Mumbai: India’s market regulator—the Securities and Exchange Board of India (Sebi)—is examining Friday’s sharp moves in shares of Dewan Housing Finance Corp. Ltd (DHFL), Yes Bank Ltd. and other lenders for possible trading irregularities, people with knowledge of the matter said.

Sebi is looking into whether brokers and investors colluded during the sharp sell-off and subsequent recovery in financial shares, the people said, asking not to be identified due to the sensitivity of the matter. The rout, which deepened Monday, has erased about $13 billion from the value of a gauge of financials.

The regulator is examining data from BSE Sensex and NSE’s Nifty 50 on which parties were buying and selling financial shares, and on the sequencing of the trades, the people said. Sebi may launch a full investigation if it uncovers evidence of wrongdoing, the people added. A Sebi spokesman didn’t respond to a message and phone calls seeking comment.

The move comes after Indian authorities and the Reserve Bank of India (RBI) vowed to support markets spooked by growing concerns of defaults by shadow banks.

Volatility erupted in Indian equities Friday after plunges in DHFL and Yes Bank sparked a rout in financials. DHFL tumbled as much as 60% before paring losses to end down 43%, while Yes Bank slumped as much as 34% before recovering to close down 29%. Indiabulls Housing Finance Ltd slid as much as 35% .

Sebi is concerned that low trading volumes in financial stocks didn’t warrant the size of the share price swings, the people said. The watchdog is also examining data to determine if trading took place based on unpublished price-sensitive information, they added. Some of the lenders have briefed the stock-exchange authorities on the slump, the people said.

Share losses in non-banking finance companies (NBFCs) extended Monday after Infrastructure Leasing & Financial Services Ltd (IL&FS), a lender at the heart of India’s recent credit market woes, missed debt payments on Friday. Indiabulls Housing declined 7.6% at the close and PNB Housing Finance Ltd slid 8.9%. Edelweiss Financial Services Ltd tumbled 8.1%.