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In a major crackdown against 'dabba' traders, the Enforcement Directorate (ED) launched raids at several locations across different parts of the country in connection with illegal market activities conducted through mobile apps including LotusBook, IBull, VMoney, VM Trading, Standard Trades, IBull Capital, 11Starss, and GameBetLeague. These online betting platforms operated through white-label apps, with administrative rights exchanged on a profit-sharing basis, Zee Business learned from sources.

During the searches in Mumbai, Delhi, Indore, and Ahmedabad, investigators found piles of illegally earned cash linked to dabba trading-related activities, the sources said.

Cracking the whip against miscreants, the country's financial crime-fighting agency covered a range of premises at these locations, according to the sources.

The searches were launched on the basis of an FIR.

In Mumbai, investigators confiscated Rs 3.3 crore in unaccounted cash—including foreign currency—along with cash counting machines, luxury watches, jewellery, and high-end vehicles, in connection with a major dabba trading and online betting case, the sources added.

Digital as well as financial records of several individuals suspected to be hawala operators and fund handlers are currently being examined, according to the sources.

Investigators found that one Vishal Agnihotri, the beneficial owner of VMoney and 11Starss, had acquired the ADMIN rights to the LotusBook platform on a 5 per cent profit-sharing basis. He subsequently transferred these rights to Dhaval Devraj Jain, retaining 0.125 per cent profit while Jain held the remaining 4.875 per cent, the sources said.

In addition, Dhaval Jain, along with his associate John States alias Pandey, developed a white-label betting platform and supplied it to Agnihotri for running 11Starss.in. Meanwhile, Mayur Padya alias Padya, a known hawala operator, handled cash-based fund transfers and payments for the betting operations, the sources added.

Although dabba trading and grey market trading are both illegal methods of trading that bypass the regulatory framework, they differ slightly in nature. Also known as bucket trading or box trading, dabba trading involves dealing in securities outside of main stock exchanges such as BSE and NSE.

In dabba trading, traders place positions in stocks or other financial instruments without actually transacting on SEBI-registered and regulated platforms.

Entities that facilitate such off-market deals are known as dabba operators or dabba trade operators.

Transactions in this illegal form of trading are settled in cash, with no formal or regulated record-keeping mechanism. In other words, traders take positions in securities without the trades ever being executed on official SEBI-recognised bourses.

In the event of losses or fraud, no grievance redressal mechanism is available to investors, as these trades are not routed through any recognised stock exchange platform.

Just like grey market trading, dabba trading is illegal in India.

In the grey market, shares of real-life businesses are traded outside of the recognised listed space.

The grey market is also referred to as the 'parallel market' because it allows participants to deal in securities 'parallelly', outside the regulated exchange ecosystem.

Capital market regulator SEBI has repeatedly conducted awareness campaigns to educate market participants about illegal and risky practices such as dabba trading, aiming to protect investors from potential losses.

SEBI officially recognises dabba trading as an illegal and unregulated form of trading.

Investors should exercise caution and strictly avoid any involvement in dabba trading, the regulator has warned.

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