Description

BSE updates the list of securities under Additional Surveillance Measure for companies in Insolvency Resolution Process as per Insolvency and Bankruptcy Code, with Carnation Industries Ltd moving to Stage 1.

Summary

BSE has issued updated surveillance measures for securities of companies undergoing Insolvency Resolution Process (IRP) under the Insolvency and Bankruptcy Code (IBC). The circular provides three annexures: securities shortlisted for various IBC stages effective October 15, 2025; securities moving to or being excluded from ASM; and a consolidated list of all securities currently under IBC surveillance framework.

Key Points

  • Carnation Industries Ltd (Scrip Code: 530609, ISIN: INE081B01028) has been shortlisted for Stage 1 Additional Surveillance Measure effective October 15, 2025
  • No securities moved from Stage 0 (Receipt of corporate announcement/disclosure) to Stage 1
  • No securities moved between Stage 1 and Stage 2
  • No securities were excluded from the IBC ASM framework as of October 14, 2025
  • The consolidated list includes 14+ securities across various IBC stages, ranging from Stage 0 (receipt of disclosure) to Stage 1
  • Notable companies in the consolidated list include Aban Offshore Ltd, AGS Transact Technologies Ltd, Alchemist Ltd, Alps Industries Ltd, Ansal Properties & Infrastructure Ltd, and Arshiya Limited

Regulatory Changes

The surveillance framework continues to implement the IBC-based Additional Surveillance Measure with multiple stages:

  • Stage 0: Receipt of corporate announcement/disclosure from the company regarding insolvency proceedings
  • Stage 1: Securities enter formal Additional Surveillance Measure for companies in IRP under IBC
  • Stage 2: Enhanced surveillance for companies with prolonged insolvency proceedings

The framework also identifies special categories including T+0 scrips shortlisted as per parent company and recommencement scrips.

Compliance Requirements

  • Market participants must be aware of the surveillance status of securities under IBC proceedings
  • Trading in Stage 1 securities is subject to Additional Surveillance Measures which may include trade-for-trade settlement, price bands, or other restrictions
  • Investors should exercise additional caution when trading securities under IBC surveillance stages
  • Companies under IBC proceedings must continue to make necessary disclosures as per regulatory requirements

Important Dates

  • October 15, 2025: Effective date for Carnation Industries Ltd moving to Stage 1 ASM
  • October 15, 2025: Effective date for updated Stage 0 and Stage 1 lists
  • October 14, 2025: Reference date for securities to be excluded from ASM (though none were excluded)

Impact Assessment

Market Impact: The addition of one security (Carnation Industries) to Stage 1 surveillance has limited immediate market-wide impact but signals heightened risk for that specific security. The consolidated list shows 14+ companies remain under various stages of IBC surveillance, indicating ongoing corporate stress in certain segments.

Trading Impact: Securities in Stage 1 typically face enhanced surveillance measures that may reduce liquidity and increase volatility. Carnation Industries shareholders and traders should expect potential restrictions on trading.

Investor Impact: Investors holding securities listed in the IBC framework should monitor developments closely as insolvency proceedings can lead to significant value erosion or complete write-offs. The framework provides transparency on which securities carry elevated insolvency risk.

Sectoral Impact: The diverse nature of companies under IBC surveillance (ranging from offshore services, technology, metals, real estate, to textiles) suggests stress is not concentrated in a single sector but spread across multiple industries.

Impact Justification

This circular updates surveillance stages for securities under IBC proceedings. One security (Carnation Industries) moved to Stage 1 ASM effective October 15, 2025. While important for affected securities, no securities were excluded or moved between higher stages, limiting broader market impact.