Investor complaints against listed companies in FY25 have surged to record highs, but the numbers tell a far more nuanced story than a simple decline in corporate conduct. This trend reflects both the empowerment of retail investors and the regulator’s sharper oversight, while also exposing structural weaknesses that companies and policymakers must urgently address.
Why complaints are rising
According to Sebi’s latest annual report, exchanges received 12,473 complaints in FY25, a 43% increase from the prior year. On Sebi’s upgraded SCORES 2.0 platform, more than 68,000 complaints were logged, while CPGRAMS and the new SECURE system together pushed the total above 71,000. Most grievances relate to basic lapses—missed dividends, delays in crediting bonus shares, or disputes over rights issues.
Experts emphasize that the surge reflects easier digital filing and heightened investor awareness rather than a deterioration in corporate behaviour. As Sonam Chandwani of KS Legal put it, what might earlier have been ignored due to cumbersome processes is now reported instantly. Still, operational lapses persist, and the friction has shifted from filing to closure as company back-ends fail to keep pace.
Compliance gaps and retail expectations
This mismatch between investor empowerment and company preparedness is creating a perception gap. Retail investors, now more vocal and digitally savvy, expect quicker resolutions. Kunal Sharma of Taraksh Lawyers notes that while front-end capture has improved, corporate resolution pipelines remain sluggish. Companies are struggling to strengthen compliance and investor relations frameworks, leaving Sebi to shoulder the burden.
Finfluencers in the spotlight
Beyond corporate lapses, Sebi is intensifying scrutiny of the advisory ecosystem. Investment advisers, research analysts, and especially finfluencers are facing tighter regulation. Many social media educators blur the line between training and disguised advisory, luring retail investors into pseudo-advisory models. Enforcement has ramped up, including penalties, cancellations, and restrictions, but experts warn that actions remain episodic—one entity is banned, while several new ones quickly appear.
To counter this, Sebi is leaning on AI-driven surveillance to scan live-market data use, referral networks, and influencer–broker revenue flows. However, enforcement speed and jurisdictional overlaps with global platforms remain concerns. As Narinder Wadhwa of SKI Capital warns, unchecked finfluencers risk mis-selling and fostering unrealistic retail expectations.
Settlements at record levels
Sebi’s enforcement arm has also scaled up settlements. Applications rose to 703 in FY25, with collections jumping to nearly ₹799 crore from ₹94 crore a year earlier, largely due to outsized cases like the NSE’s ₹643 crore settlement in the co-location-related Trade Allocation Practices matter. Experts expect Sebi to increasingly target copy-trading, influencer–broker tie-ups, and pseudo-educational schemes masking advice.
The road ahead
Looking forward, the complaint curve could be reshaped by tech-driven risks. AI-generated scams impersonating institutions may create a new wave of sophisticated frauds. Experts expect Sebi to shift from reactive enforcement to pre-emptive rulemaking, expanding liability across the influencer–intermediary chain.
For companies, the lesson is clear: while digital empowerment has made investors louder, corporate back-ends must catch up to avoid reputational and regulatory risk. For Sebi, the challenge will be to balance investor protection with a market where expectations are rising as fast as the complaint numbers.
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Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.