The messages about the 12 companies with prescient information obtained by Reuters involved mostly what were characterised as being upcoming quarterly results, including specific metrics such as net profits, revenues and operating margins.

They also included messages about upcoming bonus share issues or revenue guidance.

Seven of the companies are part of the benchmark NSE index : Dr. Reddy's, the drug maker Cipla Ltd, Axis Bank, HDFC Bank, Tata Steel, the IT services company Wipro, and Bajaj Finance .

The other five were Mahindra Holidays and Resorts, Crompton Greaves Consumer Electricals Ltd, the IT services providers Mindtree Ltd and Mastek Ltd , and India Glycols, a petrochemicals company.

Wipro, Bajaj Finance, HDFC Bank, Mastek, Crompton Greaves, Cipla and Mahindra Holidays said they were not aware messages referring to their upcoming results or announcements had circulated in WhatsApp, and that the companies adhered to strict standards of guarding sensitive company information.

Axis Bank, Tata Steel, India Glycols, Mindtree did not reply to requests for comment.

WhatsApp, which is owned by Facebook, responded to a request for comment by pointing to its terms of service, which state users can use the platform only for "legal, authorised, and acceptable purposes".

Heard on the street

Many of the postings in the WhatsApp groups are referred to as "HOS", for "Heard on the Street".

In one typical post on July 25, Fanil Motiwalla, a contractor for a small brokerage, Arcadia Share & Stock Brokers, posted a set of numbers for Axis Bank, India's third-largest private lender. Motiwalla works as a sub-broker, who are typically hired as contractors by securities firms in India to recruit customers.

"This HOS is going around for Axis," Motiwalla said when posting the numbers, which included key metrics such as gross non-performing assets and net interest margins.

Later that day, Axis Bank reported results that closely matched the final numbers in Motiwalla's message.

Arcadia said it had policies in place to prevent employees from passing on "illegal information".

Motiwalla said he just reposted a message that had already been circulating in the market and he did not consider it inside information.

"How do I know if this is coming from inside information? This could come from many sources," he said. "This information comes from different groups, and we just post it."

Arcadia said every sub-broker it hired was given a copy of SEBI's rules, adding, "whatever the alleged message sent by him is not sourced from Arcadia," referring to Motiwalla.