step in to curb manipulation ^[1].

Signals that raised red flags - A sharp rally in a small cap, followed by liquidity drying up ^[2]. - In the CIANAGRO thread, traders note ‘Dumping started’ with a flood of sell orders—near 99% sell and 0% buy ^[2]. - Retailers even checked liquidity on tools like the Kite app and Groww before acting ^[2].

Exit traps for retail investors Exiting a pumped stock is brutal. The discussion notes that stepping out would be best, but finding a buyer is hard and waiting periods feel endless ^[1].

SEBI safeguards and what they mean for recourse SEBI blocked buying in the pumped stock, a concrete move to slow the cycle and limit further damage ^[1].

Closing thought: pump-and-dump risk remains real. Verify signals, avoid chasing rallies, and watch regulator moves for prevention and recourse.

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